Execution Copy
AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT, dated as of July 19, 2000,
among IMATEC LTD., a Delaware Corporation with offices located at 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Purchaser"); SEQUEL ACQUISITION
CORPORATION, a Delaware corporation and a wholly-owned, newly-formed subsidiary
of the Purchaser with executive offices located at 000 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 ("Acquisition"); and SEQUEL TECHNOLOGY CORPORATION, a
Washington corporation with executive offices located at 0000 000xx Xxxxx XX,
Xxxxx 000, Xxxxxxxx, Xxxxxxxxxx 00000 (the "Seller").
INTRODUCTION
------------
The parties hereto executed and delivered the original Asset Purchase
Agreement dated as of May 26, 2000 (the "Original Asset Purchase Agreement").
The parties hereto desire to amend the Original Asset Purchase Agreement as set
forth herein.
The parties hereto, intending to be legally bound, hereby agree as
follows:
I. AMENDMENT
Section 1.01 Scope. Except as otherwise set forth in this Article I,
the Original Asset Purchase Agreement shall continue in full force and effect.
Section 1.02 Amendment.
(a) The definition of Employment Agreements in Section 1 of the
Original Agreement is hereby amended to exclude the Employment Agreements
between the Seller and each of Xxxxxxx Xxxxx, Xxxx Xxxxxx, Xxxx Xxxxxx, and
Xxxxxx Xxxxxxx.
(b) Section 3.04 of the Original Asset Purchase Agreement is
hereby amended to be and read in its entirety as follows:
"The authorized capital stock of Purchaser consists of (i)
20,000,000 shares of Purchaser Common Stock, of which
3,735,201 shares are outstanding, and (ii) 2,000,000 shares of
preferred stock, par value $.001 per share, of which no shares
are outstanding. The authorized capital stock of Acquisition
consists of 1,500 shares of Common Stock of which 10 shares
are outstanding and owned by Purchaser. Schedule 3.04 hereof
sets forth the capitalization of the Purchaser on a fully
diluted basis as of the date dated of this Agreement, the
proposed capitalization immediately after the Closing and the
proposed capitalization immediately following the proposed
public offering. Each of the outstanding shares of Purchaser
Common Stock and each outstanding share of capital stock of
Acquisition is validly authorized and issued, fully paid, and
nonassessable, has not been issued and is not owned or held in
violation of any preemptive or similar right of stockholders,
and is in each case free and clear of all liens, security
interests, pledges, charges, encumbrances, stockholders'
agreements, and voting trusts other than those created by the
stockholders of Purchaser or with respect to their property
but to which neither the Purchaser, nor the officers or
directors thereto is a party. Except as set forth in the
Purchaser SEC Documents, Schedule 3.04 hereto or Section 8.17
hereof, (i) there is no commitment, plan, or arrangement to
issue, and no outstanding option, warrant, or other right
calling for the issuance of, any share of capital stock of
Purchaser or of Acquisition or any security or other
instrument convertible into, or exchangeable or exercisable
for
capital stock of Purchaser or of Acquisition, and (ii) there
is outstanding no security or other instrument convertible
into, or exercisable or exchangeable for, capital stock of
Purchaser or Acquisition.
