AGREEMENT FOR PURCHASE OF STOCK
-------------------------------
This Agreement ("Agreement"), made and entered into as of the of
August, 2000 by and between Advanced Technology, Industries Inc., a Delaware
corporation, ("ATI") and Xxxxxx Xxxxxx ("Xxxxxx"), provides as follows:
RECITALS
X. Xxxxxx is the owner of 3,500,000 shares of the $.000l par value
common stock of Nurescell Inc., a Nevada Corporation ("Nurescell") which stock
is hereinafter referred to as "The Nurescell Stock."
B. ATI is a publicly owned corporation with authorized capital of fifty
million (50,000,000) shares of $.000l par value common stock of which 15,285,911
shares were issued and outstanding as of June 30, 2000, and one million
(1,000,000) shares of $.00l par value preferred stock none of which are
outstanding.
C. ATI desires to purchase and Xxxxxx desires to sell The Nurescell
Stock in exchange for shares of the ATI common stock upon the terms and
provisions set forth hereinafter.
NOW THEREFORE, in consideration for the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follow:
1. Transfer of Shares.
-------------------
Xxxxxx agrees to sell transfer and convey to ATI The Nurescell Stock
shares in consideration for the receipt of 3,500,000 shares of the $.0001 par
value common stock of ATI hereinafter referred as the "ATI Stock".
2. The Closing.
------------
The Closing hereunder ("Closing") will take place at the Law Offices.
of H. Xxx Xxxxxxx, a Professional Corporation, 00000 Xxxx Xxxxxxx Xxxx., Xxxxx
Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000 on _________, 2000 at 9:30 A.M. or such
other time and place as may be mutually agreed upon between the parties. The
Closing shall take place simultaneously with and shall be contingent upon the
Closing of that certain transaction by and between Nurescell, Nurescell AG, and
ATI involving the acquisition of certain technology by Nurescell AG, from
Nurescell.
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3. Warranties and Representations of Xxxxxx.
-----------------------------------------
Xxxxxx hereby makes the following representations and warranties to
ATI, its successors and assigns, all of which warranties and representations
shall be deemed to have been made at the Closing by Xxxxxx without any further
writing, and shall survive the Closing hereunder or termination or cancellation
of this Agreement or the failure of this transaction to close:
3.01. Nurescell has authorized capital of fifty million (50,000,000)
shares of $.000l par value common stock. As of the date of this Agreement there
were ______ shares outstanding. In the event that the outstanding shares of
Nurescell shall increase prior to Closing, Xxxxxx shall inform ATI in writing.
Except as disclosed in the most recent annual or quarterly report filed by
Nurescell pursuant to Section 13 of the Securities and Exchange Act of 1934
("Xxx 0000 Xxx") there are no agreements, warrants, options, or commitments by
Nurescell for the issuance of any additional shares of Nurescell stock.
3.02. Xxxxxx has and will have at the Closing the full right and power
to sell and transfer to ATI The Nurescell Stock free and clear of any statutory,
contractual or other limitation, and none of such shares are or will at the
Closing be subject to any lien, pledge, hypothecation or any encumbrance
whatsoever. The sale provided for herein will vest directly in ATI title to The
Nurescell Stock all free and clear of any and all encumbrances, liens,
restrictions, options, agreements, and conditions.
3.03. All of The Nurescell Stock was issued to Xxxxxx by Nurescell for
full and adequate consideration and Xxxxxx has not been notified by Nurescell or
any agent, employee, officer, or representative thereof, or any other person,
that Nurescell or any other person is contending or intends to contend that any
of The Nurescell Stock was issued for inadequate or invalid consideration or
that said shares are invalid or defective in any manner whatsoever.
3.04. The Shares by Xxxxxx will not constitute a default under any
indenture, loan, credit agreement or any other agreement, lease, or instrument
to which Xxxxxx or Nurescell is a party. Xxxxxx is entitled to transfer and
convey The Nurescell Stock without the consent of any other party.
3.05. There are no outstanding judgements against Xxxxxx or any claims
of any kind, actions, proceedings, disputes, or audits pending, or, to the
knowledge of Xxxxxx threatened or affecting Xxxxxx, whether for unpaid taxes or
otherwise. There are no outstanding and unpaid tax deficiency statements,
notices of assessments, or other demands for payment of taxes, or notices of
assessments or deficiency against Xxxxxx. Xxxxxx is not charged with or under
investigation in respect to any alleged violation of any provisions of any
federal, state, or local law, or administrative ruling or regulation.
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3.06. Xxxxxx has no asserted or unasserted claims against Nurescell or
any of its assets for severance benefits, unpaid wages or salary, fringe
benefits, loans, damages, or any other claims of any nature whatsoever.
4. Representation and Warranties of ATI.
-------------------------------------
ATI hereby makes the following representations and warranties to
Xxxxxx, his successors and assigns, all of which warranties and representations
shall be deemed to have been made at the Closing by ATI without any further
writing, and shall survive the Closing hereunder or termination or cancellation
of this Agreement or the failure of this transaction to close:
4.01 The ATI Stock delivered hereunder shall be validly issued and
outstanding and are fully paid and non-assessable.
4.02 ATI has and will have at the Closing the full right and power to
sell and transfer to Xxxxxx the ATI Shares agreed to be transferred hereunder
free and clear of any statutory, contractual, or other limitation, and none of
said shares are or will be at the Closing subject to any lien, pledge,
hypothecation, or any encumbrance whatsoever. The sale provided for herein will
vest directly in Xxxxxx title to the ATI Shares, free and clear of any and all
encumbrances, liens, restrictions, options, agreements, and conditions except as
may be set forth in Paragraph 5 hereof.
5. Restrictions Upon Shares-Investment Representation.
---------------------------------------------------
5.01 Xxxxxx warrants and represents that he is acquiring the ATI Stock
and the Earn Out Shares, if any, for his own account, for investment and not
with a view to, or for sale in connection with, any distribution of such shares
or any part thereof. Xxxxxx further warrants and represents that no other person
or entity has any interest whatsoever in said shares and that there are no
options or similar agreements, oral or written, whereby any person or entity has
the right to acquire any of said shares or any interest therein.
5.02 Xxxxxx acknowledges and agrees that, (i) the ATI Stock and the
Earn Out Shares, if any, being received hereunder have not been registered under
the Securities Act of 1933 ("Securities Act") or any state securities laws and
are issued in reliance upon certain provisions of federal and state securities
laws exempting said shares from such registration, (ii) there are substantial
restrictions on the sale of the shares acquired hereunder and that the shares
may be transferred only in accordance with the provisions of this Paragraph, and
(iii) each certificate representing the shares listed hereunder and any other
securities issued in respect of the ATI shares upon any stock split, stock
dividend, recapitalization, merger, consolidation or similar event shall (unless
otherwise permitted or unless the share have been registered under the
Securities Act) be stamped or otherwise imprinted with legends substantially in
the following form (in addition to any legend required under applicable states
securities laws):
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"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS. THEY MAY
NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND
ANY APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.
Xxxxxx acknowledges and agrees that the shares may not be transferred
without (i) registration under the Securities Act, (ii) the receipt by ATI of an
opinion of counsel acceptable to ATI that such transfer is exempt from the
registration provisions of the Securities Act and applicable state securities
laws, or (iii) the receipt by ATI of a "no-action" letter from the Securities
and Exchange Commission ("SEC") and any applicable state agency that said
transfer will not violate the Securities Act and applicable State Securities
Laws.
