Exhibit 10.1
October 21, 1999
American Electromedics Corp.
13 Columbia Drive, Suite 5
Amherst, NH 03031
Attn: Michael T. Pieniazek, President
Gentlemen:
This letter sets forth the terms and conditions of the agreement
relating to the purchase by Jim Fukushima (the "Purchaser") from
American Electromedics Corp., a Delaware Corporation (the
"Corporation"), of a 5% (percent) interest of the Corporation s
subsidiary. Rosch GmbH Medizintechnik ("Rosch GmbH") and 800,000
shares (the "Shares") of common stock, par value $.10 per share,
of the Corporation.
1. The Purchaser hereby purchases from the Corporation, and the
Corporation hereby sells to the Purchaser, the 5% (percent)
interest of Rosch GmbH and the Shares, for an aggregate
purchase price of two million dollars ($2,000,000.00), (the
"Purchase Price"), subject to the terms and conditions
herein. The Purchaser is hereby delivering via a wire
transfer to the Corporation for the Purchase Price, payment
to be received by November 12, 1999, and upon receipt
thereof the Corporation is delivering to the Purchaser a
certificate representing the Shares and an ownership of 5%
(percent) of Rosch GmbH effected through a Sub-Participation
Contract executed between the Purchaser and Mr. Andy Rosch
(Exhibit 1). The Corporation shall also issue, to the
Purchaser, a three-year Warrant to purchase of 300,000
shares of its common stock, par value $.10 per share, at an
exercise price of $2.00 share.
2. The Purchaser represents and warrants to the Corporation
that:
2.1 The Purchaser is aware that the Shares and the
common stock underlying the Warrant have not been
registered under the Securities Act of 1933, as
amended (the "Securities Act"), is aware of the
restrictions on sale or transfer thereunder, and
acknowledges that an appropriate restrictive
legend will be set forth on, and a stop transfer
order will be placed against, the certificate
evidencing the Shares to be issued to the
Purchaser. However, the Corporation agrees that
it shall include the Shares and the common stock
underlying the Warrant in a pre-effective
amendment to the registration statement filed by
the Corporation on Form SB-2 on March 31, 1999
(File No. 333-75399).
2.2 The Purchaser has received and reviewed the
Corporation s Form 10-KSB for the fiscal year
ended July 31, 1999 and Forms 10-KSB for the
fiscal quarters ended October 31. 1998, January
31, 1999 and April 30, 1999, has been advised of
the Corporation s recent sale of 4r-).990/o of its
interest in Rosch GmbH Medizintechnik, and has had
the opportunity to discuss the business, affairs
and financial prospects of the Corporation with
management of the Corporation and ha,-, made an
informed decision regarding the purchase of 5%
(percent) of Rosch GmbH and the Shares.
2.3 The Purchaser is an "accredited investor" as such
term s defined in Regulation D under the
Securities Act. The Purchaser is also a Director
of the Corporation.
2.4 The Purchaser acknowledges that an investment in
the Corporation is highly speculative, that such
investment is consistent with his investment
objectives and income prospects, and that he has
adequate means for providing for his current
financial needs, has no need for liquidity in the
investment herein, and is able to bear the risk of
loss of his entire investment in the Shares.
3. The Corporation represents and warrants to the
Purchaser that:
3.1 The Corporation is a corporation duly organized,
validly existing and in good standing under the
laws of the State of Delaware. The authorized
capital stock of the Corporation is 20,000,000
shares of Common Stock, of which 9-830,955 are
issued and outstanding, and 1,000,000 shares of
Preferred Stock, $.0l par value, of which 2,400
shares of Series A Preferred Stock and 1. 170
shares of Series B Preferred Stock are issued and
outstanding. Shares of ( common Stock are
reserved for stock options and warrants and
conversion of the Series A and Series B Preferred
Stock.
3.2 The Corporation has the full power and authority
to enter into this Agreement and to sell the 5%
(percent) of Rosch GmbH and Shares, and that the
Corporation s execution. delivery and performance
under this Agreement has been duly authorized by
all necessary action.
3.3 The Shares has been duly authorized, and upon
receipt of the Purchase Price will be fully paid
and nonassessable.
4. This letter sets forth the entire agreement between the
parties hereto as to the subject matter herein, and cannot
be amended, modified or terminated except by an agreement in
writing executed by the parties hereto. In the event any
provision of this letter is invalid or unenforceable. the
remainder of this letter shall be construed without taking
into effect such invalid or unenforceable provision. This
letter shall be governed by the laws of the State of
Delaware.
5. The Purchaser does hereby release and forever discharge the
Corporation, and its directors, officers, shareholders,
agents, employees and affiliates and their successors,
assigns. heirs and administrators from all actions, causes
of actions, claims and demands whatsoever, whether known or
unknown, in law or equity, whether statutory or common law-
whether federal, state, local, foreign or other-wise related
to or arising out of the Sub-Participation Contract between
the Purchaser and Mr. Andy Rosch and all other agreements
related to the Sub-Participation Contract, and any and all
fees and expenses relating thereto, which against the
Corporation ever had, now has, or hereafter may have, by
reason of any matter, cause or thing whatsoever.
Please signify your agreement to the foregoing by executing and
returning the original of this letter.
Very truly yours,
By: /s/ Jim Fukushima
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Jim Fukushima
17662 Irvine Blvd.
Suite #20
Tustin, CA 92780
954695826
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(Tax Identification No,)
Agreed to this 11th
day of November, 1999
AMERICAN ELECTROMEDICS CORP.
By: /s/ Michael T. Pieniazek
---------------------------------
Michael T. Pieniazek, President
*Subject to approval of
the Corporation's Board of Directors