XXXXXXX 00.0
XXX INTERNATIONAL
SERIES 97-D PREFERRED
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is made as of ___ day of August
1997, by and between SGI International, a Utah corporation (the "Company") and
the persons and entities listed on the Schedule of Investors attached hereto as
Exhibit A (the "Investors").
The Parties hereby agree as follows:
1. Authorization and Sale of Preferred Stock and Warrants.
(a) Authorization. The Company will authorize the sale and issuance of up to
550 shares ("Shares") of its Series 97-D Convertible Preferred Stock (the
"Preferred Stock", the form of which is included herein as Attachment A)
having the rights, preferences and preferences as set forth in the
Certificate of Designation to the Articles of Incorporation (the "Certificate")
in the form attached to this Agreement as Exhibit B. The Company will also
authorize the sale and issuance of three warrants ("Warrants") to each investor
to purchase common stock of the Company in connection with the purchase of the
Preferred Stock. Each Warrant will be for the number of shares of common stock
determined in accordance with Exhibit A.
(b) Sale of Preferred Stock and Warrants. Subject to the terms and conditions
hereof, the Company will severally issue and sell to each of such Investors,
and the Investors will severally buy from the Company at the Closing Date at a
price of $1,000 per Share of Preferred Stock the number of Shares of Preferred
Stock specified opposite such Investors name in the Schedule of Investors on
Exhibit A hereto. In addition, the Company will sell to each of the Investors
a total of three Warrants, with each Warrant exercisable for the number of
shares of common stock of the Company determined in accordance with Exhibit A.
The form of the Warrant is attached to this Agreement as Exhibit C. The
exercise price ("Exercise Price") for each Warrant will be equal to the average
of the closing bid price of the Company's common stock ("Common Stock") as
quoted on the OTC Bulletin Board for the five trading days preceding the
Closing Date. The Company's agreements with each of the Investors are separate
agreements, and the sale of the Preferred Stock and Warrants to each of the
Investors are separate sales.
2. Closing Dates, Delivery.
(a) Closing Dates. The Closing (the "Closing") shall be the date both parties
execute and date this Agreement. The closing of the purchase and sale of the
Preferred Stock and Warrants hereunder shall be the date ("Closing Date") the
Company confirms receipt of the full and complete purchase price for the
Preferred Stock and Warrants by Investors. The Company and the Investors shall
enter into a Registration Rights Agreement on or prior to the Closing, in the
form attached to this Agreement as Exhibit D (the "Registration Rights
Agreement").
(b) Delivery. At the Closing Date the Company will date and transmit to each
Investor a certificate or certificates in such Investors name as set forth on
the Schedule of Investors, representing the number of Shares of Preferred Stock
designated in the Schedule of Investors to be purchased by each Investor in
consideration for the payment of the purchase price therefore by cashiers check
payable to the Company or by wire transfer in immediately available, good
cleared funds, payable to the Company. Company shall concurrently send Stock
Purchase Warrant(s) in such Investor's name as set forth on the Schedule of
Investors, representing the number of shares of Common Stock to which such
Investor's purchase of Preferred Stock entitles such Investor in accordance
with Exhibit A.
3. Representation and Warranties of the Investor. Each Investor hereby
severally represents and warrants that:
(a) Organization and Authorization. Investor is duly incorporated or
organized and validly existing in the state of its incorporation or
organization and has all requisite power and authority to purchase and hold
the Securities. The decision to invest and the execution and delivery of this
Agreement by the Investor, the performance by the Investor of its obligations
hereunder and the consummation by the Investor of the transactions contemplated
hereby have been duly authorized and require no other proceedings on the part
of the Investor. The Investor's signatory has all right, power and authority
to execute and deliver this Agreement on behalf of the Investor. This
Agreement has been duly executed and delivered by the Investor and, assuming
the execution and delivery hereof and acceptance thereof by the Company, will
constitute the legal, valid and binding obligations of the Investor,
enforceable against the Investor in accordance with its terms.
(b) Evaluation of Risks. Investor has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of, and bearing the economic risks entailed by, an investment in the
Company and of protecting its interests in connection with this transaction.
It recognizes that its investment in the Company involves a high degree of risk
and the Investor can afford the complete loss of Investor's investment.
(c) Independent Counsel. Investor acknowledges that it has been advised to
consult with its own attorney regarding legal matters concerning the Company
and to consult with its tax advisor regarding the tax consequences of acquiring
the Securities.
