Exhibit 7(a)
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SECURITIES PURCHASE AGREEMENT
among
THE ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ LIVING TRUST
and
PINE RIDGE FINANCIAL INC.
Dated as of July 19, 200l
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SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of July 19,
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2001, between The ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Living Trust, a California trust (the
"Seller"), and Pine Ridge Financial Inc. an international business company duly
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organized and existing in accordance with the laws of the British Virgin Islands
(the "Purchaser").
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WHEREAS, subject to the terms and conditions set forth in this Agreement
and pursuant to Section 4(1) of the Securities Act of 1933, as amended (the
"Securities Act"), the Seller desires to sell to the Purchaser and the Purchaser
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desires to purchase from the Seller the shares of common stock (the "Common
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Stock") of CardioDynamics International Corporation, a California corporation
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(the "Company"), no par value per share, as set forth herein;
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WHEREAS, with regard to the shares of Common Stock to be sold by the Seller
to the Purchaser hereunder, the Purchaser and the Company are entering into a
Registration Rights Agreement, dated as of the date of this Agreement, in the
form of Exhibit A (the "Registration Rights Agreement"); and
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NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the parties to the Agreement do
hereby agree as follows:
ARTICLE I
PURCHASE AND SALE
1.1 Closing and Settlement Date.
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Subject to the terms and conditions set forth in this Agreement, the
Seller shall sell to the Purchasers and the Purchasers shall purchase an
aggregate of 500,000 shares of Common Stock ("Initial Shares") for an aggregate
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purchase price of $2,125,000 (the "Purchase Price"). The closing (the "Closing")
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of the transactions contemplated herein shall occur at the offices of ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP ("▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇"), 1290 Avenue of
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the ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on the execution date of this Agreement
with payment and delivery of the Initial Shares to occur on the Settlement Date
(as defined below). The date of the Closing is hereinafter referred to as the
"Closing Date."
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1.2 The Closing Date. As a condition precedent to each of the parties'
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obligations hereunder, on the Closing Date, the Company and the parties shall
deliver or shall cause to be delivered the following:
(A) the Company shall deliver to the Purchaser (i) a Registration
Rights Agreement, in the form of Exhibit A, executed by the Company and dated as
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of the date hereof, between the Company and the Purchaser and (ii) the Transfer
Agent Instructions, in the form of Exhibit B, executed by the Company and
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delivered to and acknowledged by the Company's transfer agent (the "Transfer
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Agent Instructions");
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(B) the Seller shall deliver to the Purchaser (i) this Agreement,
executed by the Seller, (ii) the legal opinion of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP,
outside counsel to the Seller, substantially in the form of Exhibit C and (iii)
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the escrow agreement ("Escrow Agreement"),
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dated as of the date hereof among the Seller, the Purchaser, California Bank &
Trust and Bear, ▇▇▇▇▇▇▇ Securities Corp. (the "Escrow Agent") executed by the
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Seller;
(C) the Purchaser shall deliver (i) to the Seller, this Agreement
executed by the Purchaser, (ii) to the Company, a Registration Rights Agreement,
executed by the Purchaser, (iii) to the Escrow Agent, the Purchase Price, in
United States dollars in immediately available funds by wire transfer, provided
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that, such funds shall only be disbursed in accordance with the terms of the
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Escrow Agreement; and (iv) to the Seller and the Escrow Agent, the Escrow
Agreement executed by the Purchaser;
(D) each of California Bank & Trust, the Company and the Escrow Agent
shall deliver to Purchaser and Seller, the Escrow Agreement executed by such
party; and
(E) the Company shall deliver to the Purchaser the Registration
Rights Agreement executed by the Company.
1.3 The Settlement Date. On or prior to the fourth Trading Day following
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the delivery of the Purchase Price to the Escrow Agent (the "Settlement Date")
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(A) the Seller shall deliver to the Purchaser, a stock certificate, registered
in the name of the Purchaser, representing the Initial Shares and (B) in
accordance with the terms of the Escrow Agreement, the Escrow Agent shall
disburse, the Purchase Price in United States dollars in immediately available
funds by wire transfer.
