EXHIBIT 10.22
AMENDED STOCK PURCHASE AGREEMENT
THIS AMENDED STOCK PURCHASE AGREEMENT (the "Agreement") entered into as
of this 23rd day of December, 1998, by and among TOP SOURCE TECHNOLOGIES, INC.
(the "Company"), G. Xxxx Xxxxxx, Co-Trustee U/A Dated 10/23/85 FBO Descendents
of Xxxxxx X. Xxxxxx ("Mennen") and Wilmington Trust Co. ("Wilmington") & Xxxxxx
Xxxx Xxxxxx, Co-Trustees U/A dated 11/25/70 with Xxxxxx X. Xxxxxx for Xxxx Xxxxx
Xxxxxx (collectively the "Purchasers") hereby amends that certain Stock Purchase
Agreement dated on November 17, 1998, as amended in order to correct scriveners
errors as to the parties to that Agreement.
WHEREAS, the Company desires to sell and has sold to Wilmington and
Mennen $2,000,000 and $1,500,000, respectively, of 9% Series B Convertible
Preferred Stock (the "Preferred Stock") on the terms and conditions contained in
this Agreement.
WHEREAS, Wilmington and Mennen desire to purchase and have purchased
$2,000,000 and $1,500,000, respectively, of Preferred Stock on the terms and
conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises made herein,
and in consideration of the representations, warranties, and covenants contained
herein, the parties agree as follows:
1. Sale of Preferred Stock and Warrants.
(a) Purchase and Sale of Preferred Stock. On and subject to
the terms and conditions of this Agreement, the Company has sold to
Mennen and Wilmington and Mennen and Wilmington have purchased from the
Company $1,500,000 and $2,000,000, respectively, of Preferred Stock.
The terms and conditions of the Preferred Stock are contained on the
Certificate of Designation annexed as Schedule 1(a) to this Agreement
which Certificate of Designation has been filed with the Delaware
Secretary of State following the Closing, as defined.
(b) Issuance of the Warrants. As additional consideration for
the $3,500,000 to be paid by the Purchasers, the Company issued Mennen
and Wilmington 150,000 and 200,000 warrants, respectively, (the
"Warrants") exercisable at a price of $1.00 above the last sale price
of the Company's common stock the day of the Closing, as defined or
$1.9375 per share. The Warrants shall not be redeemable and shall be
exercisable for a period of 10 years from issuance. Additionally, if
the Preferred Stock has not been redeemed or converted into common
stock on or before May 1, 1999, the Company shall issue to Mennen and
Wilmington an additional 21,429 and 28,571 Warrants, respectively,
containing the same terms and conditions as the 350,000 Warrants except
that the 50,000 Warrants shall be exercisable at a price of $.50 per
share above the last sale of the Company's common stock on April 30,
1999.
(c) The Closing. The closing of the transactions contemplated
by this Agreement (the "Closing") took place at the offices of the
Company at 0000 Xxxxxxx Xxxxx, Xxxxx 000, Xxxx Xxxxx Xxxxxxx, Xxxxxxx
at 10:00 a.m. on the 17th day of November, 1998. At the Closing, (i)
the Company delivered to the Purchasers the various certificates,
instruments and documents referred to in this Agreement including
certificates for the Preferred Stock and the Warrants, (ii) the
Purchasers delivered to the Company $3,500,000, and (iii) the Company
executed the Certificate of Designation and transmitted it for filing
to the Delaware Secretary of State.
2. Representations and Warranties of the Company. The Company
represents and warrants to the Purchasers that the statements contained in this
Section 2 are, to its knowledge, correct and complete as of the date of this
Agreement and were, to its knowledge, correct and complete as of the Closing
Date.
