Exhibit 4.1
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PRIVATE PLACEMENT PURCHASE AGREEMENT
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Nexar Technologies, Inc.
000 Xxxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
re: Purchase of Securities
Gentlemen:
1. Certain Representations; Opinion of Counsel.
(a) Nexar Technologies, Inc. (the "Company") represents and warrants
to the undersigned ("Holder") as follows:
(i) all filings which the Company has made with the Securities
and Exchange Commission ("SEC") during the past 12 months
were correct and accurate in all material respects as of the
date of their filing and in all material respects stated all
facts necessary to make such filings not misleading as of
the date of their filing;
(ii) there has been no material adverse change in the business,
assets or financial condition of the Company since the most
recent such filing, except for adverse changes in the
Company's financial condition and results of operations
since September 30, 1997;
(iii) the Company has the full power and authority to enter
into this Agreement and to carry out the transactions
contemplated hereby, all proceedings required to be taken by
it or its stockholders to authorize the execution, delivery
and performance of this Agreement and the agreements
relating hereto have been properly taken and this Agreement
constitutes a valid and binding obligation of the Company,
enforceable in accordance with its terms; and
(iv) neither the execution, delivery nor performance of this
Agreement by the Company will, with or without the giving of
notice or the passage of time, or both, conflict with,
result in a default, right to accelerate or loss of rights
under, or result in the creation of any lien, charge or
encumbrance pursuant to, any provision of the Company's
certificate of incorporation or by-laws or any franchise,
mortgage, deed of trust, lease, license, agreement,
understanding, law, rule or regulation or any order,
judgment or decree to which the Company is a party or by
which it may be bound or affected.
(b) Counsel to the Company is concurrently herewith rendering an
opinion to Holder in respect of the validity of the securities
issued hereby and on certain other matters.
2. Sale of Securities.
(a) The Company hereby agrees to sell to Holder, and Holder hereby
agrees to purchase from the Company, the number of shares of
Series B Convertible Preferred Stock ("Preferred"), in multiples
of 200, set forth opposite Holder's name below. The purchase
price for each share of Preferred is $100, and is payable in cash
concurrently herewith.
(b) The Certificate of Designation of the Preferred is in the form of
Exhibit 1.
(c) The term "Purchasers" as used herein means Holders who in the
aggregate are on this date (the "Closing Date") purchasing 32,000
shares of Preferred under agreements of the same tenor as this
Agreement.
3. Commissions.
(a) The Company will pay to each of Adar Equities, LLC ("Adar") and
Xxxxxxx & Company , Inc. ("Xxxxxxx") a finder's fee equal to 2.5%
of the gross proceeds to the Company from the sale of the
Preferred.
(b) In addition, as a further fee, the Company shall concurrently
herewith issue:
(i) to Adar a warrant in the form of Exhibit 2A (an "A Warrant")
to purchase 1,000,000 shares of common stock of the Company
("common stock"),
(ii) to Adar a warrant in the form of Exhibit 2B (a "B Warrant")
to purchase 25,000 shares of common stock,
(iii) to Xxxxxxx a B Warrant to purchase 525,000 shares of
common stock, and
(iv) to Adar a warrant in the form of Exhibit 2C (a "C Warrant")
to purchase 25,000 shares of common stock, and
(v) to Xxxxxxx a C Warrant to purchase 525,000 shares of common
stock
(c) The warrants aforesaid are collectively referred to herein as the
"Warrants."
4. Registration.
(a) The Company will, on or before May 1, 1998 file a registration
statement on Form S-3 (the "Registration Statement") for the
public sale by Holder of the shares which are issuable on
conversion of the Preferred and for the public sale by Adar and
Xxxxxxx of shares issuable on exercise of the Warrants.
Sufficient shares shall be registered to cover conversions of the
Preferred at a Conversion Price (as defined in the Preferred) of
$2.00 and
exercise of all of the Warrants. The Registration Statement shall
also cover such indeterminate number of shares as may be
permitted under Rules 416 and 457 under the Securities Act of
1933. If, as of the close of business on any date, the number of
shares registered under the Registration Statement or a
supplementary registration statement is less than 120% of the
number of shares then issuable under the Preferred (based on the
then Conversion Price) and Warrants, the Company shall forthwith
file a new or amended registration statement to cover conversions
at one-half of such Conversion Price; such additional
registration statement(s) shall also constitute a "Registration
Statement" for all purposes hereof. The shares to be covered by
the Registration Statement are collectively referred to as the
"registered shares."
(b) The Company shall be entitled to impose reasonable black-out
periods, not to extend beyond 30 days per black-out, and not to
exceed two black-out periods in any 12-month period, during which
sales may not be made under the Registration Statement as a
result of the occurrence of material developments which render
the Registration Statement incomplete or misleading. The Company
will within 10 days of the commencement of each black-out amend
or supplement the Registration Statement, if necessary, so as to
permit resumption of sales thereunder.
(c) In addition to, and without limiting Holder's other remedies, for
each month (pro rated for any part of a month) by which the
Company is late in filing the Registration Statement, the Company
will pay to Holder promptly upon demand an amount equal to 1% of
the purchase price paid by Holder for the Preferred hereunder.