1.4 Purchasers' Option To Purchase Additional Shares. During the period
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commencing on the Closing Date and terminating on the earlier of (i) the 30/th/
day after the Closing Date and (ii) the date the Shares are registered with the
Commission pursuant to the Registration Rights Agreement ("Filing Date"), the
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Purchaser shall have an option to purchase an aggregate of up to 1,000,000
additional shares ("Additional Shares") of Common Stock from the Seller at a
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purchase price per share of $4.32. The Purchaser may exercise this option at any
time after the Closing Date until 5:00 p.m. (California time) on the day prior
to the Filing Date, provided, however, that the Seller must notify the Purchaser
of the date on which the Registration Statement is expected to be filed by the
Company and such notice must be delivered to the Purchaser at least five (5)
Business Days prior to such date. The Purchaser may exercise its option under
this Section by providing the Seller with a written notice, via facsimile
("Option Exercise Notice"), specifying the number of Additional Shares to be
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purchased by the Purchaser at a purchase price per share of $4.32. The sale of
such Additional Shares to the Purchaser shall be effected on the date of
delivery of the Option Exercise Notice to the Seller (such date, the "Sale
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Date"). Within four (4) Business Days of the delivery to the Escrow Agent by the
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Purchaser of the aggregate purchase price for the Additional Shares so
purchased, the Seller shall deliver to the Purchaser at its address for notice
set forth herein, a stock certificate, registered in the name of the Purchaser,
representing such Additional Shares as set forth in the Option Exercise Notice.
No later than the two days following the Sale Date, the Purchaser will deliver
the aggregate purchase price for the Additional Shares to the Escrow Agent for
disbursement in accordance with the Escrow Agreement.
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1.5 Certain Defined Terms.
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"Affiliate" means, with respect to any Person, any other Person that
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directly or indirectly controls or is controlled by or under common control with
such Person. For the purposes of this definition, "control," when used with
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respect to any Person, means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms of "affiliated," "controlling" and "controlled" have meanings
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correlative to the foregoing.
"Business Day" shall mean any day except Saturday, Sunday and any day
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which shall be a legal holiday or a day on which banking institutions in New
York City or California are authorized or required by law or other governmental
action to close.
"Commission" means the United States Securities and Exchange Commission.
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"Nasdaq" means the Nasdaq National Market.
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"Person" means an individual or corporation, partnership, trust,
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incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof)
or other entity of any kind.
"Registration Statement" shall mean the registration statement required to
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be filed by the Company pursuant to the Registration Rights Agreement, including
the prospectus and any amendments and supplements to such registration statement
or prospectus, including pre- and post- effective amendments, all exhibits
thereto, and all material incorporated by reference or deemed to be incorporated
by reference in such registration statement.
"Shares" shall mean, collectively, the Initial Shares and the Additional
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Shares, if any.
"Subsequent Market" shall mean any of the New York Stock Exchange, American
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Stock Exchange, Inc or Nasdaq Small Cap Market.
"Trading Day" means a day on which the shares of Common Stock are traded on
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the Nasdaq or on such Subsequent Market on which the shares of Common Stock are
then listed or quoted, or (b) if the shares of Common Stock are not listed on
the Nasdaq or a Subsequent Market, a day on which the shares of Common Stock are
traded in the over-the-counter market, as reported by the OTC Bulletin Board, or
(c) if the shares of Common Stock are not quoted on the OTC Bulletin Board, a
day on which the shares of Common Stock are quoted in the over-the-counter
market as reported by the National Quotation Bureau Incorporated (or any similar
organization or agency succeeding its functions of reporting prices); provided,
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that in the event that the shares of Common Stock are not listed or quoted as
set forth in (a), (b) and (c) hereof, then Trading Day shall mean a Business
Day.
