Securities Purchase Agreement
Exhibit 10.1
This Securities Purchase Agreement (this “Agreement”) is made and entered into effective as of June 22, 2018, by and between Xxxxxxx Xxxxx (“Seller”) and Interlink Electronics, Inc., a Nevada corporation (the “Company”).
RECITALS
A. Seller is the beneficial owner of 867,681 shares (the “Shares”) of the common stock of the Company (the “Common Stock”), held in the capacities and amounts set forth on Exhibit A hereto, which Common Stock trades on the NASDAQ Stock Market. |
B. Seller desires to sell to the Company, and the Company desires to purchase from Seller, all of the Shares on the terms set forth herein (the “Sale”). |
AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Purchase and Sale of Shares. Seller hereby agrees to sell to the Company, and the Company hereby agrees to purchase from Seller, all of the Shares in the manner set forth in Section 2 hereof, at a purchase price of $3.00 per share, or an aggregate purchase price of $2,603,043 (the “Purchase Price”). |
2. Closing. |
2.1 At or prior to the Closing, (i) Seller shall cause its broker to electronically transfer the Shares to the Company’s transfer agent, Computershare, Inc. (the “Transfer Agent”), and (ii) the Company shall deliver the Purchase Price to Xxxxxx Xxxxxxxx & Markiles LLP, legal counsel to the Company (“XXX”), by wire transfer of immediately available funds in accordance with the following wire transfer instructions, which shall be held by XXX and released to Seller at the Closing (as defined below): |
Bank: |
City National Bank |
|
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000 |
|
Xxx Xxxxxxx, XX 00000 |
ABA: |
000000000 |
Account Number: |
[Omitted] |
Account Name: |
Xxxxxx Xxxxxxxx & Markiles, LLP |
Reference: |
Interlink Electronics, Inc. |
2.2 The closing of the purchase and sale of the Shares (the “Closing”) will occur on June 22, 2018, or otherwise on the first business day following SAM’s receipt of (i) the Purchase Price and (ii) confirmation from the Transfer Agent that the Shares have been |
electronically transferred to the Company. At the Closing, XXX shall deliver the Purchase Price to Seller in accordance with instructions provided by Seller. |
2.3 The Company and Seller agree that the deposit of the Purchase Price, and SAM’s obligations with respect thereto, are subject to the additional terms and conditions set forth on Exhibit B attached hereto. |
3. Representations and Warranties of Seller. In order to induce the Company to enter into this Agreement and consummate the transactions contemplated hereby, Seller represents and warrants to the Company, and otherwise agrees, as follows: |
3.1 Seller has all requisite right, power and authority and full legal capacity to enter into this Agreement, to carry out Seller’s obligations hereunder and to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by Seller and, assuming due authorization, execution and delivery by the Company, constitutes a valid and binding obligation of Seller enforceable against Seller in accordance with its terms. The execution and delivery of this Agreement by Seller and the performance by Seller of the transactions contemplated hereby do not (i) violate any provision of any law applicable to Seller or the transactions contemplated hereby or (ii) result in a breach of, cause a default under (with or without notice, or lapse of time, or both), conflict with, or result in a termination of any agreement, contract or arrangement to which Seller is a party or by which the Shares are bound. |
3.2 Seller is the lawful owner of the Shares and has full right, title and interest in and to the Shares, free and clear of any security interest, pledge, mortgage, lien, charge, or encumbrance. |
3.3 Seller approached the Company and initiated negotiations with the Company regarding the sale of the Shares as described above. Neither the Company nor anyone acting on the Company’s behalf approached Seller regarding this transaction. Neither Seller nor anyone acting on its behalf has received any commission or remuneration directly or indirectly in connection with or in order to solicit or facilitate the Sale. |
3.4 Seller has sufficient experience in business, financial and investment matters to be able to evaluate the risks involved in the sale of the Shares and to make an informed investment decision with respect to the Sale, and Seller acknowledges that the Company makes no representation regarding the value of the Shares. Seller, upon independent investigation, analysis and evaluation, has determined that the Purchase Price is fair and equitable to it. |
