ASSET PURCHASE AGREEMENT
This
Asset Purchase Agreement (this “Agreement”)
is
dated as of July 8, 2008, by and among bioMETRX, Inc., a Delaware corporation
having its principal offices at 000 Xxxxx Xxxxxxxx, Xxxxx 000, Xxxxxxx, Xxx
Xxxx
00000 (the “Company”),
bioMETRX Florida, Inc., a Florida Corporation and wholly owned Subsidiary of
the
Company and Biometrics Investors LLC, a limited liability corporation having
its
principal offices at x/x Xxxxxxxxx Xxxxxxx, 00 Xxxxxx Xxxxx, Xxxxx X,
Xxxxxxxxxx, XX 00000 (“BIL”).
WHEREAS,
BIL was a secured lender to Sequiam Corporation (“SQUM”);
WHEREAS,
BIL has foreclosed on the capital stock of certain subsidiaries of SQUM (the
“SQUM
Subsidiaries”);
WHEREAS,
the SQUM Subsidiaries own certain valuable assets and business opportunities
which BMRX seeks to acquire;
WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant
to
Section 4(1) of the Securities Act, BIL desires to transfer to the Company
the
assets and business, and business opportunities of the SQUM Subsidiaries to
BFI;
and
WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant
to
Section 4(2) of the Securities Act and Rule 506 promulgated thereunder, the
Company, through BFI, desires to acquire such assets and business opportunities
of the SQUM Subsidiaries and to issue to BIL in exchange therefor, restricted
securities of the Company and BFI.
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration the receipt and adequacy of which
are hereby acknowledged, the Company, BFI and BIL agree as follows:
ARTICLE
I.
DEFINITIONS
1.1 Definitions.
In addition to the terms defined elsewhere in this Agreement, for all purposes
of this Agreement, the following terms have the meanings set forth in this
Section 1.1:
“Affiliate”
means
any Person that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a Person as such
terms are used in and construed under Rule 405 under the Securities
Act.
“BFI”
means
bioMETRX Florida, Inc., a Florida Corporation and wholly-owned Subsidiary of
the
Company.
“Board
of Directors”
means
the board of directors of the Company and BFI.
“Business
Day”
means
any day except Saturday, Sunday, any day which is a federal legal holiday in
the
United States or any day on which banking institutions in the State of New
York
are authorized or required by law or other governmental action to
close.
1
“Certificate
of Designation”
means
the Certificate of Designation to be filed prior to the Closing by the Company
with the Secretary of State of Delaware in the form of Exhibit
A
attached
hereto.
“Closing”
means
the closing of the transactions relating to the issuance of the Securities
and
the transfer of the SQUM Subsidiary Assets pursuant to this
Agreement.
“Closing
Date”
means
the Business Day when all of the Transaction Documents have been executed and
delivered by the applicable parties thereto, and all conditions precedent to
(i)
BIL’s obligations to transfer the SQUM Subsidiary Assets and (ii) the Company’s
obligations to deliver the Securities have been satisfied or
waived.
“Commission”
means
the United States Securities and Exchange Commission.
“Common
Stock”
means
the common stock of the Company, par value $0.001 per share, and any other
class
of securities into which such securities may hereafter be reclassified or
changed into.
“Common
Stock Equivalents”
means
any securities of the Company or any Subsidiary which would entitle the holder
thereof to acquire at any time Common Stock, including, without limitation,
any
debt, preferred stock, rights, options, warrants or other instrument that is
at
any time convertible into or exercisable or exchangeable for, or otherwise
entitles the holder thereof to receive, Common Stock.
“Company
Counsel”
for
purposes of this transaction and Agreement shall mean the Law Offices of D.
Xxxxx Xxxxx, with offices located at 000 Xxxxx Xxxxxxxx, Xxxxx 000, Xxxxxxx,
Xxx
Xxxx 00000.
“Effective
Date”
means
the earlier of the date that a registration statement filed by the Company
registering the Underlying Shares is first declared effective by the Commission
and the date that the Underlying Shares may be resold pursuant to Rule 144
without volume and manner restrictions.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
“FWS”
means
Xxxxxxx Xxxxxxxxx & Xxxxx LLP with offices located at 000 Xxxxxxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000-0000, counsel to BIL for the purposes
of
this transaction and Agreement.
“Material
Adverse Effect”
means
(i) a material adverse effect on the legality, validity or enforceability of
any
Transaction Document, (ii) a material adverse effect on the results of
operations, assets, business, prospects or condition (financial or otherwise)
of
the Company and the Subsidiaries, taken as a whole or (iii) a material adverse
effect on the Company’s ability to perform in any material respect on a timely
basis its obligations under any Transaction Document.
2
“Person”
means
an individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any
kind.
“Preferred
Stock”
means
the 300 shares of the Company’s Series A Convertible Preferred Stock issued
hereunder having the rights, preferences and privileges set forth in the
Certificate of Designation, in the form of Exhibit
A
hereto.
“Required
Approvals”
shall
have the meaning ascribed to such term in Section 3.1(e).
“Rule
144”
means
Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
“SEC
Reports”
shall
have the meaning ascribed to such term in Section 3.1(f).
“Securities”
means
the Shares, the Preferred Stock and the shares underlying the Preferred Stock,
of which the Shares and Preferred Stock are listed on Schedule
B
attached
hereto.
“Securities
Act”
means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Shares”
means
the shares of Common Stock issued or issuable to BIL pursuant to this
Agreement.