(c) Section 4.01(a)(i) of the Original Asset Purchase Agreement is
hereby amended to be and read in its entirety as follows:
"Acquisition shall cause Purchaser to deliver an aggregate
number of shares of Purchaser Common Stock equal to the sum of
(A) 15,000,000 and (B) the product obtained by multiplying the
dollar amount of the gross proceeds of the private placement
of convertible indebtedness currently being conducted by the
Seller by 2; at a purchase price of $.50 per share to those
creditors of Seller as set forth on Schedule 4.01(a)(i) hereto
(the "New Purchaser Shareholders") (a portion of such shares
will be deposited in the Escrow Account pursuant to the terms
of the Escrow Agreement and Section 4.04 hereof);"
(d) Section 4.01(a)(iii) of the Original Asset Purchase Agreement
is hereby amended to be and read in its entirety as follows:
"Acquisition shall assume such obligations and liabilities of
Seller as are in conformity with the representations and
warranties of Seller and are set forth on Schedule
4.01(a)(iii) hereof, it being understood that Acquisition is
assuming all such liabilities listed on Schedule 4.01(a)(iii)
as of March 1, 2000, and shall assume the obligations of the
Seller which shall be no less favorable to the Purchaser than
those set forth in the terms of the Term Sheet
with Imperial Bank dated as of August __, 2000 and attached
hereto as Exhibit 4.01(a)(iii);"
(e) Section 4.02 of the Asset Purchase Agreement is hereby amended
to be and read in its entirety as follows:
"The closing of the transactions contemplated by Section 4.01
shall take place at the offices of Xxxxx Xxxxxxxxxxx LLC,
counsel to the Purchaser and Acquisition, 000 Xxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m., local
time, on the fifth business day after the date the conditions
in Articles V and VI have been satisfied. The closing may
occur at such different place, such different time, or such
different date or a combination thereof as the Purchaser and
Seller agree in writing. The closing of the transactions
contemplated by Section 4.01, is referred to as the "Closing."
(f) Article VIII of the Original Asset Purchase Agreement is
hereby amended to add to the end thereof the following Sections, which shall be
and read in their entirety as follows:
"Section 8.16 Insurance. At the Closing, the Purchaser shall
acquire, and shall maintain for a period of six years
following the date of the Closing, a "tail" insurance policy
covering the directors and officers of the Purchaser prior to
Closing in the amount of $2 million.
Section 8.17 Stock Split. Prior to the Closing, the Purchaser
shall take all steps to, and shall, effect a two-for-one stock
split of the outstanding Purchaser Common Stock held of record
prior to the date Closing. The
shares of Purchaser Common Stock issuable upon such stock
split may be distributed to holders of record of Purchaser
Common Stock prior to the date of Closing following the
Closing. The Purchaser shall take all steps required to permit
such additional shares of Common Stock to trade on any
securities market, exchange, or trading system on which the
Purchaser Common Stock shall trade and shall take all actions
under state securities or "blue sky" laws relating such
issuance, distribution, and trading. Seller hereby agrees that
the aforementioned stock split shall be deemed in the ordinary
course of business of the Purchaser for the purposes of this
Agreement and that the number of shares of Purchaser Common
Stock deliverable to, or at the direction of, the Seller
pursuant to Article IV hereof shall not be subject to
adjustment as a result of such stock split.
Section 8.18 Preferred Stock. Prior to the Closing, the
Purchaser shall take all steps to, and shall, create a class
of preferred stock substantially with the terms attached
hereto as Exhibit 8.18."
Section 1.03 Waivers.
(a) The Purchaser and Acquisition each hereby waives all
conditions to Closing.
(b) The Seller hereby waives all conditions to closing.
Section 1.04 Pre-Closing; Closing; Post Closing Matters.
(a) The parties hereto hereby agree to proceed to Closing as soon
as reasonably practicable.
(b) The parties hereby agree to take all actions required after
the date hereof in order to satisfy any condition to Closing which remains
unsatisfied as of the date hereof, as well as to comply with applicable law.
(c) Until Closing, the Purchaser will finance the semi-monthly
operating requirements of the Seller until and including such date, provided
that the monthly rate of such operating requirements shall not exceed $100,000
per month.
Section 1.05 Release.
The Seller fully and unconditionally releases and discharges all claims
and causes of action which it or its successors (if applicable), or assigns ever
had, now have, or hereafter may have against the Purchaser and/or Acquisition,
and their respective officers, directors, employees, counsel, agents, and
stockholders, in each case past, present, or as they may exist at any time after
this date, and each person, if any, who controls, controlled, or will control
any of them within the meaning of Section 15 of the Securities Act of 1933, as
amended, or Section 20(a) of the Securities Exchange Act of 1934, as amended, in
connection with any and all matters relating to the financing and the
acquisition of the assets of Sequel Technology Corporation, a Washington
corporation, and or its affiliates, thereby, as contemplated by the Original
Asset Purchase Agreement.
II. MISCELLANEOUS
The provisions of Article IX of the Asset Purchase Agreement are hereby
incorporated herein by reference as if stated verbatim herein.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first written above.
IMATEC LTD.