3.5 Seller has had such opportunity as it has deemed adequate to obtain from representatives of the Company such information as is necessary to permit Seller to evaluate the merits and risks of the transaction contemplated hereby and acknowledges that it, among other things, has received or reviewed copies of the Company’s Annual Report on Form 10-K for the year ended 2017 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2018. Seller acknowledges that the Company may have in its possession (i) non-public information concerning the Company’s business, operations and prospects, (ii) non-public information specifically relating to the Shares, which if known publicly could materially affect the market price of the Shares (collectively, the “Excluded Information”), which may be positive or negative, which information |
has not been communicated, directly or indirectly, by the Company to Seller. The Company has offered to disclose the Excluded Information to Seller prior to the execution of this Agreement, but Seller has advised the Company that it does not want to receive the Excluded Information. |
4. Representations and Warranties of the Company. In order to induce Seller to enter into this Agreement and consummate the transactions contemplated hereby, the Company represents and warrants to Seller as follows: (i) it is a corporation duly organized and validly existing under the laws of the State of Nevada; (ii) it has all of the corporate power and authority necessary to enter into this Agreement and to consummate the transactions contemplated hereunder; (iii) it has taken all corporate action as may be necessary to authorize the execution and delivery of this Agreement and the consummation of the transaction contemplated by this Agreement and the performance of its obligations hereunder; (iv) assuming due authorization, execution and delivery by Seller, this Agreement constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with its terms; and (v) neither the execution and delivery hereof or the performance of its obligations hereunder will violate or contravene any applicable requirements of law or its charter, bylaws or material agreements. |
5.2 Successors and Assigns. This Agreement shall bind the permitted heirs, personal representatives, successors, assigns, executors and administrators of each party, and inure to the benefit of each party or its heirs, successors and assigns. |
and any such prohibition or unenforceability in any jurisdiction will not invalidate or render unenforceable such provision in any other jurisdiction. |
5.4 Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of California without giving effect to the principles of conflicts of law thereof. |
5.5 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., xxx.xxxxxxxx.xxx) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. |
[Signature Page Follows]
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be signed as of the date first above written.
SELLER:
/s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx
THE COMPANY:
INTERLINK ELECTRONICS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
Name:Xxxxxx X. Xxxxxxx
Title:Chief Executive Officer
ACKNOWLEDGED AND AGREED:
XXXXXX XXXXXXXX & MARKILES, LLP
By: /s/ Xxxxx Xxxxxxx
Name:Xxxxx Xxxxxxx
Title: Partner
EXHIBIT A
OWNERSHIP
Holder |
Shares |
Fidelity Investments |
|
0-000-000-0000 |
|
DTC # 0226 |
70,000 |
Account Number: [Omitted] |
|
Fidelity Non-Prototype, Xxxxxxx Xxxxx & Xxxxxxxx Xxxxx – Trustees |
|
Xxxxx & Xxxxx CPA’s PC 401k/PS Plan f/b/o Xxxxxxx Xxxxx |
|
Fidelity Investments |
|
0-000-000-0000 |
707,883 |
DTC # 0226 |
|
Account Number: [Omitted] |
|
Fidelity Non-Prototype, Xxxxxxx Xxxxx & Xxxxxxxx Xxxxx – Trustees |
|
Xxxxx & Xxxxx CPA’s PC Money Purchase Plan f/b/o Xxxxxxx Xxxxx |
|
Fidelity Investments |
|
0-000-000-0000 |
13,600 |
DTC # 0226 |
|
Account Number: [Omitted] |
|
Fidelity Non-Prototype, Xxxxxxx Xxxxx & Xxxxxxxx Xxxxx – Trustees |
|
Xxxxx & Xxxxx CPA’s PC 401k/PS Plan f/b/o Xxxxxxx Xxxxx |
|
Fidelity Investments |
|
0-000-000-0000 |
50,688 |
DTC # 0226 |
|
Account Number: [Omitted] |
|
Xxxxxxx Xxxxx |
|
E-Trade Securities LLC |
|
0-000-000-0000 |
25,510 |
DTC # 0385 |
|
Account Number [Omitted] |
|
Xxxxxxx Xxxxx |
|
Total: |
867,681 |
EXHIBIT B
ESCROW PROVISIONS
1. Collected Funds. No portion of the Purchase Price shall be disbursed by XXX unless such funds have been received by XXX in immediately available funds, or such funds have cleared. |
