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EXHIBIT 10.15
eVENTURES GROUP, INC.
COMMON STOCK SUBSCRIPTION AGREEMENT
This Subscription Agreement (this "Agreement"), dated as of
April 4, 2000, has been executed by eVentures Group, Inc., a Delaware
corporation (the "Company") and the investors listed on Schedule 1 hereto
(collectively herein referred to as the "Investors") in connection with the
private placement of shares of common stock, par value $0.00002 per share
("Common Stock") of the Company.
1. AGREEMENT TO SUBSCRIBE; PAYMENT.
Each Investor, severally and not jointly, hereby offers to
subscribe for the number of shares of Common Stock set forth next to such
Investor's name on Schedule 1 hereto (the "Shares").
The Shares will be sold to each Investor at a price of $23.00
per share, for a total purchase price (the "Purchase Price") set forth next to
such Investor's name on Schedule 1 hereto.
The Company and each Investor understand that the closing of
the purchase and sale of the Shares as to each Investor is scheduled to occur at
2:00 p.m., Dallas time, on April 4, 2000, or on such other date as the parties
agree, but in no event later than 5:00 p.m., Dallas time, on April 17, 2000 (the
"Closing Date"). Payment of the Purchase Price of each Investor shall be made by
wire transfer of immediately available funds to the account (the "Escrow
Account") at Chase Bank of Texas, National Association (the "Escrow Agent")
established pursuant to the terms of the Escrow Agreement, dated on or about
April 4, 2000, by and between the Company and the Escrow Agent. Funds deposited
to the Escrow Account may be released to the Company from the Escrow Account
when such account accrues funds of at least $40 million. Regardless of the
amount deposited by Investors into the Escrow Account, the Company agrees not to
withdraw funds from the Escrow Account until each of Xxxx Xxxxxx, Xxx XxXxxxxx,
Xxx Xxxxxx and Xxxx Xxxxx have executed employment agreements with the Company.
After such release of funds, payment of the Purchase Price may be made to the
Company by wire transfer of immediately available funds to an account determined
by the Company and any Investor paying its Purchase Price at such time. In the
event that the Escrow Account does not accrue funds of at least $40 million as
of 5:00 p.m., Dallas time, on April 17, 2000, the Purchase Price for the Shares
previously remitted by Investors, together with interest thereon at a rate of
eight percent (8%) annually, shall be refunded to the Investors no later than
April 25, 2000.
The Investors acknowledge that the offer and sale of the
Shares hereunder is being made pursuant to a private placement of up to
5,000,000 Shares (the "Placement"). The Company represents that each Investor
party hereto that is paying a Purchase Price of less than $25 million shall
participate in the Placement under terms and conditions as favorable as the
terms and conditions of each other Investor participating in the Placement that
is paying a
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Purchase Price of more than $25 million. The Investors acknowledge
that, up to and including the Closing Date, other investors may subscribe for
Shares by executing a signature page to this Agreement, whereby any such person
shall become an "Investor" under the terms and conditions of this Agreement.
The Company agrees to allow the Investors to enforce the
Company's rights under the Escrow Agreement, to the extent permitted by the
Escrow Agreement, if the Company fails to exercise such rights within a
reasonable time.
THE INVESTORS UNDERSTAND THAT THIS INVESTMENT IN THE COMPANY
IS ILLIQUID AND INVOLVES A HIGH DEGREE OF SPECULATIVE RISK.
2. QUALIFICATIONS OF INVESTOR.
(a) Accredited Investor Status. Each Investor, severally and
not jointly, hereby represents and warrants to the Company that it is an
"accredited investor", as defined in Rule 501 under the Securities Act of 1933
(the "Act"), and it has executed a letter to that effect addressed to the
Company, in the form attached as Exhibit 1.
(b) Sophisticated Investor Status. Each Investor, severally
and not jointly, hereby represents and warrants to the Company that alone, or
with his purchaser representative (as defined in Rule 501 under the Act), if
any, such Investor has such knowledge and experience in financial and business
matters so as to be capable of evaluating the merits and risks of this
transaction and of an investment in the Company.
(c) Investor Suitability; Illiquidity; Ability to Bear Loss.
If an Investor is a natural person, such Investor has a net worth of at least
$1,000,000 (exclusive of home, furnishings, and automobiles) or such Investor
had during the two most recent years an annual gross income of at least
$200,000, and has a reasonable expectation of having an annual gross income of
at least $200,000 during the current year.
The overall commitment of each Investor to purchase securities
which are not readily marketable is not disproportionate to such Investor's net
worth, and the investment in the Shares will not cause such Investor's overall
commitment to become excessive.
Each Investor has adequate means of providing for current
needs and personal contingencies, has no need for liquidity in his or her
investment in the Shares, and can sustain a complete loss of the investment in
the Shares.
(d) Entity Investors. If the Investor is other than a natural
person, such Investor represents and warrants that: (i) it has not been formed,
re-formed, or recapitalized for the specific purpose of purchasing the Shares,
or if it has been formed or re-formed for such purpose, each of its beneficial
owners of equity securities or equity interests (including partners, in the case
of a partnership) is an "accredited investor," as defined in Rule 501(a) under
the Act; (ii) it has been duly formed and is validly existing under the laws of
the jurisdiction of its formation, with full power and authority to enter into
the transactions contemplated by this
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Agreement; and (iii) this Agreement has been duly and validly authorized,
executed, and delivered by it and, when executed and delivered by the Company,
will constitute the valid, binding, and enforceable agreement of such entity,
subject to general equitable principles (whether considered in a proceeding in
equity or at law)
3. ACCESS TO INFORMATION; INDEPENDENT INVESTIGATION.
(a) Receipt of Information. Each Investor has received and
carefully reviewed the Registration Statement on Form 10 filed by the Company
with the Securities and Exchange Commission on December 20, 1999, as amended on
March 8, 2000, including the unaudited and audited financial statements and
unaudited pro forma financial statements of the Company included therein
(together with all amendments to the date hereof, the "Form 10"). Each Investor
has carefully reviewed and fully considered the contents of the Form 10,
including, without limitation, the material set forth under the caption "Risk
Factors".
