EXHIBIT 4.5 NOTE PURCHASE AGREEMENTNote Purchase Agreement |
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Section 4.5 NOTE PURCHASE AGREEMENT BETWEEN Exhibit 4.5 VILLAGEEDOCS AND BARRON PARTNERS LP DATED April 13, 2005
NOTE PURCHASE AGREEMENT This NOTE PURCHASE AGREEMENT (the " Agreement" ) is made and entered into as of the 13th day of April, 2005 between VILLAGEEDOCS, a corporation organized and existing under the laws of the State of California (the " Company ") and BARRON PARTNERS LP, a Delaware limited partnership (" Investor "). PRELIMINARY STATEMENT : WHEREAS , the Investor wishes to purchase from the Company, upon the terms and subject to the conditions of this Agreement, a convertible promissory note in the principal amount of EIGHT HUNDRED THOUSAND DOLLARS AND NO CENTS ($800,000.00) in the form attached hereto as Exhibit A (the " Note ") which will be convertible into Sixteen Million (16,000,000) shares of common stock , no par value, of the Company (the " Common Stock ") until such time as the Company amends its articles of incorporation so as to authorize and designate a class of preferred stock (the "Preferred Stock" ) as described in the Certificate of Designations, Rights and Preferences in substantially the form attached hereto as Exhibit B (the " Certificate of Designations ) and thereafter will be convertible solely into Preferred Stock . WHEREAS , the Company wishes to issue to the Investor (1) a warrant in the form attached hereto as Exhibit E (the " A Warrant ") granting the Investor the right to purchase up to Thirty Two Million (32,000,000) shares of Common Stock until such time as the Company amends its certificate of incorporation so as to authorize and designate the Preferred Stock] and (2) a warrant in the form attached hereto as Exhibit F (the " B Warrant ," and together with the A Warrant, the " Warrants ") granting the Investor the right to purchase up to Eight Million (8,000,000) shares of Common Stock ; and WHEREAS , the parties intend to memorialize the purchase and sale of such Note and the Warrants. NOW, THEREFORE , in consideration of the mutual covenants and premises contained herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby conclusively acknowledged, the parties hereto, intending to be legally bound, agree as follows: ARTICLE I INCORPORATION BY REFERENCE, SUPERSEDER AND DEFINITIONS 1.1 Incorporation by Reference . The foregoing recitals and the Exhibits and Schedules attached hereto and referred to herein, are hereby acknowledged to be true and accurate, and are incorporated herein by this reference. 1.2 Superseder . This Agreement, to the extent that it is inconsistent with any other instrument or understanding among the parties governing the affairs of the Company, shall supersede such instrument or understanding to the fullest extent permitted by law. A copy of this Agreement shall be filed at the Company's principal office. 1.3 Certain Definitions . For purposes of this Agreement, the following capitalized terms shall have the following meanings (all capitalized terms used in this Agreement that are not defined in this Article 1 shall have the meanings set forth elsewhere in this Agreement): 1.3.1 " 1933 Act " means the Securities Act of 1933, as amended. 1.3.2 " 1934 Act " means the Securities Exchange Act of 1934, as amended. 1.3.3 " Affiliate " means a Person or Persons directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with the Person(s) in question. The term "control," as used in the immediately preceding sentence, means, with respect to a Person that is a corporation, the right to the exercise, directly or indirectly, of more than 50 percent of the voting rights attributable to the shares of such controlled corporation and, with respect to a Person that is not a corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such controlled Person. 1.3.4 " Articles " means the Articles of Incorporation of the Company, as the same may be amended from time to time. 1.3.5 " Closing " shall mean the Closing of the transactions contemplated by this Agreement on the Closing Date. 1.3.6 " Closing Date " means the date on which the payment of the Purchase Price (as defined herein) by the Investor is made to the Company pursuant to this Agreement , which date shall be no later than April 15, 2005. 1.3.7 " Common Stock " means shares of common stock of the Company, no par value. 1.3.8 " 2004 Annual Report " means the Company's Annual Report on Form 10-KSB, filed with the SEC for the year ended December 31, 2004. 