AGREEMENT AND PLAN OF MERGER
AGREEMENT effective as of the 29th day of April by and between X-CEED
MOTIVATION ATLANTA, INC. ("X-ceed Atlanta"), a Georgia corporation with offices
at 000Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000, XXXXXX X. XXXXX ("Xxxxx"),
residing at 000 Xxxxxxx Xxx, Xxxxxxx, Xxxxxxx 00000, and XCEED INC. ("Xceed"), a
Delaware corporation with principal offices at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000.
W I T N E S S E T H :
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WHEREAS, Xceed presently owns fifty percent (50%) of the issued and
outstanding Common Stock of X-ceed Atlanta; and
WHEREAS, the board of directors of Xceed and X-ceed Atlanta deem it
advisable and in the best interest of their respective companies and their
stockholders that X-ceed Atlanta merge with and into Xceed (the "Merger"); and
WHEREAS, it is intended that the Merger qualify as a tax-free
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, provisions and covenants herein contained, the parties hereby agree
as follows:
1. The Merger.
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1.1. The Merger. At the Effective Time (as defined in Section
1.3), upon the terms and subject to the conditions of this Agreement, X-ceed
Atlanta shall be merged with and into Xceed in accordance with the Georgia
Business Corporation Law (the "GBCL") and the Delaware General Corporation Law
("DGCL"), whereupon the separate existence of X-ceed Atlanta shall cease, other
than as provided for in Section 3.4, and Xceed shall be the surviving
corporation.
1.2. Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of XxXxxxxxxx &
Xxxxx, LLP, 260 Madison Avenue, New York, New York, as soon as practicable
following satisfaction or waiver of all of the conditions to the obligations of
the parties to consummate the transactions contemplated hereby in accordance
with this Agreement, or at such other time, place and date as is mutually agreed
to by the parties hereto. The date of the Closing is referred to in this
Agreement as the "Closing Date."
1.3. Effective Time. As soon as practicable after satisfaction
or, to the extent permitted hereunder, waiver of all conditions to the Merger,
X-ceed Atlanta and Xceed shall file a Certificate of Merger, in the form
attached hereto as Exhibit A, with the Secretary of State of the State of
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Delaware, and an Agreement of Merger, in the form attached hereto as Exhibit B,
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with the Secretary of State of the State of Georgia, and make all other filings
or recordings required by the GBCL and the DGCL in connection with the Merger.
The Merger shall become effective at such time as the Certificate of Merger is
duly filed with the Secretary of State of the State of Delaware and the
Agreement of Merger is duly filed with the Secretary of State of the State of
Georgia (the "Effective Time").
1.4. Corporate Organization. At and after the Effective Time,
Xceed shall possess all the rights, privileges, powers and franchises and be
subject to all of the restrictions, liabilities and duties of Xceed and X-ceed
Atlanta, all as provided under the GBCL and the DGCL.
2. Effect of the Merger on the Capital Stock of the Constituent
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Corporations. At the Effective Time, by virtue of the Merger and without any
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action on the part of any holder of common stock of X-ceed Atlanta ("X-ceed
Atlanta Common Stock"), the following shall occur:
2.1. Each share of X-ceed Atlanta Common Stock held by X-ceed
Atlanta as treasury stock shall be canceled, and no payment shall be made with
respect thereto.
2.2. The fifty (50) shares of X-ceed Atlanta Common Stock
beneficially owned by Xxxxx, by virtue of the Merger and upon delivery by Xxxxx
at the Closing, shall be automatically converted into 210,000 shares of the
common stock of Xceed ("Xceed Common Stock"). However, and in the event that the
average of the closing bid and closing asked price of Xceed Common Stock as
traded on the NASDAQ National Market on the day preceding the Closing is less
than $6.50 per share, then Xxxxx shall be entitled to receive at Closing that
amount of Xceed Common Stock having a market value of $1,365,000.
2.3. Exception. Notwithstanding anything to the contrary
contained herein, Xceed acknowledges that there shall be excluded from the
merger the property described in Schedule A attached hereto, which personal
property is owned by Xxxxx and which personal property may be removed from
X-ceed Atlanta's offices at any time at the sole discretion of Xxxxx.