(d) Disclosure Documentation. Investor has received and reviewed copies of
the Company's reports filed under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), including its December 31, 1996 and December 31, 1995
Form 10-Ks and Form 10-Q for the quarter ended March 31, 1997 (collectively,
the "SEC Filings"). Except for the SEC Filings, Investor is not relying on any
other information relating to the offer and sale of the Securities. Investor
acknowledges that the Company has offered to make available any additional
public information that the Investor may reasonably request, including
technical information, and other material information about the Company and
Investor has been offered Company's full and unconditional cooperation in
making such information available to Investor and acknowledges that the Company
has recommended that the Investor request and review such information prior to
making an investment decision. No oral or written representations have been
made, or oral or written information furnished to the undersigned or its
advisors, if any, in connection with the offering of the Securities which were
or are in any way inconsistent with the SEC Filings.
(e) Opportunity to Ask Questions. Investor has had a reasonable opportunity
to ask questions of and receive answers from the Company concerning the Company
and the offering, and all such questions, if any, have been answered to the
full satisfaction of Investor.
(f) SEC Filings Constitute Sole Representations. Except as set forth in the
SEC Filings, no representations or warranties have been made to Investor by (a)
the Company or any agent, employee or affiliate of the Company or (b) any other
person, and in entering into this transaction Investor is not relying upon any
information, other than that contained in the SEC Filings and the results of
independent investigation by Investor.
(g) Investor is Accredited Investor. The undersigned is an "Accredited
Investor" as defined below who represents and warrants it is included within
one or more of the following categories of "Accredited Investors."
(i) Any bank as defined in Section 3(a)(2) of the Act, or any savings and
loan associated or other institution as defined in Section 3(a)(5)A of the Act
whether acting in its individual or fiduciary capacity; any broker or dealer
registered pursuant to Section 15 of the 1934 Act; any insurance company as
defined in Section 2(13) of the Act; any investment company registered under
the Investment Company Act of 1940 or a business development company as defined
in Section 2(a)(48) of that Act; any Small Business Investment Company licensed
by the U.S. Small Business Administration under Section 301(c) or (d) of the
Small Business Act of 1958; any plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or its
political subdivision, for the benefit of its employees if such plan has total
assets in excess of $5,000,000; and an employee benefit plan within the meaning
of Title I of the Employee Retirement Income Security Act of 1974 if the
investment decision is made by a plan fiduciary, as defined in Section 3(21) of
such Act, which is either a bank, savings and loan association, insurance
company, or registered investment advisor, or if the employee benefit plan has
total assets in excess of $5,000,000 or, if a self-directed plan, with
investment decisions made solely by persons that are accredited investors;
(ii) Any private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
(iii) Any organization described in Section 501(c)(3) of the Internal Revenue
Code, corporation, Massachusetts or similar business trust, or partnership, not
formed for the specific purpose of acquiring the securities offered, with total
assets in excess of $5,000,000;
(iv) Any director, executive officer, or general partner of the issuer of the
securities being offered or sold, or any director, executive officer, or
general partner of a general partner of that issuer;
(v) Any natural person whose individual net worth, or joint net worth with
that person's spouse, at the time of his purchase exceeds $1,000,000;
(vi) Any natural person who had an individual income in excess of $200,000
in each of the two (2) most recent years or joint income with that person's
spouse in excess of $300,000 in each of those years and has a reasonable
expectation of reaching that same income level in the current year;
(vii) Any trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person as described in Section 230.506(b)(2)(ii);
(viii) Any entity in which all of the equity owners are accredited investors;
and
(ix) Any self-directed employee benefit plan with investment decisions made
solely by persons that are accredited investors within the meaning of Rule 501
of Regulation D promulgated under the Act.
(h) No Registration, Review or Approval. Investor acknowledges and
understands that the limited private offering and sale of Securities (as
defined in the Registration Agreement) pursuant to this Agreement has not been
reviewed or approved by the SEC or by any state securities commission,
authority or agency, and is not registered under the Act or under the
securities or "blue sky" laws, rules or regulations of any state. Investor
acknowledges, understands and agrees that the Securities are being offered and
sold hereunder pursuant to (i) aprivate placement exemption to the registration
provisions of the Act pursuant to Section 3(b) or Section 4(2) of such Act and
Regulation D, including Rules 505 and/or 506, promulgated under such Act, and
(ii) a similar exemption to the registration provisions of applicable state
securities laws and are restricted securities as described in the Registration
Rights Agreement (Exhibit D) which is incorporated by this reference. Investor
understands that the Company is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and understandings of
Investor set forth herein in order to determine the applicability of such
exemptions and the suitability of Investor to acquire the Securities. Investor
will advise the Company of the state of residence of each Investor prior to the
receipt of the purchase price for the Preferred Stock offered hereby or the
execution of this or any other agreement with the Company a reasonable time
prior thereto to enable the Company to comply with applicable blue-sky
securities laws.
