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EXHIBIT 10.1
EYE TECHNOLOGY, INC.
STOCK EXCHANGE AGREEMENT
FEBRUARY 6, 1998
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TABLE OF CONTENTS
ARTICLE I - TRANSFER AND EXCHANGE..........................................1
Section 1.1 Transfer and Exchange; Stock for Stock..........1
Section 1.2 Closing.........................................2
Section 1.3 Transactions at Closing.........................2
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF COMPANY.....................2
Section 2.1 Organization, Standing and Qualification........2
Section 2.2 Capitalization..................................2
Section 2.3 Post Closing Issuance of Stock..................3
Section 2.4 Validity of Stock...............................3
Section 2.5 Authorization, Approvals........................3
Section 2.6 No Conflict with Other Instruments..............4
Section 2.7 Private Offering................................4
Section 2.8 Fees and Commissions............................4
Section 2.9 Minute Books....................................4
ARTICLE III - REPRESENTATION, WARRANTEE AND COVENANT OF THE PURCHASERS
Section 3.1 Authorization...................................5
Section 3.2 Investment Representations......................5
Section 3.3 Restrictions on Transfer........................5
Section 3.4 Fees and Commissions............................5
ARTICLE IV - MISCELLANEOUS.................................................6
Section 4.1 Entire Agreement................................6
Section 4.2 Survival of Warranties..........................6
Section 4.3 Notices.........................................7
Section 4.4 Amendments......................................7
Section 4.5 Waiver and Consent..............................7
Section 4.6 Attorneys' Fees.................................7
Section 4.7 Successors and Assigns..........................7
Section 4.8 Rights of Purchaser.............................8
Section 4.9 Execution and Counterparts......................8
Section 4.10 No Third Party Beneficiaries....................8
Section 4.11 Severability....................................8
Section 4.12 Rules of Construction...........................8
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SCHEDULES
1.1 - Purchasers
2.2 - Security Holders
2.3 - Common Stock in Satisfaction of Debt
EXHIBITS
A - Form of Certificate of Designation
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STOCK EXCHANGE AGREEMENT
This STOCK EXCHANGE AGREEMENT (the "Agreement") dated as of February 6,
1998, is entered into by and between EYE TECHNOLOGY, INC., a Delaware
corporation (the "Company"), and the entities and/or individuals listed on
Schedule 1.1 attached hereto (collectively referred to herein as the
"Purchasers" and individually as "Purchaser").
RECITAL
WHEREAS, the Purchasers own 100% of the issued shares of common stock
of Star Tobacco & Pharmaceutical, Inc., a Delaware Corporation ("Star Tobacco"),
and desire to exchange all such shares for shares of Series B Convertible Voting
Preferred Stock, par value $.01 per share, of the Company (the "Series B
Preferred Stock"), having the rights, preferences, privileges and restrictions
set forth in the Company's Certificate of Designations, substantially in the
form attached hereto as Exhibit A (the "Certificate of Designations"), in such
amount which, if converted into shares of Common Stock of the Company pursuant
to the terms thereof, would equal the product of nine multiplied by (a) all
issued and outstanding shares of Common Stock of the Company as of the Closing
Date, plus (b) the number of shares of Common Stock of the Company currently
reserved for issuance pursuant to any options, warrants, conversion rights,
and/or purchase rights as set forth in Schedule 2.2 attached hereto, and the
Company desires to transfer to the Purchasers such number of shares of Series B
Preferred Stock in exchange for the 100% of the issued common stock of Star
Tobacco (the "Star Tobacco Common Stock") on the terms and subject to the
conditions set forth herein;
AGREEMENT
NOW, THEREFORE, in consideration of the premises, mutual covenants and
agreements hereinafter contained and for other good and valuable consideration,
the Company and the Purchasers hereby agree as follows:
ARTICLE I - TRANSFER AND EXCHANGE
Section 1.1 Transfer and Exchange; Stock for Stock . Subject to the
provisions of this Agreement, on the Closing Date (as hereinafter defined) the
Company will transfer to the Purchasers the number of such shares of Series B
Preferred Stock in such amount which, if converted into shares of Common Stock
of the Company pursuant to the terms thereof, would equal the product of nine
multiplied by (a) all issued and outstanding shares of Common Stock of the
Company as of the Closing Date, plus (b) the number of shares of Common Stock of
the Company currently reserved for issuance pursuant to any options, warrants,
conversion rights, and/or purchase rights as set forth in Schedule 2.2 attached
hereto, in exchange for the transfer of the respective Purchaser's shares of
Star Tobacco Common Stock in the amounts as set forth and described in Schedule
1.1, attached hereto. Such transfer of Series B Preferred Stock to Purchasers by
the Company shall be deemed a partial transfer subject to adjustment in the
number of Series B Preferred Stock to be transferred
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pursuant to Section 2.3 below.
