SECURITIES PURCHASE AGREEMENT
Exhibit 10.1
SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of February 8, 2007, by and among
JMAR Technologies, Inc., a Delaware corporation (the ‘Company’), and Laurus Master Fund, Ltd., a
Cayman Islands company (“Buyer”).
WHEREAS:
A. The Company and Buyer are executing and delivering this Agreement in reliance
upon the exemption from securities registration afforded by Section 4(2) of the Securities Act of
1933, as amended (the “1933 Act”), and Rule 506 of Regulation D (“Regulation D”) as promulgated by
the United States Securities and Exchange Commission (the “SEC”) under the 1933 Act; and
B. The Buyer wishes to purchase, and the Company wishes to sell, upon the terms and
conditions stated in this Agreement, the number of shares of Common Stock, par value $0.01 per
share, of the Company (“Common Stock”), set forth in Section 1 below.
NOW, THEREFORE, the Company and Buyer hereby agree as follows:
| 1. | PURCHASE AND SALE OF COMMON STOCK. |
(a) Purchase of Common Stock. The Company agrees to issue and sell to the Buyer, and
the Buyer agrees to purchase from the Company on the Closing Date (as defined below), 1,212,800
shares of Common Stock (the “Common Shares”).
(b) Purchase Price. The purchase price for the Common Shares to be purchased by the
Buyer at the Closing shall be $0.19 per share (the “Purchase Price”).
(c) Closing Date. The purchase and sale of the Common Shares (the “Closing”) shall
take place at 10:00 a.m., New York City Time, on the date hereof (the “Closing Date”) (or such
other date and time as is mutually agreed to by the Company and each Buyer).
(d) Form of Payment. On the Closing Date, (i) Buyer shall pay the Purchase Price to
the Company for the Common Shares to be issued and sold to Buyer at the Closing, by wire transfer
of immediately available funds in accordance with the Company’s written wire instructions, and (ii)
the Company shall deliver to Buyer (A) one or more stock certificates, free and clear of all
restrictive and other legends (except as expressly provided in Section 2(f) hereof), evidencing the
number of Common Shares Buyer is purchasing, duly executed on behalf of the Company and registered
in the name of Buyer.
| 2. | BUYER’S REPRESENTATIONS AND WARRANTIES. | ||
| Buyer represents and warrants that: |
(a) No Public Sale or Distribution. Buyer is acquiring the Common Shares in the
ordinary course of business for its own account and not with a view towards, or for resale in
connection with, the public sale or distribution thereof, except pursuant to sales registered or
exempted under the 1933 Act and Buyer does not have a present arrangement to effect any
distribution of the Common Shares to or through any person or entity; provided,
however, that by making the representations herein, Buyer does not agree to hold any of the
Common Shares for any minimum or other specific term and reserves the right to dispose of the
Common Shares at any time in accordance with or pursuant to a registration statement or an
exemption under the 1933 Act.
(b) Accredited Investor Status. Buyer is an “accredited investor” as that term is
defined in Rule 501(a) of Regulation D.
(c) Reliance on Exemptions. Buyer understands that the Common Shares are being
offered and sold to it in reliance on specific exemptions from the registration requirements of
United States federal and state securities laws and that the Company is relying in part upon the
truth and accuracy of, and Buyer’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Buyer set forth herein in order to determine the
availability of such exemptions and the eligibility of Buyer to acquire the Common Shares.
(d) Information. Buyer and its advisors, if any, have been furnished with all
materials relating to the business, finances and operations of the Company and materials relating
to the offer and sale of the Common Shares which have been requested by Buyer. Buyer and its
advisors, if any, have been afforded the opportunity to ask questions of the Company. Neither such
inquiries nor any other due diligence investigations conducted by Buyer or its advisors, if any, or
its representatives shall modify, amend or affect Buyer’s right to rely on the Company’s
representations and warranties contained herein. Buyer understands that its investment in the
Common Shares involves a high degree of risk and is able to afford a complete loss of such
investment. Buyer has sought such accounting, legal and tax advice as it has considered necessary
to make an informed investment decision with respect to its acquisition of the Common Shares.
