Document:

exhibit107.htm

THIS WARRANT, AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD WITHOUT AN EFFECTIVE REGISTRATION STATEMENT, OR AN EXEMPTION FROM REGISTRATION, UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS.

	
CSPW _______

	
Void After May __, 2023

 

PLURES TECHNOLOGIES, INC.

 

Common Stock Purchase Warrant

 

Plures Technologies, Inc., a Delaware corporation (the “Corporation”), certifies that for value received, Massachusetts Development Finance Agency, or assigns, is entitled to purchase, subject to the terms and conditions of this Warrant, Fifty-Nine Thousand Five Hundred Twenty-Four (59,524) shares of Common Stock of the Corporation at the Stated Purchase Price per share as provided below.

 

SECTION 1.   Definitions.

 

As used in this Warrant, the following terms will have the following meanings, unless the context otherwise requires:

 

(a) “Common Stock” will mean the Corporation’s Common Stock, $0.10 par value per share.

 

(b) “Stated Purchase Price” will mean the purchase price to be paid upon exercise of this Warrant in accordance with the terms of this Warrant.  The Stated Purchase Price initially will be $0.10 per share, and will be subject to adjustment from time to time pursuant to the provisions of Section 7.

 

(c) “Warrant Expiration Date” will mean 5:00 p.m., Eastern Time, on May __, 2023; provided that if such date is a holiday or a day on which banks are authorized to close in the Commonwealth of Massachusetts, then 5:00 p.m., Eastern Time, on the next following day that is not a holiday or a day on which banks are authorized to close.

 

SECTION 2.   Notice.  If: (a) the Corporation pays any dividend or makes any distribution (other than regular cash dividends from earnings or earned surplus paid at an established rate) to the holders of its Common Stock; (b) the Corporation offers for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or other rights; (c) there is a capital reorganization or reclassification of the capital stock of the Corporation or consolidation or merger of the Corporation with or sale of all or substantially all of its assets to another corporation; or (d) there is a voluntary or involuntary dissolution, liquidation or winding up of the Corporation; then, in any one or more of such cases, the Corporation will give written notice, by first class mail, postage prepaid, addressed to the registered holder of this Warrant at the address of such registered holder as shown 

 

  

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on the books of the Corporation of the date on which (i) the books of the Corporation will close or a record date will be fixed for determining the shareholders entitled to such dividend, distribution or subscription rights, or (ii) such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, winding up, conversion, redemption or other event will take place, as the case may be.  The notice will also provide reasonable details of the proposed transaction and specify the date as of which the holders of Common Stock of record will participate in such dividend, distribution or subscription rights, or will be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, winding up, conversion, redemption or other event, as the case may be.  The notice will be given at least 5 days prior to the action in question and not less than 5 days prior to the record date or the date on which the Corporation’s transfer books are closed in respect thereto.

 

SECTION 3.   Exercise.

 

(a)    Manner of Exercise. This Warrant may be exercised at any time or from time to time, on any day which is not a Saturday, Sunday or holiday under the laws of the Commonwealth of Massachusetts, for all or any part of the number of shares of Common Stock purchasable upon its exercise; provided, however, that this Warrant will be void and all rights represented hereby will cease unless exercised before the Warrant Expiration Date.  In order to exercise this Warrant, in whole or in part, the holder of this Warrant will deliver to the Corporation at its office at the address set forth on Exhibit A, or at such other office as the Corporation may designate by notice in writing, (i) this Warrant, and (ii) a written notice of such holder’s election to exercise its Warrant substantially in the form of Exhibit A, and will pay to the Corporation by wire transfer of funds to a bank account designated by the Corporation an amount equal to the aggregate purchase price for all shares of common stock as to which this Warrant is exercised.  In lieu of such exercise of this Warrant, provided that the fair market value of the Common Stock can be determined pursuant to Section 10(a) or (b), the holder may from time to time convert this Warrant, in whole or in part, into a number of shares of Common Stock determined by using the following formula:

 

	
X =

	
[(P)(Y)(A-B)]

	 
	  	
A

	 

where

	
  

	
X = the number of shares of Common Stock to be issued to the holder for the portion of this Warrant being exercised;

P = the percentage of this Warrant being exercised;

	
  

	
Y = the total number of shares of Common Stock issuable upon exercise of this Warrant in full;

	
  

	
A = the Value of one share of Common Stock as of the exercise date; and

B = the Stated Purchase Price as in effect on the exercise date.

 

Any portion of this Warrant that is exercised will be immediately canceled.  As used in this Warrant, (i) “Conversion Date” will mean the date when the executed exercise notice is delivered to the Corporation, as provided above, and (ii) “Value” will mean the current fair market value as determined pursuant to Section 10.

 

 

  

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(b)  Issuance of Common Stock.  Upon receipt of the documents and payments described in Section 3(a), the Corporation will, as promptly as practicable, and in any event within 30 days thereafter, execute or cause to be executed, and deliver to such holder a certificate or certificates representing the aggregate number of full shares of Common Stock issuable upon such exercise, together with an amount in cash in lieu of any fraction of a share, as provided below.  The stock certificate or certificates so delivered will be in the denomination specified in said notice and will be registered in the name of the holder of this Warrant. This Warrant will be deemed to have been exercised and a certificate or certificates for shares of Common Stock will be deemed to have been issued, and the holder of this Warrant or any other person so designated to be named therein will be deemed to have become a holder of record of such shares for all purposes as of the date the notice, this Warrant, and the documents and payments described in Section 3(a), are received by the Corporation.  If this Warrant is exercised in part, the Corporation will, at the time of delivery of said certificate or certificates, deliver to the holder of this Warrant a new Warrant evidencing the rights of such holder to purchase the unpurchased shares of Common Stock called for by this Warrant.  The new Warrant will in all other respects be identical to this Warrant.

 

SECTION 4.   Reservation of Shares; Investment Representation.

 

(a)  The Corporation covenants that it will at all times until the Warrant Expiration Date reserve and keep available out of its authorized and unissued Common Stock, solely for the purpose of issue upon exercise of this Warrant, such number of shares of Common Stock as will then be issuable upon the exercise of this Warrant.

 

(b)  Massachusetts Development Finance Agency represents and warrants to the Corporation that (i) it is an “accredited investor” as defined in Regulation D under the Securities Act (as defined in Section 11.1), and (ii) it is acquiring this Warrant and the shares of Common Stock issuable upon exercise of this Warrant for its own account for investment and not with a view to, or for sale in connection with, any distribution thereof, nor with any present intention of distributing or selling the same.

 

SECTION 5.   Negotiability.  This Warrant is issued upon the following terms, to all of which each holder or owner of this Warrant consents and agrees:

 

(a)  Subject to compliance with federal and applicable state securities laws, title to this Warrant may be transferred by endorsement (by the holder of this Warrant executing the form of assignment attached as Exhibit B) and delivery in the same manner as in the case of a negotiable instrument transferable by endorsement and delivery;

 

(b)  Subject to compliance with federal and applicable state securities laws, as reasonably determined by counsel to the Corporation, any person in possession of this Warrant properly endorsed is authorized to represent himself as the absolute owner and is empowered to transfer absolute title to this Warrant by endorsement and delivery of this Warrant to a bona fide purchaser for value; each prior taker or owner waives and renounces all of his equities or rights in this Warrant in favor of each such bona fide purchaser, and each such bona fide purchaser will acquire absolute title to this Warrant and to all rights represented by this Warrant; and

 

  

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(c)  Until this Warrant is transferred on the books of the Corporation, the Corporation may treat the registered holder of this Warrant as the absolute owner of this Warrant for all purposes, notwithstanding any notice to the contrary.

 

SECTION 6.   Loss or Mutilation.  Upon receipt of evidence satisfactory to the Corporation of the loss, theft, destruction or mutilation of this Warrant (including a reasonably detailed affidavit with respect to the circumstances of any loss, theft or destruction of such Warrant) and, if requested in the case of any such loss, theft or destruction, upon delivery of an indemnity bond or other agreement or security reasonably satisfactory to the Corporation, or, in the case of any such mutilation, upon surrender and cancellation of this Warrant, the Corporation at its expense will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor.

 

SECTION 7.   Adjustments.

 

(a)  Adjustment of Number of Shares. Upon each adjustment of the Stated Purchase Price as provided in Section 7(b), the holder of this Warrant will thereafter be entitled to purchase, at the Stated Purchase Price resulting from such adjustment, the number of shares obtained by multiplying the Stated Purchase Price in effect immediately prior to such adjustment by the number of shares purchasable pursuant to this Warrant immediately prior to such adjustment and dividing the product thereof by the Stated Purchase Price resulting from such adjustment.

 

(b)  Adjustment of Stated Purchase Price.  The Stated Purchase Price will be subject to adjustment from time to time as follows:

 

(i)  If the Corporation issues shares of Common Stock other than Excluded Stock (as defined below) without consideration or for a consideration per share less than the Stated Purchase Price in effect immediately prior to the issuance of such Common Stock, the Stated Purchase Price in effect immediately prior to each such issuance or adjustment will be adjusted to a price equal to the quotient obtained by dividing:

 

(A)  an amount equal to the sum of (x) the total number of shares of Common Stock outstanding (including any shares of Common Stock deemed to have been issued pursuant to subdivision (3) of this clause (i) and to clause (ii) below) immediately prior to such issuance multiplied by the Stated Purchase Price in effect immediately prior to such issuance, plus (y)  the consideration received by the Corporation upon such issuance,

 

by

 

(B)  the total number of shares of Common Stock outstanding (including any shares of Common Stock deemed to have been issued pursuant to subdivision (3) of this clause (i) and to clause (ii) below) immediately after the issuance of such Common Stock.

 

For the purposes of any adjustment of the Stated Purchase Price pursuant to this clause (i), the following provisions will be applicable:

 

1.  In the case of the issuance of Common Stock for cash, the consideration will be deemed to be the amount of cash paid therefor after deducting 

 

 

  

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therefrom any discounts, commissions or other expenses allowed, paid or incurred by the Corporation for any underwriting or otherwise in connection with the issuance and sale thereof.

 

2.  In the case of the issuance of Common Stock for a consideration in whole or in part other than cash, the consideration other than cash will be deemed to be the fair market value thereof as determined by the Board of Directors of the Corporation, irrespective of any accounting treatment; provided, however, that such fair market value as determined by the Board of Directors, together with any cash consideration being paid, will not exceed the Value of the shares of Common Stock being issued.

 

3.  In the case of the issuance of (i) options to purchase or rights to subscribe for Common Stock, (ii) securities by their terms convertible into or exchangeable for Common Stock or (iii) options to purchase or rights to subscribe for such convertible or exchangeable securities:

 

(A)  the aggregate maximum number of shares of Common Stock deliverable upon exercise of such options to purchase or rights to subscribe for Common Stock will be deemed to have been issued at the time such options or rights were issued and for a consideration equal to the consideration (determined in the manner provided in subdivisions (1) and (2) above with the proviso in subdivision (2) being applied to the number of shares of Common Stock deliverable upon such exercise), if any, received by the Corporation upon the issuance of such options or rights plus the minimum purchase price provided in such options or rights for the Common Stock covered thereby;

 

(B)  the aggregate maximum number of shares of Common Stock deliverable upon conversion of or in exchange for any such convertible or exchangeable securities or upon the exercise of options to purchase or rights to subscribe for such convertible or exchangeable securities and subsequent conversions or exchanges thereof will be deemed to have been issued at the time such securities were issued or such options or rights were issued and for a consideration equal to the consideration received by the Corporation for any such securities and related options or rights (excluding any cash received on account of accrued interest or accrued dividends), plus the additional consideration, if any, to be received by the Corporation upon the conversion or exchange of such securities or the exercise of any related options or rights (the consideration in each case to be determined in the manner provided in subdivisions (1) and (2) above with the proviso in subdivision (2) being applied to the number of shares of Common Stock deliverable upon such conversion, exchange or exercise);

 

(C)  on any change in the number of shares of Common Stock deliverable upon exercise of any such options or rights or conversion of or exchange for such convertible or exchangeable securities, other than a change resulting from the antidilution provisions thereof, the Stated Purchase Price will forthwith be readjusted to such Stated Purchase Price as would have obtained had the adjustment made upon the issuance of such options, rights or securities been made upon the basis of such change; and

 

(D)  on the expiration of any such options or rights, the termination of any such rights to convert or exchange or the expiration of any options or rights related to such convertible or exchangeable securities, the Stated Purchase Price will forthwith be readjusted to such Stated Purchase Price as would have obtained had the adjustment made upon the issuance of such options, rights, securities or options or rights related to such securities been made upon the basis of the issuance of only the number of shares of Common Stock actually issued upon the conversion or exchange of such securities or upon the exercise of the options or rights related to such securities, if any.

