EXHIBIT 4.6
FORM OF
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
This Preferred Stock and Warrant Purchase Agreement is made and
entered into as of the 17th day of November, 1998, between Global MAINTECH
Corporation, a Minnesota corporation, and those investors who have executed an
Acceptance on Schedule A attached hereto (collectively, the "Investors" and
each, an "Investor"). Except where the context otherwise requires, all
references to the "Company" herein shall be collectively to Global MAINTECH
Corporation and its subsidiaries, including, without limitation, Global
MAINTECH, Inc.
For good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged by the Company and the Investors, the Company and the
Investors agree as follows:
1. Sale and Purchase of Securities. Subject to the terms and
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conditions hereof, the Company agrees to sell to each Investor at the Closing
(as defined herein), and each Investor agrees, severally, to purchase from the
Company at the Closing, the number of Units set forth above such Investor's name
on Schedule A, each Unit consisting of one share of the Company's Series B
Convertible Cumulative Preferred Stock (the "Preferred Stock") with the rights
and preferences provided in the Certificate of Designation for such Preferred
Stock attached hereto as Exhibit A (the "Certificate of Designation") and a
five-year callable Warrant in the form attached hereto as Exhibit B (the
"Warrant") provided, however, the Company shall not be obligated to sell more
than 615,385 Units in the aggregate. Subject to adjustment as set forth in the
Warrant, the Warrant in each Unit will entitle the holder thereof to purchase
the same number of shares of common stock into which the share of Preferred
Stock contained in the same Unit will have been converted. The purchase price
per Unit is $6.50. The Units, the Preferred Stock and the Warrant are sometimes
collectively referred to herein as the "Securities."
2. Closing.
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(a) Closing. Provided that Investor acceptances have been
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received for at least the Minimum Offering, the closing or closings of the
purchase and sale of the Securities hereunder shall take place at the offices of
Xxxxxxx, Street and Deinard Professional Association, Minneapolis, Minnesota, at
1:00 p.m., Minnesota time, on September 23, 1998 or at such other place(s) or
different time(s) or day(s) as the Company in its own discretion shall determine
(the "Closing"). At the Closing, the Company will deliver to each Investor
participating in such closing a Warrant representing the right to purchase that
number of shares of the common stock of the Company to be determined at the time
of conversion of the Preferred Stock, dated such Closing date and will deliver
to each such Investor a certificate representing the number of shares of
Preferred Stock set forth above such Investor's name on Schedule A and each such
Investor shall cause to be delivered to the Company a wire transfer or check
payable to the Company in the amount set forth opposite such Investor's name on
Schedule A.
3. Representations and Warranties by the Company. To induce the
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Investors to enter into this Agreement and to purchase the Securities, the
Company hereby represents and warrants to the Investors as follows:
(a) Disclosure. The Company has provided each Investor with all
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the information such Investor has requested in deciding whether to purchase the
Securities and all information the Company believes is necessary or appropriate
relating to an investment in the Company, including, without limitation, the
Company's Annual Report on Form 10-KSB for the year ended December 31, 1997,
Quarterly Reports on Form 10-QSB for the quarters ended March 31, 1998 and June
30, 1998, the Company's Proxy Statement for its 1998 Annual Meeting of
Shareholders and its 1997 Annual Report to Shareholders (collectively, the "SEC
Filings") press releases issued by the Company since June 30, 1998 and a Term
Sheet describing the terms of this offering and the Securities (such documents
and the SEC Filings referred to collectively as the "Disclosed Information").
There are no facts known to the Company which individually or in the aggregate
materially adversely affect the business, assets, financial condition or
prospects of the Company, except as set forth in the Disclosed Information. The
Disclosed Information fairly presents all material information regarding the
Company as of the date hereof and, as of the date of the Closing, the Disclosed
Information will (i) fairly present all material information regarding the
Company, and (ii) not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading. The SEC Filings comply in all material
respects with the requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and all applicable rules and regulations of the
Securities Exchange Commission (the "Commission").
(b) Organization, Good Standing, Etc. The Company is duly
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incorporated and validly existing as a corporation in good standing under the
laws of the State of Minnesota, with power and authority to own its properties
and conduct its business as now conducted and proposed to be conducted. The
Company is duly qualified to do business as a foreign corporation and is in good
standing in all states or jurisdictions in which the ownership or lease of its
property or the conduct of its business requires such qualification and the
failure to be so qualified would have a material adverse effect on the Company's
business. The Company has one active subsidiary, Global MAINTECH, Inc.
(c) Financial Statements. The financial statements (including all
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related schedules and notes) included in the Disclosed Information fairly
represent the financial condition and results of operations of the Company as of
the dates and for the periods indicated; such statements have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods indicated; and the report of the public accountant
included in the Disclosed Information is issued by an independent public
accountant within the meaning of the Exchange Act, and the rules and regulations
thereunder.
(d) Authorization and Enforceability. The Company has full legal
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power, right and authority to enter into this Agreement and the Registration
Rights Agreement among the Company and the Investors, the form of which is
attached hereto as Exhibit E (the "Registration Rights Agreement") and to issue
the Securities and to carry out and perform its obligations under this Agreement
and the Registration Rights Agreement. This Agreement, the
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Registration Rights Agreement and the Securities, have been duly authorized,
executed and delivered on behalf of the Company and are the valid and binding
obligations of the Company, enforceable in accordance with their respective
terms and subject, as to enforcement, to applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the rights of creditors
generally, to the exercise of judicial discretion as to the availability of
equitable remedies such as specific performance and injunction and, as to
enforcement of the indemnification provisions, to limitations under applicable
securities laws. The Securities when delivered pursuant to the terms of this
Agreement will be validly issued, fully paid and nonassessable.
