Exhibit 10.5 Agreements and notes in connection with the financing of Xxx and
associates
NOTE PURCHASE AGREEMENT
This NOTE PURCHASE AGREEMENT (this "Agreement") is made and entered into
as of May 25, 2004 by and among Amplidyne, Inc., a Delaware corporation (the
"Company"), and the party executing this Agreement (such party hereinafter
individually referred to as an "Investor").
R E C I T A L S
A. The Company requires an aggregate of $500,000 in funding (referred to
herein as the "Bridge Amount").
B. The Investor is willing to advance a portion of the Bridge Amount in
exchange for the issuance of a certain convertible promissory notes evidencing
such advance.
NOW THEREFORE, the parties hereby agree as follows:
1. PURCHASE AND SALE OF NOTES.
1.1 First Note Purchase. The undersigned Investor agrees to purchase
from the Company, on or before May 25, 2004, a Convertible Promissory Note in
the form attached to this Agreement as Exhibit A ("Note") in the aggregate
principal face amount of $150,000. This Agreement shall be effective as between
a given Investor and the Company upon the execution and delivery hereof by such
Investor and the Company. Simultaneously with the issuance of the Note, the
Investor shall deliver or wire transfer immediately available funds of $150,000
as directed by the Company.
1.2 Second Note Purchase. The undersigned Investor agrees to
purchase from the Company, on or before May 30, 2004, a Convertible Promissory
Note in the form attached to this Agreement as Exhibit A ("Note") in the
aggregate principal face amount of $50,000 (the "Second Note"). This Agreement
shall be effective as between the Investor and the Company upon the execution
and delivery hereof by such Investor and the Company. Simultaneously with the
issuance of the Second Note, the Investor shall deliver or wire transfer
immediately available funds of $50,000 as directed by the Company.
1.3 Third Note Purchase. The undersigned Investor agrees to purchase
from the Company, between May 30 and October 31, 2004, one or more Convertible
Promissory Notes in the form attached to this Agreement as Exhibit A ("Note") in
the aggregate principal face amount of $300,000. This Agreement shall be
effective as between a given Investor and the Company upon the execution and
delivery hereof by such Investor and the Company. Simultaneously with the
issuance of the Note, the Investor shall deliver or wire transfer immediately
available funds of $300,000 as directed by the Company.
54
Exhibit 10.5 - continued
2. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF INVESTORS. The
Investor hereby represents and warrants to, and agrees with, the Company, that:
2.1 Authorization. This Agreement constitutes such Investor's valid
and legally binding obligation, enforceable in accordance with its terms except
as may be limited by (i) applicable bankruptcy, insolvency, reorganization or
other laws of general application relating to or affecting the enforcement of
creditors' rights generally and (ii) the effect of rules of law governing the
availability of equitable remedies. The Investor represents that he has full
power and authority to enter into this Agreement.
3.2 Purchase for Own Account. The Notes and the shares of the
Company's capital stock issuable upon the conversion of the Notes (the
"Conversion Stock" or the "Securities") will be acquired for investment for the
Investor's own account, not as a nominee or agent, and not with a view to the
public resale or distribution thereof within the meaning of the 1933 Act, and
such Investor has no present intention of selling, granting any participation
in, or otherwise distributing the same.
3.3 Disclosure of Information. The Investor has received or has had
full access to all the information it considers necessary or appropriate to make
an informed investment decision with respect to the Note and the Securities. The
Investor further has had an opportunity to ask questions and receive answers
from the Company regarding the terms and conditions of the offering of the
Securities and to obtain additional information (to the extent the Company
possessed such information or could acquire it without unreasonable effort or
expense) necessary to verify any information furnished to such Investor or to
which such Investor had access.
3.4 Investment Experience. Such Investor understands that the
purchase of the Securities involves substantial risk. Such Investor (i) has
experience as an investor in securities of companies in the development stage
and acknowledges that such Investor is able to fend for itself, can bear the
economic risk of such Investor's investment in the Securities and has such
knowledge and experience in financial or business matters that such Investor is
capable of evaluating the merits and risks of this investment in the Securities
and protecting its own interests in connection with this investment and/or (ii)
has a preexisting personal or business relationship with the Company and certain
of its officers, directors or controlling persons of a nature and duration that
enables such Investor to be aware of the character, business acumen and
financial circumstances of such persons.