“SQUM
Subsidiaries”
means
the following subsidiaries of SQUM: (1) Sequiam Software, Inc., (2) Fingerprint
Detection Technologies, Inc., (3) Biometrics Security Ltd. and (4) Sequiam
Biometrics, Inc.
“SQUM
Subsidiary Assets”
shall
mean all of the assets and properties, real, personal and mixed of the SQUM
Subsidiaries, including, without limitation, all copyrights, trademarks,
tradenames, accounts receivable, equipment, inventory and cash, marketable
securities and other cash equivalents and the business and business
opportunities of each SQUM Subsidiary as presently exists as set forth on
Schedule
A
attached
hereto.
“Subsidiary”
means
any subsidiary of the Company and shall, where applicable, also include any
direct or indirect subsidiary of the Company formed or acquired after the date
hereof.
“Trading
Day”
means
a
day on which the New York Stock Exchange is open for trading.
3
“Trading
Market”
means
the following markets or exchanges on which the Common Stock is listed or quoted
for trading on the date in question: the American Stock Exchange, the Nasdaq
Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market,
the
New York Stock Exchange or the OTC Bulletin Board.
“Transaction
Documents”
means
this Agreement, the Certificate of Designation and any other documents or
agreements executed in connection with the transactions contemplated
hereunder.
“Transfer
Agent”
means
American Stock Transfer, the current transfer agent of the Company, with a
mailing address of 00 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx and a facsimile number
of
(000) 000-0000, and any successor transfer agent of the Company.
“Underlying
Shares”
means
the Shares and the shares of Common Stock underlying the Preferred
Stock.
“Variable
Rate Transaction”
shall
have the meaning ascribed to such term in Section 8.7.
ARTICLE
II.
TRANSFER
OF ASSETS
2.1 On
the
Closing Date, upon the terms and subject to the conditions set forth herein,
BIL
shall transfer and use commercially reasonable efforts deliver to the Company
all of BIL’s right, title and interest to the SQUM Subsidiary assets, and shall
undertake to use reasonable commercial efforts to cause the SQUM Subsidiaries
to
transfer and deliver, or use commercially reasonable efforts to cause to be
transferred and delivered all of such assets, by physical delivery in the
instance of physical assets, and by such transfer documents as necessary and
appropriate to effectuate a change of title as to the physical assets, and
all
intangible assets, including intellectual property and domain names. The
Company understands that it is receiving assets only, that it is not acquiring
any employees, any continuing contractual commitments of purchase or sale of
SQUM products, or any good will attached to the SQUM name or business.
This is the purchase of, and transfer of, assets only.
ARTICLE
III.
ISSUANCE
OF SECURITIES
3.1 On
the
Closing Date, upon the terms and subject to the conditions set forth herein,
the
Company shall issue to BIL the Securities.
ARTICLE
IV.
REPRESENTATIONS
AND WARRANTIES OF BIL
4.1 BIL
hereby represents and warrants, as of the date hereof and as of the Closing
Date, to the Company and BFI as follows:
4
(a) Organization;
Authority.
BIL is
an entity duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization with full right, corporate or
partnership power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder. The execution and delivery of the
Transaction Documents and performance by BIL of the transactions contemplated
by
the Transaction Documents have been duly authorized by all necessary corporate
or similar action on the part of BIL. Each Transaction Document to which it
is a
party has been duly executed by BIL, and when delivered by BIL in accordance
with the terms hereof, will constitute the valid and legally binding obligation
of BIL, enforceable against it in accordance with its terms, except: (i) as
limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may
be
limited by applicable law.
(b) Own
Account.
BIL
understands that the Securities are “restricted securities” and have not been
registered under the Securities Act or any applicable state securities law
and
is acquiring the Securities as principal for its own account and not with a
view
to or for distributing or reselling such Securities or any part thereof in
violation of the Securities Act or any applicable state securities law, has
no
present intention of distributing any of such Securities in violation of the
Securities Act or any applicable state securities law and has no direct or
indirect arrangement or understandings with any other persons to distribute
or
regarding the distribution of such Securities (this representation and warranty
not limiting BIL’s right to sell the Securities pursuant to a registration
statement or otherwise in compliance with applicable federal and state
securities laws) in violation of the Securities Act or any applicable state
securities law. BIL is acquiring the Securities hereunder in the ordinary course
of its business.
(c) BIL
Status.
At the
time BIL was offered the Securities, it was, and as of the date hereof it is,
an
“accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or
(a)(8) under the Securities Act.
(d) Experience
of BIL.
BIL,
either alone or together with its representatives, has such knowledge,
sophistication and experience in business and financial matters so as to be
capable of evaluating the merits and risks of the prospective investment in
the
Securities, and has so evaluated the merits and risks of such investment. BIL
is
able to bear the economic risk of an investment in the Securities and, at the
present time, is able to afford a complete loss of such investment.
(e) No
Consents/Advice.
No
notice to, filing with, or authorization, registration, consent or approval
of
any governmental authority or other Person is necessary for the execution,
delivery or performance of this Agreement or the consummation of the
transactions contemplated hereby by it. BIL has consulted such legal, tax and
investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its transfer of the SQUM Subsidiary
Assets.
5
(f) [Intentionally
Deleted]
(g) SQUM
Subsidiary Assets.
To the
best of BIL's knowledge and information, without having undertaken independent
verification or investigation, each of the SQUM Subsidiaries owns the SQUM
Subsidiary Assets free and clear of any debt, obligations, claims, obligations
or encumbrances, with respect thereto, except
as
expressly set forth on the Schedule
of Assets.