 

  

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(ii)  “Excluded Stock” will mean (A) shares of Common Stock issued by the Corporation as a stock dividend payable in shares of Common Stock or upon any subdivision or split-up of the outstanding shares of Common Stock, or (B) up to 600,000 shares of Common Stock issued or issuable to officers, employees or directors of, or consultants to, the Corporation pursuant to any stock purchase or option plan or other employee stock bonus arrangement which is approved by the affirmative vote of a majority of the Board of Directors; provided, however, that the number of shares referred to in this subclause (B) may be adjusted pursuant to antidilution provisions contained in any such plan or arrangement or (C) shares of Common Stock issuable upon conversion of the Corporation’s Series A Preferred Stock.

 

(iii)  If the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up of shares of Common Stock, then, following the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the Stated Purchase Price will be appropriately decreased so that the number of shares of Common Stock issuable upon the exercise of this Warrant will be increased in proportion to such increase in outstanding shares.

 

(iv)  If the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, then, following the record date for such combination, the Stated Purchase Price will be appropriately increased so that the number of shares of Common Stock issuable upon the exercise of this Warrant will be decreased in proportion to such decrease in outstanding shares.

 

(v)  In case the Corporation declares a cash dividend upon its Common Stock payable otherwise than out of earnings or earned surplus or will distribute to holders of its Common Stock shares of its capital stock (other than Common Stock), stock or other securities of other persons, evidences of indebtedness issued by the Corporation or other persons, assets (excluding cash dividends and distributions) or options or rights (excluding options to purchase and rights to subscribe for Common Stock or other securities of the Corporation convertible into or exchangeable for Common Stock), then, in each such case, immediately following the record date fixed for the determination of the holders of Common Stock entitled to receive such dividend or distribution, the Stated Purchase Price in effect thereafter will be determined by multiplying the Stated Purchase Price in effect immediately prior to such record date by a fraction of which the numerator will be an amount equal to (x) the Value of one share of Common Stock minus (y) the fair market value (as determined by the Board of Directors of the Corporation, whose determination will be conclusive) of the stock, securities, evidences of indebtedness, assets, options or rights so distributed in respect of one share of Common Stock, and of which the denominator will be such Value.

 

 

  

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(vi)  Adjustments made pursuant to clauses (iii), (iv) and (v) above will be made on the date such dividend, subdivision, split-up, combination or distribution, as the case may be, is made, and will become effective at the opening of business on the business day next following the record date for the determination of stockholders entitled to such dividend, subdivision, split-up, combination or distribution.

 

(vii)  If the Corporation proposes to take any action of the types described in clauses (iii), (iv), or (v) of this Section 7, the Corporation will forward, at the same time and in the same manner, to the holder of this Warrant such notice, if any, which the Corporation gives to the holders of capital stock of the Corporation .

 

(viii)  In any case in which the provisions of this Section 7 require that an adjustment become effective immediately after a record date for an event, the Corporation may defer until the occurrence of such event issuing to the holder of all or any part of this Warrant which is exercised after such record date and before the occurrence of such event the additional shares of capital stock issuable upon such exercise by reason of the adjustment required by such event over and above the shares of capital stock issuable upon such exercise before giving effect to such adjustment exercise; provided, however, that the Corporation will deliver to such holder a due bill or other appropriate instrument evidencing such holder’s right to receive such additional shares upon the occurrence of the event requiring such adjustment.

 

SECTION 8.    Consolidation, Merger, etc.  If any consolidation or merger of the Corporation with another corporation, or the sale of all or substantially all of its assets to another corporation (each an “Extraordinary Event”) is effected, then, as a condition of such Extraordinary Event, the Corporation will cause lawful and adequate provision to be made whereby the registered holder of this Warrant will thereafter have the right to purchase and receive, upon exercise of this Warrant and the payment of the Stated Purchase Price, in lieu of the shares of Common Stock of the Corporation immediately theretofore purchasable and receivable upon the exercise of this Warrant, such shares of stock, securities or property (including cash) as may be issued or payable with respect to or in exchange for a number of shares of Common Stock of the Corporation immediately theretofore purchasable and receivable upon the exercise of this Warrant had such Extraordinary Event taken place immediately after such exercise, and in any such case appropriate provision will be made with respect to the rights and interests of the holder of this Warrant to the end that the provisions of this Warrant (including, without limitation, provisions for adjustments of the Stated Purchase Price and of the number of shares purchasable upon the exercise of this Warrant) will thereafter be applicable, as nearly as may be, in relation to any shares of stock, securities or property thereafter deliverable upon the exercise of this Warrant.  The foregoing provisions will similarly apply to successive Extraordinary Events.  The Corporation will not effect any such consolidation, merger or sale unless, prior to the consummation thereof, the successor corporation (if other than the Corporation) resulting from such consolidation or merger or the corporation purchasing such assets will assume by written instrument executed and mailed to the registered holder at the last address of such registered holder appearing on the books of the Corporation, the obligation to deliver to such registered holder such shares of stock, securities or property as, in accordance with the foregoing provisions, such registered holder may be entitled to purchase or receive.

 

  

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SECTION 9.   Notice of Adjustment of Stated Purchase Price.  Upon any adjustment or other change relating to the Stated Purchase Price or the securities purchasable upon the exercise of this Warrant, then, and in each such case, the Corporation will give written notice thereof, by first class mail, postage prepaid, addressed to the registered holder at the address of such registered holder as shown on the books of the Corporation, which notice will state the Stated Purchase Price resulting from such adjustment and the increase or decrease in the number or other denominations of securities purchasable at such price upon the exercise of this Warrant setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.  Where appropriate, such notice may be given in advance and may be included as part of the notice required to be mailed under the provisions of Section 7 (vii).

 

SECTION 10.   Fractional Shares.  If the number of shares of Common Stock purchasable upon the exercise of this Warrant is adjusted pursuant to Section 7, the Corporation will nevertheless not be required to issue fractions of shares, upon exercise of this Warrant or otherwise, or to distribute certificates that evidence fractional shares.  With respect to any fraction of a share called for upon any exercise of this Warrant, the Corporation will pay to the holder of this Warrant an amount in cash equal to such fraction multiplied by the current fair market value of such fractional share, determined as follows:

 

(a)  If the Common Stock is listed on a National Securities Exchange or admitted to unlisted trading privileges on such exchange or quoted in the NASDAQ System, the current fair market value will be the average of the high and low prices of Common Stock listed on the principal national securities exchange on which Common Stock is so traded, in each case for the twenty (20) trading days preceding the date of exercise of this Warrant; or

 

(b)  If the Common Stock is not listed or admitted to unlisted trading privileges, the current fair market value will be the mean of the last reported bid and asked prices reported by the National Quotation Bureau, on the last business day prior to the date of the exercise of this Warrant; or

 

(c)  If the Common Stock is not so listed or admitted to unlisted trading privileges and bid and asked prices are not so reported, the current fair market value will be an amount determined in such reasonable manner as may be prescribed by the Board of Directors of the Corporation.

 

SECTION 11.   Incidental Registration Rights.

 

11.1           Certain Definitions.  As used in this Section 11 and elsewhere in this Warrant, the following terms shall have the following respective meanings:

 

“Commission” means the Securities and Exchange Commission, or any other Federal agency at the time administering the Securities Act.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any similar Federal statute, and the rules and regulations of the Commission issued under such Act, as they each may, from time to time, be in effect.

 

 

  

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“Securities Act” means the Securities Act of 1933, as amended, or any similar Federal statute, and the rules and regulations of the Commission issued under such Act, as they each may, from time to time, be in effect.

 

“Registration Statement” means a registration statement filed by the Corporation with the Commission for a public offering and sale of securities of the Corporation (other than a registration statement on Form S-8 or Form S-4, or their successors, or any other form for a limited purpose, or any registration statement covering only securities proposed to be issued in exchange for securities or assets of another corporation).

 

“Registration Expenses” means the expenses described in Section 11.4.

 

“Registrable Shares” means (i) the shares of Stock issued or issuable upon exercise of this Warrant, and (ii) any other shares of Stock of the Corporation issued in respect of such shares (because of stock splits, stock dividends, reclassifications, recapitalizations, or similar events). Wherever reference is made in this Warrant to a request or consent of holders of a certain percentage of Registrable Shares, or to a number or percentage of Registrable Shares held by a Stockholder, such reference shall include shares of Stock issuable upon this Warrant even though such exercise has not yet occurred.

 

“Stockholder” means the initial holder hereof and any persons or entities to whom the rights granted under this Section 11 are transferred by such holder and their permitted successors or assigns.

 

11.2           Registration.

 

(a)           Whenever the Corporation proposes to file a Registration Statement, it will, prior to such filing, give written notice to all Stockholders of its intention to do so and, upon the written request of a Stockholder or Stockholders given within twenty (20) days after the Corporation provides such notice (which request shall state the intended method of disposition of such Registrable Shares), the Corporation shall use reasonable commercial efforts to cause all Registrable Shares which the Corporation has been requested to register to be registered under the Securities Act to the extent necessary to permit their sale or other disposition in accordance with the intended methods of distribution specified in the request of such Stockholder(s); provided that the Corporation shall have the right to postpone or withdraw any registration effected pursuant to this Section 11.2 without obligation to any Stockholder unless barred or limited by the terms of an agreement pursuant to which such registration statement has been filed.

 

(b)           In connection with any offering under this Section 11.2 involving an underwriting, the Corporation shall not be required to include any Registrable Shares in such underwriting unless the holders thereof accept the terms of the underwriting as agreed upon between the Corporation and the underwriters selected by it, and then only in such quantity as will not, in the opinion of the underwriters, jeopardize the success of the offering by the Corporation.  If in the opinion of the managing underwriter delivered in writing to the Corporation and the holder of any Registrable Shares the registration of all, or part of, the Registrable Shares which the holders have requested to be included would materially and adversely affect such public offering, then the Corporation shall be required to include in the underwriting only that number of Registrable Shares, if any, which the 

 

 

  

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managing underwriter believes may be sold without causing such adverse effect.  In the event of such a reduction in the number of shares to be included in the underwriting, the holders of Registrable Shares who have requested registration shall participate in the underwriting pro rata along with other holders of contractual rights to participate in such registration based upon their respective total ownership of Registrable Shares and other shares entitled to registration rights (or in any other proportion as agreed upon by such holders) and if any holder would thus be entitled to include more shares than such holder requested to be registered, the excess shall be allocated among other requesting holders pro rata based on their ownership of Registrable Shares and other shares entitled to registration rights.