3. The Surviving Corporation.
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3.1. Certificate of Incorporation. The certificate of
incorporation of Xceed in effect at the Effective Time shall remain the
certificate of incorporation of Xceed as the surviving corporation until amended
in accordance with applicable law.
3.2. Bylaws. The Bylaws of Xceed in effect at the Effective Time
shall be the Bylaws of Xceed as the surviving corporation until amended in
accordance with applicable law.
3.3. Directors and Officers. From and after the Effective Time,
until successors are duly elected or appointed and qualified in accordance with
applicable law, the directors of Xceed at the Effective Time shall remain the
directors of Xceed and the officers of Xceed at the Effective Time shall be the
officers of Xceed; provided, however, that at the Effective Time, Xxxxx shall be
named Managing Director of the Xceed Atlanta division and shall enter into an
Employment Agreement with Xceed in substantially the form as attached hereto as
Exhibit C.
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3.4. Separate Division. From and after the Effective Time, the
business of X-ceed Atlanta will be conducted as "Xceed Motivations/Atlanta," a
separate division of Xceed.
4. Representations and Warranties of X-ceed Atlanta and Xxxxx.
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X-ceed Atlanta and Xxxxx represent and warrant to Xceed as follows:
4.1. Organization and Standing of X-ceed Atlanta. X-ceed Atlanta
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Georgia.
4.1.1. Copies of X-ceed Atlanta's (i) Certificate of
Incorporation and all amendments thereof to date, certified by the Secretary of
State of Georgia, and (ii) Bylaws as amended to date, certified by the Secretary
of X-ceed Atlanta, have been delivered to Xceed and are complete and correct as
of the date of this Agreement.
4.1.2. X-ceed Atlanta has the power and authority to carry
on its business as and where such business is now conducted and is qualified to
do business as a foreign corporation in such other states in which the ownership
of its assets and conduct of its business require such qualification.
4.2. Capitalization. The authorized capital stock of X-ceed
Atlanta consists of 100 shares of Common Stock, par value $10.00 per share, of
which 100 shares are issued and outstanding: 51 shares to Xceed Atlanta, and 49
shares to Xceed. All of the issued and outstanding shares of X-ceed Atlanta
Common Stock are duly authorized, validly issued, fully paid and non-assessable.
There are no preemptive rights on the part of any holder of X-ceed Atlanta
Common Stock and no options, warrants or other rights, agreements, commitments
of any kind obligating X-ceed Atlanta, contingently or otherwise, to issue or
sell any shares of its Common Stock, and no authorization therefor has been
given.
4.2.1 The fifty (51) shares of X-ceed Atlanta Common Stock
being delivered to Xceed by Xxxxx are free and clear of all encumbrances, and
Xxxxx has the full right and authority to transfer said shares to Xceed. To
Isaac's knowledge, there are no claims or demands on such shares by any other
person or entity.
4.2.2 The transfer of the 50 shares by Xxxxx to Xceed in
accordance with the terms of this Agreement will not constitute a prohibitive
assignment or transfer of any license, lease or contract.
4.3. Litigation. There is no litigation or proceeding pending
against X-ceed Atlanta or, to Isaac's knowledge, threatened against or relating
to X-ceed Atlanta, nor does Xxxxx have reasonable grounds to know of any bases
for any such action or any government investigation or inquiry relative to X-
ceed Atlanta or its business.
4.4. Financial Condition. X-ceed Atlanta has granted Xceed full
access to X-ceed Atlanta's books and records to assist Xceed in preparing
consolidated audited financial statements of Xceed for the year ended August 31,
1998 and quarterly unaudited consolidated statements of Xceed for the quarters
ended November 30, 1998 and February 28, 1999. Xxxxx represents and warrants
that the books and records of X-ceed Atlanta as of the fiscal year ended August
31, 1998 and as of the quarters ended November 30, 1998 and February 28, 1999
are true and complete and that there are no undisclosed liabilities of any
nature, whether accrued, absolute, contingent or otherwise. Xxxxx further
represents and warrants that there are no other liabilities of any nature or in
any amount not fully reflected in X-ceed Atlanta's books and
records as of the fiscal year ended August 31, 1998 and as of the quarters ended
November 30, 1998 and February 28, 1999. Xxxxx further represents and warrants
that:
4.4.1. Since February 28, 1999 and to the date of Closing
there are and shall not be any material change in X-ceed Atlanta's financial
condition, assets, liabilities or business other than changes in the ordinary
course of business.