6. Earn Out Shares.
----------------
6.01 Additional shares of ATI $.0001 par value common stock
(hereinafter referred to as the "Earn Out Shares") shall be issued to Xxxxxx up
to a total of 2,000,000 additional shares provided that the following levels of
Gross Revenues are achieved by Nurescell AG in any of the five succeeding
calendar years:
Gross Revenues Additional Shares
-------------- -----------------
Over $5 Million but less than
$6 Million 200,000
Over $6 Million but less than
$7.5 Million 400,000
Over $7.5 Million but less than
$10 Million 666,000
Over $10 Million 1,000,000
6.02. For purpose of this Paragraph the term "Gross Revenue" shall
means all revenues derived by Nurescell AG from operations including the sale of
products, licensing revenues, or any other operational revenue but excluding any
extraordinary items including, but not limited to, (i) the sale of assets other
than in the ordinary course of business, or (ii) capital transactions involving
the issuance of stock or other securities.
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6.03 Upon the issuance of any of the Earn Out Shares said shares shall
be subject to the provisions of this agreement including but not limited to the
provisions of Paragraph 5 and 7 hereof.
7. Registration-Lock Up of Shares.
-------------------------------
Simultaneously with the execution of this Agreement the parties shall
execute the Registration Rights Agreement in the form attached hereto as Exhibit
"A" providing for the registration of the ATI Shares and the Earn Out Shares.
7.01 Xxxxxx shall have the right to register and/or sell not to exceed
six hundred thousand (600,000) shares of The ATI Stock after one (1) year from
the date of this Agreement and an additional six hundred thousand (600,000)
shares each year thereafter pursuant to the Registration Rights Agreement which
is attached hereto as Exhibit "A" and incorporated by this reference as though
fully set forth herein.
7.02 Except for the rights of Xxxxxx to have shares registered and to
sell said shares pursuant to Paragraph 7.01 hereof, Xxxxxx shall not sell,
transfer, convey, or assign any interest in the ATI Stock or the Earn-Out Shares
until the expiration of five (5) years from the date of this agreement unless
the transferee expressly assumes in writing all of the obligations and duties of
Xxxxxx under this Agreement, the Registration Rights Agreement, and the Voting
Trust Agreement, including, but not limited to, the restriction against transfer
of shares except pursuant to Paragraph 7.01 as provided herein.
8. Voting Trust Agreement
----------------------
Simultaneously with the execution of this Agreement and as additional
consideration for the covenants and agreements contained herein, the parties
hereto shall execute the Voting Trust Agreement in the form attached hereto as
Exhibit "B".
9. Closing Documents.
------------------
9.01 At the Closing ATI shall deliver to Xxxxxx the following
documents:
(a) 3,500,000 shares of the $.001 par value common stock of
ATI.
(b) The executed Registration Rights Agreement in the form
attached hereto as Exhibit "A".
(c) The executed Voting Trust Agreement in the form attached
hereto as Exhibit "B".
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9.02 At the Closing Xxxxxx shall deliver the following documents to
ATI:
(a) Shares Certificates of Nurescell totaling 3,500,000 shares
together with properly executed Stock Powers Separate From Certificate
executed by Xxxxxx and any other person in whose name such shares may
stand.
(b) A resolution of the Board of' Directors of Nurescell
executed by all of the directors thereof stating The Nurescell Stock is
validly issued and outstanding, fully paid, and that there are no
claims by Nurescell Inc., that The Nurescell Stock or any portion
thereof is not validly issued, issued for insufficient consideration,
or that there is any claim by Nurescell that may affect the validity of
said shares. Said resolution shall otherwise be in a form acceptable to
ATI.
(c) An executed Registration Rights Agreement in the form
attached as Exhibit "A" hereto.
(d) An executed Voting Trust Agreement in the form attached as
Exhibit "B" hereto.
10. Non-Interference
----------------
Simultaneously herewith Nurescell Inc, and Nurescell AG are executing
an Investment Agreement which contains certain agreements therein relating to
the corporate governance of Nurescell, Inc. and Nurescell AG pending the receipt
of full payment of the license fee in the amount of $1,000,000 under that
certain License Agreement entered into between said parties simultaneously with
the execution of the Investment Agreement. Xxxxxx acknowledges that he is
familiar with the provisions of those agreements in that regard and agrees that
he will not take any action directly or indirectly or solicit, advise, assist or
make any recommendation to any other person to take any action directly or
indirectly which is inconsistent with the provisions of those agreements in that
regard including, but not limited to, the voting of stock in Nurescell, Inc. or
Nurescell AG.
11. Indemnification
---------------
11.01 Xxxxxx (the "Indemnifying Party") hereby agrees to indemnify ATI
and its successors and assigns and the officers, directors, affiliates,
employees, controlling persons, and agents of ATI ("Indemnitee") and to hold
each Indemnitee harmless against and in respect of any losses, damages, taxes,
penalties or other additions to taxes, claims, actions or causes of action, cost
and expenses, including attorneys' and accountants' fees, specifically excluding
lost profit and consequential damages, collectively referred to hereinafter as
"Losses", incurred by any Indemnitee by reason of (a) a breach of any
representations or warranties made by Xxxxxx in this Agreement, or (b)
nonperformance (whether partial or total) of any covenants or agreements made by
Xxxxxx in this Agreement or any agreement entered into pursuant hereto.
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11.02 Without limiting the generality of the foregoing, in the event
of any claim for indemnification hereunder resulting in the commencement of
legal proceedings by a third party, the Indemnitee shall give notice to the
Indemnifying Party no later than ten (10) days prior to the time any response to
the asserted claim is required, if possible. In the event of any such claim for
indemnification resulting from or in connection with any third-party claim or
legal proceeding, the Indemnifying Party may assume the defense thereof;
provided, however, that no settlement may be made without the prior written
consent of the Indemnitee. If the Indemnifying Party assumes the defense of any
such claim or legal proceeding, the Indemnifying Party shall be entitled to
select counsel and take all steps necessary in the settlement or defense
thereof, provided, however, that the Indemnitee may, at its own expense,
participate in any such proceeding with counsel of its choice. The Indemnitee
may not compromise or settle such claim or proceeding without the prior written
consent of the Indemnifying Party unless (a) the Indemnifying Party s not
defending in good faith such claim or proceeding. (b) the continued defense of
such claim or proceedings is materially prejudicial to the Indemnitee. or (c)
the Indemnitee believes in good faith that the Indemnifying Party will be unable
to pay the amount of such settlement. If the indemnifying Party does not assume
the defense of any such claim or litigation in such manner as it may deem
appropriate, including, but not limited to, settling such claim or litigation
(after giving notice of the same to the Indemnifying Party), the Indemnifying
Party will promptly indemnify the Indemnitee in accordance with the provisions
of this Paragraph, provided, however, that in the event the Indemnitee intends
to settle a claim or litigation without the Indemnifying Party's consent, the
Indemnitee shall notify the Indemnifying Party of such intent in writing. Within
five (5) business days of receipt of such notice, the Indemnifying Party shall
deliver to the Indemnitee its written objection, if any, to the amount of such
settlement specifying the amount to which it objects. The Indemnifying Party
shall only be liable for that portion of the loss resulting from any settlement
that the Indemnifying Party does not reasonably dispute in good faith in its
written objection.
12. Miscellaneous
-------------
12.01 NOTICES
All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally or by commercial delivery service,
or mailed by registered or certified mail (return receipt requested) or sent via
facsimile (with acknowledgment of computer transmission) to the parties at the
following addresses (or at another address for a party as shall be specified by
like notice):
To Advanced Technology Advanced Technology Industries Inc.
Industries, Inc.: Xxxxxxxxxxxxx 00
Xxxxxx, Xxxxxxx D-10117
Telephone No.: (0000) 000-0000
Facsimile No.: ________________
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With copy to: H. Xxx Xxxxxxx
Law Offices of H. Xxx Xxxxxxx
11900 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
To Xxxxxx Xxxxxx: __________________________________
__________________________________
__________________________________
__________________________________
Telephone No.: ___________________
Facsimile No.: ___________________
12.02 Interpretation
--------------
The words "include", "includes" and "including", when used herein,
shall be deemed in each case to be followed by the words "without limitation".
The headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
12.03 Counterparts and Facsimile Signatures
-------------------------------------
This Agreement may be executed in one or more counterparts and by
facsimile signature, all which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each party delivered to the other party, it being understood that all patties
need not sign the same counterpart.
12.04 Entire Agreement
----------------
This Agreement and the exhibits hereto, and the documents and
instruments and other agreements among the parties hereto referenced herein
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof.
12.05 Assignments
-----------
Neither the rights or obligations of any party hereunder may be
assigned without the written consent of the remaining parties hereto, provided
that ATI may assign its respective rights and delegate its respective
obligations hereunder to any of its affiliates.
8
12.06 Severability
------------
In the event that any provision of this Agreement, or the application
thereof, becomes or is declared by a court of competent jurisdiction to be
illegal, void, or unenforceable, the remainder of this Agreement will continue
in full force and effect and the application of such provisions to persons or
circumstances will be interpreted reasonably so as to give effect to the intent
of the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes intended by the void or unenforceable provision.
12.07 Other Remedies
--------------
Except as otherwise provided herein, any and all remedies herein
expressly conferred upon a party will be deemed cumulative with, and not
exclusive of, any other remedy conferred hereby, or by law or equity, upon such
party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.
12.08 Governing Law: Venue
--------------------
This Agreement shall be governed by and construed in accordance with
the laws of the State of California, regardless of the laws that might otherwise
govern under applicable principles of conflicts of laws thereof. The parties
irrevocably consent to the jurisdiction and venue of the state and federal
courts located in California concerning any action relating to this Agreement.
12.09 Rules of Construction
---------------------
The parties hereto agree that they have been represented by counsel
during the negotiation and execution of this Agreement and, therefore, waive the
application of any law, regulation, holding or rule of construction providing
that ambiguities in an agreement or other document will be construed against the
party drafting such agreement or document.
12.10 Specific Performance
--------------------
The parties hereto agree that irreparable damages would occur in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court having proper venue hereunder, this
being in addition to any other remedy to which they are entitled at law or in
equity.
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12.11 Publicity
---------
All notices to third parties and all other publicity concerning the
transaction contemplated by this Agreement shall be jointly planned and
coordinated by and between the parties hereto. None of the parties shall act
unilaterally in this regard without the prior written approval of the others,
provided, however, this approval shall not be unreasonably withheld, and further
provided, that in the event the parties hereto do not arrive at an agreement
concerning the text of the publicity to be given by virtue of the execution of
this Agreement, ATI shall be authorized to disclose that it has entered into
this Agreement to purchase The Nurescell Stock hereunder and to subsequently
announce that said transaction has closed if the Closing occurs.
12.12 Attorneys' Fees and Cost
------------------------
In the event of any action at law or in equity between the parties
hereto to enforce any of the provisions hereof, the unsuccessful party or
parties to such litigation shall pay to the successful party or parties all
costs and expenses, including actual attorneys' fees, incurred therein by such
successful party or parties and if such successful party or parties shall
recover judgment in any such action or proceeding, such costs, expenses and
attorneys' fees shall be included in and as part of such judgment. The
successful party shall be the party who is entitled to recover his or its costs
of suit, whether or not the suit proceeds to final judgment. A party not
entitled to recover his or its costs shall not recover attorneys' fees.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as
of the day and year first above written.
Advanced Technology Industries, Inc.
/s/ Xxxxxx Xxxxxx By: /s/ Xxxx Xxxxxxx Xxxxxxxxx
------------------------------ -----------------------------------
XXXXXX XXXXXX SEPARATE -----------------------------------
PROPERTY REVOCABLE Its President
LIVING TRUST.
/s/ X. Xxxxxx /s/ Xxxxxx Xxxxxx
------------------------------- -----------------------------------
XXXXXX XXXXXX SEPARATE Xxxxxx Xxxxxx SEPARATE
PROPERTY REVOCABLE PROPERTY TRUST.
LIVING TRUST
Adoption, Ratification and Consent of Wife of Shareholder
---------------------------------------------------------
The undersigned, being the wife of Xxxxxx Xxxxxx, hereby certifies that
she has carefully read the foregoing Agreement for Purchase of Stock and
understands its meaning and effect: that she fully and freely consents to,
approves and joins in its purposes and does hereby subjects to the terms
thereof, any community or marital property interest that she may have in any
property
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therein referred to, and that she promises and agrees to execute any and all
instruments and to do any and all things necessary and proper to accomplish the
purposes set forth in said Agreement. The undersigned does hereby appoint Xxxxxx
Xxxxxx as attorney in fact for the purpose of modifying, amending, supplementing
or terminating said Agreement and does hereby authorize, ratify, confirm, and
adopt such modification, amendment, supplement, or termination as may at any
time and from time to time be made by him. In consideration of the benefits to
the undersigned, the undersigned hereby agrees to be bound by the terms and
conditions of said Agreement and all other documents and instruments executed in
connection therewith.
Dated: 8/23, 2000 /s/ X. Xxxxxx
--------------------------------------
Xxxxxx Xxxxxx Separate Property
Revocable Living Trust
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REGISTRATION RIGHTS AGREEMENT
-----------------------------
This Registration Right Agreement (the "Agreement") is entered into as
of ______ 2000, by and between Advanced Technology Industries, Inc. (the
"Company"), and Xxxxxx Xxxxxx ("Xxxxxx") with references to the following facts
and circumstances:
A. An Agreement For Purchase of Stock is being entered into by and
between Company and Xxxxxx simultaneously herewith where by Xxxxxx is acquiring
certain shares of the Company stock referred to therein as the ATI Stock and the
Earn Out Shares which are hereinafter collectively referenced to as the
"Shares".
B. In connection with the Agreement For Purchase of Stock, the Company
desires to grant certain registration rights with respect to the Shares.
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties agree as follows:
SECTION 1
DEFINITIONS
-----------
Capitalized terms used in this Agreement and not defined elsewhere
herein shall have the meanings set forth below:
"COMMISSION" means the Securities of Exchange Commission, or any other
federal agency then administrating the Securities Act.
"COMMON STOCK" means the $.0001 par value common stock of Company.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
or any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect.
"LOSSES" means all losses, claims, damages, or liabilities and
reasonable expenses related thereto.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
SECTION 2
1
EXHIBIT A
DEMAND REGISTRATION
-------------------
2.1 At any time commencing with the first anniversary date of this
Agreement and during a period of five years from the date hereof upon the
written demand of Xxxxxx, the Company shall prepare and file a registration
statement under the Securities Act covering an offering of such number of Shares
as shall have been requested to be registered by Xxxxxx in such demand;
provided, however, that (i) the Company shall be obligated to effect a
registration pursuant to this Section 2.1 for no more than 600,000 shares in
each twelve (12) month period and no more than one (1) registration during each
twelve (12) month period.
2.2 The Company shall proceed as expeditiously as possible after
receipt of a demand pursuant to Section 2.1 hereof to file a registration
statement and use its best efforts to cause such registration statement to
become effective within one hundred twenty (120) days after the receipt of such
written demand or, in the case of demand made within (60) days prior to the end
of the Company's then fiscal year, within two hundred ten (210) days after the
receipt of such written demand. The Company shall select any underwriter(s) to
be engaged in connection with any such registration.
SECTION 3
PIGGYBACK REGISTRATION
----------------------
3.1 If at any time within five (5) years from the date of this
Agreement the Company proposes to register any offering of shares of its capital
stock under the Securities Act, and if such registration is to be on a form of
the Commission that may include, or is at any time amended or changed to such a
form that may include the Shares, the Company will provide written notice to
Xxxxxx of the Company's intention to register the offering at least thirty (30)
days prior to the tiling of said registration statement.
