Exhibit 10.13
SECURITIES PURCHASE
AGREEMENT
Dated as of May 18, 2009
among
SOCKET MOBILE, INC.
THE NON-MANAGEMENT PURCHASERS LISTED ON EXHIBIT A
and
THE MANAGEMENT PURCHASERS LISTED ON EXHIBIT A
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TABLE OF
CONTENTS
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PAGE
NO.
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ARTICLE I Purchase and Sale
of Common Stock and Warrants
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1
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Section 1.1 Purchase and Sale of Common Stock
and Warrants
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1
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Section 1.2 Purchase Price and Closing
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1
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Section 1.3 Delivery
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2
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Section 1.4 Warrant Shares
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2
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ARTICLE II Representations
and Warranties
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2
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Section 2.1 Representations and Warranties of
the Company
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2
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Section 2.2 Representations and Warranties of
the Purchasers
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5
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ARTICLE III Covenants
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8
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Section 3.1 Reservation of Shares
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8
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Section 3.2 Listing
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8
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Section 3.3 Disclosure of Transactions and
Other Material Information
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8
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Section 3.4 Delivery of Share Certificates
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8
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ARTICLE IV Conditions
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8
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Section 4.1 Conditions Precedent to the
Obligation of the Company to Close and to Sell the Shares and
Warrants
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8
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Section 4.2 Conditions Precedent to the
Obligation of the Purchasers to Close and to Purchase the Shares
and Warrants
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9
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ARTICLE V Certificate
Legend
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11
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Section 5.1 Legend
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11
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ARTICLE VI Termination
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12
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Section 6.1 Termination by Mutual Consent
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12
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Section 6.2 Effect of Termination
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12
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ARTICLE VII
Miscellaneous
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12
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Section 7.1 Fees and Expenses
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12
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Section 7.2 Specific Enforcement; Consent to
Jurisdiction
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12
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Section 7.3 Entire Agreement; Amendment
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13
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Section 7.4 Notices
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13
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Section 7.5 Waivers
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14
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Section 7.6 Headings
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14
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Section 7.7 Successors and Assigns
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14
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Section 7.8 No Third Party Beneficiaries
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14
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Section 7.9 Governing Law
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14
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Section 7.10 Survival
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15
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Section 7.11 Counterparts
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15
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Section 7.12 Publicity
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15
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Section 7.13 California Corporate Securities
Law
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15
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Section 7.14 Severability
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15
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Section 7.15 Further Assurances
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15
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Section 7.16 Independent Nature of Purchasers'
Obligations and Rights
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15
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EXHIBIT A LIST OF
PURCHASERS
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A-1
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EXHIBIT B FORM OF
WARRANT
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B-1
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EXHIBIT C FORM OF
REGISTRATION RIGHTS AGREEMENT
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C-1
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SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE
AGREEMENT this (" Agreement "), dated as of May 18, 2009, is
made by and among Socket Mobile, Inc., a Delaware corporation (the
" Company "), the entities listed on Exhibit A hereto
as Non-Management Purchasers (each, a " Non-Management
Purchaser " and collectively, the " Non-Management
Purchasers "), and the entities and individuals listed on
Exhibit A hereto as Management Purchasers (each, a "
Management Purchaser " and collectively, the " Management
Purchasers ", and together with the Non-Management Purchasers,
the " Purchasers "), for the purchase and sale by the
Purchasers of shares of the Company's Common Stock, par value
$0.001 per share (the " Common Stock "), and warrants to
purchase shares of the Common Stock.
The parties hereto agree
as follows:
ARTICLE I
Purchase and Sale of Common Stock and Warrant
Section 1.1 Purchase and Sale of Common Stock and Warrants
(a) Non-Management Purchasers . Upon the following terms and
conditions, the Company shall issue and sell to the Non-Management
Purchasers, and each Non-Management Purchaser shall, severally but
not jointly, purchase from the Company that number of shares of
Common Stock (the " Shares ") and related warrants to
purchase that number of shares of Common Stock equal to twenty
percent (20%) of the number of Shares to be purchased by such
Non-Management Purchaser, in substantially the form attached hereto
as Exhibit B (the " Warrants "), at a price per Share
(including related Warrants) equal to $1.80, in each case as set
forth opposite such Non-Management Purchaser's name on Exhibit
A hereto.
