Document:

ex_151776.htm

Exhibit 10.1

 

SUBSCRIPTION AGREEMENT 

 

THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE OR ANY OTHER JURISDICTION. THERE ARE FURTHER RESTRICTIONS ON THE TRANSFERABILITY OF THE SECURITIES DESCRIBED HEREIN.

 

THE PURCHASE OF THE SECURITIES INVOLVES A HIGH DEGREE OF RISK AND SHOULD BE CONSIDERED ONLY BY PERSONS WHO CAN BEAR THE RISK OF THE LOSS OF THEIR ENTIRE INVESTMENT.

 

CURAEGIS TECHNOLOGIES, INC.

1999 MT. READ BOULEVARD, BUILDING 3

ROCHESTER, NEW YORK 14615

 

RECITALS:

 

A.     The undersigned understands that CURAEGIS TECHNOLOGIES, INC., a corporation organized under the laws of New York (the “Company”), is offering an aggregate of up to [____________] shares of its common stock, par value $0.01 per share (the “Securities”) in a private placement. The undersigned further understands that the offering is being made without registration of the Securities under the Securities Act of 1933, as amended (the “Securities Act”), or any securities law of any state of the United States or of any other jurisdiction, and is being made only to “accredited investors” (as defined in Rule 501 of Regulation D under the Securities Act).

 

B.     The undersigned has agreed to co-borrow with the Company; and, in connection with such co-borrowing, the undersigned and the Company are entering into in that certain Demand Note, dated [____________] (as amended from time to time, the “Note”), in favor of M&T Bank, with an original principal amount of $[____________].

 

PROVISIONS: 

 

NOW THEREFORE, the undersigned and the Company hereby agree as follows:

 

	
			1.

				
			Subscription.

			

 

(a)    Securities. Subject to the terms and conditions hereof, the undersigned hereby irrevocably subscribes for those Securities set forth in Appendix A hereto for the aggregate purchase prices set forth in Appendix A, which are payable as described in Section 4 hereof. The undersigned acknowledges that the Securities will be subject to restrictions on transfer as set forth in this subscription agreement (this “Subscription Agreement”).

 

(b)    Co-Borrower Option Shares. On the basis of the representations, warranties and covenants herein, and the agreement of undersigned to co-borrow with the Company as described above, subject to the conditions herein:

 

1

 

 

(i)     the undersigned shall have the option (the “Co-Borrower Option”) to purchase, in whole or in part, up to that amount of Securities listed under the “Option Shares” column set forth in Appendix A (the “Option Shares”) from the Company at a price per share equal to [_____] per share (the “Option Purchase Price”);

 

(ii)    upon an exercise of the Co-Borrower Option and subject to the terms and conditions herein, the Company agrees to issue and sell the Option Shares to the undersigned;

 

(iii)    the undersigned may exercise the Co-Borrower Option by written notice to the Company (the “Option Exercise Notice”) during the period beginning on the date hereof and ending on the date that all indebtedness under the Note is paid in full (such period, the “Exercise Period”); provided, however, that in the event the Company consummates the sale of the Company’s Aegis Division or all or substantially all of the Company’ s pump and motor technology and related intellectual property (the determination of which date shall be made by the Company in its sole discretion), the Exercise Period shall end on the date that is [______] business days after the date the Company provides notice of such sale to the undersigned;

 

(iv)    the undersigned must provide the Option Exercise Notice to the Company no later than the last date of the Exercise Period;

 

(v)     the Option Exercise Notice shall set forth:

 

	 	
			(A)

				
			the aggregate number of Option Shares as to which the Co-Borrower Option is being exercised;

			

 

	 	
			(B)

				
			the aggregate Option Purchase Price; and

			

 

	 	
			(C)

				
			the names and denominations in which the certificates for the Option Shares are to be registered; and

			

 

(vi)    in the event the undersigned does not provide the Option Exercise Notice to the Company on or prior to the last date of the Exercise Period, the Co-Borrower Option shall expire automatically and be of no further force or effect.

 

2.     Acceptance of Subscription and Issuance of Securities. It is understood and agreed that the Company shall have the sole right, at its complete discretion, to accept or reject this subscription, in whole or in part, for any reason and that the same shall be deemed to be accepted by the Company only when it is signed by a duly authorized officer of the Company and delivered to the undersigned at the Initial Closing referred to in Section 3 hereof. Subscriptions need not be accepted in the order received, and the Securities may be allocated among subscribers. Notwithstanding anything in this Subscription Agreement to the contrary, the Company shall have no obligation to issue any of the Securities to any person who is a resident of a jurisdiction in which the issuance of Securities to such person would constitute a violation of the securities, “blue sky” or other similar laws of such jurisdiction (collectively referred to as the “State Securities Laws”).