(h) Certain
Fees.
No
brokerage or finder’s fees or commissions are or will be payable by the Company
to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by the Transaction Documents. The Company shall have no obligation
with respect to any fees or with respect to any claims made by or on behalf
of
other Persons for fees of a type contemplated in this Section that may be due
in
connection with the transactions contemplated by the Transaction
Documents.
(i) Full
Disclosure.
BIL has
not omitted to disclose to the Company any material fact known to it necessary
to make the representations and warranties made by it herein not misleading;
provided,
however,
that
Company acknowledges that BIL has undertaken no independent verification or
investigation of the facts underlying the representations and warrants of the
BIL Subsidiary Assets.
ARTICLE
V.
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY AND BFI
5.1 The
Company and BFI hereby represent and warrant, jointly and severally, as of
the
date hereof and as of the Closing Date, to BIL as follows:
(a) Organization
and Qualification.
The
Company and each of the Subsidiaries is an entity duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, with the requisite power and
authority to own and use its properties and assets and to carry on its business
as currently conducted. Neither the Company nor any Subsidiary is in violation
nor default of any of the provisions of its respective certificate or articles
of incorporation, bylaws or other organizational or charter documents. Each
of
the Company and the Subsidiaries is duly qualified to conduct business and
is in
good standing as a foreign corporation or other entity in each jurisdiction
in
which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in
good
standing, as the case may be, could not have or reasonably be expected to result
in a Material Adverse Effect on the Company and no Proceeding has been
instituted in any such jurisdiction revoking, limiting or curtailing or seeking
to revoke, limit or curtail such power and authority or
qualification.
6
(b) Authorization;
Enforcement.
Each of
the Company and BFI has the requisite corporate power and authority to enter
into and to consummate the transactions contemplated by each of the Transaction
Documents and otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of each of the Transaction Documents by the Company
and BFI and the consummation by each them of the transactions contemplated
hereby and thereby have been duly authorized by all necessary action on the
part
of the Company and BFI, respectively, and no further action is required by
the
Company or BFI, the Board of Directors of each, or the Company’s or BFI’s
stockholders. Each Transaction Document to which the Company and/or BFI is
a
party has been (or upon delivery will have been) duly executed on behalf of
the
Company and BFI, as applicable, and, when delivered in accordance with the
terms
hereof and thereof, will constitute the valid and binding obligation of the
Company and BFI, as applicable, enforceable against the Company and BFI, as
applicable, in accordance with its terms, except: (i) as limited by general
equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors’ rights generally, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may
be
limited by applicable law.
(c) No
Conflicts.
The
execution, delivery and performance by each of the Company and each Subsidiary
of the Transaction Documents, the issuance and sale of the Securities, and
the
consummation by the Company and each Subsidiary to which it is a party of the
other transactions contemplated hereby and thereby do not and will not: (i)
conflict with or violate any provision of the Company’s or any Subsidiary’s
certificate or articles of incorporation, bylaws or other organizational or
charter documents, (ii) conflict with, or constitute a default (or an event
that
with notice or lapse of time or both would become a default) under, result
in
the creation of any lien upon any of the properties or assets of the Company
or
any Subsidiary, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both)
of,
any agreement, credit facility, debt or other instrument (evidencing a Company
or Subsidiary debt or otherwise) or other understanding to which the Company
or
any Subsidiary is a party or by which any property or asset of the Company
or
any Subsidiary is bound or affected, or (iii) subject to the Required Approvals,
conflict with or result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company or a Subsidiary is subject (including federal
and
state securities laws and regulations), or by which any property or asset of
the
Company or a Subsidiary is bound or affected; except in the case of each of
clauses (ii) and (iii), such as could not have or reasonably be expected to
result in a Material Adverse Effect.
(d) Filings,
Consents and Approvals.
Neither
the Company nor BFI is required to obtain any consent, waiver, authorization
or
order of, give any notice to, or make any filing or registration with, any
court
or other federal, state, local or other governmental authority or other Person
in connection with the execution, delivery and performance by the Company and
BFI of the Transaction Documents, other than: (i) the filings required pursuant
to Section 8.4 of this Agreement, (ii) application(s) to each applicable Trading
Market for the listing of the Underlying for trading thereon in the time and
manner required thereby and (iii) the filing of Form D with the Commission
and
such filings as are required to be made under applicable state securities laws
(collectively, the “Required
Approvals”).
7
(e) Issuance
of the Securities.
The
Securities are duly authorized and, when issued in accordance with the
applicable Transaction Documents, will be duly and validly issued, fully paid
and nonassessable, free and clear of all liens imposed by the Company other
than
restrictions on transfer provided for in the Transaction Documents. The shares
underlying the Preferred Stock, when issued in accordance with the terms of
the
Certificate of Designation, will be validly issued, fully paid and
nonassessable, free and clear of all Liens imposed by the Company other than
restrictions on transfer provided for in the Transaction Documents. The Company
has reserved from its duly authorized capital stock the maximum number of shares
of Common Stock issuable pursuant to this Agreement and the Certificate of
Designation.
(f) SEC
Reports; Financial Statements.