(b) Management Purchasers . Upon the same terms and
conditions, the Company shall issue and sell to the Management
Purchasers, and each Management Purchaser shall, severally but not
jointly, purchase from the Company that number of shares of Common
Stock (the " Shares ") at a price per Share equal to $2.00,
in each case as set forth opposite such Management Purchaser's name
on Exhibit A hereto.
(c) Securities . The Company and the Purchasers are
executing and delivering this Agreement in accordance with and in
reliance upon the exemption from securities registration afforded
by Section 4(2) of the U.S. Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder (the "
Securities Act "), including Regulation D (" Regulation
D "), and/or upon such other exemption from the registration
requirements of the Securities Act as may be available with respect
to any or all of the investments to be made hereunder. The
aggregate number of Shares issued hereunder shall not exceed six
hundred forty-five thousand nine hundred eighty-three
(645,983).
Section 1.2 Purchase Price and Closing . The Company agrees
to issue and sell to the Purchasers and, in consideration of and in
express reliance upon the representations, warranties, covenants,
terms and conditions of this Agreement, the Purchasers, severally
but not jointly, agree to purchase the number of Shares and, with
respect to the Non-Management Purchasers, the Warrants set forth
opposite their respective names on Exhibit A. The closing of the
purchase and sale of the Shares and Warrants to be acquired from
the Company under this Agreement (the "Closing") shall take place
at the offices of the Company located at 39700 Eureka Drive,
Newark, California 94560 at 10:00 a.m., Pacific Time (i) on or
before May 31, 2009, provided, that all of the conditions set forth
in Article IV hereof and applicable to the Closing shall have been
fulfilled or waived in accordance herewith, or (ii) at such other
time and place or on such date as the Purchasers and the Company
may agree upon (the "Closing Date"). The entire Purchase Price
shall be paid by the Purchasers in cash, by wire transfer or in
readily available funds.
Section 1.3 Delivery . At the Closing,
the Company shall issue to each Purchaser (a) certificate(s)
representing the Shares in such number as is set forth opposite
such Purchaser's name on Exhibit A hereto, and (b) with
respect to the Non-Management Purchasers, such number of Warrants
to purchase shares of Common Stock as is set forth opposite such
Purchaser's name on Exhibit A hereto. The Warrants shall be
exercisable for five (5) years from the Closing Date and shall have
an exercise price of $1.80 per Share (the " Exercise Price
").
Section 1.4 Warrant Shares . The Company has authorized and
has reserved and covenants to continue to reserve, free of
preemptive rights and other similar contractual rights of
stockholders, a number of its authorized but unissued shares of
Common Stock equal to the aggregate number of shares of Common
Stock necessary to effect the exercise of the Warrants. Any shares
of Common Stock issuable upon exercise of the Warrants (and such
shares when issued) are herein referred to as the "Warrant Shares".
The Shares, the Warrants and the Warrant Shares are sometimes
collectively referred to herein as the " Securities ".
Representations and
Warranties
Section 2.1 Representations and Warranties of the Company .
In order to induce the Purchasers to enter into this Agreement and
to purchase the Shares and the Warrants, the Company hereby makes
the following representations and warranties to the Purchasers:
(a) Organization, Good Standing and Power . The Company is a
corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware and has the
requisite corporate power to own, lease and operate its properties
and assets and to conduct its business as it is now being
conducted. The Company does not have any subsidiaries or own
securities of any kind in any other entity. The Company is duly
qualified as a foreign corporation to do business and is in good
standing in every jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification
necessary, except for any jurisdiction(s) (alone or in the
aggregate) in which the failure to be so qualified will not have a
Material Adverse Effect. For the purposes of this Agreement, "
Material Adverse Effect " means any adverse effect on the
business, operations, properties or financial condition of the
Company which is material to the Company taken as a whole.