 

2

 

 

3.     The Closings.

 

(a)   Initial Closing. The closing (the “Initial Closing”) of the purchase and sale of those Securities listed under the “Initial Shares” column set forth in Appendix A (the “Initial Shares”) will take place on [_____________________] (the “Initial Closing Date”) at the offices of the Company, at 1999 Mount Read Blvd., Building 3, Rochester, New York 14615, or remotely by exchange of electronic copies as the Company and the undersigned shall mutually agree.

 

(i)     At the Initial Closing, the Company shall deliver to the undersigned (against the undersigned’s deliveries set forth in Section 3(a)(ii)) the Initial Shares set forth on the signature page to this Agreement.

 

(ii)    At the Initial Closing, the undersigned shall deliver (against the Company’s deliveries set forth in Section 3(a)(i)):

 

 (A)     to the Company, the purchase price set forth under the “Initial Purchase Price” column in Appendix A, by check or wire transfer of immediately available funds to the account designated by the Company in writing for such purpose;

 

 (B)     to the Company, an Accredited Investor Questionnaire, completed and duly executed by the undersigned, together with the information specified therein necessary for the Company to verify that the undersigned is an “accredited investor” as defined in Regulation D under the Securities Act; and

 

 (C)     to M&T Bank, the Note, duly executed by the undersigned.

 

(b)    Option Closing. The closing (the “Option Closing” and, together with the Initial Closing, the “Closings”) of the purchase and sale of the Option Shares, if any, shall be effective as of the close of business on the date the Option Exercise Notice is duly delivered and will take place promptly after such date, at the offices of the Company, at 1999 Mount Read Blvd., Building 3, Rochester, New York 14615, or remotely by exchange of electronic copies as the Company and the undersigned shall mutually agree.

 

(i)     At the Option Closing, the Company shall deliver to the undersigned (against the undersigned’s deliveries set forth in Section 3(b)(ii)) the aggregate number of Option Shares as to which the Co-Borrower Option is being exercised.

 

(ii)     At the Option Closing, the undersigned shall deliver to the Company (against the Company’s deliveries set forth in Section 3(b)(i)):

 

  (A)     the aggregate Option Purchase Price, by check or wire transfer of immediately available funds to the account designated by the Company in writing for such purpose, corresponding to the Option Shares as to which the Co-Borrower Option is being exercised; and

 

  (B)     an Accredited Investor Questionnaire, completed and duly executed by the undersigned, together with the information specified therein necessary for the Company to verify that the undersigned is an “accredited investor” as defined in Regulation D under the Securities Act.

 

3

 

 

4.    Payment for Securities. Payment for the Securities shall be received by the Company from the undersigned by wire transfer of immediately available funds or other means approved by the Company at or prior to the Closings (including as set forth in Section 1 and Section 3), in the amounts as set forth in Appendix A hereto. The Company shall deliver certificates representing the Securities to the undersigned (or if shares of the Securities are uncertificated, cause the transfer agent for the Securities to issue and register such shares, in book-entry form, in the name of the undersigned and deliver evidence of such registration) at the Closings bearing an appropriate legend referring to the fact that the Securities were sold in reliance upon an exemption from registration under the Securities Act.

 

5.     Representations and Warranties of the Company. As of each of the Closings, the Company represents and warrants that:

 

(a)     The Company is duly incorporated and validly existing under the laws of New York, with full power and authority to conduct its business as it is currently being conducted and to own its assets; and has secured any other authorizations, approvals, permits and orders required by law for the conduct by the Company of its business as it is currently being conducted.

 

(b)     The Securities have been duly authorized and, when issued, delivered and paid for in the manner set forth in this Subscription Agreement, will be validly issued, fully paid and nonassessable.

 

(c)     The Company has filed all reports required to be filed by it under the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including pursuant to Section 13(a) or 15(d) of the Exchange Act, for the two years preceding the date hereof on a timely basis or has received a valid extension of such time of filing and has filed all reports, schedules, forms, statements and other documents required to be filed with the Securities and Exchange Commission (“SEC”) by the Company since December 31, 2018, through and including through the date hereof, with the SEC pursuant to the reporting requirements of the Exchange Act, including all exhibits included or incorporated by reference therein and financial statements and schedules thereto and documents included or incorporated by reference therein (the “SEC Reports”) prior to the expiration of any such extension. The SEC Reports incorporated by reference herein include without limitation the Form 10-K for the fiscal year ended December 31, 2018, including the audited financial statements included therein.

 

(d)     As of their respective dates, the SEC Reports or any amendments thereof, complied in all material respects with the requirements of the Exchange Act applicable to the SEC Reports, and none of the SEC Reports or to the extent such reports were amended, at the time they were filed with the SEC, contained 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.

