RCM TECHNOLOGIES, INC.
0000 XxXxxxxxx Xxxxxx (Xxxxx 000)
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000
January 12, 1996
Xx. Xxxxx Xxxxxxxx
c/o Acquest International, L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Xx. Xxxxxxxx:
This letter will confirm our agreement with respect to the issuance
and sale by RCM Technologies, Inc. (the "Company"), and the purchase by you, of
shares of Common Stock, $.05 par value, of the Company.
1. Subscription. On the terms and subject to the conditions set forth in
this agreement, the Company hereby agrees to sell to you,and you hereby agree to
purchase from the Company, on the "Closing Date" (as hereinafter defined) such
number of shares of Common Stock, $.05 par value (the "Shares"), of the Company
which equals the amount of $1,000,000 divided by the purchase price per Share as
determined pursuant to this Section 1. The purchase price per Share shall equal
the greater of $0.60 or the product of (i) the average of the closing prices for
the Shares as reported by NASDAQ Stock Market for the twenty (20) trading days
immediately preceding the Closing Date (the "Average Price") and (ii) (A) 80% if
the Average Price is less than $1.00, (b) 77.5% if the Average Price is equal to
or more than $1.00 but less than $1.25 or (C) 75% if the Average Price is $1.25
or more. On the Closing Date, you shall pay the purchase price for the Shares by
delivering to the Company a certified or bank cashier's check in the amount of
$1,000,000 against delivery of a stock certificate representing the Shares.
2. Representations and Warranties of the Company. The Company represents
and warrants to you as follows:
(a) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada.
(b) The Company has all requisite legal and corporate power to execute this
Agreement. The execution, delivery and performance by the Company of this
Agreement and the consummation of the transactions contemplated hereby have been
authorized by all necessary corporate action on the part of the Company.
(c) This Agreement has been duly executed by the Company and, assuming due
and valid execution and delivery of the same by you, constitutes the valid and
legally binding obligation of the Company enforceable in accordance with its
terms.
(d) The Shares, when delivered to you, will be duly and validly issued,
fully paid and nonassessable.
3. Representations and Warranties of Subscriber. You hereby represent and
warrant to the Company as follows:
(a) Investigation. You have made your own investigation of the financial
condition and affairs of the Company and the nature of its business and are
fully familiar with the same, and you have such knowledge and experience in
financial and business matters that you are capable of evaluating the risks of
your investment in the Shares.
(b) Access to Information. You have had access to all material and relevant
information concerning the Company necessary to enable you to make an informed
investment decision with respect to your investment in the Shares. You
acknowledge that you had the opportunity to ask questions of and receive answers
from, and to obtain additional information from, the Company or its
representatives concerning the terms and conditions of the acquisition of the
Shares and the present and proposed business and financial condition of the
Company and have had all such questions answered to your satisfaction and have
been supplied all information requested.
(c) SEC Reports. You acknowledge that you have been provided with, and
reviewed to your satisfaction, copies of the reports which the Company is
required to file with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934 (the "Reports") for the two-year period
preceding the date of this Agreement.
(d) Financial Matters and Sophistication. You have such knowledge and
experience in business and financial matters, such that you are capable of
evaluating the merits and risks of investing in the Shares. You represent that
you are:
(i) an "accredited investor" as defined in Rule 501(a) of Regulation D
promulgated under the Securities Act of 1933 (the "1933 Act"); and
(ii) that you are capable of assuming the risk of investing in the Shares.
(e) Investment Intent.
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(i) You are acquiring the Shares for your own account and not on behalf of
any other person (except that you may assign your rights herein prior to Closing
pursuant to Section 10 hereof);
(ii) You are acquiring the Shares for investment and not with a view to
distribution or with the intent to divide your participation with others by
reselling or otherwise distributing the Shares (except that you may assign your
rights herein prior to Closing pursuant to Section 10 hereof); and
(iii) Neither you nor anyone acting on your behalf has paid or will pay any
commission or other remuneration to any person in connection with the purchase
of the Shares, except as set forth herein.
(f) Understanding of Investment Risks.
You understand that an investment in the Shares involves a degree of risk.
The Shares are a suitable investment only if you can afford a total loss of your
investment. Before making the decision to purchase the Shares, you do hereby
acknowledge that you have considered carefully, among other things, the
speculative nature of an investment in shares of a public company and a number
of risks associated with an investment in the Shares.
(g) Understanding of Nature of Shares. You understand that:
(i) The Shares have not been registered under the 1933 Act or any state
securities laws and are being issued and sold in reliance upon certain of the
exemptions contained in the 1933 Act and under applicable state securities laws;
(ii) The Shares are "restricted securities" as that term is defined in Rule
144 promulgated under the 1933 Act;
(iii) The Shares cannot be sold or transferred without registration under
the 1933 Act and applicable state securities laws, unless the Company receives
an opinion of counsel reasonably acceptable to it (as to both counsel and the
opinion) that such registration is not necessary;
(iv) The Shares and any certificates issued in replacement therefor shall
bear the following legend, in addition to any other legend required by law or
otherwise:
"The securities represented by this
certificate have not been registered under
the Securities Act of 1933, as amended.
The securities represented
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by this certificate have been taken by the
registered owner for investment, and
without a view to resale or distribution
thereof, and may not be transferred or
disposed of without an opinion of counsel
satisfactory to the issuer that such
transfer or disposition does not violate
the Securities Act of 1933, as amended, or
the rules and regulations thereunder."
