1
EXHIBIT 10.21
AXCESS INC.
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx 00000
March 27, 1998
Amphion Ventures L.P.
c/o Jackson Hole Management Co.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Series H Preferred Stock Purchase Agreement
Ladies and Gentlemen:
By letter dated March 27, 1998, and amended on April 21, 1998, Amphion
Ventures L.P., a Delaware limited partnership (the "Purchaser"), committed to
provide up to $5,500,000 of equity financing to AXCESS Inc., a Delaware
corporation (the "Company"), in connection with the Company's 1998 plan of
operations and to maintain the Company's compliance with the net tangible asset
requirement of the new Nasdaq listing requirements (the "Commitment"). This
letter sets forth the terms and conditions on which the Company will issue and
sell to Purchaser shares of Series H Non-Voting Preferred Stock of the Company,
par value $.01 per share ("Series H Preferred Stock"), for an aggregate purchase
price of up to $5,500,000, payable as provided herein.
1. Advances; Purchase Price; Effectiveness. The Purchaser hereby agrees to
subscribe for and purchase from the Company, and the Company hereby agrees to
issue and sell to the Purchaser, up to $5,500,000 of shares (the "Shares") of
Series H Preferred Stock. The purchase price for each Share shall be $10,000,
payable in cash. The purchase and sale of Shares hereunder shall be effective as
of the date the Company receives the purchase price for each Share from
Purchaser (the "Effective Date") (subject to the filing of the Certificate of
Designation of the Series H Preferred Stock in the office of the Secretary of
State of the State of Delaware (the "Series H Certificate of Designation"),
which filing may occur subsequently to the Effective Date without effecting the
rights and obligations of the parties hereto).
2. Purchase and Delivery of Shares. Upon its receipt of the purchase price
for each Share, the Company shall issue and sell to Purchaser the number of
shares of Series H Preferred Stock (the "Shares"), the stated value of which
shall be $10,000 per share (the "Original Series H Issue Price"). On and as of
the Effective Date, the Company shall execute and deliver to the Purchaser a
stock certificate in proper form representing the Shares.
2
AXCESS Inc.
March 27, 1998
Page 2
3. Conversion of Non-Voting Common Stock to Voting Common Stock. Purchaser
hereby agrees that until it receives written notice from the Company confirming
that the Company has issued 500,000 shares of Common Stock to XL Vision, Inc.
pursuant to the terms of that certain Technology Acquisition Agreement dated
January 8, 1998, it shall not, without the prior written consent of the Company,
convert any shares of the Non-Voting Common Stock issuable to Purchaser upon its
conversion of any Shares to voting Common Stock of the Company.
4. Securities Act Legend; Registration Rights.
4.1 The Shares will not be registered under the Securities Act of 1933,
as amended (the "Securities Act"). Certificates representing the Shares shall
bear a restrictive legend substantially to the effect of the following:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, OR APPLICABLE STATE SECURITIES LAWS, OR THE
SECURITIES LAWS OF ANY OTHER JURISDICTION. THEY MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER
THOSE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION THEREFROM. ADDITIONAL
RESTRICTIONS REGARDING THE TERMS UNDER WHICH THE SHARES REPRESENTED BY THIS
CERTIFICATE MAY BE CONVERTED INTO NON-VOTING COMMON STOCK OF THE COMPANY
ARE SET FORTH IN THAT CERTAIN SERIES H PREFERRED STOCK PURCHASE AGREEMENT
DATED AS OF MARCH 27, 1998.
4.2 The Purchaser shall have the same registration rights with regard to
any shares of Non-Voting Common Stock issuable upon conversion of the Shares as
Antiope Ventures L.P. (formerly Xxxxxxxxxx Associates L.P. was entitled to
pursuant to the Stock Purchase Agreement dated as of January 20, 1994 (the
"Prior Agreement")), between the Company and Antiope Ventures L.P. The Company
shall have the same expense, indemnification and other obligations to the
Purchaser with respect to such registration rights as the Company owed to
Antiope Ventures L.P. under the Prior Agreement. The Company and the Purchaser
shall enter into a registration rights agreement in customary form to confirm
the registration rights provided for in this paragraph, as soon as practicable
after the date hereof.
