Note Purchase Agreement
June 10, 1997
AGREEMENT, dated as of June 10, 1997, by and among XXXXXXXXX XXXXXX
("Xxxxxx"), SPRING TECHNOLOGY CORP. ("Spring") and COFINVEST 97 LTD.
("Cofinvest" and collectively with Spring, the "1993 Noteholders") and, to the
extent provided herein, AMNEX, Inc. (the "Company"), XXXXXXX CORPORATE FINANCE
AG ("Xxxxxxx XX"), XXXXXXX CORPORATE FINANCE INC. ("Xxxxxxx Inc."), and XXXXX
XXXXXXX ("Xxxxxxx" and collectively with Xxxxxxx XX and Xxxxxxx Inc., the
WHEREAS, Spring was initially the registered owner and Holder (the
"Holder") of a certain promissory note of the Company, dated March 8, 1993, in
the original principal amount of four hundred fifty thousand dollars ($450,000)
(the "Spring Note"), convertible at the conversion rate of $.20 per share into
2,250,000 shares ("Shares") of the Company's common stock, $.001 par value
("Common Stock"), plus Shares which the Holder is entitled to receive on account
of the conversion of the amount of Accrued Interest, subject to further
adjustment as specified in the Spring Note;
WHEREAS, Spring has elected to convert ninety-six thousand dollars
($96,000) in principal amount of the Spring Note into Conversion Shares
effective June 30, 1997, the Company having reissued to Spring a new Note in the
form attached as Exhibit A (the "New Spring Note") for the balance of the
unconverted principal amount of the Spring Note, ($354,000), plus Accrued
Interest, which Note is convertible into Shares (collectively "Conversion
Shares") with respect to such principal amount and Accrued Interest;
WHEREAS, Cofinvest is the registered owner and Holder (the "Holder") of a
certain promissory note of the Company, dated July 13, 1993, in the original
principal amount of fifty thousand dollars ($50,000) (the "Cofinvest Note,"
collectively with the New Spring Note the "1993 Notes" or the "Notes")
convertible into 250,000 Conversion Shares on account of principal, plus
additional Conversion Shares on account of Accrued Interest.
WHEREAS, the 1993 Notes provide for the payment of interest on the
principal amount thereof at the rate of ten percent (10%) per annum, such
interest ("Interest") being originally payable from the following dates:
(i) with respect to the Cofinvest Note, from November 18, 1992; and
(ii) with respect to the New Spring Note, from July 1, 1994.
WHEREAS, the 1993 Noteholders propose, subject to the terms and conditions
stated herein, to sell to Galesi or his Permitted Transferee (the "Purchaser"),
the 1993 Notes, representing an aggregate original principal amount of $404,000,
plus all rights and benefits pertaining thereto as provided in the 1993 Notes
(including but not limited to Accrued Interest conversion rights, including the
right to convert Accrued Interest into Conversion Shares, security and Interest
hereinafter accruing and either paid or becoming Accrued Interest) and Galesi
proposes to purchase the same for an aggregate purchase price of $3,863,000.
WHEREAS, the 1993 Noteholders have delivered the Spring and Cofinvest Notes
and the Instruments of Transfer to the Escrow Agent, to hold in escrow pursuant
to the Escrow Agreement pending the Closing.
NOW, THEREFORE, in consideration of the premises, the parties hereto have
agreed, and do hereby agree, as follows:
1. Recitals. Each of the parties hereto acknowledges and agrees that each
of the above recitals is true and that each has relied upon the accuracy thereof
in entering into this Agreement.
2. Definitions. The following terms, when used in this Agreement, have the
following meanings, unless the context otherwise indicates. Additional defined
terms are found in the body of the text. Defined terms not otherwise defined
herein shall carry the meanings specified in the Notes and/or in the Logitech
(a) "Acceptable Currency" shall mean and include cash and any other
method of payment which will result in such payment being credited to the
account previously (at least two days prior to the Closing) designated by
the Representative to Purchaser in time to earn interest for the day
immediately following the day of the Closing.