4.4.2. X-ceed Atlanta has good and marketable title to all
of its properties, real and personal, subject to no security interest, mortgage,
pledge, lien, encumbrance or charge except for those disclosed in X-ceed
Atlanta's books and records as of February 28, 1999, except that the personal
property listed in Schedule A attached hereto is the sole and exclusive propety
of Xxxxx and Xxxxx retains the right at any time to remove the property from X-
ceed Atlanta's offices. Xceed acknowledges that the personal property listed in
Schedule A is not included in the Merger.
4.4.3. All accounts receivable as reflected in X-ceed
Atlanta's books and records as of February 28, 1999 and all accounts receivable
on the books of X-ceed Atlanta from February 28, 1999 up to and including the
Closing are and shall be genuine obligations of the account debtors for valid
consideration.
4.5. Disclosure. No representation or warranty by Xxxxx in this
Agreement nor any statement or certificate furnished or to be furnished to Xceed
pursuant hereto or in connection with the transactions contemplated hereby
contains or will contain any untrue statement of a material fact or will omit to
state a material fact necessary to make the statement made not misleading. The
representations and warrantees by Xxxxx in this Agreement shall survive the
Closing.
4.6. Access and Information. Xxxxx shall cause X-ceed Atlanta to
give to Xceed and Xceed's representatives full access to the X-ceed Atlanta's
books, records and properties and shall furnish Xceed with all information as
Xceed may reasonably request.
4.7. Conduct of Business Prior to Closing. Xxxxx covenants that
pending the Closing:
4.7.1. X-ceed Atlanta's business will be conducted only in
the ordinary course.
4.7.2. No increase will be made in the compensation payable
or to become payable by X-ceed Atlanta to any officer, employee, agent nor will
any bonus payment or arrangement or other benefits be paid by X-ceed Atlanta
without the prior written consent of Xceed.
4.7.3. No contract or commitment will be entered into by or
on behalf of X-ceed Atlanta except normal commitments in the ordinary course of
business which in any single case will not involve payment by X-ceed Atlanta of
more than $2,000 without the prior written consent of Xceed.
4.7.4. No change will be made affecting X-ceed Atlanta's
personnel, compensation payments or banking arrangements without prior written
consent of Xceed.
4.7.5. No contract rights will be waived by X-ceed Atlanta.
4.7.6. No obligations except current liabilities entered
into in the ordinary course of business will be incurred.
5. Xceed's Representations and Warranties. Xceed represents and
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warrants as follows:
5.1. Corporate.
5.1.1. Xceed is a corporation duly organized, validly
existing and in good standing under and by virtue of the laws of the State of
Delaware. Xceed is qualified to do business as a foreign corporation in such
other states in which ownership of its respective assets or the nature and
conduct of its business requires such qualification.
5.1.2. Xceed and each of its subsidiaries has the power to
own its properties and to carry on its businesses as and where such are now
conducted. Xceed does not have any equity interest in any other corporation,
partnership, joint venture or association or control, directly or indirectly, of
any other entity except for its interests in the subsidiaries listed on its Form
10-K for the year ended August 31, 1998 (the Form "10-K"), copies of which have
been furnished to X-ceed Atlanta and Xxxxx.
5.1.3. The authorized capital stock of Xceed consists of
30,000,000 shares of Common Stock, par value $.01 per share, of which 15,866,693
shares are presently outstanding immediately prior to the date hereof and Two
Million (2,000,000) shares of Preferred Stock, par value $.05 per share, of
which no shares of Preferred Stock are issued and outstanding. All of the issued
and outstanding shares of Xceed's Common Stock are duly authorized, validly
issued, fully paid and non-assessable. There are no preemptive rights on the
part of any holder of any class of securities of Xceed or any of its
subsidiaries and no options, warrants, conversion or other rights, agreements,
or commitments of any kind obligating Xceed or any of its subsidiaries,
contingently or otherwise, to issue or sell any shares of its capital stock of
any class or any securities convertible into or exchangeable for any such shares
and no authorization therefor has been given, except as set forth in the
Form 10-K.