Section 1.2 Closing. The transfer and exchange of the Series B
Preferred Stock for the Star Tobacco Common Stock pursuant to Section 1.1 (the
"Closing") shall take place at the offices of Star Tobacco, 00 Xxxxx Xxxxxx Xx.
Xxxxxxxxxx, Xxxxxxxx or at such other place as may be agreed upon by the Company
and the Purchasers, at 2:00 p.m. local time on February 6, 1998, or at such
other time and date as may be agreed upon by the Company and the Purchasers (the
"Closing Date").
Section 1.3 Transactions at Closing. At the Closing, the Company
shall deliver to each Purchaser a certificate or certificates for the shares of
Series B Preferred Stock to be issued and transferred to such Purchaser
hereunder duly registered in the Purchaser's name as provided in Schedule 1.1,
or in such other name as the Purchaser shall have specified in writing to the
Company prior to the Closing Date, against the transfer and delivery by each
Purchaser of a certificate or certificates for all such Purchaser's shares of
Star Tobacco common stock.
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF COMPANY
The Company represents and warrants to the Purchasers that:
Section 2.1 Organization, Standing and Qualification. The Company
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to own, lease and operate its property and assets and to conduct its
business as presently conducted and as proposed to be conducted by it. The
Company has all requisite corporate power and authority to enter into and
perform its obligations under this Agreement, and to carry out the transactions
contemplated hereby and thereby. The Company is duly qualified to do business as
a foreign corporation and is in good standing in each jurisdiction in which the
failure to so qualify would have a material adverse effect on its assets,
properties, condition (financial or otherwise), operating results, prospects or
business. Complete and correct copies of the Certificate of Incorporation and
Bylaws of the Company, each as amended to date, have been delivered to the
Purchasers.
Section 2.2 Capitalization. On the Closing Date, the authorized
capital stock of the Company will consist of (a) 100,000 shares of preferred
stock, par value $.01 per share, of which 15,000 shares will be designated
"Series B Convertible Preferred Stock," and of which no shares shall be issued
or outstanding prior to the Closing, (b) 4,000 shares of Class A Preferred
Stock, par value $.01 per share, of which 2,570 shares are issued and
outstanding, and (c) 10,000,000 shares of common stock, par value $.01 per share
("Common Stock"), of which 3,438,656 shares are issued and outstanding. In
addition, there are shares of Common Stock reserved for issuance pursuant to
employee or director stock purchase and/or option plans or agreements and
convertible notes, which have been adopted by the Company and are identified on
Schedule 2.2 hereto. In addition, there are 205,600 shares of Common Stock
reserved for issuance upon conversion of the Class A Preferred Stock. Schedule
2.2 sets forth a complete and correct list of the number of issued and
outstanding shares of Common Stock or other Company securities (including
options) as of the date of this Agreement. The outstanding shares of Common
Stock and Preferred Stock are duly authorized and validly issued in accordance
with applicable law, fully paid and nonassessable.
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Section 2.3 Post-Closing Issuance of Stock. As described on Schedule
2.3 attached hereto, the Company may issue to certain individuals shares of the
Company's Common Stock, and if so issued, Purchasers shall be entitled to
receive additional shared of Series B Preferred Stock in accordance with this
section. In addition, if there are options, warrants, conversion rights or
similar rights, outstanding as of the Closing Date and not specifically listed
on Schedule 2.2, the Purchasers shall also be entitled to receive additional
shares of Series B Preferred Stock in accordance with this section.
The number of shares of Series B Preferred Stock of the Company to be
transferred to Purchasers pursuant to this Section 2.3, if any, shall be equal
to such number (including any fractional share) of said shares of Series B
Preferred Stock which, if converted into shares of Common Stock of the Company
pursuant to the terms thereof, would equal the product of nine multiplied by the
number of shares of Common Stock of the Company (a) which are issued within
thirty (30) days of the Closing Date to the individuals listed in Schedule 2.3
in satisfaction of all or a portion of debt owed by the Company to such
individuals, plus (b) which are subject to options, warrants, conversion rights,
or similar rights, or are outstanding as of the Closing Date and not listed on
Schedule 2.2. The number of shares of Common Stock of the Company which may be
issued within thirty (30) days of the Closing Date to the individuals listed in
Schedule 2.3 in satisfaction of all or a portion of debt owed by the Company
shall not exceed 300,000 shares. The Company shall within a reasonable time
issue the additional shares of Series B Preferred Stock to the Purchasers
pursuant to this Section 2.3, if any.