For example, if the Registration Statement is filed on May 16,
1998 (i.e., 15 days late) and Holder has paid $100,000 for the
Preferred, the Company shall upon request pay to Holder $500.
(d) The Company shall use its diligent efforts to cause the
Registration Statement to become effective not later than 90 days
after the date of this Agreement, and to remain effective for two
years and thereafter so long as any Warrants remain exercisable.
The registration shall be accompanied by blue sky clearances in
such states as Holder may reasonably request. The Company will
file an acceleration request with the SEC no later than three
business days after SEC clearance to do so.
(e) The Company shall pay all expenses of the registration hereunder,
other than Holder's underwriting discounts, brokerage fees and
counsel or other fees and selling expenses.
(f) The Company shall supply to Holder a reasonable number of copies
of all registration materials and prospectuses. The Company and
Holder shall execute and deliver to each other indemnity
agreements which are conventional in registered offerings of this
type. The Holder shall reasonably cooperate with the Company in
the preparation and filing of the Registration Statement and
appropriate amendments thereto, and shall
provide to the Company such information with respect to the
Holder as the Company may reasonably require in connection
therewith.
(g) Holder may transfer all or any part of its registration rights to
"permitted transferees" of the Preferred or portions thereof. A
"permitted transferee" is a person to whom a transfer of one or
more Preferred is made at one time in accordance with the terms
of this Agreement, but only if such transfer is in compliance
with applicable federal and state securities laws and only if the
transferee in a written notice addressed to the transferor and to
the Company (i) agrees to comply with all covenants and
agreements set forth in this Agreement, and (ii) can and does
make each of the representations and warranties of Holder set
forth in this Agreement.
(h) Once the registration statement is effective, the Company will
issue UNLEGENDED shares of common stock (in form which can be
transmitted electronically if desired by Holder):
(i) on conversion of the Preferred, whether or not such shares
are sold simultaneously with such conversion or exercise; or
(ii) in exchange for any legended shares of common stock which
were issued on prior conversion of the Preferred.
(i) Holder covenants that in connection with all sales pursuant to
the Registration Statement it will deliver to the buyer or its
agent a copy of the prospectus which shall constitute a part of
the Registration Statement.
(j) Should Holder from time to time or times give to the Company
notice that it has assigned the Warrants or any portion thereof,
the Company shall, within ten business days after receipt of such
notice as provided below, file a supplement to the registration
statement to reflect the name(s) of the transferee(s) as a
selling shareholder.
5. Until the 90/th/ day after the date of the effectiveness of the
Registration Statement, the Company shall not issue any securities pursuant to
Regulation D or Section 4(2) under the Securities Act of 1933, as amended (the
"Securities Act"). From the 91/st/ day until the 180/th/ day after the date of
the effectiveness of the Registration Statement, the Company shall not issue any
securities pursuant to Regulation D or Section 4(2) under the Securities Act
unless the Company first offers to the Purchasers the 30-day right of first
refusal to purchase such securities, allocated among Purchasers based on the
respective number of shares of Preferred purchased by them. So long as any
shares of Preferred are outstanding, the Company shall not issue any securities
under Regulation S under the Securities Act.
6. The Company represents that neither the issuance of the Preferred and
Warrants, nor the conversion or exercise thereof, will trigger any rights or
obligations under any outstanding securities of the Company.
7. The Company's obligations under this Agreement and under the
securities issuable hereunder shall not be subject to defense, offset or
counterclaim for any matter or thing. All
claims by the Company against any holder of such securities shall be brought by
the Company in separate actions for monetary damages only, and injunctive relief
shall not be available.
8. Securities Representations.
(a) Holder represents and warrants that it is purchasing the
Preferred solely for investment solely for its own account and
not with a view to or for the resale or distribution thereof
except as permitted under the Registration Statement or as
otherwise permitted under the Securities Act.
(b) Holder understands that it may sell or otherwise transfer the
Preferred or the shares issuable on conversion of the Preferred
only if such transaction is duly registered under the Securities
Act, under the Registration Statement or Rule 144 or otherwise,
or if Holder shall have received the favorable opinion of counsel
to the holder, which opinion shall be reasonably satisfactory to
counsel to the Company, to the effect that such sale or other
transfer may be made in the absence of registration under the
Securities Act, and registration or qualification in every
applicable state. The certificates representing the aforesaid
securities will be legended to reflect these restrictions, and
stop transfer instructions will apply. Holder realizes that the
Preferred are not a liquid investment.
(c) Holder has not relied upon the advice of a "Purchaser
Representative" (as defined in Regulation D of the Securities
Act) in evaluating the risks and merits of this investment.
Holder has the knowledge and experience to evaluate the Company
and the risks and merits relating thereto.
(d) Holder represents and warrants that Holder is an "accredited
investor" as such term is defined in Rule 501 of Regulation D
promulgated pursuant to the Securities Act, and shall be such on
the date any Preferred are issued to the holder; Holder
acknowledges that Holder is able to bear the economic risk of
losing Holder's entire investment in the shares and understands
that an investment in the Company involves substantial risks;
Holder has the power and authority to enter into this agreement,
and the execution and delivery of, and performance under this
agreement shall not conflict with any rule, regulation, judgment
or agreement applicable to the Holder; and Holder has invested in
previous transactions involving restricted securities. Holder has
had the opportunity to discuss the Company's affairs with the
Company's officers.