(v) Only the Company can register the Shares under the 1933 Act and
applicable state securities laws;
(vi) Except as set forth in this Agreement, no representations have been
made to you that the Company will register the Shares under the 1933 Act or any
applicable state securities laws, or with respect to compliance with any
exemption therefrom; and
(vii) The Company may, from time to time, make stop transfer notations in
its transfer records to ensure compliance with the 1933 Act.
(h) No Other Representations. No representation, warranty or other
statement or assertion has been made to you by the Company or by any officer or
director of the Company to induce you to purchase the Shares, other than as set
forth herein.
4. Conditions Precedent to Your Obligation. Your obligation to consummate
the purchase of the Shares on the Closing Date is, at your option, subject to
the satisfaction of the following conditions:
(a) Each of the representations of the Company contained in Paragraph 2
hereof shall be true and correct when made and in all material respects as of
the Closing Date with the same force and effect as though the same had been made
on and as of the Closing Date.
(b) You shall have obtained financing of $1,000,000 on terms acceptable to
you in your sole discretion.
(c) The Company has completed the acquisition of all or substantially all
of the assets, stock or business of The Consortium, Inc. (the "Consortium
Acquisition").
(d) You shall have received the Registration Rights Agreement, described in
Section 8 hereof, duly executed by the Company.
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5. The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of the Company, 0000
XxXxxxxxx Xxxxxx (Xxxxx 000), Xxxxxxxxxx, Xxx Xxxxxx 00000-0000 on a date
specified by you by written notice given at least three (3) days prior to such
date. Either party shall have the right to terminate this Agreement, but only
prior to the Company's receipt of the foregoing notice, upon written notice to
the other in the event that the Closing has not occurred on or prior to the
earlier of (i) ten (10) days after the closing of the Consortium Acquisition or
(ii) May 31, 1996. The time and date of the Closing is referred to in this
Agreement as the "Closing Date."
6. Survival of Representations and Warranties. The parties hereto agree
that the representations and warranties contained in this Agreement shall
survive the execution and delivery of this Agreement, and the Closing hereunder,
regardless of any investigation made by the parties hereto. The election of any
party to proceed with the Closing shall not be construed as a waiver of any of
his rights hereunder and the waiver of any such right shall not be deemed a
waiver of any other right derived hereunder.
7. Voting of the Shares. You hereby agree that, for so long as you retain
any Shares, Xxxx Xxxxx is granted an irrevocable proxy entitling him to vote the
Shares owned by you, or to execute and deliver written consents or otherwise act
with respect to such Shares as fully, to the same extent and with the same
effect as you might or could do under any applicable laws or regulations
governing the rights and powers of shareholders of a corporation organized under
the laws of the State of Nevada, in connection with the election of directors of
the Company, at any regular or special meetings of the shareholders.
8. Registration Rights Agreement. On the Closing Date, the Company shall
execute and deliver to you a Registration Rights Agreement which provides that
the Company will, at its sole cost and expense, prepare and file with the
Securities and Exchange Commission a Shelf Registration Statement covering all
the Shares then owned by you by February 15, 1997 and thereafter seek to obtain
the effectiveness thereof. The Registration Rights Agreement shall also provide
that the Company shall maintain the effectiveness of such Shelf Registration
Statement until such time as Rule 144 promulgated under the 1933 Act becomes
available to you with respect to the resale of the Shares. Notwithstanding the
foregoing, the Company shall have no obligation (i) to assist in the offering or
disposition of the Shares, (ii) to obtain a commitment from an underwriter
relative to the sale of the Shares, or (iii) to include such Shares within an
underwritten offering.
9. Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if in
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writing and personally delivered, sent by electronic facsimile transmission
with a copy by first class mail, sent by overnight courier service, or sent by
first class, registered or certified mail, return receipt requested, postage
prepaid, addressed as follows or to such other address as a party may hereafter
designate by notice given pursuant hereto:
In the case of the Company:
RCM Technologies, Inc.
0000 XxXxxxxxx Xxxxxx (Xxxxx 000)
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000
Attn: Xxxx Xxxxx, Chief Executive Officer
Fax No.: (000) 000-0000
In the case of Xxxxx Xxxxxxxx:
Xxxxx Xxxxxxxx
c/o Acquest International, L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax No.: (000) 000-0000
10. Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, personal representatives, successors and assigns.
Notwithstanding the foregoing, this Agreement and all rights and obligations
hereunder may not be assigned or transferred, without the prior written consent
of the other party, except that you may assign your rights hereunder to any
partnership of which you are a general partner or any limited liability company
of which you are a member, provided that such partnership or limited liability
company agrees in writing to be bound by the terms hereof.
11. Entire Agreement; Amendments. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and may be amended only by a writing executed by you and the Company.
12. Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York from time to time
in effect.
13. Counterparts; Facsimile Signatures. This Agreement may be executed in
any number of counterparts, each of which shall be an original, but all of which
together shall constitute one
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instrument. A facsimile signature by any party on a counterpart of this
Agreement shall be binding and effective for all purposes. Such party shall,
however, subsequently deliver to the other party an original, executed copy of
this Agreement.
Very truly yours,
RCM TECHNOLOGIES, INC.
By:/s/XXXX XXXXX
Xxxx Xxxxx,
Chief Executive Officer
ACCEPTED AND AGREED TO:
/s/
XXXXX X. XXXXXXXX
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