(e) Transfer or Resale. Buyer understands that: (i) the Common Shares have not been
and are not being registered under the 1933 Act or any state securities laws, and may not be
offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B)
Buyer shall have delivered to the Company an opinion of counsel, in a form reasonably acceptable to
the Company, to the effect that such Common Shares to be sold, assigned or transferred may be sold,
assigned or transferred pursuant to an exemption from such registration, or (C) Buyer provides the
Company with reasonable assurance that such Common Shares can be sold, assigned or transferred
pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act, as amended, (or a successor rule
thereto) (collectively, “Rule 144”); (ii) any sale of the Common Shares made in reliance on Rule
144 may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not
applicable, any resale of the Common Shares 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 defined in the 0000 Xxx) may require compliance with
some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and
(iii) neither the Company nor any other person is under any obligation to register the Common
Shares under the 1933 Act or any state securities laws or to comply with the terms and conditions
of any exemption thereunder. Notwithstanding the foregoing, the Common Shares may be pledged in
connection with a bona fide margin account or other loan secured by the Common Shares and such
pledge of Common Shares shall not be deemed to be a transfer, sale or assignment of the Common
Shares hereunder, and no Buyer effecting a pledge of Common Shares shall be required to provide the
Company with any notice thereof or otherwise make any delivery to the Company pursuant to this
Agreement or any other Transaction Document, including, without limitation, this Section 2(e);
provided, that in order to make any sale, transfer or assignment of Common Shares, Buyer and its
pledgee makes such disposition in accordance with or pursuant to a registration statement or an
exemption under the 1933 Act.
(f) Legends. Buyer understands that the certificates or other instruments
representing the Common Shares shall bear any legend as required by the “blue sky” laws of any
state and a restrictive legend in substantially the following form (and a stop-transfer order may
be placed against transfer of such stock certificates):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A FORM
REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID
ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
(g) Validity; Enforcement. This Agreement has been duly and validly authorized,
executed and delivered on behalf of Buyer and shall constitute the legal, valid and binding
obligations of Buyer enforceable against Buyer in accordance with its terms, except as such
enforceability may be limited by general principles of equity or to applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors’ rights and remedies.
(h) No Conflicts. The execution, delivery and performance by Buyer of this Agreement
and the consummation by Buyer of the transactions contemplated hereby and thereby will not (i)
result in a violation of the organizational documents of Buyer 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 Buyer is a party, or (iii) result
in a violation of any law, rule, regulation, order, judgment or decree (including federal and
state securities laws) applicable to Buyer, except in the case of clauses (ii) and (iii) above, for
such conflicts, defaults, rights or violations which would not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the ability of Buyer to perform its
obligations hereunder.
| 3. | REPRESENTATIONS AND WARRANTIES OF THE COMPANY. | ||
| The Company represents and warrants to the Buyer that: |
(a) Organization and Qualification. The Company is a corporation duly organized and
validly existing in good standing under the laws of Delaware, and has the requisite corporate power
and authorization to own its properties and to carry on its business as now being conducted. The
Company is duly qualified as a foreign corporation to do business and is in good standing in every
jurisdiction in which its ownership of property or the nature of the business conducted by it makes
such qualification necessary, except to the extent that the failure to be so qualified or be in
good standing would not have a Material Adverse Effect. As used in this Agreement, “Material
Adverse Effect” means any material adverse effect on the business, properties, assets, operations,
results of operations, condition (financial or otherwise) or prospects of the Company or on the
transactions contemplated hereby or on the authority or ability of the Company to perform its
obligations under this Agreement.