3.5 Accredited Investor Status. Such Investor is an "accredited
investor" within the meaning of Regulation D promulgated under the 1933 Act.
55
Exhibit 10.5 - continued
3.6 Restricted Securities. Such Investor understands that the
Securities are characterized as "restricted securities" under the 1933 Act and
Rule 144 promulgated thereunder inasmuch as they are being acquired from the
Company in a transaction not involving a public offering, and that under the
1933 Act and applicable regulations thereunder such securities may be resold
without registration under the 1933 Act only in certain limited circumstances.
In this connection, such Investor represents that such Investor is familiar with
Rule 144 of the U.S. Securities and Exchange Commission, as presently in effect,
and understands the resale limitations imposed thereby and by the 1933 Act. Such
Investor understands that the Company is under no obligation to register any of
the securities sold hereunder.
3.7 No Solicitation. At no time was the Investor presented with or
solicited by any publicly issued or circulated newspaper, mail, radio,
television or other form of general advertising or solicitation in connection
with the offer, sale and purchase of the Securities.
3.8 Further Limitations on Disposition. Without in any way limiting
the representations set forth above, the Investor further agrees not to make any
disposition of all or any portion of the Securities unless and until:
(a) there is then in effect a registration statement under the
1933 Act covering such proposed disposition and such disposition is made in
accordance with such registration statement; or
(b) such Investor shall have notified the Company of the
proposed disposition, and shall have furnished the Company with a statement of
the circumstances surrounding the proposed disposition, and, at the expense of
such Investor or its transferee, with an opinion of counsel, reasonably
satisfactory to the Company, that such disposition will not require registration
of such securities under the 1933 Act.
Notwithstanding the provisions of paragraphs (a) and (b) above, no such
registration statement or opinion of counsel shall be required: (i) for any
transfer of any Securities in compliance with Rule 144 or Rule 144A; (ii) for
any transfer of any Securities by an Investor that is a partnership or a
corporation to (A) a partner of such partnership or shareholder of such
corporation, (B) a retired partner of such partnership who retires after the
date hereof, (C) the estate of any such partner or shareholder; or (iii) for the
transfer by gift, will or intestate succession by any Investor to his or her
spouse or lineal descendants or ancestors or any trust for any of the foregoing;
provided that in each of the foregoing cases the transferee agrees in writing to
be subject to the terms of this Section 3 to the same extent as if the
transferee were an original Investor hereunder.
56
Exhibit 10.5 - continued
3.9 Legends. Such Investor understands and agrees that the
certificates evidencing the Securities will bear legends substantially similar
to those set forth below in addition to any other legend that may be required by
applicable law, by the Company's Certificate of Incorporation or Bylaws, or by
any agreement between the Company and such Investor:
(a) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS
ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE
REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD
OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED
TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
The legend set forth in (a) above shall be removed by the Company from any
certificate evidencing the Securities upon delivery to the Company of an opinion
of counsel, reasonably satisfactory to the Company, that a registration
statement under the 1933 Act is at that time in effect with respect to the
legended security or that such security can be freely transferred in a public
sale (other than pursuant to Rule 144 or Rule 145 under the 0000 Xxx) without
such a registration statement being in effect and that such transfer will not
jeopardize the exemption or exemptions from registration pursuant to which the
Company issued the Securities.
4. MISCELLANEOUS.
4.1 Governing Law. This Agreement shall be governed by and construed
under the internal laws of the State of New Jersey without reference to
principles of conflict of laws or choice of laws.