3.2 Unless objected to by any underwriter(s) participating in the sale
and distribution of the Company's securities covered by such registration
statement referenced to in Section 3.1 hereof, the Company's notice shall accord
Xxxxxx an opportunity to elect to include in the registration some of the Shares
as provided herein. Xxxxxx shall have thirty (30) days after receipt of the
Company's notice to notify the Company in writing of the number of Shares (the
"Elected Shares") which Xxxxxx elects to include in the offering. If the number
Elected Shares that Xxxxxx requests to include in such registration exceeds the
number of shares permitted by any underwriter, then Xxxxxx, and each other
selling shareholder who also has piggyback registration rights and has elected
to include shares of Common Stock in the registration, shall be entitled to
include that number of shares of Common Stock that bears the same ratio to the
number of shares permitted by the underwriter as the number of Elected Shares
which Xxxxxx requests to include bears to the aggregate number of shares that
Xxxxxx and any other selling shareholders request to include. The piggyback
registration rights provided by Section 3.2 with respect to the Shares shall not
apply to offerings that are registered on Form X-0, Xxxx X-0, or successor
thereto for registering stock issued under business combinations or employees
plans.
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3.3 The inclusion of Shares in registered offerings pursuant to this
Section 3 shall be upon the condition that Xxxxxx xxxxx its Elected Shares to
any underwriter at the same prices and on substantially the same terms and
conditions as the Company.
3.4 The Company shall accord Xxxxxx the right to participate in each
registration pursuant to this Section 3 without limitation as to number of
registrations provided, however, that notwithstanding anything to the contrary
contained in this Agreement Xxxxxx shall not have the right to demand
registration for more than 600,000 of the Shares in any twelve (12) month
period.
3.5 In the case of any public offering of securities of the Company
pursuant to which Xxxxxx exercises registration rights under this Section 3, the
Company shall designate any underwriters in connection therewith.
SECTION 4
CONDITIONS TO PARTICIPATE
-------------------------
4.1 To include any Shares in a registration under Section 2 or Section
3 hereof, Xxxxxx shall:
(a) cooperate with the Company in preparing the registration
an execute any agreements as Company or any underwriter may deem reasonably
necessary including, but not limited to, an agreement concerning distribution of
the shares to be registered to insure that the distribution will not adversely
impact the market price of said shares;
(b) promptly supply the Company with any information,
documents, representations and agreements as any underwriter may deem reasonably
necessary in connection with such registration; and
(c) as requested by the Company or any underwriter, agree in
writing not to sell or transfer any shares of the capital stock of the Company
not included in such registration for a period of fifteen (15) days prior to and
one hundred eighty (180) days after the effective date of the agreement unless
the other holders of Common Stock include in the offering covered by such
registration shall similarly agree.
SECTION 5
OPINION OF COUNSEL
The Company shall have no obligations under Section 2 or Section 3
hereof to register any Shares if the Company delivers to Xxxxxx an opinion of
counsel reasonably satisfactory to Xxxxxx
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to the effect that the proposed sale or disposition of the Shares for which
registration was requested does not require registration under the Securities
Act for a sale or disposition in a single public transaction. The Company hereby
agrees to indemnify Xxxxxx against, and to hold him harmless from, all losses,
including liability for rescission, that may incur under the Securities Act or
other wise by reason of him proceeding in accordance with such opinion of
counsel.
SECTION 6
REGISTRATION PROCEDURES
-----------------------
If and whenever the Company is obligated by the provisions of this
Agreement to effect the registration of any offering of Shares under the
Securities Act, as expeditiously as possible the Company will, or will use its
best efforts to, as the case may be:
(a) Prepare and file with the Commission a registration
statement with respect to such Shares and cause such registration statement to
become effective; provided, however, that before filing a registration statement
or prospectus or any amendments or supplements thereto, the Company shall
furnish to Xxxxxx and his counsel selected pursuant to Section 7.2 hereof copies
of all such documents proposed to be filed, which documents will be the subject
of review of Xxxxxx and his counsel and, in the event of a demand registration
which is not accompanied by registration of Common Stock for sale by the
Company, the Company shall not file any registration statement or prospectus or
any amendments or supplements thereto to which Xxxxxx or its counsel shall
reasonably object on a timely basis.
(b) Prepare and file with the Commission such amendments and
supplements to the registration statement and the prospectus used in connection
therewith as may be necessary to keep the registration statement effective until
the earlier of the sale of all Shares covered thereby or the expiration of a
period of two hundred seventy (270) days after its effective date, and comply
with the provisions of the Securities Act with respect to the disposition of all
shares of Common Stock covered by the registration statement; provided, however,
that if maintaining the effectiveness of the registration statement would
require the filing of a post-effective amendment including new financial
statements (other than financial statements which the Company would be required
to include in a current report on Form 10-Q or Form 10QSB, the Company shall be
obligated hereunder to use its best efforts to maintain the effectiveness of the
registration statement for only six (6) months in the case of the first
registration filed hereunder, and ninety (90) days in the case of any other
registration flied hereunder, in the event that any Shares included in the
registration statement subject to this Agreement remain unsold at the end of the
period during which the Company is obligated to use its best efforts to maintain
the effectiveness of the registration statement, the Company, if and when a
further amendment or supplement would be required to comply with Section 10 of
the Securities Act, may file a post-effective amendment to the registration
statement for the purpose of removing such Shares from registered status.
4
(c) Furnish to Xxxxxx as many topics of prospectuses,
including preliminary prospectuses. in conformity with the requirements of the
Securities Act, and other related documents, as Xxxxxx may reasonably request.
(d) Register or qualify the Shares covered by the registration
statement under the securities or blue sky laws of such jurisdictions as Xxxxxx
shall reasonably request, and do any acts that may be reasonably necessary or
advisable to enable Xxxxxx consummate the disposition in such jurisdictions of
the Shares; provided, however, that the Company shall not be obligated, by
reason thereof, to qualify as a foreign corporation or file any general consent
to service of process under the laws of any such jurisdiction or subject itself
to taxation as doing business in any such jurisdiction.
(e) Furnish to Xxxxxx an opinion of counsel for the Company,
which opinion shall be reasonably acceptable to Xxxxxx and the counsel selected
pursuant to Section 7.2 hereof, to the effect that a registration statement
covering the offering or the Shares has been filed with the Commission under the
Securities Acts and has been made effective by order of the Commission, that a
prospectus complying as to form with the requirements of the Securities Act is
available for delivery, that no stop order has been issued by the Commission
suspending the effectiveness of such registration statement and that, to the
best of such counsel's knowledge, no proceedings for the issuance of such a stop
order arc threatened to contemplated, and that the securities included in the
offering covered by such registration statement have been registered or
qualified, or exempted from such registration or qualification under the
securities or blue sky laws of each state in which the Company has been required
to register or qualify such shares under Section 6(d) hereof in giving such
opinion, counsel for the Company shall be entitled to rely upon opinion of
counsel for any underwriter.
(f) Notify Xxxxxx promptly after the Company shall receive
notice that any registration statements, supplement or amendment has become
effective, any registration statement is required to be amended or supplemented,
or any stop order with respect thereto has been issued.