5.1.4. This Agreement has been duly executed and delivered
by Xceed and constitutes the legal, valid and binding obligation of Xceed,
enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
rights and remedies of creditors generally, and by general principles of equity.
The execution, delivery and performance of this Agreement, and the consummation
of the transactions contemplated hereby have been duly and validly authorized by
all necessary corporation action on the part of Xceed, and no other corporate
proceedings on its part are necessary to authorize this Agreement.
5.2. Financial.
5.2.1. The audited balance sheet of Xceed as of August 31,
1998, the related audited statement of earnings and cash flows for the twelve
months ended August 31, 1998, the unaudited balance sheet of Xceed as of
February 28, 1998, the related unaudited statement of earnings and cash flows
for the six months ended February 28, 1998, all of which have previously been
delivered to X-ceed Atlanta and Xxxxx, are complete and correct and
present fairly the financial condition of Xceed as of such date, and the results
of its operations for the periods then ended, in conformity with generally
accepted accounting principles applied on a basis consistent with that of
preceding periods.
5.2.2. Since February 28, 1999, the business of Xceed has
been carried on in the ordinary course in substantially the same manner as prior
to that date, and there has not been:
5.2.2.1. any Material Adverse Change in the
financial condition or in the operations or the business of Xceed from that
shown on Xceed financial statements, or any event which has occurred that may
result in such a Material Adverse Change;
5.2.2.2. any damages, destruction or loss, whether
covered by insurance or not, which have materially and adversely affected the
business, property or assets of Xceed;
5.2.2.3. any declaration, setting aside or payment
of any dividend, or any distribution with respect to the capital stock of
Xceed or any direct or indirect redemption, purchase or other acquisition by
Xceed of any such stock;
5.2.2.4. any other event or condition of any
character, not in the ordinary course of business, that has materially and
adversely affected the results of operations or business or financial condition
of Xceed.
5.3. Undisclosed Liabilities.
5.3.1. Xceed has no liabilities or obligations, either
accrued, absolute, contingent or otherwise, except:
5.3.1.1. to the extent reflected or reserved
against in the Xceed financial statements, and not heretofore paid or
discharged; and
5.3.1.2. those incurred in or as a result of the
normal and ordinary course of business since February 28, 1999, all of which
have been consistent with past practices and none of which (x) arise out of,
relate to, is in the nature of, or was caused by any breach of contract,
breach of warranty, tort, infringement or violation of law or (y) individually
or in the aggregate is material to the business, properties, financial
condition or results of operations of Xceed.
5.3.2. There is no basis for any present or future action,
suit, proceeding, hearing, investigation charge, complaint, demand or claim
against Xceed or any liability of any nature in any amount not fully set forth
in Xceed financial statements.
5.4. Title to Property.
5.4.1. Xceed owns all right, title and interest in and to
all of Xceed's properties, and all other properties and assets used by Xceed are
free and clear of all mortgages, liens, pledges, charges or encumbrances of any
nature whatsoever, except as set forth
in Xceed's Form 10-K; and Xceed has taken all steps necessary or otherwise
required to perfect and protect its rights in and to Xceed's Properties.
5.4.2. Xceed does not lease any real or personal property
as lessee, except as set forth in Xceed's Annual Report on Form 10-K. Each of
these leases (the "Xceed Leases") is in good standing, valid, binding, and in
full force and effect and has not been modified. Xceed is not in default under
any of Xceed's Leases and has not received any notice of its default under any
of Xceed's Leases and Xceed has not given any notice of any, and, to the best of
Xceed's knowledge, there is no default by any other party under any of Xceed's
Leases, nor has any event occurred which, with notice or the passage of time, or
both, would constitute a default by any other party under any of Xceed's Leases.