(b) Authorization; Enforcement . The Company has the
requisite corporate power and authority to enter into and perform
this Agreement, the Registration Rights Agreement (in substantially
the form attached hereto as Exhibit C , the "
Registration Rights Agreement "), the Warrants, and the
other agreements and documents contemplated hereby and thereby and
executed by the Company or to which the Company is party
(collectively, the " Transaction Documents "), and to issue
and sell the Shares and the Warrants in accordance with the terms
hereof. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by it of the
transactions contemplated thereby have been duly and validly
authorized by all necessary corporate action, and no further
consent or authorization of the Company, its Board of Directors or
its stockholders is required. This Agreement has been duly executed
and delivered by the Company. The other Transaction Documents will
have been duly executed and delivered by the Company at the
Closing. Each of the Transaction Documents constitutes, or shall
constitute when executed and delivered, a valid and binding
obligation of the Company enforceable against the Company in
accordance with its terms, except (i) to the extent that the
indemnification provisions contained in the Registration Rights
Agreement may be limited by applicable law and principles of public
policy, (ii) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors' rights generally, and (iii) as
limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies or by
general principles of equity.
(c) Capitalization . The authorized capital stock of the
Company as of the date of this Agreement consists of 10,000,000
shares of Common Stock, $0.001 par value, of which 3,229,916 shares
are issued and outstanding and 3,000,000 shares of Preferred Stock,
$0.001 par value, none of which are issued and outstanding. All of
the outstanding shares of the Company's Common Stock and any other
security of the Company have been duly and validly authorized. No
shares of Common Stock or any other security of the Company are
entitled to preemptive rights. Except (i) options to purchase
1,266,887 shares of the Company's Common Stock issued pursuant to
the Company's stock option plans and outstanding as of the date of
this Agreement, (ii) an additional 65,182 shares of Common Stock
reserved for issuance pursuant to the Company's stock option plans,
and (iii) as set forth in the Transaction Documents, there are no
outstanding options, warrants, scrip, rights to subscribe to, call
or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock
of the Company, and there are no contracts, commitments,
understandings, or arrangements by which the Company is or may
become bound to issue additional shares of the capital stock of the
Company or options, securities or rights convertible into shares of
capital stock of the Company. Except as set forth in the
Transaction Documents, the Company is not a party to or bound by
any agreement or understanding granting registration or
anti-dilution rights to any person with respect to any of its
equity or debt securities. The Company has furnished or made
available to the Purchasers true and correct copies of the
Company's Certificate of Incorporation as in effect on the date
hereof (the " Certificate ") and the Company's Bylaws as in
effect on the date hereof (the " Bylaws ").
(d) Issuance of Securities . The Shares and the Warrants to
be issued at the Closing have been duly authorized by all necessary
corporate action and, when paid for or issued in accordance with
the terms hereof, the Shares shall be validly issued and
outstanding, fully paid and nonassessable and free and clear of all
liens, encumbrances and rights of refusal of any kind (other than
those arising from the actions or inactions of the Purchasers
themselves), and the holders shall be entitled to all rights
accorded to a holder of Common Stock; provided ,
however , that the Shares and the Warrants may be subject to
restriction or transfer under state and federal securities laws.
When the Warrant Shares are issued and paid for in accordance with
the terms of this Agreement and as set forth in the Warrants, such
shares will be duly authorized by all necessary corporate action
and validly issued and outstanding, fully paid and nonassessable,
free and clear of all liens, encumbrances and rights of refusal of
any kind (other than those arising from the actions or inactions of
the Purchasers themselves) and the holders shall be entitled to all
rights accorded to a holder of Common Stock; provided ,
however , that the Warrant Shares may be subject to
restriction or transfer under state and federal securities
laws.
