|
EXHIBIT 10.3
------------
SECURITIES PURCHASE AGREEMENT
PALWEB CORPORATION
1613 E. 15th
Tulsa, Oklahoma 74120
____________, 2004
TO: _______________________
_______________________
_______________________
The undersigned, PalWeb Corporation, an Oklahoma corporation
(the
"Company"), hereby agrees with you as follows, effective as of
the date above
written:
1. Authorization and Sale of the Securities.
1.1 Authorization. The Company represents that it has authorized
the
issuance to you pursuant to the terms and conditions hereof
of:
(a) _____________shares of its common stock, par value
$0.0001
per share ("Common Stock"); and
(b) a warrant (the "Warrant") to purchase ____________
shares
of the Company's Common Stock ("Warrant Shares") in accordance
with the
terms set forth in the form of the Common Share Warrant
Certificate
attached hereto as Exhibit A.
The shares of Common Stock and Warrant to be purchased pursuant
to the terms of
this Agreement are collectively referred to herein as the
"Securities."
1.2 Sale. Subject to the terms and conditions hereof, on the
Purchase
Date (defined below), the Company shall issue and sell to you
and you shall
purchase from the Company, the Securities for an aggregate
purchase price of
$_____________ (the "Purchase Price").
2. Payment of Purchase Price; Delivery.
Upon the execution of this Agreement, you shall deliver to the
Company
wire funds or a check payable to the Company in the amount of
the Purchase
Price. Upon receipt of the Purchase Price from you (the
"Purchase Date"), the
Company shall promptly issue and deliver to you the
Securities.
<PAGE>
3. Representations and Warranties of the Company.
The Company hereby represents and warrants to you as
follows:
3.1 Organization and Standing; Articles and Bylaws. The Company
is a
corporation duly organized and existing under, and by virtue of,
the laws of the
State of Oklahoma and is in good standing under such laws. The
Company is
qualified, licensed or domesticated as a foreign corporation in
all
jurisdictions where the nature of its business conducted or the
character of its
properties owned or leased makes such qualification, licensing
or domestication
necessary at this time except in those jurisdictions where the
failure to be so
qualified or licensed and in good standing does not and will not
have a
materially adverse effect on the Company, the conduct of its
business or the
ownership or operation of its properties. The Company has
furnished you with
copies of its Certificate of Incorporation and Bylaws. Said
copies are true,
correct and complete and contain all amendments through the date
of this
Agreement.
3.2 Corporate Power. The Company has the requisite corporate
power to
own and operate its properties and assets, and to carry on its
business as
presently conducted and as proposed to be conducted. The Company
has now, and
will have at the Purchase Date, all requisite legal and
corporate power to enter
into this Agreement, to sell the Securities hereunder, and to
carry out and
perform its obligations under the terms of this Agreement.
3.3 Subsidiaries. The Company has two wholly owned
subsidiaries:
Plastic Pallet Production, Inc., a Texas corporation ("PPP"),
and Greystone
Manufacturing, LLC, an Oklahoma limited liability company
("Greystone"). Other
than the shares of PPP and the membership interests of
Greystone, the Company
does not own, directly or indirectly, shares of stock or other
interests in any
other corporation, association, joint venture or business
organization.
3.4 Capitalization. The authorized capital stock of the
Company
consists of 100,000,000 shares of common stock and 20,750,000
shares of
preferred stock, par value $0.0001 per share. There are issued
and outstanding
approximately 12,790,451 shares of common stock and 50,000
shares of Series 2003
Cumulative Convertible Senior Preferred Stock (the "2003
Preferred Stock"). The
issued and outstanding shares of common stock and 2003 Preferred
Stock are fully
paid and nonassessable. Except as disclosed in the Disclosure
Materials (as
defined in Section 4.1 below), there are no outstanding options,
warrants or
other rights, including preemptive rights, entitling the holder
thereof to
purchase or acquire shares of common stock or 2003 Preferred
Stock of the
Company.