5. Representations and Warranties by the Company. The Company hereby
represents and warrants to the Purchaser as follows:
5.1 The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, and has the corporate
power and authority to execute and deliver this agreement, to issue the Shares
on the basis described herein and otherwise to perform its obligations under
this agreement.
-2-
3
AXCESS Inc.
March 27, 1998
Page 3
5.2 The execution and delivery by the Company of this Agreement, the
issuance of the Shares, and the performance by the Company of its obligations
hereunder, have been duly authorized by all requisite corporate action on the
part of the Company (other than the filing of the Series H Certificate of
Designation and will not (i) violate any provision of law, statute, rule or
regulation or any order of any court or other agency of government, (ii)
conflict with or violate the Certificate of Incorporation or By-Laws of the
Company, in each case as amended, or (iii) violate, conflict with or constitute
(with due notice or lapse of time or both) a default under any indenture,
mortgage, lease, license, agreement or other contract or instrument or result in
the creation or imposition of any lien, charge or encumbrance of any nature upon
the properties or assets of the Company or any of its subsidiaries, in each case
if such violation, conflict, default, lien, charge or encumbrance would have a
material adverse effect on the Company.
5.3 This agreement has been duly executed and delivered by the Company
and constitutes the valid and legally binding obligation of the Company,
enforceable in accordance with its terms, except to the extent the
enforceability hereof may be limited by applicable bankruptcy, moratorium or
similar laws affecting the rights of creditors generally.
5.4 Based in part upon the representations and warranties of the
Purchaser contained in this agreement, no registration or filing with, or
consent or approval of, or other action by, any federal, state or other
governmental department, commission, board, bureau, agency or instrumentality or
any third party is or will be necessary for the execution and delivery of this
agreement by the Company and the issuance of the Shares hereunder, other than
(x) the filing of the Series H Certificate of Designation and (y) the filing of
a notice of sale on Form D with the Securities and Exchange Commission in
accordance with the rules and regulations thereof under the Securities Act.
5.5 Subject only to the filing of the Series H Certificate of
Designation, the Shares are duly authorized, validly issued, fully paid and
non-assessable shares of Series H Preferred Stock, and are not subject to any
preemptive rights.
5.6 Attached hereto as Exhibit A is a true copy of the Series H
Certificate of Designation. On the Effective Date, the Board of Directors of the
Company approved and adopted resolutions, in the form of the resolutions set
forth in Exhibit A, creating the Series H Preferred Stock and directing the
proper officers of the Company to file the same with the office of the Secretary
of State of the State of Delaware, in accordance with the applicable provisions
of the Delaware General Corporation Law. The Company hereby covenants and
agrees, for the benefit of the Purchaser, that the Company will cause the Series
H Certificate of Designation to be filed with the office of the Secretary of
State of the State of Delaware, in accordance with the applicable provisions of
the Delaware General Corporation Law, within 10 days after the date hereof.
-3-
4
AXCESS Inc.
March 27, 1998
Page 4
6. Representations and Warranties of the Purchaser. The Purchaser hereby
represents and warrants to the Company as follows:
6.1 The Purchaser is acquiring the Shares for its own account, for
investment and not with a view to the distribution thereof within the meaning of
the Securities Act.
6.2 The Purchaser understands that the Shares have not been registered
under the Securities Act, by reason of their issuance by the Company in
transactions exempt from the registration requirements of the Securities Act,
and that the Shares must be held by the Purchaser indefinitely unless a
subsequent disposition thereof is registered under the Securities Act or is
exempt from such registration.
6.3 The Purchaser further understands that the exemption from
registration afforded by Rule 144 (the provisions of which are known to it)
promulgated under the Act depends on the satisfaction of various conditions, and
that, if applicable, Rule 144 may afford the basis for sales only in limited
amounts, after compliance with the holding periods and other provisions thereof.
