Exhibit 10.5
November 15, 1999
American Electromedics Corp.
00 Xxxxxxxx Xxxxx, Xxxxx 0
Xxxxxxx, XX 00000
Gentleman:
This letter sets forth the terms and conditions of the agreement
relating to the purchase by Concord Effekten AG (the "purchaser")
from American Electromedica Corp., a Delaware Corporation (the
"Corporation"), of 1,333,333 shares (the "Shares") of common
stock, par value $.10 per share of the Corporation.
The Purchaser hereby purchases from the Corporation, and the
Corporation hereby sells to the Purchaser, the Shares at a price
of $.75 per Share, or an aggregate purchase price of $1,000,000
(the "Purchase Price"), subject to the terms and conditions
herein. The Purchaser is hererby delivering a wire transfer to
the Corporation for the Purchase Price, payment to be received by
November 18, 1999, and upon receipt thereof the Corporation is
delivering to the Purchaser a certificate representing the
Shares.
2. The Purchaser represents and warrants to the Corporation
that:
2.1 The purchaser is aware that the Share have
not been registered under the Securities Act
of 1933, as amended (the "Securities Act"),
is aware of the restrictions on sale or
transfer thereunder, and acknowledges that an
appropriate restrictive legend will be set
forth on, and a stop transfer order will be
placed against, the certificate evidencing
the Shares to be issued to the Purchaser.
However, the Corporation agrees that it shall
include the Shares in a pre-effective
amendment to the registration statement filed
by the Corporation on Form SB-2 on March 31,
1999 (File No. 333-75399).
2.2 The Purchaser has received and reviewed the
Corporation s Form 10-KSB for the fiscal year
ended July 31, 1999 and Preliminary Proxy
Statement for the 1999 Annual Meeting of
Stockholders, and has had the opportunity to
discuss the business, affairs and financial
prospects of the Corporation with management
of the Corporation and has made an informed
decision regarding the purchase of the
Shares.
2.3 The Purchaser is an "accredited investor" as such term
is defined in Regulation D under the Securities Act.
2.4 The Purchaser acknowledges that an investment in the
Corporation is highly speculative, that such investment
is consistent with his investment objectives and income
prospects, and that he has adequate means for providing
for his current financial needs, has no need for
liquidity in the investment herein, and is able to bear
the risk of loss of his entire investment in the
Shares.
3. The Corporation represents and warrants to the Purchaser
that:
3.1 The Corporation is a corporation duly
organized, validly existing and in good
standing under the laws of the State of
Delaware. The authorized capital stock of
the Corporation is 20,000,000 shares of
Common Stock, of which 10,630,955 are issued
and outstanding, and 1,000,000 shares of
Preferred Stock, $.01 par value, of which
2,400 shares of Series A Preferred Stock and
1,170 shares of Series B Preferred Stock are
issued and outstanding. Shares of Common
Stock are reserved for stock options and
warrants and conversion of the Series A and
Series B Preferred Stock.
3.2 The Corporation has the full power and
authority to enter into this Agreement and to
sell the Shares, and that the Corporation s
execution, delivery and performance under
this Agreement has been duly authorized by
all necessary action.
3.3 The Shares has been duly authorized, and upon
receipt of the Purchase Price will be fully
paid and nonassessable.
3.4 The Corporation will be able to remove all
outstanding convertible preferred stock
within 3 business days of receipt of the
Purchase Price.
3.5 The Corporation will send the Purchaser a
copy of the certificate representing the
Shares issued to the Purchaser by November
18, 1999.
3.6 The Corporation is not aware of any reason
that would cause a significant delay in the
filing and acceptance by the SEC of the
pre-effective amendment to the registration
statement on Form SB-2, discussed in Section
2.1 of this agreement.
4. This letter sets forth the entire agreement between the
parties hereto as to the subject matter herein, and
cannot be amended, modified or terminated except by an
agreement in writing executed by the parties hereto.
In the event any provision of this letter is invalid or
unenforceable, the remainder of this letter shall be
construed without taking into effect such invalid or
unenforceable provisions. This letter shall be
governed by the laws of the State of Delaware.
Please signify your agreement to the foregoing by executing,
faxing and returning the original of this letter.
Very truly yours,
CONCORD EFFEKTEN AG
By: /s/ Illegible
----------------------
Name: Illegible
--------------------
Xxxxxxxxxxxxxxx 0
00000 Xxxxxxxxx xx Xxxx
Xxxxxxx
Agreed to this 17th
day of November, 1999
AMERICAN ELECTROMEDICS CORP.
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx, President