(e) License and Approvals. The Company has all licenses,
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certificates, permits and other approvals from governmental and regulatory
authorities necessary for the conduct of its business as it is currently being
conducted and as proposed to be conducted except those which would not have a
material adverse effect on the Company if not obtained.
(f) Intellectual Property. The Company owns or possesses all
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assets, patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service xxxx registrations, copyrights, licenses,
inventions, trade secrets and rights necessary for the conduct of its business
as it is currently being conducted and as proposed to be conducted and has not
received any notice of conflict with the asserted rights of others in respect
thereof. To the best of the Company's knowledge, no name which the Company uses
and no other aspect of the business of the Company involves or gives rise to any
infringement of, or license or similar fees for, any patents, patent
applications, trademarks, service marks, trade names, trademark registrations,
service xxxx registrations, copyrights, licenses, inventions, trade secrets or
other similar rights of others, except for license fees payable by the Company
to Circle X Corp. of Japan for the Company's use of certain intellectual
property rights used by the Company in its VCC product, which rights are
licensed to it by Circle X Corp. of Japan.
(g) Defaults. The Company is not in breach, default or violation
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of, and the execution of this Agreement and the Registration Rights Agreement
and the consummation of the transactions herein and therein contemplated will
not conflict with or result in any breach of, any of the terms or conditions of,
or constitute a default or violation under, (i) the Articles of Incorporation,
as amended, or Bylaws, as amended, of the Company, (ii) any indenture, agreement
or other instrument to which the Company is now a party, or (iii) any law or any
order, rule or regulation applicable to the Company of any court or of any
federal or state regulatory body or administrative agency having jurisdiction
over the Company or its property.
(h) Consents. No consent, authorization, approval, permit or
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order of or filing with any governmental or regulatory authority is required
under current laws and regulations in connection with the execution and delivery
of this Agreement or the Registration Rights Agreement or the offer, issuance,
sale or delivery of the Securities, other than the qualification thereof, if
required, under applicable state securities laws, which qualification has been
or will be effected as a condition of the sale of the Securities to the
Investors. The Company has not, directly or through any agent other than Xxxxxx,
Xxxxxxx & Xxxxx Incorporated, offered the Securities or any similar securities
for sale to, or solicited any offers to acquire such securities from, persons
other than the Investors. Under the circumstances contemplated by this
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Agreement, the offer, issuance, sale and delivery of the Securities will not,
under current laws and regulations, require compliance with the prospectus
delivery or registration requirements of the Securities Act of 1933, as amended
(the "Securities Act"). The Company has filed all reports or other documentation
that it is required to file under the Exchange Act, any rules or regulations
promulgated thereunder, the applicable rules and regulations of the National
Association of Securities Dealers ("NASD") and all applicable state securities
laws, and the information contained in such reports or other documents did not
make any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein made, in the light of the
circumstances under which they were made, not misleading.
(i) Valid Issuance of Preferred Stock. The Preferred Stock, when
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authorized, issued, sold and delivered in accordance with the terms hereof will
be duly authorized, validly issued, fully paid and nonassessable and after
registration under applicable securities laws as contemplated by this Agreement
will be free of restrictions on transfer and, based in part upon the
representations of the Investors in this Agreement, will be issued in compliance
with applicable securities laws.
(j) Valid Issuance of Common Stock. The shares of the Company's
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common stock issuable upon conversion of the Preferred Stock and upon exercise
of the Warrant have been reserved for issuance and, when issued and delivered in
accordance with the terms thereof, will be duly authorized, validly issued,
fully paid and non-assessable, shall be free of any pledges, liens, encumbrances
and restrictions, and will be issued in compliance with all applicable
securities laws.
(k) Litigation/Proceedings. There are no pending, threatened or,
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to the Company's knowledge, contemplated actions, suits, proceedings or
investigations before or by any court or governmental agency, authority or body,
or any arbitrator, which are not ordinary, routine and incidental to the
business of the Company or which might result in any material adverse change in
the business condition (financial and other) or properties of the Company.
(l) Capital Stock. The authorized capital stock of the Company
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consists of 50,000,000 shares, including the following: (a) 48,496,635 shares of
common stock, of which 17,549,758 shares are issued and outstanding; (b) 887,980
shares of Series A Convertible Preferred Stock, of which 244,113 shares are
issued and outstanding; and (c) 615,385 shares of Series B Convertible Preferred
Stock. Except for an aggregate of 4,944,593 shares of the Company's common stock
which are subject to outstanding options to employees under the Company's
various stock option plans, or reserved for issuance under such plans, 1,773,398
shares of the Company's common stock which are subject to outstanding warrants
and 147,868 shares of the Company's common stock into which the Company's
outstanding Series A Convertible Preferred Stock is convertible, there are no
outstanding rights to acquire from the Company any shares of its capital stock.