(a) Organization of the Company. The Company is a corporation
duly organized, validly existing, and in good standing under the laws
of the State of Delaware. The Company is duly authorized to conduct
business and is in good standing under the laws of each jurisdiction in
which the Company owns, leases or operates property or in which such
qualification is required for the conduct of its business except where
the failure to be so qualified will not have a material adverse effect
on the results of operations or future prospects of the Company taken
as a whole. The Company has full corporate power and authority to carry
on the businesses in which it is engaged and to own and use the
properties owned and used by it. The Company has delivered to the
Purchasers correct and complete copies of its certificate of
incorporation and bylaws, as amended. The Company is not in default
under or in violation of any provision of its certificate of
incorporation or bylaws.
(b) Authorization of Transaction. The Company has the full
power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. Subject to execution, delivery and
authorization of the Purchasers, this Agreement constitutes the binding
obligation of the Company enforceable in accordance with its terms and
conditions. The Company need not give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any
government or governmental agency in order to consummate the
transactions contemplated by this Agreement.
(c) Non-Contravention. Neither the execution and the delivery
of this Agreement, nor the consummation of the transactions
contemplated hereby, will (i) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any government, governmental agency, or court
to which the Company is subject or, (ii) conflict with, result in a
breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or
cancel, or require any notice under, any agreement, contract, lease,
license, instrument, or other arrangement to which the Company is a
party or by which it is bound or to which any of its assets are
subject.
(d) Brokers' Fees. The Company has no liability or obligation
to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which
the Purchasers could become liable or obligated.
(e) Title to Assets. The Company has good and marketable title
to, or a valid leasehold interest in, the properties and assets used by
it, located on its premises, shown on its Form 10-Q for the quarter
ended June 30, 1998 (the "Form 10-Q") or acquired after the date
thereof and the properties and assets are free and clear of all
security interests, except for properties and assets disposed of in the
ordinary course of business since June 30, 1998, as shown on Schedule
2(e), or as disclosed on the Form 10-Q, Form 10-K/A No. 3 for the year
ended September 30, 1997 (the "Form 10-K") or the preliminary Proxy
Statement dated November 6, 1998 (the "Proxy") and the Supplement dated
November 23, 1998 filed by the Company with the Securities and Exchange
Commission (the "SEC").
(f) Capitalization.
(i) The authorized capital stock of the Company
consists of 50,000,000 shares of common stock of which
29,018,439 shares are outstanding and 5,000,000 shares of
Preferred Stock of which 1,000 shares of 5% Series A Preferred
Stock were outstanding as of November 17, 1998. All of the
issued and outstanding shares of common stock and the
outstanding 5% Series A Preferred Stock are validly issued and
are fully paid, non-assessable and free of preemptive rights.
(ii) Except as disclosed in the Form 10-Q, the Form
10-K, the Proxy or the Supplement, or as set forth on Schedule
2(f)(ii), there are (A) no outstanding subscriptions, options,
calls, contracts, commitments, understandings, restrictions,
arrangements, rights or warrants, including any right of
conversion or exchange under any outstanding security,
instrument or other agreement and also including any rights
plan or other anti-takeover agreement, obligating the Company
to issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares of the capital stock of the Company or
obligating the Company to grant, extend or enter into any
agreement or commitment, and (B) no voting trusts, proxies or
other agreements or understandings to which the Company is a
party or is bound with respect to the voting of any shares of
the capital stock of the Company. The shares of common stock
to be issued to the Purchasers upon conversion of the
Preferred Stock and exercise of the Warrants will be duly
authorized, validly issued, fully paid and non-assessable and
free of preemptive rights.
(g) Reports and Financial Statements. The Company has filed
with the SEC all forms, statements, reports and documents (including
all exhibits, amendments and supplements thereto) required to be filed
by it under each of the Securities Act of 1933 (the "Securities Act"),
the Securities Exchange Act of 1934 and the respective rules and
regulations thereunder, all of which, as amended if applicable,
complied in all material respects with all applicable requirements of
the appropriate act and the rules and regulations thereunder. The
Company has previously delivered to the Purchasers copies of its Form
10-Q, Form 10-K, the Proxy and the Supplement. As of their respective
dates, the Form 10-Q, the Form 10-K, the Proxy and the Supplement did
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading. The financial statements of the Company included
in such reports (collectively the "Company's Financial Statements")
have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis (except as may be indicated
therein or in the notes thereto) and fairly present the financial
position of the Company as of the dates thereof and the results of
operations and changes in financial position for the periods then
ended, subject, in the case of the unaudited interim financial
statements, to normal year-end and audit adjustments and any other
adjustments described therein.