Section 2.4 Validity of Stock. The Series B Preferred Stock, when
issued, sold, and delivered in accordance with the terms of this Agreement, will
be duly authorized and validly issued, fully paid and nonassessable, and will be
free of restrictions on transfer other than restrictions on transfer under this
Agreement and under applicable state and federal securities laws. The Company
agrees that it will use its best efforts in good faith to have the Common Stock
issuable upon conversion of the Series B Preferred Stock duly authorized and
validly reserved for issuance and, upon issuance in accordance with the terms of
the Certification of Incorporation and Certificate of Designations, will be duly
and validly issued, fully paid, and nonassessable and will be free of
restrictions on transfer other than restrictions under applicable state and
federal securities laws.
Section 2.5 Authorization, Approvals. All corporate action on the
part of the Company and its stockholders necessary for the authorization,
execution, delivery and performance of all its obligations under this Agreement
and for the authorization, issuance and delivery of the Series B Preferred Stock
being exchanged under this Agreement will be or has been taken prior to the
Closing. The Company will use its best efforts and good faith to have the Common
Stock initially issuable upon conversion of the Series B Preferred Stock
properly authorized in the near future. The Agreement, when executed and
delivered by or on behalf of the Company, shall constitute the valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms. The Company has obtained or will obtain prior to the Closing Date all
necessary consents, authorizations, approvals and orders, and has made all
registrations, qualifications, designations, declarations or filings with all
federal, state or other relevant governmental authorities required on the part
of the Company in connection with the consummation of the transactions
contemplated by
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the Agreement, except for such filings as may be required to be made after the
Closing in order to comply with the requirements of Regulation D promulgated
under the Securities Act of 1933, as amended (the "Securities Act"), and
applicable state laws.
Section 2.6 No Conflict with Other Instruments. The execution,
delivery and performance of the Agreement will not result in any violation of,
be in conflict with, or constitute, with or without the passage of time or
giving of notice or both, a default under any terms or provisions of (i) the
Certificate of Incorporation or Bylaws of the Company; (ii) any judgment, decree
or order of any court or government agency or body having jurisdiction over the
Company or its properties; (iii) any agreement, contract, understanding,
indenture or other instrument to which the Company is a party or by which it is
bound, the effect of which would have a material adverse effect on the assets,
properties, condition (financial or otherwise), operating results, prospects or
business of the Company; or (iv) any statute, rule or governmental regulation
applicable to the Company.
Section 2.7 Private Offering. Neither the Company nor anyone acting
on its behalf has offered any of the Series B Preferred Stock, or substantially
similar securities of the Company for sale to, or solicited offers to buy any
securities of the Company from, or otherwise approached or negotiated with
respect thereto with any prospective purchaser other than the Purchaser. The
Company agrees that neither the Company nor anyone acting on its behalf has
offered or will offer such securities of the Company or any part thereof or any
similar securities for issuance or sale to, or solicit any offer to acquire any
of the same from, anyone so as to make the issuance and sale of the Series B
Preferred Stock not exempt from the registration requirements of Section 5 of
the Securities Act. None of the shares of the Company's capital stock issued and
outstanding has been offered or sold in such a manner as to make the issuance
and sale of such shares not exempt from such registration requirements of
Section 5 of the Securities Act, and all such shares of capital stock have been
offered and sold in compliance with all applicable federal and state securities
laws.
Section 2.8 Fees and Commissions. The Company has not retained any
finder, broker, agent, financial advisor or other intermediary (collectively
"Intermediary") in connection with the transactions contemplated by this
Agreement, and the Company shall indemnify and hold harmless the Purchasers from
liability for any compensation to any Intermediary and the fees and expenses of
defending against such liability or alleged liability.
Section 2.9 Minute Books. The minute books of the Company have been
made available to the Purchasers and contain a complete summary of all material
actions and discussions at all meetings of directors and stockholders of the
Company since the time of incorporation and reflect all transactions referred to
in such minutes accurately in all material respects.