All outstanding shares of the Company's capital stock have been duly authorized,
validly issued, fully paid and nonassessable and, to the Company's knowledge,
have been issued pursuant to valid registrations under, or valid exemptions
from, the registration requirements of the Securities Act and appropriate state
blue sky laws. There are no voting agreements, voting trusts, calls, pledges,
transfer restrictions (other than those imposed by federal and state securities
laws and, with respect to outstanding options or warrants, those
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imposed by the Company's stock option plans or by applicable option or warrant
agreements), liens, rights of first refusal, rights of first offer, anti-
dilution provisions or commitments of any kind relating to the issued or
unissued capital stock of the Company.
(m) Title to Properties. The Company has good and marketable
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title, free and clear of all liens, encumbrances and equities, and of all
charges or claims, to all of the real and personal property owned by it, except
liens, encumbrances and equities, and charges or claims, which are not material
and do not materially affect the value of such property or interfere with the
conduct of the Company's business. The Company has valid and binding leases to
all of the real and personal property necessary for the conduct of its business
with such exceptions as do not materially interfere with the conduct of its
business.
(n) Tax Returns. The Company has filed all necessary federal,
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state and foreign income, franchise and other tax returns and has paid all taxes
shown as due thereon, and the Company has received no notice of any tax
deficiency which has been asserted against the Company.
(o) Authority. The Company has all requisite power and authority
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to issue, sell and deliver the Preferred Stock and Warrants in accordance with
and upon the terms set forth in this Agreement. The Company has duly taken all
required action for the due and proper authorization, issuance, sale and
delivery of the Preferred Stock and Warrants. No preemptive rights or other
rights of subscription, first refusal or similar rights of security holders of
the Company exist with respect to the issuance and sale of the Preferred Stock
and Warrants by the Company or the shares of the Company's common stock issuable
upon conversion and exercise, respectively, thereof. No security holder of the
Company possesses any registration rights. The issuance of the Securities and
the shares of the Company's common stock underlying the Securities will not
result in the issuance of any additional shares of the Company's common stock or
the triggering of other anti-dilution or similar rights contained in any
options, warrants or other securities issued by, or agreements of, the Company.
(p) Investment Company. In retaining and using the proceeds from
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the sale of the Securities, the Company will not be required to register as an
"Investment Company" under the Investment Company Act of 1940, as amended.
(q) Bad Boy Certification. Neither the Company, any of its
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predecessors, any affiliated issuer nor any of the Company's directors,
officers, beneficial owners of 10% or more of any class of its equity securities
or other affiliates nor any promoter of the Company is subject to any of the
disabilities enumerated in Exhibit C hereto and the representations and
warranties contained therein are true and correct.
(r) Fees and Commissions. Other than pursuant to agreements with
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Xxxxxx, Xxxxxxx & Xxxxx, Incorporated, the Company has not incurred any
liability for any finder's or broker's fee or agent's commission in connection
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
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(s) Changes, Dividends, Etc. Except for the transactions
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contemplated by this Agreement, since the date of the most recent financial
statements of the Company provided to Investors, the Company has not: (i)
incurred any debts, obligations or liabilities, absolute, accrued or contingent
and whether due or to become due, except current liabilities incurred in the
ordinary course of business which (individually or in the aggregate) will not
materially and adversely affect the business, properties or prospects of the
Company; (ii) paid any obligation or liability other than, or discharged or
satisfied any liens or encumbrances other than those securing, current
liabilities, in each case in the ordinary course of business; (iii) declared or
made any payment to or distribution to its shareholders as such, or used or
redeemed any of its shares of capital stock, or obligated itself to do so; (iv)
mortgaged, pledged or subjected to lien, charge, security interest or other
encumbrance any of its assets, tangible or intangible, except in the ordinary
course of business; (v) sold, transferred or leased any of its assets except in
the ordinary course of business; (vi) suffered any physical damage, destruction
or loss (whether or not covered by insurance) materially and adversely affecting
the tangible properties, business or prospects of the Company; (vii) encountered
any labor difficulties or labor union organizing activities; (viii) except as
set forth on Schedule 3(n), issued or sold any shares of capital stock or other
securities or granted any options other than to employees, warrants, or other
purchase rights with respect thereto other than pursuant to this Agreement; (ix)
made any acquisition or disposition of any material assets or became involved in
any other material transaction, other than for fair value in the ordinary course
of business; or (x) agreed to do any of the foregoing other than pursuant
hereto. There has been no material adverse change in the financial condition,
operations, results of operations or business of the Company since the date of
the most recent financial statements of the Company provided to the Investors.
(t) Reporting. The Company is subject to the reporting
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requirements of the Securities Act and the Exchange Act and (i) has timely filed
all reports and statements required to be filed thereunder in the 12-month
period prior to the date hereof, and (ii) to the Company's knowledge, each
report and statement was true and complete in all material respects when filed.
4. Representations of the Investors. Each Investor represents for
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itself that:
(a) Investment Intent. The Securities being acquired by the
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Investor are being purchased for investment for the Investor's own account and
not with the view to, or for resale in connection with, any distribution or
public offering thereof. The Investor understands that the Securities have not
been registered under the Securities Act or any state securities laws by reason
of their contemplated issuance in a transaction exempt from the registration
requirements of the Securities Act and applicable state securities laws, and
that the reliance of the Company upon these exemptions is predicated in part
upon this representation by the Investor. The Investor further understands that
the Securities, and the shares of the Company's common stock issuable upon
conversion or exercise thereof, may not be transferred or resold without (i)
registration under the Securities Act and applicable state securities laws, or
(ii) an exemption from the requirements of the Securities Act and applicable
state securities laws.