(h) Absence of Undisclosed Liabilities. Except as disclosed in
the Form 10-Q, the Company did not have at June 30, 1998, and has not
incurred since that date, any liabilities or obligations (whether
absolute, accrued, contingent or otherwise) of any nature, except: (A)
liabilities, obligations or contingencies (1) which are accrued or
reserved against in the Company's Financial Statements or reflected in
the notes thereto, or (2) which were incurred after June 30, 1998 and
were incurred in the ordinary course of business and consistent with
past practices; (B) liabilities, obligations or contingencies which (1)
would not, in the aggregate, have a material adverse effect on the
Company, or (2) have been discharged or paid in full prior to the date
hereof; and (C) liabilities and obligations which are of a nature not
required to be reflected in the financial statements of the Company
prepared in accordance with generally accepted accounting principles
consistently applied and which were incurred in the ordinary course of
business.
(i) Absence of Certain Changes or Events. Since the date of
the Form 10-Q, except as disclosed in the Proxy, there has not been any
material adverse change in the business, operations, properties,
assets, liabilities, condition (financial or other), results of
operations or prospects of the Company, taken as a whole, including as
a result of any change in capital structure, employee compensation
arrangement (including severance rights and benefit plans), accounting
method or applicable law.
(j) Material Agreements. Since October 1, 1997, the Company
has not entered into any material agreements which were not filed as
exhibits to or disclosed in the Form 10-Q, Form 10-K, the Proxy or the
Supplement except in the ordinary course of business.
(k) Form 8-Ks. Since October 1, 1997, the Company has not
filed with the SEC any reports on Form 8-K.
(l) Disclosure. The representations and warranties contained
in this Section 2(l) do not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements and information contained in this Section 4 not misleading.
(m) No Other Representations. The Company shall not be deemed
to have made to the Purchasers any representation or warranty other
than as is expressly made in Sections 2(a) through (l).
3. Representations and Warranties of the Purchasers. The
representations and warranties of Wilmington are being made by Xxxxxx
Xxxx Xxxxxx, as Co-Trustee and Wilmington Trust Co., Trustee is relying
on Xxxxxx Xxxx Xxxxxx as to the accuracy of such representations and
warranties.
(a) Authorization of Transaction. The Purchasers have the full
power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. Subject to execution, delivery and
authorization of the Company, this Agreement constitutes the obligation
of the Purchasers enforceable in accordance with its terms and
conditions. The Purchasers need not give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any
government or governmental agency in order to consummate the
transactions contemplated by this Agreement.
(b) Investment Intent. The Purchasers are acquiring the
Preferred Stock and the Warrants for investment for their own account
and not with a view to, or for resale in connection with any
distribution thereof. The Purchasers understand that neither the
Preferred Stock nor the Warrants have been registered under the
Securities Act or the securities laws of any state by reason of
specific exemptions from the registration provisions of the Securities
Act and applicable state securities laws, which exemptions are
dependent upon, among other things, the bona fide nature of the
investment of the Purchasers as expressed herein.
(c) Accreditation Investor. The Purchasers are "accredited
investors" as that term is defined by Rule 501(a) promulgated under the
Securities Act.
(d) Rule 144. The Purchasers understand that the Preferred
Stock and the Warrants must be held indefinitely by them unless
subsequently registered under the Securities Act and applicable
securities laws or an exemption from such registration is available.