9. Fee. Concurrently herewith, the Company is paying to Xxxxx X. Xxxxxx,
as counsel to certain Purchasers, a fee in the amount of $15,000.
10. Hedging Transactions. Nothing contained herein shall limit the right
of Holder, to the extent permitted by law, to engage in hedging, short sale and
similar transactions in securities of the Company. The Holder represents that
Holder has no current short position in securities of the Company.
11. Miscellaneous.
(a) This Agreement may not be changed or terminated except by written
agreement. It shall be binding on the parties and on their
personal representatives and permitted assigns. It sets forth all
agreements of the parties, and may be signed in counterparts. It
shall be enforceable by decrees of specific performance (without
posting bond or other security) as well as by other available
remedies. This Agreement shall be governed by, and construed in
accordance with, the laws of Delaware. The federal and state
courts sitting in Boston, Massachusetts shall have exclusive
jurisdiction over all matters relating to this Agreement. Trial
by jury is expressly waived.
(e) All notices, requests, service of process, consents, and other
communications under this Agreement shall be in writing and shall
be deemed to have been delivered (i) on the date personally
delivered or (ii) one day after properly sent by recognized
overnight courier, addressed to the respective parties at their
address set forth in this Agreement or (iii) on the day
transmitted by facsimile so long as a confirmation copy is
simultaneously forwarded by recognized overnight courier, in each
case addressed to the respective parties at their address set
forth in this Agreement. Either party hereto may designate a
different address by providing written notice of such new address
to the other party hereto as provided above.
12. Except as otherwise set forth herein, each party hereto shall be
responsible for its own expenses with regard to the negotiation and execution of
this Agreement.
Dated: March 20, 1998
HOLDER:
Signature: _________________________
Type or print name: ________________
Address: ___________________________
Fax No.
Social Security No or EIN: _______________
Number of shares of Preferred: ____________
AGREED:
NEXAR TECHNOLOGIES, INC.
BY_______________________
EXHIBIT 1
Certificate of Designation
NEXAR TECHNOLOGIES, INC.
There is hereby created a series of the Preferred Stock of this corporation
to consist of 32,000 of the shares of Series B Convertible Preferred Stock, $.01
par value per share, which this corporation now has authority to issue.
1. The distinctive designation of the series shall be "Series B
Convertible Preferred Stock" (the "Preferred Stock" or the "Series B Preferred
Stock"). The number of shares of Series B Convertible Preferred Stock shall be
32,000.
2. For purposes of this Certificate of Designation and the Company's
Certificate of Incorporation, (i) any series of Preferred Stock of the Company
entitled to dividends and liquidation preference on a parity with the Series B
Preferred Stock shall be referred to as "Parity Preferred Stock," (ii) any
series of Preferred Stock ranking senior to the Series B and Parity Preferred
Stock with respect to dividends and liquidation preference shall be referred to
as "Senior Stock," and (iii) the Common Stock and any series of Preferred Stock
ranking junior to the Series B and Parity Preferred Stock with respect to
dividends and liquidation preference shall be referred to as "Junior Stock." As
of the date of this Certificate of Designation there is not outstanding any
Parity Preferred Stock. Without limiting the generality of the foregoing, the
outstanding 45,684 shares of the Company's Convertible Preferred Stock are and
shall be Junior Stock.
3. In the event of any liquidation, dissolution or winding up of the
Company, either voluntary or involuntary, after setting apart or paying in full
the preferential amounts due to holders of Senior Stock, the holders of Series B
Preferred Stock and Parity Preferred Stock shall be entitled to receive, prior
and in preference to any distribution of any of the assets or surplus funds of
the Company to the holders of Junior Stock or Common Stock by reason of their
ownership thereof, an amount equal to their full liquidation preference, which
in the case of shares of Series B Preferred Stock shall be $100 per share, plus
accrued and unpaid dividends (the "Redemption Value"). If, upon such
liquidation, dissolution or winding-up of the Company, the assets of the Company
available for distribution to the holders of its stock be insufficient to permit
the distribution in full of the amounts receivable as aforesaid by the holders
of Preferred Stock and Parity Preferred Stock, then all such assets of the
Company shall be distributed ratably among the holders of Preferred Stock and
Parity Preferred Stock in proportion to the amounts which each would have been
entitled to receive if such assets were sufficient to permit distribution in
full as aforesaid. Neither the consolidation nor merger of the Company nor the
sale, lease or transfer by the Company of all or any part of its assets shall be
deemed to be a liquidation, dissolution or winding-up of the Company for the
purposes of this paragraph.
4. Certain Definitions and References
(a) The Preferred Stock is being issued under Private Placement
Purchase Agreements between the Company and the holders of the
Preferred Stock (each, a "Subscription Agreement").
(b) The terms "Registration Statement" and "Closing Date" shall have
the meanings attributed thereto in the Subscription Agreement,
and the term "Effective Date" means the date on which the
Registration Statement shall be declared to be effective.