Other
than the Company’s late filing of its Quarterly Report on Form 10-Q for the
quarter ended march 31, 2008 which has since been filed in compliance with
the
requirements of the Exchange Act, the Company has filed all reports, schedules,
forms, statements and other documents required to be filed by the Company under
the Securities Act and the Exchange Act, including pursuant to Section 13(a)
or
15(d) thereof, for the two years preceding the date hereof (or such shorter
period as the Company was required by law or regulation to file such material)
(the foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, being collectively referred to herein as
the
“SEC
Reports”)
on a
timely basis or has received a valid extension of such time of filing and has
filed any such SEC Reports prior to the expiration of any such extension. As
of
their respective dates, the SEC Reports complied in all material respects with
the requirements of the Securities Act and the Exchange Act, as applicable,
and
none of the SEC Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The Company has never
been an issuer subject to Rule 144(i) under the Securities Act. The financial
statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of
filing.
(g) Capitalization.
The
capitalization of the Company is as set forth on the SEC Reports. Except as
set
forth in the SEC Reports or previously disclosed in writing to BIL, the Company
has not issued any capital stock since its most
recently filed periodic report under the Exchange Act.
No
Person has any right of first refusal, preemptive right, right of participation,
or any similar right to participate in the transactions contemplated by the
Transaction Documents. Except as set forth in the SEC Reports, or as a result
of
the issuance of the Securities, (i) there are no outstanding options, warrants,
scrip rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into or
exercisable or exchangeable for, or giving any Person any right to subscribe
for
or acquire any shares of Common Stock, (ii) contracts, commitments,
understandings or arrangements by which the Company or any Subsidiary is or
may
become bound to issue additional shares of Common Stock or Common Stock
Equivalents and (iii) the issuance of the Securities will not obligate the
Company to issue shares of Common Stock or other securities to any Person (other
than the Purchasers) and will not result in a right of any holder of Company
securities to adjust the exercise, conversion, exchange or reset price under
any
of such securities. All of the outstanding shares of capital stock of the
Company are validly issued, fully paid and nonassessable, have been issued
in
compliance with all federal and state securities laws, and none of such
outstanding shares was issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities. No further approval or
authorization of any stockholder, the Board of Directors or others is required
for the issuance of the Securities. There are no stockholders agreements, voting
agreements or other similar agreements with respect to the Company’s capital
stock to which the Company is a party or, to the knowledge of the Company,
between or among any of the Company’s stockholders.
8
(h) Material
Changes; Undisclosed Events, Liabilities or Developments.
Since
the date of the latest audited financial statements included within the SEC
Reports, except as specifically disclosed in a subsequent SEC Report filed
prior
to the date hereof: (i) there has been no event, occurrence or development
that
has had or that could reasonably be expected to result in a Material Adverse
Effect, (ii) the Company has not incurred any liabilities (contingent or
otherwise) other than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice and (B) liabilities
not required to be reflected in the Company’s financial statements pursuant to
GAAP or disclosed in filings made with the Commission, (iii) the Company has
not
altered its method of accounting, (iv) the Company has not declared or made
any
dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any shares
of
its capital stock and (v) the Company has not issued any equity securities
to
any officer, director or Affiliate, except pursuant to existing Company stock
option plans. The Company does not have pending before the Commission any
request for confidential treatment of information. Except for the issuance
of
the Securities contemplated by this Agreement or as set forth on Schedule
5.1(h),
no
event, liability or development has occurred or exists with respect to the
Company or its Subsidiaries or their respective business, properties, operations
or financial condition, that would be required to be disclosed by the Company
under applicable securities laws at the time this representation is made or
deemed made that has not been publicly disclosed at least one Trading Day prior
to the date that this representation is made.
(i) Certain
Fees.
No
brokerage or finder’s fees or commissions are or will be payable by the Company
to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by the Transaction Documents. BIL shall have no obligation with
respect to any fees or with respect to any claims made by or on behalf of other
Persons for fees of a type contemplated in this Section that may be due in
connection with the transactions contemplated by the Transaction
Documents.
(j) Full
Disclosure.
The
Company has not omitted to disclose to BIL any material fact known to it
necessary to make the representations and warranties made by it herein not
misleading.
9
ARTICLE
VI.
CLOSING/CLOSING
DOCUMENTS
6.1 Closing.
Upon satisfaction of the covenants and conditions set forth in this Agreement,
the Closing shall occur at the offices of FWS on Tuesday, July 11, 2008 at
2:00
pm ET, or such other location as the parties shall mutually agree; provided
that
either party may adjourn the Closing for any and all reasons without penalty
for
up to ten (10) Business Days. From time to time from and after the Closing,
the
parties hereto shall execute and deliver, or cause to be executed and delivered,
any and all such further agreements, certificates and other instruments, and
shall take or cause to be taken any and all such further action, as any of
the
parties may reasonably deem necessary or desirable in order to carry out the
intent and purposes of this Agreement.
6.2 Closing
Deliveries.
(a) BIL
Deliveries.
On or
prior to the Closing Date, BIL shall deliver or cause to be delivered to the
Company the following:
(i) this
Agreement duly executed by BIL;
(ii) an
officer’s certificate from the Chief Executive Officer of BIL, dated as of the
Closing Date, certifying and setting forth (i) the names, signatures and
positions of the Persons authorized to execute this Agreement and any other
Transaction Documents to which BIL is a party and (ii) a copy of the resolutions
of BIL authorizing the execution, delivery and performance of this Agreement;
and
(iii) Bills
of
Sale from such SQUM Subsidiaries transferring to BFI the SQUM Subsidiary Assets
in the form of Exhibit
B
attached
hereto.
(b) Company
Deliveries.