 

4

 

 

(e)     As of their respective dates, except as set forth therein or in the notes thereto, the financial statements contained in the SEC Reports and the related notes (the “Financial Statements”) complied as to form in all material respects with all applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. The Financial Statements: (i) were prepared in accordance with GAAP, consistently applied during the periods involved (except (A) as may be otherwise indicated in the notes thereto or (B) in the case of unaudited interim statements, to the extent that they may not include footnotes, may be condensed or summary statements or may conform to the SEC’s rules and instructions for Reports on Form 10-Q), (ii) fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal and recurring year-end audit adjustments) and (iii) are in all material respects in accordance with the books of account and records of the Company and its consolidated Subsidiaries (except as may be otherwise noted therein).

 

(f)     EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 5, THE COMPANY MAKES NO OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, IN RESPECT OF ANY OF ITS ASSETS, LIABILITIES OR OPERATIONS.

 

6.     Representations and Warranties of the Undersigned. The undersigned hereby represents and warrants to and covenants with the Company that:

 

(a)     General.

 

  (i)    The undersigned has all requisite authority (and in the case of an individual, the capacity) to purchase the Securities, enter into this Subscription Agreement and to perform all the obligations required to be performed by the undersigned hereunder, and such purchase will not contravene any law, rule or regulation binding on the undersigned or any investment guideline or restriction applicable to the undersigned.

 

  (ii)    The undersigned is a resident of the state set forth on the signature page hereto and is not acquiring the Securities as a nominee or agent or otherwise for any other person.

 

  (iii)   The undersigned will comply with all applicable laws and regulations in effect in any jurisdiction in which the undersigned purchases or sells Securities and obtain any consent, approval or permission required for such purchases or sales under the laws and regulations of any jurisdiction to which the undersigned is subject or in which the undersigned makes such purchases or sales, and the Company shall have no responsibility therefor.

 

(b)     Information Concerning the Company.

 

  (i)     An investment in the Securities involves various risks, including the risks outlined in this Subscription Agreement. The undersigned is able to bear any loss associated with an investment in the Securities.

 

  (ii)   The undersigned is not relying on any communication (written or oral) of the Company or any of its affiliates, as investment advice or as a recommendation to purchase the Securities. It is understood that information and explanations related to the terms and conditions of the Securities provided by the Company or any of its affiliates shall not be considered investment advice or a recommendation to purchase the Securities, and that neither the Company nor any of its affiliates is acting or has acted as an advisor to the undersigned in deciding to invest in the Securities. The undersigned acknowledges that neither the Company nor any of its affiliates has made any representation regarding the proper characterization of the Securities for purposes of determining the undersigned’s authority to invest in the Securities.

 

5

 

 

  (iii)   The undersigned is familiar with the business and financial condition and operations of the Company. The undersigned has had access to such information concerning the Company and the Securities as the undersigned deems necessary to make an informed investment decision concerning the purchase of the Securities.

 

  (iv)   The undersigned understands that, unless the undersigned notifies the Company in writing to the contrary at or before the Closing, each of the undersigned’s representations and warranties contained in this Subscription Agreement will be deemed to have been reaffirmed and confirmed as of each of the Closings, taking into account all information received by the undersigned.

 

  (v)     The undersigned understands that no federal or state agency has passed upon the merits or risks of an investment in the Securities or made any finding or determination concerning the fairness or advisability of this investment.

 

(c)     Non-reliance.

 

  (i)     The undersigned is not relying on (and will not at any time rely on) any communication (written or oral) of the Company, as investment advice or as a recommendation to purchase the Securities, it being understood that information and explanations related to the terms and conditions of the Securities and the Credit Facility shall not be considered investment advice or a recommendation to purchase the Securities.

 

6

 

 

  (ii)   The undersigned confirms that the Company has not (A) given any guarantee or representation as to the potential success, return, effect or benefit (either legal, regulatory, tax, financial, accounting or otherwise) of an investment in the Securities or (B) made any representation to the undersigned regarding the legality of an investment in the Securities under applicable legal investment or similar laws or regulations. In deciding to purchase the Securities, the undersigned is not relying on the advice or recommendations of the Company and the undersigned has made his, her, or its (as applicable) own independent decision that the investment in the Securities is suitable and appropriate for the undersigned.

 

(d)     Status of Undersigned.

 

  (i)     The undersigned has such knowledge, skill and experience in business, financial and investment matters that the undersigned is capable of evaluating the merits and risks of an investment in the Securities. With the assistance of the undersigned’s own professional advisors, to the extent that the undersigned has deemed appropriate, the undersigned has made his, her, or its (as applicable) own legal, tax, accounting and financial evaluation of the merits and risks of an investment in the Securities and the consequences of this Subscription Agreement. The undersigned has considered the suitability of the Securities as an investment in light of the undersigned’s own circumstances and financial condition, and the undersigned is able to bear the risks associated with an investment in the Securities and its authority to invest in the Securities.