1.3.9 " Escrow Agent " shall mean Johnson, Pope, Bokor, Ruppel & Burns, LLP, in its capacity as Escrow Agent under the Escrow Agreement. 1.3.10 " Escrow Agreement " shall mean the Escrow Agreement among the Company, the Investor and the Escrow Agent, attached hereto as Exhibit C. 1.3.11 " Exempt Issuance " means the issuance of (a) the Note, (b) shares of Common Stock or options to employees, officers, or directors of the Company pursuant to any stock or option plan duly adopted by a majority of the non‑employee members of the Board of Directors of the Company or a majority of the members of a committee of non‑employee directors established for such purpose, (c) securities upon the exercise of or conversion of any securities issued hereunder, and (d) securities issued pursuant to acquisitions or strategic transactions, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities. 1.3.12 " Material Adverse Effect " shall mean any adverse effect on the business, operations, properties or financial condition of the Company that is material and adverse to the Company and its subsidiaries and affiliates, taken as a whole and/or any condition, circumstance, or situation that would prohibit or otherwise materially interfere with the ability of the Company to perform any of its material obligations under this Agreement or the Registration Rights Agreement or to perform its obligations under any other material agreement. 1.3.13 " Person " means an individual, partnership, firm, limited liability company , trust, joint venture, association, corporation, or any other legal entity. 1.3.14 " Purchase Price " means the sum of $800,000.00 paid by the Investor to the Company for the Note and the Warrants. 1.3.15 " Registration Rights Agreement " shall mean the registration rights agreement between the Investor and the Company attached hereto as Exhibit D . 1.3.16 " Registration Statement " shall mean the registration statement under the 1933 Act to be filed with the SEC for the registration of the Shares pursuant to the Registration Rights Agreement. 1.3.16 " SEC " means the Securities and Exchange Commission. 1.3.17 " SEC Documents " shall mean the Company's latest Form 10-K or 10-KSB as of the time in question, all Forms 10-Q or 10-QSB and 8-K filed thereafter, and the Proxy Statement for its latest fiscal year as of the time in question until such time as the Company no longer has an obligation to maintain the effectiveness of a Registration Statement as set forth in the Registration Rights Agreement. 1.3.18 " Shares " shall mean, collectively, the shares of Preferred Stock and/or Common Stock issued and issuable upon conversion of the Note and exercise of the Warrants and the shares of Common Stock issued and issuable upon conversion of the Preferred Stock . 1.3.19 " Subsequent Financing " shall mean any offer and sale of shares of capital stock or debt that is convertible into Common Stock or otherwise senior or superior to the Preferred Stock. 1.3.20 " Transaction Documents " shall mean this Agreement, all Schedules and Exhibits attached hereto and all other documents and instruments to be executed and delivered by the parties in order to consummate the transactions contemplated hereby, including, but not limited to the documents listed in Sections 3.2 and 3.3 hereof , including without limitation the Warrants, the Registration Rights Agreement, the Escrow Agreement and the Note.
ARTICLE II SALE AND PURCHASE OF THE NOTE AND WARRANTS 2.1 Sale of Preferred Stock and Issuance of Warrants. (a) Upon the terms and subject to the conditions set forth herein, and in accordance with applicable law, the Company agrees to sell to the Investor, and the Investor agrees to purchase from the Company, on the Closing Date the Note and the Warrants for the the Purchase Price . The Purchase Price shall be paid by the Investor to the Company on the Closing Date by a wire transfer of the Purchase Price into escrow to be held by the Escrow Agent pursuant to the terms of the Escrow Agreement. The Company shall cause the Note and the Warrants to be issued to the Investor upon the release of the Purchase Price to the Company by the Escrow Agent pursuant to the terms of the Escrow Agreement. The Company shall register the shares of Common Stock into which the Preferred Stock is convertible pursuant to the terms and conditions of a Registration Rights Agreement attached hereto as Exhibit B . (b) Upon execution and delivery of this Agreement and the Company's receipt of the Purchase Price from the Escrow Agent pursuant to the terms of the Escrow Agreement, the Company shall issue the Warrants to the Investor .
