Exhibit 10.15
NOTE PURCHASE AGREEMENT
This Note Purchase Agreement (this "Agreement") is made and entered
into as of January 1, 2004 by and between Solution Technology International,
Inc., a Delaware corporation (the "Company") and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the
"Lender").
WHEREAS, the Company is currently in need of funds to help finance its
operations; and
WHEREAS, the Lender is willing to advance funds to the Company, from
time to time, in exchange for the issuance to her of certain promissory notes
evidencing the Company's obligation to repay the Lender's loan of the advanced
funds, all as provided in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the parties hereby agree as follows:
1. CERTAIN DEFINITIONS.
1.1 Borrowing. The term "Borrowing" shall mean a borrowing
consisting of all of the Loans made by the Lender under the terms of this
Agreement.
1.2 Change of Control Defined. The term "Change of Control"
shall mean any consolidation or merger of the Company with or into any other
corporation or other entity, or any other corporate reorganization, in which the
stockholders of the Company immediately prior to such consolidation, merger or
reorganization, own less than 50% of the voting power immediately after such
consolidation, merger or reorganization of the surviving corporation or other
entity of such consolidation, merger or reorganization, or any transaction or
series of related transactions to which the Company is a party in which in
excess of 50% of the Company's voting power is transferred, or any sale or other
disposition of all or substantially all of the Company's assets.
1.3 Commitment. The term "Commitment" shall mean, with respect
to the Lender, the Dollar amount, set forth opposite such Lender's name on
Exhibit A.
1.4 Credit Period. The term "Credit Period" means that period
of time beginning on the Effective Date and ending on the Maturity Date.
1.5 Event of Default The term "Event of Default" has the
meaning assigned to it in Section 8.
1.6 Maturity Date. The term "Maturity Date" means the earlier
to occur of the following: December 31, 2004, the upon which a Change in Control
occurs, the date on which the Company has sufficient funds available to repay
the Loans, or the date on which the Lender and the Company mutually agree in
writing to terminate the Commitment.
2. AMOUNT AND TERMS OF CREDIT.
2.1 Commitment to Lend.
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(a) Subject to all the terms and conditions of this
Agreement, the Lender agrees to advance to the Company from time to time during
the Credit Period such loans (the "Loans") that the Company may request under
the Agreement; provided, however, that the Lender shall have no obligation to
make a Loan if, after giving effect to such Loan, the amount of outstanding
principal of the Lender's Loans would exceed the Lender's Commitment. The total
Commitment hereunder shall not exceed $75,000.
(b) Notice of Borrowing. During the Credit Period,
the Company shall request each Loan by delivering to the Lender an irrevocable
written notice in the form of Exhibit B (a "Notice of Borrowing"), which
specifies (a) the principal amount of such Borrowing, and (b) the date of such
Borrowing, which shall be a business day. Each Notice of Borrowing shall include
a certification by the Company that no Event of Default has occurred hereunder
or under any Note. The Company shall give each Notice of Borrowing to the Lender
at least ten (10) business days before the date of the requested Borrowing;
provided, however, that the first Borrowing shall be delivered and the first
Borrowing shall occur at the Closing pursuant to Section 2.1 hereof.
Notwithstanding the foregoing, the Lender will not be obligated to advance any
Loans to the Company on or after the Maturity Date.
2.2 Loan Funding.
(a) Lender Funding and Disbursements to Company.
Provided that no Event of Default has occurred hereunder or under any Note, the
Lender shall, before 5:00 p.m. (Eastern Standard time) on the date of each
Borrowing, deliver to the Company the amount indicated on such Notice of
Borrowing, by means of (i) a check payable to the Company's order, (ii) wire
transfer of funds to the Company, or (iii) any combination of the foregoing.
(b) No Reborrowing. The Company may not reborrow the
principal amount of a Loan after repayment or prepayment thereof.