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ARTICLE III - REPRESENTATION, WARRANTEE AND COVENANT OF THE PURCHASERS
The Purchasers represent and warrant to the Company that:
Section 3.1 Authorization. The Purchasers have all requisite power
and authority to enter into and to perform this Agreement in accordance with its
terms. This Agreement has been duly executed and delivered by the Purchasers and
constitutes a valid and binding obligation of the Purchasers, enforceable
against each Purchaser in accordance with its terms.
Section 3.2 Investment Representations. Each Purchaser is acquiring
the Series B Preferred Stock (and any Common Stock into which the Series B
Preferred Stock may be converted) solely for Purchaser's own account, for
investment purposes and not with a view to, or for sale in connection with, any
distribution of such stock or any part thereof.
Section 3.3 Restrictions on Transfer. Each Purchaser agrees that (a)
it will not offer, sell, transfer, give, pledge, hypothecate or otherwise
dispose of the Series B Preferred Stock (or the Common Stock into which it may
be converted) or make any attempt to the foregoing unless such offer, sale,
transfer, gift, pledge, hypothecation or other disposition is (i) registered
under the Securities Act, or (ii) in compliance with an opinion of counsel to
the Purchasers, delivered to the Company and reasonably acceptable to it, to the
effect that such offer, sale, pledge, hypothecation or other disposition thereof
does not violate the Securities Act, and (b) the certificate(s) representing the
Series B Preferred Stock (and any Common Stock into which it may be converted)
shall bear a legend stating in substance:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
UNLESS AND UNTIL REGISTERED UNDER SAID ACT OR, IN
THE OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER OF THESE SECURITIES,
SUCH OFFER, SALE OR TRANSFER, PLEDGE OR
HYPOTHECATION DOES NOT VIOLATE THE PROVISIONS
THEREOF.
Upon request of a holder of Series B Preferred Stock (or the Common
Stock into which it has been converted), the Company shall remove the legend set
forth above from the certificates evidencing such Series B Preferred or Common
Stock or issue to such holder new certificates therefor free of such legend, if
with such request the Company shall have received an opinion of counsel selected
by the holder and reasonably satisfactory to the Company, in form and substance
reasonably satisfactory to the Company, to the effect that such Series B
Preferred Stock or Common Stock is not required by the Securities Act to
continue to bear the legend.
Section 3.4 Fees and Commissions. The Purchasers have retained no
Intermediary in
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connection with the transactions contemplated by this Agreement and the
Purchasers agree to indemnity and hold harmless the Company from liability for
any compensation to any Intermediary and the fees and expenses of defending
against such liability or alleged liability.
ARTICLE IV - MISCELLANEOUS
Section 4.1 Entire Agreement. This Agreement constitute the entire
agreement between the parties hereto and supersedes all prior agreements and
understandings, oral and written, between the parties hereto with respect to the
subject matter hereof. No party shall be liable or bound to any other party in
any manner by any warranties, representation, or covenants except as
specifically set forth herein or therein.
Section 4.2 Survival of Warranties. The warranties, representations
and covenants of the Company and the Purchasers contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement and
the Closing.
Section 4.3 Notices. All notices, requests, demands, consents and
other communications herein shall be in writing and shall be deemed, unless
otherwise specified herein, to have been duly given if personally delivered or
mailed, first-class certified mail, postage prepaid and return receipt requested
or sent by recognized overnight courier service or transmitted by telex or
facsimile, as follows:
(a) If to the Company:
Xxxxxx X. Xxxxxxxxxxx
0000 Xxxxx Xxxxx
Xx. Xxxx XX 00000
Facsimile number: ___________
with a copy to (which shall not constitute
effective notice to the Company):
Xxxxxxx X. Xxxx, Esq.
Xxxxxxxx & Xxxxxx, P.A.
0000 Xxxxx Xxxxxx Towers
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Facsimile number:(000)000-0000
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(b) If to the Purchasers:
c/o Xxxxxx X. Xxxxx, Xx.
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile number: (000) 000-0000
with a copy to (which shall not constitute
effective notice to the Purchasers):
Xxxxxx Xxxxxxx Xxxxx, Esq.
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile number: (000) 000-0000
or such other addresses as each of the parties hereto may provide from time to
time in writing to the party. For purposes of computing the time periods set
forth in this Section 4.3, the delivery date shall be deemed to be (i) three (3)
days after the date of mailing, (ii) the date personally delivered or sent by
telex or facsimile, or (iii) the business day after the date sent by recognized
overnight courier service.