ARTICLE III CLOSING DATE AND DELIVERIES AT CLOSING
3.1 Closing Date The Closing shall be held at the offices of the Company, at 5:00 P.M. local time, on the Closing Date or on such other date and at such other place as may be mutually agreed by the parties, including closing by facsimile with originals to follow. 3.2 Deliveries by the Company In addition to and without limiting any other provision of this Agreement, the Company agrees to deliver, or cause to be delivered, to the Escrow Agent under the Escrow Agreement, the following on or before the Closing Date :
3.3 Deliveries by Investor. In addition to and without limiting any other provision of this Agreement, the Investor agrees to deliver, or cause to be delivered, to the Escrow Agent under the Escrow Agreement, the following on or before the Closing Date :
In the event any document provided to the other party in Paragraphs 3.2 and 3.3 herein are provided by facsimile, the party shall forward an original document to the other party within seven (7) business days. 3.4 Further Assurances . The Company and the Investor shall, upon request, on or after the Closing Date, cooperate with each other (specifically, the Company shall cooperate with the Investor, and the Investor shall cooperate with the Company) by furnishing any additional information, executing and delivering any additional documents and/or other instruments and doing any and all such things as may be reasonably required by the parties or their counsel to consummate or otherwise implement the transactions contemplated by this Agreement. 3.5 Waiver. The Investor may waive any of the requirements of Section 3.2 of this Agreement, and the Company may waive any of the provisions of Section 3.3 of this Agreement. The Investor may also waive any of the requirements of the Company under the Escrow Agreement. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company represents and warrants to the Investor as of the date hereof and as of Closing Date (which warranties and representations shall survive the Closing regardless of what examinations, inspections, audits and other investigations the Investor has heretofore made or may hereinafter make with respect to such warranties and representations) as follows: 4.1 Organization and Qualification . VillageEDOCS is a corporation duly organized, validly existing and in good standing under the laws of the State of California, and has the requisite corporate power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted and is duly qualified to do business in any other jurisdiction by virtue of the nature of the businesses conducted by it or the ownership or leasing of its properties, except where the failure to be so qualified will not, when taken together with all other such failures, have a Material Adverse Effect on the business, operations, properties, assets, financial condition or results of operation of the Company and its subsidiaries taken as a whole. 4.2 Articles of Incorporation and By-Laws . The copies of the Articles and By-Laws of the Company that have been filed with the SEC are complete and correct copies of such documents as in effect . 4.3.1 The authorized and outstanding capital stock of the Company is set forth in the 2004 Annual Report and updated on all subsequent SEC Documents. All shares of capital stock of the Company have been duly authorized and are validly issued, and are fully paid and no assessable, and free of preemptive rights. 4.3.2 As of the date of this Agreement, the authorized capital stock of the Company consists of 175,000,000 shares Common Stock and no shares of preferred stock, of which approximately 76,369,213 share of Common Stock are issued and outstanding. All outstanding shares of capital stock have been duly authorized and are validly issued, and are fully paid and nonassessable and free of preemptive rights. 4.3.4 Except pursuant to this Agreement and as set forth in Schedule 4.3 hereto, and as set forth in the SEC Documents as of the date hereof and as of the Closing Date, there are not now any outstanding options, warrants, rights to subscribe for, calls or commitments of any character whatsoever relating to, or securities or rights convertible into or exchangeable for, shares of any class of capital stock of the Company, or agreements, understandings or arrangements to which the Company is a party, or by which the Company is or may be bound, to issue additional shares of its capital stock or options, warrants, scrip or rights to subscribe for, calls or commitment of any character whatsoever relating to, or securities or rights convertible into or exchangeable for, any shares of any class of its capital stock. The Company agrees to inform the Investors in writing of any additional warrants granted prior to the Closing Date. 4.4 Shares . The Shares underlying the Note and the Warrants will be duly and validly issued, fully paid, and non-assessable (a) with respect to the Common Stock, when validly converted in accordance with the terms of the Note, and upon exercise of the Warrants in accordance with their terms and (b) with respect to the Preferred Stock, once authorized and designated and when validly converted in accordance with the terms of the Note, and upon exercise of the Warrants in accordance with their terms. 