3.5 Authorization.
(a) All corporate action on the part of the Company, its
officers, directors and shareholders necessary for the sale
and
issuance of the Securities pursuant hereto and the performance
of the
Company's obligations hereunder has been taken or will be taken
prior
to the Purchase Date. This Agreement is a legal, valid and
binding
obligation of the Company, enforceable against the Company
in
accordance with its terms, except as limited by bankruptcy,
insolvency,
reorganization, moratorium or similar laws of general
application
affecting enforcement of creditors' rights, and except as
limited by
application of legal principles affecting the availability of
equitable
remedies.
2
<PAGE>
(b) The Securities, when issued in compliance with the
provisions of this Agreement, will be validly issued, fully paid
and
nonassessable, and will be free of any liens or encumbrances;
provided,
however, that such Securities and the Warrant Shares will be
subject to
restrictions on transfer under state and/or federal securities
laws,
and as may be required by future changes in such laws.
(c) No shareholder of the Company has any right of first
refusal or any preemptive rights in connection with the issuance
of the
Securities or of any other capital stock of the Company.
3.6 Compliance with Instruments. The Company is not in violation
of any
terms of its Certificate of Incorporation or Bylaws, or, to the
knowledge of the
Company, any judgment, decree or order applicable to it. The
execution, delivery
and performance by the Company of this Agreement, and the
issuance and sale of
the Securities pursuant hereto, will not result in any such
violation or be in
conflict with or constitute a default under any such term, or
cause the
acceleration of maturity of any loan or material obligation to
which the Company
is a party or by which it is bound or with respect to which it
is an obligor or
guarantor, or result in the creation or imposition of any
material lien, claim,
charge, restriction, equity or encumbrance of any kind
whatsoever upon, or, to
the knowledge of the Company, give to any other person any
interest or right
(including any right of termination or cancellation) in or with
respect to any
of the material properties, assets, business or agreements of
the Company.
3.7 Litigation, etc. Except as described in the Disclosure
Materials,
there are no actions, proceedings or, to the knowledge of the
Company,
investigations pending which might result in any material
adverse change in the
business, prospects, conditions, affairs or operations of the
Company or in any
of its properties or assets, or in any impairment of the right
or ability of the
Company to carry on its business as proposed to be conducted, or
in any material
liability on the part of the Company, or which question the
validity of this
Agreement or any action taken or to be taken in connection
herewith.
3.8 Governmental Consent, etc. Except as may be required in
connection
with any filings required under the federal securities laws
and/or the
securities laws of any state due to the offer and sale of the
Securities
pursuant to this Agreement, no consent, approval or
authorization of, or
designation, declaration or filing with, any governmental unit
is required on
the part of the Company in connection with the valid execution
and delivery of
this Agreement, or the offer, sale or issuance of the Securities
or the
consummation of any other transaction contemplated hereby.
3.9 Securities Registration and Filings. The outstanding shares
of the
Company's Common Stock are registered pursuant to Section 12(g)
of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"). The Company
has filed all reports required by Section 13 or 15(d) of the
Exchange Act since
June 10, 1999. All of such reports were, at the time they were
filed, complete
and accurate in all material respects and did not include an
untrue statement of
a material fact or omit to state a material fact necessary in
order to make the
statements made therein, in the light of the circumstances under
which they were
made, not misleading.
3
<PAGE>
4. Representations and Warranties of Purchaser and Restrictions
on
Transfer Imposed by the Securities Act.
4.1 Representations and Warranties by Purchaser. You represent
and
warrant to the Company as follows:
(a) The Company has provided to you: a copy of the Company's
Annual Report on Form 10-KSB for year ended May 31, 2003; copies
of the
Company's Quarterly Reports on Form 10-QSB for the periods ended
August
31, 2003, November 30, 2003 and February 29, 2004; copies of
the
Company's Current Reports on Form 8-K or Form 8-K/A, as the case
may
be, filed by the Company on September 23, 2003, January 12,
2004,
January 20, 2004, January 27, 2004, February 18, 2004, March 24,
2004
and July 19, 2004; and, a supplement describing certain aspects
of this
offering. The said materials are referred to herein collectively
as the
"Disclosure Materials."
(b) You are experienced in evaluating and investing in
companies such as the Company. Further, you understand that
the
Securities purchased hereby are of a highly speculative nature
and
could result in the loss of your entire investment.
