Exhibit 1
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (the "Agreement") is made and entered
into as of August 2, 2002, by and between FRANKLIN ELECTRONIC PUBLISHERS, INC.,
a Pennsylvania corporation (the "Seller"), and BELLE GROUP, LTD., a Nevada
Limited Liability Company (the "Purchaser").
RECITALS
WHEREAS, the Seller owns a total of 74,258,788 shares of Voice Powered
Technology International, Inc. (the "Company") common stock, par value of $0.001
per share (the "Shares") and
WHEREAS, the Seller desires to sell the Shares to Purchaser on the terms
and conditions set forth herein; and
WHEREAS, Purchaser desires to purchase the Shares on the terms and
conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises, representations, warranties, and covenants hereinafter set forth and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Agreement to Sell and Purchase.
1.1 Sale and Purchase of Shares. Subject to the terms and conditions set
forth herein, the Seller hereby agrees to sell to Purchaser and
Purchaser agrees to purchase from the Seller at the Closing (as
defined in Section 2.1 hereof) the Shares for $100,000.00.
1.2 Sale of Shares. At the Closing, (i) Purchaser shall deliver to the
Seller by wire transfer to the account of the Seller designated
prior to the Closing the sum of $100,000, and (ii) the Seller shall
deliver to Purchaser a stock certificate(s)
representing the Shares, together with assignments, separate
therefrom, assigning the interest of the Seller in the Shares to the
Purchaser. The Shares are validly issued, fully paid and
non-assessable.
2. Closing, Delivery and Payment.
2.1 Closing. Subject to satisfaction of the conditions contained herein,
the closing of the sale and purchase of the Shares under this
Agreement (the "Closing") shall take place on the eleventh day after
the Company files a Form 14F-1 pursuant to the Securities Exchange
Act of 1934 (the "Exchange Act") with the Securities and Exchange
Commission and concurrently, therewith, transmits Form 14F-1 to all
holders of record of common stock of the Company who would be
entitled to vote at a meeting for the election of directors. (Such
date is hereinafter referred to as the "Closing Date"). With the
cooperation of the Purchaser, the Company shall use its best efforts
to prepare, file and distribute to its shareholders the Form 14F-1
within five (5) business days after execution of this Agreement.
2.2 Election of Directors. Currently, Messrs. Lipsky, Winsky, Xxxxxx and
Xxxxx are the directors and officers of the Company. Effective as of
the Closing, the Seller, as owner of 82.3 percent of the outstanding
capital stock of the Company shall cause the Board to elect Xxxxxxx
X. Xxxxxxx and such others as may be selected by him as the
Directors of the Company, and the Company shall have complied in all
material respects with all California laws and the Securities
Exchange Act of 1934 and the rules and regulations promulgated,
thereunder, in electing such Directors.
3. Representations and Warranties of the Seller. The Seller hereby represents
and warrants to Purchaser the following:
3.1 Organization, Good Standing and Qualification. The Seller is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Pennsylvania. The Seller has all
requisite corporate power and authority to execute and deliver this
Agreement, to sell the Shares, and to carry out the provisions of
this Agreement.
3.2 Authorization; Binding Obligations. All corporate action on the part
of the Seller, its officers and directors for the authorization of
this Agreement, the performance of all obligations of the Seller
hereunder at the Closing and the authorization, sale and delivery of
the Shares pursuant hereto has been taken. This Agreement, when
executed and delivered, will be a valid and binding obligation of
the Seller enforceable in accordance with its terms, except (a) as
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application affecting
enforcement of creditors' rights, and (b) general principles of
equity that restrict the availability of equitable remedies. The
sale of
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the Shares is not and will not be subject to any preemptive rights
or rights of first refusal that have not been properly waived or
complied with.
3.3 Liabilities. The Seller, to its knowledge, is not aware of any
liabilities, contingent or otherwise, including for taxes, which are
not disclosed in the audited financial statements for the year-ended
December 31, 2001, and the unaudited financial statements of the
Company for the three-months ending March 31, 2002 (the "Financial
Statements").