(b) Independent Investigation; Access. Each Investor, in
making the decision to purchase the Shares subscribed for, has relied upon
independent investigations made by such Investor, the financial and legal
advisors to the Investor (if any) and its purchaser representative (if any), and
each Investor and such representative (if any) has, prior to any sale to the
Investors, been given access and the opportunity to examine all material books
and records of the Company, all material contracts and documents relating to
this offering, and an opportunity to ask questions of and to receive answers
from the Company, any officer, director or employee of the Company, or any
person acting on its behalf concerning the Company and its businesses, the terms
and conditions of this offering or any other matter set forth in the Form 10 and
an opportunity to obtain any additional information, to the extent the Company
possesses such information or can acquire it without unreasonable effort or
expense, necessary to verify the accuracy of the information set forth in the
Form 10.
Each Investor and its advisors, if any, has had access to (i)
all public materials requested by such Investor relating to the business,
finances, and operation of the Company, and (ii) materials relating to the offer
and sale of the Shares and (iii) anything set forth in the Form 10 that has been
requested. Each Investor and its advisors, if any, have received complete and
satisfactory answers to any such inquiries.
(c) No Other Representations. Each Investor acknowledges that
it has not relied on any representation made to such Investor or such Investor's
purchaser representative (if any) concerning the Shares, the Company, its
business or prospects, or other matters, except as set forth in this Agreement,
in the Form 10 and in the other written materials referred to in Sections 3(a)
and (b) above.
(d) Adequacy of Investigation. Each Investor acknowledges that
it is subscribing for the Shares after what it deems to be adequate
investigation of the business, finances, and prospects of the Company by such
Investor and such Investor's advisors, if any.
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(e) No Governmental Recommendation or Approval. Each Investor
understands that no federal or state agency has passed on or made any
recommendation or endorsement of the Shares.
4. INVESTMENT REPRESENTATIONS.
(a) Shares Not Registered; Indefinite Holding. Each Investor
has been advised by the Company, and understands, that it must bear the economic
risk of an investment in the Shares for an indefinite period of time because the
Shares have not been registered under the Act and the Company is under no
obligation to register the Shares other than as set forth in the registration
rights agreement dated as of the date hereof, among the Company and the
Investors (the "Registration Rights Agreement"). Therefore, the Shares must be
held by the undersigned unless they are subsequently registered under the Act or
an exemption from such registration is available for the transfer of the Shares.
Notwithstanding the foregoing, the Investors agree (as
provided in paragraph 4(c) below), not to sell or otherwise transfer or dispose
of any Shares except as permitted by the Registration Rights Agreement.
(b) Purchase for Own Account. Each Investor represents that
the Shares are being acquired solely for its own account for investment and not
with a view toward, or for resale in connection with, any distribution (as that
term is used in the Act and the rules and regulations thereunder) of all or any
portion thereof.
(c) No Disposition of Shares Without Securities Law
Compliance. Except as permitted by the Registration Rights Agreement, each
Investor agrees not to subdivide the Shares or to offer, sell or otherwise
transfer or dispose of any of the Shares in the absence of an effective
registration statement under the Act covering such disposition, or an opinion of
counsel, satisfactory to the Company and its counsel, to the effect that
registration under the Act is not required for such transfer or disposition;
provided, however, that an Investor may transfer Registrable Shares to an
Affiliate (as defined in the Registration Rights Agreement) without the
requirement that such Investor or Affiliate deliver a legal opinion to the
Company confirming that such transfer may be made without registration under
federal or state securities laws, unless the Company reasonably believes that
such transfer would violate federal or state securities laws.
(d) Stop-Transfer and Legends on Certificates. (i) Each
Investor further understands that a stop-transfer order will be placed on the
stock-transfer books of the Company respecting the certificates evidencing the
Shares, and such certificates shall bear, until such time as the Shares shall
have been registered under the Act or have been transferred in accordance with
such an opinion of counsel, the following legends or ones substantially similar
thereto:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED, EXCEPT (1) ACCORDING TO AN OPINION OF
COUNSEL SATISFACTORY TO EVENTURES
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GROUP, INC., IN A TRANSACTION THAT IS EXEMPT FROM, OR NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.
FURTHER, THE SHARES REPRESENTED BY THIS CERTIFICATE MAY ONLY
BE RESOLD AS PROVIDED IN A REGISTRATION RIGHTS AGREEMENT
BETWEEN EVENTURES GROUP, INC. AND THE ORIGINAL PURCHASER OF
THESE SHARES, A COPY OF WHICH IS AVAILABLE FOR INSPECTION AT
THE OFFICES OF EVENTURES GROUP, INC.
as well as any legend that may be required under any applicable state law.
(ii) The foregoing legend shall be removed from the
certificates representing any Shares, at the request of the holder thereof, at
such time as (A) they are sold pursuant to an effective registration statement,
(B) they become eligible for resale pursuant to Rule 144(k), or (C) an opinion
of counsel reasonably satisfactory to the Company is obtained to the effect that
the proposed transfer is exempt from the Act; provided that in the case of
clauses (B) and (C) the holder is permitted to transfer the Securities pursuant
to Section 8 of the Registration Rights Agreement. The portion of the legend
referring to the Registration Rights Agreement shall be eliminated at such time
as Section 8 of that agreement ceases to be applicable.
(e) "Private-Offering" Exemption, Reliance on Representations.
Each Investor understands that the offer and sale of the Shares is not being
registered under the Act in reliance on the so-called "private offering"
exemption provided by Section 4(2) of the Act and/or Regulation D promulgated
pursuant to the Act and that the Company is basing its reliance on that
exemption in part on the representations, warranties, statements, and agreements
contained herein and in those of other investors contained in similar
subscription agreements.
Each Investor further understands that other investors are
making their investment in reliance on the representations, warranties,
statements, and agreements of the other Investors.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
COMPANY.
(a) Corporate Organization, Etc. The Company and each of
AxisTel Communications, Inc. ("AxisTel"), a wholly-owned subsidiary of the
Company, and e.Volve Technology Group, Inc. ("e.Volve"), a wholly-owned
subsidiary of the Company and Internet Global Services, Inc. ("IGS"), a
wholly-owned subsidiary of the Company (each of AxisTel, e.Volve and IGS, a
"Material Subsidiary," and collectively, the "Material Subsidiaries"), is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation. The Company and each Material Subsidiary
has full corporate power and authority to carry on its business as it is now
being conducted and as presently proposed to be conducted and to own, operate
and lease its properties and assets.