4.2 Counterparts. This Agreement may be executed 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.
57
Exhibit 10.5 - continued
4.3 Notices. All notices and other communications required or
permitted hereunder shall be in writing and may be delivered in person or by
facsimile with confirmation of delivery, electronic mail, or courier, postage
prepaid and addressed (a) if to the Investor, at c/o TEK Ltd. 0 Xxx Xxxxxx,
Xxxxxxxxxx, XX 00000-0000, or at such other address as the Investor shall have
furnished to the Company in writing, or (b) if to the Company, at 00 XxXxxxxx
Xxxxxx, Xxxxxxx, XX 00000, ATTN: Xxxx Xxxxx, or at such other address as the
Company shall have furnished to the Holder. Each such notice or other
communication shall, for all purposes of this Note, be treated as effective or
having been given when delivered if delivered personally, or, if sent by mail,
at the earlier of its receipt or 72 hours after the same has been deposited in a
regularly maintained receptacle for the deposit of the United States mail,
addressed and mailed as aforesaid.
4.4 Amendments and Waivers. Any term of this Agreement and the Notes
may be amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
Notes representing at least a majority of the aggregate principal amount of the
Notes at the time outstanding. Any amendment or waiver effected in accordance
with this Section 4.4 shall be binding upon each holder of any Notes at the time
outstanding, each future holder of such securities, and the Company.
4.5 Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision(s) shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision(s) were so excluded and shall be enforceable in
accordance with its terms.
4.6 Entire Agreement. This Agreement, together with all exhibits and
schedules hereto, constitutes the entire understanding and agreement of the
parties with respect to the subject matter hereof and supersedes all prior
understandings and agreements with respect to such matters. This Agreement may
be signed in one counterpart or several, and if more than one, then all
counterparts, taken together, shall constitute the original.
4.7 Other Agreements.Xxxxxxxx Xxxxx and Xxxxxxxxx Xxxxx agree to
devote their full business time and attention to the business of the Company for
eight (8) years from the date hereof. In the event that either Xxxxxxxx Xxxxx or
Xxxxxxxxx Xxxxx must leave the employ of the Company for any reason, each agrees
that, if requested by the Board of Directors of the Company, he will use his
best efforts to find a qualified replacement for himself acceptable to the Board
of Directors, and that he will not engage in a business competitive with the
Company for a period of eight (8) years. Company Agrees to resolve open matters
with its Transfer Agent and to reinstate its corporate charter in Delaware
within four (4) weeks from the date hereof.
58
Exhibit 10.5 - continued
The Investor fully understands that the Note and the Securities are speculative
investments which involve a high degree of risk and possible loss of his entire
investment. He fully understands the nature of the risks involved in purchasing
the Note and the Securities and he is qualified by my knowledge and experience
to evaluate investments of this type. He has carefully considered the potential
risks relating to the Company and purchase of the Note and the Securities. His
advisors and he have had the opportunity to ask questions of, and receive
answers from, representatives of the Company or persons acting on its behalf
concerning the Company and the terms and conditions of a proposed investment in
the Company. His advisors and I have also had the opportunity to obtain
additional information necessary to verify the accuracy of information furnished
about the Company. Accordingly, he has independently evaluated the risks of
purchasing the Note and the Securities. The Investor further understands that if
the Company does not raise the entire $500,000 contemplated in this Agreement,
that there is no guarantee that the Company will survive.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
COMPANY INVESTOR
AMPLIDYNE, INC. Name: Xxxx Xxx
By: By:
-------------------------------- --------------------------------
Name: Name:
-----------------------------
Title: Title:
----------------------------- ----------------------------
----------------------------------- -----------------------------------
Xxxxxxxx Xxxxx, as to Section 4.7 Xxxxxxxxx Xxxxx, as to Section 4.7
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER APPLICABLE
STATE SECURITIES LAWS AND HAVE BEEN TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT
WITH A VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION THEREOF. THE
SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION AND QUALIFICATION WITHOUT, EXCEPT UNDER CERTAIN SPECIFIC LIMITED
CIRCUMSTANCES, AN OPINION OF COUNSEL FOR THE HOLDER, CONCURRED IN BY COUNSEL FOR
THE COMPANY THAT SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
59
Exhibit 10.5 - continued
---------------------
CONVERTIBLE PROMISSORY NOTE
(FIRST NOTE)
Raritan, New Jersey
$150,000 May 25, 2004
Principal
For value received, Amplidyne, Inc. (the "Company"), a Delaware corporation, for
value received, hereby promises to pay to the order of Xxxx Xxx or holder (the
"Holder") in lawful money of the United States at the address of the Holder set
forth below, the principal amount of One Hundred Fifty Thousand and no/100
Dollars exactly ($150,000.00), without interest.