 

11.3           Registration Procedures.  If and whenever the Corporation is required by the provisions of this Warrant to use its reasonable commercial efforts to effect the registration of any of the Registrable Shares under the Securities Act, the Corporation shall:

 

(a)           as expeditiously as possible prepare and file with the Commission any amendments and supplements to the Registration Statement and the prospectus included in the Registration Statement as may be necessary to keep the Registration Statement effective for a period of not less than 90 days from the effective date;

 

(b)           as expeditiously as possible furnish to each selling Stockholder such reasonable numbers of copies of the prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as the selling Stockholder may reasonably request in order to facilitate the public sale or other disposition of the Registrable Shares owned by the selling Stockholder; and

 

(c)           as expeditiously as possible use its best efforts to register or qualify the Registrable Shares covered by the Registration Statement under the securities or Blue Sky laws of such states as the selling Stockholder shall reasonably request, and do any and all other acts and things that may be necessary or desirable to enable the selling Stockholder to consummate the public sale or other disposition in such jurisdictions of the Registrable Shares owned by the selling Stockholder; provided, however, that the Corporation shall not be required in connection with this paragraph (c) to qualify as a foreign corporation or execute a general consent to service of process in any jurisdiction.

 

(d)           If the Corporation has delivered preliminary or final prospectuses to the selling Stockholder and after having done so the prospectus is amended to comply with the requirements of the Securities Act, the Corporation shall promptly notify the selling Stockholder and, if requested, the selling Stockholder shall immediately cease making offers of Registrable Shares and shall return all prospectuses to the Corporation.  The Corporation shall promptly provide the selling Stockholder with revised prospectuses and, following receipt of the revised prospectuses, the selling Stockholder shall be free to resume making offers of the Registrable Shares.

 

11.4           Registration Expenses.  The Corporation shall pay the Registration Expenses for all registrations requested pursuant to Section 11.2 of this Warrant (as between the Corporation and the Stockholder).  For purposes of this Section, the term “Registration Expenses” shall mean all expenses incurred by the Corporation in complying with 

 

 

  

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this Section 11, including, without limitation, all registration and filing fees, exchange listing fees, printing expenses, fees and disbursements of counsel for the Corporation, state Blue Sky fees and expenses, and the expense of any special audits incident to or required by any such registration, but excluding underwriting discount and selling commissions and fees and disbursements of counsel for the selling Stockholders. Such underwriting discounts and selling commissions shall in the case of all registration requests be borne pro rata by the selling Stockholders in accordance with the number of their Registrable Shares included in such registration.

 

11.5           Indemnification.  In the event of any registration of any of the Registrable Shares under the Securities Act pursuant to this Warrant, to the extent permitted by law the Corporation will indemnify and hold harmless the seller of such Registrable Shares, each underwriter of such Registrable Shares and each other person, if any, who controls such seller or underwriter within the meaning of the Securities Act or the Exchange Act against any losses, claims, damages or liabilities, joint or several, to which such seller, underwriter or controlling person may become subject under the Securities Act, the Exchange Act, state securities laws or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement under which such Registrable Shares were registered under the Securities Act, any preliminary prospectus or final prospectus contained in the Registration Statement, or any amendment or supplement to such Registration Statement, or arise out of or are based upon the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and the Corporation will reimburse such seller, underwriter and each such controlling person for any legal or any other expenses reasonably incurred by such seller, underwriter or controlling person in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Corporation will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any untrue statement or omission made in such Registration Statement, preliminary prospectus or prospectus, or any such amendment or supplement, in reliance upon and in conformity with information furnished to the Corporation, in writing, by or on behalf of such seller, underwriter or controlling person specifically for use in the preparation thereof.

 

In the event of any registration of any of the Registrable Shares under the Securities Act pursuant to this Warrant, to the extent permitted by law each seller of Registrable Shares severally and not jointly, will indemnify and hold harmless the Corporation, each of its directors and officers and each underwriter (if any) and each person, if any, who controls the Corporation or any such underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages or liabilities joint or several, to which the Corporation, such directors and officers, underwriter or controlling person may become subject under the Securities Act, Exchange Act, state securities laws or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement or a material fact contained in 

  

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any Registration Statement under which such Registrable Shares were registered under the Securities Act, any preliminary prospectus or final prospectus contained in the Registration Statement, or any amendment or supplement to the Registration Statement, or arise out of or are based upon any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, if the statement or omission was made in reliance upon and in conformity with information furnished in writing to the Corporation by or on behalf of such seller, specifically for use in connection with the preparation of such Registration Statement, prospectus, amendment or supplement; provided, however, that the obligations of such Stockholder hereunder shall be limited to an amount equal to the proceeds of each Stockholder of Registrable Shares sold as contemplated herein.  No indemnification shall be provided pursuant to this Section 11.5 in the event that any error in a preliminary prospectus of the Corporation is subsequently corrected in the final prospectus of the Corporation for a particular offering.

 

Each party entitled to indemnification under this Section 11.5 (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom; provided, that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld); and, provided, further, that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 11 so long as such failure did not result in a material adverse impact on the ability of the Indemnifying Party to defend the claim.  The Indemnified Party may participate in such defense at such party’s expense; provided, however, that the Indemnifying Party shall pay the expenses of one counsel to represent the Indemnified Party (or the Indemnified Parties as a group) if representation of such Indemnified Party or Parties by the counsel retained by the Indemnifying Party would be inappropriate due to differing interests between the Indemnified Party and any other party represented by such counsel in such proceeding. No Indemnifying Party, in the defense of any such claim or litigation shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect of such claim or litigation, and no Indemnified Party shall consent to entry of any judgment or settle such claim or litigation without the prior written consent of the Indemnifying Party.

 

If the indemnification provided for in this Section 11.5 is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any loss, liability, claim, damage or expense referred to herein, the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, liability, claim, damage or expense as is appropriate to reflect (i) the proportionate relative fault of the Indemnifying Party on the one hand and the Indemnified Party on the other (determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission relates to information supplied by the Indemnifying Party or the Indemnified Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission), or (ii) if the allocation provided by clause (i) above is not permitted by applicable law or provides a lesser sum to the Indemnified Party than the amount hereinafter calculated, not only the proportionate relative fault of the Indemnifying Party and the Indemnified Party, but also the relative benefits received by the Indemnifying Party on the one hand and the Indemnified Party on the other, as well as any other relevant equitable considerations.  No Indemnified Party guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Indemnifying Party who was not guilty of such fraudulent misrepresentation.

 

  

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11.6           Information by Holder.  Each holder of Registrable Shares included in any registration shall furnish to the Corporation such information regarding such holder and the distribution proposed by such holder as the Corporation may request in writing and as shall be required in connection with any registration, qualification or compliance referred to in this Section 5.

 

11.7           Rule 144 Requirements.  With a view to making available to the Stockholder the benefits of Rule 144 promulgated under the Securities Act and any other rule or regulation of the Commission that may at any time permit a Stockholder to sell securities of the Corporation to the public or to others without registration, the Corporation agrees to use its best efforts to:

 

(a)           make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act;

 

(b)           use its best efforts to file with the Commission in a timely manner all reports and other documents required of the Corporation under the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements); and

 

(c)           furnish to any holder of Registrable Shares upon request a written statement by the Corporation as to its compliance with the reporting requirements of said Rule 144 and of the Securities Act and the Exchange Act, a copy of the most recent annual or quarterly report of the Corporation, and such other reports and documents of the Corporation as such holder may reasonably request to avail itself of any similar rule or regulation of the Commission allowing it to sell any such securities without registration.

 

11.8           Termination of Registration Rights. Notwithstanding the provisions of this Section 11, the Corporation shall not be required to include any Registrable Shares in any offering pursuant to this Section 11 if the holders of those shares could then sell all of the shares of the Corporation’s Common Stock which they requested to be registered in such offering pursuant to Rule 144 under the Securities Act.

 

SECTION 12.   Warrant Holder Not Deemed Stockholder.  The holder of this Warrant will not, as such, be entitled to vote or to receive dividends or be deemed the holder of Common Stock that may at any time be issuable upon exercise of this Warrant for any purpose whatsoever, nor will anything contained in this Warrant be construed to confer upon the holder, as such, any of the rights of a stockholder of the Corporation or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to receive dividends or subscription rights, until the holder has exercised this Warrant and has been issued shares of Common Stock in accordance with the provisions of this Warrant.

 

SECTION 13.   Transfer Restrictions.  This Warrant may not be pledged, sold, assigned or otherwise transferred unless the proposed disposition is the subject of a currently effective registration statement under the Securities Act of 1933, as amended, or unless the Corporation has received an opinion of counsel reasonably satisfactory in form and scope to the Corporation that such registration is not required.  This Warrant and the Common Stock issuable upon exercise of this Warrant will be imprinted with a legend in substantially the following form:

 

  

13

  

TRANSFER RESTRICTED

THIS WARRANT, AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD WITHOUT AN EFFECTIVE REGISTRATION STATEMENT, OR AN EXEMPTION FROM REGISTRATION, UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS.

 

SECTION 14.   Rights of Action; Remedies.  All rights of action with respect to this Warrant are vested in the holder of this Warrant, and the holder may enforce against the Corporation its right to exercise this Warrant for the purchase of shares of Common Stock in the manner provided in this Warrant.  The Corporation stipulates that the remedies at law of the holder of this Warrant in the event of any default or threatened default by the Corporation in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate, and that such terms may be specifically enforced by a decree for the specific performance of any agreement contained in this Warrant or by an injunction against a violation of any of the terms of this Warrant or otherwise.

 

SECTION 15.   Notices.  All notices and other communications from the Corporation to the holder, or vice versa, will be deemed delivered and effective when given personally or sent by electronic facsimile transmission, express overnight courier service, or mailed by first class registered or certified mail, postage prepaid, at such address as may have been furnished to the Corporation or the holder, as the case may be, in writing by the Corporation or such holder from time to time.  Holder’s address for notice purposes is 160 Federal Street, Boston, Massachusetts 02110.

 

SECTION 16.   Modification of Warrant.  This Warrant will not be modified, supplemented or altered in any respect except with the consent in writing of the holder of this Warrant and the Corporation.  No change in the number or nature of the securities purchasable upon the exercise of this Warrant, or the Stated Purchase Price therefor, or the acceleration of the Warrant Expiration Date, will be made without the consent in writing of the holder of this Warrant, other than such changes as are specifically prescribed by this Warrant as originally executed.

 

SECTION 17.   Miscellaneous.  This Warrant will be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its principles of conflicts of laws.  The headings in this Warrant are for purposes of reference only, and will not limit or otherwise affect any of the terms of this Warrant.  This Warrant is being executed as an instrument under seal.  The invalidity or unenforceability of any provision of this Warrant will in no way affect the validity or enforceability of any other provision.

 

  

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The Corporation has caused this Warrant to be duly executed as of May __, 2013.

 

                               Plures Technologies, Inc.

                               By: _______________________________

                                      Name:

                                      Title:

 

 

 

  

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EXHIBIT A

EXERCISE FORM

(To be signed only on exercise of Warrant)

Plures Technologies, Inc.

[insert address]

The undersigned hereby irrevocably elects to exercise the right to purchase represented by the within Warrant for, and to purchase thereunder, _______ shares of the stock provided for therein, and requests that certificates for such shares be issued in the name of:

_________________________________________________________________

                         (Please print name, address, and social security number)

_________________________________________________________________

and, if said number of shares will not be all the shares purchasable thereunder, that a new Warrant for the balance remaining of the shares purchasable under the within Warrant be registered in the name of the undersigned holder of the within Warrant or his Assignee as below indicated and delivered to the address stated below.