(b) Authorization; Enforcement; Validity. The Company has the requisite corporate
power and authority to enter into and perform its obligations under this Agreement and to issue the
Common Shares in accordance with the terms hereof and thereof. The execution and delivery of the
Agreement by the Company and the consummation by the Company of the transactions contemplated
hereby, including, without limitation, the issuance of the Common Shares, have been duly authorized
by the Company’s Board of Directors and no further consent or authorization is required by the
Company, its Board of Directors or its stockholders. This Agreement has been duly executed and
delivered by the Company, and constitutes the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with its terms, except as such enforceability may be
limited by general principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies.
(c) Issuance of Common Shares. The Common Shares are duly authorized and, upon
issuance in accordance with the terms hereof, shall be validly issued and free from all taxes,
liens and charges with respect to the issue thereof and shall be fully paid and nonassessable with
the holder being entitled to all rights accorded to a holder of Common Stock. The issuance by the
Company of the Common Shares is exempt from registration under the 1933 Act.
(d) No Integrated Offering. Neither the Company, nor any of its subsidiaries or
affiliates, nor any person acting on its or their behalf, has directly or indirectly made any
offers or sales of any security or solicited any offers to buy any security under circumstances
that would cause the offering of the Common Shares pursuant to this Agreement to be integrated with
prior offerings by the Company for purposes of the Securities Act which would prevent the Company
from selling the Common Shares pursuant to Rule 506 under the Securities Act, or any
applicable exchange-related stockholder approval provisions, nor will the Company or any of
its affiliates or subsidiaries take any action or steps that would cause the offering of the Common
Shares to be integrated with other offerings.
(e) No Conflicts. The execution, delivery and performance of this Agreement by the
Company and the consummation by the Company of the transactions contemplated hereby and thereby
(including, without limitation, the issuance of the Common Shares) will not (i) result in a
violation of the Certificate of Incorporation (as defined below) or Bylaws (as defined below) of
the Company 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 material agreement, indenture or instrument to
which the Company is a party, or (iii) result in a violation of any law, rule, regulation, order,
judgment or decree (including federal and state securities laws and regulations) applicable to the
Company or by which any property or asset of the Company is bound or affected.
(f) Consents. The Company is not required to obtain any consent, authorization or
order of, or make any filing or registration with, any court, governmental agency or any regulatory
or self-regulatory agency or any other person in order for it to execute, deliver or perform any of
its obligations under or contemplated by the Agreement in accordance with the terms hereof.
(g) Acknowledgment Regarding Buyer’s Purchase of Common Shares. The Company
acknowledges and agrees that Buyer is acting solely in the capacity of arm’s length purchaser with
respect to the Agreement and the transactions contemplated hereby and thereby and that Buyer is not
(i) an officer or director of the Company, (ii) an “affiliate” of the Company (as defined in Rule
144) or (iii) to the knowledge of the Company, a “beneficial owner” of more than 10% of the Common
Stock (as defined for purposes of Rule 13d-3 of the Securities Exchange Act of 1934, as amended
(the “1934 Act”)).
(h) No General Solicitation; Placement Agent’s Fees. Neither the Company, nor any of
its affiliates, nor any person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in connection with the
offer or sale of the Common Shares. The Company shall be responsible for the payment of any
placement agent’s fees, financial advisory fees, or brokers’ commissions (other than for persons
engaged by any Buyer or its investment advisor) relating to or arising out of the transactions
contemplated hereby.