5. Dividends
(a) The holders of the Preferred Stock shall be entitled to receive
a dividend, payable in arrears quarterly on the last day of each
calendar quarter commencing with the calendar quarter which
begins on April 1, 1998 or on earlier conversion or redemption of
the Preferred Stock, which accrues from the date of issuance at
the annual rate of $5 per share, provided that the annual rate
shall be $18 during any First Delay Period and the annual rate
shall be $24 during any Extended Delay Period.
(i) The reference to the "First Delay Period" shall apply only
if the Effective Date has not occurred by the close of
business on June 30, 1998 and means the period which begins
on July 1, 1998 and ends on the earlier of August 31, 1998
or the Effective Date.
(ii) The reference to the "Extended Delay Period" shall apply
only if the Effective Date has not occurred by August 31,
1998 and means the period which begins on September 1, 1998
and ends on the Effective Date.
(b) The dividends shall be payable at the option of the Company
either in cash or in shares of Common Stock which on the date of
the dividend payment are convertible into shares of Common Stock
which have a value equal to the dividend, provided that dividends
may be paid in Common Stock only if the public sale thereof is
permitted under a then effective registration statement. The
value of each share of Common Stock for the purposes of any
dividend payment shall be equal to the average of the last
reported sales prices therefor on the NASDAQ National or Small
Cap Market on the last five trading days prior to the date of the
payment.
(c) Nothing in this Certificate shall limit any other remedies which
may be available to the Holder by reason of any delay in the
filing or the effectiveness of the Registration Statement.
6. Conversion
(a) The holder shall have the right at any time (whether before or
after the Effective Date or otherwise) in its sole discretion, to
convert the Preferred Stock, in whole or in part, into a number
of shares (the "Conversion Shares") of the Company's common stock
(the "Common Stock") equal to $100 per share converted divided by
the Conversion Price. The Conversion Price means the lesser of
(1) $3.25 or (2) 75% of the average of the closing bid price of a
share of Common Stock of the Company during the five trading days
prior to such conversion.
(b) In the event that the holder elects to exercise its conversion
rights hereunder, it shall give to the Company written notice (by
fax or overnight courier service or personal delivery) of such
election and shall surrender his Preferred Stock to the Company
for cancellation. Conversion shall be effective upon the giving
of such notice provided that the certificate for the converted
Preferred Stock is received by the Company within three days
thereafter. The Company shall, within three business days after
receipt by the Company of notice of conversion and the Preferred
Stock being converted, deliver irrevocable instructions to its
transfer agent (with a copy to Holder) to DWAC the shares of
Common Stock issuable on such conversion. In addition to, and
without limiting any other remedy available to Holder for any
breach by the Company of its obligation timely to DWAC shares
upon conversion as aforesaid , (1) Holder shall be entitled at
its option by notice to rescind any such conversion, and (2) the
Company shall forthwith upon Holder's demand from time to time or
times pay to Holder $50 per share for each day of delay in
fulfilling such obligation. Such obligation to pay such amount
shall accrue interest, payable on demand, at the rate of 11% per
annum.
(c) The Preferred Stock shall on March 1, 2000 automatically convert
into Common Stock at the then Conversion Price, provided that
such conversion shall occur on such date only if the Company's
listing on the NASDAQ Small Cap or National Market has then been
in effect at all times from and after January 1, 1999, and only
if all of the Common Stock issuable upon conversion of the
Preferred Stock may then be resold publicly pursuant to an
effective registration statement under the Securities Act of 1933
or under Rule 144 thereunder. If by reason of the proviso in the
preceding sentence the Preferred Stock shall not convert
automatically on March 1, 2000, the Holder may, in addition to
such Holder's other remedies, by written notice to the Company,
require the Company forthwith to redeem the Preferred Stock at a
redemption price equal to $100 per share plus accrued dividends.
The redemption price shall accrue interest payable on demand at
the rate of 15% per annum.
(d) The Company shall reserve for issuance on conversion and exercise
of the Preferred Stock and the Warrant (as defined in the
Subscription Agreement) the number of shares of Common Stock
which would be issuable under the Preferred Stock if converted at
a Conversion Price of $1.50, and shall reserve additional shares
as requisite should the Conversion Price decline below $1.50. The
Company shall use its diligent efforts promptly to list on NASDAQ
all shares of Common Stock which are issued upon conversion of
the Preferred Stock.
(e) The Preferred Stock shall be convertible at any time only to the
extent that Holder would not as a result of such exercise (and
after giving effect to any shares or warrants or other securities
owned by Holder) beneficially own more that 9.99% of the then
outstanding Common Stock. Beneficial ownership shall be defined
in accordance with Rule 13d-3 under the Securities Exchange Act
of 1934. The opinion of counsel to Holder shall
prevail in the event of any dispute on the calculation of
Holder's beneficial ownership.