 

  (ii)    The undersigned is an “accredited investor” as defined in Rule 501(a) under the Securities Act. The undersigned agrees to furnish any additional information requested by the Company or any of its affiliates to assure compliance with applicable U.S. federal and state securities laws in connection with the purchase and sale of the Securities. The undersigned acknowledges that the undersigned has completed the Accredited Investor Questionnaire contained in Appendix B and that the information contained therein is complete and accurate as of the date thereof and is hereby affirmed as of the date hereof. Any information that has been furnished or that will be furnished by the undersigned to evidence its status as an accredited investor is accurate and complete, and does not contain any misrepresentation or material omission.

 

(e)     Restrictions on Transfer or Sale of Securities. As applies to the undersigned:

 

  (i)     The undersigned is acquiring the Securities solely for the undersigned’s own beneficial account, for investment purposes, and not with a view to, or for resale in connection with, any distribution of the Securities. The undersigned understands that the Securities have not been registered under the Securities Act or any State Securities Laws by reason of specific exemptions under the provisions thereof which depend in part upon the investment intent of the undersigned and of the other representations made by the undersigned in this Subscription Agreement. The undersigned understands that the Company is relying upon the representations and agreements contained in this Subscription Agreement (and any supplemental information) for the purpose of determining whether this transaction meets the requirements for such exemptions.

 

  (ii)    The undersigned understands that the Securities are “restricted securities” under applicable federal securities laws and that the Securities Act and the rules of the U.S. Securities and Exchange Commission (the “Commission”) provide in substance that the undersigned may dispose of the Securities only pursuant to an effective registration statement under the Securities Act or an exemption therefrom, and the undersigned understands that the Company has no obligation or intention to register any of the Securities, or to take action so as to permit sales pursuant to the Securities Act (including Rule 144 thereunder). Accordingly, the undersigned understands that under the Commission’s rules, the undersigned may dispose of the Securities principally only in “private placements” which are exempt from registration under the Securities Act, in which event the transferee will acquire “restricted securities” subject to the same limitations as in the hands of the undersigned. Consequently, the undersigned understands that the undersigned must bear the economic risks of the investment in the Securities for an indefinite period of time.

 

  (iii)    The undersigned agrees: (A) that the undersigned will not sell, assign, pledge, give, transfer or otherwise dispose of the Securities or any interest therein, or make any offer or attempt to do any of the foregoing, except pursuant to a registration of the Securities under the Securities Act and all applicable State Securities Laws, or in a transaction which is exempt from the registration provisions of the Securities Act and all applicable State Securities Laws; (B) that the certificates representing the Securities will bear a legend making reference to the foregoing restrictions; and (C) that the Company and its affiliates shall not be required to give effect to any purported transfer of such Securities except upon compliance with the foregoing restrictions.

 

7

 

 

  (iv)   The undersigned acknowledges that neither the Company nor any other person offered to sell the Securities to the undersigned by means of any form of general solicitation or advertising, including but not limited to: (A) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio or (B) any seminar or meeting whose attendees were invited by any general solicitation or general advertising.

 

  (v)     The undersigned has not engaged in any short sales of the Company’s common stock or instructed any third parties to engage in any short sales of the Company’s common stock on behalf of the undersigned prior to the Closings. The undersigned covenants and agrees that the undersigned will not be in a net short position with respect to the Company’s common stock. For purposes of this Section 6, a “net short position” means a sale of the Company’s common stock by the undersigned that is marked as a short sale and that is made at a time when there is no equivalent offsetting long position in the Company’s common stock held by the undersigned.

 

7.     Conditions to Obligations of the Undersigned and the Company. The obligations of the undersigned to purchase and pay for the Securities specified in Appendix A and of the Company to sell the Securities are subject to the satisfaction at or prior to the Closing of the following conditions precedent:

 

(a)     the representations and warranties of the Company contained in Section 5 hereof and of the undersigned contained in Section 6 hereof shall be true and correct as of each applicable Closing in all respects with the same effect as though such representations and warranties had been made as of such Closing;

 

(b)     the Company shall have obtained the consent of the Series C/C-2 Investors under that certain Amended and Restated Investors Rights Agreement made as of March 28, 2014 (the “Investors’ Rights Agreement”), by and among the Company and the Investors (as defined therein), to the sale and issuance of the Securities, and the waiver by such Series C/C-2 Investors of their rights of first refusal under the Investors Rights Agreement with respect to the sale and issuance of the Securities and such consent and waiver shall remain in full force and effect; and

 

(c)     No Proceeding (as defined below) shall be pending or, to the knowledge of Company, threatened by any third party or by or before any court or governmental agency in which it is sought to restrain or prohibit or to obtain damages or other relief in connection with the consummation of the transactions contemplated hereby.

 

8.     Obligations Irrevocable. The obligations of the undersigned shall be irrevocable.

 

9.     Indemnification. The undersigned hereby agrees to indemnify the Company, and the officers, directors, agents and employees thereof harmless against all liability, costs or expenses (including reasonable attorneys’ fees) arising by reason of or in connection with any misrepresentation or any breach of the representations and warranties of the Undersigned contained in this Agreement, or arising as a result of the sale or distribution of the Securities by the undersigned in violation of the Securities Act, the Exchange Act or any other applicable law, either federal or state.