2.3 On the Effective Date, the Company shall execute and
deliver to the order of the Lender, a Promissory Note in the form attached to
this Agreement as Exhibit C (individually a "Note" and collectively the
"Notes"), as additional evidence of the Company's indebtedness to the Lender in
respect of Loans advanced by the Lender to the Company from time to time. The
Lender shall be authorized to endorse on the schedules annexed to its Note(s)
the date and amount of each Loan made by it from time to time and the amount of
each payment of principal or interest made by the Company from time to time with
respect thereto; provided, however, that the failure of the Lender to make, or
an error in making, a notation thereon with respect to any Loan or payment
(which must be manifest) shall not limit or otherwise affect the obligations of
the Company hereunder or under any such Note to the Lender.
3. CLOSING. The Company shall deliver a Notice of Borrowing for the
First Borrowing, which Notice of Borrowing shall specify that the First
Borrowing shall occur on the Effective Date. The Lender shall make the
Commitment provided for herein on the Effective Date and shall deliver to the
Company the amount specified on such Notice of Borrowing. The time and events
described in this Section 3 are referred to in this Agreement as the "Closing."
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to the Lender that, except as set forth in the Schedule
of Exceptions (the "Schedule of Exceptions") attached to this Agreement as
Exhibit D (which Schedule of Exceptions shall be deemed to be representations
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and warranties to the Lender by the Company under this Section 4), the
statements in the following paragraphs of this Section 4 are all true and
complete immediately prior to the Closing:
4.1 Organization, Good Standing, Corporate Power and
Qualification. The Company has been duly incorporated and organized, and is
validly existing in good standing, under the laws of the State of Delaware. The
Company has the requisite corporate power and authority to enter into and
perform this Agreement and the Related Agreements, to own and operate its
properties and assets and to carry on its business as currently conducted and as
presently proposed to be conducted. The Company is duly qualified to do business
as a foreign corporation in good standing in all jurisdictions in which it is
required to be qualified to do intrastate business as the Company's business is
currently conducted and as presently proposed to be conducted by the Company,
except for jurisdictions in which failure to so qualify could not reasonably be
expected to have a material adverse effect on the business and operations of the
Company taken as a whole.
4.2 Due Authorization. All corporate action on the part of the
Company's directors and stockholders necessary for the authorization, execution,
delivery of, and the performance of all obligations of the Company under, this
Agreement and the Notes has been taken or will be taken prior to Closing, and
this Agreement constitutes, and the Notes when executed and delivered, will
constitute, valid and legally binding obligations of the Company, enforceable in
accordance with their respective terms, except as may be limited by (i)
applicable bankruptcy, insolvency, reorganization or others 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.
4.3 Subsidiaries. The Company does not presently own or
control, directly or indirectly, any interest in any other corporation,
partnership, trust, joint venture, association, or other entity.
4.4 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state, local or foreign governmental authority is
required on the part of the Company in order to enable the Company to execute,
deliver and perform its obligations under this Agreement and the Notes.
4.5 Litigation. There is no action, suit, proceeding, claim,
arbitration or investigation (the "Action") pending (or, to the Company's and
subsidiaries' knowledge, currently threatened) against the Company or any of its
subsidiaries, its or any of its subsidiaries' activities or its or any of its
subsidiaries' properties before any court or governmental agency. The Company
and its subsidiaries are not a party or subject to the provisions of any order,
writ, injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding or investigation by the
Company or any of its subsidiaries currently pending or which the Company or any
of its subsidiaries intends to initiate.
4.6 Compliance with Law and Documents. The Company is not in
violation or default of any provisions of its Third Amended and Restated
Certificate of Incorporation ("Restated Certificate") or Bylaws, both as amended
to-date, and to the Company's knowledge, the Company and its subsidiaries are in
compliance with all applicable statutes, laws, regulations and executive orders
of the United States of America and all states, foreign countries or other
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governmental bodies and agencies having jurisdiction over the Company's business
or properties where such violation would have a material and adverse impact on
the Company's and its subsidiaries business taken as a whole. Neither the
Company nor any of its subsidiaries have received any notice of any violation of
any such statute, law, regulation or order which has not been remedied prior to
the date hereof. The execution, delivery and performance of this Agreement and
the Notes and the consummation of the transactions contemplated hereby or
thereby will not result in any such violation or default, or be in conflict with
or result in a violation or breach of, with or without the passage of time or
the giving of notice or both, the Company's Restated Certificate or Bylaws, any
judgment, order or decree of any court or arbitrator to which the Company is a
party or is subject, any agreement or contract of the Company, or, to the
Company's knowledge, a violation of any statute, law, regulation or order, or an
event which results in the creation of any lien, charge or encumbrance upon any
asset of the Company.
