Exhibit 10.1
COMMON STOCK PURCHASE AGREEMENT
AGREEMENT, dated as of October 27, 1997, by and between
AMERICAN ELECTROMEDICS CORP., a Delaware corporation (the "Company"),
and ___________________________ ("Purchaser").
WHEREAS, the Company is offering to sell (the "Placement") a
minimum of 500,000 shares and a maximum of 1,000,000 shares of its
Common Stock, $.10 par value per share ("Common Stock"), to qualified
investors, including the Purchaser, at a purchase price of $1.00 per
share, subject to the terms and conditions herein and in similar
agreements with the other investors (collectively, the "Purchasers");
and
WHEREAS, the Company desires to issue and sell, and the
Purchaser desire to purchase shares of Common Stock, subject to the
terms and conditions herein;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and conditions herein contained, the Company and the
Purchaser hereby agree as follows:
SECTION 1
Sale and Purchase of the Shares
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The Purchaser hereby agrees to purchase, and the Company
hereby agrees to sell, _____________ shares (the "Shares") of Common
Stock at a purchase price of $____________ (the "Purchase Price"). The
Purchaser shall pay for the Shares as set forth in Section 2.02 hereof
and at the Closing (as defined in Section 2.01 hereof), the Company
shall issue and deliver the Shares to the Purchaser.
SECTION 2
Closing, Payment and Delivery
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2.01 Closing Date and Place of Closing. The purchase and
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sale of the Shares hereunder shall be consummated at the Closing (the
"Closing") to be held at the offices of Reid & Priest LLP, 40 West
57th Street, New York, New York not later than three business days
after the Company has received Agreements, together with funds
therefor, from Purchasers for the purchase of at least 500,000 shares
of Common Stock. Thereafter, closings shall be held upon receipt of
Agreements and funds for the balance of the 1,000,000 shares of Common
Stock being offered.
2.02 Payment and Delivery. On or before the Closing, the
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Purchaser shall deposit the full amount of the Purchase Price with the
Reid & Priest Escrow Account (the "Escrow Account") by wire transfer
of immediately available funds pursuant to the wire transfer
instructions included in Schedule A hereto. At the Closing, the
Company shall cause the Purchase Price to be paid to the Company from
the Escrow Account. Should less than 500,000 shares of Common Stock be
arranged to be purchased pursuant to the Agreements, or for any other
reason the Company decides to terminate the offering, the entire
amount of the Purchaser's funds representing the Purchase Price
deposited in the Escrow Account will be promptly returned to the
Purchaser, without interest or deduction.
SECTION 3
Representations and Warranties of the Company
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The Company hereby represents and warrants to the Purchaser
as follows:
3.01 Organization, Qualification, Certificate and By-laws.
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The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and is duly
qualified or licensed to do business as a foreign corporation in good
standing in every jurisdiction where such qualification is necessary.
3.02 Corporate Power. The Company has all requisite
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corporate power to enter into this Agreement, to sell the Shares and
to carry out and perform its obligations under the terms of this
Agreement.
3.03 Authorization. All corporate action on the part of the
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Company necessary for the authorization, execution, delivery and
performance by the Company of this Agreement and for the
authorization, issuance and delivery of the Shares issuable upon
payment therefor has been taken. This Agreement constitutes a valid
and binding agreement of the Company enforceable in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of
creditors' rights generally and general principles of equity.
3.04 Common Stock. The Shares will be validly issued, fully
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paid and non-assessable shares of Common Stock.
3.05 Financial Information. The Company's Annual Report on
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Form 10-KSB for the fiscal year ended July 27, 1996 and its Forms
10-QSB for the three quarters of fiscal 1997 (the "Company's Reports")
present fairly the financial position and results of operations of the
Company at the dates and for the periods to which they relate. The
audited financial statements contained in the Company's Reports have
been prepared in accordance with generally accepted accounting
principles consistently followed throughout the periods involved
(except as may be otherwise indicated in the notes thereto). The
Company Reports taken as a whole do not contain any untrue statement
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of material fact or omit to state a material fact required to be
stated therein, in light of the circumstances in which they were made,
not misleading.
3.06 Absence of Certain Changes. Except as otherwise set
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forth in Schedule 3.06 hereto, at all times since July 31, 1997, there
has not been any event or condition of any character which has
adversely affected, or may be expected to adversely affect, the
Company's business or prospects.
3.07 Taxes. The Company has filed or will file within the
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time prescribed by law all tax returns and reports required to be
filed with the United States Internal Revenue Service and with the
States of Delaware and New Hampshire.
3.08 Litigation. Except as otherwise disclosed in the
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Company's Reports, there is neither pending nor, to the Company's
knowledge, threatened, any action, suit, proceeding or claim to which
the Company is or may be named as a party and in which an unfavorable
outcome might have a material adverse effect on the Company.
3.09 Consents. No approval of any governmental authority is
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required in connection with the Company's execution, delivery or
performance of this Agreement, or the offer, sale or issuance of the
Shares other than "Blue Sky" filings which will be based upon the
address of the Purchaser.