 

8

 

 

10.     Company Covenants.

 

  (a)     The accrued interest payable under the Note shall be paid by the Company, not by the undersigned. In the event that any demands or claims are asserted by M&T Bank in respect of such accrued interest, and the undersigned satisfies any portion of such demands or claims pursuant to the Note, the undersigned shall be reimbursed therefor by the Company within five (5) days after making a demand for such reimbursement.

 

  (b)     No later than one (1) business day after the Option Closing, if any, the Company shall pay to M&T Bank, as repayment of indebtedness under the Note, an amount equal to the aggregate Option Purchase Price paid to the Company at the Option Closing.

 

11.     Legend. The certificates representing the Securities sold pursuant to this Subscription Agreement will be imprinted with a legend in substantially the following form:

 

  “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.”

 

12.     Waiver, Amendment. Neither this Subscription Agreement nor any provisions hereof shall be modified, changed, discharged or terminated except by an instrument in writing, signed by the party against whom any waiver, change, discharge or termination is sought.

 

13.     Assignability. Neither this Subscription Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by either the Company or the undersigned without the prior written consent of the other party.

 

14.     Waiver of Jury Trial. THE UNDERSIGNED IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF THE TRANSACTIONS CONTEMPLATED BY THIS SUBSCRIPTION AGREEMENT.

 

15.   Submission to Jurisdiction. With respect to any suit, action or proceeding relating to any offers, purchases or sales of the Securities by the undersigned (“Proceedings”), the undersigned irrevocably submits to the jurisdiction of the federal or state courts located in the City of Rochester, New York, which submission shall be exclusive unless none of such courts has lawful jurisdiction over such Proceedings.

 

16.     Governing Law. This Subscription Agreement shall be governed by and construed in accordance with the laws of the State of New York.

 

17.    Section and Other Headings; Recitals. The section and other headings contained in this Subscription Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Subscription Agreement. However, the Recitals above are hereby incorporated into this Subscription Agreement by reference.

 

9

 

 

18.     Counterparts. This Subscription Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

19.     Notices. Any notice or other communication required or permitted under this Subscription Agreement shall be in writing and shall be deemed to have been duly given (a) upon personal delivery; or (b) on the third day following depositing the same in the United States mail, certified or registered, return receipt requested with postage prepaid, or (c) on the first day following delivery to a nationally recognized United States overnight courier service, fee prepaid, to the parties at their addresses set forth below: (or such other address as a party may designate by notice in accordance with this Section 19):

 

  if to the Company, to:

 

CurAegis Technologies, Inc.

1999 Mt. Read Boulevard, Building 3

Rochester, New York 14615

Attention: Chief Executive Officer

 

With a copy to (which shall not constitute notice):

 

Woods Oviatt Gilman LLP

1900 Bausch & Lomb Place

Rochester, NY 14604

Attention: Gordon E. Forth, Sean D. Jensen

 

  if to the undersigned, to the address set forth on the signature page to this Agreement.

 

20.     Binding Effect. The provisions of this Subscription Agreement shall be binding upon and accrue to the benefit of the parties hereto and their respective heirs, legal representatives, successors and assigns.

 

21.     Survival. All representations, warranties and covenants contained in this Subscription Agreement shall survive (a) the acceptance of the subscription by the Company and the Closing, and (b) the death or disability of the undersigned.

 

22.     Notification of Changes. The undersigned hereby covenants and agrees to notify the Company upon the occurrence of any event prior to the closing of the purchase of the Securities pursuant to this Subscription Agreement which would cause any representation, warranty, or covenant of the undersigned contained in this Subscription Agreement to be false or incorrect.

 

10

 

 

23.     Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.

 

24.     No Offer. This Agreement does not constitute an offer to any prospective purchaser of Securities, and no agreement exists or shall exist between the Company and any Purchaser, unless and until the Company and that Purchaser have exchanged the respective deliverables under Section 3(a) or Section 3(b).

 

25.    Further Assurances. At such time and from time to time on and after the date hereof upon request by the Purchasers or the undersigned, the other will execute, acknowledge and deliver, or will cause to be done, executed, acknowledged and delivered, all such further acts, certificates and assurances that may be reasonably required for the conveying, transferring, assigning, delivering, purchasing and confirming to the undersigned or the Company all of the Securities or to otherwise carry out the purposes of this Subscription Agreement and the agreements, documents and instruments contemplated hereby.

 

26.     Counsel. Each party to this Subscription Agreement acknowledges that Woods Oviatt Gilman LLP acted solely as counsel to the Company in connection with this Subscription Agreement and the transactions contemplated hereby, and that he, she or it (as applicable) retained or had sufficient opportunity to retain independent legal counsel and other advisors in connection with this Subscription Agreement and the transactions contemplated hereby, including without limitation in connection with any documents, agreements, or other instruments required or requested by M&T Bank, or between the undersigned and M&T Bank, and the transactions contemplated thereby.