(i) Investment Intent. Without limiting its ability to resell the Securities
pursuant to an effective registration statement, Investor is acquiring the
Securities solely for its own account and not with a view to the distribution,
assignment or resale to others. Investor understands and agrees that it may
bear the economic risk of its investment in the Securities for an indefinite
period of time. Investor does not now have any short position or hedge or
similar position in the Company's Common Stock nor will the Investor make any
promissory notes and/or pledges to that effect on the Company's Common Stock.
(j) Demand Rights. The parties shall have entered into a Registration Rights
Agreement (Exhibit D) prior to the Closing.
(k) No Advertisements. The Investor is not subscribing for Securities as a
result of or subsequent to any advertisement, article, notice or other
communication published in any newspaper, magazine, or similar media or
broadcast over television or radio, or presented at any seminar or meeting.
4. Representations and Warranties of the Company. For so long as any
Securities held by Investor remains outstanding, the Company acknowledges,
represents, warrants and agrees as follows:
(a) Organization and Authorization. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Utah and has all requisite corporate power and authority to own and operate its
properties and assets and to carry on its business as currently conducted. The
Company is not in default or violation of any material term or provision of its
Articles of Incorporation, as amended, or By-laws nor will the consummation of
the transactions contemplated by this Agreement cause any such default or
violation. The Company has all requisite corporate power and authority to
enter into this Agreement, to sell the Securities hereunder and to carry out
and perform its obligations under the terms of this Agreement. This
Agreement is a valid and binding obligation of the Company, enforceable in
accordance with its terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
effecting the rights of creditors generally and available equitable remedies.
(b) Reporting Issuer Company Status. To the best of its knowledge, the
Company is in full timely compliance, to the extent applicable, with all
reporting obligations under either Section 12(b), 12(g) or 15(d) of the
1934 Act, and shall use its best efforts to maintain such status on a timely
basis. The Company has registered its Common Stock pursuant to Section 12 of
the 1934 Act and the Common Stock currently trades on the OTC Bulletin Board.
(c) Further Representations and Warranties of the Company. For so long as any
Securities held by the Investor remain outstanding, the Company acknowledges,
represents, warrants and agrees as follows:
(i) It will reserve from its authorized but unissued shares of Common Stock
sufficient number of shares of Common Stock to permit the conversion in full
and the exercise of the outstanding Securities.
(ii) It will use its best efforts to maintain the listing of its Common Stock
on the OTC Bulletin Board, or on any major stock exchange to which it is
accepted.
(iii) It will permit the Investor to exercise its right to convert the
Preferred Stock by telecopying an executed and completed Notice of Conversion
(Attachment B hereto) to the Company and delivering the original Notice of
Conversion and the certificate representing the Preferred Stock to the Company
by express courier. Each business date on which a Notice of Conversion is
received by the Company in accordance with the provisions hereof shall be
deemed a conversion date ("Conversion Date"). The Company will use its best
efforts to transmit the certificates representing shares of Common Stock
issuable upon conversion of any Preferred Stock (together with the certificates
representing the Preferred Stock not so converted) to the Investor via express
courier, by electronic transfer or otherwise within three business days after
the conversion date if the Company has received the original Notice of
Conversion and Preferred Stock certificate being so converted by such date. In
addition to any other remedies which may be available to the Investor, in the
event that the Company fails to effect delivery of such shares of Common Stock
within such three business day period, the Investor will be entitled to revoke
the relevant Notice of Conversion by delivering a notice to such effect to the
Company whereupon the Company and the Investor shall each be restored to their
respective positions immediately prior to delivery of such Notice of
Conversion. The Notice of Conversion and Preferred Stock representing the
portion of the Shares converted shall be delivered as follows:
To the Company:
Attn: Xxxx Xxxxxx, Esq.