(g) Enter into such agreements, including an underwriting
agreement in form, scope and substance as is customary in underwritten
offerings, and take all other actions in connection therewith, including actions
reasonably requested by any underwriter or Xxxxxx, in order to expedite or
facilitate the dispositions of the Shares. The Company's obligations pursuant to
the preceding sentence can include without limitation, the Company: (i) making
representations and warranties to the underwriters with respect to the business
of the Company, the registration statement, the prospectus and the documents, if
any, incorporated or deemed to be incorporated by reference in the registration
statement, in each case in form, substance and scope as arc customarily made by
issuers to underwriters in underwritten secondary offerings and confirm such
matters if and when requested: (ii) obtaining opinions of counsel to the Company
and updates thereof, which counsel and opinions, in form, scope and substance,
shall be reasonably satisfactory
5
to the underwriters, covering the matters customarily covered in opinions
requested in underwritten offerings, (iii) obtaining "cold comfort" letters and
updates thereof from the independent certified public accountants of the Company
(and, if necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company for which
financial statements and financial data are as required to be included in the
registration statement) addressed to the underwriters, such letters to be in
customary form and covering matters of the type customarily covered in "cold
comfort" letters to underwriters in connection with underwritten offerings; (iv)
agreeing in any underwriting agreement to the indemnification and contribution
provisions and procedures of Sections 9 through 12 hereof (or such other less
favorable provisions and procedures for the underwriters that acceptable to the
underwriters) with respect to all parties to be indemnified pursuant to said
Sections; and (v) delivering such documents and certificates as may be requested
by an underwriter to evidence the continued validity of the representations and
warranties made pursuant to clause (i) of this Section (6)(g), and to evidence
compliance with any customary conditions contained in the underwriting agreement
or other agreement entered into the Company.
(h) Make available for inspection, by any underwriter and any
counsel or accountant retained by the underwriter, financial and other records,
pertinent corporate documents and properties of the Company; and cause the
officers, directors and employees of the Company to supply information
reasonably requested by any underwriter, counsel or accountant in connection
with such registration statement; provided, however, that any records,
information or documents that are designated by the Company in writing as
confidential shall be kept confidential by such persons unless (i) disclosure of
such records, information or documents is required by court or administrative
order, (ii) disclosures of such records, information to documents, for the
opinion of counsel to such person, is required by law, including without
limitations pursuant to the requirements of the Securities Act, or (iii) such
records, information or documents are in the public domain or otherwise publicly
available.
SECTION 7
REGISTRATION EXPENSES: COUNSEL FOR XXXXXX
-----------------------------------------
7.1 The costs and expenses in connection with the registration and
qualifications of Shares under Section 2 hereof shall be paid by Xxxxxx. The
costs and expenses (other than underwriting discounts or commissions and such
fees for counsel, printing, registration and other fees as state securities
officials may require that Xxxxxx and other selling shareholders pay) of all
registrations and qualifications of Shares under Section 3 hereof shall be paid
by the Company, including without limitations all registration and filing fees,
printing expenses, costs of special audits incident to or required by any
registration, fees and disbursements of counsel for the Company and the fees and
disbursements of one special counsel acting for Xxxxxx and selected pursuant to
Section 7.2 hereof, except that all such expenses in connection with any
amendment or supplement to the registration statement or the prospectus used in
connection therewith required to be filed more than two hundred seventy (270)
days after the date on which such
6
registration statement becomes effective under the Securities Act because Xxxxxx
has not effected the disposition of all Shares covered by such registration
statement shall be borne pro rata by Xxxxxx and any other selling shareholders
benefitted thereby.
7.2 Xxxxxx may elect the counsel to act on its behalf in connection
with a registration, under this agreement, provided that such counsel is
reasonably acceptable to the Company.
SECTION 8
RULE 144
--------
The Company shall file the reports required under the Securities Act
and the Exchange Act and the rules and regulations adopted by the Commission
thereunder; and shall take such further action as Xxxxxx may reasonably request
as required from time to time to enable Xxxxxx to sell Shares without
registration under the Securities Act within the limitations of the exemptions
provided by Rule 144 under the Securities Act, as such Rule may be amended from
time to time, or any similar rule or regulation hereafter adopted by the
Commission.
SECTION 9
INDEMNIFICATION BY THE COMPANY
------------------------------
In the event of any registration under the Securities Act of any
offering of Shares, the Company hereby agrees to indemnify and hold harmless
Xxxxxx and each person (including each underwriter, and each other person, if
any who controls such underwriter) who participates in the offering of such
Shares against any Losses, joint or several, to which Xxxxxx or participating
person may become subject under the Securities Act or otherwise, insofar as such
Losses (or Proceedings in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement or alleged omission made in such
registration statement, said preliminary or final prospectus or said amendment
or supplement in reliance upon and in conformity with written information
furnished by Xxxxxx or such participating person, as the case may be,
specifically for use in the preparation thereof. The Company shall also
indemnify underwriters, selling brokers, dealers managers and similar securities
industry professionals participating in the distribution, their officers,
directors, agents and employees and each person who controls such persons
(within the meaning of Section 15 of the Securities Act or Section 20 of the
exchange Act) to the same extent as provided above with respect to the
indemnification of Xxxxxx.
SECTION 10
INDEMNIFICATION BY XXXXXX
-------------------------
In the event of any registration under the Securities Act of any
offering of Shares, Xxxxxx hereby agrees to indemnify and hold harmless the
Company and each person who controls the
7
Company within the meaning of the Securities Act and each other person
(including each underwriter, and each other person, if any, who controls such
underwriter, and each other selling shareholder, and each other person, if any,
who controls such shareholder) who participates in the offering of such Shares,
against any Losses, joint or several, to which the Company, other selling
shareholder, or controlling person or participating person may become subject
under the Securities Act or otherwise, insofar as such Losses (or proceedings in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained therein, on the effective date
thereof, in any registration under which an offering of such Shares was
registered under the Securities Act, in any preliminary prospectus or final
prospectus contained therein, or in any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to he stated therein or necessary to make the
statements therein not misleading, and will reimburse the Company, other selling
shareholders, and each such controlling person or participating person for any
legal or other expenses reasonably incurred by the Company, other selling
shareholders, or such loss or proceeding: PROVIDED, HOWEVER, that Xxxxxx will be
liable in any such case to the extent, and only to the extent, that any such
Loss arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
said preliminary or final prospectus or said amendment or supplement in the
preparation thereof. Notwithstanding the foregoing, the liability of Xxxxxx
under this Section 10 shall be limited to an amount equal to the price of the
Shares sold by Xxxxxx in connection with such registration unless such liability
arises out of acts based on willful conduct of Xxxxxx.
SECTION 11
CONDUCT OF INDEMNIFICATION PROCEEDINGS
--------------------------------------
If any action or proceeding (including any governmental Investigation
or inquiry) shall be brought or any claim shall be asserted against any person
entitled to indemnity hereunder (an "indemnified party") such indemnity is
sought (the "indemnifying party") in writing, and the indemnifying party shall
assume the defense thereof, including the employment of counsel reasonably
satisfactory to the indemnified party and the payment of all fees and expenses
incurred in connection with the defense thereof. Any such indemnified party
shall have the right, to employ separate counsel in any such action, claim or
proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be the fees and expenses of the indemnified party unless.
(i) the indemnifying party has agreed to pay such fees and expenses or (ii) the
indemnifying party shall have failed to promptly assume the defense of such
action, claim or proceeding or (iii) the named parties to any such action, claim
or proceeding (including any impleaded parties) include both such indemnified
party and the indemnifying party, and such indemnified party shall have been
advised by counsel that there may be one or more legal defenses available to it
which are different from or in addition to those available to the indemnifying
party and that the assertion of such defenses would create a conflict of
interest such that counsel employed by the indemnifying party could not
faithfully represent the indemnified party (in which case, if such indemnified
party notifies the indemnifying party in writing that it elect to employ
separate counsel
8
at the expense of the indemnifying party, the indemnifying party shall not have
the right to assume the defense of such action, claim, or proceeding on behalf
of such indemnified party, if being understood, however, that the indemnifying
party shall not, in connection with any one such action, claim or proceeding or
separate but substantially similar or related actions, claims or proceedings in
the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (together with appropriate local counsel) at any time
for all such indemnified parties, unless in the reasonable judgment of such
indemnified party a conflict of interest may exist between such indemnified
party and any other of such indemnified party with respect to such action, claim
or proceeding, in which event the indemnifying party shall be obligated to pay
the fees and expenses of such additional counsel or counsels). The indemnifying
party shall not be liable for any settlement of any such action or proceeding
effected without its written consent.