(b) Location of Principal Office, Qualification as an Accredited
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Investor, Etc. The state in which the Investor's principal office is located is
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the state set forth in the Investor's address on Schedule A. The Investor
qualifies as an accredited investor for purposes of Regulation
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D promulgated under the Securities Act. The Investor acknowledges receipt of the
Disclosed Information and that the Company has made available to the Investor at
a reasonable time prior to the execution of this Agreement the opportunity to
ask questions and receive answers concerning the business and affairs of the
Company and the terms and conditions of the sale of Securities contemplated by
this Agreement and to obtain any additional information (which the Company
possessed or could acquire without unreasonable effort or expense) to verify the
accuracy of information furnished to the Investor. The Investor (i) is able to
bear the loss of the Investor's entire investment in the Securities without any
material adverse effect on such Investor's business, operations or prospects,
and (ii) has such knowledge and experience in financial and business matters
that such Investor is capable of evaluating the merits and risks of the
investment to be made pursuant to this Agreement.
(c) Acts and Proceedings. This Agreement has been duly authorized
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by all necessary action on the part of the Investor, has been duly executed and
delivered by the Investor, and is a valid and binding agreement of the Investor.
5. Conditions of the Investors' Obligation. The obligation to
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purchase and pay for the Securities at the Closing is subject to the fulfillment
prior to or on the Closing date of the conditions set forth in this Section 5.
In the event that any such condition is not satisfied to the satisfaction of
each Investor, then the Investors shall not be obligated to proceed with the
purchase of the Securities at the Closing.
(a) Representations and Warranties. The representations and
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warranties of the Company under this Agreement shall be true on and as of the
Closing date with the same effect as though made on and as of the Closing date.
(b) Compliance with Agreement. The Company shall have performed
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and complied with all agreements or conditions required by this Agreement to be
performed and complied with by it prior to or as of the Closing date.
(c) Certificate of Officers. The Company shall have delivered to
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the Investors a certificate, dated the Closing date, executed by the Chief
Executive Officer and the Chief Financial Officer of the Company, and certifying
to the satisfaction of the conditions specified in Sections 5(a) and 5(b).
(d) Opinion of the Company's Counsel. The Investors shall have
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received from Xxxxxx & Whitney LLP, counsel for the Company, an opinion, dated
the Closing date, in the form attached hereto as Exhibit D.
(e) Supporting Documents. The Investors shall have received the
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following:
(i) A copy of the resolutions of the Board of Directors of
the Company certified by the Secretary of the Company authorizing and approving
the execution, delivery and performance of this Agreement and issuance of the
Securities;
(ii) A certificate of incumbency executed by the Secretary of
the Company certifying the names, titles and signatures of the officers of the
Company authorized to
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execute this Agreement and further certifying that the Articles of Incorporation
and Bylaws of the Company delivered to the Investors at the time of the
execution of this Agreement have been validly adopted and have not been amended
or modified; and
(iii) A copy of the Articles of Incorporation and Bylaws of
the Company as of such date and such additional supporting documentation and
other information with respect to the transactions contemplated hereby as the
Investors may reasonably request.
(f) Qualification Under State Securities Laws. All registrations,
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qualifications, permits and approvals required under applicable state securities
laws for the lawful execution and delivery of this Agreement and the offer,
sale, issuance and delivery of the Securities to the Investors at the Closing
shall have been obtained.
(g) Proceeding and Documents. All corporate and other proceedings
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and actions taken in connection with the transactions contemplated hereby and
all certificates, opinions, agreements, instruments and documents mentioned
herein or incident to any such transaction shall be reasonably satisfactory in
form and substance to the Investors.
(h) File Certificate of Designation. It shall be a condition to
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the Investors' obligation to close the transactions contemplated hereby that the
Company have filed the Certificate of Designation with the Secretary of State of
the State of Minnesota and that such certificate be accepted and duly filed by
such Secretary's office.
(i) Execution of Registration Rights Agreement. It shall be a
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condition to the Investors' obligation to close the transactions contemplated
hereby that the Company execute and deliver to the Investors the Registration
Rights Agreement attached hereto as Exhibit E.
6. Affirmative Covenants of the Company. The Company covenants and
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agrees as follows:
(a) Corporate Existence. The Company will maintain its corporate
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existence in good standing.
(b) Books of Accounts. The Company will keep books of record and
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account in which correct and complete entries are made of all of its respective
dealings, business and affairs, in accordance with generally accepted accounting
principles. The Company will employ certified public accountants who are
"independent" within the meaning of the accounting regulations of the
Commission.
(c) Patents and Other Intangible Rights. The Company will apply
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for, or obtain assignments of, or licenses to use, all patents, trademarks,
trade names and copyrights which in the opinion of a prudent and experienced
businessperson operating in the industry in which the Company is operating are
desirable or necessary for the conduct and protection of the business of the
Company.
