SECURITIES PURCHASE AGREEMENT
EDITEK, Inc.
1238 Anthony Road
Burlington, North Carolina 27215
Re: Private Offering Of Common Stock
Gentlemen:
In connection with the offer (the "Offering") and proposed issuance of shares
("Common Shares") of common stock of EDITEK, Inc. (the "Company"), the
undersigned prospective investor ("the Investor") and the Company hereby agree
as follows:
1. Subscription. The Investor hereby subscribes for the purchase of the
Common Shares and agrees to purchase the aggregate number of Common Shares
set forth on the signature page of this Agreement. The Company, in its
sole discretion and for any reason, may accept or reject this purchase in
whole or in part at any time not later than 10 days after receipt of this
Agreement.
2. Listing of Shares. The Company agrees to make any required listing
application with the American Stock Exchange to qualify the Common Shares
for trading on the AMEX and use its best efforts to effect such listing.
3. Payment Of Purchase Price. The Investor shall pay for the Common Shares by
either wire transfer of funds to the Company at a time designated by the
Company (the "Closing"). The number of Common Shares issuable to the
Investor shall be equal to the aggregate purchase price of the Common
Shares divided by the purchase price per share of the Common Shares, less
any fractional shares. The aggregate purchase price of the Common Shares
shall be $600,002.25 less an amount corresponding to any fractional
shares. The purchase price per share of the Common Shares shall be equal
to Seventy Five Percent (75%) of the Market Price of the common stock of
the Company. The "Market Price" as used in this Section shall mean the
average of the closing prices of the Company's Common Stock on the five
(5) trading days immediately prior to February 1, 1996 as quoted in The
Wall Street Journal.
The Company undertakes to deliver certificates for the Common Shares
within five (5) business days following Closing.
4. Company's Conditions. The Company's obligation to issue and sell the
Common Shares shall be subject to the satisfaction (or waiver by it) of
the following conditions precedent:
a) Performance. The Investor shall have tendered payment for the Common
Stock.
b) Representations. Each representation and warranty made by the
Investor in this Agreement shall be true and correct in all material
respects as though made on and as of the Closing Date.
c) Legality. No change shall have occurred in any law, rule or
regulation that would prohibit the consummation of any transaction
contemplated hereby.
d) Litigation. No action, proceeding or investigation shall have been
instituted or threatened nor shall any order, judgment or decree have
been issued or be proposed to be issued by any court, agency or
authority to set aside, restrain, enjoin or prevent the consummation
of any transaction contemplated hereby.
5. Representations and Warranties. The Investor makes the representations,
declarations and warranties set forth in this Section with the intent that
the same may be relied upon in determining the Investor's suitability as a
purchaser of the Common Shares. If the Investor includes or consists of
more than one person or entity, the obligations of the Investor shall be
joint and several and the representations and warranties herein contained
shall be deemed to be made by and be binding upon each such person or
entity and their respective heirs, executors, administrators, successors
and assigns.
a) No Regulatory Review. The Investor is aware that this is a limited
private offering and that no federal, state or other agency has made
any finding or determination as to the fairness of the investment nor
made any recommendation or endorsement of the Common Shares.
b) Ability to Evaluate. The Investor, by reason of the Investor's
knowledge and experience in financial and business matters, is
capable of evaluating the risks and merits of an investment in the
Common Shares.
c) Investment Intent. The Investor acknowledges that the purchase of
Common Shares hereunder is being made for the Investor's own account,
for investment purposes only and not with the present intention of
distributing for reselling the Common Shares in whole or in part. The
Investor further understands that the Common Shares are not being
sold to the Investor in a transaction registered under the Securities
Act, or any state securities laws. As a result, the Investor
understands that there will be restrictions on the transfer and sale
of the Common Shares. Investor hereby agrees to exercise the
registration rights granted hereby, and to sell the Common Shares
pursuant to such registration, in a manner consistent with the
representations and warranties made by Investor to the Company
hereunder. Investor understands that the SEC may in its discretion
comment on certain aspects of the Registration Statement and the
transaction and that such comments may cause delay in the
Registration Statement becoming effective. The Company shall have no
liability to Investor on account of any delays initiated by the SEC.
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d) Investment Information. The Investor has received and reviewed
pertinent information regarding the Company, including the most
recent SEC Forms 10-K and 1O-Q filed by the Company prior to the
execution of this Agreement and is capable of understanding and
evaluating the information contained therein. Specifically, the
Investor is fully aware of the risks relating to the business of the
Company and purchase of the Common Shares. The Investor will rely
solely upon his independent investigation and analysis in making the
decision to purchase the Common Shares. In particular, and without
limiting the generality of the foregoing, the Investor has not relied
on, and the Investor's decision to subscribe for Common Shares has
not been influenced by: (i) newspaper, magazine or other media
articles or reports related to the Company or its business; (ii)
promotional literature or other materials used by the Company for
sales or marketing purposes, or (iii) any other written or oral
statement of the Company or persons purporting to represent the
Company. The Investor has had the opportunity to discuss all aspects
of this transaction with management of the Company, has made or has
had the opportunity to make such inspection of the books and records
of the Company as the Investor has deemed necessary in connection
with this investment, and any questions asked have been answered to
the satisfaction of the Investor.
e) Confidentiality. The Investor understands that the Offering is
confidential. The Investor has not distributed information on the
Offering to anyone other than such legal or financial advisors as the
Investor has deemed necessary for purposes of evaluating an
investment in the Common Shares.
f) Authorization and Formation of Investor. The Investor, if a
corporation, partnership, trust or other form of business entity, is
authorized and otherwise duly qualified to purchase and hold the
Common Shares and such entity has not been formed for the specific
purposes of acquiring Common Shares in the Offering. If the Investor
is one of the aforementioned entities, it hereby agrees that upon
request of the Company it will supply the Company with any additional
written information that may be requested by the Company.
g) Accredited Investor Status. The Investor is an "accredited investor"
as such term is defined in Rule 501(a) of Regulation D under the Act
and within the meaning of similar regulations under state securities
laws. If the Investor is an individual, he or she is of majority age.
