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Note Purchase Agreement

Note Purchase Agreement

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Published by M00SEKATEER
Note Purchase Agreemenet
Note Purchase Agreemenet

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Categories:Types, Business/Law
Published by: M00SEKATEER on Mar 06, 2013
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03/06/2013

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NOTE PURCHASE AGREEMENT
This Note Purchase Agreement (this “
 Agreement 
”) is made as of June [●], 2012 by and among[XXX], a [XXX] corporation (the “
Company
”), and [Investor] (the “
 Investor 
”).
A.
The Company currently requires funds to help finance its operations as it pursues its nextround of equity financing.
B.
The Investor is willing to advance funds to the Company in exchange for the issuance toit of a Senior Secured Convertible Note, evidencing the Company’s obligation to repaythe Investor’s loan of the advanced funds.
C.
The Note (as defined below) will automatically be secured by the assets of the Company pursuant to that certain Security Agreement, dated as of [XXXX], by and amongCompany, the Collateral Agent and the Secured Creditors (each as defined therein), asamended to date (the “
 Security Agreement 
”). NOW THEREFORE, the parties hereby agree as follows.
1.
PURCHASE AND SALE OF NOTE .
Subject to the terms and conditions of thisAgreement, the Company agrees to sell to the Investor, and the Investor agrees to purchase from theCompany, a Third Amended and Restated Senior Secured Convertible Note in the form attached to thisAgreement as Exhibit A (the “
 Note
” and, together with this Agreement, the “
Financing Documents
”) inthe principal amount of $[XXX].
2.
CLOSING .
The purchase and sale of the Note will take place remotely via the exchangeof documents and signatures on the date of this Agreement or at such other time and place as theCompany and the Investor mutually agree upon, orally or in writing (which time and place are designatedas the “
Closing 
”). At the Closing, the Investor will deliver to the Company as payment in full for the Note, 1,500,000.00 by wire transfer of funds to the Company.
3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY .
The Companyhereby represents and warrants to the Investor that the statements in the following paragraphs of thisSection3are all true and complete as of immediately prior to the Closing.
3.1
Organization, Good Standing and Qualification
. The Company has been dulyincorporated and organized, and is validly existing in good standing, under the laws of the State of Delaware. The Company has the corporate power and authority to own and operate its properties andassets and to carry on its business as currently conducted and as presently proposed to be conducted.
3.2
Due Authorization
. All corporate action on the part of the Company’s board of directors and stockholders necessary for the authorization, execution, delivery of, and the performance of all obligations of the Company under, the Financing Documents has been taken or will be taken prior tothe Closing. The Financing Documents, when executed and delivered by the Company, will constitute,valid and legally binding obligations of the Company, enforceable against the Company in accordancewith their respective terms, except as may be limited by (a) applicable bankruptcy, insolvency,reorganization or other laws of general application relating to or affecting the enforcement of creditors’rights generally and (b) the effect of rules of law governing the availability of equitable remedies.
-1-
A1000/00104/DOCS/1914210.1A1000/00104/DOCS/1914210.1
 
 
3.3
Corporate Power
. The Company has the corporate power and authority toexecute and deliver the Financing Documents to which it is a signatory, to issue to the Investor the Noteand to carry out and perform all its obligations under the Financing Documents.
3.4
Valid Issuance
.3.4.1Conversion Stock. The shares of the Company’s capital stock issuable upon the conversion of the Note (the “
Conversion Stock 
”), when issued, sold and delivered in accordance with the terms of thisAgreement and the Note for the consideration provided for herein and therein, will be duly and validlyissued, fully paid and nonassessable.3.4.2Securities Laws. Based in part on the representations made by the Investor in Section4hereof,the offer and sale of the Note solely to the Investor in accordance with this Agreement and (assuming nochange in currently applicable law or in the Company’s Certificate of Incorporation in effect as of immediately prior to the Closing, no transfer of Note and no commission or other remuneration is paid or given, directly or indirectly, for soliciting the issuance of shares of Conversion Stock upon conversion of the Note) the issuance of the Conversion Stock are exempt from the registration and prospectus deliveryrequirements of the U.S. Securities Act of 1933, as amended (the “
 Securities Act 
”), and the securitiesregistration and qualification requirements of the currently effective provisions of the securities laws of the state in which the Investor is resident.
4.
REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF THEINVESTOR 
. The Investor hereby represents and warrants to and agrees with the Company as follows.
4.1
Authorization
. The Financing Documents will constitute the Investor’s validand legally binding obligations, enforceable against the Investor in accordance with its terms, except asmay be limited by (a) applicable bankruptcy, insolvency, reorganization or other laws of generalapplication relating to or affecting the enforcement of creditors’ rights generally and (b) the effect of rulesof law governing the availability of equitable remedies. The Investor represents and warrants to theCompany that the Investor has full power and authority to enter into this Agreement.
4.2
Purchase for Own Account
. The Note and the Conversion Stock (collectively,the “
 Securities
”) will be acquired for investment for the Investor’s own account, not as a nominee or agent, and not with a view to the public resale or distribution thereof within the meaning of the SecuritiesAct, and the Investor has no present intention of selling, granting any participation in, or otherwisedistributing the same.
 