(b) "Accrued Interest" means, with respect to any Note, all Interest
accrued and unpaid on such Note from and after the date such Interest was
(c) "'33 Act" means the Securities Act of 1933, as amended, or any
similar federal law then in force.
(d) "Affiliate" means, with respect to any specified person, (1) any
other person who, directly or indirectly, owns or controls, is under common
ownership or control with, or is owned or controlled by, such specified
person, (2) any other person who is a director, officer or partner or is,
directly or indirectly, the beneficial owner of 10 percent or more of any
class of equity securities, of the specified person or a person described
in clause (1) of this paragraph, (3) another person of whom the specified
person is a director, officer or partner or is, directly or indirectly, the
beneficial owner of 10 percent or more of any class of equity securities,
(4) another person in whom the specified person has a substantial
beneficial interest or as to whom the specified person serves as trustee or
in a similar capacity, or (5) any relative or spouse of the specified
person or any of the foregoing persons, any relative of such spouse or any
spouse of any such relative.
(e) "Business Day" means any day when banks in the Borough of
Manhattan, The City of New York, New York, are open for business.
(f) "Closing" means the consummation of the 1993 Noteholders' sale and
the Purchaser's purchase of the 1993 Notes.
(g) "Closing Date" means the date on which the Closing occurs or
occurred, which shall be the same date and time as the Closing Date
specified in the Logitech Agreement.
(h) "Commission" means the United States Securities and Exchange
(i) "Common Stock" means the $.001 par value common stock of AMNEX,
(j) "Conversion Shares" shall mean the shares of the Company's Common
Stock into which the Notes may be converted, as described in the Preamble.
(k) "Escrow Agreement" and "Escrow Agent" means respectively the
escrow agreement with the firm of Certilman, Balin, Xxxxx & Xxxxx, LLP,
escrow agent, pursuant to which the 1993 Notes and appropriate Instruments
of Transfer are being delivered to the Escrow Agent, to be held pursuant to
the terms and conditions of the Escrow Agreement.
(l) "Instruments of Transfer" mean such endorsements, agreements and
documents as the Purchaser shall reasonably request, including but not
limited to requests pursuant to Section 9(d) of this Agreement to confirm
in the Purchaser good, marketable and assignable record and beneficial
title to the 1993 Notes at the Closing. Without limiting the generality of
the foregoing, Instrument of Transfer will include instruments of
assignment as provided in the Notes, unqualified and unconditional
endorsements (whether on each of the Notes, affixed thereto and/or in a
separate instrument) and accompanied by such formality (notarial seal,
signature guarantee, etc.) as the Purchaser may reasonably request.
(m) "Logitech Agreement" shall mean an agreement(s) of even date
between the Company and certain persons designated as Holders, including
but not limited to Logitech Corp.
(n) "Material Adverse Change" means a change (or circumstance
involving a prospective change) in the business, operations, assets,
liabilities, results of operations, cash flows, condition (financial or
otherwise) or prospects of the Company which is materially adverse.
(o) "Permitted Transferee" means any Affiliate of Galesi to which or
whom Galesi elects at any time to assign and transfer the Notes and/or the
Conversion Shares, providing that, Galesi shall not be released from his
obligations under this Agreement.
(p) "Proxy Statement" means the Proxy Statement dated May 3, 1997 with
regard to the Company's Annual Meeting of Shareholders held on May 14,
1997, as described in the Logitech Agreement.
(q) "Representative" means Xxxxxxx Corporate Finance AG, named as the
attorney in fact of Spring and Cofinvest respectively as Holders of the
Spring and Cofinvest Notes in the text of the Notes themselves.
The masculine form of words includes the feminine and the neuter and vice
versa, and, unless the context otherwise requires, the singular form of words
includes the plural and vice versa. The words "herein," "hereof," "hereunder,"
and other words of similar import when used in this Agreement refer to this
Agreement as a whole, and not to any particular section or subsection.
3. Delivery of the 1993 Notes into Escrow. In accordance with the
provisions of this Note Purchase Agreement, Spring and Cofinvest as Holders of
the New Spring Note and Cofinvest Note, and the Representative as the attorney
in fact of each, have delivered, as of the execution and delivery of this
Agreement, the New Spring Note and Cofinvest Note and all Instruments of
Transfer to the Escrow Agent, executing in each case the form of assignment
attached to the Note and such other Instruments of Transfer as may have
reasonably been requested for the purpose of assigning and transferring the New
Spring Note and Cofinvest Note to the Purchaser at the Closing and complying in
all other respects with the provisions of said Notes, including but not limited
to effecting a valid transfer and change of registered owner under Section 1 of
the terms of said Notes and each Holder and the Representative has hereby
irrevocably instructed the Escrow Agent to deliver said Notes to the Purchaser
at the Closing in accordance with the provisions of the Escrow Agreement.
4. Purchase Price; Closing Procedures. Subject to the terms of this Note
Purchase Agreement, on the Closing Date the 1993 Noteholders shall sell to the
Purchaser and the Purchaser shall purchase from the 1993 Noteholders the 1993
Notes together with Accrued Interest, for an aggregate purchase price of
$3,863,000. The Purchaser shall pay the purchase price by payment of $3,863,000
in Acceptable Currency, $3,384,000 to Spring and $479,000 to Cofinvest.
The Closing shall be held at the place specified in the Logitech Agreement
upon the Closing Date. At the Closing, the Escrow Agent will, pursuant to the
terms of the Escrow Agreement, deliver the 1993 Notes, plus all Instruments of
Transfer, to the Purchaser and the Purchaser will pay the purchase price, as
above provided in this Section.
5. 1993 Noteholders Representations and Warranties (and Certain Covenants).
The 1993 Noteholders jointly and severally do, and each of them does, represent
and warrant to the Purchaser that:
(a) The 1993 Noteholders, and each of them, has the power and
authority to enter into this Agreement and to perform its obligations
hereunder. The execution and delivery of this Agreement and the performance
by the 1993 Noteholders of its obligations hereunder have been duly
authorized by the Board of Directors or other governing body of the 1993
Noteholders and, if required, their respective shareholders in conformity
with applicable law. No other corporate proceeding on the part of the 1993
Noteholders is necessary to authorize the execution or delivery of this
Agreement or the performance by the 1993 Noteholders of its obligations
hereunder. This Agreement is the valid and binding obligation of, and is
enforceable in accordance with its terms against the 1993 Noteholders.
(b) The issue and sale of the 1993 Notes and the compliance by the
1993 Noteholders with all of the provisions of the Notes and this
Agreement, and the consummation of the transactions herein and therein
contemplated will not materially conflict with or result in a material
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, sale/leaseback
agreement, loan agreement, or other agreement or instrument to which the
1993 Noteholders are, or either of them is, a party or by which the 1993
Noteholders are bound, nor will such action result in any violation of the
provisions of the certificate of incorporation or bylaws of the Company or
any statute or any order, rule, or regulation of any court or governmental
agency or body having jurisdiction over the Company or the 1993
Noteholders; and no consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or body
is required for the issue and sale of the 1993 Notes or the consummation by
the 1993 Noteholders of the other transactions contemplated by this
(c) Neither the execution, delivery or performance of this Agreement
by the 1993 Noteholders, nor the performance by the 1993 Noteholders of its
obligations hereunder, requires the consent or approval of any third party
or any foreign governmental body or other foreign regulatory or
administrative authority, agency, bureau or commission.
(d) The New Spring Note and Cofinvest Note have been held since
original issuance only by Spring and Cofinvest respectively, have not been
directly or indirectly hypothecated or assigned and, when delivered to the
Escrow Agent and the Purchaser pursuant to this Agreement, will have been
duly delivered free and clear of all adverse claims, liens, pledges,
security interests, rights and other encumbrances.
(e) The 1993 Noteholders have complied in all respects with the terms
of the Notes.