SECTION 12
CONTRIBUTION
------------
If the indemnification provided for in this Agreement is unavailable to
an indemnified party under Section 9 or Section 10 hereof (other than by reason
of expectations provided in such Section) in respect of any Losses, then each
applicable indemnifying party in lieu of indemnifying such indemnified party
shall contribute to the amount paid or payable by such indemnified party as a
result of such Losses, in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and indemnified parties in connection
with the actions, statements or omissions which resulted in such Losses as well
as any other relevant equitable considerations. The relative fault of such
indemnifying party and the indemnified party shall be determined by references
to among, other things, whether any action in question, including any untrue
statement or alleged untrue statement of a material fact omission or alleged
omission of a material fact, has been taken or made by, or relates to
information supplied, by, such indemnifying party or indemnified party, and the
parties relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 11 hereof, any legal or other fees or
expenses reasonably incurred by such party in connection with any action, suit
claim, investigation or proceeding.
The parties hereto agree that it would be just and equitable if
contribution pursuant to this Section 12 were determined by pro rata allocation
on by any other method of allocation which does not take into account the
equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 12, Xxxxxx shall not be required
to contribute any amount in excess of the amount by which total price at which
the Shares sold by him exceeds the amount of any damages which such indemnifying
party has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution form any person who was not guilty of such
fraudulent misrepresentation.
9
SECTION 13
RIGHT OF FIRST REFUSAL
----------------------
In lieu of registering any shares under this Agreement pursuant to
Section 2 or 3 hereof or rendering an opinion pursuant to Section 5 hereof
Company may elect to purchase all or a portion of the shares that Xxxxxx demands
to be registered under Section 2 or requests to be registered under Section 3.
Company may elect to purchase said shares by giving notice thereof to Xxxxxx
within 15 days from receipt by Company of the demand from Xxxxxx under Section 2
or the request to register shares under Section 3. The purchase price of said
shares shall be 80% of the average of the bid prices for the last 20 trading
days. Company shall pay said amount to Xxxxxx within 15 days of the receipt of
the election to purchase by Xxxxxx. Simultaneously with receipt of payment
Xxxxxx shall deliver to Company share certificates evidencing the number of
shares to be purchased by Company together with executed Stock Transfers
Separate from Certificate and such other documents as Company may reasonably
demand.
SECTION 14
LOCK IN
-------
Notwithstanding anything to the contrary herein Xxxxxx shall be
prohibited from selling, assigning, transferring, or encumbering the ATI Shares
in any manner except to the extent of 600,000 shares per year as provided for in
this agreement.
SECTION 15
EQUITABLE RELIEF
----------------
The parties agree and declare that legal remedies may be inadequate to
enforce the provisions of this Agreement and that equitable relief, including,
specific performance and injunctive relief, may be used to enforce such
provisions.
SECTION 16
MISCELLANEOUS
-------------
10
16.1 NOTICES. Any notice or other communication provided for herein
shall be given in writing, and delivered personally, by courier, by facsimile,
or by registered or certified mail postage prepaid, addressed, if to the Company
at Xxxxxxxxxxxxx 00 Xxxxxx, Xxxxxxx D-10117 Fax No. ________________, to Xxxxxx
at: _______________________________ ________________- or such other address or
facsimile number as may be designated in writing by the Company or Xxxxxx.
Except as otherwise provided in this Agreement, each such notice shall be deemed
given when received by the person to whom the notice is addressed.
16.2 TERMINATION OF REGISTRATION RIGHTS. The obligations of the company
to register Shares pursuant to Section 2 or Section 3 hereof, and the rights to
Xxxxxx to include its Shares in registration statements pursuant to Sections,
shall terminate five (5) years following the date of the this Agreement.
16.3 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their representative successors
and assigns.
16.4 WAIVER. No failure or delay on the part of the parties in
exercising any right, power or privilege hereunder, nor any course of dealing
among the parties shall operate as a waiver of any such right, power or
privilege or shall any single or partial exercise or any such right, power or
privilege nor shall any single or partial exercise of any such right, power or
privilege preclude the simultaneous or later acarus of any other right, power or
privilege. The rights and remedies provided herein are cumulative and are not
exclusive of any rights or remedies which any of the parties would otherwise
have.
16.5 FURTHER ASSURANCE. Each party agrees to execute and deliver
additional documents and take actions that the other party may reasonably
request for purpose of carrying our the transactions contemplated by this
Agreement.
16.6 ATTORNEY'S FEES. In any action or proceeding brought to enforce
any provision of this Agreement, or where any provisions hereof is validly
asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees (including any fees incurred in any appeal) in
addition to its costs and expenses and any other available remedy.
16.7 GOVERNING LAW. This Agreement shall be governed by arid construed
in accordance with the laws of the State of California, USA, without reference
to principles of conflict laws.
16.8 ENTIRE AGREEMENT MODIFICATION. This Agreement expresses the entire
understanding of the parties as to its subject matter and supersedes any prior
discussions, negotiations and agreements with respect to such subject matter.
The terms of this Agreement may be amended or waived only in a writing that is
approved by the Company and Xxxxxx.
11
16.9 SEVERABILITY. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective only to the extent of such prohibition or enforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provisions in any other jurisdiction.
16.10 CAPTION HEADINGS: SINGULAR AND PLURAL: PERSONS: Caption headings
are provided for convenience only and shall not affect the interpretation of
this Agreement. As used herein references to the singular include the plural and
the plural include the singular, except where the context requires otherwise. As
used herein references to person included individuals and entities.
16.11 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to he an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
Advanced Technology Industries
Inc.
By:_____________________
Its: ___________________
________________________
Xxxxxx Xxxxxx
12
VOTING TRUST AGREEMENT
THIS AGREEMENT, effective as of the _____ day of August, 2000 is
entered into by and between Xxxxxx Xxxxxx ("Shareholder" or "Certificate
Holder") and Advanced Technology Industries, Inc. ("Trustee").
RECITALS
A. The Shareholder is the owner of ATI Stock and will be the owner of
Earn Out Shares as those terms are defined in that certain Agreement For
Purchase Of Stock entered into between Shareholder and Advanced Technology
Industries, Inc., a Delaware Corporation ("Corporation") simultaneously
herewith.
B. Shareholder desires to enter into a Voting Trust Agreement, prepared
in accordance with Section 218 of the Delaware Corporations Code for the
efficient management of the Corporation.
AGREEMENT
ARTICLE 1. EXCHANGE OF SHARES FOR VOTING TRUST CERTIFICATES
1.01 EXCHANGE OF SHARES FOR VOTING TRUST CERTIFICATES. Simultaneously
with the execution of this Agreement, the Shareholder will assign and deliver
3,500,000 shares of stock in the Corporation to the Trustee. The Trustee will
cause the shares to be transferred to it on the books of the Corporation and
will issue and deliver to the Shareholder Voting Trust Certificates for the
number of shares transferred to the Trustee.
1.02 FORM OF VOTING TRUST CERTIFICATES. The Voting Trust Certificates
shall be in substantially the form of Exhibit "A" attached to this Agreement and
made a part hereof as though fully set forth.
1.03 REPLACEMENT OF CERTIFICATES. If a Voting Trust Certificate is
lost, stolen, mutilated, or destroyed, the Trustee shall issue a duplicate of
the Certificate, provided, however, that the Trustee may require the Shareholder
to offer such proof and indemnification to the Trustee as the Trustee may
require in its sole discretion.
1.04 WITHDRAWAL OF SHARES. A Certificate Holder may not withdraw his or
her shares at any time before the termination of this Agreement, as provided in
Article 6.