(c) You have been furnished by the Company with all
information requested concerning the proposed operations,
affairs and
current financial condition of the Company. Such information and
access
have been available to the extent you consider necessary and
advisable
in making an intelligent investment decision. In addition, you
have
received and reviewed copies of the Disclosure Materials and
have had
the opportunity to discuss the Company's business, management
and
financial affairs with its Chief Executive Officer. You
understand that
such discussions, as well as the Disclosure Materials and any
other
written information issued by the Company, were intended to
describe
certain aspects of the Company's business and prospects which
it
believes to be material but were not necessarily a thorough
or
exhaustive description.
(d) The Securities to be acquired by you will be acquired,
solely for your account, for investment purposes only and not
with a
view to the resale or distribution thereof, are not being
purchased for
subdivision or fractionalization thereof, and you have no
contract,
undertaking, agreement or arrangement with any person to sell
or
transfer such Securities to any person and do not intend to
enter into
such contract or arrangement.
(e) You understand that the Securities have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), nor are they registered or qualified under
the blue
sky or securities laws of any state, by reason of their issuance
in a
transaction exempt from the registration and prospectus
delivery
requirements of the Securities Act pursuant to Sections 3(b) or
4(2) of
the Securities Act and available exemptions from the
registration
requirements of any applicable state securities laws. You
further
understand that the Securities must be held by you indefinitely
and you
must therefore bear the economic risk of such investment
indefinitely,
unless a subsequent disposition thereof is registered under
the
Securities Act or is exempt from registration.
(f) You have the full right, power and authority to enter
into
and perform this Agreement, and this Agreement constitutes a
legal,
valid and binding obligation upon you
4
<PAGE>
except as may be limited by bankruptcy, insolvency,
reorganization,
moratorium or similar laws of general application affecting
enforcement
of creditors' rights, and except as limited by application of
legal
principles affecting the availability of equitable remedies.
(g) You are able to bear the full economic risk of your
investment in the Securities, including the risk of a total loss
of
your investment in connection therewith. You are an accredited
investor
as that term is defined in Rule 501(a) of Regulation D
promulgated by
the Securities and Exchange Commission (the "SEC").
(h) You were not offered the Securities by means of general
solicitations, publicly disseminated advertisements or sales
literature.
4.2 Legends. Each instrument representing the Securities and
the
Warrant Shares shall be endorsed with the legend set forth
below:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
UNDER
ANY STATE SECURITIES ACT. THE SECURITIES HAVE BEEN ACQUIRED
FOR
INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS (I) THEY HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE
SECURITIES ACT, OR (II) THE COMPANY SHALL HAVE BEEN FURNISHED
AN
OPINION OF COUNSEL, SATISFACTORY TO COUNSEL FOR THE COMPANY,
THAT
REGISTRATION IS NOT REQUIRED UNDER ANY OF SUCH ACTS.
In addition, each instrument representing the Securities and the
Warrant Shares
shall be endorsed with any other legend required by any state
securities laws.
The Company need not register a transfer of legended Securities
and the Warrant
Shares, and may also instruct its transfer agent not to register
the transfer of
the Securities and the Warrant Shares, unless one of the
conditions specified in
each of the foregoing legends is satisfied.
5. Indemnification by Purchaser.
You acknowledge and understand that the Company has agreed to
offer and
sell the Securities to you based upon the representations and
warranties made by
you in this Agreement, and you hereby agree to indemnify the
Company and to hold
the Company and its incorporators, officers, directors and
professional advisors
harmless against all liability, costs or expenses (including
attorneys' fees)
arising by reason of or in connection with any misrepresentation
or any breach
of such representations and warranties by you, or arising as a
result of the
sale or distribution of any Securities by you in violation of
the Securities Act
or other applicable law.
6. Registration Rights.
6.1 Filing of Registration Statement. The Company shall use
commercially reasonable
5
<PAGE>
efforts to cause a registration statement relating to, among
other things, the
Common Stock sold to you pursuant to this Agreement and the
Warrant Shares to be
filed and to be declared effective on or before December 31,
2004 (the
"Registration Statement") and, thereafter, the Company shall use
commercially
reasonable efforts to cause the Registration Statement to remain
effective until
June 30, 2005. The Registration Statement shall be prepared in
accordance with
the requirements of Form SB-2 under the Securities Act or any
equivalent
thereof. The Company shall pay for the cost of the Registration
Statement
(excluding underwriter discounts and commissions, if any, and
the fees and
expenses of your counsel).
