Exhibit 10.1
INTERNATIONAL DISPLAYWORKS, INC.
COMMON STOCK PURCHASE AGREEMENT
______________ ____, 2003
TABLE OF CONTENTS
Page
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1. AUTHORIZATION AND SALE OF COMMMON STOCK..............................1
1.1 AUTHORIZATION AND SALE OF COMMON STOCK............................1
1.2 SALE OF SHARES....................................................1
2. CLOSING DATE; DELIVERY...............................................1
2.1 CLOSING DATE......................................................1
2.2 DELIVERY..........................................................1
2.3 WIRE TRANSFERS....................................................1
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................2
3.1 SHARES............................................................2
3.2 DUE AUTHORIZATION.................................................2
3.3 FINANCIAL STATEMENTS..............................................2
3.4 LITIGATION AND CLAIMS.............................................2
3.5 DUE ORGANIZATION AND QUALIFICATION................................3
3.6 CAPITALIZATION....................................................3
3.7 DISCLOSURE........................................................3
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS..........3
4.1 COMPLIANCE WITH LAW...............................................3
4.2 INFORMATION.......................................................4
4.3 RESIDENCE; ACCREDITED STATUS......................................5
4.4 EXPERIENCE; RISK..................................................5
4.5 ACCESS TO DATA....................................................5
4.6 AUTHORIZATION AND BINDING EFFECT..................................5
4.7 GOVERNMENT CONSENTS...............................................5
4.8 TRADING IN COMPANY SECURITIES.....................................5
4.9 PURCHASE WITHOUT VIEW TO DISTRIBUTE...............................5
4.10 BROKER OR FINDER..................................................6
5. CONDITIONS TO CLOSING OF PURCHASERS..................................6
5.1 REPRESENTATIONS AND WARRANTIES CORRECT............................6
5.2 COVENANTS.........................................................6
5.3 QUALIFICATIONS....................................................6
6. CONDITIONS TO CLOSING OF THE COMPANY.................................6
6.1 REPRESENTATIONS...................................................6
6.2 QUALIFICATION.....................................................6
7. MISCELLANEOUS........................................................6
7.1 GOVERNING LAW.....................................................6
7.2 SURVIVAL..........................................................7
7.3 SUCCESSORS AND ASSIGNS............................................7
7.4 ENTIRE AGREEMENT..................................................7
7.5 NOTICES...........................................................7
7.6 DELAYS OR OMISSIONS...............................................7
7.7 COUNTERPARTS......................................................7
7.8 SEVERABILITY......................................................7
7.9 TITLES AND SUBTITLES..............................................8
7.10 EXPENSES..........................................................8
INTERNATIONAL DISPLAYWORKS, INC.
COMMON STOCK PURCHASE AGREEMENT
Parties
INTERNATIONAL DISPLAYWORKS, INC., a Delaware corporation (the "Company")
PERSONS AND ENTITIES executing this agreement (the "Purchasers")
Agreements
1. Authorization and Sale of Common Stock.
1.1 Authorization and Sale of Common Stock. The Company has authorized
the sale and issuance of up to 1,666,667 shares of its common stock (the
"Shares"), having the rights, preferences, privileges and restrictions set forth
in the Company's Certificate of Incorporation.
1.2 Sale of Shares. Subject to the terms and conditions hereof, on the
Closing Date (as defined below) the Company will issue and sell to each
Purchaser, and each Purchaser will purchase severally, and not jointly, at a
purchase price of $0.30 per Share from the Company, the number of Shares
specified opposite the name of each such Purchaser on signature page.
2. Closing Date, Delivery.
2.1 Closing Date. The closing of the purchase and sale of the Shares
(the "Closing") shall be held at the offices of the Company, 000 Xxxxx Xxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000, on _______________, or at such other time
and place upon which the Company and the Purchasers shall agree (the date of the
Closing is hereinafter referred to as the "Closing Date").
2.2 Delivery. Within 30 days after the Closing, the Company will
deliver to each Purchaser a certificate or certificates representing the number
of Shares set forth on the Purchaser's signature page against payment of the
purchase price therefore, by check or wire transfer payable to the Company.
2.3 Wire Transfers. Wire transfer shall be delivered according to the
following instructions:
3. Representations and Warranties of the Company. The Company, as a
material inducement to Purchasers to enter into this Agreement and consummate
the transactions contemplated hereby, makes the following representations and
warranties to Purchasers, which representations are true and correct at this
date, and will be true and correct on the Closing Date as though made on and as
of such date:
3.1 Shares. The Shares to be delivered to the Purchasers at Closing
will be valid and legally issued shares of the Company's common stock, free and
clear of all liens, encumbrances, and preemptive rights, and will be fully-paid
and non-assessable shares.