1.6 Representations and Warranties of the Purchaser. The Purchaser
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represents and warrants to the Seller as follows:
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(a) Organization: Authority. The Purchaser is an entity duly
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organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite corporate or partnership
power and authority to enter into and to consummate the transactions
contemplated by this Agreement, the Registration Rights Agreement and the Escrow
Agreement and otherwise to carry out its obligations thereunder. The purchase by
the Purchaser of Shares hereunder has been duly authorized by all necessary
action on the part of it. Each of this Agreement, the Registration Rights
Agreement and the Escrow Agreement has been duly executed by the Purchaser, and
when delivered by the Purchaser in accordance with the terms hereof, will
constitute the valid and legally binding obligation of the Purchaser,
enforceable against it in accordance with its terms.
(b) Investment Intent. The Purchaser is acquiring the Shares as
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principal for its own account, for investment purposes only and not with a view
to or for distributing or reselling such Shares or any part thereof, without
prejudice, however, to the Purchaser's right, subject to the provisions of this
Agreement, the Registration Rights Agreement and the Escrow Agreement at all
times to sell or otherwise dispose of all or any part of such Shares pursuant to
an effective registration statement under the Securities Act or under an
exemption from such registration and in compliance with applicable Federal and
state securities laws. Subject to compliance with Federal and state securities
laws, nothing contained herein shall be deemed a representation or warranty by
the Purchaser to hold the Shares for any period of time. The Purchaser is
acquiring the Shares hereunder in the ordinary course of its business. The
Purchaser does not have any agreement or understanding, directly or indirectly,
with any Person to distribute the Shares.
(c) Purchaser Status. At the time the Purchaser was offered the
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Shares, it was, at the date hereof it is and on the date on which it exercises
its option pursuant to Section 1.4 it shall be, an "accredited investor" as
defined in Rule 501(a) under the Securities Act. The Purchaser was not formed
for the purpose of acquiring the Shares.
(d) Experience of the Purchaser. The Purchaser, either alone or
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together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Shares, and has so
evaluated the merits and risks of such investment.
(e) Ability of such Purchaser to Bear Risk of Investment. The
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Purchaser is able to bear the economic risk of its investment in the Shares and,
at the present time, is able to afford a complete loss of such investment.
(f) Access to Information. The Purchaser acknowledges that it has
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reviewed all necessary information concerning the Seller and has been afforded
(i) the opportunity to ask such questions as it has deemed necessary of, and to
receive answers from, representatives of the Seller concerning the terms and
conditions of the offering of the Shares and the merits and risks of investing
in the Shares; and (ii) the opportunity to obtain such additional information
which the Seller possesses or can acquire without unreasonable effort or expense
that is necessary to make an informed investment decision with respect to the
investment.
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(g) General Solicitation. The Purchaser is not purchasing the Shares
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as a result of or subsequent to any advertisement, article, notice or other
communication regarding the Shares published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar
or any other general solicitation or general advertisement.
(h) Reliance. The Purchaser understands and acknowledges that (i)
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Shares are being offered and sold to it without registration under the
Securities Act in a private placement that is exempt from the registration
provisions of the Securities Act and (ii) the availability of such exemption,
depends in part on, and the Seller will rely upon the accuracy and truthfulness
of, the foregoing representations and the Purchaser hereby consents to and
acknowledges such reliance.
The Seller acknowledges and agrees that other than the representations
and warranties contained herein, the Purchaser does not make or has not made any
representations or warranties to the Seller with respect to the transactions
contemplated hereby.
1.7 Representations and Warranties of the Seller. The Seller hereby
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represents and warrants to the Purchaser as follows:
(a) Authorization; Enforcement. The Seller has the requisite
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corporate power and authority to enter into and to consummate the transactions
contemplated by each of this Agreement and the Escrow Agreement and otherwise to
carry out its obligations thereunder. The execution and delivery of this
Agreement and the Escrow Agreement by the Seller and the consummation by it of
the transactions contemplated thereby have been duly authorized by all necessary
action on the part of the Seller and no further action is required by the
Seller. This Agreement and the Escrow Agreement have been duly executed by the
Seller and, when delivered in accordance with the terms hereof, will constitute
the valid and binding obligation of the Seller enforceable against the Seller in
accordance with its terms. The Seller is not in violation of any of the
provisions of its organizational or charter documents as a result of the
transaction contemplated in this Agreement and the Escrow Agreement.