4.7 Title to Property and Assets. The Company and its
subsidiaries each own their properties and assets free and clear of all
mortgages, deeds of trust, liens, encumbrances and security interests except for
statutory liens for the payment of current taxes that are not yet delinquent and
liens, encumbrances and security interests which arise in the ordinary course of
business and which do not affect material properties and assets of the Company
or any of its subsidiaries. With respect to the property and assets it or any of
its subsidiaries leases, the Company and its subsidiaries are in material
compliance with such lease.
4.8 Financial Statements. The Company has provided the Lender
its most recent consolidated audited balance sheet, and statement of operations
and cash flows of the Company and its subsidiaries and consolidated unaudited
balance sheet and statement of operations of the Company and its subsidiaries
dated as of November 30, 2003 (the "Balance Sheet Date") (all such financial
statements being collectively referred to herein as the "Financial Statements").
Such Financial Statements (i) are in accordance with the books and records of
the Company, (ii) are true, correct and complete and present fairly the
financial condition of the Company at the date or dates therein indicated and
the results of operations for the period or periods therein specified, and (iii)
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis, except, as to the unaudited Financial Statements,
for the omission of notes thereto and normal year-end audit adjustments.
4.9 Certain Actions. Since the Balance Sheet Date, the Company
has not (i) declared or paid any dividends, or authorized or made any
distribution upon or with respect to any class or series of its capital stock;
(ii) incurred any indebtedness for money borrowed; (iii) made any loans or
advances to any person, other than ordinary advances for travel expenses; (iv)
sold, exchanged or otherwise disposed of or encumbered any material asset or
rights other than the sale of inventory in the ordinary course of its business;
or (v) entered into any material transactions with any of its officers,
directors, stockholders or employees or any entity controlled by such
individuals.
4.10 Activities Since Balance Sheet Date. Since the Balance
Sheet Date, there has not been:
(a) any damage, destruction or loss, whether or not
covered by insurance, materially and adversely affecting the assets, properties,
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financial condition, operating results, prospects or business of the Company (as
presently conducted and as presently proposed to be conducted); or
(b) any material change or amendment to a material
contract or arrangement by which the Company or any of its assets or properties
is bound or subject, except for changes or amendments which are expressly
provided for or disclosed in this Agreement.
4.11 Tax Returns and Payments. The Company has timely filed
all tax returns and reports required by law. All tax returns and reports of the
Company are true and correct in all material respects. The Company has paid all
taxes and other assessments due, except those, if any, currently being contested
by it in good faith which are listed in the Schedule of Exceptions.
5. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF LENDER. The
Lender hereby represents and warrants to, and agrees with, the Company, that:
5.1 Authorization. This Agreement constitutes Lender'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. Lender represents that Lender has full power
and authority to enter into this Agreement.
5.2 Disclosure of Information. Such Lender has received or has
had full access to all the information it considers necessary or appropriate to
make an informed decision with respect to the Lender's Commitment.
5.3 Tax Liability. Lender has reviewed with its own tax
advisors the federal, state, local and foreign tax consequences of this
investment and the transactions contemplated by this Agreement. Lender relies
solely on such advisors and not on any statements or representations of the
Company, the Company's counsel, or any of the Company's agents. It understands
that it (and not the Company) shall be responsible for its own tax liability
that may arise as a result of this investment or the transactions contemplated
by this Agreement.
