Exihibit 10.1
SECURITIES PURCHASE AGREEMENT
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This Securities Purchase Agreement made this 10th day of April, 1998
is executed in reliance upon the transactional exemption afforded by Regulation
D ("Regulation D") as promulgated by the Securities and Exchange Commission
("SEC"), under the Securities Act of 1933, as amended ("1933 Act").
This Securities Purchase Agreement has been executed by the
undersigned in connection with the private placement of 400,000 shares of Common
Stock and a Common Stock Purchase Warrant for the purchase of up to 200,000
shares of Common Stock at an exercise price of U.S.$1.25 per share (hereinafter
collectively referred to as the "Securities") of:
The Eastwind Group, Inc.
100 Four Falls Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
a corporation organized under the laws of the State of Delaware (hereinafter
referred to as "ISSUER"), all in accordance with the terms of a Confidential
Private Offering Memorandum of ISSUER dated April 10, 1998 and all exhibits and
attachments thereto (the "Offering Memorandum").
The undersigned:
Xxxxxxx Capital Ltd.
Tropic Isle Building
Road Town
Tortola, British Virgin Islands
a corporation organized under the laws of the British Virgin Islands
(hereinafter referred to as the "PURCHASER"), hereby represents and warrants to,
and agrees with ISSUER as follows:
1. AGREEMENT TO SUBSCRIBE; PURCHASE PRICE.
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PURCHASER hereby subscribes for 400,000 shares of Common Stock and a
Common Stock Purchase Warrant (the "Warrant") for the purchase of up to 200,000
shares of Common Stock at an exercise price of U.S.$1.25 per share (subject to
adjustment as provided in the Warrant) at an aggregate purchase price of
U.S.$500,000 (the "Purchase Price") payable in United States Dollars in cash by
wire transfer of immediately available funds at Closing, as defined below.
2. THE CLOSING-ACTIONS TO BE COMPLETED AT THE CLOSING.
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It is contemplated by the parties hereto that a closing (the
"Closing") shall occur upon receipt by ISSUER of this Securities Purchase
Agreement duly executed by PURCHASER, which executed Securities Purchase
Agreement is then accepted and executed by ISSUER. The date of the Closing
shall be the Closing Date. At the Closing, the following shall occur:
(a) ISSUER shall deliver or cause to be delivered to PURCHASER
within three (3) business days of Closing, certificates representing the shares
of Common Stock acquired hereby, registered in the name of PURCHASER, free and
clear of all liens, claims, charges and encumbrances (except as imposed under
applicable securities laws);
(b) ISSUER shall deliver or cause to be delivered to PURCHASER
within three (3) business days of Closing, the Warrant, a form of which is
attached to the Offering Memorandum as Exhibit B, respectively;
(c) PURCHASER shall deliver or cause to be delivered to ISSUER
U.S.$500,000 in cash by wire transfer of immediately available funds in full
payment of the Purchase Price; and
(d) ISSUER shall execute and deliver to PURCHASER a registration
rights agreement in substantially the form appearing as Appendix "A" hereto.
3. PURCHASER REPRESENTATIONS AND WARRANTIES.
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PURCHASER represents and warrants to ISSUER as follows:
(a) PURCHASER is purchasing the Securities for its own account
for investment only and not with a view to resale or distribution and will not
offer to sell, transfer or otherwise dispose of the Securities without
registration under the Act and any other applicable securities laws, or pursuant
to an exemption therefrom in the opinion of counsel satisfactory to ISSUER.
(b) All offering documents received by PURCHASER include
statements to the effect that the Securities have not been registered under the
Act or any other securities or blue sky laws and may not be offered for sale,
sold, transferred or otherwise disposed of unless the Securities are registered
under the Act and any other applicable securities laws or pursuant to an
exemption therefrom in the opinion of counsel satisfactory to ISSUER.
(c) PURCHASER acknowledges that the purchase of the Securities
involves a high degree of risk and further acknowledges that it can bear the
economic risk of the purchase of the Securities, including the total loss of its
investment for an indefinite period of time.
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(d) PURCHASER understands that the Securities are being offered
and sold to it in reliance on specific exemptions from the registration
requirements of federal and other applicable securities laws and that ISSUER is
relying upon the truth and accuracy of the representations, warranties,
agreements, acknowledgments and understandings of PURCHASER set forth herein in
order to determine the applicability of such exemptions and the suitability of
PURCHASER to acquire the Securities.