By:
------------------------------------------
Name: Xx. Xxxxxx Xxxxxx
Title: President, Chief Executive Officer
& Chairman of the Board
SEQUEL ACQUISITION
CORPORATION
By:
------------------------------------------
Name: Xx. Xxxxxx Xxxxxx
Title: President, Chief Executive Officer
& Chairman of the Board
SEQUEL TECHNOLOGY
CORPORATION
By:
------------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Chairman of the Board of Directors
Exhibit 4.01(a)(iii)
--------------------
Intentionally omitted.
Exhibit 8.18
------------
CERTIFICATE OF DESIGNATION, PREFERENCES,
RIGHTS, AND LIMITATIONS
OF
SERIES A CONVERTIBLE PREFERRED STOCK
OF
IMATEC LTD.
Pursuant to Section 151 of the General Corporation Law of the State of
Delaware (the "DGCL"), IMATEC LTD., a Delaware corporation (the "Corporation"),
does hereby certify that:
FIRST: The Corporation was incorporated in the State of Delaware on
September 20, 1995 and the authorized number of shares of Preferred Stock, par
value $0.0001 per share, of the Corporation is 2,000,000, none of which is
outstanding prior to the filing hereof;
SECOND: Pursuant to authority conferred upon the Board of Directors by
the Certificate of Incorporation of the Corporation and by the provisions of
Sections 141 and 151 et seq of the DGCL, the Board of Directors, by unanimous
written consent in lieu of a meeting in accordance with Section 141(f) of the
DGCL, adopted the following resolutions authorizing the issuance of an aggregate
of 500,000 shares of Series A Preferred Stock (as described below), which
resolutions are still in full force and effect and are not in conflict with any
provisions of the Certificate of Incorporation or By-Laws of the Corporation:
WHEREAS, the Board of Directors of the Corporation is
authorized, within the limitations and restrictions stated in the
Certificate of Incorporation, to fix by resolution or resolutions the
designation of each series of preferred stock and the powers,
preferences, and relative participating, optional, voting or other
special rights, and the qualifications, limitations, or restrictions
thereof; and
WHEREAS, it is the desire of the Board of Directors of the
Corporation, pursuant to its authority as aforesaid, to fix the terms
of one series of preferred stock;
NOW, THEREFORE, BE IT RESOLVED, that pursuant to authority
vested in the Board of Directors of the Corporation by Section 151 of
the DGCL, and in accordance with the provisions of the Certificate of
Incorporation of the Corporation, one series of preferred stock, par
value $0.0001 per share, of the Corporation be and hereby is created
and provided for with the terms, designation, relative rights,
preferences, and limitations as follows:
1. Definitions.
-----------
Common Stock. Common stock, par value $0.0001 per share, of the
Corporation.
Conversion Price. $0.50 per share, subject to adjustment a provided in
paragraph 6(c) hereof, and, after any such adjustment, the Conversion
Price as theretofore adjusted.
Liquidation. The event of any voluntary or involuntary liquidation,
dissolution, or winding up of the Corporation.
Reorganization. As defined in Section 6(d) hereof.
Securities Act. Securities Act of 1933, as amended.
Series A Preferred Stock. The Series A Convertible Preferred Stock, par
value $0.0001 per share.
Stated Value. $5.00 per share.
2. Designation and Number of Shares. The series of preferred stock
established hereby shall consist of 500,000 shares and shall be designated
"Series A Convertible Preferred Stock, par value $0.0001 per share".
3. Dividends. Subject to Section 6 hereof, dividends on the Series A
Preferred Stock shall be non-cumulative and shall be payable as and when
declared by the Board of Directors in its sole and absolute discretion,
provided, however, that such dividends shall, in all events, be equal to, or
greater than, and shall be prior in right of payment to, any dividends payable
on the Common Stock.