Section 4.4 Amendments. Any term of this Agreement may be amended
only with the written consent of the Company and the holders of more than 51% of
the Common Stock issued or issuable upon conversion of the Series B Preferred
Stock not previously sold to the public. Any amendment effected in accordance
with this paragraph shall be binding upon each holder of Series B Preferred
Stock purchased under this Agreement at the time outstanding (including Common
Stock into which such Series B Preferred Stock have been converted), each future
holder of such securities, and the Company.
Section 4.5 Waiver and Consent. No action taken pursuant to this
Agreement, including any investigation by or on behalf of any party, shall be
deemed to constitute a waiver by the party taking such action of compliance with
any party hereto of a breach of any representations, warranties, covenants or
agreements contained herein. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
preceding or succeeding breach, and no failure by any party to exercise any
right or privilege hereunder shall be deemed a waiver of such party's rights or
privileges hereunder or shall be deemed a waiver of such party's rights to
exercise the same at any subsequent time or times hereunder.
Section 4.6 Attorneys' Fees. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement or the Certificate
of Designations, the prevailing party shall be entitled to reasonable attorneys'
fees, costs and disbursements in addition to any other relief to which such
party may be entitled.
Section 4.7 Successors and Assigns. Except as otherwise expressly
provided in this
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Agreement, all of the terms of this Agreement shall be binding upon and inure to
the benefit of and be enforceable by the respective successors and assigns of
the parties hereto (including permitted transfers of any shares of Series B
Preferred Stock sold hereunder or any Common Stock issued upon conversion
thereof). Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto, and their respective successors,
legal representatives and permitted assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
Section 4.8 Rights of Purchaser. The Purchaser shall have the
absolute right to exercise or refrain from exercising any right or rights that
the Purchaser may have by reason of this Agreement or any Series B Preferred
Stock, including the right to consent to the waiver of any obligation of the
Company under this Agreement and to enter into any agreement with the Company
for the purpose of modifying this Agreement or any agreement effecting any such
modification.
Section 4.9 Execution and Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original, and all of which together shall constitute one instrument.
Section 4.10 No Third Party Beneficiaries. Except as otherwise
provided, this Agreement has been and is made solely for the benefit of and
shall be binding upon the Company and the Purchaser and no other person shall
acquire or have any rights under or by virtue of this Agreement.
Section 4.11 Severability. Any provision of this Agreement that is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or lack of authorization without invalidating the remaining
provisions hereof or affecting the validity, unenforceability or legality of
such provision in any other jurisdiction.
Section 4.12 Rules of Construction. The article and section headings
and the table of contents contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. As used in this Agreement, unless otherwise provided to the contrary,
(a) all references to days or months shall be deemed references to calendar days
or months and (b) any reference to a "Section," "Article," "Exhibit" or
"Schedule" shall be deemed to refer to a section or article of this Agreement or
an exhibit or schedule to this Agreement. The words "hereof," "herein" and
"hereunder" and words of similar import referring to this Agreement refer to
this Agreement as a whole and not to any particular provision of this Agreement.
Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation."
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized officers as of the date first above written.
EYE TECHNOLOGY, INC:
By: /s/ XXXXXX X. XXXXXXXXXXX
----------------------------------
Name: XXXXXX X. XXXXXXXXXXX
--------------------------------
Title: President
--------------------------------
PURCHASERS:
/s/ XXXXXX X. XXXXXXXX
--------------------------------------
XXXXXX X. XXXXXXXX
X. X. XXXXXXXX 1994 IRREVOCABLE TRUST X. X. XXXXXXXX 1994 IRREVOCABLE TRUST
F/B/O XXXXXXXX XXXXXXXX F/B/O X.X. XXXXXXXX, JR.
/s/ XXXXXXX X. X'XXXXXXX, XX. /s/ XXXXXXX X. X'XXXXXXX, XX.