ARTICLE 2. RESTRICTIONS ON TRANSFER
2.01 RESTRICTIONS ON TRANSFER. To accomplish the purposes of this
Voting Trust Agreement, any transfer, sale, assignment, hypothecation,
encumbrance, or alienation of any of the
1
EXHIBIT B
Voting Trust Certificates issued under this Agreement, other than according to
the terms of this Agreement, is void and shall transfer no right, title, or
interest in or to those certificates to the purported transferee, buyer,
assignee, pledgee, or encumbrance holder.
2.02 RIGHT TO RECEIVE DIVIDENDS. The Certificate Holder will have the
right to receive dividends paid on the shares until the certificates are sold or
transferred as provided in this Agreement subject to Paragraph 4.07 of this
Agreement. Trustee shall not be bound by any notice to the contrary.
2.03 RIGHT OF FIRST REFUSAL. The Certificate Holder (or Certificate
Holder's estate) will not sell, assign, transfer, or otherwise dispose of any of
his certificates, or of any interest in those certificates, without first
offering those certificates to the Company.
ARTICLE 3. NUMBER. TERM, AND REPLACEMENT OR REMOVAL OF TRUSTEES
3.01 NUMBER AND TERM OF TRUSTEES. There will be one (1) Trustee of this
trust. The first Trustee will be the Corporation. Its successor will be
appointed as provided in this Agreement. In the absence of resignation,
dissolution, death, or incapacity the Trustee will serve for the entire term of
this trust.
3.02 DEATH OR INCAPACITY OF TRUSTEE. The rights and duties of the
Trustee will terminate on his or her death or incapacity and no interest in any
of the property owned or held by the trust nor any of the rights or duties of
the Trustee may be transferred by will, devise, succession, or in any manner
except as provided in this Agreement. The heirs, administrators, and executors
of the Trustee shall however, have the right and duty to convey any property
held by the Trustee to the successor Trustee.
3.03 RESIGNATION. Any Trustee may resign by giving notice or his, her,
or its resignation to the successor Trustee and the Certificate Holder. On the
resignation of any Trustee, the Trustee will settle any account or transaction
with the Trust.
3.04 DISSOLUTION. In the event the Trustee is a corporation, the
dissolution of the corporation will terminate its status as Trustee provided,
however, that the corporation may appoint a successor trustee pursuant to the
provisions at' Paragraph 3.05 prior to filing a certificate of dissolution.
3.05 SUCCESSOR TRUSTEES. In the event of the death or incapacity to act
of any Trustee or the resignation or dissolution of a Trustee without the
appointment by that Trustee of a successor Trustee, the Certificate Holder shall
appoint the successor Trustee provided, however, that the successor Trustee
shall be a bank trust company authorized to act as a trustee in the State of
California.
2
ARTICLE 4. RIGHTS AND DUTIES OF TRUSTEE
4.01 VOTING OF SHARES. During the period of this Voting Trust, the
Trustee will have the exclusive right to vote the shares or give written
consent, in person or by proxy, at all meetings of the shareholders of the
Corporation, and in all proceedings in which the vote or written consent of
shareholders may be required or authorized by law. The Trustee will have all the
rights, powers, and privileges of shareholders, except as otherwise provided in
this Agreement.
4.02 DIVIDENDS. If the Corporation issues dividends, the Trustee shall
receive and distribute the dividends to the Certificate Holder subject to the
provisions of paragraph 4.07 of this Agreement. If the dividends are in the form
of share certificates having voting rights, the share dividends shall be held by
the Trustees, as provided in Paragraph 1.03 of this Agreement.
4.03 NO SALE OF SHARES. The Trustee shall have no authority to sell or
otherwise dispose of or encumber any of the stock deposited under this
Agreement.
4.04 TRUSTEE AS SHAREHOLDERS, DIRECTORS, OR EMPLOYEES. The Trustee may
serve the Corporation or any of its subsidiaries as a director or officer or in
any other capacity, and in any such capacity receive compensation from the
Corporation.
4.05 TRUSTEES' LIABILITY. No Trustee will be liable for acts or
omissions of any other Trustee or for acts or omissions of any employee or agent
of any other Trustee. The Trustee will not be liable in acting on any notice,
requests, consent, certificate, declaration, or other paper or document, or
signature believed by him, her, or it to be genuine and to have been signed by
the proper party or parties. The Trustee shall not be liable for any error of
judgment or fir any act or omission done in good faith, except for the Trustee's
own willful default or gross negligence. The Trustee may consult with legal
counsel, and any act or omission under this Agreement done in good faith in
accordance with the opinion of legal counsel will be binding on the parties to
this Agreement and will not subject the Trustee to any liability.
4.06 PAYMENT OF TRUSTEES' EXPENSES AND COMPENSATION. The Trustee is
entitled to reasonable compensation for his, her, or its services as Trustee
under this Agreement, provided, however, that the Corporation waives any right
to compensation in acting in its capacity as Trustee. The Certificate Holder
agrees to reimburse the Trustee for any expenses lawfully incurred in the
administration of his, her, or its duties as Trustee. Any such expenses may be
deducted from the dividends or other monies received by the Trustee on the
shares deposited under this Agreement.
ARTICLE 5. BOOKS AND RECORDS
5.01 MAINTENANCE OF RECORDS. The Trustee will maintain adequate records
of the Trust, including, but not limited to, a record of shares (showing all
share certificates transferred to the Trustee, the name in which the stock was
held, the date of issuance, the class and series of the stock, the number of
shares, the number of the certificates representing those shares, the date of
transfer to
3
the Trustee); a record of trust certificates (showing the number of Voting Trust
Certificates held by each person, the total number of the Voting Trust
Certificates held by each person, the dates on which the Voting Trust
Certificates were issued, canceled, transferred, or replaced); and a book of
accounts (showing all money received by the Trustee, all disbursements made by
the Trustee, and all unpaid obligations incurred by the Trustee).
5.02 INSPECTION OF RECORDS. The books and records of this Trust will be
open to inspection by the parties to this Agreement or their successors at any
time. The inspection will be made at the office of the Corporation's secretary
and will include the right to make copies of the books and records. However, any
inspection or copying requires that reasonable notice be given to the
Corporation's secretary. In the event of a dispute, the Trustee will determine
the reasonableness of the request for inspection and copying.
ARTICLE 6. TERMINATION OF AGREEMENT
6.01 IRREVOCABILITY OF TRUST. Except as otherwise provided in this
Agreement, the Trust created by this Agreement is irrevocable.
6.02 TERMINATION. This Agreement will terminate five years after the
date of this Agreement.
6.03 EXCHANGE OF VOTING TRUST CERTIFICATES FOR SHARE CERTIFICATES. On
termination of this Agreement, the Certificate Holder will surrender his Voting
Trust Certificate to the Trustee, together with payment of money sufficient to
cover any expenses, including taxes, relating to the transfer or delivery of the
Certificates, and the Trustee will deliver to the Certificate Holder share
certificates of the Corporation properly endorsed for transfer, equivalent to
the amount of shares represented by Voting Trust Certificates surrendered in
exchange for shares. The Trustee may deliver the shares to the Corporation or to
any bank trust company in California for the benefit of the person entitled to
those shares. On delivery, the Trustee will have discharged his, her, or its
duty with respect to those shares certificates.
ARTICLE 7. NOTICES FROM CORPORATION
7.01 NOTICES FROM CORPORATION. The Trustee will promptly forward copies
of all notices, reports, statements, and other communications received from the
Corporation to the Certificate Holder, stamped with the date of receipt.
7.02. MERGER OR CONSOLIDATION. If the Corporation is merged into or
consolidated with another corporation, or all or substantially all of the assets
of the Corporation are transferred to another corporation, then the term
"Corporation" will be construed to include the successor corporation shares
received by him, her, or it as a result of his, her, or its ownership as trustee
of shares held by him, her, or it under this Agreement before the merger,
consolidation, or transfer that
4
remain outstanding, but the Trustee may, in his, her, or its discretion,
substitute for these shares new voting certificates in appropriate form.