On or
prior to the Closing Date, the Company shall deliver or cause to be delivered
to
BIL the following:
(i) this
Agreement duly executed by the Company;
(ii) duly
authorized and issued certificates representing the Securities set forth on
Schedule
B
registered in the name of BIL; and
(iii) an
officer’s certificate from the Chief Executive Officer of the Company and BFI,
respectively, dated as of the Closing Date, certifying and setting forth (i)
the
names, signatures and positions of the Persons authorized to execute this
Agreement and any other Transaction Documents to which the Company or BFI is
a
party and (ii) a copy of the resolutions of the Company and BFI, as applicable,
authorizing the execution, delivery and performance of this
Agreement.
10
ARTICLE
VII.
CLOSING
CONDITIONS
7.1 Company
Conditions. The obligations of the Company hereunder in connection with the
Closing are subject to the following conditions being met, unless waived by
the
Company:
(i) the
accuracy in all material respects on the Closing Date of the representations
and
warranties of BIL contained herein;
(ii) all
obligations, covenants and agreements of BIL required to be performed at or
prior to the Closing Date shall have been performed;
(iii) the
delivery by BIL of the items set forth in Section 6.2(a) of this
Agreement;
(iv) concurrently
with the Closing, BIL shall have converted its 12% Secured Convertible
Promissory Note with a principal amount of $250,000 into 1,388,889 shares of
Common Stock provided that BIL shall also receive common stock purchase warrants
to purchase up to 1,388,889 shares of Common Stock, which warrant shall be
in
form and substance reasonably satisfactory to BIL; and
(v) there
shall have been no Material Adverse Effect with respect to the Company
occasioned by the transaction, SQUM, the SQUM Subsidiaries or the SQUM
Subsidiary Assets to be transferred pursuant to the terms of this
Agreement.
7.2 BIL
Conditions. The obligations of BIL hereunder in connection with the Closing
are subject to the following conditions being met, unless waived by
BIL:
(i) the
accuracy in all material respects on the Closing Date of the representations
and
warranties of the Company and BFI contained herein;
(ii) all
obligations, covenants and agreements of the Company required to be performed
at
or prior to the Closing Date shall have been performed;
(iii) the
delivery by the Company of the items set forth in Section 6.2(b) of this
Agreement;
(iv)
the
Company shall have agreed to a restructuring of the indebtedness and conversion
features of the Company held by BridgePointe Master Fund Ltd. to the reasonable
satisfaction of BIL and the Company; and
(v) there
shall have been no Material Adverse Effect with respect to the Company since
the
date hereof.
11
ARTICLE
VIII.
OTHER
AGREEMENTS OF THE PARTIES
8.1 Transfer
Restrictions on Securities.
(a) The
Securities may only be disposed of in compliance with state and federal
securities laws. In connection with any transfer of Securities other than
pursuant to an effective registration statement or Rule 144, to the Company,
or
to an Affiliate of BIL or in connection with a pledge as contemplated in Section
8.1(b), the Company or BFI, as applicable, may require the transferor thereof
to
provide to the Company, an opinion of counsel selected by the transferor and
reasonably acceptable to the Company, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred Securities under
the
Securities Act. As a condition of transfer, any such transferee shall agree
in
writing to be bound by the terms of this Agreement and shall have the rights
of
a BIL under this Agreement.
(b) BIL
agrees to the imprinting, so long as is required by this Section 8.1, of a
legend on any of the Securities in the following form:
THIS
SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE
SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.
12
The
Company acknowledges and agrees that a BIL may from time to time pledge pursuant
to a bona fide margin agreement with a registered broker-dealer or grant a
security interest in some or all of the Securities to a financial institution
that is an “accredited investor” as defined in Rule 501(a) under the Securities
Act and who agrees to be bound by the provisions of this Agreement and, if
required under the terms of such arrangement, BIL may transfer pledged or
secured Securities to the pledgees or secured parties. Such a pledge or transfer
would not be subject to approval of the Company and no legal opinion of legal
counsel of the pledgee, secured party or pledgor shall be required in connection
therewith. Further, no notice shall be required of such pledge. At the
appropriate BIL’s expense, the Company, will execute and deliver such reasonable
documentation as a pledgee or secured party of Securities may reasonably request
in connection with a pledge or transfer of the Securities. Any pledge shall
take
such Securities subject to the restrictions on transfer set forth in this
Agreement.
(c) Certificates
evidencing the Underlying Shares shall not contain any legend (including the
legend set forth in Section 8.1(b) hereof), (i) while a registration statement
covering the resale of such security is effective under the Securities Act,
(ii)
following any sale of such Underlying Shares pursuant to Rule 144, (iii) if
such
Underlying Shares are eligible for sale under Rule 144, without the requirement
for the Company to be in compliance with the current public information required
under Rule 144 as to such Underlying Shares and without volume or manner-of-sale
restrictions or (iv) if such legend is not required under applicable
requirements of the Securities Act (including judicial interpretations and
pronouncements issued by the staff of the Commission). The Company shall cause
its counsel to issue a legal opinion to the Transfer Agent promptly after the
Effective Date if required by the Transfer Agent to effect the removal of the
legend hereunder. If all or any shares of Preferred Stock are converted at
a
time when there is an effective registration statement to cover the resale
of
the Underlying Shares, or if such Underlying Shares may be sold under Rule
144,
without the requirement for the Company to be in compliance with the current
public information required under Rule 144 as to such Underlying Shares and
without volume or manner-of-sale restrictions or if such legend is not otherwise
required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the Commission) then
such Underlying Shares shall be issued free of all legends. The Company agrees
that following the Effective Date or at such time as such legend is no longer
required under this Section 8.1(c), it will, no later than three Trading Days
following the delivery by a BIL to the Company or the Transfer Agent of a
certificate representing Underlying Shares, as the case may be, issued with
a
restrictive legend, deliver or cause to be delivered to BIL a certificate
representing such shares that is free from all restrictive and other legends.