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(b) Authorization, Etc. The Company has full corporate power
and authority to enter into this Agreement and the Registration Rights Agreement
and to carry out the transactions contemplated hereby and thereby. The Board of
Directors of the Company has duly authorized the execution, delivery and
performance of this Agreement and the Registration Rights Agreement and the
consummation of the transactions contemplated hereby and thereby, and no other
corporate proceedings on the part of the Company are necessary to authorize this
Agreement and the Registration Rights Agreement and the transactions
contemplated hereby and thereby. Each of this Agreement and the Registration
Rights Agreement constitutes the legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms.
(c) No Violation. The execution, delivery and performance by
the Company of this Agreement, the Registration Rights Agreement and all other
agreements contemplated hereby, and the fulfillment of and compliance with the
respective terms hereof and thereof by the Company, do not and will not (i)
require any authorization, consent, approval, exemption or other action by, or
notice to, or filing with any court or other governmental authority having
jurisdiction over the Company or its properties, (ii) result in a violation of,
conflict with, constitute a default under, or result in a breach of, the terms,
conditions or provisions of, the charter or bylaws of the Company, any
applicable law, regulation, order or any contract to which the Company, or its
properties or assets, are subject, including federal or state securities laws
(assuming the truth of the representations of each Investor herein), or (iii)
result in the creation of a lien or encumbrance against any of the property or
assets of the Company or any Material Subsidiary, except that the execution and
delivery of the Registration Rights Agreement requires the consent of certain
shareholders pursuant to the Registration Rights Agreement of the Company dated
as of September 22, 1999, a copy of which is attached as an exhibit to the Form
10, which consent has been received. The Company will comply in all material
respects with all applicable regulations and orders in connection with its
execution, delivery and performance of this Agreement and the transactions
contemplated hereby.
(d) Compliance with Applicable Laws; No Material Breach.
Neither the Company nor any Material Subsidiary, are in violation or default of
any provision of their respective Certificates of Incorporation or Bylaws, both
as amended, and except for violations that individually or in the aggregate
would not have a material adverse effect on the Company's or any Material
Subsidiary's properties, assets, business, operations or financial condition
taken as a whole a ("Material Adverse Effect"), the Company and each Material
Subsidiary is in compliance with all applicable United States statutes, laws and
regulations. Except as disclosed in the Form 10, neither the Company nor any
Material Subsidiary has breached or defaulted under, nor does the Company have
any knowledge of any claim or threat that the Company or any Material Subsidiary
has breached or defaulted under, any term or condition of any agreement,
contract, lease, license, instrument or commitment to which the Company or any
Material Subsidiary, as the case may be, is a party or by which it or its
properties or assets are bound that individually or in the aggregate would have
a Material Adverse Effect.
The Company believes that it and its Material Subsidiaries are
in compliance with all material applicable laws in jurisdictions other than the
United States in the operation of their
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businesses. However, the Company is not an expert in the laws of such foreign
jurisdictions and has not secured legal opinions or other definitive evidence
that its operations are compliant under such foreign laws. Accordingly, no
assurances can be given that the Company or its Material Subsidiaries are in
full compliance with all material aspects of the laws of jurisdictions other
than the United States.
(e) Capitalization. The authorized capital stock of the
Company consists of 75,000,000 shares of Common Stock and 5,000,000 shares of
preferred stock, par value $0.00002 per share (the "EVG Preferred Stock"), of
which 1,200 shares have been designated Series A Convertible Preferred Stock
(the "Series A Stock"), 25,000 shares have been designated Series B Convertible
Preferred Stock (the "Series B Stock"), and 30,000 shares have been designated
Series C Convertible Preferred Stock (the "Series C Stock"). As of the date
hereof, there are issued and outstanding 45,779,832 shares of Common Stock, no
shares of Series A Stock, 7,000 shares of Series B Stock and 15,570 shares of
Series C Stock. All of the shares of capital stock have been duly authorized,
and are validly issued, fully paid and non-assessable. None of the issued and
outstanding shares of capital stock was issued in violation of any preemptive
rights. Other than as disclosed in the Form 10 or on Schedule 2 attached hereto
(the "Schedule of Exceptions"), there are no options, warrants, convertible or
exchangeable securities or other rights, agreements, arrangements or commitments
of any character relating to the capital stock of the Company or obligating the
Company to issue or sell any shares of capital stock of, or any other interest
in, the Company. Except as disclosed in the Form 10, there are no outstanding
contractual obligations of the Company to repurchase, redeem or otherwise
acquire any shares of capital stock or to provide funds to, or make any
investment (in the form of a loan, capital contribution or otherwise) in, any
person. Upon consummation of the transactions contemplated by this Agreement,
the Investors will own the Shares, in each case free and clear of all liens and
encumbrances, other than liens and encumbrances created or suffered by an
Investor. The Shares have been duly authorized. Upon consummation of the
transactions contemplated by this Agreement, the Shares will have been validly
issued, fully paid and non-assessable, and the issuance thereof will not have
been subject to any preemptive rights or made in violation of any applicable
law. All of the shares of capital stock of each Material Subsidiary are duly
authorized and validly issued, fully paid and non-assessable, and have been
approved by all requisite Board of Directors and stockholder action. There are
no voting trusts, stockholder agreements, proxies or other agreements or
understandings in effect with respect to the voting or transfer of any of the
capital stock. Except as provided under those certain Registration Rights
Agreements dated September 22, 1999, November 19, 1999 and December 31, 1999 and
March 10, 2000, the Company is not under any obligation to register under the
Act any of its currently outstanding securities or any securities issuable upon
exercise or conversion of its currently outstanding securities nor is the
Company obligated to register or qualify any such securities under any state
securities or "blue sky" laws.
(f) Ownership of Material Subsidiaries. As of the Closing
Date, the Company owns free and clear of any liens and encumbrances (i) 100% of
the issued and outstanding capital stock of AxisTel, (ii) 100% of the issued and
outstanding capital stock of e.Volve and (iii) 100% of the issued and
outstanding capital stock of IGS which are all the subsidiaries of the Company
material to its business, operations, condition (financial or otherwise) or
prospects.
