STOCK PURCHASE AGREEMENT
BETWEEN
GLOBAL AXCESS CORP.
AND
CERTAIN INVESTORS
(AS LISTED ON SCHEDULE A)
DATED
January 29, 2004
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered
into as of the 29th day of January, 2004 by and among GLOBAL AXCESS CORP., a
corporation organized and existing under the laws of the State of Nevada
("GLOBAL AXCESS CORP." or the "Company"), and certain investors, (hereinafter
referred to collectively as "Investor" or "Investors") as listed on Schedule A
herein (each agreement with an Investor being deemed a separate and independent
agreement between the Company and such Investor).
PRELIMINARY STATEMENT:
WHEREAS, the Investors wish to purchase, upon the terms and subject to
the conditions of this Agreement, an aggregate of Three Million, Five Hundred
Thousand Dollars ($3,500,000) of the Common Stock of the Company with the right,
upon the purchase of each two shares of Common Stock, to receive four (4) common
stock purchase warrants (each share of Common Stock and corresponding stock
purchase warrants are referred to herein as a "Unit"); and
WHEREAS, the parties intend to memorialize the purchase and sale of
such Units;
NOW, THEREFORE, in consideration of the mutual covenants and premises
contained herein, and for other good and valuable consideration, the receipt and
adequacy of which are hereby conclusively acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
ARTICLE I
INCORPORATION BY REFERENCE, SUPERSEDER AND DEFINITIONS
1.1 Incorporation by Reference. The foregoing recitals, Schedules and
the Exhibits attached hereto and referred to herein, are hereby acknowledged to
be true and accurate, and are incorporated herein by this reference.
1.2 Superseder. This Agreement, to the extent that it is inconsistent
with any other instrument or understanding among the parties governing the
affairs of the Company, shall supersede such instrument or understanding to the
fullest extent permitted by law. A copy of this Agreement shall be filed at the
Company's principal office.
1.3 Certain Definitions. For purposes of this Agreement, the following
capitalized terms shall have the following meanings (all capitalized terms used
in this Agreement that are not defined in this Article 1 shall have the meanings
set forth elsewhere in this Agreement):
.........1.3.1 "1933 Act" means the Securities Act of 1933, as
amended.
.........1.3.2 "1934 Act" means the Securities Exchange Act of 1934,
as amended.
.........1.3.3 "Affiliate" means a Person or Persons directly or
indirectly, through one or more intermediaries, controlling, controlled by or
under common control with the Person(s) in question. The term "control," as used
in the immediately preceding sentence, means, with respect to a Person that is a
corporation, the right to the exercise, directly or indirectly, of more than 50
percent of the voting rights attributable to the shares of such controlled
corporation and, with respect to a Person that is not a corporation, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such controlled Person.
1.3.4 "Articles". The Articles of Organization of the Company, as the
same may be amended from time to time.
1.3.5 "Closing Date" means the earlier of January 29, 2004 or upon all
of the conditions of Article VIII and Article IX herein are satisfied, unless
extended by mutual consent by the Company and the Investors until January 30,
2004.
1.3.6 "Common Stock" means the shares of common stock of GLOBAL AXCESS
CORP., par value
$0.001 per share.
1.3.7 "Effective Date" shall mean the date the Registration Statement
of the Company covering the Shares being subscribed for hereby is declared
effective.
1.3.8 "Material Adverse Effect" shall mean any adverse effect on the
business, operations, properties or financial condition of the Company that is
material and adverse to the Company and its subsidiaries and affiliates, taken
as a whole and/or any condition, circumstance, or situation that would prohibit
or otherwise materially interfere with the ability of the Company to perform any
of its material obligations under this Agreement or the Registration Rights
Agreement or to perform its obligations under any other material agreement.
1.3.9 "Nevada Act" means the Nevada revised Statutes, as amended.
1.3.10 "Person" means an individual, partnership, firm, limited
liability company, trust, joint venture, association, corporation, or any other
legal entity.
1.3.11 "Purchase Price" means the purchase price for the Units.
1.3.12 Registration Rights Agreement" shall mean the registration
rights agreement between the Investors and the Company attached hereto as
Exhibit B.
1.3.13 "Registration Statement" shall mean the registration statement
under the 1933 Act to be filed with the Securities and Exchange Commission for
the registration of the Shares pursuant to the Registration Rights Agreement
attached hereto as Exhibit B.
1.3.14 "SEC" means the Securities and Exchange Commission.
1.3.15 "SEC Documents" shall mean the Company's latest Form 10-K or
10-KSB as of the time in question, all Forms 10-Q or 10-QSB and 8-K filed
thereafter, and the Proxy Statement for its latest fiscal year as of the time in
question until such time as the Company no longer has an obligation to maintain
the effectiveness of a Registration Statement as set forth in the Registration
Rights Agreement.
1.3.16 "Shares" shall mean, collectively, the shares of Common Stock
of the Company being subscribed for hereunder and those shares of Common Stock
issuable to the Investor upon exercise of the Warrants.
1.3.17 "Units" shall mean the Common Stock and the Warrants
collectively.
1.3.18 "Warrants" shall mean the Common Stock purchase warrants in the
forms attached hereto Exhibits A1, A2, A3 and A4.