The Company may not make any notation on its records or give instructions to
the
Transfer Agent that enlarge the restrictions on transfer set forth in this
Section 8. Certificates for Underlying Shares subject to legend removal
hereunder shall be transmitted by the Transfer Agent to BIL by crediting the
account of BIL’s prime broker with the Depository Trust Company System as
directed by BIL.
8.2 Furnishing
of Information. The Company covenants to maintain the registration of the
Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely
file
(or obtain extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act. As long as BIL owns Securities, if the Company
is
not required to file reports pursuant to the Exchange Act, it will prepare
and
furnish to BIL and make publicly available in accordance with Rule 144(c) such
information as is required for BIL to sell the Securities under Rule 144. The
Company further covenants that it will take such further action as any holder
of
Underlying Shares may reasonably request, to the extent required from time
to
time to enable such Person to sell such Underlying Shares without registration
under the Securities Act within the requirements of the exemption provided
by
Rule 144.
13
8.3 Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Securities in a
manner that would require the registration under the Securities Act of the
sale
of the Securities to BIL or that would be integrated with the offer or sale
of
the Securities to BIL for purposes of the rules and regulations of any Trading
Market such that it would require shareholder approval prior to the closing
of
such other transaction unless shareholder approval is obtained before the
closing of such subsequent transaction.
8.4 Securities
Laws Disclosure; Publicity. The Company shall disclose the material terms of
the transactions contemplated hereby in a Current Report on Form 8-K in a timely
manner. The Company and BIL shall consult with each other in issuing any other
press releases with respect to the transactions contemplated hereby, and neither
the Company nor BIL shall issue any such press release nor otherwise make any
such public statement without the prior consent of the other party, which
consent shall not unreasonably be withheld or delayed, except if such disclosure
is required by law, in which case the disclosing party shall promptly provide
the other party with prior notice of such public statement or communication.
Notwithstanding the foregoing, the Company shall not publicly disclose the
name
of BIL, or include the name of BIL in any filing with the Commission or any
regulatory agency or Trading Market, without the prior written consent of BIL,
except (a) as required by federal securities law in connection with (i) any
registration statement or (ii) the filing of final Transaction Documents
(including signature pages thereto) with the Commission or (b) to the extent
such disclosure is required by law or Trading Market regulations, in which
case
the Company shall provide BIL with prior notice of such disclosure permitted
under this clause (b).
8.5 Non-Public
Information. Except with respect to the material terms and conditions of the
transactions contemplated by the Transaction Documents, the Company covenants
and agrees that neither it, nor any other Person acting on its behalf, including
but not limited to BFI, will provide BIL or its agents or counsel with any
information that the Company believes constitutes material non-public
information, unless prior thereto BIL shall have executed a written agreement
regarding the confidentiality and use of such information. The Company
understands and confirms that BIL shall be relying on the foregoing covenant
in
effecting transactions in securities of the Company.
8.6 Listing
of Common Stock.
The
Company hereby agrees to use best efforts to maintain the listing of the Common
Stock on a Trading Market, and as soon as reasonably practicable following
the
Closing (but not later than the earlier of the Effective Date and the first
anniversary of the Closing Date) to list all of the Underlying Shares on such
Trading Market. The Company further agrees, if the Company applies to have
the
Common Stock traded on any other Trading Market, it will then include in such
application all of the Underlying Shares, and will take such other action as
is
necessary to cause all of the Underlying Shares to be listed on such other
Trading Market as promptly as possible. The Company will then take all action
reasonably necessary to continue the listing and trading of its Common Stock
on
a Trading Market and will comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the Trading
Market.
14
8.7 Subsequent
Equity Sales. From the date hereof until such time as no BIL holds any of
the Securities, neither the Company nor any Subsidiary shall effect or enter
into an agreement to effect any Subsequent Financing involving a Variable Rate
Transaction. “Variable Rate Transaction” means a transaction in which the
Company or any Subsidiry issues or sells (i) any debt or equity securities
that
are convertible into, exchangeable or exercisable for, or include the right
to
receive additional shares of Common Stock either (A) at a conversion price,
exercise price or exchange rate or other price that is based upon and/or varies
with the trading prices of or quotations for the shares of Common Stock at
any
time after the initial issuance of such debt or equity securities or (B) with
a
conversion, exercise or exchange price that is subject to being reset at some
future date after the initial issuance of such debt or equity security or upon
the occurrence of specified or contingent events directly or indirectly related
to the business of the Company or the market for the Common Stock or (ii) enters
into any agreement, including, but not limited to, an equity line of credit,
whereby the Company may sell securities at a future determined price. BIL shall
be entitled to obtain injunctive relief against the Company to preclude any
such
issuance, which remedy shall be in addition to any right to collect
damages.
8.8 Conversion
Procedures. The form of Notice of Conversion/Exchange included in the
Certificate of Designation sets forth the totality of the procedures required
of
the Purchasers in order to convert the Preferred Stock. No additional legal
opinion, other information or instructions shall be required of the Purchasers
to convert their Preferred Stock. The Company shall honor conversions of the
Preferred Stock and shall deliver Underlying Shares in accordance with the
terms, conditions and time periods set forth in the Transaction
Documents.