SGI International
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xx Xxxxx, XX 00000
Fax: (000) 000-0000
In the event that the Common Stock issuable upon conversion of the Preferred
Stock is not delivered by the Company within five (5) business days of receipt
by the Company of a valid Conversion Notice and the Preferred Stock to be
converted, the Company shall pay to the Purchaser, in immediately available
funds, upon demand, as liquidated damages for such failure and not as a
penalty, for each $100,000 of Preferred Stock sought to be converted, $500 for
each of the first ten (10) days and $1,000 per day thereafter that the
Conversion Shares as defined in the Registration Agreement are not delivered,
which liquidated damages shall run from the sixth business day after the
Conversion Date. Any and all payments required pursuant to this paragraph shall
be payable only in shares of Common Stock and not in cash. The number of such
shares shall be determined by dividing the total sum payable by the Conversion
Price.
(d) Full Disclosure. There is no fact known to the Company (other than
general economic conditions known to the public generally) that has
not been disclosed in writing to the Investor that could reasonably be expected
to have a material adverse effect on the condition (financial or otherwise) or
on the earnings, business affairs, business prospects, properties or assets of
the Company.
(e) Opinion of Counsel. The Company shall have their counsel provide, at the
Company's expense, an opinion of counsel acceptable to the transfer agent (if
required) upon conversion of the 97-D Convertible Preferred Stock, upon receipt
of Notice of Conversion from each Investor, as well as upon exercise of the
Warrants.
Investor shall, upon the Closing, receive an opinion letter from counsel for
the Company to the effect that:
(i) The Company is duly incorporated and validly existing under the laws
and jurisdiction of its incorporation.
(ii) Except as set forth in the SEC Filings, to the best of Counsels'
knowledge, without an independent investigation, there is no action, proceeding
or investigation pending, or to such counsel's knowledge, threatened against
the Company which might result, either individually or in the aggregate, in any
material adverse change in the business, prospects, conditions, affairs or
operations of the Company.
(iii) Except as set forth in the SEC Filings, to the best of Counsels'
knowledge, without an independent investigation, the Company is not a party to
or subject to the provisions of any order, writ, injunction, judgment or decree
of any court or government agency or instrumentality.
(iv) Except as set forth in the SEC Filings, to the best of Counsels'
knowledge, without an independent investigation, there is no action, suit,
proceeding or investigation by the Company currently pending or which the
Company currently intends to initiate.
(v) The Preferred Stock which shall be issued at the closing is properly
issued under the Company's state of incorporation.
(vi) The Stock Purchase Agreement, the issuance of the Preferred Stock,
Warrants and the issuance of Common Stock, upon conversion of the Preferred
Stock, have been duly approved by all required corporate action and that all
such securities, upon delivery, shall be validly issued and outstanding, fully
paid and nonassessable.
(vii) The issuance of the Preferred Stock will not violate the applicable
listing agreement between the Company and any securities exchange or market on
which the Company's securities are listed as of the date of this Agreement.
(f) That it will obtain for the Investor, at the Company's expense, any and
all opinions of counsel which may be reasonably required in order to convert
the Preferred Stock.
(g) Outstanding Debt or Equity Securities. Except as described in the
Company's Form 10-K Annual Reports, Form 10-Q Quarterly Reports, Form
8-Ks and all filings made to the SEC pursuant to the Act for the 1990-1996
fiscal years and the SEC filings, there are no other outstanding debt or equity
securities presently convertible into shares of Common Stock.
(h) Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the SEC which may at any time permit the sale
of the Securities to the public without registration, the Company agrees to use
its best efforts to:
(i) make and keep public information available, as those terms are understood
and defined in Rule 144 under the Act, at all times after the effective date on
which the Company becomes subject to the reporting requirements of the Act or
the Exchange Act;
(ii) file with the SEC in a timely manner all reports and other documents
required of the Company under the Act and the 1934 Act;
(iii) to furnish to Investor forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of said Rule 144,
and of the Act and the 1934 Act, a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents of the Company and
other information in the possession of or reasonably obtainable by the Company
as Investor may reasonably request in availing itself of any rule or regulation
of the SEC allowing Investor to sell any such Securities without registration.
5. Representations and Warranties of the Company and Investor. Each of
the Investors and the Company represent to the other the following with respect
to itself:
(a) Stock Purchase Agreement. The Agreement has been duly authorized, validly
executed and delivered on behalf of the Company and Investor and is a valid and
binding agreement in accordance with its terms, subject to general principles
of equity and to bankruptcy or other laws affecting the enforcement of
creditors' rights generally.
(b) Non-contravention. The execution and delivery of the Agreement and the
consummation of the issuance of the Securities and the transaction contemplated
by the Agreement do not and will not conflict with or result in a breach by the
Company or Investor of any of the terms or provisions of, or constitute a
default under, the Articles of Incorporation or by-laws of the Company or
Investor, or any indenture, mortgage, deed of trust of other material agreement
or instrument to which the Company or Investor is a party or by which either of
them or any of their respective properties or assets are bound, or any
applicable decree, judgment or order of any court, Federal or State regulatory
body, administrative agency or other governmental body having jurisdiction over
the Company or Investor or any of their respective properties or assets.
(c) Approvals. Neither the Company nor Investor is aware of any
authorization, approval or consent of any governmental body which is legally
required for the issuance and sale of the Securities, except as may be required
by applicable blue-sky laws.
(d) Indemnification. Each of the Company and the Investor agrees to indemnify
the other and to hold the other harmless from and against any and all losses,
damages, liabilities, costs and expenses (including reasonable attorneys' fees)
which the other may sustain or incur in connection with the breach by the
indemnifying party of any representation, warranty or covenant made by it in
this Agreement.
(e) Favored Nations. In the event that during a one year period from the
Closing the Company enters into any third party convertible stock purchase
agreement with similar terms and conditions, in an aggregate amount of $550,000
or less in a single transaction, where the Conversion Price as defined in the
Certificate of Designation, provides a greater discount for such third party
conversion than for Holders herein, then Company shall make a payment to
Holders in an amount equal to the difference between one divided by the
discount for Holders and one divided by the discount for the third party
investor, multiplied by the amount of the Holders' investment. As an example,
assuming that a 25% discount on conversion was afforded the third party
investor then Company would pay Holders the difference of 4% (1.33-1.29)
multiplied by $550,000. A "third party" under this provision shall not
include employees, consultants, and Rule 145 and similar transactions.
6. Restrictions on Conversion of Preferred Stock. The Investor or any
subsequent holder of the Preferred Stock (the "Holder") shall be prohibited
from converting any portion of the Preferred Stock which would result in the
Investor or the Holder being deemed the beneficial owner, in accordance with
the provisions of Rule 13d-3 of the 1934 Act, as amended, of 4.99% or more of
the then issued and outstanding Common Stock of the Company.
7. Registration or Exemption Requirements. Investor acknowledges and
understands that the Securities may not be resold or otherwise transferred
except in a transaction registered under the Act and any applicable state
securities laws or unless an exemption from such registration is available.
Investor understands that the Securities will be imprinted with a legend that
prohibits the transfer of the Securities unless (i) they are registered or such
registration is not required, and (ii) if the transfer is pursuant to an
exemption from registration other than Rule 144 under the Act and, if the
Company shall so request in writing, an opinion of counsel reasonably
satisfactory to the Company is obtained to the effect that the transaction is
so exempt.
8 Legend. The certificates representing each of the Securities shall be
subject to a legend restricting transfer under the Act, such legend to be
substantially as follows:
"THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). SUCH
SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
OR AN EXEMPTION THEREFROM UNDER SAID ACT WHICH, EXCEPT IN THE CASE OF AN
EXEMPTION PURSUANT TO RULE 144 UNDER SAID ACT, IS CONFIRMED IN A LEGAL OPINION
SATISFACTORY TO THE COMPANY."
Each of the Securities shall also include any legends required by any
applicable state securities laws.
The legend(s) shall be removed and the Company shall issue replacement
certificates without such legend to the holder of such certificates if such
holder provides to the Company an opinion of counsel reasonably acceptable to
the Company, to the effect that a public sale, transfer or assignment of such
Securities may be made without registration.
9. Stock Delivery Instructions. The Preferred Stock Certificates and Warrants
shall be delivered to Investor upon confirmation of receipt of the purchase
price.
10. Conditions to the Obligations of the Company. The Company's obligation to
sell and issue the Preferred Stock and Warrants to each Investor at the Closing
Date, is at the option of the Company, subject to the fulfillment as of the
Closing Date of the following conditions:
(a) Representations. The representations and warranties made by the Investors
in Section 3 hereof shall be true and correct when made, and shall be true and
correct on the Closing.