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(g) Intellectual Property. To the best knowledge of the
Company and other than as disclosed in the Form 10, each of the Company and each
Material Subsidiary owns or possesses valid and binding licenses and other
rights to use all patents, trade secrets, trade names, trademarks, copyrights,
inventions and processes used in their respective businesses other than such
patents, trade secrets, trade names, trademarks, inventions and processes which
the failure to own or possess rights to use would not interfere in any material
respect with the conduct of the business of the Company and its Material
Subsidiaries as currently conducted or as proposed to be conducted, and, to the
best knowledge of the Company, neither the Company nor any Material Subsidiary
has violated or infringed, and neither has received any notice or claim of any
such violation or infringement of, any rights of others with respect thereto.
(h) Litigation. Other than as disclosed in the Form 10, there
is no action, suit, investigation arbitration, mediation or any judicial or
administrative proceeding pending against, or to the knowledge of the Company,
threatened against or affecting, the Company or any Subsidiary before any court
or arbitrator or any governmental body, agency or official (i) which,
individually or in the aggregate, if determined or resolved adversely in
accordance with the plaintiff's demands, could be expected to have a Material
Adverse Effect or (ii) which in any manner challenges or seeks to prevent,
enjoin, alter or materially delay the transactions contemplated by this
Agreement.
(i) Form 10. The Form 10 complies as to form with the
requirements set forth in the rules relating to such Form promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") by the
Securities and Exchange Commission. The Form 10 does not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(j) Financial Statements. The audited financial statements of
the Company and its consolidated subsidiaries as at and for the fiscal year
ended June 30, 1999 and the unaudited financial statements of the Company and
its consolidated subsidiaries as at and for the fiscal period ended December 31,
1999 were prepared in accordance with generally accepted accounting practices
consistently applied ("GAAP") (except, with respect to the unaudited financial
statements, for the omission of footnotes, and subject to normal year-end
adjustments) and present fairly the financial position, operating results,
changes in cash flows and changes in stockholders' equity of the Company and its
consolidated subsidiaries as of the dates and for the periods indicated therein.
The consolidated balance sheet of the company as of December 31, 1999 is
referred to herein as the "Balance Sheet".
(k) Absence of Certain Changes. Since December 31, 1999,
except as disclosed in the Form 10 or on the Company's report on Form 8-K filed
with the SEC on March 27, 2000, each of the Company, AxisTel, e.Volve and, to
the knowledge of the Company, IGS, has conducted its respective business only
in, and has not engaged in any material transaction other than according to, the
ordinary and usual course of such businesses and there has not been (i) any
change in the condition (financial or otherwise), properties, business,
operations or results of operations of the Company, AxisTel, e.Volve or, to the
knowledge of the Company, IGS,
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taken as a whole, or any development or combination of developments that,
individually or in the aggregate, has had or would have a Material Adverse
Effect; (ii) any declaration, setting aside or payment of any dividend, or other
distribution in cash, stock or property in respect of the capital stock of the
Company; (iii) any split in the Company's capital stock, combination,
subdivision or reclassification of any of the Company's capital stock or
issuance or authorization of any issuance of any other securities in respect of,
in lieu of or in substitution for shares of its capital stock (iv) any change by
the Company or any of its Material Subsidiaries in accounting principles,
practices or methods or (v) except as disclosed in the Schedule of Exceptions,
any increase in the compensation payable by the Company, AxisTel, e.Volve or, to
the knowledge of the Company, IGS, to officers or key employees, or any
amendment to any compensation or benefit plans of the Company, AxisTel, e.Volve
or, to the knowledge of the Company, IGS, except for increases or amendments in
the ordinary or usual course.
(l) Title to Properties; Encumbrances. The Company has good
and valid title to all tangible property and assets set forth in the Balance
Sheet, except as indicated in the notes thereto and except for properties and
assets reflected in the Balance Sheet which have been sold or otherwise disposed
of in the ordinary course of business, in each case, free and clear of any and
all liens other than (i) liens reflected in the Balance Sheet, (ii) liens for
taxes, levies, fees, water and sewer charges and other governmental and similar
charges not yet due and payable or which, or the amount of which, are being
contested in accordance with applicable law and for which adequate allowance has
been made on the Balance Sheet, and (iii) other liens, imperfections in title,
charges, restrictions and other defects, irregularities and encumbrances which,
individually or in the aggregate, do not detract from the value, or interfere
with the present or proposed use, of the property subject thereto or affected
thereby in any material respect.
(m) Taxes. Except as set forth on the Schedule of Exceptions,
the Company and each of the Material Subsidiaries has timely filed its federal
and state tax returns when due and has timely paid all taxes (whether or not
shown as due on such tax returns).
(n) Use of Proceeds. The proceeds of the subscription
contemplated by this Agreement will be used for working capital and other
general corporate purposes.
(o) Investment Company Act. The Company represents and
warrants that, as of March 31, 2000, it is not an Investment Company (as defined
in the Investment Company Act of 1940, as amended).
(p) Private Offering. No form of general solicitation or
advertising was used by the Company or its representatives in connection with
the offer and sale of the Shares. Subject to the accuracy of the Investors'
representations in Section 4, no registration of the Shares, pursuant to the
provisions of the Act or any state securities or "blue sky" laws, will be
required by the offer, sale or issuance of the Shares. The Company agrees that
neither it, nor anyone acting on its behalf, shall offer to sell the Shares or
any other securities of the Company so as to require the registration of the
Shares pursuant to the provisions of the Act or any state securities or "blue
sky" laws, unless such Shares or other securities are so registered.
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(q) Interested Transactions. Except as disclosed in Item 7 of
the Form 10, no officer, director or holder of five percent (5%) or more of the
diluted equity of the Company ,or employee of the Company or any of its
subsidiaries, and no family member of any of the foregoing, is or has any direct
or indirect interest in (i) any customer, supplier or competitor of the Company,
(ii) any person from whom or to whom the Company or any of its subsidiaries
leases any real or personal property, or (iii) any other person with whom the
Company is doing business, whether directly or indirectly (including, without
limitation, a debtor or creditor), whether in existence as of the date hereof or
proposed, other than the ownership of stock of publicly traded corporations that
does not exceed five percent (5%) of the issued and outstanding stock of any
such corporation.