The Purchasers are aware of the provisions of Rule 144 promulgated
under the Securities Act which permit limited resale of securities
purchased in a private placement subject to the satisfaction of certain
conditions.
(e) No Public Market. The Purchasers understand that no public
market now exists for any of the Preferred Stock or Warrants to be
issued to it and that a public market is not expected to ever exist for
the Preferred Stock or the Warrants. the Purchasers are relying upon
the registration rights provided by Section 4(c) of this Agreement.
(f) Endorsement or Approval. The Purchasers understand and
acknowledge that no federal or state agency has passed upon or made any
recommendations or endorsement of the Preferred Stock or the Warrants.
(g) Direct Communication. The offer and sale of the Preferred
Stock and the Warrants to the Purchasers was made only through direct
personal communication between officers of the Company and officers or
representatives of the Purchasers and not through any general
solicitation or advertising.
4. Post-Closing Covenants. The Company agrees as follows with respect
to the period following the Closing:
(a) General. In case at any time after the Closing any further
action is necessary to carry out the purposes of this Agreement, the
Company will take such further action (including the execution and
delivery of such further instruments and documents) as the Purchasers
reasonably may request, all at the sole cost and expense of the
Company.
(b) Inspection. At all times upon reasonable notice, the
Purchasers or their authorized representatives shall have the power to
inspect the books and records including the books and records of
account of the Company for any proper purpose. As part of such
inspection, the Purchasers and their authorized representatives may
make such copies and extra sets of the Company's books and records as
it or they may reasonably request. All of the foregoing rights are
subject to the inspecting persons executing any confidentiality
agreement.
(c) Registration Rights. The Company shall file a registration
statement with the SEC on or before November 30, 1999 registering for
public sale the common stock underlying all of the Warrants issued and
underlying the Preferred Stock unless such Preferred Stock has been
fully redeemed. The Company shall use its best efforts to keep the
registration statement current until expiration of the Warrants.
(i) The Company shall comply with the requirements of
Section 4(c) at its own expense including legal, accounting,
filing, blue sky qualification, and printing fees and costs,
but excluding underwriting commissions or discounts and
attorneys' fees and costs for the Purchasers. The Company
shall pay for all blue sky costs in any states reasonably
requested.
(ii) The Company's obligation under Sections 4(c)
shall be conditioned upon a timely receipt by the Company in
writing of:
(A) Information as to the terms of such
public offering furnished by or on behalf of the
Purchaser intending to make a public distribution of
its common stock; and
(B) Such other information as the Company
may reasonably require from the Purchasers for
inclusion in such registration statement or
post-effective amendment including a statement as to
compliance with Regulation M promulgated under the
Securities Exchange Act of 1934.
5. Remedies For Breaches of This Agreement.
(a) Survival of Representations and Warranties. All of the
representations and warranties of the parties contained in this
Agreement shall survive the Closing hereunder and continue in full
force and effect for a period of three years (subject to any applicable
statutes of limitations).
(b) Indemnification Provisions for Benefit of the Purchasers.
In the event the Company breaches any of its representations,
warranties, and covenants contained herein and provided that the
Purchasers make a written claim for indemnification against the
Company, then the Company agrees to indemnify the Purchasers from and
against the entirety of any losses, damages, amounts paid in settlement
of any claim or action, expenses, or fees including court costs and
reasonable attorneys' fees and expenses.
6. Miscellaneous.
(a) Expenses. Each of the parties to this transaction shall
bear its own costs and expenses (including legal fees and expenses)
incurred in connection with this Agreement and the transactions
contemplated hereby except that the Company shall reimburse the
Purchasers up to $20,000 (allocated on a pro-rata basis) for legal fees
and expenses incurred in connection with the negotiation and execution
of this Agreement.
(b) Severability. In the event any parts of this Agreement are
found to be void, the remaining provisions of this Agreement shall
nevertheless be binding with the same effect as though the void parts
were deleted.
(c) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument. The
execution of this Agreement may be by actual or facsimile signature.
