EXHIBIT 10.3
COMMON STOCK PURCHASE AGREEMENT
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THIS COMMON STOCK PURCHASE AGREEMENT ("Purchase Agreement") is dated as
of January 3, 2000, by and between XYBERNAUT CORPORATION, a Delaware
corporation, with headquarters located at 12701 Fair Lakes Circle, Suite 550,
Fairfax, Virginia 22033 (the "Company"), and DALSTON HOLDINGS LIMITED, having an
office at _____________________ (the "Investor").
W I T N E S S E T H
WHEREAS, the Company wishes sell to the Investor, and the Investor is
willing to buy from the Company, subject to the terms and conditions set forth
herein, six hundred forty-seven thousand five hundred (647,500) shares of Common
Stock of the Company, par value $.01 per share.
NOW, THEREFORE, for and in consideration of the premises and the mutual
agreement contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. MUTUAL DELIVERIES.
(a) Upon the delivery by the Investor of the sum of Two
Million Five Hundred Ninety Thousand and 00/100 ($2,590,000) (the "Purchase
Price"), the Company shall deliver to the Investor one or more certificates for
647,500 shares of Common Stock of the Company (the "Shares") at the price of
$4.00 per share, bearing substantially the following legend:
THE SECURITIES REPRESENTED HEREBY (THE "SECURITIES") HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN
OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.
(b) The Company shall also deliver, or cause to be delivered,
the original or execution copies of this Purchase Agreement.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Investor that:
(a) The Company has the corporate power and authority to enter
into this Purchase Agreement, and to perform its obligations hereunder. The
execution and delivery by the Company of this Purchase Agreement and the
consummation by the Company of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of the Company.
This Purchase Agreement has been duly executed and delivered by the Company and
constitute valid and binding obligations of the Company enforceable against it
in accordance with their respective terms, subject to the effects of any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and to the application of equitable
principles in any proceeding (legal or equitable).
(b) The execution, delivery and performance by the Company of
this Purchase Agreement, and the consummation of the transactions contemplated
hereby, do not and will not breach or constitute a default under any applicable
law or regulation or of any agreement,
judgment, order, decree or other instrument binding on the Company which breach
or default could reasonably by expected to have a material adverse effect on the
Company taken as a whole.
(c) Except as set forth in Form 10-QSB filed on November 12,
1999 (the "SEC Filing"), there is no pending, or to the knowledge of the
Company, threatened, judicial, administrative or arbitral action, claim, suit,
proceeding or investigation which might affect the validity or enforceability of
this Purchase Agreement or which involves the Company and which if adversely
determined, could reasonably be expected to have a material adverse effect on
the Company.
(d) No consent or approval of, or exemption by, or filing
with, any party or governmental or public body or authority is required in
connection with the execution, delivery and performance under this Purchase
Agreement or the taking of any action contemplated hereunder or thereunder.
(e) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation.
(f) The execution, delivery and performance of this Agreement
by the Company, and the consummation of the transactions contemplated hereby,
will not (i) violate any provision of the Company's articles of incorporation or
bylaws, (ii) violate, conflict with or result in the breach of any of the terms
of, result in a material modification of the effect of, otherwise, give any
other contracting party the right to terminate, or constitute (or with notice or
lapse of time or both constitute) a default under, any contract or other
agreement to which the Company is a party or by or to which the Company or any
of the Company's assets or properties may be bound or subject, (iii) violate any
order, judgment, injunction, award or decree of any court, arbitrator or
governmental or regulatory body by which the Company, or the assets or
properties
of the Company are bound, (iv) to the Company's knowledge, violate any statute,
law or regulation.
3. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR. The Investor
hereby represents and warrants to the Company that:
(a) The Investor has the corporate power and authority to
enter into this Purchase Agreement and to perform its obligations hereunder. The
execution and delivery by the Investor of this Purchase Agreement, and the
consummation by the Investor of the transactions contemplated hereby, have been
duly authorized by all necessary corporate action on the part of the Investor.
This Purchase Agreement has been duly executed and delivered by the Investor and
constitute valid and binding obligations of the Investor, enforceable against it
in accordance with their respective terms, subject to the effects of any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and to the application of equitable
principles in any proceeding (legal or equitable).
(b) The execution, delivery and performance by the Investor of
this Purchase Agreement, and the consummation of the transactions contemplated
hereby, do not and will not breach or constitute a default under any applicable
law or regulation or of any agreement, judgment, order, decree or other
instrument binding on the Investor.