(d) Fees of Counsel. At the Closing, the Company shall pay all
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reasonable fees and expenses of legal counsel to the Investors as well as the
fees and expenses of counsel to
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Xxxxxx, Xxxxxxx & Xxxxx, Incorporated ("MJK") incurred through the date of the
Closing. In addition, at the Closing, the Company shall pay MJK 8% of the
Purchase Price and shall issue MJK a warrant, in the form attached hereto as
Exhibit F (the "Agent's Warrant"), to purchase that number of shares of the
Company's common stock equal to 10% of the number of shares of the Company's
common stock issuable upon conversion of the Preferred Stock sold by the Company
to the Investors at the Closing, assuming the conversion of the Preferred Stock
on the date of Closing. The exercise price of MJK's warrant shall be 110% of the
average closing bid price of the Company's common stock for the 20 trading days
immediately prior to the date of Closing.
(e) Reservation of Shares. The Company will, at all times on and
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after the Closing, reserve and keep available (i) authorized and unissued shares
of Preferred Stock sufficient for issuance pursuant to the terms of Section 4(c)
of Exhibit A attached hereto, and (ii) authorized and unissued shares of its
common stock sufficient for issuance upon conversion of the Preferred Stock and
exercise of each Warrant and the Agent's Warrant.
(f) Nasdaq Listing. The Company will use its best efforts to have
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its common stock included on the Nasdaq Stock Market (either Nasdaq Small Cap
Market or Nasdaq National Market) on or before December 31, 1998.
7. Restriction on Transfer of Preferred Stock, Warrant and Shares.
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(a) Legend. Each share of Preferred Stock, each Warrant, the
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Agent's Warrant, and each certificate representing shares of the Company's
common stock issued pursuant to the transactions contemplated hereby shall be
endorsed with a legend in substantially the form which follows:
"The securities represented by this certificate may not be
transferred without (i) the opinion of counsel satisfactory
to this corporation that such transfer may lawfully be made
without registration under the Securities Act of 1933, as
amended, and all applicable state securities laws, or (ii)
such registration."
(b) Removal of Legend. Any legend endorsed on a certificate
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evidencing a security pursuant to Section 7(a) hereof shall be removed, and the
Company promptly shall issue a certificate without such legend to the holder of
such security, if such security is properly being transferred pursuant to a
registration under the Securities Act or pursuant to Rule 144 or any similar
rule then in effect or if such holder provides the Company with an opinion of
counsel satisfactory to the Company to the effect that a transfer of such
security may be made without registration. In addition, if the holder of such
security delivers to the Company an opinion of counsel satisfactory to the
Company to the effect that no subsequent transfer of such security will require
registration under the Securities Act, the Company will promptly upon such
contemplated transfer deliver new certificates evidencing such security that do
not bear the legend set forth in Section 7(a).
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8. Miscellaneous.
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(a) Changes, Waivers, Etc. Neither this Agreement nor any
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provisions hereof may be changed, waived, discharged or terminated orally, but
only by a statement in writing, signed by the party against which enforcement of
the change, waiver, discharge or termination is sought.
(b) Notices. All notices, requests, consents and other
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communications required or permitted hereunder shall be in writing and shall be
delivered, or mailed first-class postage prepaid, registered or certified mail
or shall be sent by facsimile transmission followed by mailed copy:
if to the Investors at their respective addresses set forth
on Schedule A, or at such other address or facsimile number as any Investor may
specify in writing to the Company; or
if to the Company at Global MAINTECH Corporation, 0000 Xxxxxx
Xxxxx Xxxxx, Xxxx Xxxxxxx, Xxxxxxxxx 00000, Attention: CEO, facsimile number
(000) 000-0000; or at such other address or facsimile number as the Company may
specify by written notice to the Investors;
and such notices and other communications shall for all
purposes of this Agreement be treated as being effective or having been given if
delivered personally, if sent by mail, when received, or, if sent by facsimile,
upon the sender's receipt of confirmation from its facsimile machine of
transmission.
(c) Survival of Representations and Warranties. All
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representations and warranties and agreements contained herein shall survive the
execution and delivery of this Agreement, any investigation at any time made by
the Investors or on their behalf and the sale and purchase of the Securities and
payment therefor. All statements contained in any certificate, instrument or
other writing delivered by or on behalf of the Company pursuant to this
Agreement (other than legal opinions) at the Closing shall constitute
representations and warranties by the Company hereunder.
(d) Headings. The headings of the sections of this Agreement have
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been inserted for convenience of reference only and do not constitute a part of
this Agreement.
(e) Choice of Law. This Agreement shall be governed by and
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construed and enforced in accordance with the laws of the State of Minnesota
without regard to the principles of conflicts of law thereof.
(f) Counterparts. This Agreement may be executed at different
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times and in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
(g) Parties in Interest. All the terms and provisions of this
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Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and
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assigns of the parties hereto, whether so expressed or not, and, in particular,
shall inure to the benefit of and be enforceable by the holder or holders from
time to time of any of the Securities.
(h) Entire Agreement. This Agreement, including and incorporating all
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Exhibits and Schedules hereto, constitutes and contains the entire agreement and
understanding of the parties regarding the subject matter of this Agreement and
supersedes any and all prior negotiations, correspondence, understandings and
agreements, written or oral, among the parties with respect to the subject
matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed personally or by their duly authorized representatives as of the date
indicated above.
GLOBAL MAINTECH CORPORATION
By:_________________________________
Its:_________________________________
INVESTOR:
[See Attached Acceptance on Schedule A]
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EXHIBIT E TO PREFERRED STOCK AND
WARRANT PURCHASE AGREEMENT
REGISTRATION RIGHTS AGREEMENT
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This Registration Rights Agreement is made and entered into as of the 23rd
day of September, 1998, by and among Global MAINTECH Corporation, a Minnesota
corporation (the "Company") and the Investors listed on Schedule A attached
hereto (individually, an "Investor" and collectively, the "Investors").