(b) No liens on Sellers Shares. As of the Settlement Date and the
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date on which any Shares are delivered to the Purchaser pursuant to Section 1.4,
the Seller will be the sole beneficial owner of the Shares and the Shares
delivered to the Purchaser on such date will not be subject to any liens,
pledges, encumbrances, security interests, or other restrictions.
(c) No Conflicts. The execution, delivery and performance of this
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Agreement and the Escrow Agreement by the Seller and the consummation by the
Seller of the transactions contemplated hereby do not and will not (i) conflict
with or violate any provision of the Seller's organizational or charter
documents (each as amended through the date hereof), or (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation (with or without notice, lapse of time
or both) of, any material agreement or other instrument or other understanding
to which the Seller is a party or by which any property or asset of the Seller
is bound or affected, or (iii) result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any
court or governmental authority to which
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the Seller is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Seller is bound or
affected, except to the extent that any such violation would not have a material
adverse effect on the Seller.
(d) Consents and Approvals. The Seller is not required to obtain any
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consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Seller of this Agreement and the Escrow
Agreement, other than reports of beneficial ownership to applicable governmental
authorities, which the Seller agrees to promptly make.
(e) Private Offering. Assuming the accuracy of the representations
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and warranties of the Purchaser set forth in Sections 1.6, the offer and sale of
the Shares to the Purchasers as contemplated hereby are exempt from the
registration requirements of the Securities Act. Neither the Seller nor any
Person acting on its behalf has taken or is, to the knowledge of the Seller,
contemplating taking any action which could subject the offering or sale of the
Shares to the registration requirements of the Securities Act including
soliciting any offer to buy or sell the Shares by means of any form of general
solicitation or advertising.
(f) Certain Fees. Except for certain fees payable by the Seller as
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set forth in Schedule A hereto, no fees or commissions will be payable by the
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Seller to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement or the Escrow Agreement. The Purchasers shall
have no obligation with respect to any fees or with respect to any claims made
by or on behalf of other Persons for fees of a type contemplated in this Section
that may be due in connection with the transactions contemplated by this
Agreement or the Escrow Agreement as a result of any action taken by the Seller.
The Seller shall indemnify and hold harmless the Purchaser, its employees,
officers, directors, agents, and partners, and their respective Affiliates, from
and against all claims, losses, damages, costs (including the costs of
preparation and attorney's fees) and expenses suffered in respect of any such
claimed or existing fees, as such fees and expenses are incurred.
(g) Solicitation Materials. Neither the Seller nor any Person acting
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on the Seller's behalf has solicited any offer to buy or sell the Shares by
means of any form of general solicitation or advertising.
(h) Disclosure. The Seller confirms that neither it nor any other
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Person acting on its behalf has provided any of the Purchasers or its agents or
counsel with any information that constitutes or might constitute material non-
public information. The Seller understands and confirms that the Purchasers
shall be relying on the foregoing representations in effecting transactions with
respect to the Shares.
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ARTICLE II
OTHER AGREEMENTS OF THE PARTIES
2.1 Transfer Restrictions: Legend.
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(a) The Purchaser acknowledges that Shares may only be disposed of
pursuant to an effective registration statement under the Securities Act or
pursuant to an available exemption from or in a transaction not subject to the
registration requirements of the Securities Act, and in compliance with any
applicable Federal and state securities laws. In connection with any transfer of
Shares other than pursuant to an effective registration statement, except as
otherwise set forth herein, the Company may require the transferor thereof to
provide to the Company an opinion of counsel selected by the transferor, the
form and substance of which opinion shall be reasonably satisfactory to the
Company, to the effect that such transfer does not require registration of such
transferred Shares under the Securities Act. Any such transferee shall agree in
writing to be bound by the terms of this Agreement and shall have the rights of
a "Purchaser" under this Agreement, the Registration Rights Agreement and the
Escrow Agreement.