(e) No Conflicts . The execution, delivery and performance
of the Transaction Documents by the Company and the consummation by
the Company of the transactions contemplated hereby and thereby do
not and will not (i) violate any provision of the Certificate or
Bylaws, (ii) conflict with, or constitute a default (or an event
which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, mortgage, deed of
trust, indenture, note, bond, license, lease agreement, instrument
or obligation to which the Company is a party or by which the
Company's properties or assets are bound, (iii) create or impose a
lien, mortgage, security interest, charge or encumbrance of any
nature on any property or asset of the Company under any agreement
or any commitment to which the Company is a party or by which the
Company is bound or by which any of its properties or assets are
bound, or (iv) result in a violation of any federal, state, local
or foreign statute, rule, regulation, order, judgment or decree
(including federal and state securities laws and regulations)
applicable to the Company or by which any property or asset of the
Company is bound or affected, except, in all cases other than
violations pursuant to clause (i) above, for such conflicts,
defaults, terminations, amendments, acceleration, cancellations and
violations as would not, individually or in the aggregate, have a
Material Adverse Effect.
(f) Commission Documents; Financial Statements . The Common
Stock is registered pursuant to Section 12(b) or 12(g) of the
Securities Exchange Act of 1934, as amended (the " Exchange
Act "), and the Company has timely filed all material reports,
schedules, forms, statements and other documents required to be
filed by it with the Securities and Exchange Commission (the "
Commission ") pursuant to the reporting requirements of the
Exchange Act, including material filed pursuant to Section 13(a) or
15(d) of the Exchange Act (all of the foregoing, including filings
incorporated by reference therein, being referred to herein as the
" Commission Documents "). The Company has not provided to
the Purchasers any material non-public information or other
information which, according to applicable federal securities law,
rule or regulation, should have been disclosed publicly by the
Company but which has not been so disclosed, other than with
respect to the transactions contemplated by this Agreement. At the
time of its filing, the Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended March 31, 2009 (the " Form 10-Q ")
complied in all material respects with the requirements of the
Exchange Act and the rules and regulations of the Commission
promulgated thereunder, and the Form 10-Q did not contain any
untrue statement of a material fact or omitted 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. At the time of its filing, the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2008 (the " Form 10-K ") complied in all
material respects with the requirements of the Exchange Act and the
rules and regulations of the Commission promulgated thereunder,
and, at the time of its filing, the Form 10-K did not contain any
untrue statement of a material fact or omitted 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. As of their respective dates, the
financial statements of the Company included in the Form 10-Q and
Form 10-K complied as to form in all material respects with
applicable accounting requirements and the published rules and
regulations of the Commission or other applicable rules and
regulations with respect thereto. Such financial statements have
been prepared in accordance with generally accepted accounting
principles (" GAAP ") applied on a consistent basis during
the periods involved (except (i) as may be otherwise indicated in
such financial statements or the notes thereto or (ii) in the case
of unaudited interim statements, to the extent they may not include
footnotes or may be condensed or summary statements), and fairly
present in all material respects the financial position of the
Company as of the dates thereof and the results of operations and
cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).
(g) No Undisclosed Events or
Circumstances . Since March 31, 2009, except as set forth in
the Commission Documents, no event or circumstance has occurred or
exists with respect to the Company or its businesses, properties,
operations or financial condition, which, under applicable federal
securities law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been publicly so
announced or disclosed.
(h) Securities Act of 1933 . The Company has complied and
will comply with all applicable federal and state securities laws
in connection with the offer, issuance and sale of the Shares, the
Warrants and the Warrant Shares hereunder. Neither the Company nor
anyone acting on its behalf, directly or indirectly, has or will
sell, offer to sell or solicit offers to buy any of the Securities,
or similar securities to, or solicit offers with respect thereto
from, or enter into any preliminary conversations or negotiations
relating thereto with, any person, or has taken or will take any
action such that the issuance and sale of any of the Securities are
not exempt from the registration provisions of the Securities Act
and applicable state securities laws. Neither the Company nor any
of its affiliates, nor any person acting on its or their behalf,
has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D under the
Securities Act) in connection with the offer or sale of any of the
Securities.