ARTICLE II
SALE AND PURCHASE OF GLOBAL AXCESS CORP.'S UNITS
AND PURCHASE PRICE
2.1 Sale of GLOBAL AXCESS CORP. Units Upon the terms and subject to
the conditions set forth herein, and in accordance with applicable law, the
Company agrees to sell, and the Investors, severally and not jointly, agree to
purchase the following Units with an aggregate principal amount of Three
Million, Five Hundred Thousand Dollars ($3,500,000) in accordance with the
commitments set forth on Schedule A attached hereto, at the Purchase Price on
the Closing Date, each Unit consisting of:
2.1.1 Common Stock Upon execution and delivery of this Agreement and
the Company's receipt of the Purchase Price (as described herein), each Investor
shall receive shares of Common Stock of the Company at a value of $ 0.25 per
share. The Company shall register those shares of Common Stock pursuant to the
terms and conditions of a Registration Rights Agreement attached hereto as
Exhibit B. The Registration Rights Agreement shall include, but not be limited
to, such terms and conditions requiring the filing of the Registration Statement
covering the shares of Common Stock sold hereunder on or before April 30, 2004,
one demand right if all the shares of Common Stock sold hereunder are not
registered or the Registration Statement is subsequently not effective,
unlimited "piggy back" registration rights, and liquidated damages to the
Investor of thirty six percent (36%) of the Purchase Price per annum payable on
a monthly basis if the shares of Common Stock are not registered pursuant to an
effective Registration Statement within 180 days of the Closing Date, except
that the obligation of the Company terminates when the holder of shares of
Common Stock no longer holds more than twenty percent (20%) of their shares of
Common Stock as acquired herein.
2.1.2 Warrants Upon execution and delivery of this Agreement and the
Company's receipt of the Purchase Price (as described herein), each Investor
shall receive four Warrants for every two shares of Common Stock purchased. The
Warrants, forms of which are attached hereto as Xxxxxxxx X0, X0, X0 and A4 shall
include, but not be limited to, such terms and conditions as an exercise price
and callable feature of each warrant as follows:
o Warrant A1 has an exercise price of $.35 per share, and is not
callable;
o Warrant A2 has an exercise price of $.35 per share, and is
callable at $.70;
o Warrant A3 has an exercise price of $.50 per share, and is
callable at $1.00; and
o Warrant A4 has an exercise price of $1.00 per share, and is
callable at $1.25.
The Warrants that contain a callable feature are automatically exercisable at
any time prior to the Expiration Date, as defined below, if the market price of
the Company's common stock is equal to or in excess of the callable price as
defined in the Warrant for twenty consecutive (20) days and there is an
effective Registration Statement covering the shares of common stock underlying
the Warrant ("Automatic Exercise"). Upon occurrence of the Automatic Exercise,
the Company shall provide the Holder with notice of such Automatic Conversion
("Automatic Exercise Notice"). Upon receipt of the Automatic Exercise Notice,
the Holder must (i) exercise, in whole or in part, this Warrant within ten (10)
days; or (ii) notify the Company of its intent to transfer the Warrant pursuant
to Section 4 of the Warrant. In the event that the Holder elects to transfer the
Warrant pursuant to Section 4 of the Warrant, then the subsequent holder of the
Warrant must exercise the Warrant on or before the thirtieth (30) day after
notification of intent to transfer the Warrant. If the Holder does not exercise
the Warrant within ten (10) days from receipt of the Automatic Exercise Notice
or, in the event that the Warrant has been transferred pursuant to Section 4 of
the Warrant, the subsequent holder of the Warrant does not exercise the Warrant
within thirty (30) days after notification of intent to transfer of the Warrant,
then the Warrant will expire.
Each warrant has an expiration date of five (5) years from the date of issuance,
or eighteen months from effectiveness of a Registration Statement (the
"Expiration Date"), whichever is longer, with a cashless exercise provision.
Provided, however, notwithstanding anything herein contained to the contrary,
the Holder may not affect a cashless exercise of the warrants until after July
29, 2005, and thereafter so long as there is an effective registration statement
with respect to the shares of the common stock underlying the warrants
2.2 Purchase Price. The purchase price to be paid by each Investor on
the Closing Date shall be $0.25 per share in accordance with Schedule A attached
hereto, and shall be payable in United States Dollars. Payment to the Company of
the Purchase Price shall be made at the Closing Date by wire transfer of funds
to the account specified by the Company and provided to the Investor.
Payment by wire shall be as follows:
Account: Global Axcess Corp. PPM Account
Bank: People's Xxxxx Xxxx, Xxxxx Xxxxx Xxxxx, Xxxxxxx 00000
ABA Number: 000000000
Account No.: 0000000
Payment by check shall be sent to:
CEO
Global Axcess Corp
000 Xxxxx Xxxxx Xxxx Xx., Xxx 000
Xxxxx Xxxxx Xxxxx, XX 00000
ARTICLE III
CLOSING DATE AND DELIVERIES AT CLOSING
3.1 Closing Date The closing of the transactions contemplated by this
Agreement (the "Closing"), unless expressly determined herein, shall be held at
the offices of the Company, at at 5:00 P.M. local time, on the Closing Date or
on such other date and at such other place as may be mutually agreed by the
parties, including closing by facsimile with originals to follow.