(b) The Purchaser acknowledges that until the Shares are registered
pursuant to an effective registration statement or may otherwise be disposed of
pursuant to an available exemption from or in a transaction not subject to the
registration requirements of the Securities Act, the following or similar legend
shall appear on the stock certificates representing the Shares:
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE, AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION OR
QUALIFICATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
2.2 Indemnification.
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(a) The Seller agrees to indemnify and hold harmless the Purchaser,
its shareholders, officers, directors, employees, agents and representatives
against any damages, claims, losses, liabilities and expenses (including
reasonable counsel fees and expenses) which may be suffered or incurred by any
of them as a result of a breach of any representation, warranty or covenant made
by the Seller in this Agreement or the Escrow Agreement.
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(b) The Purchaser, agrees to indemnify the Seller and its
shareholders, officers, directors, employees, agents and representatives against
any damages, claims, losses, liabilities and expenses (including reasonable
counsel fees and other expenses) ("Purchaser Losses") which may be suffered or
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incurred by it as a result of any breach of any representation, warranty, or
covenant made by the Purchasers in this Agreement or the Escrow Agreement.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any Person in respect of which indemnity may be
sought pursuant to this Section, such person (the "indemnified party shall
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promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing of the occurrence of the facts and
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circumstances giving rise to such claim. The failure of any person to deliver
the notice required by this Section 2.2 shall not in any way affect the
indemnifying party's indemnification obligation hereunder except and only to the
extent that the indemnifying party is actually prejudiced thereby. In case any
such proceeding shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party and
shall pay as incurred the fees and expenses of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel or pay its own expenses. Notwithstanding the
foregoing, the indemnifying party shall pay as incurred the fees and expenses of
the counsel retained by the indemnified party in the event (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceedings (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. The indemnifying
party shall not be liable for any settlement of any proceeding effected without
its written consent (which consent may not be unreasonably withheld) but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment and the
indemnifying party shall obtain a full release of the indemnified party.
2.3 Material Inducement. The Seller agrees and acknowledges that the
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Company's commitment and obligation to file a Registration Statement with
respect to the Shares to be sold under this Agreement is a material inducement
to the Purchasers' execution of this Agreement. In the event that the
Registration Rights Agreement is not declared effective by the Commission prior
to the 90/th/ day after the Closing Date, the Purchaser shall have the right,
exercisable in writing by the Purchaser within the succeeding 10 business days
following the 90/th/ day after the Closing Date to require the Seller to
repurchase the Shares acquired by the Purchaser pursuant to this Agreement at
the per share purchase price equal to the price per share paid by the Purchaser
for such Shares as set forth in Sections 1.1 and 1.4 hereof. The closing for the
purchase and sale of the Shares shall occur at the office of the Purchaser no
later than 10 Business Days following the giving of the notice by the Purchaser
to the Seller.