 

 

[SIGNATURE PAGE FOLLOWS] 

 

11

 

 

IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement this [______] OF [____________], 2019.

 

	
			PURCHASER (if an individual): 

				
			PURCHASER (if an entity):

			
	 	 
	
			By_____________________

			Name:

				
			_______________________

			Legal Name of Entity

			 

			By_____________________

			Name:

			Title:

			

 

State/Country of Domicile or Formation: ______________________________________ 

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to __________ shares of common stock.

 

	 	
			CURAEGIS TECHNOLOGIES, INC.

			
	 	
			 

			By_____________________

			Name: Richard A. Kaplan

			Title: Chief Executive Officer

			

 

 

UNDERSIGNED COMPLETE THIS ADDRESS SECTION 

 

	Principal Residence Address: 	
			Mailing Address, if different from

			Residence Address:

			
	
			____________________________

			____________________________

			____________________________

				
			____________________________

			____________________________

			____________________________

			

 

Electronic Mail: ________________________________

 

12

 

 

APPENDIX A

 

 

 

	 	
			I.

				
			Initial Shares. 

			

 

	
			Securities to Be Acquired

				 	
			Initial Purchase Price

			
	 	 	 
	
			_________ shares of common stock 

				 	
			1.        US$ ___________; and 

			
	 	 	
			2.        Execution and Delivery of the

			Note.

			
	 	 	 

 

 

	 	
			II.

				
			Option Shares. 

			

 

	
			Securities to Be Acquired

				 	
			Purchase Price

			
	 	 	 
	
			Up to _________ shares of common stock 

				 	
			Up to US$ ___________, the maximum

			aggregate Option Purchase Price 

			

 

 

A-1ex_151791.htm

Exhibit 10.2

 

 

 

DEMAND NOTE

New York

 

	July __, 2019	$_______________

 

BORROWER:     CurAegis Technologies, Inc., a New York corporation with an office at 1999 Mt. Read Boulevard, Building 3, Rochester, New York 14615 and _________________________, an individual with an address of _________________________.

 

	
			BANK:

				
			M&T BANK, a New York banking corporation with its banking offices at One M&T Plaza, Buffalo, New York 14203 Attention: Office of the General Counsel

			

 

Promise to Pay. For value received, and intending to be legally bound, Borrower promises to pay to the order of the Bank on demand the principal sum of _________________________ ($_______________) plus interest as agreed below and all fees and costs (including without limitation attorneys’ fees and disbursements whether for internal or outside counsel) the Bank incurs in order to collect any amount due under this Note, to negotiate or document a workout or restructuring, or to preserve its rights or realize upon any guaranty or other security for the payment of this Note (“Expenses”).

 

Interest. The unpaid principal balance of this Note shall earn interest calculated on the basis of a 360-day year for the actual number of days in each year (365 or 366), from and including the date the proceeds of this Note are disbursed to, but not including, the date all amounts hereunder are paid in full, at a rate per year which shall be:

 

variable based on the zero percentage points above the rate in effect each day as announced by the Bank as its prime rate of interest.

 

If no rate is specified above, interest shall accrue at the Maximum Legal Rate (defined below).

 

Maximum Legal Rate. It is the intent of the Bank and Borrower that in no event shall interest be payable at a rate in excess of the maximum rate permitted by applicable law (the “Maximum Legal Rate”). Solely to the extent necessary to prevent interest under this Note from exceeding the Maximum Legal Rate, Borrower agrees that any amount that would be treated as excessive under a final judicial interpretation of applicable law shall be deemed to have been a mistake and automatically canceled, and, if received by the Bank, shall be refunded to Borrower, without interest.

 

Due on Demand. This is a demand Note and all amounts referenced hereunder shall become immediately due and payable upon demand by the Bank; provided, however, that all amounts due hereunder shall automatically become immediately due and payable if Borrower or any guarantor or endorser of this Note commences or has commenced against it any bankruptcy or insolvency proceeding. Borrower hereby waives protest, presentment and notice of any kind in connection with this Note. Absent demand for payment in full, interest shall be due and payable monthly.

 

Default Rate. If the Bank has not actually received any payment under this Note within thirty (30) days after its due date, from and after such thirtieth day the interest rate for all amounts outstanding under this Note shall automatically increase to five (5) percentage points above the otherwise applicable rate per year, and any judgment entered hereon or otherwise in connection with any suit to collect amounts due hereunder shall bear interest at such default rate.

 

Payments. Payments shall be made in immediately available United States funds at any banking office of the Bank.

 

Preauthorized Transfers from Deposit Account. If a deposit account number is provided in the following blank, Borrower hereby authorizes the Bank to debit Borrower’s deposit account #________________________ with the Bank automatically for any amount which becomes due under this Note.