3.2 Due Authorization. This Agreement has been duly authorized,
executed, and delivered by the Company, and constitutes a legal, valid and
binding obligation of the Company, enforceable in accordance with its terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
moratorium, and other similar laws relating to, limiting or affecting the
enforcement of creditors rights generally; and neither the execution and
delivery of this Agreement nor the consummation by the Company of the
transactions contemplated hereby, nor compliance with any of the provisions
hereof, will violate the Company's Certificate of Incorporation, Bylaws, any
statute, law, rule or regulation or any order, writ, injunction or decree of any
court or governmental authority, or violate or conflict with or constitute a
default under (or give rise to any right of termination, cancellation or
acceleration under) the terms or conditions or provisions of any note, bond,
lease, mortgage, obligation, agreement, understanding, arrangement or
restriction of any kind to which the Company is a party or by which the Company
or its properties may be bound. No consent or approval by any governmental
authority is required in connection with the execution and delivery by the
Company of this Agreement or the consummation of the transactions contemplated
hereby.
3.3 Financial Statements. The Company has delivered to Purchasers its
audited financial statements for fiscal 2002 and 2001 and unaudited quarterly
reports for the first and second fiscal quarters of fiscal 2003 in the Public
Filings (as hereinafter defined) (the "Statements "). The Statements fairly and
accurately reflect the financial condition of the Company as of the dates
thereof and the results of operations for the periods reflected therein. The
Statements have been prepared in accordance with generally accepted accounting
principles, consistently applied, except as otherwise stated therein; and the
books and records, financial and others, of the Company are in all material
respects complete and correct and have been maintained in accordance with good
business and accounting practices.
3.4 Litigation and Claims. Except as set forth in its Public Filings
or in the Statements, there are no material actions, suits, claims,
investigations or legal or administrative or arbitration proceedings pending or
threatened against the Company, its assets or business, whether at law or in
equity, or before or by any federal, state, municipal, local, foreign or other
governmental department, commission, board, bureau, agency or instrumentality;
nor does the Company know or have any reason to know of a threat of such
litigation or any basis for any such action, suit, claim, investigation or
proceeding which could materially and adversely affect the business or
properties of the Company.
3.5 Due Organization and Qualification. The Company is a corporation
duly organized and validly existing under the laws of the State of Delaware, is
qualified to do business and in good standing in each state where it is required
to be qualified and such qualification is material, and has the corporate power
to own its property and to carry on its business as now being conducted, except
where its failure to qualify to be licensed would not have a material adverse
effect on the Company.
3.6 Capitalization. The authorized capitalization of the Company is as
set forth in the Statements. Except as set forth in the Statements, there are no
outstanding or presently authorized securities, warrants, preemptive rights,
subscription rights, options or related commitments of any nature to issue any
of the Company's securities which are not reflected in the Statements. All
outstanding shares of capital stock have been duly authorized, validly issued,
and are fully-paid and non-assessable, and all such shares were issued in
compliance with all applicable federal and state securities laws.
3.7 Disclosure. The representations and warranties by the Company
herein, including any Schedules referenced in Paragraph 3 or in any certificate
furnished by the Company pursuant to this Agreement, and the information and
documents provided by the Company and listed in Paragraph 3, when all such
documents are read together in their entirety, do not contain and will not
contain at the Closing Date any untrue statement of a material fact, and do not
omit and will not omit at the Closing Date any material fact necessary in order
to make the statements contained herein or therein, in the light of the
circumstances under which made, not misleading. The Company has delivered or
made available true and complete copies of each document that has been requested
by Purchasers, or their respective counsel, in connection with their legal and
accounting review of the Company.