a. The principal of this Note is due and payable immediately upon
written demand for such payment; provided, however, that a demand
cannot be made prior to December 31, 2004, unless the Company is in
default of the Note Purchase Agreement between the Holder and the
Company. This Note may be prepaid without penalty or premium, in
whole or in part, at any time.
b. Upon payment in full of all principal payable hereunder, this Note
shall be surrendered to Company for cancellation.
2. Conversion.
a. Conversion. The outstanding principal balance of this Note shall be
converted into Series C Convertible Preferred Stock ("Securities")
representing Twenty-Four percent (24%) of the issued and outstanding
capital stock of the Company at such time as the Company's charter
is reinstated in Delaware, and its shareholders approve this
transaction and an increase in the Company's authorized common stock
to at least 70,675,000 shares.
b. Mechanics of Conversion. Upon the conversion of this Note, the
outstanding principal and interest payable hereunder shall be
converted automatically without any further action by the Holder and
whether or not the Note is surrendered to the Company or its
transfer agent. The Company shall not be obligated to issue
certificates evidencing the shares of the securities issuable upon
conversion unless such Notes are either delivered to the Company or
its transfer agent, or the Holder notifies the Company or its
transfer agent that such Note has been lost, stolen or destroyed and
executes an agreement satisfactory to the Company to indemnify the
Company from any loss incurred by it in connection with such Note.
The Company shall, as soon as practicable after such delivery, or
such agreement and indemnification, issue and deliver at such office
to such holder of such Note, a certificate or certificates for the
number of Securities to which the Holder shall be entitled. The
person or persons entitled to receive the Securities issuable upon
such conversion shall be treated for all purposes as the record
holder or holders of such securities on such date.
3. Attorneys Fees. If the indebtedness represented by this Note or any part
thereof is collected in bankruptcy, receivership or other judicial
proceedings or if this Note is placed in the hands of attorneys for
collection after default, the Company agrees to pay, in addition to the
principal and interest payable hereunder, reasonable attorneys' fees and
costs incurred by the Holder.
60
4. Notices. All notices and other communications required or permitted
hereunder shall be in writing and may be delivered in person or by
facsimile with confirmation of delivery, electronic mail, or courier,
postage prepaid and addressed (a) if to the Holder, at c/o TEK Ltd. 0 Xxx
Xxxxxx, Xxxxxxxxxx, XX 00000-0000, or at such other address as the Holder
shall have furnished to the Company in writing, or (b) if to the Company,
at 00 XxXxxxxx Xxxxxx, Xxxxxxx, XX 00000, ATTN: Xxxx Xxxxx, or at such
other address as the Company shall have furnished to the Holder. Each such
notice or other communication shall, for all purposes of this Note, be
treated as effective or having been given when delivered if delivered
personally, or, if sent by mail, at the earlier of its receipt or 72 hours
after the same has been deposited in a regularly maintained receptacle for
the deposit of the United States mail, addressed and mailed as aforesaid.
5. Governing Law. This Agreement shall be governed by and construed under the
internal laws of the State of New Jersey without reference to principles
of conflict of law or choice of laws.
6. No Personal Liability. In no event shall any officer, director or
shareholder of the Company be personally liable for any amount due
hereunder.
AMPLIDYNE, INC.
By:
------------------------------------
Name:
-----------------------------------
Its:
-----------------------------------
Agreed and Accepted:
Name: Xxxx Xxx
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
61
Exhibit 10.5 - continued
NOTE PURCHASE AGREEMENT
Xxx Xxxxx "Xxxxxxx" Xxx
This NOTE PURCHASE AGREEMENT (this "Agreement") is made and entered into
as of August 25, 2004 by and among Amplidyne, Inc., a Delaware corporation (the
"Company"), and the party executing this Agreement (such party hereinafter
individually referred to as an "Investor").
R E C I T A L S
A. The Company requires an aggregate of $500,000 in funding (referred to
herein as the "Bridge Amount").