If the Investor is an entity, the person executing this Securities
Purchase Agreement on behalf of the Investor is of majority age.
6. Reliance on Representations and Warranties: Indemnity. The Investor
understands that the Company will rely on the representations and
warranties of the Investor herein in determining whether a sale of the
Common Shares to the Investor is in compliance with federal and applicable
state securities laws. The Investor hereby agrees to indemnify the Company
and its affiliates, and hold the Company and its affiliates and agents
harmless from and against any and all liability, damage, cost or expense
(including reasonable attorneys' fees) incurred on account of or arising
out of: (a) any inaccuracy in the Investor's
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declarations, representations and warranties set forth in this Agreement;
(b) the disposition of any of the Common Shares which the Investor will
receive, contrary to the Investor's declarations, representations and
warranties in this Agreement; (c) any lawsuit or proceeding based upon a
claim that said declarations, representations or warranties were
inaccurate or misleading or otherwise cause for obtaining damages or
redress from the Company or any of its affiliates or the disposition of
all or any part of the Investor's Common Shares and (d) the Investor's
failure to fulfill any or all of the Investor's obligations herein.
7. Updating Information. All of the information set forth herein with respect
to the Investor, including, without limitation, all of the representations
and warranties set forth in Section 5, is correct and complete as of the
date hereof and, if there should be any material change in such
information prior to the acceptance of this subscription by the Company,
the Investor will immediately furnish the revised or corrected information
to the Company.
8. Notices. Any notice or other communications required or permitted
hereunder shall be sufficiently given if in writing and sent by registered
or certified mail, postage prepaid, return receipt requested, if to the
Company at the address set forth on the first page of this Agreement, and
to Investor, at the address set forth following the Investor's signature
to this Agreement, or, to such other address as either the Company or the
Investor shall designate to the other by notice in writing in accordance
with this Section 9.
9. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of North Carolina.
10. Representations and Warranties of the Company. The Company represents and
warrants to Investor as follows:
a) The Company has legal capacity, power and authority to enter into and
perform this Agreement and to consummate the transaction contemplated
hereby.
b) This Agreement has been duly authorized, executed and delivered by
the Company and constitutes a legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its
terms.
c) The execution and delivery of this Agreement and the performance of
the obligations imposed hereunder will not result in a violation of
any order, decree or judgment of any court or governmental agency
having jurisdiction over the Company or the Company's properties,
will not conflict with, constitute a default under, or result in the
breach of, any contract, agreement or other instrument to which the
Company is a party or is otherwise bound and no consent,
authorization or order of, or filing or registration with, any court
or governmental agency is required for the execution, delivery and
performance of this Agreement.
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d) There is no litigation or proceeding pending or, to the best of the
Company's knowledge, threatened, against the Company which would have
a material effect on the validity or performance of this Agreement.
e) Upon consummation of the transaction contemplated hereby, the
Investor will own the Common Shares free and clear of all liens,
rights, claims, charges and other encumbrances and the delivery of
the Shares to the Investor pursuant to this Agreement will transfer
legal and valid title thereto, free and clear of all liens, rights,
claims, charges and other encumbrances.
f) The Company will pay all transfer fees and expenses, except such
expenses of registration as are described in the Registration Rights
Agreement executed pursuant to Section 2 hereof.
g) The Common Shares, when issued and delivered, will be duly and
validly authorized and issued, and when paid for by the Investor in
accordance with this Agreement will be fully-paid and nonassessable
and will not subject the holders thereof to personal liability by
reason of being such holders. There are no preemptive rights of any
shareholder of the Company.
h) The Company hereby agrees to indemnify and hold harmless the Investor
from and against any liability, damage, cost or expense incurred as a
result of breach by the Company of any representation, warranty or
covenant of the Company hereunder.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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11. Signatures. The Investor declares that the statements, representations and
warranties contained herein are true, correct and complete and that this
Agreement was executed at:
St. Paul Minnesota
(City) (State)
Number of Common Shares 235,295 @ $ 2.55 Per Share
Total Purchase Price $ (less amount for fractional shares)
$ 600,002.25
Exact Name(s) in which ownership
of Common Shares is to be registered: Harry G. McCoy, Jr.
Address: 402 West Country Road D
City, State, Zip Code: St. Paul, MN 55112
Subscriber Joint Subscriber (if necessary)
Harry G. McCoy, Jr.
(Print Name) (Print Name)
/s/ Harry G. McCoy, Jr.
(Signature) (Signature)
- ------------------------ -------------------------
(Title) (Title)
Date: 1/31/96 Date: ____________________
RECEIVED AND ACCEPTED AT __________________________, North Carolina:
(City)
Amount: $
Date:
EDITEK, Inc.
By: /s/ James D. Skinner
Its: President and CEO
* To be determined by dividing aggregate purchase price by the purchase
price per share calculated under Section 4.
** Purchase price per share calculated under Section 4.
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