3.2 Deliveries by the Company. In addition to and without limiting any
other provision of this Agreement, the Company agrees to deliver, or cause to be
delivered, to the Investors, the following:
(a) Within seven (7) business days, Certificates representing GLOBAL
AXCESS CORP. Shares, which certificates shall be duly endorsed to
the Investor; (b) At or prior to Closing, an executed Agreement;
(c) At or prior to Closing, executed Warrants in the name of the
Investor in the forms attached hereto as Exhibit A1, A2, A3 and
A4;
(d) At or prior to Closing, an executed Registration Rights Agreement
between the Investor and the Company in the form attached hereto
as Exhibit B; and
(e) Such other documents or certificates as shall be reasonably
requested by the each Investor or its counsel.
3.3 Deliveries by Investor. In addition to and without limiting any
other provision of this Agreement, each Investor agrees to deliver, or cause to
be delivered, to the Company, as appropriate, the following:
(a) At or prior to Closing, the Purchase Price;
(b) At or prior to Closing, an executed Agreement;
(c) At or prior to Closing, an executed Registration Rights Agreement
between the Investor and the Company in the form attached hereto
as Exhibit B; and
(d) Such other documents or certificates as shall be reasonably
requested by the Company or his counsel.
In the event any document provided to the other party in Paragraphs 3.2 and 3.2
herein are provided by facsimile, the party shall forward an original document
to the other party within seven (7) business days.
3.4 Further Assurances. The Company and each Investor shall, upon
request, on or after the Closing Date, cooperate with each other (specifically,
the Company shall cooperate with each Investor, and each Investor shall
cooperate with the Company, and no Investor is required to cooperate with any
other Investor) by furnishing any additional information, executing and
delivering any additional documents and/or other instruments and doing any and
all such things as may be reasonably required by the parties or their counsel to
consummate or otherwise implement the transactions contemplated by this
Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF GLOBAL AXCESS CORP.
GLOBAL AXCESS CORP. represents and warrants to the Investors (which
warranties and representations shall survive the Closing regardless of what
examinations, inspections, audits and other investigations the Purchaser has
heretofore made or may hereinafter make with respect to such warranties and
representations) as follows:
4.1 Organization and Qualification. GLOBAL AXCESS CORP. is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Nevada, and has the requisite corporate power and authority to
own, lease and operate its properties and to carry on its business as it is now
being conducted and is duly qualified to do business in any other jurisdiction
by virtue of the nature of the businesses conducted by it or the ownership or
leasing of its properties, except where the failure to be so qualified will not,
when taken together with all other such failures, have a Material Adverse Effect
on the business, operations, properties, assets, financial condition or results
of operation of GLOBAL AXCESS CORP. and its subsidiaries taken as a whole.
4.2 Articles of Incorporation and By-Laws. The complete and correct
copies of GLOBAL AXCESS CORP.'s Articles of Incorporation and By-Laws, as
amended or restated to date which have been filed with the Securities and
Exchange Commission are a complete and correct copy of such document as in
effect on the date hereof and as of the Closing Date.
4.3 Capitalization.
4.3.1 The authorized and outstanding capital stock of GLOBAL AXCESS
CORP. is set forth in GLOBAL AXCESS CORP.'s Annual Report on Form 10-KSB, filed
on March 31, 2003, and the 10-QSB, filed on November 4, 2003 with the Securities
and Exchange Commission and updated on all subsequent SEC Documents. All shares
of capital stock have been duly authorized and are validly issued, and are fully
paid and no assessable, and free of preemptive rights.
4.3.2 Except pursuant to this Agreement, and as set forth in GLOBAL
AXCESS CORP.'s Annual Report on Form 10-KSB filed on March 31, 2003, the 10-QSB
filed November 4, 2003 with the SEC and as set forth on Exhibit C, as of the
date hereof and as of the Closing Date, there are not now outstanding options,
warrants, rights to subscribe for, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into or exchangeable
for, shares of any class of capital stock of GLOBAL AXCESS CORP., or agreements,
understandings or arrangements to which GLOBAL AXCESS CORP. is a party, or by
which GLOBAL AXCESS CORP. is or may be bound, to issue additional shares of its
capital stock or options, warrants, scrip or rights to subscribe for, calls or
commitment of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, any shares of any class of its capital
stock. The Company agrees to inform the Investors in writing of any additional
warrants granted prior to the Closing Date.
4.3.3 The Company on the Closing Date (i) will have full right, power,
and authority to sell, assign, transfer, and deliver, by reason of record and
beneficial ownership, to each Investor, GLOBAL AXCESS CORP. Shares hereunder,
free and clear of all liens, charges, claims, options, pledges, restrictions,
and encumbrances whatsoever; and (ii) except for the restrictions set forth in
Sections 7.2 and 7.3, upon delivery of and payment by each Investor of the
Purchase Price to the Company, such Investor will acquire good and marketable
title to such Company Stock, free and clear of all liens, charges, claims,
options, pledges, restrictions, and encumbrances whatsoever.
4.4 Authority. GLOBAL AXCESS CORP. has all requisite corporate power
and authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by GLOBAL AXCESS CORP. and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action and no other corporate proceedings on the part of GLOBAL AXCESS
CORP. is necessary to authorize this Agreement or to consummate the transactions
contemplated hereby except as disclosed in this Agreement. This Agreement has
been duly executed and delivered by GLOBAL AXCESS CORP. and constitutes the
legal, valid and binding obligation of GLOBAL AXCESS CORP., enforceable against
GLOBAL AXCESS CORP. in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium, or other similar laws
affecting the enforcement of creditors' rights generally and general principles
of equity.