6.2 Blue Sky Qualification. The Company shall use
commercially
reasonable efforts to qualify the Common Stock sold to you
pursuant to this
Agreement and the Warrant Shares under the securities or "Blue
Sky" laws of such
states of the United States of America as you may reasonably
request.
6.3 Obligations of Company Relating to the Registration
Statement.
(a) Following the filing of the Registration Statement
by the Company, the Company agrees to notify you as soon as
practicable after it becomes aware that Registration Statement
has
become effective or any supplement to any prospectus forming
part of
the Registration Statement has been filed.
(b) As soon as practicable after the effective date of
the Registration Statement, the Company shall furnish you with
such
numbers of copies of the Registration Statement and the
related
prospectus as you may from time to time reasonably request.
(c) If, during the period when the Registration
Statement is effective, any event occurs as a result of which
the
prospectus included in the Registration Statement would include
an
untrue statement of a material fact or omit to state a material
fact
necessary in order to make the statements made, not misleading,
or
it shall be necessary to amend or supplement such prospectus
to
comply with applicable law, the Company will notify you thereof
and
upon your request: (i) prepare and file under the Securities
Act
such amendments and supplements as may be necessary to keep
available a prospectus covering such registered stock meeting
the
requirements of the Securities Act; and (ii) furnish to you
such
numbers of copies of the Registration Statement and prospectus,
as
amended or supplemented, as may reasonably be requested from
time to
time.
(d) The Company agrees to notify you promptly of any
request by the SEC for the amendment or supplementation of
the
Registration Statement or prospectus, or for additional
information.
(e) The Company shall use commercially reasonable
efforts to prepare and file with the SEC promptly upon your
request
any amendment of, or supplement to, the Registration Statement
or
prospectus relating to information respecting you that, in
the
opinion of your counsel, may be necessary or advisable in
connection
with the distribution of the Common Stock owned by you and
covered
by the Registration Statement.
(f) In the event that the Company receives notice or
obtains knowledge of the issuance of a stop order by the SEC
suspending the effectiveness of the Registration
6
<PAGE>
Statement or of the initiation or threat of any proceeding for
that
purpose, the Company shall promptly advise you of such
circumstances
and shall use commercially reasonable efforts to prevent the
issuance of any stop order and to obtain the withdrawal of any
stop
order in the event that one is issued.
6.5 Obligations of Purchaser Relating to the Registration
Statement.
(a) You shall furnish to the Company such information as
may be reasonably requested by the Company in connection with
the
preparation and filing of the Registration Statement, any
prospectus
contained in the Registration Statement and any amendment
thereof or
supplement thereto.
(b) You will cooperate with the Company as reasonably
requested by the Company in connection with causing the
Registration
Statement to become and remain effective as contemplated in
this
Agreement.
(c) You agree that at any time and from time to time the
Company may suspend your use of any prospectus contained in
the
Registration Statement for a period not to exceed 30 calendar
days
by providing written notice to you provided an event has
occurred
and is continuing as a result of which the Registration
Statement
would, in the Company's judgment, contain an untrue statement of
a
material fact or omit to state a material fact required to be
stated
therein or necessary to make the statements therein not
misleading.
6.6 Indemnification Relating to the Registration Statement.
(a) The Company agrees that it will: (i) indemnify and
hold harmless you in connection with any losses, claims,
damages,
expenses or liabilities to which you become subject, whether
under
the Securities Act or otherwise, insofar as such losses,
claims,
damages, expenses or liabilities (or actions in respect thereof)
are
caused by (A) any untrue statement or alleged untrue statement
of
any material fact contained in the Registration Statement,
any
prospectus contained therein, any amendment thereof or
supplement
thereto or any documents incorporated by reference into any of
the
foregoing; or (B) any omission or alleged omission to state
therein
a material fact required to be stated therein or necessary to
make
the statements therein not misleading; and (ii) reimburse you
for
any legal or other expenses reasonably incurred by
| 