RECITALS
A. The Investors and the Company have entered into that certain Preferred
Stock and Warrant Purchase Agreement, dated September 23, 1998 (the "Purchase
Agreement").
B. It is a condition to the transactions contemplated in the Purchase
Agreement that the Company provide the registration and other rights provided
herein and the parties hereto desire to provide for such rights on the terms and
conditions contained herein.
NOW, THEREFORE, in consideration of the premises and covenants contained
herein, the parties hereto agree as follows:
1. Defined Terms. Unless otherwise noted, all capitalized terms used
-------------
herein shall have the meanings afforded them in the Purchase Agreement and the
Exhibits attached thereto.
2. Required Registration. Within 30 days of the date hereof (the "File
---------------------
Date"), the Company shall file a Registration Statement under the Securities Act
of 1933, as amended (the "Securities Act"), in accordance with the provisions of
either Form SB-1, Form SB-2 or Form S-3, as required by the Securities and
Exchange Commission (the "Commission") covering the resale of the shares of the
Company's common stock (i) underlying the Preferred Stock, (ii) underlying the
Warrants issued by the Company to Investors of even date herewith (collectively,
the "Warrants"), and (iii) issuable by the Company in payment of the dividends
on the shares of the Preferred Stock (the "Dividends") and will use its best
efforts to have such Registration Statement become effective with the Commission
as soon as possible thereafter, and in any event, by December 31, 1998. The
shares of the Company's common stock underlying the Preferred Stock and the
Warrants and issuable in payment of the Dividends is referred to herein as the
"Registrable Stock."
3. Registration--General Provisions. In connection with the registration
--------------------------------
of the Registrable Stock under the Securities Act, the Company will:
(a) prepare and file with the Commission a registration statement with
respect to such securities, within 30 days of the date hereof, and use its best
efforts to cause such registration statement to become effective as soon as
possible after the date it is filed and keep
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the prospectus which is a part of such Registration Statement current until the
earlier of the date on which: (i) all such shares have been sold, or (ii) five
years after the date it is declared effective by the Commission (the
"Effectiveness Period");
(b) prepare and file with the Commission such amendments to such
Registration Statement and supplements to the prospectus contained therein as
may be necessary to keep such Registration Statement effective for the
Effectiveness Period referred to in Section 3(a) above;
(c) at the request of an Investor, provide such Investor's counsel
(referred to herein as "Investor's Counsel") with reasonable opportunities to
review and comment on, and otherwise participate in, the preparation of such
Registration Statement;
(d) furnish to the Investors participating in such registration and to
the underwriters of the securities being registered, if any, such reasonable
number of copies of the Registration Statement, preliminary prospectus, final
prospectus and such other documents as the Investors and underwriters may
reasonably request in order to facilitate the public offering of such
securities;
(e) use its diligent, good-faith efforts to register or qualify the
securities covered by such Registration Statement under such state securities or
blue sky laws of such jurisdictions as the Investors may reasonably request in
writing within 30 days following the original filing of such Registration
Statement, except that the Company shall not for any purpose be required to
execute a general consent to service of process (which shall not include a
"Uniform Consent to Service of Process" or other similar consent to service of
process which relates only to actions or proceedings arising out of or in
connection with the sale of securities, or out of a violation of the laws of the
jurisdiction requesting such consent) or to qualify to do business as a foreign
corporation in any jurisdiction wherein it is not so qualified;
(f) notify the Investors, promptly after it shall receive notice
thereof, of the time when such Registration Statement has become effective or a
supplement to any prospectus forming a part of such Registration Statement has
been filed with the Commission;
(g) notify the Investors promptly of any request by the Commission for
the amending or supplementing of such Registration Statement or prospectus or
for additional information;
(h) prepare and file with the Commission, promptly upon the request of
the Investors, any amendments or supplements to such Registration Statement or
prospectus which, in the opinion of Investor's Counsel, if any (and concurred in
by counsel for the Company), is required under the Securities Act or the rules
and regulations promulgated thereunder in connection with the distribution of
the shares of the Company's common stock by the Investors;
(i) prepare and promptly file with the Commission and promptly notify
the Investors of the filing of such amendment or supplement to such Registration
Statement or
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prospectus as may be necessary to correct any statements or omissions if, at the
time when a prospectus relating to such securities is required to be delivered
under the Securities Act, any event shall have occurred as the result of which
any such prospectus or any other prospectus as then in effect would include an
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances in which they
were made, not misleading;
(j) advise the Investors, and the Investor's Counsel, if any,
promptly after it shall receive notice or obtain knowledge thereof, of the
issuance of any stop order by the Commission suspending the effectiveness of
such Registration Statement or the initiation or threatening of any proceeding
for that purpose and promptly use its best efforts to prevent the issuance of
any stop order or to obtain its withdrawal if such stop order should be issued;
(k) not file any amendment or supplement to such Registration
Statement or prospectus to which the Investors shall have reasonably objected on
the grounds that such amendment or supplement does not comply in all material
respects with the requirements of the Securities Act or the rules and
regulations promulgated thereunder, after having been furnished with a copy
thereof at least five business days prior to the filing thereof, unless in the
opinion of counsel for the Company the filing of such amendment or supplement is
reasonably necessary to protect the Company from any liabilities under any
applicable federal or state law and such filing will not violate applicable law;
and
(l) at the request of the Investors, furnish on the effective date of
the Registration Statement and, if such registration includes an underwritten
public offering, at the closing provided for in the underwriting agreement: (i)
opinions, dated such respective dates, of the counsel representing the Company
for the purposes of such registration, addressed to the underwriters, if any,
and to the Investors making such request, covering such matters as such
underwriters or Investors may reasonably request, and (ii) letters, dated such
respective dates, from the independent certified public accountants of the
Company, addressed to the underwriters, if any, and to the Investors, covering
such matters as such underwriters or Investors may reasonably request.