3.10 Compliance. The execution, delivery and performance of
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this Agreement by the Company does not conflict with or cause a breach
under its Certificate of Incorporation or By- Laws.
3.11 Intellectual Property. The Company owns or has valid,
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adequate and subsisting rights to use and exploit all patents, patent
licenses, trade secrets, copyrights, trademarks and service marks
necessary for the conduct of its business (collectively, the
"Intellectual Property") free and clear of any pledge, lien, charge,
claim or option. Such Intellectual Property is valid and in full force
and effect. None of the processes currently used by the Company or any
of the properties or products currently sold by the Company, to the
best knowledge of the Company, infringes the patent, industrial
property, trademark, trade name, other mark, right or copyright of any
other person or entity.
3.12 Offering of the Shares. Subject to the accuracy of the
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representations of the Purchaser, the offering and sale of the Shares
would be exempt from the registration requirements of Section 5 of the
Securities Act and, subject to making necessary notice filings, would
be exempt from the provisions of any securities, "blue sky" or similar
law of any applicable jurisdiction.
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SECTION 4
Representations and Warranties of Purchasers
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The Purchaser represents and warrants to the Company as
follows:
4.01 Experience. He is experienced in evaluating and
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investing in companies such as the Company, and has such knowledge and
experience in evaluating the merits and risks of his investment, and
has the ability to bear the economic risks of his investment. He is an
"accredited investor", as such term is defined in Regulation D under
the Securities Act.
4.02 Investment. He is acquiring the Shares for investment
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for his own account and not with the view to, or for resale in
connection with, any distribution thereof. He understands that the
Shares have not been registered under the Securities Act by reason of
an exemption from the registration provisions of the Securities Act
which depends upon, among other things, the bona fide nature of his
investment intent as expressed herein, and that the resale of the
Shares is restricted under the Securities Act.
4.03 Rule 144. He acknowledges that the Shares must be held
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indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. He
is aware of the Company's obligation to register the Shares as set
forth in Section 5 of this Agreement. He has been advised or is aware
of the provisions of Rule 144 promulgated under the Securities Act,
which permits limited resale of securities purchased in a private
placement subject to the satisfaction of certain conditions.
4.04 Authority. He has full power and authority under all
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applicable laws to enter into this Agreement and to consummate the
transactions herein and has taken all action necessary to authorize
his execution and performance of this Agreement. This Agreement when
executed and delivered will be duly executed and will constitute his
legal, valid and binding obligation, enforceable in accordance with
its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency or other similar laws affecting the enforcement
or creditors' rights generally and general principles of equity.
4.05 Access to Data. He is fully familiar with the Company's
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business, operations and financial history as set forth in the Company
Reports. He, or his financial or investment advisor, has had an
opportunity to discuss the Company's business, operations and
financial affairs with its management and has had the opportunity to
review the Company's facilities.
4.06 Use of Proceeds. He is aware that the proceeds of the
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Placement will be used by the Company to pay down $150,000 of the
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indebtedness on the Company's bank loans as required by the Company's
bank, for acquisitions, and for working capital purposes.
SECTION 5
Registration Rights
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5.01 Registration. The Company will use its best efforts,
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within six months from the date of the initial Closing, to file a
registration statement (the "Registration Statement") on Form S-3 or
such other applicable form under the Securities Act with the
Securities and Exchange Commission (the "Commission") to register
Common Stock (the "Registered Common Stock"), including the Shares,
for sale and use its best efforts to cause the Registration Statement
to be declared effective and to maintain the Registration Statement
under the Securities Act from its effective date until the earlier of
(A) one (1) year after the date of the Closing or (B) all Registered
Common Stock included therein have been sold. The Company may include
the Shares in a registration statement being filed by the Company with
respect to other securities of the Company. The Company shall give
written notice to the Purchaser at least twenty (20) days prior to
filing the Registration Statement asking the Purchaser how many of his
shares of Common Stock he wants to include in the Registration
Statement. If the Purchaser fails to timely advise the Company in
writing of the number of shares of Common Stock he wants to include in
the Registration Statement, he shall have no further rights to have
his shares included therein. The obligation of the Company under this
Section 5 shall be limited to one Registration Statement which becomes
effective under the Securities Act.
5.02 Registration Procedures. (a) The Company shall pay all
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expenses of the Registration Statement filed pursuant to this Section
5, including, without limitation, all registration, filing and
qualification fees, printing expenses, fees and disbursements of
counsel for the Company, accounting fees incidental to or required by
such registration; provided, however, that the Purchaser shall pay all
underwriting discounts and commissions applicable to his Registered
Common Stock and fees and disbursements of his own attorney. The
Company shall furnish the Purchaser such number of copies of a
prospectus, including a preliminary prospectus, to the Registration
Statement as the Purchaser may reasonably request.
(b) In connection with any Registration Statement filed
pursuant to this Section 5, the Company shall file any post- effective
amendment or amendments to the Registration Statement which may be
required under the Securities Act during the period reasonably
required to effect the distribution contemplated thereby.