(b) State Securities Laws, Legal Investment. The Company shall have obtained
all permits and qualifications required by any state for the offer and sale of
the Preferred Stock and Warrants, or shall have the availability of exemptions
therefrom. At the Closing Date, the sale and issuance of the Preferred Stock
and the Warrants, and the proposed issuance of the Common Stock underlying the
Preferred Stock and Warrants shall be legally permitted by all laws and
regulations to which the Investors and the Company are subject.
(c) Certificate of Secretary. The Certificate of Secretary for the Series
97-D Convertible Preferred Stock shall have been filed with the Utah Secretary
of State.
(d) Legal Matters. All material matters of a legal nature which pertain to
this Agreement, the Registration Rights Agreement, the Warrant, and the
transactions contemplated hereby and thereby, shall have been reasonably
approved by counsel to the Company.
(e) Minimum Investment. The Investors shall purchase at the Closing,
Preferred Stock and Warrants having an aggregate purchase price of not less
than $550,000.
(f) Performance of Obligations. The Investors shall have performed and
complied with all agreements and conditions herein required to be performed or
complied with by them on or before the Closing Date including payment of good
cleared funds in consideration for the issuance of the Preferred Stock and
Warrants to be transmitted to them in accordance with Section 2(b) hereof.
(g) Registration Rights Agreement. Each Investor and each holder of the
Preferred Stock and Warrants offered hereby shall have executed and delivered
the Registration Rights Agreement at Exhibit D hereof.
11. Conditions to the Obligations of the Investors. The Investors'
obligations to purchase the Preferred Stock and Warrants at the Closing are
subject to the fulfillment of the following conditions, the waiver of which
shall not be effective against any Investor who does not consent in writing
thereto
(a) Representations. The representations and warranties made by the Company
in Section 4 hereof shall be true and correct when made, and shall be true and
correct on the Closing Date.
(b) State Securities Laws, Legal Investment. The Company shall have obtained
all permits and qualifications required by any state for the offer and sale of
the Preferred Stock and Warrants, or shall have the availability of exemptions
therefrom. At the Closing Date, the sale and issuance of the Preferred Stock
and Warrants, and the proposed issuance of the Common Stock underlying the
Preferred Stock and Warrants shall be legally permitted by all laws and
regulations to which the Company and the Investors are subject.
(c) Certificate of Secretary. The Certificate of Secretary for the Series
97-D Convertible Preferred Stock shall have been filed by the Company with the
Utah Secretary of State.
(d) Legal Matters. All material matters of a legal nature which pertain to
this Agreement, the Registration Rights Agreement, the Warrant, and the
transactions contemplated hereby and thereby, shall have been reasonably
approved by counsel to the Investors.
(e) Minimum Investment. The Investors shall purchase at the Closing,
Preferred Stock and Warrants having an aggregate purchase price of not less
than $550,000.
(f) Performance of Obligations. The Company shall have performed and complied
with all agreements and conditions herein required to be performed or complied
with by it on or before the Closing, excepting that delivery of the Preferred
Stock and Warrants shall be in accordance with Section 2(b) hereof, which
delivery shall be made as soon as possible after receipt by Company of good,
cleared funds as full and complete payment for the Preferred Stock.
(g) Registration Rights Agreement. Each Investor, and the Company, and each
holder of the Preferred Stock and Warrants offered hereby shall have executed
and delivered the Registration Rights Agreement at Exhibit D hereof.
(h) Opinion of Counsel. The Investors shall have received from Xxxxxx Xxxxxxx
LLP, counsel to the Company, an opinion dated the Closing Date, in form and
substance satisfactory to the Investors, in the form of Section 4(e) hereof.
12. Miscellaneous.
(a) Governing Law. This Agreement will be construed and enforced in
accordance with and governed by the laws of the State of New York, except for
matters arising under the Act, without reference to principles of conflicts of
law. Each of the parties consents to the jurisdiction of the federal courts
whose districts encompass any part of the State of New York or the state courts
of the State of New York in connection with any dispute arising under this
Agreement and hereby waives, to the maximum extent permitted by law, any
objection, including any objection based on forum non conveniens, to the
bringing of any such proceeding in such jurisdictions. Each party hereby
agrees that if another party to this Agreement obtains a judgment against it in
such a proceeding, the party which obtained such judgment may enforce same by
summary judgment in the courts of any state having jurisdiction over the party
against whom such judgment was obtained, and each party hereby waives any
defenses available to it under local law and agrees to the enforcement of such
a judgment. Each party to this Agreement irrevocably consents to the service
of process in any such proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to such party at its address set
forth herein. Nothing herein shall affect the right of any party to serve
process in any other manner permitted by law.