(e) PURCHASER is sufficiently experienced in financial and
business matters to be capable of evaluating the merits and risks of its
investments, and to make an informed decision relating thereto and is an
"accredited investor" as that term is defined in Rule 501 of Regulation D under
the Act.
(f) In evaluating this investment, PURCHASER has consulted its
own investment and/or legal and/or tax advisors.
(g) PURCHASER acknowledges that in the view of the SEC the
statutory basis for the exemption claimed for this transaction would not be
present if the offering of Securities, although in technical compliance with
Regulation D, is part of a plan or scheme to evade the registration provisions
of the Act. PURCHASER is acquiring the Securities for investment purposes and
has no present intention to resell, distribute, or offer to resell the
Securities.
(h) PURCHASER is not an underwriter of, or dealer in, the
Securities, and PURCHASER is not participating, pursuant to a contractual
agreement, in the distribution of the Securities.
(i) If PURCHASER is purchasing the Securities subscribed for
hereby in a representative or fiduciary capacity, the representations and
warranties in this Securities Purchase Agreement shall be deemed to have been
made on behalf of the person or persons for whom PURCHASER is so purchasing.
(j) PURCHASER acknowledges that it has received and reviewed
carefully the Offering Memorandum to which a form of this Securities Purchase
Agreement is attached, and all other exhibits thereto.
(k) PURCHASER acknowledges that, in making the decision to
purchase the Securities subscribed for, it has relied upon independent
investigations made by it and its purchaser representatives, if any, and
PURCHASER, and such representatives, if any, have, prior to any sale to it, been
given access and the opportunity to examine all material books and records of
ISSUER, all material contracts and documents relating to this offering and an
opportunity to ask questions of, and to receive answers from ISSUER or any
person acting on its behalf concerning the terms and conditions of this
offering. PURCHASER and its advisors, if
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any, have been furnished with access to all publicly available materials
relating to the business, finances and operations of the ISSUER and materials
relating to the offer and sale of the Securities which have been requested.
PURCHASER and its advisors, if any, have received complete and satisfactory
answers to any such inquiries.
(l) PURCHASER understands that no federal or state agency has
made or will make any finding or determination relating to the fairness for
public investment in the Securities, or has passed or made, or will pass on or
make, any recommendation or endorsement of the Securities.
(m) If PURCHASER is a partnership, corporation or trust, the
person executing this Securities Purchase Agreement on its behalf represents and
warrants that:
(1) He or she has made due inquiry to determine the
truthfulness of the representations and warranties made pursuant to this
Securities Purchase Agreement; and that
(2) He or she is duly authorized to make this investment and
to enter into and execute this Securities Purchase Agreement on behalf of such
entity.
(n) PURCHASER has legal power and authority to enter into and
perform this Securities Purchase Agreement and to consummate the transactions
contemplated hereby.
(o) This Securities Purchase Agreement has been duly executed and
delivered by PURCHASER and constitutes a legal, valid and binding obligation of
PURCHASER, enforceable against PURCHASER in accordance with its terms.
(p) The execution and delivery of this Securities Purchase
Agreement and the performance of the obligations imposed hereunder will not
result in a violation of any order, decree or judgment of any court or
governmental agency having jurisdiction over PURCHASER or PURCHASER's
properties, will not conflict with, constitute a default under, or result in the
breach of, any contract, agreement or other instrument to which PURCHASER is a
party or is otherwise bound and no consent, authorization or order of, or filing
or registration with, any court or governmental agency is required for the
execution, delivery and performance of this Securities Purchase Agreement.
(q) There is no litigation or proceeding pending or, to the best
knowledge of PURCHASER threatened, against PURCHASER which would have an effect
on the validity or performance of this Securities Purchase Agreement.
(r) PURCHASER understands and acknowledges that the acceptance of
a Purchase by ISSUER does not constitute a determination by ISSUER that an
investment in
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the Securities is suitable for the PURCHASER. The final determination of the
suitability of investment in the Securities must be made by the PURCHASER and
his, her or its advisors.