8.9 Reservation
of Common Stock. As of the date hereof, the Company has reserved and the
Company shall continue to reserve and keep available at all times, free of
preemptive rights, a sufficient number of shares of Common Stock for the purpose
of enabling the Company to issue shares of Common Stock pursuant to this
Agreement and Underlying Shares pursuant to any conversion of Preferred Stock
(whether vested or unvested) assuming conversion in full and for purposes of
this provision ignoring any conversion restrictions therein.
8.10 Restriction
on Resales by BIL. Until the 18 month anniversary of the date hereof, BIL
hereby agrees that it shall not offer, sell, contract to sell, hypothecate,
pledge or otherwise dispose of, directly or indirectly, with respect to any
of
the Securities unless the applicable assignee, transferee or pledge shall enter
into the same agreement for the benefit of the Company (the restrictions shall
apply ratably to such Persons and BIL); provided, however,
beginning on the 6 month anniversary of the date hereof BIL shall be permitted
to dispose of, cumulatively and in any 60 day period, up to an amount of
Securities convertible into a number of shares of Common Stock, or shares of
Common Stock, equal to the greater of (a) the number of shares of Common Stock
could otherwise sell pursuant to Rule 144 during such 60 day period and (b)
the
number of shares equal to 10% of the number of shares of Common Stock then
issuable upon conversion of all vested shares of Preferred Stock held by the
holder of such Preferred Stock on the date in question, ignoring for such
purposes any conversion limitations set forth therein.
15
8.11 Directorship.
Following the date that at least $3 million of additional capital is raised
by
the Company following the Closing but prior to December 31, 2008, BIL and the
Company shall nominate a representative of BIL to the Board of Directors and
the
Company and such nominee shall serve for at least one year following the Closing
Date. Such nominee shall have the right to resign from the Board of Directors,
without a replacement appointee by BIL, at any time following the earlier of
(a)
one year anniversary of the date hereof and (b) the date that the Company
voluntarily or involuntarily commences (or is commenced by a third party) a
case
or other proceeding under any bankruptcy, reorganization, relief of debtors,
dissolution, insolvency or liquidation or similar law.
8.12 Sequiam
Biometrics (PTY) Ltd. The Company is currently undertaking a due diligence
review of the assets of Sequiam Biometrics (PTY) Ltd. In the event the Company
elects to acquire such subsidiary and/or the assets of such subsidiary prior
to
December 31, 2008, BIL shall use commercially reasonable efforts to effect
the
transfer of such subsidiary and/or the assets of such subsidiary to the Company
for no additional consideration to BIL.
8.13 Reimbursement
of Audit Expenses. BIL shall reimburse (or pay directly if directed by the
Company and sufficient funds are available to BIL at such time to make such
payment), the Company up to, in the aggregate, $55,000 for any accountable,
out
of pocket expenses to the Company in connection with the appraisal and audit
of
the SQUM Subsidiary Assets incurred prior to December 31, 2008 and resolved
prior to December 31, 2009; provided, however, in the event that
the Company raises gross proceeds in one or more debt or equity financing of
at
least, in the aggregate, $250,000 during the two weeks immediately following
the
Closing Date, BIL shall not be required to make any reimbursement
hereunder.
8.14 Preferred
Stock Clawback. In the event that the Company pays cash after the date
hereof for any liabilities of the SQUM Subsidiaries not known to the Company
or
its agents and representatives on or prior to the date hereof, which liabilities
were incurred solely in connection with past services provided to SQUM or
products sold by SQUM, BIL hereby agrees to surrender for cancellation one
share
of Preferred Stock (applied first to any vested shares and if no vested shares
are then held by BIL, to the first vested shares thereafter) for each $50,000
increment of such liabilities actually paid, up to, in the aggregate, 10 shares
of Preferred Stock (or up to, in the aggregate, $500,000 of such liabilities).
The Company shall promptly notify BIL of the payment of such liabilities in
writing.
ARTICLE
IX.
MISCELLANEOUS
9.1 Termination.
This Agreement may be terminated by either party if the Closing has not been
consummated on or before July 31, 2008, subject to extension pursuant to Section
6.1; provided, however, that no such termination will affect the
right of any party to xxx the other party for any alleged breach by the other
party occurring prior to such termination.
9.2 Fees
and Expenses. Except as expressly set forth in the Transaction Documents to
the contrary, each party shall pay the fees and expenses of its own advisers,
counsel, accountants and other experts, if any, and all other expenses incurred
by such party incident to the negotiation, preparation, execution, delivery
and
performance of this Agreement. The Company shall pay all Transfer Agent fees,
stamp taxes and other taxes and duties levied in connection with the delivery
of
any Securities to BIL.
16
9.3 Entire
Agreement. The Transaction Documents, together with the exhibits and
schedules thereto, contain the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and
schedules.
9.4 Notices.
Any and all notices or other communications or deliveries required or permitted
to be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of: (a) the date of transmission, if such notice
or
communication is delivered via facsimile at the facsimile number set forth
on
the signature pages attached hereto prior to 5:30 p.m. (New York City time)
on a
Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number
set
forth on the signature pages attached hereto on a day that is not a Trading
Day
or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the
2nd
Trading
Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service or (d) upon actual receipt by the party to whom such
notice is required to be given. The address for such notices and communications
shall be as set forth on the signature pages attached hereto.