(f) If any consolidation or merger of the Company into another
corporation which has a market capitalization of not less than
$75 million, or the sale or conveyance of all or substantially
all of its assets to any such corporation, shall be effected,
then, at the election of the Company, exercisable by notice (an
"Automatic Conversion Notice") to the Holder given not later than
the 20/th/ business day prior to the consummation of such
transaction, the Preferred Stock shall be deemed automatically
converted immediately prior to the consummation of such
transaction as provided above, provided that:
(i) cash shall be payable in respect of the Company's common
stock in the transaction or the securities issuable in
respect of the Company's common stock in the transaction
shall be immediately freely and publicly tradeable; and
(ii) the Company shall give to the holders of the Preferred Stock
not less than 20 days' prior written notice of such
transaction. For purposes of this Section, "market
capitalization" shall mean the product of the number of
outstanding shares of the other corporation's stock
multiplied by the average of the closing bid prices for the
other corporation's stock (as quoted on a national
securities exchange or on NASDAQ) during the 20 trading days
prior to the measurement date.
(b) If the Company does not timely give an Automatic Conversion
Notice in respect of a transaction referred to above, or if any
other consolidation, merger or sale shall be effected, or if any
capital reorganization or reclassification of the Common Stock
shall be effected, then, as a condition precedent of such
transaction, appropriate provision shall be made to the end that
conversion rights hereunder (including, without limitation,
provisions for appropriate adjustments) shall thereafter be
applicable, as nearly as may be practicable in relation to the
kind of stock, securities or assets which are deliverable in
respect of Common Stock upon the consummation of such
transaction, to the end that the Holder shall have the right to
receive upon conversion the kind of shares of capital stock or
other securities or property which such Holder would have been
entitled to receive upon or as a result of such transaction had
the Preferred Stock been converted immediately prior to such
event.
(c) The Company covenants to call a special or annual meeting of
shareholders which will be held on or before June 30, 1998 and at
which the Company's shareholders will be asked to approve the
issuance of shares on conversion of the Preferred Stock and
Warrants issued to the Purchasers (each such terms as defined in
the Subscription Agreement). The Board of Directors of the
Company will recommend that the shareholders of the Company vote
in favor of such approval. Until such approval is obtained, the
maximum number of shares which will be issued
on conversion of the Preferred Stock and exercise of the Warrants
is 2,001,810, issuable on a first converted-first exercised
basis. Should such approval not be obtained by the close of
business on June 30, 1998, then until such approval is obtained,
the Company shall on demand by Holder made at any time or times
redeem any portion of the Preferred Stock designated by Holder
for redemption (the "Redeemed Portion") at a redemption price per
share equal to $125 plus accrued dividends. The redemption price
shall be payable within five business days after demand for
redemption is made, and shall accrue interest payable on demand
at 11% per annum. The Holders of shares of common stock issued on
conversion of the Preferred Stock shall not vote their shares of
common stock at the meeting aforesaid.
7. Purchase for Investment. The Holder, by acceptance of shares of
Preferred Stock, acknowledges that the Preferred Stock (and the Common Stock
into which the Preferred Stock is convertible) has not been registered under the
Act, covenants and agrees with the Company that such Holder is taking and
holding the Preferred Stock (and the Common Stock into which the Preferred Stock
is convertible) for investment purposes and not with a view to, or for sale in
connection with, a distribution thereof and that the Preferred Stock (and the
Common Stock into which the Preferred Stock is convertible) may not be assigned,
hypothecated or otherwise disposed of in the absence of an effective
registration statement under the Act or an opinion of counsel for the Holder,
which counsel shall be reasonably satisfactory to the Company, to the effect
that such disposition is in compliance with the Act, and represents and warrants
that such Holder is an "accredited investor" that such Holder has, or with its
representative has, such knowledge and experience in financial and business
matters to be capable of evaluating the merits and risks in respect of this
Preferred Stock (and the Common Stock into which the Preferred Stock is
convertible) and is able to bear the economic risk of such investment.
8. The Company covenants and agrees that all shares of Common Stock which
may be issued upon conversion of this Preferred Stock will, upon issuance, be
duly and validly issued, fully paid and non-assessable and no personal liability
will attach to the holder thereof.
9. Certain Events of Mandatory Redemption.
(a) An "event of redemption" with respect to this Preferred Stock
shall exist if any of the following shall occur, if:
(i) The Company shall breach or fail to comply with any provision of
this Preferred Stock and such breach or failure shall continue
for 15 days after written notice by any Holder of any Preferred
Stock to the Company.
(ii) A receiver, liquidator or trustee of the Company or of a
substantial part of its properties shall be appointed by court
order and such order shall remain in effect for more than 15
days; or the Company shall be adjudicated bankrupt or insolvent;
or a substantial part of the property of the Company shall be
sequestered by court order and such order shall remain in effect
for more than 15 days; or a petition to reorganize the Company
under any bankruptcy, reorganization or insolvency law shall be
filed against the Company and shall not be dismissed within 45
days after such filing.
(iii) The Company shall file a petition in voluntary bankruptcy or
request reorganization under any provision of any bankruptcy,
reorganization or insolvency law, or shall consent to the filing
of any petition against it under any such law.
(iv) The Company shall make an assignment for the benefit of its
creditors, or admit in writing its inability to pay its debts
generally as they become due, or consent to the appointment of a
receiver, trustee or liquidator of the Company, or of all or any
substantial part of its properties.
(b) If an event of redemption shall occur, the Holder may, in
addition to such Holder's other remedies, by written notice to
the Company, require the Company forthwith to redeem the
Preferred Stock at a redemption price equal to $100 per share
plus accrued dividends. The redemption price shall accrue
interest payable on demand at the rate of 15% per annum.