(r) Broker's or Finder's Fee. Neither the Company nor any of
its subsidiaries has paid, become obligated to pay or will become obligated to
pay any fee or commission to any broker, finder or intermediary in connection
with this Agreement, except for fees that may be paid to Xxxxx, Xxxxxxx &
X'Xxxx, LLC. The Investors will have no obligation nor liability with respect to
such fees.
(s) Liabilities. Except as disclosed on the Schedule of
Exceptions, neither the Company nor any of its Material Subsidiaries has any
outstanding claims, liabilities or indebtedness, contingent or otherwise, except
as reflected in the Balance Sheet or referred to in the notes thereto, other
than liabilities to trade creditors incurred subsequent to December 31, 1999 in
the ordinary course of business not involving borrowings by the Company or any
of its Material Subsidiaries. Neither the Company nor any of its Material
Subsidiaries is in default in respect of the terms or conditions of any material
indebtedness.
6. INDEMNIFICATION.
Each Investor agrees severally and not jointly, to indemnify
and hold the Company, its officers, directors, and stockholders or any other
person who may be deemed to "control" the Company harmless from any loss,
liability, claim, damage, or expense arising out of the inaccuracy of any of the
above representations, warranties, or statements of such Investor or the breach
of any of the agreements of such Investor contained herein, and this
indemnification shall survive the purchase and sale of the Shares subscribed for
herein. With respect to each Investor, such indemnification shall not exceed the
Purchase Price paid by such Investor for the Shares purchased hereunder.
The Company agrees to indemnify and hold each of the
Investors, their respective officers, directors, stockholders and partners and
any other person who may be deemed to "control" any Investor harmless from any
loss, liability, claim, damage, or expense arising out of the inaccuracy of any
of the above representations, warranties, or statements of the Company or the
breach of any of the agreements of the Company contained herein, and this
indemnification shall survive the purchase and sale of the Shares subscribed for
herein.
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7. BLUE SKY NOTICES.
Each Investor understands that the Shares may be subject to
notice requirements and other restrictions under state "blue sky" laws.
8. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
Each Investor understands that the Company's obligation to
sell the Shares, with respect to each Investor, is conditioned upon:
(a) delivery to the Company by the Escrow Agent of immediately
available funds on the Closing Date, representing the aggregate Purchase Price
for all Shares subscribed for hereunder, and such funds aggregating not less
than $40 million;
(b) the receipt and acceptance by the Company of an executed
copy of this Agreement;
(c) each of the representations made by, and all of the
information provided by, the Investors being true and correct as of the Closing
Date;
(d) the receipt and acceptance by the Company of an executed
copy of the Registration Rights Agreement; and
(e) the receipt with respect to such Investor of a letter in
the form attached as Exhibit 1 whereby such Investor represents and warrants
that it is an "accredited investor", as defined in Rule 501 under the Act.
9. CONDITIONS TO INVESTORS' OBLIGATION TO PURCHASE.
Each Investor's obligation to purchase the Shares in
accordance with the terms of this Agreement is conditioned upon:
(a) delivery to such Investor of certificates evidencing the
Shares against payment of the Purchase Price;
(b) the receipt by such Investor of executed copies of this
Agreement;
(c) each of the representations made by, and all of the
information provided by, the Company being true and correct as though made or
provided on the Closing Date;
(d) the receipt and acceptance by such Investor of executed
copies of the Registration Rights Agreement from each of the parties other than
the Investors;
(e) all authorizations, approvals or permits, if any, of any
governmental authority or regulatory body of the United States or of any state
that are required in connection with the lawful issuance and sale of the Shares
pursuant to this Agreement shall be obtained and in effect as of the Closing
Date;
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(f) the receipt by such Investor from the Secretary of the
Company of a certificate certifying the names of the officers of the company
authorized to sign this Agreement, the certificates for the Shares and the other
documents, instruments or certificates to be delivered pursuant to this
Agreement by the Company or any of its officers, together with the true
signatures of such officers, and attaching (A) copies of the charter and bylaws
of the Company certified as true and correct on the date of the Closing, (B) a
copy of the resolutions of the Board of Directors authorizing the issuance of
the Shares to the Investors and the other transactions contemplated hereby and
(C) a good standing certificate issued by the Secretary of State of Delaware
with respect to the Company.
10. INVESTOR STANDSTILL RESTRICTIONS
Prior to the second annual anniversary of the date hereof and
subject to the last sentence of this section, without the prior written consent
of the Company, no Investor shall:
(a) acquire, offer to acquire, or agree to acquire, directly
or indirectly, by purchase or otherwise, any voting securities or direct or
indirect rights to acquire any voting securities of the Company or any
subsidiary thereof, or of any successor to or person in control of the Company,
or any assets of the Company or subsidiary or division thereof or of any such
successor or controlling person, except in the case of any Investor shares of
Common Stock in an aggregate amount up to five percent (5%) of the total
outstanding shares of Common Stock; provided, however, that the provisions of
this Section 10(a) shall not apply to purchases of Common Stock made in the
ordinary course of business of an Investor, if such Investor would be eligible,
as confirmed either (a) by a written opinion of counsel addressed to the Company
and reasonably acceptable to the Company or (b) by the filing of Form 13G under
the Exchange Act; provided further that if on some future date prior to the
second annual anniversary of the date hereof such Investor would not have been
eligible to report such purchase on Form 13G if such purchase had occurred as of
such date (the "Non-Eligibility Date"), then such Investor shall sell to an
unaffiliated party within five (5) days of the Non-Eligibility Date any shares
of Common Stock purchased in reliance on this sentence;
(b) make, or in any way participate, directly or indirectly,
in any "solicitation" of "proxies" to vote (as such terms are used in the rules
of the SEC), or seek to advise or influence any person or entity with respect to
the voting of any voting securities of the Company;
(c) make any public announcement with respect to, or submit a
proposal for, or offer of (with or without conditions) any extraordinary
transaction involving the Company or any of its securities or assets;
(d) form, join or in any way participate in a "group" as
defined in Section 13(d)(3) of the Exchange Act, as amended, in connection with
any of the foregoing;
(e) seek to propose to influence the Company's management or
policies;
(f) request the Company directly or indirectly, to amend or
waive any provision of this paragraph; or
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(g) make any public disclosure with respect to the foregoing.
Each Investor will promptly advise the Company of any inquiry
or proposal made with respect to any of the foregoing.