(f) Following the Closing, the 1993 Noteholders shall have no further
rights with regard to the Notes; prior to the Closing, neither the 1993
Noteholders nor the Representative will demand or accept Interest or
principal payments with respect to the 1993 Notes, or will attempt to
convert or otherwise assert rights as a Holder thereof; the 1993
Noteholders and the Representative will remit any such Interest and
principal payments, if made, to the Escrow Agent, to be delivered at the
Closing to the Purchaser together with the 1993 Notes.
(g) The powers of attorney granted to the Representative in the Notes
each remain in full force and effect. Without limiting the generality of
the foregoing, the Representative is and will be authorized to take all
actions contemplated by this Agreement on behalf of the 1993 Noteholders as
if they, and each of them, were acting personally.
6. Company Representations and Warranties.
(a) The New Spring Note and Cofinvest Note are duly and validly issued
to the Holder, free and clear from all defenses, waivers, notices of
dishonor, and, to the knowledge of the Company, from all adverse claims,
liens, pledges, security interests, rights and other encumbrances; such
Notes are enforceable against the Company in accordance with their terms
and may be validly converted by the Purchaser in accordance with the terms
(b) The 1993 Noteholders are the sole registered owners of the Notes
according to the Company's records and the Company considers and shall
continue to consider, pending the assignments and transfers provided
herein, the 1993 Noteholders as absolute owners thereof for all purposes
(c) The New Spring Note invests in the Holder all the rights and
powers of the previous Holder of the Spring Note.
(d) The Conversion Shares have been duly authorized and reserved for
issuance and, when issued, will be duly authorized, fully paid,
non-assessable and validly outstanding, and will be listed for trading on
the Nasdaq Small Cap Market system in accordance with the rules of Nasdaq.
(e) All statements in the Preamble are accurate and complete.
7. Xxxxxxx Representations and Warranties (and Certain Covenants). The
Xxxxxxx Group (including but not limited to the Representative) jointly and
severally represent and warrant to the Purchaser, at and as of the Closing that
(a) the representations and warranties of the 1993 Noteholders are accurate and
complete and the signatures of the persons purporting to act on behalf of the
1993 Noteholders, and of the Representative, in each case as affixed hereto, are
duly authorized and genuine; and (b) the 1993 Noteholders are each the sole
Holders of the Notes, as that term is as defined in the Notes. The
Representative joins in the 1993 Noteholders covenants in Section 5(f).
8. Purchaser Representations and Warranties. The Purchaser represents and
warrants to the 1993 Noteholders, at and as of the Closing that:
(a) The Purchaser has full power and authority and, if not an
individual, has taken all required corporate (or trust or partnership, as
the case may be) and other action necessary to permit it to execute and
deliver this Agreement, and all other documents or instruments required by
this Agreement, and to carry out the terms of this Agreement and of all
such other documents or instruments.
(b) The Purchaser is purchasing the 1993 Notes and Conversion Shares
into which such Notes may be converted for investment, for its own account
and not with a view to distribution thereof, except for transfers permitted
hereunder. The Purchaser understands that the 1993 Notes and Conversion
Shares received upon conversion of the 1993 Notes must be held indefinitely
unless registered under the '33 Act or an exemption from such registration
9. Additional Covenants of the Parties.
(a) Implementing Agreement. Each party hereto, including the Xxxxxxx
Group, shall use its best efforts to take all action required of it to
fulfill its obligations under the terms of this Agreement and to facilitate
the consummation of the transactions contemplated hereby. No party,
including each member of the Xxxxxxx Group, will take any action which
would have the effect of preventing or disabling such party's respective
performance of its obligations under this Agreement.
(b) Company Cure. The Company will cure promptly any defects in the
creation and issuance of the Notes, the New Spring Note and/or the
Conversion Shares, and in the execution and delivery of this Agreement. The
Company, at its expense, will promptly execute and deliver promptly to the
Purchaser upon request all such other and further documents, agreements and
instruments in compliance with or pursuant to its covenants and agreements
herein, and will make any recordings, file any notices, and obtain any
consents as may be necessary or appropriate in connection therewith.