(c) The Investor has prior substantial investment experience,
including investment in non-listed and non-registered securities and has had the
opportunity to engage the services of an investment advisor, attorney or
accountant to read all of the documents furnished
or made available by the Company to the Investor in connection with this
investment and to evaluate the merits and risks of this investment.
4. COVENANTS OF THE COMPANY. The Company covenants and agrees to use
its best efforts to register the Shares and to include the Shares in the first
registration statement to be filed subsequent to the effective date of the
registration statement currently pending before the Securities and Exchange
Commission.
5. DELIVERY OF SHARES.
a. Promptly following the delivery by the Investor of the
Purchase Price for the Common Stock in accordance with Section 1 hereof, the
Company will irrevocably instruct its transfer agent to issue the Shares to the
Investor with the legended certificates representing the Shares.
b. Within three (3) business days (such third business day,
the "Delivery Date") after the business day on which the Company has received
both of the Notice of Sale (by facsimile or other delivery) and the original
Common Stock certificate (and if the same are not delivered to the Company on
the same date, the date of delivery of the second of such items), the Company
(i) shall deliver, and shall cause legal counsel selected by the Company to
deliver, to its transfer agent (with copies to Investor) an appropriate
instruction and opinion of such counsel, for the delivery of Unlegended Shares
issuable upon sale of the Shares pursuant to Registration Statement ("Unlegended
Shares"); and (ii) transmit the certificates representing the Unlegended Shares
(together, unless otherwise instructed by the Investor, with Common Stock not
sold), to the Investor at the address specified in a Notice of Sale (which may
be the Investor's address for
notices as contemplated by Section 6 hereof or a different address) via express
courier, by electronic transfer or otherwise.
c. In lieu of delivering physical certificates representing
the Unlegended Shares provided the Company's transfer agent is participating in
the Depository Trust Company ("DTC") Fast Automated Securities Transfer program,
upon request of the Investor and its compliance with the provisions contained in
this paragraph, so long as the certificates therefor do not bear a legend and
the Investor thereof is not obligated to return such certificate for the
placement of a legend thereon, the Company shall use its best efforts to cause
its transfer agent to electronically transmit the Unlegended Shares by crediting
the account of Investor's Prime Broker with DTC through its Deposit Withdrawal
Agent Commission system.
6. NOTICES. Any notice required or permitted hereunder shall be given
in writing (unless otherwise specified herein) and shall be deemed effectively
given upon personal delivery or seven business days after deposit in the United
States Postal Service, by (a) advance copy by fax, and (b) mailing by express
courier or registered or certified mail with postage and fees prepaid, addressed
to each of the other parties thereunto entitled at the following addresses, or
at such other addresses as a party may designate by ten days advance written
notice to each of the other parties hereto.
COMPANY: XYBERNAUT CORPORATION
12701 Fair Lakes Circle
Suite 550
Fairfax, Virginia 22033
ATT: Mr. Steven Newman, Vice Chairman
Telephone No.: (703) 631-6925
Facsimile No.: (703) 631-6734
with a copy to:
Parker Chapin Flattau & Klimpl, LLP
1211 Avenue of the Americas
New York, New York 10036
ATTN: Martin Eric Weisberg, Esq.
Telephone No.: (212) 704-6000
Facsimile No.: (212) 704-6288
PURCHASER: At the address set forth on the first page of this Agreement.
with a copy to:
Krieger & Prager, LLP
39 Broadway, Suite 1440
New York, New York 10006
Telephone No.: (212) 363-2900
Facsimile No.: (212) 363-2999
7. SEVERABILITY. If a court of competent jurisdiction determines that
any provision of this Purchase Agreement is invalid, unenforceable or illegal
for any reason, such determination shall not affect or impair the validity,
legality and enforceability of the other provisions of this Purchase Agreement.
If any such invalidity, unenforceability or illegality of a provision of this
Purchase Agreement becomes known or apparent to any of the parties hereto, the
parties shall negotiate promptly and in good faith in an attempt to make
appropriate changes and adjustments to such provision specifically and this
Purchase Agreement generally to achieve as closely as possible, consistent with
applicable law, the intent and spirit of such provision specifically and this
Purchase Agreement generally.
8. EXECUTION IN COUNTERPARTS. This Purchase Agreement may be executed
in counterparts, each of which shall be deemed an original, but all of which
together shall constitute the same Purchase Agreement.
9. GOVERNING LAW. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties have executed this Purchase Agreement
as of the date first written above.
XYBERNAUT CORPORATION
By: ______________________________________
Name:
Title:
DALSTON HOLDINGS LIMITED
By: ______________________________________
Name:
Title: