STOCK TRANSFER IN LIEU OF FORECLOSURE AGREEMENT
BETWEEN
GLOBAL TECHNOLOGY VALUE PARTNERS LIMITED, AS TRANSFEROR
AND
INFINITY INVESTORS LIMITED, AS TRANSFEREE
December 23, 2001
STOCK TRANSFER IN LIEU OF FORECLOSURE AGREEMENT
THIS STOCK TRANSFER IN LIEU OF FORECLOSURE AGREEMENT
("Agreement") has been made and entered into as of this [23rd]
day of December, 2001, between INFINITY INVESTORS LIMITED, a
Nevis, West Indies corporation ("Transferee" or "Infinity"), and
GLOBAL TECHNOLOGY VALUE PARTNERS LIMITED, a British Virgin
Islands company (the "Transferor" or "Global").
R E C I T A L S:
A. Pursuant to that certain Letter Agreement dated October 23,
2000 between Infinity and Global (the "Letter Agreement"), Global
acquired from Infinity 6,869,854 shares of common stock of Edge,
which also constitutes the Transferred Shares. The aggregate
purchase price for the shares acquired thereunder was $5,500,000,
or approximately $0.80 per share (the "Purchase Price"),
originally payable on or before June 30, 2001. The obligation to
pay the Purchase Price was with full recourse but without
interest. Global's obligation to pay the Purchase Price is
secured by a pledge of the shares granted pursuant a Pledge
Agreement, dated as of October 23, 2000, between Infinity and
Global. In connection with the Pledge Agreement, Global executed
an undated Stock Power in favor of Infinity.
B. By letter agreement dated June 21, 2001, Infinity and
Global agreed to extend the payment date for the Purchase Price
from June 30, 2001 to November 30, 2001 in consideration of the
payment of interest at the rate of 6% per annum on the unpaid
balance of the Purchase Price from and after July 1, 2001.
C. Infinity and Global have been in discussions over the
past several months and have been unable to reach an acceptable
agreement with respect to extending the payment date or
restructuring of the debt. Global does not have the ability to
pay the note, which is now due and payable.
D. In order to avoid the costs of litigation and the
associated diversion of energy and manpower, Infinity and Global
have agreed that Global will transfer the Transferred Stock to
Infinity in lieu of foreclosure in exchange for cancellation of
the debt and a release from the associated transaction documents.
E. The parties hereto desire to effect a stock transfer
(the "Stock Transfer") pursuant to which Transferee will acquire
from the Transferor an aggregate of 6,869,854 shares (the
"Transferred Shares") of the common stock of Edge Technology
Group, Inc., a Delaware corporation ("Edge"), par value $.001 per
share (the "Edge Stock"), for the consideration set forth herein.
F. Pursuant to the Stock Transfer, the Transferor will
transfer, and Transferee will acquire, the Transferred Shares.
NOW, THEREFORE, in consideration of the mutual agreements
and covenants contained herein, the parties hereto agree as
follows and do thereby adopt this Agreement.
ARTICLE I.
DEFINITIONS
The terms defined in this Article (except as otherwise
expressly provided in this Agreement) for all purposes of this
Agreement shall have the respective meanings specified in this
Article.
"Affiliate" shall mean any entity controlling or controlled
by another person, under common control with another person, or
controlled by any entity which controls such person.
"Agreement" shall mean this Agreement, and all the exhibits,
schedules and other documents attached to or referred to in the
Agreement, and all amendments and supplements, if any, to this
Agreement.
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"Closing" shall mean the closing of the Transaction at which
the Closing Documents shall be exchanged by the parties, except
for those documents or other items specifically required to be
exchanged at a later time.
"Closing Date" shall mean the date of this Agreement, or
such other date as agreed in writing to by the parties on which
the Closing occurs.
"Closing Documents" shall mean the papers, instruments and
documents required to be executed and delivered at the Closing
pursuant to this Agreement.