(b) Transaction Not Consummated. If for any reason the transactions
contemplated by this Agreement are not consummated, each of the parties hereto
shall keep confidential any information obtained from any other party (except
information publicly available or in such party's domain prior to the date
hereof, and except as required by court order) and shall promptly return to the
other parties all schedules, documents, instruments, work papers or other
written information, without retaining copies thereof, previously furnished by
it as a result of this Agreement or in connection herewith.
(c) Counterparts. In lieu of the original, a facsimile transmission or copy
of the original shall be as effective and enforceable as the original. This
Agreement may be executed in counterparts which shall be considered an original
document and which together shall be considered a complete document.
(d) Entire Agreement. This Agreement, Exhibits, and Attachments referenced
herein constitute the entire agreement between the Investor and the Company
with respect to the subject matter hereof.
(e) Investor Representations and Warranties. The Investor represents to the
Company that the representations and warranties of the Investor contained
herein are complete and accurate and may be relied upon by the Company in
determining the availability of an exemption from registration under federal
and state securities laws in connection with a private offering of securities.
(f) Presumption. This Agreement or any section thereof shall not be construed
against any party due to the fact that said Agreement or any section thereof
was drafted by said party.
(g) Successors and Assigns. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto,
provided however, that the rights of an Investor to purchase the Preferred
Stock shall not be assignable without the consent of the Company.
(h) Attorney Fees. In the event an arbitration, suit or action is brought by
any party under this Agreement, or exhibits thereto including the Registration
Rights Agreement or the Certificate of Designation, to enforce any of its
terms, or in any appeal therefrom, it is agreed that the prevailing party shall
be entitled to reasonable attorney fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
(i) Notices. All notices, requests, demands, and other communications
required or permitted hereunder will be in writing and will be deemed to have
been duly given when delivered by hand or two days after being mailed by
certified or registered mail, return receipt requested, with postage prepaid,
if to the Company to:
Attn: Xxxx Xxxxxx, Senior Vice President & General Counsel
SGI International
0000 Xxxxxxxx Xx., Xxxxx 000
Xx Xxxxx, XX 00000
If to one or more of the Investors, then to the address appearing on the
Schedule of Investors at Exhibit A hereto.
In any case, such notices shall be sent to such other addresses as the parties
furnishes to the Company or the other parties hereto pursuant to the above.
(j) Amendments and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the
written consent of the Company and the holders of more than 50% of the Common
Stock (that has not been sold to the public) issued or issuable upon conversion
of the Series 97-D Preferred Stock. Any amendment or waiver effected in
accordance with this Section 12(j) shall be binding upon each holder of any
securities purchased under this Agreement at the time outstanding (including
securities into which such securities have been converted), each future holder
of all such securities, and the Company.
(k) Savings Clause. In the event that any provision of this Agreement becomes
or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that no such severability shall be effective
if it materially changes the economic benefit of this Agreement to any party.
(l) Confidentiality. Each of the Company and the Investor agrees to keep
confidential and not to disclose to or use for the benefit of any third party
the terms of this Agreement or any other information which at any time is
communicated by the other party as being confidential without the prior written
approval of the other party; provided, however, that this provision shall not
apply to information which, at the time of disclosure, is already part of the
public domain (except by breach of this Agreement) and information which is
required to be disclosed by law.
(m) Finders Fee. Each party represents that the only finders fee or
commission payable to any party in connection with the transactions referenced
in this Agreement is a finders fee equal to five percent (5%) of the aggregate
purchase price of all the Preferred Stock sold by the Company to the Investors,
and payable to Xxxxx Xxxxx or his assigns or designee.
(n) Expenses. Each of the parties shall pay its own fees and expenses
(including the fees of any attorneys, accountants, appraisers or others
engaged by such party) in connection with this Agreement and the transactions
contemplated hereby.
IN WITNESS WHEREOF, this Stock Purchase Agreement was duly executed on the date
first written below.
INVESTOR:
________________________________
By___________________________
Title:_________________________
Executed this ____ day of August , 1997
Agreed to and Accepted on
this ____ day of August 0000
XXX INTERNATIONAL
a Utah Corporation
By:___________________________
Title:________________________