B. The Investor is willing to advance a portion of the Bridge Amount in
exchange for the issuance of certain promissory notes evidencing such advance.
NOW THEREFORE, the parties hereby agree as follows:
1. PURCHASE AND SALE OF NOTE.
1.4 Note Purchase. The undersigned Investor agrees to purchase from
the Company, on or before August 15, 2004, one or more Promissory Notes in the
form attached to this Agreement as Exhibit A ("Note") in the aggregate principal
face amount of $50,000. This Agreement shall be effective as between a given
Investor and the Company upon the execution and delivery hereof by such Investor
and the Company. Simultaneously with the issuance of the Note, the Investor
shall deliver or wire transfer immediately available funds of $50,000 as
directed by the Company.
2. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF INVESTORS. The
Investor hereby represents and warrants to, and agrees with, the Company, that:
2.1 Authorization. This Agreement constitutes such Investor's valid
and legally binding obligation, enforceable in accordance with its terms except
as may be limited by (i) applicable bankruptcy, insolvency, reorganization or
other laws of general application relating to or affecting the enforcement of
creditors' rights generally and (ii) the effect of rules of law governing the
availability of equitable remedies. The Investor represents that he has full
power and authority to enter into this Agreement.
3.2 Purchase for Own Account. The Notes will be acquired for
investment for the Investor's own account, not as a nominee or agent, and not
with a view to the public resale or distribution thereof within the meaning of
the 1933 Act, and such Investor has no present intention of selling, granting
any participation in, or otherwise distributing the same.
62
Exhibit 10.5 - continued
3.3 Disclosure of Information. The Investor has received or has had
full access to all the information it considers necessary or appropriate to make
an informed investment decision with respect to the Note. The Investor further
has had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the Securities and to
obtain additional information (to the extent the Company possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify any information furnished to such Investor or to which such
Investor had access.
3.4 Investment Experience. Such Investor understands that the
purchase of the Note involves substantial risk. Such Investor (i) has experience
as an investor in securities of companies in the development stage and
acknowledges that such Investor is able to fend for itself, can bear the
economic risk of such Investor's investment in the Note and has such knowledge
and experience in financial or business matters that such Investor is capable of
evaluating the merits and risks of this investment in the Securities and
protecting its own interests in connection with this investment and/or (ii) has
a preexisting personal or business relationship with the Company and certain of
its officers, directors or controlling persons of a nature and duration that
enables such Investor to be aware of the character, business acumen and
financial circumstances of such persons.
3.5 Accredited Investor Status. Such Investor is an "accredited
investor" within the meaning of Regulation D promulgated under the 0000 Xxx.
3.6 Restricted Securities. Such Investor understands that the Notes
are characterized as "restricted securities" under the 1933 Act and Rule 144
promulgated thereunder inasmuch as they are being acquired from the Company in a
transaction not involving a public offering, and that under the 1933 Act and
applicable regulations thereunder such securities may be resold without
registration under the 1933 Act only in certain limited circumstances. In this
connection, such Investor represents that such Investor is familiar with Rule
144 of the U.S. Securities and Exchange Commission, as presently in effect, and
understands the resale limitations imposed thereby and by the 1933 Act. Such
Investor understands that the Company is under no obligation to register any of
the notes sold hereunder.
3.7 No Solicitation. At no time was the Investor presented with or
solicited by any publicly issued or circulated newspaper, mail, radio,
television or other form of general advertising or solicitation in connection
with the offer, sale and purchase of the Securities.
3.8 Further Limitations on Disposition. Without in any way limiting
the representations set forth above, the Investor further agrees not to make any
disposition of all or any portion of the Notes unless and until:
(a) there is then in effect a registration statement under the
1933 Act covering such proposed disposition and such disposition is made in
accordance with such registration statement; or
63
Exhibit 10.5 - continued
(b) such Investor shall have notified the Company of the proposed disposition,
and shall have furnished the Company with a statement of the circumstances
surrounding the proposed disposition, and, at the expense of such Investor
or its transferee, with an opinion of counsel, reasonably satisfactory to
the Company, that such disposition will not require registration of such
securities under the 1933 Act.