10. Without the consent of a majority in interest of the holders of the
Preferred Stock, the Company shall not create any class of equity security which
is senior to or on parity with the Preferred Stock in liquidation rights, other
than in connection with the sale of shares to existing stockholders of the
Company; or to an entity whose relationship with the Company creates intangible
value for the Company; or to fund merger and/or acquisition related activity.
11. All share, redemption and similar amounts are subject to appropriate
adjustment in the event of stock splits, stock dividends, recapitalization and
similar events.
12. The Preferred Stock shall have no voting rights except as otherwise
required by law.
13. Miscellaneous.
(a) All notices and other communications required or permitted to be
given hereunder shall be in writing and shall be given (and shall
be deemed to have been duly given upon receipt) by delivery in
person, by telegram, by facsimile, recognized overnight mail
carrier, telex or other standard form of telecommunications, or
by registered or certified mail, postage prepaid, return receipt
requested, addressed as follows: (a) if to the Holder, to such
address as such Holder shall furnish to the Company in accordance
with this Section, or (b) if to the Company, to it at its
headquarters office, or to such other address as the Company
shall furnish to the Holder in accordance with this Section.
(b) The waiver of any event of default or the failure of the Holder
to exercise any right or remedy to which it may be entitled shall
not be deemed a waiver of any subsequent event of default or of
the Holder's right to exercise that or any other right or remedy
to which the Holder is entitled.
(c) The Holder shall be entitled to recover its legal and other costs
of collecting on the Preferred Stock, and such costs shall accrue
interest, payable on demand, at the rate of 15% per annum.
In addition to all other remedies to which the Holder may be entitled
hereunder, Holder shall also be entitled to decrees of specific performance
without posting bond or other security.
Exhibit 2A, 2B and 2C
[Note that all exhibits are identical except as set forth in Section 1 regarding
the exercise price]
Neither this Warrant nor the shares of Common Stock issuable on exercise of
this Warrant have been registered under the Securities Act of 1933. None of such
securities may be transferred in the absence of registration under such Act or
an opinion of counsel to the effect that such registration is not required.
NEXAR TECHNOLOGIES, INC.
WARRANT
DATED:
Number of Shares:
Holder:
Address:
_______________________________
1. THIS CERTIFIES THAT the Holder is entitled to purchase from NEXAR
TECHNOLOGIES, INC., a Delaware corporation (hereinafter called the
"Company"), the number of shares of the Company's common stock ("Common
Stock") set forth above, at an exercise price per share equal to
1.1.1. [For Exhibit A] $4.00
1.1.2. [For Exhibit B] $4.25
1.1.3. [For Exhibit C] $4.75
2. All rights granted under this Warrant shall expire on the fourth
anniversary of the date of issuance of this Warrant, provided that this
Warrant may expire earlier as provided in Section 3.
3. Early Expiration.
3.1. The following terms shall have the following definitions:
3.1.1. Effective Date means the date of the effectiveness of the
registration statement (the "Registration Statement") referred
to in a Private Placement Purchase Agreement dated as of the
date of this Warrant.
3.1.2. The "30-day Price" means the closing bid price (on NASDAQ or
such other securities exchange where the common stock may then
be listed) of the Common Stock in a period of 30 consecutive
trading days (the "Test Period") which begins after the
Effective Date and through which the Registration Statement
continues to be effective.
3.2. If any 30-day Price is not less than $7 per share in any Test Period,
then, upon notice given by the Company within 10 days after the end of such Test
Period, this Warrant shall expire.
4. This Warrant may be exercised in whole or in part at any time prior to
expiration.
5. Notwithstanding anything to the contrary contained herein, Holder shall not
have the right to exercise this Warrant so long as and to the extent that
at the time of such exercise, such exercise would cause the Holder then to
be the "beneficial owner" (as defined in Section 13(d) of the Securities
Exchange Act of 1934, as amended) of 10% or more of the Company's then
outstanding Common Stock. The opinion of counsel to Holder shall prevail in
the event of any dispute on the calculation of Holder's beneficial
ownership.
6. This Warrant and the Common Stock issuable on exercise of this Warrant (the
"Underlying Shares") may be transferred, sold, assigned or hypothecated in
whole or in part, only if registered by the Company under the Securities
Act of 1933, as amended (the "Act"), or if the Company has received from
counsel to the Holder a written opinion to the effect that registration of
the Warrant or the Underlying Shares is not necessary in connection with
such transfer, sale, assignment or hypothecation. The Warrant and the
Underlying Shares shall be appropriately legended to reflect this
restriction and stop transfer instructions shall apply. The Holder shall
through its counsel provide such information as is reasonably necessary in
connection with such opinion. Notwithstanding the above, this Warrant may
only be transferred to a transferee that is, and has complied with the
requirements of, a "permitted transferee" (as defined in the Subscription
Agreement).
7. The holder of this Warrant is entitled to certain registration rights under
an Agreement dated of even date herewith (the "Subscription Agreement").
Upon each permitted transfer of this Warrant after the registration
statement has been declared effective, the Company will within ten business
days after receipt of notice thereof supplement the registration statement
to reflect the name of the transferee as a selling shareholder thereunder.