(i) SEC Documents; Financial Statements. During the two years prior to the date
hereof, the Company has timely filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act (all
of the foregoing filed prior to the date hereof or prior to the date of the Closing, and all
exhibits included therein and financial statements and schedules thereto and documents incorporated
by reference therein being hereinafter referred to as the
“SEC Documents”). As of their respective
dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act
and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. As of their respective
dates, the financial statements of the Company included in the SEC Documents complied as to form in
all material respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial statements have been prepared in
accordance with generally accepted accounting principles, consistently applied, during the periods
involved (except (i) as may be otherwise indicated in such financial statements or the notes
thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all material respects
the financial position of the Company as of the dates thereof and the results of its operations and
cash flows for the periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments). No other information provided by or on behalf of the Company to the
Buyer which is not included in the SEC Documents, including, without limitation, information
referred to in Section 2(d) of this Agreement, contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make the statements therein, in the light of
the circumstance under which they are or were made, not misleading.
| 4. | MISCELLANEOUS. |
(a) Governing Law; Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of New York, without giving effect to any choice of law or conflict of
law provision or rule (whether of the State of New York or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State of New York. Each
party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts
sitting in The City of New York, Borough of Manhattan for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that such suit, action or
proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding
is improper. Each party hereby irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding by mailing a copy thereof to such party
at the address for such notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner permitted by law.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL
FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
(b) Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the other party;
provided that a facsimile signature shall be considered due execution and shall be binding upon the
signatory thereto with the same force and effect as if the signature were an original, not a
facsimile signature.
(c) Headings. The headings of this Agreement are for convenience of reference and
shall not form part of, or affect the interpretation of, this Agreement.
(d) Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity
or enforceability of any provision of this Agreement in any other jurisdiction.
(e) Entire Agreement; Amendments. This Agreement supersedes all other prior oral or
written agreements between the Buyer, the Company, their affiliates and persons acting on their
behalf with respect to the matters discussed herein, and this Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or therein, neither the
Company nor Buyer makes any representation, warranty, covenant or undertaking with respect to such
matters. No provision of this Agreement may be amended other than by an instrument in writing
signed by the Company and Buyer. No provision hereof may be waived other than by an instrument in
writing signed by the party against whom enforcement is sought.
(f) Notices. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and will be deemed to
have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by
facsimile (provided confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one Business Day after deposit with an overnight
courier service, in each case properly addressed to the party to receive the same. The addresses
and facsimile numbers for such communications shall be:
If to the Company:
JMAR Technologies, Inc.
00000 Xxxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Chief Financial Officer
00000 Xxxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Chief Financial Officer
If to Buyer:
Laurus Master Fund, Ltd.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxx, Esq.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxx, Esq.
or to such other address and/or facsimile number and/or to the attention of such other person as
the recipient party has specified by written notice given to each other party five (5) days prior
to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of
such notice, consent, waiver or other communication, (B) mechanically or electronically generated
by the sender’s facsimile machine containing the time, date, recipient facsimile number and an
image of the first page of such transmission or (C) provided by an overnight courier service shall
be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight
courier service in accordance with clause (i), (ii) or (iii) above, respectively.
(g) Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns, including any purchasers of the
Common Shares. The Company shall not assign this Agreement or any rights or obligations hereunder
without the prior written consent of Buyer, including by merger or consolidation. Buyer may assign
some or all of its rights hereunder without the consent of the Company, in which event such
assignee shall be deemed to be a Buyer hereunder with respect to such assigned rights.
(h) No Third Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective permitted successors and assigns, and is not for the benefit
of, nor may any provision hereof be enforced by, any other person.
(i) Survival. The representations and warranties of the Company and Buyer contained
in Sections 2 and 3 and the agreements and covenants set forth in this Section 4 shall survive the
Closing and the delivery of Common Shares.
(j) Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as any other party may reasonably request in
order to carry out the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
IN WITNESS WHEREOF, the Buyer and the Company have executed this Securities Purchase Agreement
as of the date first written above.
| JMAR TECHNOLOGIES, INC. |
||||
| By: | /s/ C. NEIL BEER | |||
| Name: | C. Neil Beer | |||
| Title: | Chief Executive Officer | |||
| LAURUS MASTER FUND, LTD. |
||||
| By: | /s/ XXXXXX GRIN | |||
| Name: | Xxxxxx Grin | |||
| Title: | Director | |||