5.4.3. All real property in which Xceed has an ownership or
leasehold interest, and all tangible personal property owned by Xceed are is in
all material respects in good operating condition and repair and in all material
respects conforms to all applicable laws, including without limitation building
and zoning laws, statutes, ordinances or regulations and no notice of any
violation of such matters relating to the business, property or assets of Xceed
has been received by Xceed.
5.4.4. Neither the whole nor any portion of any of Xceed's
Properties has been condemned or otherwise taken by a public authority, nor does
Xceed know or have any reasonable grounds to believe that any such condemnation
or taking is threatened or contemplated.
5.5. Inventories. The inventories of Xceed consist of items of a
quality and quantity usable or saleable in the normal course of its business,
subject to normal usability and salability exceptions which are consistent with
past business experience. The present inventories of Xceed are maintained at
levels that are consistent with past practices.
5.6. Contracts and Commitments.
5.6.1. Xceed is not restricted by agreement from carrying
on its business anywhere in the states or provinces in which it operates;
5.6.2. No director, officer, employee or stockholder of
Xceed, or member of the family of any such person, or any corporation,
partnership, trust or other entity in which any such person, or any member of
the family of any such person, has a substantial interest or in which any such
person is an officer, director, trustee, partner or holder of more than 5% of
the outstanding capital stock thereof in an entity who is, a competitor,
customer, supplier or other, entity, or who, during the past 12 months has been
a party to any transaction with Xceed, including any contract, agreement or
other arrangement providing for the employment of, furnishing of services by,
rental of real or personal property from or otherwise requiring payments to any
such person or firm;
5.6.3. Xceed is not in default, nor is there any known
basis for any claim of default, under any contracts or commitments made or
obligations owed by it which default is reasonably likely to have a Material
Adverse Effect on Xceed. Xceed has no present expectation or intention of not
fully performing all its obligations under any lease, contract or other
agreement to which it is a party, and Xceed has no knowledge of any breach or
anticipated breach by the other party to any lease, contract or commitment to
which Xceed is a party. Xceed
is in full compliance with all of the terms and provisions of its Charter and
by-laws, as amended. No consent or approval of any third party is required with
respect to such contract in order to avoid a default thereunder by reason of the
transactions contemplated by this Agreement.
5.6.4. All accounts receivable of Xceed are current and
collectible, except to the extent reserved against in Xceed financial
statements.
5.7. No Breach of Statute or Contract.
5.7.1. Neither the execution and delivery of this
Agreement, nor compliance with the terms and provisions of this Agreement on the
part of Xceed, will (i) violate any statute, license, or regulation of any
governmental authority, domestic or foreign, (ii) result in the default by Xceed
of any judgment, order, writ, decree, rule or regulation of any court or
administrative agency, (iii) breach, conflict with, or result in a breach of any
of the terms, conditions or provisions of any material agreement or instrument
to which Xceed is a party, or by which it is or may be bound, or constitute a
default or require any notice thereunder, (iv) violate any provision of Xceed's
certificates of incorporation or by-laws or (v) result in the creation or
imposition of any claim, lien, charge or encumbrance of any nature whatsoever
upon, or (vi) give to others any claim, interest or rights, including rights of
termination, modification, acceleration or cancellation in, or with respect to,
any of their property, assets, contracts, licenses or businesses.
5.7.2. The conduct of Xceed business does not violate any
law or regulation applicable to such business. Xceed's has complied with all
laws, rules, regulations and orders applicable to its business, operations,
properties, assets, products and services, and Xceed has all necessary permits,
licenses and other authorizations required to conduct its business as conducted
and as proposed to be conducted. There is no existing law, rule, regulation or
order, and Xceed is not aware of any proposed law, rule, regulation or order,
whether Federal or state, which would prohibit or materially restrict Xceed
from, or otherwise materially adversely affect Xceed in, conducting its business
in any jurisdiction in which it is now conducting business.