The provisions of this Section 10 shall not restrict the
activities of an Investor that is, or is affiliated with, a registered
broker-dealer or registered or exempt financial advisor or registered or exempt
investment company, with respect to transactions effected by the Investor as
agent or broker on behalf of customers of the Investor or such affiliate in
which the Investor does not acquire or dispose of beneficial ownership of any
securities of the Company, including any brokerage, investment advisory,
financial advisory, anti-raid advisory, financing, asset management, trading,
market making, arbitrage and other similar activities conducted in the ordinary
course of its business.
11. AMENDMENT.
No amendment, modification, termination or cancellation of
this Agreement shall be effective unless made in writing signed by the Company
and a majority of the Investors; provided, however, that no amendment that
materially and adversely affects the rights of any Investor shall be made
without the consent of such Investor.
12. SEVERABILITY.
The invalidity and unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
13. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
Company and each Investor acknowledge that the representations and warranties
made by the Company and the Investors shall survive the Closing and consummation
of the transactions contemplated herein.
13. GOVERNING LAW.
This Agreement shall be governed by, and interpreted in
accordance with, the laws of the State of Delaware without regard to the
principles or policies thereof with respect to conflicts of law.
14. COUNTERPARTS.
This Agreement may be executed in any number of counterparts
and by the different parties hereto on separate counterparts, each of which when
so executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
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15. ENTIRE AGREEMENT.
This Agreement and the Registration Rights Agreement
constitute the entire agreement of the parties with respect to the matters
contained herein and may only be amended by a written instrument signed by all
parties hereto and thereto.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF this Subscription Agreement was duly
executed on the 4th day of April, 2000.
eVentures Group, Inc.
By: /s/ XXXXXX XXXXXXXXX
Name: Xxxxxx Xxxxxxxxx
Title: Vice President - Business
Development, General Counsel and
Secretary
[SUBSCRIPTION AGREEMENT SIGNATURE PAGE]
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IN WITNESS WHEREOF this Subscription Agreement was duly
executed on the 4th day of April, 2000.
LIBERTY MEDIA CORPORATION
By: /s/ XXXXXX X. XXXXXXX
Name: Xxxxxx X. Xxxxxxx
Title: President and Chief Executive
Officer
[SUBSCRIPTION AGREEMENT SIGNATURE PAGE]
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IN WITNESS WHEREOF this Subscription Agreement was duly
executed on the 4th day of April, 2000.
CHASE EQUITY ASSOCIATES, LP
By: Chase Capital Partners, its general
partner
By: /s/ XXXXX XXXXXXX
Name: Xxxxx Xxxxxxx
Title: General Partner
[SUBSCRIPTION AGREEMENT SIGNATURE PAGE]
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IN WITNESS WHEREOF this Subscription Agreement was duly
executed on the 4th day of April, 2000.
XXXX CAPITAL PARTNERS VI, L.P.
By: Xxxx Capital Management, L.L.C., its
managing partner
By: /s/ XXXXX X. XXXX
Name: Xxxxx X. Xxxx, III
Title: Managing Member
[SUBSCRIPTION AGREEMENT SIGNATURE PAGE]
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IN WITNESS WHEREOF this Subscription Agreement was duly
executed on the 4th day of April, 2000.
PCP ASSOCIATES, L.P.
By: Xxxx Capital Management, L.L.C., its
managing partner
By: /s/ XXXXX X. XXXX
Name: Xxxxx X. Xxxx, III
Title: Managing Member
[SUBSCRIPTION AGREEMENT SIGNATURE PAGE]
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IN WITNESS WHEREOF this Subscription Agreement was duly
executed on the 4th day of April, 2000.
BANCBOSTON CAPITAL INC.
By: /s/ XXX X. XXXXXXX
Name: Xxx X. Xxxxxxx
Title: Managing Director
[SUBSCRIPTION AGREEMENT SIGNATURE PAGE]
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IN WITNESS WHEREOF this Subscription Agreement was duly
executed on the 4th day of April, 2000.
X.X. XXXX CO., INC., as Nominee 2000-59
By: /s/ XXXXXX X. XXXX
Name: Xxxxxx X. Xxxx, Xx.
Title: Vice President
[SUBSCRIPTION AGREEMENT SIGNATURE PAGE]
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IN WITNESS WHEREOF this Subscription Agreement was duly
executed on the 4th day of April, 2000.
BLACKSTONE FAMILY INVESTMENT
PARTNERSHIP III L.P.
By: Blackstone Management Associates III
LLC, its General Partner
By: /s/ XXXX XXXXXXXX
Name: Xxxx Xxxxxxxx
Title: Member
[SUBSCRIPTION AGREEMENT SIGNATURE PAGE]
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IN WITNESS WHEREOF this Subscription Agreement was duly
executed on the 4th day of April, 2000.
BLACKSTONE OFFSHORE CAPITAL
PARTNERS III L.P.
By: Blackstone Management Associates III
LLC, its General Partner
By: /s/ XXXX XXXXXXXX
Name: Xxxx Xxxxxxxx
Title: Member
[SUBSCRIPTION AGREEMENT SIGNATURE PAGE]
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IN WITNESS WHEREOF this Subscription Agreement was duly
executed on the 4th day of April, 2000.
BLACKSTONE CAPITAL PARTNERS III
MERCHANT BANKING
FUND L.P.
By: Blackstone Management Associates III
LLC, its General Partner
By: /s/ XXXX XXXXXXXX
Name: Xxxx Xxxxxxxx
Title: Member
[SUBSCRIPTION AGREEMENT SIGNATURE PAGE]
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IN WITNESS WHEREOF this Subscription Agreement was duly
executed on the 4th day of April, 2000.
THE XXXXXXX XXXXX GROUP, INC.
By: /s/ XXXXXXX X XXXXXXXX
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
[SUBSCRIPTION AGREEMENT SIGNATURE PAGE]
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IN WITNESS WHEREOF this Subscription Agreement was duly
executed on the 4th day of April, 2000.
BRAZOS eVENTURES ACQUISITION,
LLC
By: /s/ XXXXXXX X. XXXXXXXX
Name: Xxxxxxx X. Xxxxxxxx
Title: President
[SUBSCRIPTION AGREEMENT SIGNATURE PAGE]
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IN WITNESS WHEREOF this Subscription Agreement was duly
executed on the 4th day of April, 2000.