(i) Governmental Approvals . Except for the filing of any
notice prior or subsequent to the Closing that may be required
under applicable state and/or federal securities laws (which if
required, shall be filed on a timely basis), no authorization,
consent, approval, license, exemption of, filing or registration
with any court or governmental department, commission, board,
bureau, agency or instrumentality located in the United States is
or will be necessary for, or in connection with, the issuance or
delivery of the Shares and the Warrants, or for the performance by
the Company of its obligations under the Transaction Documents.
Section 2.2 Representations and Warranties of the Purchasers
. Each of the Purchasers hereby makes the following representations
and warranties to the Company with respect solely to itself and not
with respect to any other Purchaser:
(a) Organization and Standing of the Purchasers . If such
Purchaser is an entity, such Purchaser is a corporation, limited
liability company or partnership duly incorporated or organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization.
(b) Authorization and Power . Such Purchaser has all
requisite power and authority to execute and deliver the
Transaction Documents, to purchase the Shares and, if applicable,
the Warrants being sold to it hereunder, and to carry out and
perform its obligations under the terms of the Transaction
Documents. All action on the part of such Purchaser necessary for
the authorization, execution, delivery and performance of the
Transaction Documents, and the performance of all such Purchaser's
obligations under the Transaction Documents, has been taken or will
be taken prior to the Closing. The Transaction Documents
constitute, or shall constitute when executed and delivered, valid
and legally binding obligations of such Purchaser enforceable
against such Purchaser in accordance with their terms, except: (i)
to the extent that the indemnification provisions contained in the
Registration Rights Agreement may be limited by applicable law and
principles of public policy, (ii) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors' rights
generally, and (iii) as limited by laws relating to the
availability of specific performance, injunctive relief or other
equitable remedies or by general principles of equity. No consent,
approval, authorization, order, filing, registration or
qualification of or with any court, governmental authority or third
person is required to be obtained by such Purchaser in connection
with the execution and delivery of the Transaction Documents by
such Purchaser or the performance of such Purchaser's obligations
hereunder or thereunder.
(c) Acquisition for Investment . Such Purchaser is
purchasing the Shares and, if applicable, acquiring the Warrants
solely for its own account, not as a nominee or agent, and for the
purpose of investment and not with a view to or for resale in
connection with the distribution thereof. Such Purchaser does not
have a present intention to sell any of the Securities, nor a
present arrangement (whether or not legally binding) or intention
to effect any distribution of any of the Securities to or through
any person or entity. Such Purchaser acknowledges that it (i) has
such knowledge and experience in financial and business matters
such that such Purchaser is capable of evaluating the merits and
risks of its investment in the Company and (ii) is able to bear the
financial risks associated with an investment in the Company.
(d) Rule 144 . Such Purchaser understands that the
Securities must be held indefinitely unless such Securities are
registered under the Securities Act or an exemption from
registration is available. Such Purchaser acknowledges that it is
familiar with the provisions of Rule 144 promulgated pursuant to
the Securities Act (" Rule 144 "), which permit resale of
shares purchased in a private placement subject to the satisfaction
of certain conditions, which may include, among other things, the
availability of certain current public information about the
Company; the resale occurring not less than a specified period
after a party has purchased and paid for the security to be sold;
the number of shares being sold during any three-month period not
exceeding specified limitations; the sale being effected through a
"brokers' transaction," a transaction directly with a "market
maker" or a "riskless principal transaction" (as those terms are
defined in the Securities Act or the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated
thereunder); and the filing of a Form 144 notice, if applicable,
and that such Purchaser has been advised that Rule 144 permits
resales only under certain circumstances. Such Purchaser
understands that to the extent that Rule 144 is not available, such
Purchaser will be unable to sell any Securities without either
registration under the Securities Act or the existence of another
exemption from such registration requirement. Such Purchaser
understands that, although Rule 144 is not exclusive, the
Commission has expressed its opinion that persons proposing to sell
restricted securities received in a private offering, other than
pursuant to Rule 144 will have a substantial burden of proof in
establishing that an exemption from registration is available for
such offers or sales, and that such persons and the brokers who
participate in the transactions do so at their own risk.
(e) General . Such Purchaser understands that the Securities
are being offered and sold in reliance on a transactional exem
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