NAME OF HOLDER OR ASSIGNEE:______________________________________

(Please print)

ADDRESS OF HOLDER

OR ASSIGNEE:_____________________________________________________

SIGNATURE OF HOLDER:_____________________________________________

DATED:__________________

Note:  The above signature must correspond with the name exactly as written upon the face of the within Warrant in every particular, without alteration or enlargement or any change whatever, unless the within Warrant has been assigned.

 

  

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EXHIBIT B

FORM OF ASSIGNMENT

(To be signed only on transfer of Warrant)

For value received, the undersigned hereby sells, assigns, and transfers unto _____________________________ the right represented by the within Warrant to purchase __________________ shares of Common Stock of Plures Technologies, Inc. to which the within Warrant relates, and appoints ___________________ attorney to transfer such rights on the books of Plures Technologies, Inc. with full power of substitution in the premises.

NAME OF HOLDER:__________________________________________________

(Please print)

ADDRESS:_________________________________________________________

SIGNATURE OF HOLDER:_____________________________________________

DATED:__________________

Note:  The above signature must correspond with the name exactly as written upon the face of the within Warrant in every particular, without alteration or enlargement or any change whatever, unless the within Warrant has been assigned.

SIGNED IN THE PRESENCE OF:

__________________________

 

 

  

17exhibit108.htm

 

AMENDED SECURITIES PURCHASE AGREEMENT

 

THIS AMENDED SECURITIES PURCHASE AGREEMENT (this “Agreement”), is dated as of May 8, 2013 (the “Effective Date”), by and among Plures Technologies, Inc., a publicly reporting corporation organized under the laws of the State of Delaware (the “Borrower” or “Company”), the subscriber identified on the signature page hereto as listed on Schedule A annexed hereto (the  “Subscriber” and collectively with all persons who have previously signed copies of this Agreement or will sign copies of this  Agreement, the “Subscribers”) and RENN Capital Group, Inc., as Collateral Agent for the Subscribers.

R E C I T A L S

A.           The Company has previously sold approximately $2,433,333 of 2% notes (the “Prior Notes”) to investors (“Prior Subscribers”) and now desires to sell an additional $3,200,000 of 2% notes to investors.  All of the investors in the 2% notes (approximately $5,633,333) desire to combine their loans by virtue of this Amended Securities Purchase Agreement into one consolidated loan and security interest.  The holders of the $2,433,333 of 2% notes have evidenced their agreement by signing a Modification Agreement of even date herewith.  The subscribers for the $3,200,000 of 2% notes (the “Subscribers”) are signing this Amended Securities Purchase Agreement and related documents.

B.           The Company and the Subscribers are executing and delivering this Agreement in reliance upon an exemption from securities registration afforded by the provisions of Section 4(2), Section 4(6) and/or Regulation D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “1933 Act”).

 

C.           The Company desires to raise capital by sale to the Prior Subscribers and the Subscribers of (i) up to $5,633,333 of 2% Secured Convertible Promissory Notes substantially in the form as annexed hereto as Exhibit A (each, a “Note”) at face value (the “Purchase Price”) based on the principal amount of Note acquired by such Subscriber (the “Principal Amount”), which Notes mature on the Fifty Four (54) month anniversary of the date of issuance (subject to acceleration) and are voluntarily convertible into shares of the Company’s Common Stock, $.001 par value (the “Common Stock” and, the shares issuable upon conversion of the Notes, are sometimes referred to herein as the “Conversion Shares”) at an initial per share conversion price of $1.60 per share for Notes provided that if the cash of the Company and its subsidiaries is less than $1,000,000, the conversion price will become $1.00 (the “Conversion Price”) and (ii) Common Stock Purchase Warrants exercisable for four (4) years from the date of issuance at $0.01 per share, for such number of shares as equals the number of Common Stock into which the Notes are convertible (the “Warrant Shares”) substantially in the form as annexed hereto as Exhibit B (the “Warrant”).  The Notes, and shares of Common Stock issuable upon conversion of the Notes (the “Conversion Shares”), the Warrants and the Warrant Shares are sometimes collectively referred to herein as the “Securities”.

 

D.           As a further inducement to Subscribers to invest in the Notes and Warrants, and among other representations, warranties, covenants or benefits provided, the Company and its Subsidiaries (as hereinafter defined) have each agreed to provide Subscribers with a security interest in all of their respective assets, which interest shall be pari passu with the Prior Notes and senior to all other security interests of the Company other than that certain senior, first priority security interest in all assets of Advanced Microsensors Corporation, a New York corporation and wholly owned subsidiary of the Company (“AMS”) (excluding any intellectual property)  in favor of the Massachusetts Development Finance Agency (the “MDFA Lien”) and, the Subsidiaries have each agreed to guarantee, jointly and severally, repayment of the Notes; provided however, that the Company expects to borrow up to $3,000,000 from Hercules Technology Growth Capital, Inc. which will be granted a super senior lien on all of the assets of the Company and its subsidiaries (the “Super Senior Lien”), senior to that of MDFA and the Subscribers, so that the Notes will then be subordinate to both the Super Senior Lien and the MDFA Lien, and the holders of the Notes agree to execute and deliver a subordination agreement or agreements confirming the same.

 

  

  

  

E.            In order to perfect the liens granted by the Company and each Subsidiary and to effectuate the Subsidiary guarantees in favor of Prior Subscribers and Subscribers (i) each of: Plures Holdings, Inc., a Delaware corporation  and wholly owned subsidiary of the Company (“Plures Holdings”), Advanced MicroSensors Corporation, a New York corporation and wholly owned subsidiary of the Company, AMS, and 95% owned subsidiary of Plures Holdings and  Magnetic Sense, Inc., a Delaware corporation (“MSI” and, together with Plures Holdings and AMS, the “Subsidiaries” and each, a “Subsidiary”) have executed a Guaranty Agreement in favor of Collateral Agent (as hereinafter defined) on behalf of the Prior Subscribers and Subscribers substantially in the form as annexed hereto as Exhibit C (each, a “Subsidiary Guaranty”), jointly and severally guaranteeing all of the Company’s obligations under all of the Notes, (ii) the Company has agreed to grant a security interest and pledge, in favor of Collateral Agent on behalf of the Prior Subscribers and Subscribers as secured parties, with respect to its assets (subject to the MDFA Lien and the Super Senior Lien) and all of the shares of Plures Holdings (the “Amended Plures Holdings Pledge”) and of MSI (the “Amended MSI Pledge”), and Plures Holdings has agreed to pledge all of the shares it owns of AMS (the “Amended AMS Pledge”), each in accordance with the form of Pledge and Security Agreement in the form annexed hereto as Exhibit D (the “Security Agreement” and, together with the together with this Agreement, the Notes, the Guaranty agreement executed by the Company and each subsidiary, as the case may be, being collectively referred to herein as the “Transaction Documents”)

 

WHEREAS, Prior Subscribers and Subscribers understand that there is a great deal of risk, illiquidity and uncertainty in the purchase of the Securities herein and that no assurance can be made that the Company will raise the substantial additional capital needed or that it will complete its business plans or, if completed, that it will be successful in doing so and, have already, in good faith, submitted funds to the Company;

 

WHEREAS, Prior Subscribers and Subscribers have agreed, as secured lenders, to appoint RENN Capital Group, Inc. or its successor as Collateral Agent (the “CollateralAgent”) for the Subscribers as secured parties under the Security Agreements, Pledges and Subsidiary Guaranty.

 

WHEREAS, each Subscriber understands it will share a security interest with the other Subscribers and with the Prior Subscribers, which will be subordinate to the Super Senior Lien and the MDFA Lien.

 

NOW, THEREFORE, in consideration of the mutual covenants and other agreements contained in this Agreement the Company and the Subscribers hereby agree as follows:

 

1.           Date and Time.

 

(a)  Closing. The sale of Notes and Warrants will take place in one or more closings (each, a “Closing” and, each date a Closing occurs being referred to as a “Closing Date”), subject to the satisfaction of all the parties hereto of their obligations herein, at the sole discretion of the Company, provided that the Company and its Subsidiaries have duly executed and delivered all of the Transaction Documents to which they are a party and have satisfied all other obligations herein and therein.   There is no minimum offering amount . Closings will take place at such times as subscriptions are received without notice to the Subscribers.  Schedule A sets forth information as to the Subscribers and the Securities being purchased.

 

(b)           No Escrow Collateral Agent.    There is no escrow Collateral Agent in this offering and moneys will not be held in any segregated or secured account pending acceptance or rejection.  Accordingly, there is also no minimum offering amount and funds reflecting the Purchase Price are immediately available for use by the Company and susceptible to rights of third party creditors without protection.  The Company has agreed to issue the Notes and enter into this Agreement and all related agreements, or return funds to any Subscriber whose investment is not accepted.

 

  

2

  

2.           Closing/Ratio of Notes and Warrants.   Subject to the satisfaction or waiver of the terms and conditions of this Agreement, on the Closing Date, each Subscriber shall purchase and the Company shall sell to each Subscriber a Note in the Principal Amount designated on the signature page for such Subscriber hereto for the Purchase Price indicated thereon, and warrants to purchase such number of shares as equals the Principal Amount divided by the Conversion Price, rounded down to the nearest share.  There is no minimum per subscriber.  All references herein to purchase or sale of the Note shall be deemed to include, and intend, the Note and the Warrant.

 

3.           Acceptance of Appointment of Collateral Agent.  Each Subscriber hereby appoints RENN Capital Group Inc. to act as its Collateral Agent, in all respects on behalf of such Subscriber as a Secured Party under the Transaction Documents.  The Subscribers understand that they are authorizing and entrusting Collateral Agent with certain authority to act on their behalf, to hold and dispose of collateral on their behalf and to make certain decisions as provided herein and in the Transaction Documents.  Each Prior Subscriber and Subscriber hereby waives any conflict of interest of Collateral Agent, as more fully provided below, and holds harmless Collateral Agent from any and all claims, liabilities and suits.  Subscriber understands that Collateral Agent may resign at any time.  The Company and each Subsidiary accepts the appointment of the Collateral Agent and hereby accepts the appointment of any successor Collateral Agent appointed by the lenders from time to time in accordance with these Transaction Documents, provided that written notice to the Company is provided to it advising of such successor Collateral Agent, executed by holders of 70% or greater of outstanding Notes and interest.

 

4.           Subscriber Representations and Warranties.  In order to induce the Company to enter into this Agreement and the Transaction Agreements and to consummate the transactions contemplated hereby and thereby, each Subscriber hereby represents and warrants to and agrees with the Company and each Subsidiary only as to such Subscriber, as of the Effective Date and each Closing Date on which such Subscriber purchases a Note, that:

(a)           Organization and Standing of the Subscribers.  If such Subscriber is an entity, such Subscriber is a corporation, partnership or other entity 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 Subscriber has the requisite power and authority or capacity, as the case may be, to enter into and perform this Agreement and to purchase the Notes being sold to it hereunder, and to appoint Collateral Agent as Collateral Agent on its behalf.

(c)           Information on Company.   Such Subscriber has access to  the Securities and Exchange Commission’s (the “SEC”) EDGAR database, to enable review of all of the reports of the Company filed with the SEC (collectively  the “Reports”) which Reports are part of, and are incorporated by reference by Company herein.

(e)           Information on Subscriber.  Such Subscriber is, an “accredited investor”, as such term is defined in Regulation D promulgated by the Commission under the 1933 Act, is experienced in investments and business matters, has made investments of a speculative nature and has purchased securities of United States and non-U.S. publicly-owned companies in private placements in the past and, with its representatives, has such knowledge and experience in financial, tax and other business matters as to enable such Subscriber to utilize the information made available by the Company to evaluate the merits and risks of and to make an informed investment decision with respect to the proposed purchase, which represents a speculative investment.