The foregoing representations and warranties are true and accurate as
of the date hereof, shall be true and accurate as of the date of the acceptance
by ISSUER of PURCHASER's subscription, and shall survive thereafter. If
PURCHASER has knowledge, prior to the acceptance of this Securities Purchase
Agreement by ISSUER, that any such representations and warranties shall not be
true and accurate in any respect, PURCHASER, prior to such acceptance, will give
written notice of such fact to ISSUER specifying which representations and
warranties are not true and accurate and the reasons therefor.
4. INDEMNIFICATION. PURCHASER agrees to indemnify and hold harmless
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the ISSUER and its officers, directors and affiliates from and against all
damages, losses, costs and expenses (including reasonable attorneys' fees) which
they may incur by reason of the failure of PURCHASER to fulfill any of the terms
or conditions of this Securities Purchase Agreement, or by reason of any breach
of the representations and warranties made by PURCHASER herein, or in any
document provided by the undersigned to the ISSUER.
5. ISSUER REPRESENTATIONS AND WARRANTIES.
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ISSUER represents and warrants to PURCHASER as follows:
(a) ISSUER is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has the corporate
power to conduct its business.
(b) The execution, delivery and performance of this Securities
Purchase Agreement by ISSUER has been duly approved by the Board of Directors of
ISSUER.
(c) The Securities have been duly and validly authorized and when
issued in accordance with the terms hereof, will be validly issued and non-
assessable.
6. EXEMPTION, RELIANCE ON REPRESENTATIONS.
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PURCHASER understands that the offer and sale of the Securities is not
being registered under the Act and that ISSUER is relying on the rules governing
the limited offering exemption pursuant to Regulation D under the Act.
7. TRANSFER AGENT INSTRUCTIONS.
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The Securities will be issued subject to a restrictive legend as
follows:
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"The shares of Common Stock represented by this Certificate were
issued pursuant to Regulation D under the Securities Act of 1933, as
amended (the "Act") and may not be sold, transferred or otherwise
disposed of except pursuant to registration under the Act and any
other applicable securities laws or the availability of an exemption
from registration under the Act and such laws, based upon an opinion
of counsel satisfactory to the Company."
The Warrant will also bear the following legend:
"This Warrant and the shares of Common Stock to be issued in
connection with this Warrant were issued pursuant to Regulation D
under the Securities Act of 1933, as amended (the "Act") and may
not be sold, transferred, or otherwise disposed of except
pursuant to registration under the Act and any other applicable
securities laws, or the availability of an exemption from
registration under the Act and such laws, based upon an opinion
of counsel satisfactory to the Company."
8. CONDITIONS TO THE ISSUER'S OBLIGATION TO SELL.
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PURCHASER understands ISSUER's obligation to sell the Securities is
conditioned upon:
(a) The receipt and acceptance by ISSUER of this Securities
Purchase Agreement for all of the Securities subscribed for (which acceptance
shall be evidenced by execution of this Securities Purchase Agreement by an
executive officer of ISSUER).
(b) Delivery to ISSUER by PURCHASER of the Purchase Price as
payment for the purchase of the Securities.
9. GOVERNING LAW.
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This Securities Purchase Agreement shall be enforced, governed by and
construed in accordance with the laws of the State of Delaware applicable to
agreements made and to be performed entirely within such State. In the event
that any provision of this Securities Purchase Agreement is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any
provision hereof which may prove invalid or unenforceable under any law shall
not affect the validity or enforceability of any other provision hereof. The
parties hereto hereby submit to the exclusive jurisdiction of the
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United States Federal Courts located in Delaware with respect to any dispute
arising under this Securities Purchase Agreement or the transactions
contemplated hereby.
10. ENTIRE AGREEMENT.
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This Securities Purchase Agreement constitutes the entire agreement
among the parties hereof with respect to the subject matter hereof and
supersedes any and all prior or contemporaneous representations, warranties,
agreements and understandings in connection therewith. This Securities Purchase
Agreement may be amended only by a writing executed by all parties hereto.
IN WITNESS WHEREOF, the undersigned have executed this Securities
Purchase Agreement as of the 10th day of April, 1998.
PURCHASER:
XXXXXXX CAPITAL LTD.
/s/ Xxxxxxxx X. Xxxxx
By:___________________________
Name: ________________________
Title: _______________________
Acknowledged and Accepted:
THE EASTWIND GROUP, INC.
/s/ Xxxx X. XxXxxxxx
By:_____________________________
Chairman
Title:__________________________
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