6. CONDITIONS TO LENDER'S OBLIGATION AT CLOSING. The obligations of the
Lender under Section 3 of this Agreement are subject to the fulfillment or
waiver, on or before the Closing, of each of the following conditions, the
waiver of which shall not be effective against Lender if Lender does not consent
to such waiver, which consent may be given by written, oral or telephone
communication to the Company, its counsel or to counsel of Lender:
6.1 Representations and Warranties True. Each of the
representations and warranties of the Company and its subsidiaries contained in
Section 4 shall be true and complete on and as of the Closing with the same
effect as though such representations and warranties had been made on and as of
the date of the Closing.
6.2 Performance. The Company shall have performed and complied
with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing and
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shall have obtained all approvals, consents and qualifications necessary to
complete the purchase and sale described herein.
7. CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING. The obligations
of the Company to Lender under this Agreement are subject to the fulfillment or
waiver on or before the Closing of each of the following conditions by Lender:
7.1 Representations and Warranties. The representations and
warranties of Lender contained in Section 5 shall be true and complete on the
date of the Closing with the same effect as though such representations and
warranties had been made on and as of the Closing.
7.2 Payment of Purchase Price. Lender shall have delivered to
the Company the amount specified in the Notice of Borrowing.
8. DEFAULT. As set forth in Section 8 of the Notes, an "Event of
Default" will occur if any of the following happens and such default is not
cured within a five (5) day period after a Lender has given the Company written
notice of such default:
8.1 Upon the Company's failure to make any payment when due
under this Note within two (2) days after written notice of such default, but in
no event, later than five (5) days after such payment is due;
8.2 Upon the filing by or against the Company of any voluntary
or involuntary petition in bankruptcy or any petition for relief under the
federal bankruptcy code or any other state or federal law for the relief of
debtors; provided, however, with respect to an involuntary petition in
bankruptcy, such petition has not been dismissed within ninety (90) days after
the filing of such petition; or
8.3 Upon the execution by the Company of an assignment for the
benefit of creditors or the appointment of a receiver, custodian, trustee or
similar party to take possession of the Company's assets or property.
Upon the occurrence of any Event of Default, all accrued but unpaid interest,
all principal and any other amounts outstanding under such Note shall become
immediately due and payable in full without further notice or demand by the
Lender.
9. GENERAL PROVISIONS.
9.1 Survival of Warranties. The representations, warranties
and covenants of the Company and the Lender contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement and
the Closing and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of any of the Lender, their counsel or the
Company, as the case may be.
9.2 Successors and Assigns. Except as otherwise provided in
this Agreement, this Agreement, and the rights and obligations of the parties
hereunder, will be binding upon and inure to the benefit of their respective
successors, assigns, heirs, executors, administrators and legal representatives.
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9.3 Governing Law. This Agreement will be governed by and
construed in accordance with the laws of the State of Delaware, without giving
effect to that body of laws pertaining to conflict of laws.
9.4 Counterparts. This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered will be deemed an
original, and all of which together shall constitute one and the same agreement.
9.5 Titles and Headings. The titles, captions and headings of
this Agreement are included for ease of reference only and will be disregarded
in interpreting or construing this Agreement. Unless otherwise specifically
stated, all references herein to "sections" and "exhibits" will mean "sections"
and "exhibits" to this Agreement.
9.6 Notices. Any and all notices required or permitted to be
given to a party pursuant to the provisions of this Agreement will be in writing
and will be effective and deemed to provide such party sufficient notice under
this Agreement on the earliest of the following: (i) at the time of personal
delivery, if delivery is in person; (ii) at the time of transmission by
facsimile, addressed to the other party at its facsimile number specified herein
(or hereafter modified by subsequent notice to the parties hereto), with
confirmation of receipt made by both telephone and printed confirmation sheet
verifying successful transmission of the facsimile; (iii) one (1) business day
after deposit with an express overnight courier for United States deliveries, or
two (2) business days after such deposit for deliveries outside of the United
States, with proof of delivery from the courier requested; or (iv) five (5)
business days after deposit in the United States mail by certified mail (return
receipt requested) for United States deliveries.