(c) State Takeover Laws Not Applicable. No provision of any state law
analogous to Section 203 of the Delaware General Corporation Law will apply
to this Agreement or the transactions contemplated hereby and thereby. The
Company will take all steps within its control irrevocably to exempt the
transactions contemplated by this Agreement from any such law and from any
applicable charter or contractual provision containing change of control or
(d) Instruments of Transfer. The 1993 Noteholders and/or the
Representative shall, on reasonable request by the Purchaser prior to the
Closing, execute and deliver any additional Instruments of Transfer to the
10. Conditions to Purchaser's Obligations. The obligation of the Purchaser
to purchase the 1993 Notes at the Closing shall be subject, in its discretion,
to satisfaction of the following conditions at and as of the Closing:
(a) All representations and warranties and other statements of the
1993 Noteholders, the Company and the Xxxxxxx Group herein are, at and as
of the Closing, true and correct in all material respects.
(b) The 1993 Noteholders, the Xxxxxxx Group and the Company shall have
performed all of their covenants and obligations required to be performed
(c) There exists no litigation or governmental proceedings pending or
threatened to restrain, invalidate, prevent, or otherwise impede any
transaction contemplated hereby.
(d) The 1993 Notes together with the Instruments of Transfer specified
by the Purchaser shall have been delivered by the Escrow Agent to the
Purchaser as directed.
(e) The Company, and certain holders of the Company's preferred stock
and debt, shall have duly authorized and executed the Logitech Agreement
and the Closing specified in that Agreement shall have occurred
(f) The Company and its counsel shall have furnished satisfactory
evidence that the Company's representations and warranties in Section 6 are
accurate and complete.
(g) All corporate and other proceedings to be taken by the 1993
Noteholders in connection with the transactions contemplated hereby and all
documents incident thereto, including but not limited to the Instruments of
Transfer, shall be satisfactory in form and substance to Purchaser and its
special counsel, and said counsel shall have received all such counterpart
originals or certified or other copies of such documents as they may
(h) On or prior to the Closing, the Company shall have consummated the
convertible debt offering described in the Proxy Statement or other similar
equity or convertible debt offering (in either case, the "Offering") and,
in either case, shall have received gross proceeds of at least fifty
million dollars ($50,000,000) therefrom.
(i) The Company shall not have suffered any Material Adverse Change in
its business or financial condition.
The Purchaser may in its discretion elect to waive one or more of the
foregoing (or portion thereof) and proceed to Closing, upon notice to the other
parties of its election.
11. Conditions to 1993 Noteholders' Obligations. The obligation of the 1993
Noteholders to sell the 1993 Notes at the Closing shall be subject to the
condition that, at and as of the Closing, the representations and warranties of
the Purchaser in Section 8 hereof shall be accurate and complete.
12. Survival of Representations. The representations and warranties of the
parties in Sections 5 through 8 above shall survive termination of this
Agreement, and shall apply until the expiration of the applicable statutes of
13. Termination. This Agreement may be terminated and the transactions
provided for herein abandoned at any time prior to the Closing Date:
(a) by mutual consent of the Purchaser and the 1993 Noteholders;
(b) by the Purchaser if any of the conditions set forth in Section 10
hereof shall not have been fulfilled on or prior to July 31, 1997 (the
"Outside Date"), or shall become incapable of fulfillment, and shall not
have been waived by the Purchaser; or
(c) by the 1993 Noteholders if any of the conditions set forth in
Section 11 hereof shall not have been fulfilled on or prior to the Outside
Date (except that the Purchaser shall have the right to extend the Outside
Date to a date no later than September 30, 1997 upon written notice to the
1993 Noteholders) or shall have become incapable of fulfillment, and shall
not have been waived by the 1993 Noteholders.
If this Agreement is terminated as provided for above, this Agreement shall
be of no further force and effect and no party shall have any liability or
obligation hereunder, except for any breach of this Agreement that has occurred
prior to or upon termination thereof.