Notwithstanding the provisions of paragraphs (a) and (b) above, no such
registration statement or opinion of counsel shall be required: (i) for any
transfer of any Note in compliance with Rule 144 or Rule 144A; (ii) for any
transfer of any Note by an Investor that is a partnership or a corporation to
(A) a partner of such partnership or shareholder of such corporation, (B) a
retired partner of such partnership who retires after the date hereof, (C) the
estate of any such partner or shareholder; or (iii) for the transfer by gift,
will or intestate succession by any Investor to his or her spouse or lineal
descendants or ancestors or any trust for any of the foregoing; provided that in
each of the foregoing cases the transferee agrees in writing to be subject to
the terms of this Section 3 to the same extent as if the transferee were an
original Investor hereunder.
3.9 Legends. Such Investor understands and agrees that the Notes
will bear legends substantially similar to those set forth below in addition to
any other legend that may be required by applicable law, by the Company's
Certificate of Incorporation or Bylaws, or by any agreement between the Company
and such Investor:
t 18 0 (a) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS
ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE
REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD
OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED
TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
4. MISCELLANEOUS.
4.1 Governing Law. This Agreement shall be governed by and construed
under the internal laws of the State of New Jersey without reference to
principles of conflict of laws or choice of laws.
Exhibit 10.5 - continued
64
4.2 Counterparts. This Agreement may be executed 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.
4.3 Notices. All notices and other communications required or
permitted hereunder shall be in writing and may be delivered in person or by
facsimile with confirmation of delivery, electronic mail, or courier, postage
prepaid and addressed (a) if to the Investor, at 0 Xxxxxxxx Xxxxx, Xxxxxxxxxx,
XX 00000 or at such other address as the Investor shall have furnished to the
Company in writing, or (b) if to the Company, at 00 XxXxxxxx Xxxxxx, Xxxxxxx, XX
00000, ATTN: Xxxx Xxxxx, or at such other address as the Company shall have
furnished to the Holder. Each such notice or other communication shall, for all
purposes of this Note, be treated as effective or having been given when
delivered if delivered personally, or, if sent by mail, at the earlier of its
receipt or 72 hours after the same has been deposited in a regularly maintained
receptacle for the deposit of the United States mail, addressed and mailed as
aforesaid.
4.4 Amendments and Waivers. Any term of this Agreement and the Notes
may be amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
Notes representing at least a majority of the aggregate principal amount of the
Notes at the time outstanding. Any amendment or waiver effected in accordance
with this Section 4.4 shall be binding upon each holder of any Notes at the time
outstanding, each future holder of such securities, and the Company.
4.5 Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision(s) shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision(s) were so excluded and shall be enforceable in
accordance with its terms.
4.6 Entire Agreement. This Agreement, together with all exhibits and
schedules hereto, constitutes the entire understanding and agreement of the
parties with respect to the subject matter hereof and supersedes all prior
understandings and agreements with respect to such matters. This Agreement may
be signed in one counterpart or several, and if more than one, then all
counterparts, taken together, shall constitute the original.
4.7 Other Agreements.Xxxxxxxx Xxxxx and Xxxxxxxxx Xxxxx agree to
devote their full business time and attention to the business of the Company for
eight (8) years from the date hereof. In the event that either Xxxxxxxx Xxxxx or
Xxxxxxxxx Xxxxx must leave the employ of the Company for any reason, each agrees
that, if requested by the Board of Directors of the Company, he will use his
best efforts to find a qualified replacement for himself acceptable to the Board
of Directors, and that he will not engage in a business competitive with the
Company for a period of eight (8) years. Company Agrees to resolve open matters
with its Transfer Agent and to reinstate its corporate charter in Delaware
within four (4) weeks from May 25, 2004.