4.3
No Solicitation
. At no time was the Investor presented with or solicited by any publicly issued or circulated newspaper, mail, radio, television or other form of general advertising or solicitation in connection with the offer, sale and purchase of the Securities.
4.4
Disclosure of Information
. The Investor has received or has had full access toall the information the Investor considers necessary or appropriate to make an informed investmentdecision with respect to the Securities. The Investor further has had an opportunity to ask questions andreceive answers from the Company regarding the terms and conditions of the offering of the Securitiesand to obtain additional information (to the extent the Company possessed such information or couldacquire it without unreasonable effort or expense) necessary to verify any information furnished to theInvestor or to which the Investor had access. The foregoing, however, does not in any way limit or modify the representations and warranties made by the Company in Section3.
-2-
26553/00025/SF/5395520.2
 
4.5
Investment Experience
. The Investor understands that the purchase of theSecurities involves substantial risk. The Investor has experience as an investor in securities of companiesin the development stage and acknowledges that the Investor is able to fend for itself, can bear theeconomic risk of the Investor’s investment in the Securities and has such knowledge and experience infinancial or business matters that the Investor is capable of evaluating the merits and risks of thisinvestment in the Securities and protecting the Investor’s own interests in connection with this investmentin the Securities
4.6
Preexisting Relationship
. The Investor has a preexisting personal or businessrelationship with the Company and certain of its officers, directors or controlling persons of a nature andduration that enables the Investor to be aware of the character, business acumen and financialcircumstances of such persons.
4.7
Accredited Investor Status
. The Investor is familiar with the definition of, andqualifies as, an “accredited investor” within the meaning of Regulation D promulgated under theSecurities Act.
4.8
Restricted Securities
. The Investor understands that the Securities arecharacterized as “restricted securities” under the Securities Act and Rule 144 promulgated thereunder (“
 Rule 144
”) since they are being acquired from the Company in a transaction not involving a publicoffering, and that under the Securities Act and applicable regulations thereunder the Securities may beresold without registration under the Securities Act only in certain limited circumstances. The Investor further understands that the Company is under no obligation to register the Securities except as set forthin that certain Investors’ Rights Agreement dated as of August 16, 2011 by and among the Company andthe investors and equity holders signatory thereto, and the Company has no present plans to do so.Furthermore, the Investor is familiar with Rule 144, as presently in effect, and understands the limitationsimposed thereby and by the Securities Act on resale of the Securities without such registration. TheInvestor understands that, whether or not the Securities may be resold in the future without registrationunder the Securities Act, no public market now exists for any of the Securities and that it is uncertainwhether a public market will ever exist for the Securities.
4.9
Legends
. The Investor understands and agrees that the certificates evidencingthe Securities will bear the legends that may be required by applicable law, the Company’s Certificate of Incorporation or Bylaws or any other agreement between the Company and the Investor.
4.10
Foreign Investors
. The Investor has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Securities or any use of this Agreement, including (i) the legal requirements within its jurisdiction for the purchase of theSecurities, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any,that may be relevant to the purchase, holding, redemption, sale, or transfer of the Securities. TheInvestor’s subscription and payment for and continued beneficial ownership of the Securities will notviolate any applicable securities or other laws of the Investor’s jurisdiction.
5.
GENERAL PROVISIONS
.
5.1
Survival of Warranties
. The representations, warranties and covenants of theCompany and the Investor contained in or made pursuant
 
to this Agreement shall survive the executionand delivery of this Agreement, the Closing and shall in no way be affected by any investigation of thesubject matter thereof made by or on behalf of the Investor or the Company, as the case may be.
-3-
26553/00025/SF/5395520.2

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