"Code" shall mean the Internal Revenue of 1986, or any
successor law, and regulations issued by the Internal Revenue
Service pursuant to the Internal Revenue Code or any successor
law.
"Encumbrance" shall mean any charge, claim, encumbrance,
community property interest, condition, equitable interest, lien,
option, pledge, security interest, right of first refusal, or
restriction of any kind, including any restriction on use, voting
(in the case of any security), transfer, receipt of income, or
exercise of any other attribute of ownership other than (a) liens
for taxes not yet due and payable, or (b) liens that secure the
ownership interests of lessors of equipment.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Transaction" shall mean the Stock Transfer and releases
contemplated by this Agreement.
ARTICLE II.
THE TRANSACTION
2.1 Stock Transfer. The Transferor hereby agrees to
transfer and deliver to Transferee, and Transferee hereby agrees
to accept, the Transferred Shares, in consideration of the
release from liability granted below. Further, the Transferor
hereby instructs Transferee (directly or through Xxxxx & Xxxxxx
LLP, Transferee's legal counsel) to date the Stock Power as of
the date hereof, and to submit the Stock Power along with the
executed version of the letter attached hereto as Exhibit A
(described below) to effect the transfer of the Transferred
Shares to Transferee.
2.2 Securities Law Matters.
2.2.1 Private Transaction. Transferee understands
that the Transferred Shares will not be registered under the
Securities Act, but will be transferred in reliance upon
exemptions available for resales by Affiliates in private
transactions. The Certificate of Edge Stock registered in
the name of the Transferee pursuant to terms of this
Agreement shall bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT
OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS, AND MAY NOT BE TRANSFERRED UNLESS
THEY ARE SO REGISTERED OR, IN THE OPINION OF
COUNSEL ACCEPTABLE TO THIS CORPORATION, SUCH
TRANSFER IS EXEMPT FROM REGISTRATION.
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Transferor. The
Transferor hereby represents and warrants to Transferee that:
3.1.1 Ownership of Transferred Shares. Neither
Edge nor the Transferor is a party to any agreement, voting
trust, proxy or other agreement or understanding of any
character, whether written or oral, with any other
stockholders of Edge with respect to or concerning the
purchase, sale or transfer or voting of the Transferred
Shares.
3.1.2 No Encumbrance. The Transferor is the sole
beneficial and record holder of the Transferred Shares. The
Transferor holds the Transferred Shares free and clear of
any Encumbrance of any kind whatsoever.
3.1.3 No Brokerage. No broker or finder has
rendered services to Transferor in connection with the
Transaction.
ARTICLE IV.
RELEASE
4.1. Release by Transferee. In consideration of the
Transferred Shares, the covenants contained herein and other good
and valuable consideration, Infinity hereby accepts the
Transferred Shares as payment in full of all obligations under
the Letter Agreement, as amended, and hereby releases, discharges
and acquits Global from all liabilities and amounts payable
pursuant to the Letter Agreement, as amended, and the Pledge
Agreement.
4.2. Release by Transferor. In consideration of the
covenants contained herein and other good and valuable
consideration, Global hereby releases, discharges and acquits
Infinity from all liabilities in connection with the Letter
Agreement, as amended, and the Pledge Agreement.
ARTICLE V.
CLOSING DELIVERIES
5.1. The Closing. The Closing shall take place on the date
of this Agreement (unless such date is extended by the mutual
agreement of the parties).
5.2. Deliveries by Transferor. The Transferor hereby agrees
to deliver, or cause to be delivered, to Transferee, (i) a letter
executed by Transferor to the Edge transfer agent directing the
transfer agent to transfer the Transferred Shares to Transferee,
in the form attached hereto as Exhibit A; and (ii) a dated Stock
Power transferring the Transferred Shares to Infinity.