2.4 Right of First Refusal From the date of this Agreement until the date
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on which the Registration Statement is declared effective by the Commission
(provided that in no event shall
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such time period exceed 90 days after the Closing Date), other than to the
Purchaser or an Affiliate thereof, the Seller shall not directly or indirectly,
offer, sell, grant any option to purchase, or otherwise dispose of (or announce
any offer, sale, grant of any option to purchase or other disposition) any of
its shares of Common Stock of the Company or any securities that are
exchangeable or convertible (directly or indirectly) for shares of its Common
Stock, (collectively, a "Subsequent Placement"), unless: (A) the Seller delivers
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to the Purchaser a written notice (the "Subsequent Placement Notice") of its
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intention to effect such Subsequent Placement, which Subsequent Placement Notice
shall describe in reasonable detail the proposed terms of such Subsequent
Placement, the amount of proceeds intended to be raised thereunder, and subject
to the terms of any applicable confidentiality agreement, the Person with whom
such Subsequent Placement shall be effected, and attached to which shall be a
term sheet or similar document relating thereto and (B) the Purchaser shall not
have notified the Seller by 6:30 p.m. (New York City time) on the third Business
Day after its receipt of the Subsequent Placement Notice of its willingness to
purchase (or to cause its sole designee to purchase), subject to completion of
mutually acceptable documentation, the shares of Common Stock referenced in the
Subsequent Placement Notice on the same terms and conditions set forth in such
notice (such notice to purchase the shares is referred to as the "Purchase
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Notice"). If the Purchaser shall fail to deliver a Purchase Notice to the Seller
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regarding its intention to enter into such negotiations within three Business
Days after receipt of a Subsequent Placement Notice, or upon delivery of a
Purchase Notice the Purchaser fails to consummate the purchase of the shares in
accordance with such Purchase Notice within ten Business Days of delivery of the
Purchase Notice (the "Expiration Date"), then the Seller may effect the
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Subsequent Placement substantially upon the terms and to the Persons
(or Affiliates of such Persons) set forth in the Subsequent Placement Notice;
provided, that the Seller shall provide the Purchaser with a second Subsequent
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Placement Notice and the Purchaser shall again have the right of first refusal
set forth above in this paragraph (b), if the Subsequent Placement subject to
the initial Subsequent Placement Notice shall not have been consummated for any
reason on the terms set forth in such Subsequent Placement Notice within 20
calendar days after the Expiration Date of the Purchase Notice.
ARTICLE III
MISCELLANEOUS
3.1 Fees and Expenses. On the Settlement Date, the Seller shall reimburse
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the Purchaser for its legal fees and expenses incurred in connection with the
preparation and negotiation of the documents executed in connection with this
transaction by paying to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ $25,000. The amount contemplated by
the immediately preceding sentence shall be deducted from the aggregate purchase
price due to the Seller with respect to the Shares delivered to Purchaser on the
Settlement Date in accordance with the Escrow Agreement. Other than the amount
contemplated in this Agreement, each party hereto shall pay the fees and
expenses of its advisers, counsel, accountants and other experts, if any, and
all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement.
3.2 Entire Agreement: Amendments. This Agreement and the Escrow Agreement,
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together with any Exhibits or Schedules thereto contain the entire understanding
of the parties
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with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.
3.3 Notices. Any and all notices or other communications or deliveries
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required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section prior to 6:30 p.m. (New York City
time) on a Business Day, (ii) the Business Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Agreement later than 6:30 p.m. (New York City
time) on any date and earlier than 11:59 p.m. (New York City time) on such date,
(iii) the Business Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (iv) upon actual receipt by the party
to whom such notice is required to be given. The address for such notices and
communications shall be as follows:
If to the Seller: The ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Living Trust
▇▇▇▇▇▇▇ Enterprises
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Attn: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
and ▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to: ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
If to the Purchaser: To the address set forth under
the Purchaser's name on the
signature pages hereto
or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
3.4 Amendments: Waivers. No provision of this Agreement may be waived or
-------------------
amended except in a written instrument signed, in the case of an amendment, by
the parties or, in the case of a waiver, by the party against whom enforcement
of any such waiver is sought. No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of either party to exercise
any right hereunder in any manner impair the exercise of any such right accruing
to it thereafter.
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3.5 Headings. The headings herein are for convenience only, do not
---------
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
3.6 Successors and Assigns. This Agreement shall be binding upon and inure
----------------------
to the benefit of the parties and their successors and permitted assigns.
Neither the Seller nor the Purchaser may assign this Agreement or any rights or
obligations hereunder without the prior written consent of the Purchaser or the
Seller, respectively. This provision shall not limit the Purchaser's right to
transfer the Shares in accordance with Section 2.1 (a).
3.7 No Third-Party Beneficiaries. This Agreement is intended for the
----------------------------
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.