  

3

  

(f)           Purchase of Notes and Warrants.  On such Closing Date, such Subscriber will purchase the Notes and Warrants as principal for its own account, not as a nominee or Collateral Agent, for investment only and not with a view toward, or for resale in connection with, the public sale or any distribution thereof and such Subscriber has no present intention of selling, granting any participation in or otherwise distributing the same. Subscriber has subscribed for, and agrees to purchase on the terms herein, for such Principal Amount of Notes and such number of Warrants as set forth on the signature page hereto for such Subscriber, as reflected on Schedule A.

(g)           Shares Legend.  The Securities (including any Conversion Shares, the Warrant and Warrant Shares) shall bear substantially the following or similar legend:

“NEITHER THE ISSUANCE OF THIS SECURITY NOR THE UNDERLYING SHARES OF COMMON STOCK HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE “ACT”). THIS SECURITY HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE TRANSFERRED UNTIL (i) A REGISTRATION STATEMENT UNDER THE ACT SHALL HAVE BECOME EFFECTIVE WITH RESPECT THERETO OR (ii) RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER NOR IS IN VIOLATION OF ANY APPLICABLE STATE SECURITIES LAWS.  THIS LEGEND SHALL BE ENDORSED UPON ANY NOTE ISSUED IN EXCHANGE FOR THIS NOTE. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

(h)           Representative of Note holders; Waivers of Conflict of Interest.   Subscriber understands that it is entrusting certain decision making on its behalf to the Collateral Agent as more fully provided therein.  Subscriber understands that Collateral Agent, and or one or more of its affiliates and other noteholders and their affiliates, may be officers, directors, or affiliates of the Borrower, or may represent Borrower in one or more capacities as counsel.  Subscriber hereby states that (i) it has reviewed and understands the risks and conflicts relating thereto and that (ii) it hereby forever waives any conflict of interest interposed as a result of such affiliations of Collateral Agent or of other Note holders whose interests may not be aligned with Note holders that are not otherwise affiliated with the Borrower.  Each Subscriber advises that it understands the nature of the conflict and that it has sought the advice of its own counsel in connection herewith.

(i)            Other Risks; Need for Additional Capital.  The Subscribers understand that an investment in the Company involves a significant amount of risk and illiquidity, including risk of loss of one’s entire investment and, among other things, that the Company is in need of substantial additional capital even after closing of this financing.

(j)           Permitted Transfers.   Notwithstanding anything to the contrary contained in this Agreement, such Subscriber may transfer (without restriction, without the consent of the Company and without the need for an opinion of counsel) the Securities to its Affiliates (as defined below) provided that each such Affiliate is an “accredited investor” under Regulation D, such Affiliate agrees to be bound by the terms and conditions of this Agreement, and written notice of such transfer is provided the Company within ten (10) business days of said transfer. For the purposes of this Agreement, an “Affiliate” of any person or entity means any other person or entity directly or indirectly controlling, controlled by or under direct or indirect common control with such person or entity.  With respect to the Company, Affiliate includes each Subsidiary (as defined below) of the Company.  For purposes of this definition, “control” means the power to direct the management and policies of such person or firm, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.

 

  

4

  

5.           Company Representations and Warranties.  The Company represents and warrants to each Subscriber and agrees with each Subscriber, as of the Effective Date and each Closing Date (except to the extent a different date is specified in this Section 5) that:

 

(a)           Due Incorporation.  The Company is a corporation or other entity duly incorporated or organized, validly existing and in good standing under the laws of the jurisdiction of the State of Delaware and has the requisite corporate power to own its properties and to carry on its business as presently conducted.  The Subsidiaries are each incorporated in the jurisdictions set forth in the recitals above.  The Company and each Subsidiary are duly qualified as a foreign corporation to do business and are in good standing in each jurisdiction where the nature of the business conducted or property owned by it makes such qualification necessary, other than those jurisdictions in which the failure to so qualify would not have a Material Adverse Effect.  For purposes of this Agreement, a “Material Adverse Effect” shall mean a material adverse effect on the financial condition, results of operations, prospects, properties or business of the Company and its Subsidiaries taken as a whole.  The Company does not have any wholly owned or partially owned subsidiaries other than the Subsidiaries or parent companies, or other entities that it operates through or with for its business generally except as set forth herein.

 

(b)           Outstanding Stock.  All issued and outstanding shares of capital stock of the Company and of each Subsidiary, have been duly authorized and validly issued and are fully paid and non-assessable.  At each Closing, and other than Conversion Shares or Notes issued herein, there are 1,375,000 shares of Series A preferred Stock and approximately 5,000,000 shares of Common Stock issued and outstanding. The Company’s capitalization is, substantially as provided in the SEC Reports.

 

(c)           Authority; Enforceability.  This Agreement, the Note, the Warrants, the Security Agreement, the Subsidiary Guaranty, and any other agreements delivered together with this Agreement or in connection herewith (collectively “Transaction Documents”) have been duly authorized, executed and delivered by the Company and / or its Subsidiaries (as applicable) and are valid and binding agreements of the Company or respective Subsidiary, as the case may be, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights generally and to general principles of equity.  The Company has full corporate power and authority necessary to enter into and deliver the Transaction Documents and to perform its obligations thereunder.  Company further warrants and represents that (i) it has assessed with its counsel and advisors all of the fees, interests and costs associated with this Note and the Warrants and, the actual annual percentage rate and related costs of issuance of the Note and, (ii) it has determined that each of the Transaction Documents is fully enforceable as against the Company in all respects and reasonable, without counterclaim, defense or set off or deduction.  Company acknowledges and understand that, among other things, Subscriber have each relied on and continue to rely on such representations, among other representations, in making an investment hereby.

 

(d)           Additional Issuances.  There are no outstanding agreements or preemptive or similar rights affecting the Company’s Common Stock, preferred stock or equity and no outstanding rights, warrants or options to acquire, or debt equity or other instruments or derivatives convertible into or exchangeable for, or agreements or understandings with respect to the sale or issuance of any shares of Common Stock or equity of the Company or any Subsidiary (if any) or other equity interest in the Company after the date of the Reports before or existing on Closing Date (other than pursuant to this Agreement and the Transaction Documents) of Company except as described in the Reports.  The Common Stock, preferred stock, options and derivative securities of the Company on a fully diluted basis outstanding as of the last Business Day preceding the first Closing Date is set forth on Schedule 5(d).  Plures Holdings has 1,000,000 shares authorized with 100 shares outstanding all of which are issued in the name of, and held by the Company (the “Plures Shares”).  AMS has 250,000 shares of Common Stock and 50,000,000 shares of preferred stock authorized and100,000 shares of Common Stock outstanding of which 95,000 shares are held by Plures Holdings (the “AMS Shares”) with 5% of AMS (i.e. 5,000 shares of AMS) owned by third parties.  MSI has 100 shares outstanding, all of which are issued in the name of and held by the Company (the “MSI Shares” and, together with the Plures Shares and the AMS Shares are sometimes collectively referred to herein as the “Subsidiary Shares” or “Pledge Shares”).  None of the Subsidiaries have any preferred shares authorized or designated or any derivative securities outstanding which are convertible into or exchangeable or exercisable for any shares of the Subsidiaries or Company.  None of the Pledge Shares are encumbered or subject to any liens or encumbrances.  All of the Pledge Shares are duly authorized, validly issued fully paid and non assessable, by the respective entity holding said shares as provided above in this Section 5(d). There are no shares, securities, options, warrants, or rights to subscribe to, securities, rights or obligations convertible into or exchangeable for or giving any right to subscribe for any shares of capital stock of the Company or any of its Subsidiaries except as set forth on Schedule 5(d). If the Super Senior Lien is granted, the Pledged Shares will be pledged with the holder of the Super Senior Lien.

 

  

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(e)           Consents.  No consent, approval, authorization or order of any court, governmental agency or body or arbitrator having jurisdiction over the Company, or any of its Affiliates or the Company’s shareholders is required for the execution by the Company of the Transaction Documents and compliance and performance by the Company of its obligations under the Transaction Documents, including, without limitation, the issuance and sale of the Securities except from MDFA pursuant to the terms of that certain Loan Agreement between AMS and MDFA dated as of October 13, 2011 (the “MDFA Loan Agreement”) and the Super Senior Lien holder under its Loan and Security Agreement (the “Super Senior Lien Loan Agreement”).. The Transaction Documents and the Company’s performance of its obligations thereunder have been approved by the Company’s Board of Directors.  Other than the filing of a Form D with the Commission and applicable state securities commissioners with respect to the offer and sale of the Securities (which filings will be made within the time prescribed by law), no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any governmental authority, is required by the Company or any Affiliate of the Company in connection with the consummation of the transactions contemplated by this Agreement and the Transaction Documents, or the consummation of any of the other agreements, covenants or commitments of the Company or any Subsidiary contemplated by the other Transaction Documents, except as would not otherwise have a Material Adverse Effect. Any such qualifications and filings will, in the case of qualifications, be effective on the Closing and will, in the case of filings, be made within the time prescribed by law.  No consent of any third party is required to be obtained by the Company other than those consents necessary from MDFA pursuant to the terms of the MDFA Loan Agreement and from the Super Senior Lien holder pursuant to the terms of the Super Senior Lien Loan Agreement relating to subordination of Subscribers’ security interests to the MDFA Lien and the Super Senior Lien, respectively.

 

(f)           No Violation or Conflict.  Assuming the representations and warranties of the Subscribers in Section 4 are true and correct, and with the necessary consent of MDFA and the Super Senior Lien holder, neither the issuance and sale of the Securities, nor the performance of the Company’s or any Subsidiaries’ obligations under this Agreement, the Transaction Documents and all other agreements entered into by the Company or any Subsidiary relating thereto by the Company (or such Subsidiary) will:

 

(i)           violate, conflict with, result in a breach of, or constitute a default (or an event which with the giving of notice or the lapse of time or both would be reasonably likely to constitute a default) under (A) the articles or certificate of incorporation, charter or bylaws of the Company or of any Subsidiary, (B) to the Company’s Knowledge (as defined below), any decree, judgment, order, law, treaty, rule, usury or other lending limitation or rule, or other regulation or determination applicable to the Company of any court, governmental agency or body, or arbitrator having jurisdiction over the Company or over the properties or assets of the Company, and Subsidiary or any of their Affiliates, (C) the terms of any bond, debenture, note or any other evidence of indebtedness, or any agreement, stock option or other similar plan, indenture, lease, mortgage, deed of trust or other instrument to which the Company or any of its Affiliates is a party, by which the Company or any of its Affiliates is bound, or to which any of the properties of the Company or any of its Affiliates is subject, or (D) the terms of any “lock-up” or similar provision of any underwriting or similar agreement to which the Company, or any of its Affiliates is a party, except the violation, conflict, breach, or default of which would not have a Material Adverse Effect. For purposes of this Agreement, “Knowledge” shall mean the actual knowledge of the Company’s or any of its Subsidiary’s President and Chief Executive Officer, Chief Financial Officer or a member of the board of directors of the Company or a Subsidiary as of the Effective Date; or

 

  

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(ii)           result in the creation or imposition of any lien, charge or encumbrance upon the Securities or any of the assets of the Company or any of its Affiliates except as described herein.