4.5 Authority . The Company has all requisite corporate power and authority to execute and deliver this Agreement, the Note, and the Warrants, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement by the Company and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action and no other corporate proceedings on the part of the Company is necessary to authorize this Agreement or to consummate the transactions contemplated hereby except as disclosed in this Agreement. This Agreement has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. 4.6 No Conflict; Required Filings and Consents . The execution and delivery of this Agreement by the Company does not, and the performance by the Company of its obligations hereunder will not: (i) conflict with or violate the Articles or By-Laws of the Company; (ii) conflict with, breach or violate any federal, state, foreign or local law, statute, ordinance, rule, regulation, order, judgment or decree (collectively, " Laws " ) in effect as of the date of this Agreement and applicable to the Company; or (iii) result in any breach of, constitute a default (or an event that with notice or lapse of time or both would become a default) under, give to any other entity any right of termination, amendment, acceleration or cancellation of, require payment under, or result in the creation of a lien or encumbrance on any of the properties or assets of the Company pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which the Company is a party or by it or any of its properties or assets is bound. Excluding from the foregoing are such violations, conflicts, breaches, defaults, terminations, accelerations, creations of liens, or incumbency that would not, in the aggregate, have a Material Adverse Effect. 4.7 Report and Financial Statements . The 2004 Annual Report contains the audited financial statements of the Company has previously provided to the Investor the audited financial statements of the Company as of December 31, 2004 (the " Financial Statements "). The balance sheets contained in such Financial Statements (including the related notes and schedules thereto) fairly present the financial position of the Company, as of its date, and the statements of income and changes in stockholders' equity and cash flows or equivalent statements in such Financial Statements (including any related notes and schedules thereto) fairly present , changes in stockholders' equity and changes in cash flows, as the case may be, of the Company, for the periods to which they relate, in each case in accordance with United States generally accepted accounting principles (" U.S. GAAP ") consistently applied during the periods involved, except in each case as may be noted therein, subject to normal year-end audit adjustments in the case of unaudited statements. The books and records of the Company have been, and are being, maintained in all material respects in accordance with U.S. GAAP and any other applicable legal and accounting requirements and reflect only actual transaction. 4.8 Compliance with Applicable Laws . The Company is not in violation of, or, to the knowledge of the Company is under investigation with respect to or has been given notice or has been charged with the violation of any Law of a governmental agency, except for violations which individually or in the aggregate do not have a Material Adverse Effect. 4.9 Brokers. Except as set forth on Schedule 4.9 , no broker, finder or investment banker is entitled to any brokerage, finder's or other fee or Commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company. 4.10 SEC Documents . The Company is a publicly held company and has made available to the Investor true and complete copies of any requested SEC Documents. The Company has registered its Common Stock pursuant to Section 12(d) of the 1934 Act, and the Common Stock is quoted and traded on the OTC Bulletin Board . The Company is not aware of any facts or circumstances that would prohibit the trading of its Common Stock on the OTC Bulletin Board. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act, and rules and regulations of the SEC promulgated thereunder and the SEC Documents did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. 4.11 Litigation . To the knowledge of the Company, no litigation, claim, or other proceeding before any court or governmental agency is pending or to the knowledge of the Company, threatened against the Company, the prosecution or outcome of which may have a Material Adverse Effect. 4.12 Exemption from Registration. Subject |
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