ARTICLE VI
SURVIVAL OF REPRESENTATIONS
6.1 Representations to Survive Closing. The
representations and warranties of the Transferor contained herein
shall survive the Closing of the Transaction for a period of one
year following the Closing. Each party acknowledges and agrees
that, except as expressly set forth in this Agreement or any
Closing Document, no party has made (and no party is relying on)
any representation or warranties of any nature, express or
implied, regarding any or relating to any of the transactions
contemplated by this Agreement.
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ARTICLE VII.
MISCELLANEOUS
7.1. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed
delivered if delivered by hand, by overnight delivery, by courier
or mailed by certified or registered mail, postage prepaid,
addressed as follows:
If to the Transferor:
Global Technology Value Partners Limited
Lister House
00 Xxx Xxxxxx
Xx. Xxxxxx, Xxxxxx XX0 0XX
Attention: Xxxxxxxx Xxxxxx
If to Transferee:
Infinity Investors Limited
Xxxxxxx Xxxxxxxxxx Xxxxx
Xxxx Xxxxxx
P.O. Box 556
Charlestown, Nevis, West Indies
Attention: Xxxxx Xxxxxxxx
7.2. Assignability and Parties in Interest. This Agreement
shall not be assignable by any of the parties hereto without the
consent of all other parties hereto. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and
their respective successors. Nothing in this Agreement is
intended to confer, expressly or by implication, upon any other
person any rights or remedies under or by reason of this
Agreement.
7.3. Expenses. Each party shall, except as otherwise
specifically provided herein in any Exhibit hereto, bear its own
expenses and costs, including the fees of any attorney retained
by it, incurred in connection with the preparation of the Closing
Documents and consummation of the Transaction. Xxxxx & Xxxxxx
LLP shall draft the required SEC filings in connection with the
transactions contemplated hereby, as well as Exhibit A. The
parties hereto agree that Xxxxx & Xxxxxx LLP shall represent
Transferee only and Xxxxx & Xxxxxx'x legal fees and expenses
shall be charged to Transferee.
7.4. Governing Law. This Agreement shall be governed by,
and construed and enforced in accordance with, the laws of Nevis,
West Indies.
7.5. Counterparts. This Agreement may be executed as of the
same effective date in one or more counterparts, each of which
shall be deemed an original.
7.6. Headings. The headings and subheadings contained in
this Agreement are included solely for ease of reference, and are
not intended to give a full description of the contents of any
particular Section and shall not be given any weight whatever in
interpreting any provision of this Agreement.
7.7. Pronouns, Etc. Use of male, female and neuter pronouns
in the singular or plural shall be understood to include each of
the other pronouns as the context requires. The word "and"
includes the word "or". The word "or" is disjunctive but not
necessarily exclusive.
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7.8. Complete Agreement. This Agreement, the Appendices
hereto, and the documents delivered pursuant hereto or referred
to herein or therein contain the entire agreement between the
parties with respect to the Transaction and, except as provided
herein, supersede all previous negotiations, commitments and
writings.
7.9. Modifications, Amendments and Waivers. This Agreement
shall not be modified or amended except by a writing signed by
each of the parties hereto.
7.10 Severability. If any term or other provision of this
Agreement is invalid, illegal, or incapable of being enforced by
any rule of law or public policy, all other terms and provisions
of this Agreement will nevertheless remain in full force and
effect so long as the economic or legal substance of the
Transaction is not affected in any manner adverse to any party
hereto. Upon any such determination that any term or other
provision is invalid, illegal, or incapable of being enforced,
the parties hereto will negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as
closely as possible in any acceptable manner to the end that the
Transaction are consummated to the extent possible.
[signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
INFINITY INVESTORS LIMITED
By: /s/ XXXXX X. XXXXXXXX
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Director
GLOBAL TECHNOLOGY VALUE PARTNERS LIMITED
By: /s/ XXXXXXXX X.X. XXXXXX
--------------------------------
Name: Xxxxxxxx X. X. Xxxxxx
Title: Director
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