(a) All statements, requests, notices and agreements hereunder shall
be in writing, and:
if to the Purchaser shall be delivered or sent by mail, telex or facsimile
The Galesi Group
Xxxxxxxx 0, Xxxx Xxxx
Xxxxxxxxx Xxxxxxxxxx Xxxx
Schenectady, NY 12306
Attention: Xxxxxx Xxxxxx, General Counsel
Telecopier Number: 000-000-0000
with a copy to:
Xxxxxx X. Xxxxxxxx, Esq.
Xxxxxxxx & Xxxxxxxx LLP
1290 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopier Number: 000-000-0000
if to the Xxxxxxx Group or the 1993 Noteholders, to:
c/x Xxxxxxx Corporate Finance AG
Xxxxxxxxxxxxxx 0, 0000
Attention: Xxxxxxx Xxxxxx
Telecopier Number: 011 411 201 7819
if to the Company, to:
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Executive Officer
Telecopier Number: 000-000-0000
with a copy to:
Certilman, Balin, Xxxxx & Xxxxx, LLP
00 Xxxxxxx Xxxxxx
Xxxx Xxxxxx, XX 00000
Xxx Xxxxx, General Counsel
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Any such statements, requests, notices, or agreements shall take effect
upon receipt thereof.
(b) This Agreement shall be binding upon, and inure solely to the
benefit of the parties to the extent provided herein, and their respective
heirs, executors, administrators, successors, and permitted assigns, and no
other person shall acquire or have any right under or by virtue of this
(c) Time shall be of the essence of this Agreement.
(d) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
(e) The parties hereto agree that if any of the provisions of this
Agreement are not performed in accordance with their specific terms or are
otherwise breached, irreparable damage will occur, no adequate remedy at
law will exist and damages will be difficult to determine, and that the
parties shall be entitled to specific performance of the terms hereof, in
addition to any other remedy at law or equity.
(f) In the event any party to this Agreement commences any litigation,
proceeding or other legal action in connection with or relating to this
Agreement, or any matters described or contemplated herein or therein, with
respect to any of the matters described or contemplated herein or therein,
the parties to this Agreement hereby (i) agree under all circumstances
absolutely and irrevocably to institute any litigation, proceeding or other
legal action in a court of competent jurisdiction located within the City
of New York, New York, whether a state or federal court; (ii) agree that in
the event of any such litigation, proceeding or action, such parties will
consent and submit to personal jurisdiction in any such court described in
clause (i) of this Section and to service of process upon them in
accordance with the rules and statutes governing service of process (it
being understood that nothing in this Section shall be deemed to prevent
any party from seeking to remove any action to a federal court in New York,
New York; (iii) agree to waive to the full extent permitted by law any
objection that they may now or hereafter have to the venue of any such
litigation, proceeding or action in any such court or that any such
litigation, proceeding or action was brought in an inconvenient forum; (iv)
designate, appoint and direct CT Corporation System as its authorized agent
to receive on its behalf service of any and all process and documents in
any legal proceeding in the State of New York; (v) agree to notify the
other parties to this Agreement immediately if such agent shall refuse to
act, or be prevented from acting, as agent and, in such event, promptly to
designate another agent in the City of New York, New York to serve in place
of such agent and deliver to the other parties written evidence of such
substitute agent's acceptance of such designation; (vi) agree as an
alternative method of service to service of process in any legal proceeding
by mailing of copies thereof to such party at its address set forth herein
for communications to such party; (vii) agree that any service made as
provided herein shall be effective and binding service in every respect;
and (viii) agree that nothing herein shall affect the rights of any party
to effect service of process in any other manner permitted by law.
(g) This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be
an original, but all such respective counterparts shall together constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties have set their hand, and seals as of this
10th day of June, 1997.
SPRING TECHNOLOGY CORP.
COFINVEST 97 LTD.
The agreement of the Xxxxxxx Group is
limited to the representations, warranties
and covenants expressly mentioning the
XXXXXXX CORPORATE FINANCE AG
XXXXXXX CORPORATE FINANCE INC.
The agreement of AMNEX, Inc. is limited to
the representations, warranties and
covenants expressly mentioning the Company.
Exhibit A: Form of Secured Demand Promissory Note dated as of June 4, 1997, for
$354,000 to Spring.