4. Voting. Each share of Series A Preferred Stock shall be entitled to
vote on all matters submitted to the stockholders of the Corporation and shall
vote together with the Common Stock as one class. Each share of Series A
Preferred Stock shall have such number of votes as shall equal the quotient of
(a) the Stated Value divided by (b) the Conversion Price. Notwithstanding the
foregoing with respect to each of the following events, in lieu of the foregoing
voting rights, the Series A Preferred Stock shall be entitled to vote as a
separate class, and not as one class with, the Common Stock and such events
shall require the affirmative vote thereon by the holders of a majority of the
outstanding Series A Preferred Stock, as well as the affirmative vote of the
holders of Common Stock if and as required by law: (a) any action which (i)
prejudicially alters or amends the terms, relative rights, preferences, and
limitations of the Series A Preferred Stock; and (ii) creates any series of
preferred stock ranking prior to, or on parity with, the Series A Preferred
Stock in right of payment of dividends or liquidation preference; and (b) any
action which, by law, requires the holders of the Series A Preferred Stock to
vote as a single class on matters subject to class vote.
5. Liquidation Rights. The Series A Preferred Stock shall be treated on an
as converted basis with the Common Stock.
6. Conversion. (a) Immediately upon the amendment of the certificate of
incorporation of the Corporation to increase the capitalization thereof to
include a sufficient number of shares of Common Stock to permit the conversion
in full of the Series A Preferred Stock, each share of Series A Preferred Stock
shall be automatically converted into the number of shares of Common Stock equal
to the quotient of (a) the Stated Value divided by (b) the Conversion Price,
provided, that, in the event that such quotient shall result in any fractional
share, such number of shares shall be rounded to the next whole number of
shares. Notwithstanding the foregoing, in the event that the amendment of the
certificate of incorporation of the Corporation shall not take place and be
effective on or prior to January 31, 2001, the Conversion Price shall decrease
by 20% per month or portion thereof thereafter until such amendment shall take
place and be effective, provided that in no event shall the Conversion Price be
less than the par value per share of Common Stock. The preceding sentence does
not apply to any shares of Series A Preferred Stock held by Sequel Technology
Corporation ("Sequel"), a Washington corporation, as either the beneficial or
record holder, or held by any person or entity either controlling, or controlled
by, Sequel.
(b) Upon such conversion, all amounts otherwise payable with
respect to the Series A Preferred Stock shall be deemed paid in full by the
issuance of such shares of Common Stock. Upon the conversion thereof in
accordance with this Section 6, the shares of Series A Preferred Stock shall be
canceled and shall become authorized, but unissued, shares of capital stock of
the Corporation.
(c) In the event that the Corporation shall at any time after the
date of the issuance of any shares of Series A Preferred Stock (A) declare a
dividend on the outstanding Common Stock payable in shares of its capital stock,
(B) subdivide the outstanding Common Stock, (C) combine the outstanding Common
Stock into a smaller number of shares, or (D) issue any shares of its capital
stock by reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Corporation is the continuing corporation), then, in each case, the Conversion
Price at the time of the record date for the determination of stockholders
entitled to receive such dividend or distribution or of the effective date of
such subdivision, combination, or reclassification shall be adjusted so that it
shall equal the Conversion Price theretofore in effect multiplied by a fraction,
the numerator of which shall equal the number of shares outstanding immediately
prior to the effective date of such event and the denominator of which shall
equal the number of shares outstanding immediately following the effective date
of such event.
(d) In case of any capital reorganization, other than in the cases
referred to in paragraph (c) of this Section 6, or the consolidation or merger
of the Corporation with or into another corporation (other than a merger or
consolidation in which the Corporation is the continuing corporation and which
does not result in any reclassification of the outstanding shares of Common
Stock or the conversion of such outstanding shares of Common Stock into shares
of other stock or other securities or property), or in the case of any sale,
lease, or conveyance to another corporation of the property and assets of any
nature of the Company as an entirety or substantially as an entirety (such
actions being hereinafter collectively referred to as "Reorganizations"), there
shall thereafter be deliverable upon conversion of each share of Series A
Preferred Stock (in lieu of the number of shares of Common Stock theretofore
deliverable) the number of shares of stock or other securities or property to
which a holder of the respective number of shares of Common Stock which would
theretofore have been deliverable upon the conversion of such share of Series A
Preferred Stock would have been entitled upon such Reorganization if such share
of Series A Preferred Stock had been converted immediately prior to such
Reorganization. In case of any Reorganization, appropriate adjustment, as
determined in good faith by the Board of Directors of the Corporation, shall be
made in the application of the provisions herein set forth with respect to the
rights and interests of the holders of the Series A Preferred Stock so that the
provisions set forth herein shall thereafter be applicable, as nearly as
possible, in relation to any shares or other property thereafter deliverable
upon conversion of the Series A Preferred Stock. Any such adjustment shall be
made by, and set forth in, a supplemental agreement between the Corporation, or
any successor thereto, and the holders of the Series A Preferred Stock, and
shall for all purposes hereof conclusively be deemed to be an appropriate
adjustment. The Corporation shall not effect any such Reorganization unless,
upon or prior to the consummation thereof, the successor corporation, or if the
Corporation shall be the surviving corporation in any such Reorganization and is
not the issuer of the shares of stock or other securities or property to be
delivered to holders of shares of the capital stock of the Corporation
outstanding at the effective time thereof, then such issuer, shall assume by
written instrument the obligation to deliver to the holders of the Series A
Preferred Stock such shares of stock, securities, cash, or other property as
such holders shall be entitled to purchase in accordance with the foregoing
provisions.