(d) Benefit. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their legal representatives,
successors and assigns.
(e) Notices and Addresses. All notices, offers, acceptance and
any other acts under this Agreement (except payment) shall be in
writing, and shall be sufficiently given if delivered to the addressees
in person, by Federal Express or similar receipted delivery, by
facsimile delivery or, if mailed, postage prepaid, by certified mail,
return receipt requested, as follows:
The Company: Xxxxxxx X. Xxxxxx, Xx., President
Top Source Technologies, Inc.
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxx Xxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxxx, Esq.
Xxxxxxx Xxxxxx, P.A.
0000 Xxxx Xxxxx Xxxxx Xxxx.
Xxxxx 000
Xxxx Xxxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
Mennen: c/o TMF Investments, Inc.
00X Xxxxxxx Xxxx
Xxxxxxx Xxxx, XX 00000
Wilmington: Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
or to such other address as any of them, by notice to the other may
designate from time to time. The transmission confirmation receipt from
the sender's facsimile machine shall be conclusive evidence of
successful facsimile delivery. Time shall be counted to, or from, as
the case may be, the delivery in person or by mailing.
(f) Attorney's Fees. In the event that there is any
controversy or claim arising out of or relating to this Agreement, or
to the interpretation, breach or enforcement thereof, and any action or
proceeding including an arbitration proceeding is commenced to enforce
the provisions of this Agreement, the prevailing parties shall be
entitled to an award by the court or arbitrator, as appropriate, of
reasonable attorney's fees, costs and expenses.
(g) Oral Evidence. This Agreement constitutes the entire
Agreement between the parties and supersedes all prior oral and written
agreements between the parties hereto with respect to the subject
matter hereof. Neither this Agreement nor any provision hereof may be
changed, waived, discharged or terminated orally, except by a statement
in writing signed by the party or parties against which enforcement or
the change, waiver discharge or termination is sought.
(h) Governing Law. This Agreement and any dispute,
disagreement, or issue of construction or interpretation arising
hereunder whether relating to its execution, its validity, the
obligations provided herein or performance shall be governed or
interpreted according to the internal laws of the State of Delaware
without regard to choice of law considerations.
(i) Arbitration. Any controversy, dispute or claim arising out
of or relating to this Agreement, or its interpretation, application,
implementation, breach or enforcement which the parties are unable to
resolve by mutual agreement, shall be settled by submission by either
party of the controversy, claim or dispute to binding arbitration in
Palm Beach County, Florida (unless the parties agree in writing to a
different location), before three arbitrators in accordance with the
rules of the American Arbitration Association then in effect. In any
such arbitration proceeding the Parties agree to provide all discovery
deemed necessary by the arbitrators. The decision and award made by the
arbitrators shall be final, binding and conclusive on all parties
hereto for all purposes, and judgment may be entered thereon in any
court having jurisdiction thereof.
(j) Section or Paragraph Headings. Section headings herein
have been inserted for reference only and shall not be deemed to limit
or otherwise affect, in any matter, or be deemed to interpret in whole
or in part any of the terms or provisions of this Agreement.
IN WITNESS WHEREOF the parties hereto have set their hand and seals as
of the date first above written.
WITNESSES: TOP SOURCE TECHNOLOGIES, INC.
By:
Xxxxx Xxxxx, Vice President and CFO
G. Xxxx Xxxxxx, Trustee
U/A dated FBO Descendents of
Xxxxxx X. Xxxxxx
______________________ By: ___________________________
G. Xxxx Xxxxxx
----------------------
WILMINGTON TRUST CO. & XXXXXX XXXX XXXXXX, CO-TRUSTEES
U/A DATED 11/25/70 WITH XXXXXX X. XXXXXX FOR XXXX XXXXX XXXXXX
By:
Wilmington Trust Co., Trustee
By:____________________________
Xxxxxx Xxxx Xxxxxx, Co-Trustee