 

Interest Accrual; Application of Payments. Interest will continue to accrue on the actual principal balance outstanding until such amount is paid in full. All payments (excluding voluntary prepayments of principal) will be applied as of the date each payment is received and processed. Payments may be applied in any order in the sole discretion of the Bank, but, prior to a payment default, may be applied chronologically (i.e., oldest invoice first) to unpaid amounts due and owing, in the following order: first to accrued interest, then to principal, then to escrow (if any), then to late charges and other fees, and then to all other Expenses.

 

Late Charges. If Borrower fails to pay, within five (5) days of its due date, any amount due and owing pursuant to this Note or any other agreement executed and delivered to the Bank in connection with this Note, including, without limitation, any escrow payment due and owing, Borrower shall immediately pay to the Bank a late charge equal to the greatest of (a) $50.00, (b) five percent (5%) of the delinquent amount or (c) the Bank’s then current late charge as announced from time to time. Notwithstanding the above, if this Note is secured by a one- to six-family owner-occupied residence, the late charge shall equal 2% of the delinquent amount and shall be payable if payment is not received within fifteen days (15) of its due date.

 

Right of Setoff. The Bank shall have the right to set off against the amounts owing under this Note any property held in a deposit or other account with the Bank or any of its affiliates or otherwise owing by the Bank or any of its affiliates in any capacity to Borrower or any guarantor or endorser of this Note. Such set-off shall be deemed to have been exercised immediately at the time the Bank or such affiliate elects to do so.

 

Purpose of Loan. Borrower represents and warrants to the Bank that the proceeds of the loan shall be used only for a business purpose, and not for any personal, family or household purpose.

 

 

 

 

Financial and Other Information. Borrower represents and warrants to and agrees and covenants with the Bank that now and until this Note is paid in full, Borrower shall provide to the Bank the following: (i) any individual Borrower shall provide annually a personal financial statement for a year ending not more than sixty (60) days earlier, in reasonable detail and certified by such Borrower to be complete and accurate, and copies of Borrower’s federal income tax returns with all schedules attached, within one hundred twenty (120) days after the end of each year; and (ii) any entity Borrower shall provide within sixty (60) days after the end of each of its first three fiscal quarters, consolidating and consolidated statements of income and cash flows for the quarter, for the corresponding quarter in the previous fiscal year and for the period from the end of the previous fiscal year, with a consolidating and consolidated balance sheet as of the quarter end; and (iii) any entity Borrower shall provide annually within ninety (90) days after the end of each fiscal year, consolidating and consolidated statements of such Borrower’s income and cash flows and its consolidating and consolidated balance sheet as of the end of such fiscal year, setting forth comparative figures for the preceding fiscal year and to be audited by an independent certified public accountant acceptable to Bank, all such statements to be certified by such Borrower’s chief financial officer to be correct and in accordance with such Borrower’s records and to present fairly the results of such Borrower’s operations and cash flows and its financial position at year end in conformity with generally accepted accounting principles. Promptly upon the request of the Bank from time to time, Borrower shall supply all additional information requested and permit the Bank’s officers, employees, accountants, attorneys and other agents to (i) visit and inspect each of Borrower’s premises, (ii) examine, audit, copy and extract from Borrower’s records and (iii) discuss Borrower’s or its affiliates’ business, operations, assets, affairs or condition (financial or other) with its responsible officers and independent accountants.

 

Authorization. Borrower, if a corporation, partnership, trust or other entity, represents that it is duly organized and in good standing or duly constituted in the state of its organization is duly authorized to do business in all jurisdictions material to the conduct of its business; that the execution, delivery and performance of this Note have been duly authorized by all necessary regulatory and corporate or partnership action or by its governing instrument; that this Note has been duly executed by an authorized officer, partner or trustee and constitutes a binding obligation enforceable against Borrower and not in violation of any law, court order or agreement by which Borrower is bound; and that Borrower’s performance is not threatened by any pending or threatened litigation.

 

USA PATRIOT Act Notice. Bank hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act (“Patriot Act”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow Bank to identify the Borrower in accordance with the Patriot Act.  The Borrower agrees to, promptly following a request by Bank, provide all such other documentation and information that Bank requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act.

 

Miscellaneous. This Note, together with any related loan and security agreements and guaranties, contains the entire agreement between the Bank and Borrower with respect to the Note, and supersedes every course of dealing, other conduct, oral agreement and representation previously made by the Bank. All rights and remedies of the Bank under applicable law and this Note or amendment of any provision of this Note are cumulative and not exclusive. No single, partial or delayed exercise by the Bank of any right or remedy shall preclude the subsequent exercise by the Bank at any time of any right or remedy of the Bank without notice. No waiver or amendment of any provision of this Note shall be effective unless made specifically in writing by the Bank. No course of dealing or other conduct, no oral agreement or representation made by the Bank, and no usage of trade, shall operate as a waiver of any right or remedy of the Bank. No waiver of any right or remedy of the Bank shall be effective unless made specifically in writing by the Bank. Borrower agrees that in any legal proceeding, a copy of this Note kept in the Bank’s course of business may be admitted into evidence as an original. This Note is a binding obligation enforceable against Borrower and its successors and assigns and shall inure to the benefit of the Bank and its successors and assigns. If a court deems any provision of this Note invalid, the remainder of the Note shall remain in effect. Section headings are for convenience only. Singular number includes plural and neuter gender includes masculine and feminine as appropriate.