 

(g)           The Securities.  The Securities, upon issuance:

 

(i)           are, or will be, free and clear of any security interests, liens, claims or other encumbrances, subject to restrictions upon transfer under the 1933 Act and any applicable state securities laws;

(ii)           have been, or will be, duly and validly authorized and on the date of issuance of the Conversion Shares upon conversion of the Notes and/or issuance of the Warrant Shares on exercise of the Warrants, the Conversion Shares/and or Warrant Shares will be validly issued, fully paid and non-assessable;

 

(iii)           will not have been issued or sold in violation of any preemptive or other similar rights of the holders of any securities of the Company;

 

(iv)           will not subject the holders thereof to personal liability by reason of being such holders;

 

           (v)           assuming the representations warranties of the Subscribers as set forth in Section 4 hereof are true and correct, will not result in a violation of Section 5 under the 1933 Act, and

 

(h)           Litigation.  There is no pending or, to the Knowledge of the Company, threatened action, suit, proceeding or investigation before any court, governmental agency or body, or arbitrator having jurisdiction over the Company, or any of its Affiliates that would affect the execution by the Company or the performance by the Company of its obligations under the Transaction Documents.

(i)           Information Concerning Company. The Company has made available to each Purchaser through the SEC’s EDGAR system accurate and complete copies (excluding copies of exhibits) of each report, registration statement, and definitive proxy statement filed by the Borrower with the SEC.  All statements, reports, schedules, forms and other documents required to have been filed by the Company with the SEC have been so filed.  As of the time it was filed with the SEC (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing): (i) each of the Reports complied in all material respects with the applicable requirements of the 1933 Act, or the Securities Exchange Act of 1934 (the “1934 Act”), as amended; and (ii) none of the Reports 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 the light of the circumstances under which they were made, not misleading.

 

  

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(j)           Stop Transfer.  The Company and Subsidiaries will not issue any stop transfer order or other order impeding the sale, resale or delivery of any of the Securities, except as may be required by any applicable federal or state securities laws and unless contemporaneous notice of such instruction is given to the affected Subscriber.

 

(k)           Defaults.   Neither the Company nor any Subsidiary is in violation of its articles of incorporation or bylaws.  Neither the Company nor any Subsidiary is (i) in default under or in violation of any other material agreement, license, lease, intellectual property assignment or lease, or other instrument to which it is a party or by which it or any of its properties are bound or affected, which default or violation would have a Material Adverse Effect, except for certain payments due under the lease for its premises, which are expected to be made from the proceeds of this loan and the loan in connection with the Super Senior Lien (ii) in default with respect to any order of any court, arbitrator or governmental body or subject to or party to any order of any court or governmental authority arising out of any action, suit or proceeding under any statute or other law respecting antitrust, monopoly, restraint of trade, unfair competition or similar matters, or (iii) in violation of any statute, rule or regulation of any governmental authority which violation would have a Material Adverse Effect.

 

 (l)           No Undisclosed Liabilities.  The Company has no liabilities or obligations which are material, individually or in the aggregate, other than those incurred in the ordinary course of the Company business since the end of the last period set forth in the Reports, and which, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect, except as disclosed in the Reports or on Schedule 5(o).

 

(m)           No Undisclosed Events or Circumstances.  Since December 31, 2010, no event or circumstance has occurred or exists with respect to the Company or its businesses, properties, operations or financial condition, that, under applicable law, rule or regulation, requires public disclosure or announcement prior to the date hereof by the Company but which has not been so publicly announced or disclosed

 

(n)           Intellectual Property.   The Company owns or possesses (or, can acquire on commercially reasonable terms) sufficient legal rights to all Company Intellectual Property (as defined below), without any known conflict with, or infringement of, the rights of others.  To the Company’s Knowledge, no product or service marketed or sold (or proposed to be marketed or sold) by the Company, violates or will violate any license, or infringes or will infringe any intellectual property rights of any other party.  Other than with respect to commercially available software products under standard end-user object code license agreements, the Company is not bound by or a party to any options, licenses, leases, assignments or agreements of any kind or liens or pledges of any kind, with respect to the patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information, proprietary rights and processes of any other Person except for a license agreement with Quantum Corporation.  The Company has not received any communications alleging that the Company has violated or, by conducting its business, would violate any of the patents, trademarks, service marks, tradenames, copyrights, trade secrets, mask works or other proprietary rights or processes of any other Person.  For purposes of this Agreement, the term “Company Intellectual Property” shall mean all patents, patent applications, trademarks, trademark applications, service marks, tradenames, copyrights, trade secrets, licenses, domain names, mask works, information and proprietary rights and processes as are necessary to the conduct of the Company’s business as now conducted.

 

  

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(o)           Certain Transactions. Other than (i) as relates to this Agreement and the Transaction Documents (ii) standard employee benefits generally made available to all employees, (iii) the purchase of shares of the Company’s capital stock and the issuance of options to purchase Common Stock, in each instance, approved in the written minutes of the Board of Directors, there are no agreements, understandings or proposed transactions between the Company and any of its officers, directors, consultants or key employees except for representation by Ruskin Moscou Faltischek, P.C. of which a board member and officer is an employee.

 

 (p)           [Omitted.]

 

 (q)           Correctness of Representations.  The Company represents that the foregoing representations and warranties are true and correct as of the date hereof in all material respects, and, unless the Company otherwise notifies the Subscribers prior to each Closing Date, shall be true and correct in all material respects as of each Closing Date; provided, that, if such representation or warranty is made as of a different date in which case such representation or warranty shall be true as of such date.

 

(r)           Third Party Beneficiary. The Subscriber acknowledges that Collateral Agent is a third party beneficiary to the covenants and warranties made hereby.

 

(s)           Survival.  The foregoing representations and warranties shall survive the Closing Date until the one-year anniversary of the date that the Notes are fully repaid or converted.

 

6.           Regulation D Offering.  The offer and issuance of the Securities to the Subscribers is being made pursuant to the exemption from the registration provisions of the 1933 Act afforded by Section 4(2) or Section 4(6) of the 1933 Act and/or Rule 506 of Regulation D promulgated thereunder.

 

7.           Certain Miscellaneous Matters.

 

7.1.           Conversion of Note.

 

(a)           Upon the conversion of a Note or part thereof, the Company shall, at its own cost and expense, take all necessary action, including obtaining and delivering, an opinion of counsel to assure that the Company’s transfer agent shall issue stock certificates in the name of the converting Subscriber (or its permitted nominee) or such other persons as designated by Subscriber and in such denominations to be specified at conversion representing the number of shares of Common Stock issuable upon such conversion.  The Company warrants and covenants that no instructions other than these instructions have been or will be given to any transfer Collateral Agent of the Company’s Common Stock and that the certificates representing such shares shall contain no legend other than the usual 1933 Act restriction from transfer legend.  In the event that the Shares are sold in a manner that complies with an exemption from registration, the Company will, to the extent such removal is permissible under applicable law as determined by the Company in its reasonable discretion (including, without limitation, based on the advice of the Company’s legal counsel), promptly instruct its counsel to issue to the transfer agent an opinion permitting removal of the legend indefinitely, provided that Subscriber delivers all reasonably requested representations in support of such opinion.

(b)           Pursuant to the terms of a Notice of Conversion and the Note, the Company shall (or, if a transfer agent is appointed, shall cause the transfer agent to) transmit the certificates representing the Shares to the holder of the Note by (i) issuing certificated shares to such holder, or (ii) if a transfer Collateral Agent is appointed and the  holder so elects, by crediting the account of the holder’s designated broker with the Depository Trust Corporation (“DTC”) through its Deposit Withdrawal Collateral Agent Commission (“DWAC”) system within seven (7) business days after receipt by the Company of the Notice of Conversion (the “Delivery Date”).  In the case of the exercise of the conversion rights set forth herein, the conversion privilege shall be deemed to have been exercised and the Shares issuable upon such conversion shall be deemed to have been issued upon the date of receipt by the Company of the Notice of Conversion in accordance with the requirements of the Note. The holder of the Note shall be treated for all purposes as the beneficial holder of such Shares, or, in the case that Company delivers physical certificates as set forth below, the record holder of such Shares, unless the holder provides the Company written instructions to the contrary.  For avoidance of doubt, in the event that Shares cannot be delivered to the Holder via DWAC, (or, if no transfer agent is appointed) the Company shall deliver physical certificates representing the Shares by the Delivery Date to an address designated by the holder.

  

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(c)           The Company understands that a delay in the delivery of the Conversion Shares in the form required pursuant to Section 7.1 hereof later than the Delivery Date could result in economic loss to the affected Subscriber.  In addition to other damages or remedies at law or in equity to which the converting Note holder may be entitled, in the event that the Company fails for any reason to effect delivery of the Conversion Shares within ten (10) business days after the Delivery Date, such Subscriber will be entitled to revoke all or part of the relevant Notice of Conversion by delivery of a written notice to such effect to the Company whereupon the Company and such Subscriber shall each be restored to their respective positions immediately prior to the delivery of such notice, except that the liquidated damages described above shall be payable through the date notice of revocation or rescission is given to the Company.

7.2.           Conditions Precedent to the Obligation of the Subscribers to Close and to Purchase the Notes.  The obligation hereunder of the Subscribers to purchase the Notes and Warrants and to consummate the transactions contemplated by this Agreement is subject to the satisfaction or waiver, at or before such Closing, of each of the conditions set forth below.  These conditions are for the Subscribers’ and Collateral Agent’s sole benefit and may be waived by the Subscribers and Collateral Agent at any time in their sole discretion.

 

                                (a)           Accuracy of the Company’s and Subscriber’s Representations and Warranties.  Each of the representations and warranties of the Company in this Agreement and the other Transaction Documents shall be true and correct in all material respects as of each Closing, except for representations and warranties that speak as of a particular date, which shall be true and correct in all material respects as of such date.

 

 

                                (b)           Performance by the Company and each Subsidiary.  The Company and each Subsidiary shall have executed and delivered, and duly authorized each of the Transaction Documents to which they are a party.  The Company and each Subsidiary shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement or the respective Transaction Document(s) to which it or they are a party, to be performed, satisfied or complied with by the Company or such Subsidiary at or prior to such Closing.

 

 

                                (c)           [omitted]

 

 

                                (d)           No Injunction.  No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement.

 

 

                                (e)           No Proceedings or Litigation.  No action, suit or proceeding before any arbitrator or any governmental authority shall have been commenced, and no investigation by any governmental authority shall have been initiated, against the Company or any subsidiary, or any of the officers, directors or affiliates of the Company or any subsidiary seeking to restrain, prevent or change the transactions contemplated by this Agreement, or seeking damages in connection with such transactions.  .

 

 

                                (f)           Notes and Warrants.  At the Closing, the Company shall have delivered to the Subscribers the Notes and Warrants in such amounts and to such Subscribers as set forth on Schedule A hereto, along with all appropriate board resolutions or other necessary documentation in order to issue the Notes and Warrants in such denominations as each Subscriber may request.   The Company shall also deliver this Agreement, duly executed by the Company.  The Company and each Subsidiary shall have executed and delivered the Transaction Documents to which they are a party to the Subscriber and to Collateral Agent.

 

  

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                                (g)           Secretary’s Certificate.  The Company  shall have delivered to the Subscribers a secretary’s certificate, dated as of the Closing Date, as to (i) the resolutions adopted by the Board of Directors approving the transactions contemplated hereby, (ii) the Company’s Certificate of Incorporation, (iii) the Bylaws, each as in effect at such Closing, and (iv) the authority and incumbency of the officers of the Company executing the Transaction Documents and any other documents required to be executed or delivered in connection therewith.

 

(h)           Officer’s Certificate. On the each Closing Date, the Company shall have delivered to the Subscribers a certificate signed by an executive officer on behalf of the Company, dated as of such Closing Date, confirming the accuracy of the Company’s representations, warranties, and covenants as of such initial Closing Date and confirming the compliance by the Company with the conditions precedent set forth in paragraphs (7.2.(b))-(7.2(e)) and (7.2(h)) as of such Closing (provided that, with respect to the matters in paragraphs (7.2(d)) and (7.2(e)) such confirmation shall be based on the knowledge of the executive officer after due inquiry).