4.5 No Conflict; Required Filings and Consents. The execution and
delivery of this Agreement by GLOBAL AXCESS CORP. does not, and the performance
by GLOBAL AXCESS CORP. of their respective obligations hereunder will not: (i)
conflict with or violate the Articles or By-Laws of GLOBAL AXCESS CORP.; (ii)
conflict with, breach or violate any federal, state, foreign or local law,
statute, ordinance, rule, regulation, order, judgment or decree (collectively,
"Laws") in effect as of the date of this Agreement and applicable to GLOBAL
AXCESS CORP.; or (iii) result in any breach of, constitute a default (or an
event that with notice or lapse of time or both would become a default) under,
give to any other entity any right of termination, amendment, acceleration or
cancellation of, require payment under, or result in the creation of a lien or
encumbrance on any of the properties or assets of GLOBAL AXCESS CORP. pursuant
to, any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which GLOBAL AXCESS CORP.
is a party or by GLOBAL AXCESS CORP. or any of its properties or assets is
bound. Excluding from the foregoing are such violations, conflicts, breaches,
defaults, terminations, accelerations, creations of liens, or incumbency that
would not, in the aggregate, have a Material Adverse Effect.
4.6 Report and Financial Statements. GLOBAL AXCESS CORP.'s Annual
Report on Form 10-KSB, filed on March 31, 2003 with the Securities and Exchange
Commission contains the audited financial statements of GLOBAL AXCESS CORP. as
of December 31, 2002 (the "Financial Statements"). Each of the balance sheets
contained in or incorporated by reference into any such Financial Statements
(including the related notes and schedules thereto) fairly presented the
financial position of GLOBAL AXCESS CORP. as of its date, and each of the
statements of income and changes in stockholders' equity and cash flows or
equivalent statements in such Financial Statements (including any related notes
and schedules thereto) fairly presents and will fairly present the results of
operations, changes in stockholders' equity and changes in cash flows, as the
case may be, of GLOBAL AXCESS CORP. for the periods to which they relate, in
each case in accordance with United States generally accepted accounting
principles ("U.S. GAAP") consistently applied during the periods involved,
except in each case as may be noted therein, subject to normal year-end audit
adjustments in the case of unaudited statements. The books and records of GLOBAL
AXCESS CORP. have been, and are being, maintained in all material respects in
accordance with U.S. GAAP and any other applicable legal and accounting
requirements and reflect only actual transaction.
4.7 Compliance with Applicable Laws. GLOBAL AXCESS CORP. is not in
violation of, or, to the knowledge of GLOBAL AXCESS CORP. is under investigation
with respect to or has been given notice or has been charged with the violation
of any Law of a governmental agency, except for violations which individually or
in the aggregate do not have a Material Adverse Effect.
4.8 Brokers. Except for finders or investment bankers listed in
Schedule B, no broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or Commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
GLOBAL AXCESS CORP..
4.9 SEC Documents. GLOBAL AXCESS CORP. acknowledges that GLOBAL AXCESS
CORP. is a publicly held company and has made available to the Investors after
demand true and complete copies of any requested SEC Documents. The Company has
registered its Common Stock pursuant to Section 12 of the 1934 Act, and the
Common Stock is listed and traded on the OTC Bulletin Board Market of the
National Association of Securities Dealers, Inc. The Company has received no
notice, either oral or written, with respect to the continued eligibility of the
Common Stock for such listing, and the Company has maintained all requirements
for the continuation of such listing. The Company has not provided to the
Investors any information that, 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 in all material respects with the requirements of the 1934 Act, and
rules and regulations of the SEC promulgated thereunder and the SEC Documents
did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading that the Investor has received from the Company reports with the
Securities and Exchange Commission and with the NASD.
4.10 Litigation. Except as set forth in the SEC Documents, to the
knowledge of GLOBAL AXCESS CORP., no litigation, claim, or other proceeding
before any court or governmental agency is pending or threatened against GLOBAL
AXCESS CORP.
4.11 Exemption from Registration. Subject to the accuracy of the
Investors' representations in Article V, except as required pursuant to the
Registration Rights Agreement, the sale of the Units will not require
registration under the 1933 Act and/or any applicable state securities law. When
validly converted in accordance with the terms of the Warrants, the Shares
underlying the Warrants will be duly and validly issued, fully paid, and
non-assessable. The Company is issuing the Units in accordance with and in
reliance upon the exemption from securities registration afforded, inter alia,
by Rule 506 under Regulation D as promulgated by the SEC under the 1933, and/or
Section 4(2) of the 1933 Act.
4.12 No General Solicitation or Advertising in Regard to this
Transaction. Neither the Company nor any of its Affiliates nor, to the knowledge
of the Company, any Person acting on its or their behalf (i) has conducted or
will conduct any general solicitation (as that term is used in Rule 502(c) of
Regulation D as promulgated by the SEC under the 0000 Xxx) or general
advertising with respect to the sale of the Units, or (ii) made any offers or
sales of any security or solicited any offers to buy any security under any
circumstances that would require registration of the Units, under the 1933 Act,
except as required herein.
4.13 No Material Adverse Change. Since December 31, 2002, no Material
Adverse Effect has occurred or exists with respect to the Company that has not
been disclosed in the SEC Documents. No material supplier has given notice, oral
or written, that it intends to cease or reduce the volume of its business with
the Company from historical levels. Since December 31, 2002, no event or
circumstance has occurred or exists with respect to the Company or its
businesses, properties, prospects, operations or financial condition, that,
under any applicable law, rule or regulation, requires public disclosure or
announcement prior to the date hereof by the Company but which has not been so
publicly announced or disclosed in writing to the Investors.