5.8. No Litigation. Except as set forth in Xceed's Form 10-K for
the year ended August 31, 1998, copies of which have been delivered to X-ceed
Atlanta and Xceed, there is no suit, action or legal, administrative,
arbitration or other proceeding or governmental investigation, or any change in
the zoning or building ordinances affecting the real property or leasehold
interests of Xceed, pending or to the best of Xceed's knowledge threatened
against Xceed. Xceed has not received any opinion or memorandum or legal advice
from legal counsel to the effect that it is exposed, from a legal standpoint, to
any liability or disadvantage which may be material to its business, financial
condition, operations, property or affairs. Xceed is not in default with respect
to any order, writ, injunction or decree known to or served upon Xceed or its
subsidiaries of any court or of any Federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign. There is no action or suit by Xceed or its subsidiaries
pending or threatened against others. Xceed has no knowledge of any unasserted
claim, the assertion of which is likely and that, if asserted, will be for legal
or equitable relief that, if granted, would have a Material Adverse Effect. No
injunction, stay or restraining order is in effect prohibiting the consummation
of any of the transactions contemplated by this Agreement.
5.9. Patents and Trademarks. Xceed has not received written
notice of and to the best of Xceed's knowledge, there does not exist any pending
or threatened challenges regarding any letters patent, patent applications,
trade names, trademark registrations and applications, copyrights, copyright
registrations and applications, or licenses except as set forth in Xceed's Form
10-K. Except as set forth in Xceed's Form 10-K, Xceed has not received written
notice that its business as heretofore carried infringes upon the patents,
trademarks, trade name rights, copyrights or publication rights of others.
5.10. Trademark Indemnification. Except as set forth in its Form
10-K, Xceed has not given any indemnification for, patent, trademark or
copyright infringement as to any equipment, materials or supplies manufactured,
produced, used or sold by it or with respect to services rendered by it.
5.11. Absence of Undisclosed Liabilities. Xceed has no
obligations or liabilities (whether accrued, absolute, contingent, liquidated or
otherwise, including without limitation any tax liabilities due or to become
due) which are not fully disclosed and adequately provided for in Xceed
financial statements and except current liabilities incurred since the date of
such financial statements and obligations under agreements entered into in the
usual and ordinary course of business, none of which (individually or in the
aggregate) is material to the business, properties, financial condition or
results of operations of Xceed and contingent liabilities that are not
(individually or in the aggregate) material to the business, properties,
financial condition or results of operations of Xceed.
5.12. Disclosure. No representation or warranty by Xceed in this
Agreement, nor any statement, certificate or Schedule furnished, or to be
furnished, by or on behalf of Xceed pursuant to this Agreement, nor any document
or certificate delivered to Xxxxx pursuant to this Agreement, or in connection
with actions contemplated hereby, contains or shall contain any untrue statement
of a material fact, or omits, or shall omit to state a material fact necessary
to make the statements contained therein not misleading. Xceed has no knowledge
of any unasserted claim, the assertion of which is likely and that, if asserted,
will be for legal or equitable relief that, if granted, would have a Material
Adverse Effect. No injunction, stay or restraining order is in effect
prohibiting the consummation of any of the transactions contemplated by this
Agreement.
6. Precedent for Xceed. All obligations of Xceed under
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this Agreement are, at its option, subject to the fulfillment, prior to or at
the closing, of each of the following conditions:
6.1. Representations and Warranties at Closing. X-ceed Atlanta
and Isaac's representations and warranties contained in this Agreement shall be
true at the time of Closing as though such representations and warranties were
made at Closing.
6.2. Performance. X-ceed Atlanta and Xxxxx shall have performed
and complied with all conditions of this Agreement required by this Agreement to
be performed or complied with by X-ceed Atlanta and Xxxxx prior to or at the
Closing.
6.3. Officer's Certificate. X-ceed Atlanta shall have delivered
to Xceed a certificate signed by Xxxxx, dated the closing date, certifying to
the fulfillment of the conditions specified in 6.1 and 6.2 above.
6.4. Good Standing Certificate. X-ceed Atlanta shall have
delivered to Xceed at or prior to Closing a Certificate of Good Standing for X-
ceed Atlanta duly issued by the Secretary of State of the State of Georgia.