(m) Notwithstanding the foregoing, following the effectiveness of
such Registration Statement, the Company may, at any time, suspend the
effectiveness of such Registration Statement for up to no longer than ninety
(90) days, as appropriate (a "Suspension Period"), by giving notice to the
Investors, if (i) the Company, with the advice of its counsel, shall have
determined that the Company may be required to disclose any material corporate
development or (ii) the Company shall be involved in an underwritten public
offering of its securities. The Company will use its best efforts to minimize
the length of any Suspension Period. Further, no more than one 90-day Suspension
Period or multiple Suspension Periods which do not exceed 90 days in the
aggregate may occur in any 12-month period and the Effectiveness Period referred
to in Section 3(a) shall be extended by the number of days such registration is
subject to any Suspension Period. Each Investor agrees that, upon receipt of
any notice from the Company of a Suspension Period, it will not sell (subject to
the limitations on the Company set forth above) any Registrable Stock pursuant
to such Registration Statement until (i)
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such Investor is advised in writing by the Company that the use of the
applicable prospectus may be resumed, (ii) such Investor has received copies of
any additional or supplemental or amended prospectus, if applicable, and (iii)
such Investor has received copies of any additional or supplemental filings
which are incorporated or deemed to be incorporated by reference in such
prospectus.
4. Registration Expenses. The Company shall pay all Registration
---------------------
Expenses (as defined below) in connection with the inclusion of shares of the
Company's common stock in any Registration Statement, or application to register
or qualify such shares under state securities laws, filed by the Company
hereunder, other than as set forth herein. For purposes of this Agreement, the
term "Registration Expenses" means the filing fees payable to the Commission,
any state agency and the NASD; the fees and expenses of the Company's legal
counsel and independent certified public accountants in connection with the
preparation and filing of the Registration Statement (and all amendments and
supplements thereto) with the Commission; and all expenses relating to the
printing of the Registration Statement, prospectuses and various agreements
executed in connection with the Registration Statement. Notwithstanding the
foregoing, the Investors will pay the fees and expenses of any legal counsel the
Investors may engage, as well as the Investors' proportionate share of any
custodian fees or commission or discounts or transfer taxes which may be payable
to any underwriter and any other expenses incurred by the Investors not
expressly included herein.
5. Penalty Payments. In the event that the Registration Statement
----------------
relating to the resale of the Registrable Stock is not (i) filed with the
Commission by the Company on or before the File Date and/or the Company has not
exercised its best efforts to facilitate the Registration Statement being
declared effective within 90 days of the date hereof, or (ii) declared effective
by the Commission by December 31, 1998, then, the Company shall pay the
Investors the following amounts ("Penalty Payments"): (i) 1% of the purchase
price of the Preferred Stock and Warrants (the "Purchase Price") paid by the
Investors to the Company for the first 30-day period in which the Company is not
in compliance with any of the above provisions; (ii) an additional 1% of the
Purchase Price for the next 30-day period in which the Company is not in
compliance with any of the above provisions; and (iii) 3% of the Purchase Price
for each 30-day period thereafter in which the Registration Statement is not
declared effective by the Commission. Penalties for failure to file and/or to
obtain effectiveness shall be cumulative, but in no event shall the aggregate of
all such Penalty Payments paid hereunder exceed 100% of the Purchase Price . The
Company shall be liable to the Investor for a full 30-day period, determined in
accordance with the above schedule, regardless of by how many days it misses one
of the targeted filing or effective dates set forth above. All such Penalty
Payments shall be immediately payable by the Company to the Investors (on a pro
rata basis based on the number of shares of Preferred Stock purchased by each
under the Purchase Agreement) via wire transfer or Company check by the close of
business on last day of each respective period set forth above.
6. Indemnification. With respect to the registration of the resale of the
---------------
shares of Registrable Stock:
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(a) to the extent permitted by law, the Company will indemnify and
hold harmless each Investor, the trustees, partners, officers and directors of
each Investor, any underwriter (as defined in the Securities Act) for such
Investor and each person, if any, who controls such Investor or underwriter
within the meaning of the Securities Act or the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the
Securities Act, the Exchange Act or other federal or state law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any of the following statements, omissions or violations
(collectively a "Violation") by the Company: (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities law in connection with the offering
covered by the Registration Statement; and the Company will reimburse each such
Investor, trustee, partner, officer, director, underwriter or controlling person
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this Section 6(a)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss, claim, damage, liability
or action to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with written information furnished to
it expressly for use in connection with such registration by an Investor,
trustee, partner, officer, director, underwriter or controlling person of an
Investor.