MAVERICK FUND LDC
By: /s/ XXXXXXXX XXXXXX
Name: Xxxxxxxx Xxxxxx
Title: Controller. Maverick Capital,
Ltd. Fund Advisor
[SUBSCRIPTION AGREEMENT SIGNATURE PAGE]
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IN WITNESS WHEREOF this Subscription Agreement was duly
executed on the 4th day of April, 2000.
MAVERICK FUND USA, LTD.
By: /s/ XXXXXXXX XXXXXX
Name: Xxxxxxxx Xxxxxx
Title: Controller. Maverick Capital,
Ltd. Fund Advisor
[SUBSCRIPTION AGREEMENT SIGNATURE PAGE]
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IN WITNESS WHEREOF this Subscription Agreement was duly
executed on the 4th day of April, 2000.
MAVERICK FUND II, LTD.
By: /s/ XXXXXXXX XXXXXX
Name: Xxxxxxxx Xxxxxx
Title: Controller. Maverick Capital,
Ltd. Fund Advisor
[SUBSCRIPTION AGREEMENT SIGNATURE PAGE]
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IN WITNESS WHEREOF this Subscription Agreement was duly
executed on the 4th day of April, 2000.
EDGEWATER PRIVATE EQUITY FUND III, L.P.
By: Edgewater III Management, L.P., its
General Partner
By: Xxxxxx Management, Inc., its General
Partner
By: /s/ XXXXX XXXXXXXX
Name: Xxxxx Xxxxxxxx
Title: Vice President
[SUBSCRIPTION AGREEMENT SIGNATURE PAGE]
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IN WITNESS WHEREOF this Subscription Agreement was duly
executed on the 4th day of April, 2000.
XXXXX GLOBAL INVESTMENTS, LTD.
By: /s/ SAVVAS SAVVINDIS
Name: Savvas Savvindis
Title: Director of Operations
[SUBSCRIPTION AGREEMENT SIGNATURE PAGE]
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IN WITNESS WHEREOF this Subscription Agreement was duly
executed on the 4th day of April, 2000.
REMINGTON INVESTMENT
STRATEGIES, L.P.
By: /s/ SAVVAS SAVVINDIS
Name: Savvas Savvindis
Title: Director of Operations
[SUBSCRIPTION AGREEMENT SIGNATURE PAGE]
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IN WITNESS WHEREOF this Subscription Agreement was duly
executed on the 4th day of April, 2000.
MELLON VENTURES II, L.P.
By: MVMA II, L.P., its G.P.
By: MVMA, Inc., its G.P.
By: /s/ X.X. XXXXXXXXXX
Name: X.X. Xxxxxxxxxx
Title: Managing Director
[SUBSCRIPTION AGREEMENT SIGNATURE PAGE]
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IN WITNESS WHEREOF this Subscription Agreement was duly
executed on the 4th day of April, 2000.
FIRST UNION MERCHANT BANKING
2000, LLC
By: /s/ XXXXX XXXXXX
Name: Xxxxx Xxxxxx
Title: Managing Partner
[SUBSCRIPTION AGREEMENT SIGNATURE PAGE]
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SCHEDULE 1
INVESTOR SHARES OF COMMON STOCK PURCHASE PRICE
-------- ---------------------- --------------
Chase Equity Associates, LP 217,391 $4,999,993
Xxxx Capital Partners VI, L.P. 185,935 $4,276,505
PCP Associates, L.P. 31,456 $723,488
BancBoston Capital Inc. 173,913 $3,999,999
X.X. Xxxx Co., Inc. as Nominee 2000-59 130,435 $3,000,005
Blackstone Family Investment 13,044 $300,012
Partnership III X.X.
Xxxxxxxxxx Offshore Capital Partners 31,379 $721,717
III X.X.
Xxxxxxxxxx Capital Partners III 172,968 $3,978,264
Merchant Banking Fund L.P.
The Xxxxxxx Xxxxx Group, Inc. 86,956 $1,999,988
Brazos eVentures Acquisition, LLC 217,391 $4,999,993
Maverick Fund LDC 143,109 $3,291,515.49
Maverick Fund USA Ltd. 61,805 $1,421,519.98
Maverick Fund II, Ltd. 12,477 $286,957.53
Edgewater Private Equity Fund III, L.P. 173,914 $4,000,022
Xxxxx Global Investments Ltd. 104,348 $2,400,004
Remington Investment Strategies, L.P. 26,087 $600,001
Mellon Ventures II, L.P. 217,391 $4,999,993
First Union Merchant Banking 2000, LLC 326,087 $7,500,001
-------- -----------
TOTAL 2,326,086 $53,499,978
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SCHEDULE 2
Schedule of Exceptions
To
Common Stock Subscription Agreement
The following constitutes an itemization by eVentures Group,
Inc., a Delaware corporation (the "Company"), of those matters that constitute
exceptions to the items set forth in Sections 5(e), 5(k) and 5(m) of the Common
Stock Subscription Agreement, dated as of April ___, 2000 (the "Agreement").
Unless otherwise noted herein, any capitalized term in this Schedule of
Exceptions shall have the same meaning assigned to such term in the Agreement.
SECTION 5(e)
Options, Warrants, Convertible Securities etc.
1. In connection with proposed terms of employment the Company has agreed,
subject to execution of definitive employment agreements and definitive stock
option agreements, to issue the following options to purchase shares of common
stock with an exercise price of $23.00 per share:
Xxxxxxx X. Xxxxxx: 3,910,000
Xxxxxx X. XxXxxxxx: 1,360,000
Xxxxxx Xxxxxx: 1,020,000
Xxxx X. Xxxxx: 510,000
Messrs. Marcus, McMillin, Xxxxxx and Coben are referred to herein as
the "Marcus Executives."
These options vest 90 days after the grant date as to 25% of the grant,
on the first anniversary as to 50% of the grant, on the second anniversary as to
75% of the grant and are fully vested on the third anniversary of the grant
date.
2. In connection with the foregoing grants, the Company has also agreed to issue
200,000 options with an exercise price of $23.00 per share to 12 employees.
These options vest equally in 1/3rd increments on the anniversary date of grant
and are fully vested on the third anniversary of the grant date.