ARTICLE 8. INVESTMENT REPRESENTATIONS
8.01 INVESTMENT REPRESENTATIONS. Each Certificate Holder hereunder
warrants and represents that he is acquiring the Voting Trust Certificates
("Certificates") issued hereunder for his own account, for investment and not
with a view to, or for sale in connection with, any distribution of such
Certificates or any part thereof. Each Certificate Holder further warrants and
represents that no other person or entity has any interest whatsoever in said
Certificates and that there are no options or similar agreements, oral or
written, whereby any person or entity has the right to acquire any of said
Certificates or any interest therein.
8.02 ACKNOWLEDGMENTS. Each Certificate Holder acknowledges and agrees
that, (i) the Certificates being received hereunder have not been registered
under the Securities Act of 1932 ("Securities Act") or any state securities laws
and are issued in reliance upon certain provisions of federal and state
securities laws exempting said shares from such registration, (ii) there are
substantial restrictions on the sale of the Certificates acquired hereunder and
that the Certificates may be transferred only in accordance with the provisions
of this Paragraph, and (iii) each certificate representing the Certificates
issued hereunder and any other securities issued in respect of the ATI shares
upon any stock split, stock dividend, recapitalization, merger, consolidation or
similar event shall (unless otherwise permitted or unless the share have been
registered under the Securities Act) be stamped or otherwise imprinted with
legends substantially in the following form (in addition to any legend required
under applicable states securities laws):
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS. THEY MAY
NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND
ANY APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.
Each Certificate Holder acknowledges and agrees that the Certificates may not be
transferred without (i) registration under the Securities Act, (ii) the receipt
by ATI of an opinion of counsel acceptable to ATI that such transfer is exempt
from the registration provisions of the Securities Act and applicable state
securities laws, or (iii) the receipt by ATI of a "no-action" letter from the
Securities and Exchange Commission ("SEC") and any applicable state agency that
said transfer will not violate the Securities Act and applicable State
Securities Laws.
5
ARTICLE 9. MISCELLANEOUS PROVISIONS
9.01 NECESSARY ACTS. All parties to this Agreement will perform any
acts, including executing any documents, that may be reasonably necessary to
fully carry out the provisions and intent of this Agreement.
9.02 NOTICES. All notices, demands, request, or other communications
required or permitted by this Agreement will be in writing and shall be deemed
duly served when personally delivered to the party or to an officer or agent of
the party, or when deposited in the United States mail, first-class postage
prepaid, addressed to the Trustee or to the Certificate Holder at the address
appearing for him or her to the books and records of the Corporation, or at any
other address the party may designate by written notice to the others.
9.03 REMEDIES. The parties will have all the remedies available to them
for breach of this Agreement at law or in equity. The parties further agree that
in addition to all other remedies availably at law or in equity, the parties
will be entitled to specific performance of the obligations of each party to
this Agreement and immediate injunctive relief. The parties also agree that if
an action is bought in equity to enforce a party's obligations, no party will
argue as a defense that there is an adequate remedy at law.
9.04 ATTORNEYS' FEES. In the event of any obligation concerning this
Agreement between the parties to this Agreement or the parties to this Agreement
and the estate of any deceased party, the prevailing party will be entitled, in
addition to any other relief that may be granted, to reasonable attorney's fees.
9.05 BINDING ON SUCCESSORS AND ASSIGNS. This Agreement will be binding
on the parties to the Agreement and on each of their heirs, executors,
administrators, successors, and assigns.
9.06 SEVERABILITY. If any provision is unenforceable or invalid for any
reason, the remaining provisions will not be affected by such a holding.
9.07 GOVERNING LAW. This Agreement will be construed according to and
governed by the laws of the State of California, except for the law of
conflicts, provided, however, that if any provision of this Agreement would be
invalid under California law then the law of the State of Delaware shall apply
if the application of Delaware law would result in said provision being valid.
The parties irrevocably consent to the jurisdiction and venue of the state and
federal courts located in California concerning any action relating to this
Agreement.
9.08 ENTIRE AGREEMENT. This instrument constitutes the entire Agreement
of the parties and correctly sets forth the rights, duties, and obligations of
each party and of each party to the other. Any prior agreements, promises,
negotiations, or representation concerning the Agreement's subject matter not
expressly set forth in this Agreement are of no force or effect.
6
9.09 AMENDMENT OF AGREEMENT. This Agreement may only be amended or
modified by a writing executed by each of the parties hereto.
9.10 COUNTERPARTS AND FACSIMILE SIGNATURES. This Agreement may be
executed in two or more counterparts and by facsimile signature, each of which
shall be deemed to be an original but all of which together shall constitute one
and the same instrument.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as
of the day and year first above written, at ________________________.
Certificate Holder/Shareholder ______________________
Xxxxxx Xxxxxx
Trustee: Advanced technology Industries, Inc.
By____________________________
________________________
Its ____________________
7
Exhibit "A"
No.___________
______________ Shares
VOTING TRUST CERTIFICATE
This is to certify that Xxxxxx Xxxxxx has transferred to the
undersigned Trustee _______ shares of stock of Advanced Technology Industries,
Inc., a Delaware corporation, to be held by the Trustee, as provided by the
Voting Trust Agreement dated ____________. A copy of the Voting Trust Agreement
has been delivered to ________________ and filed in the office of the secretary
of the Corporation at __________, California. The Certificate Holder, or his or
her successor or successors in interest, will be entitled to receive payments
equal to the cash dividends collected by the Trustee on the shares represented
by this Certificate, as provided in the Voting Trust Agreement, and to the
delivery of a certificate or certificates for these shares on the termination of
the Voting Trust Agreement, as provided in the Voting Trust Agreement.
By acceptance of this Certificate, the Certificate Holder agrees to be
bound by all of the provisions of the Voting Trust Agreement, including any
restrictions or transfer, as if the terms of the Voting Trust Agreement were set
forth in full in this Certificate.
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD
OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND
ANY APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.
Executed on ________________, at ____________.
CERTIFICATE HOLDER:
______________________________
Xxxxxx Xxxxxx
TRUSTEE: Advanced Technology Industries, Inc.
By: _________________________
_______________________
Its____________________
8
LAW OFFICES OF
H. XXX XXXXXXX
A PROFESSIONAL CORPORATION
[LETTERHEAD]
To. Xxxxxx Xxxxxx
Re: Agreement For Purchase Of Stock
Date: August 22, 2000
In further consideration for the execution of the Agreement For
Purchase Of Stock ("Agreement") Advanced Technology Industries, Inc. ("ATI") ATI
hereby agrees to waive the requirement for the execution by you of the Voting
Trust Agreement based on your agreement to deliver an irrevocable proxy to vote
the ATI Stock and Earn Out Shares, if any, received by you under the Agreement.
The Irrevocable proxy will be for a term or five (5) years and the proxy holder
will be Xxxx Xxxxxxx or his designee. The irrevocable proxy will otherwise be in
such form is reasonably acceptable to ATI.
In the event that it is necessary to file proxy solicitation material
with the Securities and Exchange Commission you agree to cooperate therewith and
to execute such documents as may be necessary to comply with the proxy
solicitation rules of the Securities and Exchange Act of 1934.
In the event that you do not execute the irrevocable proxy within
fifteen (15) days after delivery to you ATI may take whatever steps necessary to
enforce this agreement including, but not limited to, filing an action in a
court having appropriate jurisdiction to enforce this agreement and shall be
entitled to reasonable attorneys fees in the event that it prevails.
Yours very truly
LAW OFFICES OF H. XXX XXXXXXX
By /s/ H. Xxx Xxxxxxx
--------------------------------
H. Xxx Xxxxxxx
AGREED AND ACCEPTED:
/s/ Xxxxxx Xxxxxx
-------------------
Xxxxxx Xxxxxx