6.4 The Purchaser understands that its investment hereunder involves
substantial risks and represents and warrants that it has made such independent
examinations and investigations of the Company as it has deemed necessary in
making its investment decision, and the Purchaser further represents and
warrants that it has had sufficient access to the officers, directors, books and
records of the Company as it has deemed necessary to conduct such examination
and investigation and make such investment decision.
6.5 The Purchaser is able to bear the economic risk of the investment
contemplated by this agreement and has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of the investment contemplated by this agreement.
7. Reaffirmation of Representations and Warranties. The date Shares are
purchased shall constitute a reaffirmation of each and every one of the
representations and warranties of the Company set forth in Section 5 of this
agreement and those of the Purchaser set forth in Section 6 of this agreement as
if made as of each Effective Date, unless otherwise restated or corrected by
either the Purchaser or the Company, as the case may be.
8. Miscellaneous.
8.1 This agreement constitutes our entire agreement with respect to the
subject matter hereof. This agreement may not be modified or amended or any
provision hereof waived except by an instrument in writing signed by the Company
and the Purchaser.
-4-
5
AXCESS Inc.
March 27, 1998
Page 5
8.2 This agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. The rights
of the Purchaser hereunder shall be assignable to any holder of the Shares.
Except as provided in the immediately preceding sentence, this agreement and the
rights of the Purchaser hereunder shall not be assignable, and any purported
assignment hereof or thereof shall be void.
8.3 This Agreement may be executed in any number of counterparts and on
separate counterparts, each of which shall be an original instrument, but all of
which together shall constitute a single agreement. One or more signature pages
from any counterpart of this Agreement may be attached to any other counterpart
of this Agreement without in any way changing the effect thereof. This Agreement
shall be effective when executed and delivered by the Company and the Purchaser.
8.4 All notices, requests, demands, consents, waivers, or other
communications made hereunder to any party or holder of Shares shall be in
writing and shall be deemed to have been duly given if delivered personally or
sent by nationally-recognized overnight courier, facsimile or by first class
registered or certified mail, return receipt requested, postage prepaid,
addressed to such party at the address set forth below:
if to the Company, to:
AXCESS Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
with a copy to:
Xxxxxx & Lidji, P.C.
4400 Renaissance Tower
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.; and
if to the Purchaser, to the Purchaser at its address
first set forth above,
or to such other address as the party to whom such communication is to be given
may have furnished to the other party in writing in accordance herewith. All
such notices, requests, demands, consents, waivers or other communications shall
be deemed to have been delivered (i) in the case of personal delivery, on the
date of delivery, (ii) if sent by facsimile, on the date sender receives a
confirmation
-5-
6
AXCESS Inc.
March 27, 1998
Page 6
confirming receipt, (iii) if sent by overnight courier, on the next business day
following the date sent and (iv) in the case of mailing, on the third business
day following such mailing.
8.5 All representations, warranties and agreements contained herein
shall survive the execution and delivery of this Agreement and the sale of the
Shares hereunder.
8.6 This agreement, and all rights, obligations and liabilities
hereunder, shall be construed according to the laws of the State of New York
applicable to contracts made and to be performed wholly therein. Any judicial
proceeding brought against the Company to enforce, or otherwise in connection
with, this agreement may be brought in any court of competent jurisdiction in
the City of New York, and, by execution and delivery of this agreement, the
Company (i) accepts, generally and unconditionally, the nonexclusive
jurisdiction of such courts and any related appellate court and irrevocably
agrees to be bound by any final judgment rendered thereby in connection with
this agreement and (ii) irrevocably waives any objection it may now or hereafter
have as to the venue of any such proceeding brought in such a court or that such
a court is an inconvenient forum.
If the foregoing correctly sets forth your understanding of our agreement,
please so indicate by signing and returning to the Company the enclosed
counterpart of this Agreement.
Very truly yours,
AXCESS INC.
By: /s/ Xxxxx X. Hair
-----------------------------------------
Xxxxx X. Hair, Executive Vice President,
Chief Financial Officer and Secretary
The undersigned agrees with and
accepts the foregoing terms and
provisions as of the date first a
xxxx written.
AMPHION VENTURES L.P.
By Amphion Partners L.L.C.,
its general partner
By: /s/
---------------------------------
A Managing Member
-6-