65
Exhibit 10.5 - continued
The Investor fully understands that the Note are speculative investments which
involve a high degree of risk and possible loss of his entire investment. He
fully understands the nature of the risks involved in purchasing the Note and he
is qualified by my knowledge and experience to evaluate investments of this
type. He has carefully considered the potential risks relating to the Company
and purchase of the Note and the Securities. His advisors and he have had the
opportunity to ask questions of, and receive answers from, representatives of
the Company or persons acting on its behalf concerning the Company and the terms
and conditions of a proposed investment in the Company. His advisors and he have
also had the opportunity to obtain additional information necessary to verify
the accuracy of information furnished about the Company. Accordingly, he has
independently evaluated the risks of purchasing the Note and the Securities. The
Investor further understands that if the Company does not raise the entire
$500,000 contemplated in this Agreement, that there is no guarantee that the
Company will survive.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
COMPANY INVESTOR
AMPLIDYNE, INC. Name: Xxx Xxxxx "Xxxxxxx" Xxx
By: By:
-------------------------------- --------------------------------
Name: Name:
-----------------------------
Title: Title:
----------------------------- ----------------------------
------------------------------------ -----------------------------------
Xxxxxxxx Xxxxx, as to Section 4.7 Xxxxxxxxx Xxxxx, as to Section 4.7
Exhibit 10.5 - continued
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER APPLICABLE
STATE SECURITIES LAWS AND HAVE BEEN TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT
WITH A VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION THEREOF. THE
SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION AND QUALIFICATION WITHOUT, EXCEPT UNDER CERTAIN SPECIFIC LIMITED
CIRCUMSTANCES, AN OPINION OF COUNSEL FOR THE HOLDER, CONCURRED IN BY COUNSEL FOR
THE COMPANY THAT SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
---------------
PROMISSORY NOTE
(Xxxxxxx NOTE)
Raritan, New Jersey
$50,000 August 25, 2004
1. Principal
a. For value received, Amplidyne, Inc. (the "Company"), a Delaware
corporation, for value received, hereby promises to pay to the order
of Hye Xxxxx Xxx or holder (the "Holder") in lawful money of the
United States at the address of the Holder set forth below, the
principal amount of Fifty Thousand Dollars exactly ($50,000),
without interest.
b. The principal of this Note is due and payable immediately upon
written demand for such payment; provided, however, that a demand
cannot be made prior to December 31, 2004, unless the Company is in
default of the Note Purchase Agreement between the Holder and the
Company. This Note may be prepaid without penalty or premium, in
whole or in part, at any time.
c. Upon payment in full of all principal payable hereunder, this Note
shall be surrendered to Company for cancellation.
2. Attorneys Fees. If the indebtedness represented by this Note or any part
thereof is collected in bankruptcy, receivership or other judicial
proceedings or if this Note is placed in the hands of attorneys for
collection after default, the Company agrees to pay, in addition to the
principal and interest payable hereunder, reasonable attorneys' fees and
costs incurred by the Holder.
66
Exhibit 10.5 - continued
3. Notices. All notices and other communications required or permitted
hereunder shall be in writing and may be delivered in person or by
facsimile with confirmation of delivery, electronic mail, or courier,
postage prepaid and addressed (a) if to the Holder, at 0 Xxxxxxxx Xxxxx,
Xxxxxxxxxx, XX 00000, or at such other address as the Holder shall have
furnished to the Company in writing, or (b) if to the Company, at 00
XxXxxxxx Xxxxx, Xxxxxxx, XX 00000, ATTN: Xxxx Xxxxx, or at such other
address as the Company shall have furnished to the Holder. Each such
notice or other communication shall, for all purposes of this Note, be
treated as effective or having been given when delivered if delivered
personally, or, if sent by mail, at the earlier of its receipt or 72 hours
after the same has been deposited in a regularly maintained receptacle for
the deposit of the United States mail, addressed and mailed as aforesaid.
4. Blank.
5. Governing Law. This Agreement shall be governed by and construed under the
internal laws of the State of New Jersey without reference to principles
of conflict of law or choice of laws.
6. No Personal Liability. In no event shall any officer, director or
shareholder of the Company be personally liable for any amount due
hereunder.
AMPLIDYNE, INC.
By:
------------------------------------
Name:
-----------------------------------
Its:
-----------------------------------
Agreed and Accepted:
Name: Xxx Xxxxx "Xxxxxxx" Xxx
By:
-------------------------------------
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