4. Representations, Warranties and Covenants of the Purchasers. Except as
otherwise provided, each of the Purchasers hereby represents, warrants and
covenants, severally and not jointly, to the Company with respect to the
purchase of the Shares as follows:
4.1 Compliance With Law. Purchaser acknowledges that the Shares to be
delivered pursuant to this Agreement have not been and will not be registered
under the Securities Act of 1933, as amended (the "Securities Act"), and
therefore may not be resold without compliance with the Securities Act. The
Shares to be acquired by Purchaser pursuant to this Agreement are being acquired
solely for Purchaser's own account, for investment purposes only and with no
present intention of distributing, selling or otherwise disposing of them in
connection with a distribution. Purchaser will not offer, sell, assign, pledge,
hypothecate, transfer or otherwise dispose of any of the Shares issued to
Purchaser, except after full compliance with all applicable provisions of the
Securities Act, the rules and regulations of the Securities and Exchange
Commission ("SEC ") and other applicable securities law (including state and
foreign securities laws). Purchaser acknowledges that all Shares issued shall
bear the following legend, together with any other legends required under state
and foreign securities or corporate laws:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT
AND NOT FOR DISTRIBUTION OR RESALE. THEY MAY NOT BE MORTGAGED, PLEDGED,
HYPOTHECATED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT OF 1933 AND OTHER
APPLICABLE SECURITIES LAWS OR AN OPINION OF COUNSEL FOR THE COMPANY THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND OTHER APPLICABLE SECURITIES
LAWS. THE HOLDER MAY BE REQUIRED TO PROVIDE AN OPINION AT THE HOLDER'S COST
TO THE COMPANY THAT SUCH TRANSFER IS PERMITTED WITHOUT REGISTRATION UNDER
APPLICABLE STATE SECURITIES LAWS, WHICH OPINION MUST BE ACCEPTABLE TO THE
COMPANY'S COUNSEL.
4.2 Information. Purchaser has received the following information with
respect to the Company (collectively, the "Public Filings"):
a. Annual report on Form 10-K for the fiscal year ended October
31, 2002, as filed with the SEC.
b. Quarterly report on Form 10-Q as filed with the SEC for the
Quarterly Periods Ended January 31, 2003 and April 30, 2003.
c. The following current reports on Form 8-K:
(1) A current report on Form 8-K dated December 30, 1999 and
filed with the SEC on March 10, 2003 reporting management's purchase of 320,000
shares of common stock.
(2) A current report on Form 8-K dated April 22, 2003 and
filed with the SEC on April 24, 2003, to report a significant new customer
agreement.
(3) A current report on Form 8-K dated June 17, 2003 and
filed with the SEC on June 18, 2003 ("IDW Form 8-K") to announce the Company's
results for the second quarter of fiscal year 2003.
d. The Company's proxy statement for the annual meeting of
stockholder held on July 20, 2003.
4.3 Residence, Accredited Status. The Purchaser represents that, to
the extent that he or she is an individual, that he or she is a resident of the
state set forth opposite his or her name on signature page, and, to the extent
that it is an organizational entity, they it has been organized under the laws
of the state or country set forth opposite its name on signature page. Each
Purchaser is an "accredited" investor as such term is defined under Rule 501 of
federal Regulation D and was not formed for the purpose of making this
investment.
4.4 Experience, Risk. The Purchaser has such knowledge and experience
in financial and business matters that the Purchaser is capable of evaluating
the merits and risks of the purchase of the Shares pursuant to this Agreement
and of protecting the Purchaser's interest in connection therewith. The
Purchaser is able to fend for itself in the transactions contemplated by this
Agreement and has the ability to bear the economic risk of the investment,
including complete loss of the investment. The Purchaser is experienced in
evaluating and investing in high risk companies such as the Company.
4.5 Access to Data. The Purchaser has had an opportunity to discuss
the Company's business, management and financial affairs with the Company's
management and the opportunity to review the Company's facilities and has
received all information requested from the Company regarding the investment in
the Company.
4.6 Authorization and Binding Effect. The Purchaser represents that it
has the full right, power and authority to enter into and perform the
Purchaser's obligations under this Agreement, and that this Agreement, when
executed and delivered by the Purchaser, will constitute valid and binding
obligations of the Purchaser, enforceable in accordance with its terms, subject
to the law of general application relating to bankruptcy, insolvency and the
relief of debtors, rules of law governing specific performance, injunctive
relief or other equitable remedies.
4.7 Government Consents. No consent, approval or authorization of or
designation, declaration or filing with any state, federal, or foreign
governmental authority on the part of the Purchaser is required in connection
with the valid execution and delivery of this Agreement by the Purchaser, and
the consummation by the Purchaser of the transactions contemplated hereby.
4.8 Trading in Company Securities. The Purchaser has not traded in the
Company securities based on knowledge of this transaction and will not trade in
such securities until five (5) business days after this transaction has been
announced in an SEC filing.