3.8 Governing Law. All questions concerning the construction, validity,
-------------
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each party
agrees that all legal proceedings concerning the interpretation, enforcement and
defense of the transactions contemplated by this Agreement (whether brought
against a party hereto or its respective Affiliates, directors, officers,
shareholders, employees or agents) shall be commenced in the state and federal
courts sitting in the City of New York, Borough of Manhattan (the "New York
--------
Courts"). Each party hereto hereby irrevocably submits to the jurisdiction of
------
the New York Courts for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein (including with respect to the enforcement of the any of this Agreement),
and hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is improper or that such
New York Courts are inconvenient or will be an improper forum for such
proceeding. Each party hereto (including its affiliates, agents, officers,
directors and employees) hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law. Each party hereto (including its affiliates, agents, officers,
directors and employees) hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. If either party shall commence an action or proceeding to
enforce any provisions of this Agreement, then the prevailing party in such
action or proceeding shall be reimbursed by the other party for its attorneys
fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such action or proceeding.
3.9 Survival. The representations, warranties, agreements and covenants
--------
contained herein shall survive the Closing Date until the earlier to occur of(i)
two years after the Closing
-11-
Date or (ii) the date on which all the Shares shall have been resold in
accordance with Section 2.1.
3.10 Execution. This Agreement may be executed in two or more counterparts,
---------
all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
3.11 Severability. In the event that any court of competent jurisdiction
------------
shall determine that any provision, or any portion thereof, contained in this
Agreement is unreasonable or unenforceable in any respect, then such provision
shall be deemed limited to the extent such court deems it reasonable and
enforceable, and as so limited shall remain in full force and effect. In the
event that such court shall deem any provision, or portion thereof, wholly
unenforceable, the remaining provisions of this Agreement shall be the
interpreted as if such provision were so excluded and shall nevertheless remain
in full force and effect. With regard to any provision, or portion thereof
deemed wholly unenforceable, the parties shall attempt to agree upon a valid and
enforceable provision or portion thereof, which shall be a reasonable substitute
therefor, and upon such agreement, shall incorporate such substitute provision
or portion thereof in this Agreement.
3.12 Remedies. In addition to being entitled to exercise all rights
--------
provided herein or granted by law, including recovery of damages, each of the
parties will be entitled to specific performance under this Agreement. The
parties agree that monetary damages may not be adequate compensation for any
loss incurred by reason of any breach of obligations described in the foregoing
sentence and hereby agrees to waive in any action for specific performance of
any such obligation the defense that a remedy at law would be adequate.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
THE ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ LIVING TRUST
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Co-Trustee
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Co-Trustee
PINE RIDGE FINANCIAL INC.
By: _______________________________
Name:
Title:
Purchase Price for Shares: $2,125,000
Number of Shares to be acquired: 500,000
Address for Notice:
Pine Ridge Financial Inc.
c/▇ ▇▇▇▇▇▇▇ Capital Corp.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Avi Vigder
With a copy to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ and (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
THE ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ LIVING TRUST
By: _______________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Co-Trustee
By: _______________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Co-Trustee
PINE RIDGE FINANCIAL INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Attorney-in-fact
Purchase Price for Shares: $2,125,000
Number of Shares to be acquired: 500,000
Address for Notice:
Pine Ridge Financial Inc.
c/▇ ▇▇▇▇▇▇▇ Capital Corp.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Avi Vigder
With a copy to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ and (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Schedule A
----------
Schedule of Fees Payable by Seller
----------------------------------
1. The Seller shall pay a total of $99,375 to the Company.
2. The Seller shall pay $74,375 to S.R. West Corp. as commission for its
services in connection with the transaction consummated on the Settlement Date
and in connection with the purchase of any Additional Shares under Section 1.4,
the Seller shall also pay (i) to S.R. West Corp., a dollar amount equal to 3.5%
of the gross purchase price paid by the Purchaser and (ii) to the Company, a
dollar amount equal to 3.5% of the gross purchase price paid by the Purchaser.
3. The Seller shall also pay certain fees as set forth in Section 3.1 of the
Agreement.
4. The Seller shall pay the fees of the Escrow Agent pursuant to the terms of
the Escrow Agreement.
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