2. Liability of XXX. In performing any duties under this Agreement XXX shall not be liable to the Company or Seller or any other person for damages, losses, or expenses, except for gross negligence or willful misconduct on the part of XXX or its employees. XXX shall not incur any such liability for (i) any act or failure to act or for any act omitted in good faith, or (ii) any action taken or omitted in reliance upon any instrument, including, without limitation, any written statement or affidavit (including, without limitation, a facsimile or an e-mail) that XXX shall in good faith believe to be genuine, nor will XXX be liable or responsible for forgeries, fraud, impersonations, or determining the scope of any representative authority. |
3. Fees and Expenses. It is understood that XXX is also acting as counsel to the Company and will be paid fees and usual charges agreed upon for services as counsel, but that XXX shall not receive additional compensation for services as XXX pursuant to the terms of this Agreement. However, in the event that the conditions of this Agreement are not properly fulfilled by a person other than XXX or if the Company or Seller requests a substantial modification of its terms, or if any controversy arises, or if XXX is made a party to, or intervenes in, any litigation pertaining to this Agreement or its subject matter, the Company and Seller shall compensate XXX for such extraordinary services and reimburse XXX for all costs, attorneys’ fees and expenses occasioned by such default, delay, controversy or litigation and XXX shall have the right to retain all documents or other things of value at any time held by XXX pursuant to this Agreement until such compensation, fees, costs and expenses are paid. The Company and Seller agree to pay these sums upon demand. |
4. Controversies. If any controversy arises between the parties to the Agreement, or with any other person, concerning the subject matter of the Agreement, or its terms or conditions, XXX shall not determine the controversy or be required to take any action regarding such controversy. In such event, in accordance with the provisions of Sections 2 and 5 of this Exhibit B, XXX shall not be liable for interest or damages, except in the case of gross negligence or willful misconduct on the part of XXX or its employees. Furthermore, XXX may at its option file an action of interpleader requiring the parties to any such controversy to answer and litigate any claims and rights among themselves. XXX is authorized to deposit with the clerk of the court all documents and funds held by XXX pursuant to the Agreement, except that XXX may retain an amount representing all costs, expenses, charges and attorneys’ fees incurred by XXX due to the interpleader action or otherwise due to XXX pursuant to the Agreement. Upon initiating such action, XXX shall be fully released and discharged of and from all obligation and liability imposed by the terms of the Agreement. |
5. Indemnification of XXX. The Company and Seller and their successors and assigns agree to indemnify and hold XXX harmless against any and all losses, claims, damages, liabilities, and expenses, including costs of investigation, counsel fees and distribution amounts that may be |
imposed on XXX or incurred by XXX in connection with the performance of its duties under the Agreement, including but not limited to any litigation arising from this Agreement or involving its subject matter, except for those incurred by virtue of SAM’s or its employees’ gross negligence or willful misconduct. |
6. Termination. SAM’s obligations under the Agreement shall terminate upon the disbursement of the Purchase Price pursuant to the terms of Section 2 of the Agreement, without any notices to any person. Sections 2, 3, 4 and 5 of this Exhibit B shall survive expiration or any earlier termination of this Agreement. |
7. Resignation of XXX. XXX may resign at any time upon giving at least ten (10) days prior written notice to the Company and Seller; provided, however, that no such resignation shall become effective until the appointment of a successor party to hold in escrow the Purchase Price which shall be accomplished as follows: the parties shall use their best effort to obtain a successor escrow agent within ten (10) days after receiving such notice. The successor escrow agent shall execute and deliver an instrument accepting such appointment and confirming its agreement with all of the terms of the Agreement, and it shall thereafter, without further acts, be vested with all the estates, properties, rights, powers, and duties of the predecessor escrow agent as if originally named as escrow agent. XXX shall thereupon be discharged from any further duties and liabilities under this Agreement, but shall still be entitled to benefit from the provisions of Sections 2, 3, 4 and 5 of this Exhibit B. |