4.9 Purchase Without View to Distribute. The Purchaser represents and
warrants to the Company that the shares of Common Stock and Warrant to purchase
shares of Common Stock, being purchased by it are being acquired for its own
account, not as a nominee or agent, and not with a view to resale or
distribution within the meaning of the Securities Act and the rules and
regulations thereunder.
4.10 Broker or Finder. The Purchaser represents and warrants that no
broker or finder has acted for such party in connection with this Agreement or
the transactions contemplated by this Agreement and that no broker or finder is
entitled to any broker's or finder's fee or other commission in respect thereof
based in any way on agreements, arrangements or understandings made by the
Purchaser.
5. Conditions to Closing of Purchasers. The Purchasers' obligations to
purchase the Shares at the Closing are, at the option of the Purchasers, subject
to the fulfillment on or prior to the Closing Date of the following conditions:
5.1 Representations and Warranties Correct. The representations and
warranties made by the Company in Paragraph 3 hereof shall be true and correct
in all material respects when made, and shall be true and correct on the Closing
Date in all material respects with the same force and effect as if they had been
made on and as of said date.
5.2 Covenants. All covenants, agreements and conditions contained in
this Agreement to be performed by the Company on or prior to the Closing Date
shall have been performed or complied with in all material respects.
5.3 Qualifications. All authorizations, approvals or permits, if any,
of any governmental authority or regulatory body of the United States or of any
state that are required in connection with the lawful issuance and sale of the
Shares pursuant to this Agreement shall be obtained and effective as of the
Closing Date.
6. Conditions to Closing of the Company. The Company's obligation to sell
and issue the Shares at the Closing is, at the option of The Company, subject to
the fulfillment of the following conditions:
6.1 Representations. The representations made by the Purchasers in
Paragraph 4. hereof shall be true and correct in all material respects when
made, and shall be true and correct on the Closing Date in all material respects
with the same force and effect as if they had been made on and as of said date.
6.2 Qualification. All authorizations, approvals or permits, if any,
of any governmental authority or regulatory body of the United States or of any
state that are required in connection with the lawful issuance and sale of the
Shares pursuant to this Agreement shall be obtained and effective as of the
Closing Date.
7. Miscellaneous.
7.1 Governing Law. This Agreement shall be governed in all respects by
the laws of the State of California as applied to contracts made and to be fully
performed entirely within that state between residents of that state.
7.2 Survival. The representations, warranties, covenants and
agreements made herein shall survive any investigation made by any Purchaser and
the closing of the transactions contemplated hereby.
7.3 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 the Purchasers to purchase the Shares
shall not be assignable without the consent of the Company.
7.4 Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof. This Agreement or any term hereof may be amended, waived,
discharged or terminated solely by a written instrument signed by the Company
and the Purchasers.
7.5 Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by hand or by messenger,
addressed (a) if to a Purchaser, at the address set forth on the signature page,
or at such other address as shall have been furnished to the Company upon not
less than ten (10) days notice in writing and (b) if to the Company, at 000
Xxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000, Attn: Xxxxxxx X. Xxxxxxx and
with a copy to Xxxxxx Eng & Xxxxxxxx, 000 Xxxxxxx Xxxx, Xxxxx 0000, Xxxxxxxxxx,
Xxxxxxxxxx 00000, Attention: Xxxxx X. Xxxxx, or at such other address as the
Company shall have furnished to the Purchasers upon not less than ten (10) days
notice in writing.
7.6 Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to any party to this Agreement upon any breach or
default of any other party under this Agreement, shall impair any such right,
power or remedy of such party nor shall it be construed to be a waiver of any
such breach or default, or an acquiescence therein, or of any similar breach or
default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any party of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any party, shall be cumulative
and not alternative.
7.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
7.8 Severability. 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.
7.9 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
7.10 Expenses. The Company shall pay all costs and expenses that it
incurs with respect to the negotiation, execution, delivery, and performance of
this Agreement, including the reasonable legal fees and expenses of the
Company's counsel. Purchasers shall pay all costs and expenses that they incur
with respect to the negotiation, execution, delivery, and performance of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the dates
set forth below.
THE COMPANY
INTERNATIONAL DISPLAYWORKS, INC.
Date: By:
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Xxxxxxx X. Xxxxxxx,
CEO & President
THE PURCHASER:
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(Signature)
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(Printed Name)
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(Address)
Number of Shares:
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Price Per Share: $0.30
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Total Price:
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