(e) In case of any reclassification or change of the shares of
Common Stock or other securities issuable upon conversion of the Series A
Preferred Stock (other than a change in par value or from a specified par value
to no par value, or as a result of a subdivision or combination, but including
any change in the shares into two or more classes or series of shares), or in
case of any consolidation or merger of another corporation into the Corporation
in which the Corporation is the continuing corporation and in which there is a
reclassification or change (including a change to the right to receive cash or
other property) of the shares of Common Stock or other securities issuable upon
conversion of the Series A Preferred Stock (other than a change in par value, or
from no par value to a specified par value, or as a result of a subdivision or
combination, but including any change in the shares into two or more classes or
series of shares), each share of Series A Preferred Stock shall thereafter be
convertible into solely the kind and amount of shares of stock and other
securities, property, cash, or any combination thereof receivable upon such
reclassification, change, consolidation, or merger by a holder of the number of
shares of Common Stock for which such share of Series A Preferred Stock might
have been exercised immediately prior to such reclassification, change,
consolidation, or merger. Thereafter, appropriate provision shall be made for
adjustments which shall be as nearly equivalent as practicable to the
adjustments in this Section 6.
(f) The adjustment provided by paragraph (c) of this Section 6
shall be made successively whenever any event listed above shall occur and shall
become effective at the close of business on such record date or at the close of
business on the date immediately preceding such effective date, as applicable.
The provisions of paragraphs (d) and (e) of this Section 6 shall similarly apply
to successive reclassifications and changes of shares of Common Stock and to
successive consolidations, mergers, sales, leases, or conveyances.
7. Parity of Treatment.
Except as otherwise provided herein, the Corporation shall, for all
purposes, including for purposes of distributions, treat each share of Series A
Preferred Stock as if it were, prior to such time, converted into the number of
shares of Common Stock determined pursuant to Section 6 hereof.
8. Miscellaneous.
(a) Closing of Transfer Books. To facilitate the payment of any
dividend with respect to the Series A Preferred Stock or any Liquidation, the
Board of Directors of the Corporation is authorized, but not required, to set a
record date not earlier than 60 days and not later than 10 days prior to the
date of the distribution, in the case of a dividend or a Liquidation, as the
case may be.
(b) Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be mailed by
certified mail, return receipt requested or by Federal Express, Express Mail, or
similar overnight delivery or courier service or delivered (in-person or by
telecopy, telex, or similar telecommunications equipment) against receipt to the
party to whom it is to be given, in the case of the holders of the Series A
Preferred Stock, at the address of each such holder set forth in the stock
transfer ledger of the Corporation, or, in the case of the Corporation, at 000
Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. Any notice or other communication
given by certified mail shall be deemed given at the time of certification
thereof. Any notice given by other means permitted by this paragraph 8(a) shall
be deemed given at the time of receipt thereof.
[THE REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
executed by the President and attested by its Secretary this____ day of July,
2000.
IMATEC LTD.
By:
-----------------------------------------
Name: Xxxxxx Xxxxxx
Title: President
ATTEST:
--------------------------------
Name:
Title: Secretary