 

                                (h)           Material Adverse Effect.  No Material Adverse Effect shall have occurred at or before such Closing Date.

 

                                  (i)           [Omitted.]

 

(j)  Subsidiary Guarantees.  At each Closing, Company shall deliver to Collateral Agent for the Subscribers, a Subsidiary Guaranty guaranteeing the Company’s obligations under each Note made by each of the Company’s Subsidiaries in favor of such Subscriber. The Company and each Subsidiary, as the case may be shall also deliver the UCC 1 Financing Statements naming the Collateral Agent as Secured Party on behalf of the Subscribers, in such form as is satisfactory to the Collateral Agent, and stock certificates representing the Pledge Shares and stock powers in favor of Collateral Agent on behalf of the Subscribers, so as to enable Collateral Agent to perfect the Lien on said shares.

 

7.3.           Injunction Posting of Bond.  In the event a Subscriber shall elect to convert a Note or part thereof, the Company may not refuse conversion or exercise based on any claim that such Subscriber or anyone associated or affiliated with such Subscriber has been engaged in any violation of law, or for any other reason, unless, an injunction from a court, on notice, restraining and or enjoining conversion of all or part of such Note shall have been sought and obtained by the Company or at the Company’s request or with the Company’s assistance, and the Company has posted a surety bond for the benefit of such Subscriber in the amount of 120% of the outstanding principal and interest of the Note, or aggregate purchase price of the Shares which are sought to be subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the dispute and the proceeds of which shall be payable to such Subscriber to the extent Subscriber obtains judgment in Subscriber’s favor.

8.           Placement Collateral Agent/Due Diligence Fee/Legal Fees.

(a)                      Fees.   The parties acknowledge that there are no placement agents, finders or brokers fees owed or paid in connection with this financing, and that no services of a broker, finder or placement Collateral Agent have been utilized with the possible exception of sales which may be negotiated through one or more registered broker dealers, the fees of which will be paid by the Company.

 

9.           Covenants of the Company.  The Company covenants and agrees with the Subscribers as follows:

 

(a)           Commencing after the initial Closing and continuing for so long as any of the principal or interest on the Notes are outstanding, the Company may not take the following actions without consent of the Collateral Agent (regardless of whether such designee is holding a formal board seat, and, if no director designee is agreed to or appointed or then in office, then such decisions shall be made by a consent of the Majority of Note Holders) which consent shall be deemed final and binding and accepted by all Note holders subject to waiver at any time from the Collateral Agent:

 

  

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(i)           make any loan or advance in excess of $15,000 to any person or entity more than once a year, including, without limitation, any employee or director, except, advances and similar expenditures (A) under terms of an employee stock or option plans approved by the Board of Directors and Collateral Agent or in effect prior to the date of first Closing, and (b) in the ordinary course of business, consistent with past practice;

 

(ii)           guarantee any indebtedness of any person except with regard to the debt secured by the Super Senior Lien and the MDFA Lien;

 

(iii)           make any investment in securities other than US money market funds or FDIC insured CD accounts;

 

(iv)           incur any aggregate indebtedness in excess of $100,000 that is not already included in a Board-approved budget or that is part of the normal course of business, i.e. purchase of equipment or grant or permit to exist any liens or pledges other than Permitted Liens (as hereinafter defined)  as provided below unless the same is approved by the majority of the Board;

(v)           Omitted;

 

(vi)           Omitted;

 

(vii)           sell, assign, license, lease, transfer pledge or encumber material technology or intellectual property except in the ordinary course of business, consistent with past practice or allow the same to lapse or terminate for any reason;

 

(viii)           Omitted;

 

(ix)  liquidate, dissolve, wind up, merge or consolidate the Company (including a reverse merger or similar transaction) or  sell, lease, transfer, license or dispose of all or substantially all of the assets of the Company.

 

Notwithstanding the foregoing, the Company may take the foregoing actions in a financing where the Note holders will be repaid in full at the first closing of such financing.

 

(b)                      Collateral Agent. The Collateral Agent may resign at any time, or be removed or replaced at the discretion of holders of Notes holding greater than 70% of the principal outstanding (the “Majority of Note Holders”).  In the event of inability of Collateral Agent to act on any matter, or in the event that Collateral Agent desires to obtain consent on any matter or amendment from Note holders, then the Majority of Note Holders’ consent shall be required for such matter.

 

 

 (c)           Use of Proceeds.   The proceeds of the Offering will be employed by the Company for expenses of the Offering and for working capital.  The Purchase Price may not and will not be used for accrued and unpaid officer and director salaries, redemption of outstanding notes or equity instruments of the Company nor non-trade obligations outstanding on a Closing Date  other than as approved by the board’s disinterested members.  For so long as any Notes are outstanding, the Company will not redeem any equity instruments of the Company.

 

(d)           Reservation.  Prior to the Closing Date, and at all times thereafter, the Company shall have reserved, pro rata, on behalf of each holder of a Note, from its authorized but unissued Common Stock, 120% of the Conversion Shares initially underlying the Note shares of Common Stock necessary so as  to allow each holder of a Note to be able to convert all such outstanding Notes and interest (if any).  Prior to the Closing Date, and at all times thereafter, the Company shall have reserved, pro rata on behalf of each holder of Warrants, from its authorized but unissued Common Stock, sufficient shares of Common Stock necessary to allow each holder of Warrants to be able to exercise the same for Common Stock.  The Company agrees to immediately reserve additional shares as may be necessary from time to time, in the event of an adjustment to be made in accordance with the Note, or Warrant, as the case may be.

 

  

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 (e)           Taxes.  For so long as any Notes are outstanding, the Company will promptly pay and discharge, or cause to be paid and discharged, when due and payable, all lawful taxes, assessments and governmental charges or levies imposed upon the income, profits, property or business of the Company; provided, however, that any such tax, assessment, charge or levy need not be paid if the validity thereof shall currently be contested in good faith by appropriate proceedings and if the Company shall have set aside on its books adequate reserves with respect thereto, and provided, further, that the Company will pay all such taxes, assessments, charges or levies forthwith upon the commencement of proceedings to foreclose any lien which may have attached as security therefore.

 

(f)           Insurance. For so long as any Notes are outstanding, the Company will keep its assets which are of an insurable character in the locations where they are situated, insured by financially sound and reputable insurers against loss or damage by fire, explosion and other risks customarily insured against by companies in the Company’s line of business; and the Company will maintain, with financially sound and reputable insurers, insurance against other hazards and risks and liability to persons and property to the extent and in the manner customary for companies in similar businesses similarly situated and to the extent available on commercially reasonable terms.

 

(g)           Books and Records. For so long as any Notes are outstanding, the Company will keep true records and books of account in which full, true and correct entries will be made of all dealings or transactions in relation to its business and affairs in accordance with generally accepted accounting principles applied on a consistent basis.

 

(h)           Governmental Authorities. For so long as any Notes are outstanding, the Company shall duly observe and conform in all material respects to all valid requirements of governmental authorities relating to the conduct of its business or to its properties or assets.

 

(i)           Intellectual Property.  For so long as any Notes are outstanding, the Company shall maintain in full force and effect its corporate existence, rights and franchises and all licenses and other rights to use intellectual property owned or possessed by it and reasonably deemed to be necessary to the conduct of its business, unless it is sold for value.

 

(j)           Properties. For so long as any Notes are outstanding, the Company will keep its properties in good repair, working order and condition, reasonable wear and tear excepted, and from time to time make all necessary and proper repairs, renewals, replacements, additions and improvements thereto; and the Company will at all times comply with each provision of all leases to which it is a party or under which it occupies property if the breach of such provision could reasonably be expected to have a Material Adverse Effect.

 

(k)           Filing of Reports. The Company shall, for so long as any Notes are outstanding, file timely all Reports that it is required to file pursuant to the Exchange Act from time to time, on a timely basis, subject only to duly notified extensions in accordance with Rule 12b-25 of the Exchange Act.

(l)           Negative Covenants.   So long as a Note is outstanding, without the consent of the Collateral Agent and the holders of a majority in principal amount of the Notes (in accordance with Section 12(h) hereof), the Company will not and will not permit any of its Subsidiaries to directly or indirectly, without consent of Collateral Agent:

  

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(i)           create, incur, assume or suffer to exist any pledge, hypothecation, assignment, deposit arrangement, lien, charge, claim, security interest, security title, mortgage, security deed or deed of trust, easement or encumbrance, or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any lease or title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement perfecting a security interest under the Uniform Commercial Code or comparable law of any jurisdiction) (each, a “Lien”) upon any of its property, whether now owned or hereafter acquired except for:  (a) Liens imposed by law for taxes that are not yet due or are being contested in good faith and for which adequate reserves have been established in accordance with generally accepted accounting principles; (b) carriers’, landlords’ warehousemen’s, mechanics’, material men’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 60 days or that are being contested in good faith and by appropriate proceedings; (c) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations; (d) deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business; (e) Liens created with respect to the financing of the purchase of property in the ordinary course of the Company’s business up to the amount of the purchase price of such property; (f) Liens created with respect to the financing or factoring of the Company’s accounts receivable; (g) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property; and (h) Liens disclosed on Schedule 9(l)(i) hereto (each of (a) through (h), a “Permitted Lien”);

                                            (ii)           amend its certificate of incorporation, bylaws or its charter documents so as to materially and adversely affect any rights of the Subscribers (an increase in the amount of authorized shares and an increase in the number of directors will not be deemed adverse to the rights of the Subscribers);

(iii)           repay, repurchase or offer to repay, repurchase or otherwise acquire or make any dividend or distribution in respect of any of its Common Stock, preferred stock, or other equity securities other than to the extent permitted or required under this Agreement or the other Transaction Documents.

 

(m)           Seniority.  Until the Notes are fully repaid or converted, the Company shall not grant nor allow any security interest to be taken in the assets of the Company or any subsidiary; nor issue any debt, equity or other instrument which would give the holder thereof directly or indirectly, a right in any assets of the Company or any subsidiary, superior to any right of the holder of a Note in or to such assets except for the MDFA Lien and the Super Senior Lien.

 

(n)           Notices.   For so long as the Subscribers hold any Securities, the Company will maintain as United States address and United States fax number for notices purposes under the Transaction Documents.

                      (o)           Default and Acceleration.  Notwithstanding the foregoing, the occurrence of any of the items in this Section 9, among others set forth in the Note, shall cause an acceleration and right of repayment of the Note with interest.  Any acceleration of the Note may only be called upon affirmative consent of the Collateral Agent.

 

 

10.           Covenants of the Company Regarding Indemnification.

 

  

14

  

(a)           The Company agrees to indemnify, hold harmless, reimburse and defend the Collateral Agent, Subscribers, the Subscribers’ officers, directors, Collateral Agents, Affiliates, members, managers, control persons, and each of their respective advisors and counsel, and principal shareholders, against any claim, cost, expense, liability, obligation, loss or damage (including reasonable legal fees) of any nature, incurred by or imposed upon the Subscriber or any such person which results, arises out of or is based upon (i) any material misrepresentation by Company or breach of any representation or warranty by Company in this Agreement or in any Exhibits or Schedules attached hereto, or other agreement delivered pursuant hereto; or (ii) after any applicable notice and/or cure periods, any breach or default in performance by the Company of any covenant or undertaking to be performed by the Company hereunder, or any other agreement entered into by the Company and Subscriber relating hereto.

 

If any claim, suit, action or other proceeding to which the indemnity set forth herein applies (“Claim”) is brought against an Indemnified Party, such Indemnified Party shall give the Company prompt notice of such Claim, and the Company shall have the right, at its own expense, to participate in or assume, the defense of such Claim, provided that, the Company shall use counsel reasonably acceptable to the Indemnified Party in defending such Claim. The Indemnified Party may not adjust, settle or compromise any Claim brought against it for which the indemnity set forth herein is sought without the prior written consent of the Indemnifying Party, which shall not be unreasonably withheld.