7. Conditions Precedent for X-ceed Atlanta and Xxxxx. All
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obligations of X-ceed Atlanta and Xxxxx under this Agreement are, at its option,
subject to the fulfillment, prior to or at the closing, of each of the following
conditions:
7.1. Representations and Warranties at Closing. Xceed's
representations and warranties contained in this Agreement shall be true at the
time of Closing as though such representations and warranties were made at
Closing.
7.2. Performance. Xceed shall have performed and complied with
all agreements and conditions required by this Agreement to be performed or
complied with by it at or prior to Closing.
8. Option Grant. Immediately after the Closing, the Company shall
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issue 5,000 options to Xxxxxxx Burner, which issuance shall be pursuant to and
governed by the Xceed 1998 Stock Option Plan. The options shall entitle Xxxxxxx
Burner to purchase 5,000 shares of Xceed Common Stock at an exercise price
equivalent to the average of the closing bid and ask prices as quoted on the
NASDAQ National Market on the date of grant.
9. Purchase for Investment. Xxxxx represents that:
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9.1. She is acquiring the 210,000 shares of Xceed Common Stock
for investment and agrees not to sell, transfer, pledge, hypothecate or
otherwise dispose of or offer to dispose of the Xceed Common Stock unless the
Common Stock has been registered under the Securities Act of 1933, as amended
(the "Act"), and applicable state securities laws or unless such registration is
not required in the opinion of counsel to Xxxxx reasonably acceptable to Xceed.
Notwithstanding the foregoing, and upon a showing by Xxxxx of financial
hardship, Xxxxx may pledge up to one-third of her shares with the prior written
consent of Xceed, which consent shall not be unreasonably withheld.
9.2. She has been furnished with information and materials
relating to the business, finances and operations of Xceed.
9.3. She has been given an opportunity to make further inquiries
regarding Xceed and has received satisfactory responses to such inquiries.
9.4. She has knowledge and experience in financial and business
matters as to be capable of evaluating the risks and merits of an investment in
Xceed.
9.5. She acknowledges that the stock certificates of Xceed to be
received by her will bear the following legend:
"The Shares represented by this certificate have not been registered under
the Securities Act of 1933, as amended. The Shares have been acquired for
investment and may not be offered, sold or otherwise transferred in the
absence of an effective Registration Statement for the Shares under the
Securities Act of
1933, as amended, or a prior opinion of counsel satisfactory to the issuer
that registration is not required under the Securities Act of 1933, as
amended."
10. Miscellaneous.
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10.1. Nature and Survival of Representations. All statements
contained in any certificate or other instrument delivered by or on behalf of
Xxxxx pursuant hereto, or in connection with the transactions contemplated
hereby, shall be deemed representations and warranties by Xxxxx hereunder. All
representations, warranties and agreements made by Xxxxx in this Agreement, or
pursuant hereto, shall survive the closing and any investigation at any time
made by or on behalf of Xceed.
10.2. Benefit. This Agreement shall be binding upon, and inure
to the benefit of, the respective legal representatives of Xxxxx, and the
successors and assigns of Xceed. Without limiting the foregoing, X-ceed
Atlanta's rights hereunder may be enforced by it in its own name. In the event
that Xceed causes the assets and business of X-ceed Atlanta to be transferred to
some other corporation, the rights of Xceed and of X-ceed Atlanta hereunder may
be enforced by such other corporation in its own name.
10.3. Construction. This Agreement is being delivered and is
intended to be performed in the State of New York and shall be construed and
enforced in accordance with the laws of that state.
10.4. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered or mailed, first class postage prepaid, if to Xxxxx, at
000 Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000, or at such other address as she may
have furnished to Xceed in writing, or, if to Xceed, at 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attn: Xxxxxx Xxxxx.
10.5. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have duly executed this agreement.
XCEED INC.
By: /s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx, Chief Executive Officer
XCEED MOTIVATION ATLANTA, INC.
By: /s/ Xxxxxx Xxxxx
------------------------------------
Xxxxxx Xxxxx, President
/s/ Xxxxxx Xxxxx
------------------------------------
XXXXXX XXXXX, Individually