(c) The Company shall notify the Purchaser during the period
the Registration Statement is required to remain effective, or at any
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time when a prospectus relating thereto is required to be delivered
under the Securities Act, of the happening of any event as a result of
which the Registration Statement or the prospectus contained in such
Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then
existing. The Purchaser agrees, upon receipt of such notice, forthwith
to cease making offers and sales of his Registered Shares pursuant to
the Registration Statement or deliveries of the prospectus contained
therein for any purpose and to return to the Company the copies of
such prospectus not theretofore delivered by him. The Company shall
prepare and furnish to the Purchaser a reasonable number of copies of
any supplement to or an amendment of such prospectus that may be
necessary for delivery to any purchaser of Registered Common Stock.
The Company shall promptly notify the Purchaser of any stop order or
similar proceeding initiated by state or Federal regulatory bodies and
use its best efforts to take all necessary steps expeditiously to
remove such stop order or similar proceeding.
(d) The Company shall not be required to include in any
Registration Statement any Shares if in the opinion of counsel to the
Company, registration of the Shares proposed to be included is not
required under the Securities Act as such Shares may then be publicly
sold in accordance with Section 4(1) thereof and Rule 144 thereunder.
5.03 State Securities Laws. In connection with the offering
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of any Registered Common Stock pursuant to this Section 5, the Company
shall use its best efforts to qualify or register the Registered
Common Stock under the securities or "Blue Sky" laws of such
jurisdictions as may be reasonably requested by the Purchaser. 5.04
Indemnification. In connection with any registration or qualification
of Registered Common Stock hereunder, to the extent permitted by law,
the Company shall indemnify the Purchaser, and the Purchaser shall
indemnify the Company with respect to written information furnished by
the Purchaser for inclusion in the Registration Statement, all
according to ordinary and customary procedures then in effect for such
indemnification; provided, however, that if the offering is to be
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underwritten, the Company and the Purchaser shall also indemnify each
underwriter and each underwriter shall indemnify the Company and the
Purchaser according to ordinary and customary procedures then in
effect for such indemnification.
5.05 Purchaser Obligations. The Purchaser agrees that as a
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condition to the Company's obligation under this Section 5, the
Purchaser shall provide such information and execute such documents as
may reasonably be required by the Company in connection with any
registration or listing of his Shares. Information so furnished, and
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each document so executed, shall state that it can be used in or in
connection with the Registration Statement under which the Registered
Common Stock is registered.
SECTION 6
Miscellaneous
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6.01 Governing Law. This Agreement shall be governed by and
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construed with the laws of the State of Delaware, without giving
effect to conflicts of law.
6.02 Successors and Assigns. This Agreement shall inure to
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the benefit of, and be binding upon, the parties hereto and their
respective successors, assigns, heirs, executors and administrators.
6.03 Entire Agreement; Amendment. This Agreement and the
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Shares delivered pursuant hereto constitute the full and entire
understanding and agreement among the parties with regard to the
subjects hereof. Neither this Agreement nor any term hereof may be
amended, waived, discharged or terminated except by a written
instrument signed by the Company and the Purchaser.
6.04 Notices, etc. All notices and other communications
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required hereunder shall be in writing and shall be mailed by
first-class mail, postage prepaid, by facsimile, or by express
courier, or delivered by messenger, addressed (i) if to the Purchaser
or at such facsimile number or other address as the Purchaser shall
have furnished to the Company in writing, or (ii) if to the Company,
at 13 Columbia Drive, Suite 18, Amherst, New Hampshire 03031,
Attention: Michael T. Pieniazek, President, (FAX: 603-880-8977) or at
such other address as the Company shall have furnished to the
Purchaser in writing.
6.05 Separability. In case any provision of the Agreement
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shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
6.06 Broker. Each party hereto represents to the other that
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it did not engage any broker or finder to assist with the execution
and delivery of this Agreement and the offering and sale of the
Shares.
6.07 Information Confidential. The Purchaser acknow- ledges
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that the information received by him in connection with the offer of
the Shares pursuant to this Agreement may be confidential and is for
the Purchaser's use only. He will not disclose or disseminate such
information to any other person (other than his attorneys and
financial advisors).
6.08 Expenses. The Company and the Purchaser shall bear
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their own expenses and legal fees incurred on their behalf with
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respect to this Agreement and the transactions contemplated hereby.
6.10 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all
of which together shall constitute one instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed and delivered by their respective proper and duly
authorized officers as of the day and year first above written.
AMERICAN ELECTROMEDICS CORP.
By:_________________________________
Michael T. Pieniazek, President
PURCHASER:
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Address
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Social Security or Tax ID Number
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SCHEDULE A
WIRE TRANSFER INSTRUCTIONS
Account Name: Reid & Priest Special Account (for AEC shares)
Account Number: 09322946
ABA#: 021-000-089
Bank Name: Citibank
Address: Citicorp Center
153 East 53rd Street
New York, New York 10043
Attention: Jeanne Montalbano