4.14 Material Non-Public Information. The Company has not disclosed to
the Investors any material non-public information that (i) if disclosed, would
reasonably be expected to have a material effect on the price of the Common
Stock or (ii) according to applicable law, rule or regulation, should have been
disclosed publicly by the Company prior to the date hereof but which has not
been so disclosed.
4.15 Internal Controls And Procedures. The Company maintains books and
records and internal accounting controls which provide reasonable assurance that
(i) all transactions to which the Company or any subsidiary is a party or by
which its properties are bound are executed with management's authorization;
(ii) the recorded accounting of the Company's consolidated assets is compared
with existing assets at regular intervals; (iii) access to the Company's
consolidated assets is permitted only in accordance with management's
authorization; and (iv) all transactions to which the Company or any subsidiary
is a party or by which its properties are bound are recorded as necessary to
permit preparation of the financial statements of the Company in accordance with
U.S. generally accepted accounting principles.
4.16 Full Disclosure. No representation or warranty made by GLOBAL
AXCESS CORP. in this Agreement and no certificate or document furnished or to be
furnished to the Purchaser pursuant to this Agreement contains or will contain
any untrue statement of a material fact, or omits or will omit to state a
material fact necessary to make the statements contained herein or therein not
misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
Each Investor, severally and not jointly, as to himself or itself and not as to
any other Investor, represents and warrants to the Company with the Company
that:
5.1 Organization and Standing of the Investor. Where the Investor is a
corporation, such Investor is duly incorporated, validly existing and in good
standing under the laws of the state in which it was formed. The state in which
any offer to purchase shares hereunder was made or accepted by such Investor is
the state shown as such Investor's address. If an entity, the Investor was not
formed for the purpose of investing solely in the Units the subject of this
Agreement.
5.2 Authorization and Power. The Investor has the requisite power and
authority to enter into and perform this Agreement and to purchase the Units
being sold to it hereunder. The execution, delivery and performance of this
Agreement by the Investor and the consummation by the Investor of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action where appropriate. This Agreement and the Registration Rights
Agreement have been duly executed and delivered by the Investor and at the
Closing shall constitute valid and binding obligations of the Investor
enforceable against the Investor in accordance with their terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, conservatorship, receivership or
similar laws relating to, or affecting generally the enforcement of, creditors'
rights and remedies or by other equitable principles of general application.
5.3 No Conflicts. The execution, delivery and performance of this
Agreement and the consummation by the Investor of the transactions contemplated
hereby or relating hereto do not and will not (i) result in a violation of such
Investor's charter documents or bylaws where appropriate or (ii) conflict with,
or constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of any agreement, indenture or
instrument to which the Investor is a party, or result in a violation of any
law, rule, or regulation, or any order, judgment or decree of any court or
governmental agency applicable to the Investor or its properties (except for
such conflicts, defaults and violations as would not, individually or in the
aggregate, have a Material Adverse Effect on such Investor). The Investor is not
required 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 such Investor's obligations under this Agreement or to
purchase the Units in accordance with the terms hereof, provided that for
purposes of the representation made in this sentence, the Investor is assuming
and relying upon the accuracy of the relevant representations and agreements of
the Company herein.
5.4 Financial Risks. The Investor acknowledges that such Investor is
able to bear the financial risks associated with an investment in the Units and
that it has been given full access to such records of the Company and the
subsidiaries and to the officers of the Company and the subsidiaries as it has
deemed necessary or appropriate to conduct its due diligence investigation. The
Investor is capable of evaluating the risks and merits of an investment in the
Units by virtue of its experience as an investor and its knowledge, experience,
and sophistication in financial and business matters and the Investor is capable
of bearing the entire loss of its investment in the Units.
5.5 Accredited Investor. The Investor is (i) an "accredited investor"
as that term is defined in Rule 501 of Regulation D promulgated under the 1933
Act by reason of Rule 501(a)(3) and (6), (ii) experienced in making investments
of the kind described in this Agreement and the related documents, (iii) able,
by reason of the business and financial experience of its officers (if an
entity) and professional advisors (who are not affiliated with or compensated in
any way by the Company or any of its affiliates or selling agents), to protect
its own interests in connection with the transactions described in this
Agreement, and the related documents, and (iv) able to afford the entire loss of
its investment in the Units.
5.6 Brokers. Except for or investment bankers listed in Schedule B who
shall be paid by the Company, no broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or Commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Investors.
5.7 No Short Sales. Prior to the Closing Date, neither the Investor
nor any of the Investor's Affiliates will be in a net short position with regard
to the Common Stock in any accounts directly or indirectly controlled by the
Investor.
5.8 Knowledge of Company. Each Investor and such Investor's advisors,
if any, have been, upon request, furnished with all materials relating to the
business, finances and operations of the Company and materials relating to the
offer and sale of the Units. Each Investor and such Investor's advisors, if any,
have been afforded the opportunity to ask questions of the Company and have
received complete and satisfactory answers to any such inquiries.
5.9 Risk Factors Each Investor understands that such Investor's
investment in the Units involves a high degree of risk. Each Investor
understands that no United States federal or state agency or any other
government or governmental agency has passed on or made any recommendation or
endorsement of the Units. Each Investors warrants that such Investor is able to
bear the complete loss of such Buyer's investment in the Units.
5.10 Full Disclosure. No representation or warranty made by the
Investor in this Agreement and no certificate or document furnished or to be
furnished to GLOBAL AXCESS CORP. pursuant to this Agreement contains or will
contain any untrue statement of a material fact, or omits or will omit to state
a material fact necessary to make the statements contained herein or therein not
misleading. Except as set forth or referred to in this Agreement, Investor does
not have any agreement or understanding with any person relating to acquiring,
holding, voting or disposing of any equity securities of the Company.
ARTICLE VI
COVENANTS OF THE COMPANY
6.1. Registration Rights. The Company shall cause the Registration
Rights Agreement to remain in full force and effect and the Company shall comply
in all material respects with the terms thereof.
6.2. Reservation Of Common Stock. Subject to filing the Certificate of
Amendment as set forth in Section 6.10 of this Agreement, as of the date hereof,
the Company has reserved and the Company shall continue to reserve and keep
available at all times, free of preemptive rights, shares of Common Stock for
the purpose of enabling the Company to issue the shares of Common Stock
underlying the Warrants. If the Company at any time is able to reserve part of
the required reserve shares pursuant to this Section 6.2, then such shares shall
immediately be allocated to the Investors on a pro rata basis. Until the Company
filed the Certificate of Amendment (as defined in Section 6.10), the Investors
will only be able to exercise the Warrants with respect to the number of shares
available for such exercise.
6.3. Listing Of Common Stock. The Company hereby agrees to maintain
the listing of the Common Stock on a publicly trading market. The Company will
take all action to continue the listing and trading of its Common Stock on a
publicly traded market and will comply in all respects with the Company's
reporting, filing and other obligations under the bylaws or rules of the a
publicly traded market.
6.4. Exchange Act Registration. The Company will cause its Common
Stock to continue to be registered under Section 12(b) or (g) of the 1934 Act,
will use its best efforts to comply in all respects with its reporting and
filing obligations under the 1934 Act, and will not take any action or file any
document (whether or not permitted by the 1934 Act or the rules thereunder) to
terminate or suspend such registration or to terminate or suspend its reporting
and filing obligations under the 1934 until the Investors have disposed of all
of their Shares or the shares of Common Stock underlying the Warrants.
6.5. Corporate Existence; Conflicting Agreements. The Company will
take all steps necessary to preserve and continue the corporate existence of the
Company. The Company shall not enter into any agreement, the terms of which
agreement would restrict or impair the right or ability of the Company to
perform any of its obligations under this Agreement or any of the other
agreements attached as exhibits hereto.
6.6 Intentionally left blank.
6.7 Independent Directors. The Company currently has four (4)
independent directors. The Company will at a minimum maintain a majority of
independent directors except that the obligation of the Company terminates when
the holder of shares of Common Stock no longer holds more than twenty percent
(20%) of their shares of Common Stock as acquired herein..
6.8 Use of Proceeds. The Company will use the proceeds from the sale
of the Units (excluding amounts paid by the Company for legal and administrative
fees in connection with the sale of the Units) for acquisitions and working
capital.
6.9 Price Adjustment. If, within the 12 months following the Closing
Date, the Company closes on the sale of a note or notes, shares of Common Stock,
or shares of a new class of Preferred Stock at a price per share of Common
Stock, or with a conversion right to acquire Common Stock at a price per share
of Common Stock, that is less than the Purchase Price (as adjusted to the
capitalization per share as of the Closing Date, following any stock splits,
stock dividends, or the like) (collectively, the "Subsequent Purchase Price"),
the Company shall make a post-Closing adjustment in the Purchase Price so that
the effective price per share paid by the Investors at Closing is reduced to the
Subsequent Purchase Price as applied to the Investors' then current holdings.
Within five business days following the closing of the subsequent sale, the
Company shall pay to the Investors the product of the number of Shares owned by
Investors on the date of the subsequent sale times the difference between the
Purchase Price and the Subsequent Purchase Price. Payment shall be made in cash
or issuance of the notes, Preferred Stock, Common Stock, unit offering or
whichever financing is causing the triggering of this provision, at the option
of Investors.
6.10 Certificate of Amendment to Certificate of Incorporation. The
Company shall file on or before March 31, 2004 a Certificate of Amendment with
the Secretary of State of the State of Nevada that increases its authorized
capital to enable the Company to issue all of the shares of Common Stock
issuable in connection with the sale of the Units, including the exercise of the
Warrants, in accordance with the Nevada Act and any applicable rules or
regulations of the OTCBB and obtain approval for reservation of the shares of
Common Stock underlying the Units and Warrants as set forth in Section 6.2 of
this Agreement (the "Certificate of Amendment").
ARTICLE VII
COVENANTS OF THE INVESTORS
7.1 Compliance with Law. The Investor's trading activities with
respect to shares of the Company's Common Stock will be in compliance with all
applicable state and federal securities laws, rules and regulations and rules
and regulations of any public market on which the Company's Common Stock is
listed.
7.2 Transfer Restrictions. The Investor's acknowledge that (1) the
Shares, Warrants and shares underlying the Warrants have not been registered
under the provisions of the 1933 Act, and may not be transferred unless (A)
subsequently registered thereunder or (B) the Investor's shall have delivered to
the Company an opinion of counsel, reasonably satisfactory in form, scope and
substance to the Company, to the effect that the Shares, Warrants and shares
underlying the Warrants to be sold or transferred may be sold or transferred
pursuant to an exemption from such registration; and (2) any sale of the Shares,
Warrants and shares underlying the Warrants made in reliance on Rule 144
promulgated under the 1933 Act may be made only in accordance with the terms of
said Rule and further, if said Rule is not applicable, any resale of such
Securities under circumstances in which the seller, or the person through whom
the sale is made, may be deemed to be an underwriter, as that term is used in
the 1933 Act, may require compliance with some other exemption under the 1933
Act or the rules and regulations of the SEC thereunder.
7.3 Restrictive Legend. The Investor's acknowledge and agree that the
Shares, and, until such time as the Shares have been registered under the 1933
Act and sold in accordance with an effective Registration Statement,
certificates and other instruments representing any of the Shares shall bear a
restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of any such Securities):
"THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SHARES NOR ANY
INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE
TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS
EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES
LAWS, OR (2) IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, OR (3)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT."
ARTICLE VIII
CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATIONS
The obligation of the Company to consummate the transactions
contemplated hereby shall be subject to the fulfillment, on or prior to Closing
Date, of the following conditions:
8.1 No Termination. This Agreement shall not have been terminated
pursuant to Article X hereof.
8.2 Representations True and Correct. The representations and
warranties of the Investors contained in this Agreement shall be true and
correct in all material respects on and as of the Closing Date with the same
force and effect as if made on as of the Closing Date.
8.3 Compliance with Covenants. The Investors shall have performed and
complied in all material respects with all covenants, agreements, and conditions
required by this Agreement to be performed or complied by it prior
to or at the Closing Date.
8.4 No Adverse Proceedings. On the Closing Date, except as set forth
in the SEC Documents, no actions or proceeding shall be pending by any public
authority or individual or entity before any court or administrative body to
restrain, enjoin, or otherwise prevent the consummation of this Agreement or the
transactions contemplated hereby or to recover any damages or obtain other
relief as a result of the transactions proposed hereby.
ARTICLE IX
CONDITIONS PRECEDENT TO INVESTOR'S OBLIGATIONS
The obligation of the Investors to consummate the transactions
contemplated hereby shall be subject to the fulfillment, on or prior to Closing
Date unless specified otherwise, of the following conditions:
9.1 No Termination. This Agreement shall not have been terminated
pursuant to Article X hereof.
9.2 Representations True and Correct. The representations and
warranties of GLOBAL AXCESS CORP. contained in this Agreement shall be true and
correct in all material respects on and as of the Closing Date with the same
force and effect as if made on as of the Closing Date.
9.3 Compliance with Covenants . GLOBAL AXCESS CORP. shall have
performed and complied in all material respects with all covenants, agreements,
and conditions required by this Agreement to be performed or complied by it
prior to or at the Closing Date.
9.4 No Adverse Proceedings. On the Closing Date, no action or
proceeding shall be pending by any public authority or individual or entity
before any court or administrative body to restrain, enjoin, or otherwise
prevent the consummation of this Agreement or the transactions contemplated
hereby or to recover any damages or obtain other relief as a result of the
transactions proposed hereby.
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
10.1 Termination. This Agreement may be terminated at any time prior
to the Effective Time:
10.1.1 by mutual written consent of the Investors and the Company;
10.1.2 by the Company upon a material breach of any representation,
warranty, covenant or agreement on the part of the Investor set forth in this
Agreement, or the Investor upon a material breach of any representation,
warranty, covenant or agreement on the part of GLOBAL AXCESS CORP. set forth in
this Agreement, or if any representation or warranty of GLOBAL AXCESS CORP. or
the Investor, respectively, shall have become untrue, in either case such that
any of the conditions set forth in Article VIII or Article IX hereof would not
be satisfied (a "Terminating Breach"), and such breach shall, if capable of
cure, not have been cured within five (5) days after receipt by the party in
breach of a notice from the non-breaching party setting forth in detail the
nature of such breach;
10.1.3 by either party, if the Closing Date is after January 31, 2004.
10.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to Paragraph 10.1 hereof, there shall be no liability on the
party of GLOBAL AXCESS CORP. or the Investors or any of their respective
officers, directors, agents or other representatives and all rights and
obligations of any party hereto shall cease, except as expressed herein, except
that the Company retains the obligations pursuant to Paragraph 6.7.
10.3 Amendment. This Agreement may be amended by the parties hereto
any time prior to the Closing Date by an instrument in writing signed by the
parties hereto.
10.3 Waiver. At any time prior to the Closing Date, GLOBAL AXCESS
CORP. or the Investors, as appropriate, may: (a) extend the time for the
performance of any of the obligations or other acts of other party or; (b) waive
any inaccuracies in the representations and warranties contained herein or in
any document delivered pursuant hereto which have been made to it or them; or
(c) waive compliance with any of the agreements or conditions contained herein
for its or their benefit. Any such extension or waiver shall be valid only if
set forth in an instrument in writing signed by the party or parties to be bound
hereby.
ARTICLE XI
GENERAL PROVISIONS
11.1 Transaction Costs. Except as otherwise provided herein, each of
the parties shall pay all of his or its costs and expenses (including attorney
fees and other legal costs and expenses and accountants' fees and other
accounting costs and expenses) incurred by that party in connection with this
Agreement.
11.2 Indemnification. Each Investor, severally and not jointly agrees
to defend and hold the Company (following the Closing Date) and its officers and
directors harmless against and in respect of any and all claims, demands,
losses, costs, expenses, obligations, liabilities or damages, including
interest, penalties and reasonable attorney's fees, that it shall incur or
suffer, which arise out of, result from or relate to any breach of this
Agreement by such Investor or failure by such Investors to perform with respect
to any of its representations, warranties or covenants contained in this
Agreement or in any exhibit or other instrument furnished or to be furnished
under this Agreement. The Company agrees to defend and hold the Investor
harmless against and in respect of any and all claims, demands, losses, costs,
expenses, obligations, liabilities or damages, including interest, penalties and
reasonable attorney's fees, that it shall incur or suffer, which arise out of,
result from or relate to any breach of this Agreement or failure by the Company
to perform with respect to any of its representations, warranties or covenants
contained in this Agreement or in any exhibit or other instrument furnished or
to be furnished under this Agreement.
11.3 Headings. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
11.4 Entire Agreement. This Agreement (together with the Schedule,
Exhibits, Warrants and documents referred to herein) constitute the entire
agreement of the parties and supersede all prior agreements and undertakings,
both written and oral, between the parties, or any of them, with respect to the
subject matter hereof.
11.5 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been given (i) on the date they are
delivered if delivered in person; (ii) on the date initially received if
delivered by facsimile transmission followed by registered or certified mail
confirmation; (iii) on the date delivered by an overnight courier service; or
(iv) on the third business day after it is mailed by registered or certified
mail, return receipt requested with postage and other fees prepaid as follows:
If to GLOBAL AXCESS CORP.:
CFO
GLOBAL AXCESS CORP.
000 Xxxxx Xxxxx Xxxx Xx., Xxx 000
Xxxxx Xxxxx Xxxxx, XX 00000
With a copy to:
Xxxxxxx Xxxxxxxxx, Esq.
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP
1065 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
If to the Investors:
To the address listed on Schedule A herein or to
the address provided to the Company by an Investor.
11.6 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any such term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the extent
possible.
11.7 Binding Effect. All the terms and provisions of this Agreement
whether so expressed or not, shall be binding upon, inure to the benefit of, and
be enforceable by the parties and their respective administrators, executors,
legal representatives, heirs, successors and assignees.
11.8 Preparation of Agreement. This Agreement shall not be construed
more strongly against any party regardless of who is responsible for its
preparation. The parties acknowledge each contributed and is equally responsible
for its preparation.
11.9 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Florida, without giving effect to
applicable principles of conflicts of law.
11.10 Jurisdiction. This Agreement shall be exclusively governed by
and construed in accordance with the laws of the State of Ohio. If any action is
brought among the parties with respect to this Agreement or otherwise, by way of
a claim or counterclaim, the parties agree that in any such action, and on all
issues, the parties irrevocably waive their right to a trial by jury. Exclusive
jurisdiction and venue for any such action shall be the State Courts of Ohio. In
the event suit or action is brought by any party under this Agreement to enforce
any of its terms, or in any appeal therefrom, it is agreed that the prevailing
party shall be entitled to reasonable attorneys fees to be fixed by the
arbitrator, trial court, and/or appellate court.
11.11 Preparation and Filing of Securities and Exchange Commission
filings. Each Investor shall reasonably assist and cooperate with the Company in
the preparation of all filings with the SEC after the Closing Date due after the
Closing Date.
11.12 Further Assurances, Cooperation. Each party shall, upon
reasonable request by the other party, execute and deliver any additional
documents necessary or desirable to complete the transactions herein pursuant to
and in the manner contemplated by this Agreement. The parties hereto agree to
cooperate and use their respective best efforts to consummate the transactions
contemplated by this Agreement.
11.13 Survival The representations, warranties, covenants and
agreements made herein shall survive the Closing of the transaction contemplated
hereby.
11.14 Third Parties Except as disclosed in this Agreement, nothing in
this Agreement, whether express or implied, is intended to confer any rights or
remedies under or by reason of this Agreement on any persons other than the
parties hereto and their respective administrators, executors, legal
representatives, heirs, successors and assignees. Nothing in this Agreement is
intended to relieve or discharge the obligation or liability of any third
persons to any party to this Agreement, nor shall any provision give any third
persons any right of subrogation or action over or against any party to this
Agreement.
11.15 Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty, covenant or
agreement herein, nor shall nay single or partial exercise of any such right
preclude other or further exercise thereof or of any other right. All rights and
remedies existing under this Agreement are cumulative to, and not exclusive of,
any rights or remedies otherwise available.
11.16 Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original, but all of which taken
together shall constitute one and the same agreement. A facsimile transmission
of this signed Agreement shall be legal and binding on all parties hereto.
STOCK PURCHASE AGREEMENT BETWEEN
GLOBAL AXCESS CORP., INC. AND CERTAIN INVESTORS
PAGE 22 OF 24
[SIGNATURES ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the Investors and the Company have as of the date
first written above executed this Agreement.
GLOBAL AXCESS CORP.
______________________
By: ___________________
Title:__________________
INVESTORS
Print Name:_________________________ Print Name:________________
Entity (if appropriate):____________ Entity (if appropriate):___
Title: (if appropriate):____________ Title: (if appropriate):___
Print Name:_________________________ Print Name:________________
Entity (if appropriate):____________ Entity (if appropriate):___
Title: (if appropriate):____________ Title: (if appropriate):___
Print Name:_________________________ Print Name:________________
Entity (if appropriate):____________ Entity (if appropriate):___
Title: (if appropriate):____________ Title: (if appropriate):___