----------------------------------------- --------------------------------------
By: XXXXXXX X. X'XXXXXXX, XX., TRUSTEE By: XXXXXXX X. X'XXXXXXX, XX., TRUSTEE
X. X. XXXXXXXX 1994 IRREVOCABLE TRUST REGENT COURT TECHNOLOGIES, A
F/B/O XXXXXX XXXXXXXX PARTNERSHIP
/s/ XXXXXXX X. X'XXXXXXX, XX. By: /s/ XXXXXX X. XXXXXXXX
----------------------------------------- ----------------------------------
By: XXXXXXX X. X'XXXXXXX, XX., TRUSTEE Name: XXXXXX X. XXXXXXXX
--------------------------------
X. X. XXXXXXXX 1994 IRREVOCABLE TRUST Title: Partner
F/B/O XXXXXXX XXXXXX XXXXXXXX --------------------------------
/s/ XXXXXXX X. X'XXXXXXX, XX. XXXXXXX X. X'XXXXXXX, XX.
----------------------------------------- DESCENDANTS' TRUST
By: XXXXXXX X. X'XXXXXXX, XX., TRUSTEE
/S/ XXXXXXXX X'XXXXXXX, TRUSTEE
--------------------------------------
By: XXXXXXXX X'XXXXXXX, TRUSTEE
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SCHEDULE 1.1
Holder Shares of Star Owned %
Xxxxxx X. Xxxxxxxx 10 5
Xxxxxxx X. X'Xxxxxxx, Xx., trustee of the
X.X. Xxxxxxxx 1994 Irrv. Trust f/b/o
(1) Xxxxxx X. Xxxxxxxx Xx. 2.5 1.25
(2) Xxxxxxxx Xxxxxxxx 2.5 1.25
(3) Xxxxxx Xxxxxxxx 2.5 1.25
(4) Xxxxxxx X. Xxxxxxxx 2.5 1.25
Regent Court Technologies, a
Partnership* 170 85
Xxxxxxxx X'Xxxxxxx, trustee of the
Xxxxxxx X. X'Xxxxxxx, Xx. Descendants'
Trust
10 5
---- ------
Total 200 100%
* Xxxxxx X. Xxxxxxxx and
Xxxxxxx X. X'Xxxxxxx, Xx. are sole partners
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SCHEDULE 2.2
COMPANY CAPITALIZATION
A. As of the Closing Date, the issued and outstanding shares of Common Stock
of the Company is 3,438,656 shares.
B. As of the Closing Date, the number of shares of Common Stock of the Company
currently reserved for issuance, and any options, warrants, conversion rights,
and/or purchase rights are as follows:
(i) 205,600 shares of Common Stock reserved for conversion of 2,570 shares of
issued and outstanding, Class A Preferred Stock;
(ii) Commitment to Xxxxxx Xxxxxxxxxxx of 700,000 shares of Common Stock;
(iii) Commitments to employees and other individuals, in lieu of commitments
for stock options, as follows:
Individual Options to Acquire Shares
Xxxxxxxxx, Xxxxx X. 75,000 shares
Xxxxxxx, Xxxx X. 7,500 shares
Xxxxxxxxxxx, Xxxxxx X. 187,500 shares
Xxxxxxx, Xxxxxx X. 18,750 shares
Xxxx, Xxxxxx X. 7,500 shares
Xxxxxxxx, Xxxx X. 7,500 shares
Xxxxxxxxxxx, Xxxx X. XX 7,500 shares
Xxxxx, Xxxx X. 7,500 shares
Xxxxxxxx, Xxxxxx X. 7,500 shares
Xxxxx, Xxxxxx X. 15,000 shares
Xxxxxx, Xxxxx 10,000 shares
There are no preemptive rights or rights of first refusal. Except as provided
above, there are no outstanding warrants, options, convertible securities or
rights to subscribe for or purchase any capital stock or other securities from
the Company.
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SCHEDULE 2.3
ISSUANCE OF SHARES OF COMMON STOCK IN SATISFACTION OF DEBT:
The following individuals may be issued shares of Common Stock in
satisfaction of part or all of the debt set forth opposite his or her name, as
follows:
Name Debt Conversion Rate
---- ---- ---------------
Xxxxxxxx, Xxxxxxx XxXxx $33,190 one share for each $.25 of debt
Xxxxxxx, Xxxxx $ 8,750 one share for each $.25 of debt
Xxxxxxxxx, Xxxxx $ 3,446 one share for each $.25 of debt
Xxxxxxx, Xxxxxx $ 3,077 one share for each $.25 of debt
Xxxxx, Xxxxxx $ 56,332 one share for each $.25 of debt
If any such shares of Common Stock are issued in satisfaction of such
debt, then Purchasers may be entitled to additional shares of Series B Preferred
Stock as provided in Section 2.3.