 

Notices. Any demand or notice hereunder or under any applicable law pertaining hereto shall be in writing and duly given if delivered to Borrower (at its address on the Bank’s records) or to the Bank (at the address on page one and separately to the Bank officer responsible for Borrower’s relationship with the Bank). Such notice or demand shall be deemed sufficiently given for all purposes when delivered (i) by personal delivery and shall be deemed effective when delivered, or (ii) by mail or courier and shall be deemed effective three (3) business days after deposit in an official depository maintained by the United States Post Office for the collection of mail or one (1) business day after delivery to a nationally recognized overnight courier service (e.g., Federal Express). Notice by e-mail is not valid notice under this or any other agreement between Borrower and the Bank.

 

Joint and Several. If there is more than one Borrower, each of them shall be jointly and severally liable for all amounts and obligations which become due under this Note and the term “Borrower” shall include each as well as all of them.

 

Governing Law; Jurisdiction. This Note has been delivered to and accepted by the Bank and will be deemed to be made in the State of New York. Except as otherwise provided under federal law, this Note will be interpreted in accordance with the laws of the State of New York excluding its conflict of laws rules. BORROWER HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT IN THE STATE OF NEW YORK IN A COUNTY OR JUDICIAL DISTRICT WHERE THE BANK MAINTAINS A BRANCH AND CONSENTS THAT THE BANK MAY EFFECT ANY SERVICE OF PROCESS IN THE MANNER AND AT BORROWER’S ADDRESS SET FORTH ABOVE FOR PROVIDING NOTICE OR DEMAND; PROVIDED THAT NOTHING CONTAINED IN THIS NOTE WILL PREVENT THE BANK FROM BRINGING ANY ACTION, ENFORCING ANY AWARD OR JUDGMENT OR EXERCISING ANY RIGHTS AGAINST BORROWER INDIVIDUALLY, AGAINST ANY SECURITY OR AGAINST ANY PROPERTY OF BORROWER WITHIN ANY OTHER COUNTY, STATE OR OTHER FOREIGN OR DOMESTIC JURISDICTION. Borrower acknowledges and agrees that the venue provided above is the most convenient forum for both the Bank and Borrower. Borrower waives any objection to venue and any objection based on a more convenient forum in any action instituted under this Note.

 

Waiver of Jury Trial. Borrower and the Bank hereby knowingly, voluntarily, and intentionally waive any right to trial by jury Borrower and the Bank may have in any action or proceeding, in law or in equity, in connection with this note or the transactions related hereto. Borrower represents and warrants that no representative or agent of the Bank has represented, expressly or otherwise, that the Bank will not, in the event of litigation, seek to enforce this jury trial waiver. Borrower Acknowledges that the Bank has been induced to enter into this note by, among other things, the provisions of this Section.

 

 

 

 

Acknowledgment. Borrower acknowledges that it has read and understands all the provisions of this Note, including the Governing Law; Jurisdiction and Waiver of Jury Trial, and has been advised by counsel as necessary or appropriate.

 

 

	 	 	BORROWER
	 	 	 
	 	 	CurAegis Technologies, Inc.

 

	
			 

				
			 

				
			By:

			
	
			Signature of Witness  

				
			 

				
			Richard A. Kaplan, Chief Executive Officer

			
	 	 	 
	 	 	 
	
			Typed Name of Witness

				
			 

				
			 

			
	 	 	 
	 	 	 
	Signature of Witness 	 	 
	 	 	 
	 	 	 
	Typed Name of Witness	 	 

 

 

 

 

ACKNOWLEDGMENT

 

STATE OF NEW YORK )

                                               : SS.

COUNTY OF MONROE )

 

On the _________ day of _________, 2019, before me, the undersigned, a Notary Public in and for said State, personally appeared Richard A. Kaplan, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

 

	 	Notary Public

 

 

STATE OF NEW YORK )

                                               : SS.

COUNTY OF MONROE )

 

On the _________ day of _________, 2019, before me, the undersigned, a Notary Public in and for said State, personally appeared __________________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

 

	 	Notary Public

 

 

 

 

FOR BANK USE ONLY

	Authorization Confirmed:	 
	 	 

 

	Credit A/C     #	 	Off Ck      #	 	Payoff Obligation     #	 
	 	 	 	 	 	 
	                      $	 	$	 	$

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00298-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00298-of-00352.parquet"}]]