8. The Company covenants to call a special or annual meeting of shareholders
which will be held on or before June 30, 1998 and at which the Company's
shareholders will be asked to approve the issuance of shares on conversion
of the Warrants and the Preferred Stock issued to the Purchasers (each such
terms as defined in the Subscription Agreement). The Board of Directors of
the Company will recommend that the shareholders of the Company vote in
favor of such approval. Until such approval is obtained, the maximum number
of shares which will be issued on conversion of the Preferred Stock and
exercise of the Warrants is 2,001,810, issuable on a first converted-first
exercised basis. Should such approval not be obtained by the close of
business on June 30, 1998, then until such approval is obtained, the
Company shall on demand by Holder made at any time or times redeem any
portion of the Warrants designated by Holder for redemption (the "Redeemed
Portion") at a redemption price per share equal to the pre-tax profit
Holder would have earned had Holder, at the close of business on the date
of its demand for redemption, exercised the Redeemed Portion and
simultaneously sold the shares received on such exercise at the closing
NASDAQ sales price on such date. The redemption price shall be payable
within five business days after demand for redemption is made, and shall
accrue interest payable on demand at 11% per annum.
The Holders of shares of common stock issued on conversion of the Warrants
shall not vote such shares of common stock at the meeting aforesaid.
9. Any permitted assignment of this Warrant shall be effected by the Holder by
(i) executing a standard form of assignment, (ii) surrendering the Warrant
for cancellation at the office of the Company, accompanied by the opinion
of counsel to the Holder referred to above; and (iii) unless in connection
with an effective registration statement which covers the sale of this
Warrant and or the shares underlying the Warrant, delivery to the Company
of a statement by the transferee (in a form acceptable to the Company and
its counsel) that transferee is, and has complied with the requirements of,
a "permitted transferee" (as defined in the Subscription Agreement).
10. The transferor will pay all relevant transfer taxes. Replacement warrants
shall bear the same legend as is borne by this Warrant.
11. The term "Holder" should be deemed to include any permitted transferee of
record of this Warrant.
12. Reservation of Shares. The Company covenants and agrees that all shares of
Common Stock which may be issued upon exercise hereof will, upon issuance,
be duly and validly issued, fully paid and non-assessable and no personal
liability will attach to the holder thereof. The Company further covenants
and agrees that, during the periods within which this Warrant may be
exercised, the Company will at all times have authorized and reserved a
sufficient number of shares of Common Stock for issuance upon exercise of
this Warrant and all other Warrants.
13. This Warrant shall not entitle the Holder to any voting rights or other
rights as a stockholder of the Company.
14. In the event that as a result of reorganization, merger, consolidation,
liquidation, recapitalization, stock split, combination of shares or stock
dividends payable with respect to such Common Stock, the outstanding shares
of Common Stock of the Company are at any time increased or decreased or
changed into or exchanged for a different number or kind of share or other
security of the Company or of another corporation, then appropriate
adjustments in the Exercise Price and in the number and kind of such
securities then subject to this Warrant shall be made effective as of the
date of such occurrence so that the position of the Holder upon exercise
will be the same as it would have been had it owned immediately prior to
the occurrence of such events the Common Stock subject to this Warrant.
Such adjustment shall be made successively whenever any event listed above
shall occur and the Company will notify the Holder of the Warrant of each
such adjustment. Any fraction of a share resulting from any adjustment
shall be eliminated and the price per share of the remaining shares subject
to this Warrant adjusted accordingly.
15 The rights represented by this Warrant may be exercised at any time within
the period above specified by faxed notice of exercise which is followed
within three business days by (i) surrender of this Warrant at the
principal executive office of the Company (or such other office or agency
of the Company as it may designate by notice in writing to the Holder at
the address of the Holder appearing on the books of the Company); (ii)
payment to the Company by wire transfer or certified or bank check of the
exercise price for the number of shares of common stock specified in the
above-mentioned purchase
form together with applicable stock transfer taxes, if any; and (iii)
unless in connection with an effective registration statement which covers
the sale of the shares underlying the Warrant, the delivery to the Company
of a statement by the Holder (in a form acceptable to the Company and its
counsel) that such shares are being acquired by the Holder for investment
and not with a view to their distribution or resale (unless such
distribution or resale is permitted under the Act) and of an opinion of
Holder's counsel if reasonably requested by the Company. Notwithstanding
the above, unless in connection with an effective registration statement
which covers the sale of the shares underlying the Warrant, such shares may
only be transferred to a transferee that is, and has complied with the
requirements of, a "permitted transferee" (as defined in the Subscription
Agreement).
16. Within five business days following exercise of this Warrant or any part of
this Warrant (inclusive of payment of the exercise price therefor and
delivery of the documents required above in connection therewith), the
Company shall deliver to Holder, or, at Holder's request, DWAC,
certificates evidencing the shares of Common Stock so purchased. Such
certificates shall bear appropriate restrictive legends in accordance with
applicable securities laws, but shall be unrestricted and bear no legends
once the registration statement referred to above has been declared
effective. In the event the Company breaches its obligation timely to
deliver shares of common stock on conversion, then, without limiting
Holder's other rights and remedies, the Company shall forthwith pay to the
Holder an amount accruing at the rate of $1,000 per day for each day of
such breach for each 20,000 shares of common stock subject to this Warrant,
with pro rata payments for shares in an amount less than 20,000.