3. In connection with proposed terms of employment as President of the Company,
the Company has agreed, subject to execution of a definitive employment
agreement and a definitive stock option agreement, to issue 1,400,000 options to
purchase shares of common stock with an exercise price of $23.00 per share to
Xxxxxxx X. Xxxxxxx. These options vest 90 days after the
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grant date as to 25% of the grant, on the first anniversary as to 50% of the
grant, on the second anniversary.
4. The Company is in discussions with several other potential senior executives
regarding employment. If such negotiations are successful, the Company
anticipates issuing up to 1,250,000 options on similar terms to those issued to
the Marcus Executives and Xx. Xxxxxxx.
5. On March 7, 2000, the Company entered into a non-binding letter of intent to
acquire all of the issued and outstanding shares of common stock, and all
options, warrants and other equity interests in, Advanced Data Analysis &
Preservation Technology, Inc. ("ADAPT"). The purchase price for this acquisition
is $25,750,000, payable in shares of the Company's Common Stock. The number of
shares of Common Stock issuable in this transaction will be determined by
dividing the purchase price by the average of the closing bid and ask prices of
the Common Stock during the time period beginning March 15, 2000 and ending
April 15, 2000, with a minimum price of $20.00 and a maximum price of $50.00.
The Company has also agreed to issue (i) 100,000 stock options under its Omnibus
Securities Plan (the "Plan") to the CEO of ADAPT as part of his proposed
employment as CEO and President of ADAPT following the closing of the
transaction, and (ii) 75,000 stock options under the Plan to certain other key
employees of ADAPT. As of March 31, 2000, the closing of this transaction was
still subject to satisfactory completion of due diligence, execution and
delivery of mutually acceptable documentation and the approval of the
shareholders of ADAPT.
6. In connection with the acquisition of Internet Global Services, Inc. ("IGS"),
the Company issued a total of 900,000 options under the Plan to seven key
executives of IGS. These options have an exercise price of $28.50 per share and
vest in equal 1/3rd increments annually on the anniversary date of the grants.
7. On March 13, 2000, the Company received a conversion notice from Geronimo
Partners, L.P., requesting conversion of 2,500 shares of Series B Convertible
Preferred Stock.
8. The Company has delivered instructions to its transfer agent to issue (i)
12,500 shares of common stock to Xxxx Xxxxxxx Xxxxxx White to complete the
Corpovision Settlement, (ii) 50,000 shares to Xxxx Xxxxxx Grantor Retained
Annuity Trust to complete that entity's subscription for shares on September 28,
1999 and (iii) 181,159 shares issuable upon conversion of 2,500 shares of Series
B Preferred Stock (which conversion was requested on March 13, 2000).
9. Pursuant to the terms of the acquisition of IGS, the Company is obligated to
issue 2,551,087 of common stock. The issuance instructions are not yet complete
and therefore the shares have not yet been issued.
SECTION 5(k)
Increases in Compensation
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In connection with his proposed employment as President of the Company, Xx.
Xxxxxxx'x compensation is scheduled to increase from $120,000 to $190,000.
SECTION 5(m)
1. The Company has not filed any Federal or state tax returns that may have been
due for its fiscal year ended June 30, 1999.
2. e.Volve Technology Group, Inc. has not filed any Federal or state tax returns
that may have been due for its fiscal year ended May 31, 1999.
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EXHIBIT 1
April __, 2000
eVentures Group, Inc.
0 Xxxxxxxxx Xxxxx
Xxxxxx Xxxx, XX 00000
Ladies and Gentlemen:
In connection with the purchase of shares of common stock of
eVentures Group, Inc. (the "Company") pursuant to the Common Stock Subscription
Agreement, dated as the date hereof, among the Company, the undersigned, and the
other investors thereto (the "Subscription Agreement"), the undersigned
represents and warrants that it is an "accredited investor", as defined in Rule
501 under the Securities Act of 1933 (the "Act")), inasmuch as it is:
(Please check all applicable descriptions)
[ ] A bank or savings and loan association, as defined in
the Act, whether acting in its individual or
fiduciary capacity.
[ ] A broker or dealer registered pursuant to the
Securities Exchange Act of 1934.
[ ] An insurance company, as defined in the Act.
[ ] An investment company registered under the Investment
Company Act of 1940.
[ ] A business development company, as defined in the
Investment Company Act of 1940.
[ ] A Small Business Investment Company licensed by the
U.S. Small Business Administration.
[ ] A plan established and maintained by a state, its
political subdivisions, or an agency or
instrumentality of a state or its political
subdivisions for the benefit of its employees, if
such plan has total assets in excess of $5,000,000.
[ ] An employee benefit plan within the meaning of Title
I of the Employment Retirement Income Security Act of
1974 (ERISA), if the investment decision with respect
to this investment is made by a plan fiduciary, as
defined in ERISA, which is either a bank, savings and
loan association, insurance company, or registered
investment advisor, or if the employee benefit plan
has total assets in excess of $5,000,000, or, if a
self-
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directed plan, with investment decisions made solely
by persons that are accredited investors.
[ ] A private business development company, as defined in
the Investment Advisors Act of 1940.
[ ] A tax-exempt organization defined in Section
501(c)(3) of the Internal Revenue Code, or a
corporation, Massachusetts or similar business trust,
or partnership, not formed for the specific purpose
of acquiring the shares offered under the
Subscription Agreement, with total assets in excess
of $5,000,000.
[ ] A director or executive officer of the Company.
[ ] A natural person whose individual net worth (or joint
net worth with that person's spouse) exceeds
$1,000,000.
[ ] A natural person who had an individual income in
excess of $200,000 in each of the two most recent
years or joint income with that person's spouse in
excess of $300,000 in each of those years and who
reasonably expects an income in excess of $200,000 in
the current year.
[ ] A trust, with total assets in excess of $5,000,000,
not formed for the specific purpose of acquiring the
shares offered under the Subscription Agreement,
whose purchase is directed by a sophisticated person
as described in Rule 506(b)(2)(ii) under the Act.
[ ] An entity all the equity owners of which may respond
affirmatively to any of the preceding paragraphs.
The undersigned represents that the information contained herein is complete and
accurate and may be relied upon by the Company and agrees to notify the Company
if the undersigned no longer qualifies for any description checked above.
By:
------------------------------
Name:
Title:
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