 

11.           Note Anti-Dilution.

 

(a) Anti Dilution.  The initial Conversion Price of the Note shall be $1.60. (as modified from time to time, the “Conversion Price”) into shares of Common Stock of the Company or its successor in interest (the “Conversion Shares”).   The Conversion Price shall not be adjustable for issuances of other securities, other than a stock split or stock dividend, or for corporate combinations, or for reduction of the cash of the Company and its subsidiaries below $1,000,000,  as provided in the Note.

 

 

 12.           Miscellaneous.

 

 

(a)           Notices.  All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice.  Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

 

if to the Company, to:

Plures Technologies, Inc.

5279 Parkside Drive

Canandaigua, NY 14424

Fax:

Phone: (585) 905-0554

Attn: David. R. Smith, CEO

with a copy by facsimile only to counsel for the Company at:

 

Ruskin Moscou Faltischek, P.C.

1425 RXR Plaza

Uniondale, NY 11556

ssieger@rmfpc.com

ph 516.663.6546

fx  516.663 6746

Attn. Stuart M. Sieger, Esq.

  

15

  

If to a Subscriber, then to such subscriber’s address as set forth on the books and records of the Company with a copy to Collateral Agent and to Subscriber’s counsel as follows:

RENN Capital Group Inc.

8080 N. Central Expressway,

Ste 210, LB-50

Dallas Texas 75206

Phone:  (214) 891-8924 

Fax:  (214) 891-8106

Attn:  Russell Cleveland, President

                   

With a copy to:

 

             Levy International Law, LLC 

                c/o 590 Madison Avenue, 21st Floor

                                 New York, New York 10022

Attention: Ron Levy, Esq.

Fax: (646) 219-1574

E-mail: RLevy@LevyLawNY.com

 

 

(b)           Entire Agreement; Assignment.  This Agreement and other documents delivered in connection herewith represent the entire agreement between the parties hereto with respect to the subject matter hereof and may be amended only by a writing executed by all parties hereto.  Neither the Company nor the Subscribers have relied on any representations not contained or referred to in this Agreement and the documents delivered herewith.   No right or obligation of the Company shall be assigned without prior notice to and the written consent of the Subscribers. No right or obligation of any Subscriber shall be assigned without prior notice to and the written consent of the Company.  Notwithstanding the foregoing or anything in this Agreement to the contrary, this Agreement and Schedule A hereto, may be amended from time to time by the Company, Subsidiaries and Collateral Agent, without consent of the Subscribers, for the sole purpose of accepting additional subscribers and subsequent Closings until the maximum offering amount has been sold.

 

(c)           Counterparts/Execution.  This Agreement may be executed in any number of counterparts and by the different signatories hereto on separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument.  This Agreement may be executed by facsimile signature and delivered by facsimile transmission.

 

(d)           Law Governing this Agreement.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the federal courts located in the state and county of New York.  The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens.  The parties executing this Agreement and other agreements referred to herein or delivered in connection herewith on behalf of the Company agree to submit to the in personam jurisdiction of such courts and hereby irrevocably waive trial by jury.  The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs.  In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law.  Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.  The Notes reflect an investment by the Subscribers and, are deemed an irrevocable instrument for the payment of money only, actionable and enforceable, among other remedies, by Collateral Agent or by any owner of a Note independently or together, by Summary Proceeding in Lieu of Complaint pursuant to CPLR rule 3213 or similar proceeding, as well as through conventional proceeding.

 

  

16

  

(e)           Specific Enforcement, Consent to Jurisdiction.  The Company and Subscriber acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with specific terms or were otherwise breached.  It is accordingly agreed that the parties shall be entitled to seek an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which any of them may be entitled by law or equity.  Subject to Section 12(d) hereof, the Company hereby irrevocably waives, and agrees not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction in New York of such court, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper.  Nothing in this Section shall affect or limit any right to serve process in any other manner permitted by law.

 

(f)           Independent Nature of Obligations     The Company acknowledges that the obligations of each Subscriber under the Transaction Documents are several and not joint with the obligations of any other Subscriber, and no Subscriber shall be responsible in any way for the performance of the obligations of any other Subscriber under the Transaction Documents. Nothing herein is deemed to imply or impute upon any subscriber any obligation to invest further or invest any amounts other than the amount subscribed for hereby.  The Company acknowledges that each Subscriber has represented that the decision of each Subscriber to purchase Securities has been made by such Subscriber independently of any other Subscriber and independently of any information, materials, statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial or otherwise) or prospects of the Company which may have been made or given by any other Subscriber or by any Collateral Agent or employee of any other Subscriber, and no Subscriber or any of its Collateral Agents or employees shall have any liability to any Subscriber (or any other person) relating to or arising from any such information, materials, statements or opinions.  The Company acknowledges that nothing contained in any Transaction Document, and no action taken by any Subscriber pursuant hereto or thereto (including, but not limited to, the (i) inclusion of a Subscriber in a registration statement and (ii) review by, and consent to, any such registration statement by a Subscriber) shall be deemed to constitute the Subscribers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Subscribers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents.  The Company acknowledges that, in the event that no Collateral Agent is acting on its behalf, each Subscriber shall be entitled to independently protect and enforce its rights, including without limitation, the rights arising out of the Transaction Documents, and it shall not be necessary for any other Subscriber to be joined as an additional party in any proceeding for such purpose.  The Company acknowledges that it has elected to provide all Subscribers with the same terms and Transaction Documents for the convenience of the Company and not because Company was required or requested to do so by the Subscribers.  The Company acknowledges that such procedure with respect to the Transaction Documents in no way creates a presumption that the Subscribers are in any way acting in concert or as a group with respect to the Transaction Documents or the transactions contemplated thereby.

 

  

17

  

(g)           [Omitted.]

 

(h)           Consent.   As used in the Agreement, “consent of the Subscribers” or “Consent of the “Majority of Note Holders” or similar language means the consent of holders of greater than 70% of the total Principal Amount of Notes and interest outstanding on the date consent is requested.

 

(i)           Equal Treatment.   No consideration shall be offered or paid to any person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the same consideration is also offered and paid to all the Subscribers and their permitted successors and assigns.

 

(j)           Maximum Payments.   Nothing contained herein or in any document referred to herein or delivered in connection herewith shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law.  In the event that the rate of interest, conversion rate or dividends required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Company to the Subscriber and thus refunded to the Company.

 

(k)           Calendar Days.   All references to “days” in the Transaction Documents shall mean calendar days unless otherwise stated.  The terms “business days” and “trading days” shall mean days that the New York Stock Exchange is open for trading for three or more hours.  Time periods shall be determined as if the relevant action, calculation or time period were occurring in New York City.  Any deadline that falls on a non-business day in any of the Transaction Documents shall be automatically extended to the next business day and interest, if any, shall be calculated and payable through such extended period.

(l)           Captions: Certain Definitions.  The captions of the various sections and paragraphs of this Agreement have been inserted only for the purposes of convenience; such captions are not a part of this Agreement and shall not be deemed in any manner to modify, explain, enlarge or restrict any of the provisions of this Agreement.  As used in this Agreement the term “person” shall mean and include an individual, a partnership, a joint venture, a corporation, a limited liability company, a trust, an unincorporated organization and a government or any department or agency thereof.

 

(m)           Severability.  In the event that any term or provision of this Agreement shall be finally determined to be superseded, invalid, illegal or otherwise unenforceable pursuant to applicable law by an authority having jurisdiction and venue, that determination shall not impair or otherwise affect the validity, legality or enforceability: (i) by or before that authority of the remaining terms and provisions of this Agreement, which shall be enforced as if the unenforceable term or provision were deleted, or (ii) by or before any other authority of any of the terms and provisions of this Agreement.

 

(n)           Successor Laws.  References in the Transaction Documents to laws, rules, regulations and forms shall also include successors to and functionally equivalent replacements of such laws, rules, regulations and forms.

[Signature Pages, Schedules and Exhibits Follow]

  

18

  

 LIST OF EXHIBITS AND SCHEDULES

 

               Schedule A             Schedule of Subscribers

 

Exhibit A                 Form of 2% Secured Convertible Note

 

               Exhibit B                  Form of Common Stock Purchase Warrant

 

Exhibit C                 Form of Subsidiary Guaranty

 

Exhibit D                Form of Pledge and Security Agreement

 

Company Disclosure Schedules

 

                Schedule 5(d)         Outstanding Shares, Other Issuances, Derivatives

 

Schedule 5(o)         Undisclosed Liabilities

 

Schedule 9(l)(i)       Permitted Liens

 

  

19

  

SUBSCRIBER SIGNATURE PAGE

(for Corporation, Partnership, Trust or Other Entities)

This Securities Purchase Agreement of Plures Technologies, Inc. is hereby executed and entered into by the below Subscriber.  Subscriber hereby further consents to the appointment of Collateral Agent as provided in the within Securities Purchase Agreement and related Transaction Documents.

	
 

Principal Amount of Notes

 

No. of Warrants:

 

Purchase Price

	
 

___________________________________

Name of Entity

 

___________________________________

Type of Entity (i.e., corporation, partnership, etc.)

 

___________________________________

Tax Identification or Social Security Number

 

___________________________________

State of Formation of Entity

 

____________________________________

Name of Signatory Typed or Printed

 

By __________________________________                                                                    

Name:

Title:   .

 

	  	
Address to Which Correspondence Should Be Directed (if different from above)

 

 

 

 

	  
	  	
 

All Original Securities to:

 

 

 

 

 

 

	  
	  	  	  

  

SP-1

  

SUBSCRIBER SIGNATURE PAGE

(For Individual Subscribers)

           This Securities Purchase Agreement of Plures Technologies, Inc. is hereby executed and entered into by the below Subscriber.  Subscriber hereby further consents to the appointment of Collateral Agent as provided in the within Securities Purchase Agreement and related Transaction Documents.

	
 

Principal Amount of Notes

 

No. of Warrants:

 

Purchase Price

	
 

_______________________________

Signature (Individual)

 

_______________________________

Name (Print)

 

_______________________________

Street address

 

_______________________________

City, State and Zip Code

	  	  

	  	
 

________________________________

Tax Identification or Social Security Number

 

 (______)____________________________

  Telephone Number

 

         (______)____________________________

   Facsimile Number

	  	
Address to Which Correspondence Should Be Directed (if different from above)

 

____________________________________

c/o Name

____________________________________

Street Address

 

	  	
____________________________________

City, State and Zip Code

 

(______)____________________________

Telephone Number

 

(______)____________________________

Facsimile Number

  

SP-2

  

ACCEPTANCE PAGE TO CONVERTIBLE SECURITIES PURCHASE AGREEMENT OF

PLURES TECHNOLOGIES, INC.

The foregoing subscriptions for 2% Secured Convertible Promissory Notes for a principal amount and at a purchase price of _________ (the “Purchase Price”), along with Warrants to purchase ______ shares of Common Stock,  in accordance with the foregoing Securities Purchase Agreement, to such Subscribers and in such amounts as set forth on Schedule A annexed hereto, is AGREED AND ACCEPTED.

PLURES TECHNOLOGIES, INC.

By:         /s/                                                                    

Name:

Title:

Accepted and Agreed to by Collateral Agent-

RENN Capital Group Inc.

By:          /s/                                                                   

Name: Russell Cleveland

Title: President

  

SP-3

  

Schedule A

Schedule of Subscribers

	
Name

	 	
Loan Amount

	  	 	  
	
[TO BE COMPLETED]

	 	  
	  	 	  

Schedules and Exhibits

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