(b) to the extent permitted by law, each Investor will indemnify and
hold harmless the Company, each of its directors, each of its officers, each
person, if any, who controls the Company within the meaning of the Securities
Act, any underwriter and any other Investor selling securities under the
Registration Statement or any of such other Investor's, trustees, partners,
directors or officers or any person who controls such Investor, against any
losses, claims, damages or liabilities (joint or several) to which the Company
or any such director, officer, controlling person, underwriter or other such
Investor, or trustee, partner, director, officer or controlling person of such
other Investor may become subject under the Securities Act, the Exchange Act or
other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Investor and stated to be specifically for use in connection
with such registration; and each such Investor will reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer,
controlling person, underwriter or other Investor, or trustee, partner, officer,
director or controlling person of such other Investor in connection with
investigating or defending any such loss, claim, damage, liability or action if
it is judicially determined that there was such a Violation; provided,
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however, that the indemnity agreement contained in this Section 6(b) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of the Investor,
which consent shall not be unreasonably withheld; provided further, that in no
event shall any indemnity under this Section 6 exceed the gross proceeds from
the offering received by such Investor unless the Violation is the result of
fraud on the part of such Investor.
(c) promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action (including any governmental action),
such indemnified party shall, if a claim in respect thereof is to be made
against any indemnifying party under this Section, deliver to the indemnifying
party a written notice of the commencement thereof and the indemnifying party
shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly noticed,
to assume the defense thereof with counsel mutually satisfactory to the parties;
provided, however, that an indemnified party shall have the right to retain its
own counsel, with the reasonable fees and expenses to be paid by the
indemnifying party; and provided further, that if there is more than one
indemnified party, the indemnifying party shall pay for the reasonable fees and
expenses of one counsel for any and all indemnified parties to be mutually
agreed upon by such indemnified parties, unless representation of an indemnified
party by the counsel retained by the other indemnified parties would be
inappropriate due to actual or potential differing interests between such
indemnified parties. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action, if
materially prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section,
but the omission so to deliver written notice to the indemnifying party will not
relieve it of any liability that it may have to any indemnified party other than
under this Section.
(d) if the indemnification provided for in this Section is held by a
court of competent jurisdiction to be unavailable to an indemnified party with
respect to any losses, claims, damages or liabilities referred to herein, the
indemnifying party, in lieu of indemnifying such indemnified party thereunder,
shall to the extent permitted by applicable law, contribute to the amount paid
or payable by such indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
in connection with the Violation(s) that resulted in such loss, claim, damage or
liability, as well as any other relevant equitable considerations. The relative
fault of the indemnifying party and of the indemnified party shall be determined
by a court of law by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the indemnifying
party or by the indemnified party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. No person or entity guilty of fraudulent misrepresentation (within
the meaning of Section 11 of the Securities Act) shall be entitled to
contribution from any person or entity who shall not have been guilty of such
fraudulent misrepresentation.
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(e) the obligation of the Company and the Investors under this
Section shall survive the completion of any offering for resale of shares of the
Registrable Stock in the Registration Statement, and otherwise.
7. Limitation on Subsequent Registration Rights. From and after the date
--------------------------------------------
of this Agreement and until all the Securities have been registered under the
Securities Act or become eligible for transfer under Rule 144(k) or similar rule
under the Securities Act, the Company shall not, without the prior written
consent of all of the Investors, enter into any agreement with any person or
persons providing for the granting to such holder of registration rights pari
passu or senior to those granted to Investors pursuant to this Agreement, or of
registration rights which might cause a reduction in the number of shares
includable by the Investors in any registration.
8. Miscellaneous.
-------------
(a) The Company shall not hereafter enter into any agreement with
respect to its securities that is inconsistent with the rights granted to the
Investors in this Agreement.
(b) Except as otherwise provided herein, the provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to or departures from the provisions hereof may not be given or made unless the
Company has obtained the written consent of the Investors.
(c) All notices and other communications provided for or permitted
hereunder shall be made by hand delivery, telex, facsimile, overnight courier or
registered first-class mail:
(i) if to an Investor, at the address set forth on Schedule A
attached hereto;
(ii) if to the Company, at the address set forth in the Purchase
Agreement.
All such notices and communications shall be deemed to have been duly given:
when delivered, if by hand, overnight courier or mail; when the appropriate
answer back is received, if by telex; when transmission is confirmed by the
sending unit, if by facsimile.
(d) This Agreement may be executed in any number of counterparts and
by the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(e) The headings to this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
(f) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Minnesota without giving effect to the
principles of conflicts of law thereof.
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(g) In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstances, is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of such provision in every other respect and of the remaining
provisions contained herein shall not be in any way impaired thereby, it being
intended that all of the rights and privileges of the Investors and the Company
shall be enforceable to the fullest extent permitted by law.
(h) The remedies provided for in this Agreement shall be cumulative
and in addition to all other remedies available, at law or in equity, and
nothing herein shall limit a holder's right to pursue actual damages for any
failure by the Company to comply with the terms of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date indicated
above.
GLOBAL MAINTECH CORPORATION
By:______________________________
Its:______________________________
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ENTITY INVESTOR INDIVIDUAL INVESTOR
--------------- -------------------
__________________________ __________________________________
Name of Entity Signature
By _______________________ __________________________________
* Signature Signature of Joint Holder, if any
Its ______________________
Title
__________________________ __________________________________
Name Typed or Printed Name Typed or Printed
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