All notices for delivery outside the United States
will be sent by facsimile or by express courier. Notices by facsimile shall be
machine verified as received. All notices not delivered personally or by
facsimile will be sent with postage and/or other charges prepaid and properly
addressed to the party to be notified at the address or facsimile number as
follows, or at such other address or facsimile number as such other party may
designate by one of the indicated means of notice herein to the other parties
hereto as follows:
(a) if to Lender, at:_____________________.
(b) if to the Company, marked "Attention: President",
at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
9.7 Amendments and Waivers. Any term of this Agreement 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 Lender. Any
amendment or waiver effected in accordance with this Section shall be binding
upon each holder of any Securities at the time outstanding, each future holder
of such securities, and the Company; provided, however, that no condition set
forth in Section 6 may be waived with respect to any Lender who does not consent
thereto. No delay or failure to require performance of any provision of this
Agreement shall constitute a waiver of that provision as to that or any other
instance. No waiver granted under this Agreement as to any one provision herein
shall constitute a subsequent waiver of such provision or of any other provision
herein, nor shall it constitute the waiver of any performance other than the
actual performance specifically waived.
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9.8 Severability. If any provision of this Agreement is
determined by any court or arbitrator of competent jurisdiction to be invalid,
illegal or unenforceable in any respect, such provision will be enforced to the
maximum extent possible given the intent of the parties hereto. If such clause
or provision cannot be so enforced, such provision shall be stricken from this
Agreement and the remainder of this Agreement shall be enforced as if such
invalid, illegal or unenforceable clause or provision had (to the extent not
enforceable) never been contained in this Agreement. Notwithstanding the
forgoing, if the value of this Agreement based upon the substantial benefit of
the bargain for any party is materially impaired, which determination as made by
the presiding court or arbitrator of competent jurisdiction shall be binding,
then both parties agree to substitute such provision(s) through good faith
negotiations.
9.9 Entire Agreement. This Agreement, together with all
exhibits and schedules hereto and the Notes entered into pursuant hereto,
constitutes the entire agreement and understanding of the parties with respect
to the subject matter hereof and supersedes any and all prior negotiations,
correspondence, agreements, understandings duties or obligations between the
parties with respect to the subject matter hereof.
9.10 Further Assurances. The parties agree to execute such
further documents and instruments and to take such further actions as may be
reasonably necessary to carry out the purposes and intent of this Agreement.
9.11 Facsimile Signatures. This Agreement may be executed and
delivered by facsimile and upon such delivery the facsimile signature will be
deemed to have the same effect as if the original signature had been delivered
to the other party.
9.12 Costs And Attorneys' Fees. In the event that any action,
suit or other proceeding is instituted concerning or arising out of this
Agreement or any transaction contemplated hereunder, the prevailing party shall
recover all of such party's costs and attorneys' fees incurred in each such
action, suit or other proceeding, including any and all appeals or petitions
therefrom.
[Signature Page Follows]
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In Witness Whereof, the parties hereto have executed this Note Purchase
Agreement as of the date first written above.
THE COMPANY:
SOLUTION TECHNOLOGY INTERNATIONAL, INC.
By:
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▇▇▇ ▇▇▇▇▇▇
Its: President
LENDER:
By:
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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EXHIBIT A
SCHEDULE OF LENDERS
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Lender Commitment Amount
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $75,000
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EXHIBIT B
NOTICE OF BORROWING
[LENDER ADDRESS]
Attn: Birgitta
1. Reference is made to that certain Note Purchase Agreement, dated as
of January 1, 2004 (the "Agreement"), by and between Solution Technology
International, Inc. (the "Company") and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (the "Lender"). Unless
otherwise indicated, all terms defined in the Agreement have the same meanings
when used herein.
2. Pursuant to Section 2 of the Agreement, the Company hereby
irrevocably requests a Borrowing to be made upon the following terms:
(a) The principal amount of such Borrowing is to be _________
U.S. Dollars; and
(b) The date of such Borrowing is to be _____________, _____.
3. No Event of Default has occurred under the Agreement or any Note.
IN WITNESS WHEREOF, the Company has executed this Notice of Borrowing
on the date set forth above.
Solution Technology International, Inc.
By:
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Name:
-----------------------------
Title:
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