9.5 Amendments;
Waivers. No provision of this Agreement may be waived or amended except in a
written instrument signed by the Company and BIL. No waiver of any default
with
respect to any provision, condition or requirement of this Agreement shall
be
deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof,
nor
shall any delay or omission of any party to exercise any right hereunder in
any
manner impair the exercise of any such right.
9.6 Headings.
The headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.
9.7 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit
of the parties and their successors and permitted assigns.
9.8 No
Third-Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective successors and permitted assigns and is
not
for the benefit of, nor may any provision hereof be enforced by, any other
Person.
9.9 Governing
Law. All questions concerning the construction, validity, enforcement and
interpretation of the Transaction Documents shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York,
without regard to the principles of conflicts of law thereof.
9.10 Jurisdiction
and Venue. In the event of any dispute arising hereunder, the Parties hereto
stipulate and agree to exclusive jurisdiction in either (a) the State of New
York, Nassau County, (b) Chicago, Illinois or (c) in an appropriate case, the
United States District Court for the Northern District of New York or Illinois.
As to any action brought by the Company, the jurisdiction and venue shall be
in
Chicago, Illinois and as to any action brought by BIL, the jurisdiction and
venue shall be in the State of New York, Nassau County. Each of the Parties
appoints its respective counsel, noted herein, as its agent to service of
process to accept process for such Party in connection with the investigation
of
any such action.
17
9.11 Mediation.
Unless immediate action is required to mitigate harm to a party or any action
seeking specific performance (including, but not limited to, any action or
specific performance relating to conversions, exchanges or sales of the
Securities), each party agrees to first attempt to resolve disputes by
mediation, formally or informally, and allowing at least thirty (30) days for
such mediation by a single mediator mutually agreed to by the parties, to be
successful before bringing suit against the other party.
9.12 Attorneys
Fees. Subject to Section 9.11, if either party shall commence an action
seeking relief under any provision of this Agreement and the Transaction
Documents, and the other party shall prevail, then the prevailing party in
such
action shall be reimbursed by the initiating party for the reasonable attorneys’
fees and other costs and expenses incurred by the prevailing party with respect
to the defense of such action, including any other claims and counterclaims
arising thereunder.
9.13 Survival.
The representations and warranties contained herein shall survive the Closing
and the delivery of the Securities for the applicable statute of
limitations.
9.14 Execution.
This Agreement may be executed in two or more counterparts, all of which when
taken together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to
the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission or by e-mail delivery of a “.pdf” format data file, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
facsimile or “.pdf” signature page were an original thereof.
9.15 Severability.
If any term, provision, covenant or restriction of this Agreement is held by
a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may
be
hereafter declared invalid, illegal, void or unenforceable.
9.16 Replacement
of Securities. If any certificate or instrument evidencing any Securities is
mutilated, lost, stolen or destroyed, the Company, shall issue or cause to
be
issued in exchange and substitution for and upon cancellation thereof (in the
case of mutilation), or in lieu of and substitution therefor, a new certificate
or instrument, but only upon receipt of evidence reasonably satisfactory to
the
Company, of such loss, theft or destruction. The applicant for a new certificate
or instrument under such circumstances shall also pay any reasonable third-party
costs (including customary indemnity) associated with the issuance of such
replacement Securities.
18
9.17 Saturdays,
Sundays, Holidays, etc. If
the
last or appointed day for the taking of any action or the expiration of any
right required or granted herein shall not be a Business Day, then such action
may be taken or such right may be exercised on the next succeeding Business
Day.
9.18 Construction.
The parties agree that each of them and/or their respective counsel has reviewed
and had an opportunity to revise the Transaction Documents and, therefore,
the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of the Transaction Documents or any amendments hereto.
9.19 WAIVER
OF JURY XXXXX.XX ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION
BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND
INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY
ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL
BY
JURY.
(Signature
Pages Follow)
19
IN
WITNESS WHEREOF, the parties hereto have caused this Asset Purchase Agreement
to
be duly executed by their respective authorized signatories as of the date
first
indicated above.
|
BIOMETRX,
INC.
|
Address
for Notice:
000
Xx. Xxxxxxxx
Xxxxx
000
|
|
By:__________________________________________
Name:
Title:
BIOMETRX
FLORIDA, INC.
By:__________________________________________
Name:
Title:
With
a copy to (which shall not constitute notice):
|
Xxxxxxx,
XX 00000
|
|
D.
Xxxxx Xxxxx, Esq.
000
Xxxxx Xxxxxxxx
Xxxxx
000
Xxxxxxx,
XX 00000
|
BIOMETRICS
INVESTORS
LLC
Address
for Notice:
By:
_____________________________________
Name:
Title:
With
a
copy to (which shall not constitute notice):
Xxxxxx
Xxxxxxx
Xxxxxxx
Xxxxxxxxx & Xxxxx LLP
The
Graybar Building
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000-0000
Main:
(000) 000-0000
Facsimile:
(000) 000 0000
e-mail:
xxxxxxxx@xxxxxxxxxxxxxxxx.xxx
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
20
Schedule
A
SQUM
SUBSIDIARY ASSETS
[schedules
to be attached]
21
Schedule
B
SECURITIES
ISSUED AT CLOSING
1. 300
shares of Preferred Stock (44 of which are vested, the rest
unvested).
2. 1,388,807
shares of Common Stock.
3. a
warrant
to purchase up to 1,388,807 shares of Common Stock with a term of 5 years and
an
exercise price equal to $1.00.
22