17. This Warrant shall be governed by and construed in accordance with the laws
of the State of Delaware. The federal and state courts in Boston,
Massachusetts shall have exclusive jurisdiction over this instrument and
the enforcement thereof. Service of process shall be effective if by
certified mail, return receipt requested. All notices shall be in writing
and shall be deemed given upon receipt by the party to whom addressed.
This instrument shall be enforceable by decrees of specific performances
well as other remedies.
IN WITNESS WHEREOF, Nexar Technologies, Inc. has caused this Warrant to be
signed by its duly authorized officers under Its corporate seal, and to be dated
as of the date set forth above.
NEXAR TECHNOLOGIES, INC.
By__________________________
Nexar Technologies, Inc.
000 Xxxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
re: Purchase of Securities
Xxxxxxx & Company, Inc.
Adar Equities, Inc.
Gentlemen:
1. Reference is made to a Private Placement Purchase Agreements (each, an
"Agreement") dated as of this date by and among certain purchasers and Nexar
Technologies, Inc. (the "Company"). Capitalized terms used herein have the
meanings attributed thereto in the Agreements.
2. The Company confirms to you (the "Finders") the Company's fee and
registration obligations to Finders referred to in the Agreements.
3. Should either Finder from time to time or times give to the Company
notice that it has assigned the Warrants or any portion thereof, the Company
shall, within ten business days after receipt of such notice as provided below,
file a supplement to the Registration Statement to reflect the name(s) of the
transferee(s) as a selling shareholder.
4. The Company's obligations under this Agreement and under the Warrants
shall not be subject to defense, offset or counterclaim for any matter or thing.
All claims by the Company against any holder of such securities shall be brought
by the Company in separate actions for monetary damages only, and injunctive
relief shall not be available.
5. Securities Representations.
(a) Each Finder represents and warrants that it is acquiring the
Warrants solely for investment solely for its own account and not
with a view to or for the resale or distribution thereof except
as permitted under the Registration Statement or as otherwise
permitted under the Securities Act.
(b) Each Finder understands that it may sell or otherwise transfer
the shares issuable on exercise of the Warrants only if such
transaction is duly registered under the Securities Act, under
the Registration Statement or otherwise, or if Finder shall have
received the favorable opinion of counsel to the holder, which
opinion shall be reasonably satisfactory to counsel to the
Company, to the effect that such sale or other transfer may be
made in the absence of registration under the Securities Act, and
registration or qualification in every applicable state. The
certificates representing the aforesaid securities will be
legended to reflect these restrictions, and stop transfer
instructions will apply. Finder realizes that the Warrants are
not a liquid investment.
(c) Neither Finder has relied upon the advice of a "Purchaser
Representative" (as defined in Regulation D of the Securities
Act) in evaluating the risks
and merits of this investment. Each Finder has the knowledge and
experience to evaluate the Company and the risks and merits
relating thereto.
(d) Each Finder represents and warrants that such Finder is an
"accredited investor" as such term is defined in Rule 501 of
Regulation D promulgated pursuant to the Securities Act; Finder
acknowledges that Finder is able to bear the economic risk of
losing Finder's entire investment in the shares and understands
that an investment in the Company involves substantial risks;
Finder has the power and authority to enter into this agreement,
and the execution and delivery of, and performance under this
agreement shall not conflict with any rule, regulation, judgment
or agreement applicable to the Finder; and Finder has invested in
previous transactions involving restricted securities. Finder has
had the opportunity to discuss the Company's affairs with the
Company's officers.
6. Miscellaneous.
(a) This Agreement may not be changed or terminated except by written
agreement. It shall be binding on the parties and on their
personal representatives and permitted assigns. It sets forth all
agreements of the parties, and may be signed in counterparts. It
shall be enforceable by decrees of specific performance (without
posting bond or other security) as well as by other available
remedies. This Agreement shall be governed by, and construed in
accordance with, the laws of Delaware. The federal and state
courts sitting in Boston, Massachusetts shall have exclusive
jurisdiction over all matters relating to this Agreement. Trial
by jury is expressly waived.
(e) All notices, requests, service of process, consents, and other
communications under this Agreement shall be in writing and shall
be deemed to have been delivered (i) on the date personally
delivered or (ii) one day after properly sent by recognized
overnight courier, addressed to the respective parties at their
address set forth in this Agreement or (iii) on the day
transmitted by facsimile so long as a confirmation copy is
simultaneously forwarded by recognized overnight courier, in each
case addressed to the respective parties at their address set
forth in this Agreement. Either party hereto may designate a
different address by providing written notice of such new address
to the other party hereto as provided above.
7. Except as otherwise set forth herein, each party hereto shall be
responsible for its own expenses with regard to the negotiation and execution of
this Agreement.
Dated: ________________________
ADAR EQUITIES, LLC
By __________________________
XXXXXXX & COMPANY, INC.
BY __________________________
AGREED:
NEXAR TECHNOLOGIES, INC.
BY_______________________