3.4 Agreements; Action.
(a) To the knowledge of the Seller, there are no agreements,
understandings or proposed transactions between the Company
and any of its officers, directors, affiliates or any
affiliate thereof;
(b) There are no agreements, understandings, instruments,
contracts, proposed transactions, judgments, orders, writs or
decrees to which the Company is a party or, to the knowledge
of the Seller, by which the Company is bound;
(c) Since December 31, 2001, the Company has not (i) declared or
paid any dividends, or authorized or made any distribution
upon or with respect to any class or series of its capital
stock, (ii) incurred any indebtedness for money borrowed,
(iii) made any loans or advances to any person, or (iv) sold,
exchanged or otherwise disposed of any of its assets or
rights.
3.5 Changes. Since March 31, 2002, there has not been, to the knowledge
of the Seller:
(a) Any change in the assets, liabilities, financial condition,
prospects or operations of the Company from that reflected in
the Financial Statements other than changes in liabilities
such as the cost of telephone and rent incurred in the
ordinary course of business;
(b) Any change in the contingent obligations of the Company by way
of guaranty, endorsement, indemnity, warranty or otherwise;
(c) Any damage, destruction or loss, whether or not covered by
insurance, adversely affecting the properties, business or
prospects or financial condition of the Company;
(d) Any sale, assignment or transfer of any patents, trademarks,
copyrights, trade secrets or other intangible assets of the
Company; or
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(e) Any change in any agreement to which the Company is a party or
by which it is bound which adversely affects the business,
assets, liabilities, financial condition, operations or
prospects of the Company.
3.6 Capitalization. The Company has authorized 100,000,000 shares of
$.001 stated value common stock of which 90,245,360 shares are
issued and outstanding. There are no other equity securities,
including warrants or options, of the Company authorized, issued or
outstanding, and none have been authorized to be issued at any
future date.
3.7 Litigation. To the knowledge of the Seller, except as set forth on
Schedule 3.7 hereto, there is no action, suit, proceeding or
investigation pending or, to the knowledge of the Seller, currently
threatened against the Company. The foregoing includes, without
limitation, actions pending or, to the knowledge of the Seller,
threatened or any basis therefor known by the Seller.
3.8 Taxes. To the knowledge of the Seller, all federal, foreign, state
and local tax returns and information statements required to be
filed by or with respect to the activities of the Company have been
filed for all years and periods for which such returns and
statements were due, including extensions thereof. As of the Closing
Date, the Company will not be delinquent in the payment of any such
tax or assessment, and no deficiencies for any amount of such tax
have been proposed or assessed.
3.9 Brokers' Fees. The Seller (i) has not, directly or indirectly, dealt
with any broker or finder in connection with this transaction and
(ii) has not incurred or will not incur any obligation for any
broker's or finder's fee or commission in connection with the
transactions provided for in this Agreement.
3.10 SEC Filings. To the knowledge of the Seller, the Company has filed
all required reports, schedules, forms, statements and other
documents required to be filed by it with the Securities and
Exchange Commission ("SEC") pursuant to the Exchange Act and the
Securities Act of 1933 (the "Securities Act") (collectively,
including all exhibits thereto, the "SEC Filings"). The SEC Filings,
as of their respective dates (and, if amended or superseded by a
filing prior to the date of this Agreement or the Closing Date, then
on the date of such filing), (i) did not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading, and (ii) complied in all material respects with the
Exchange Act and the Securities Act, as the case may be, and the
rules and regulations thereunder. The Seller will continue to file
all required SEC Filings which may be required to be filed prior to
the Closing.
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4. Representations and Warranties of the Purchaser. Purchaser hereby
represents and warrants to the Seller as follows:
4.1 Requisite Power and Authority. Purchaser has all necessary power and
authority under all applicable provisions of law to execute and
deliver this Agreement and to carry out the provisions hereof and
thereof. All action on Purchaser's part necessary for the
authorization, execution and delivery of this Agreement have been
taken. Upon Purchaser's execution and delivery, this Agreement will
be a valid and binding obligation of Purchaser, enforceable in
accordance with its terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of
general application affecting enforcement of creditors' rights, and
(b) as limited by general principles of equity that restrict the
availability of equitable remedies.
4.2 Investment Representations. Purchaser understands that the Shares
are being offered and sold pursuant to an exemption from
registration contained in the Securities Act based in part upon
Purchaser's representations contained in this Agreement. Purchaser
hereby represents and warrants as follows:
(a) Purchaser Bears Economic Risk. Purchaser has substantial
experience in evaluating and investing in private placement
transactions of securities in companies similar to the Company
so that Purchaser is capable of evaluating the merits and
risks of its investment in the Company and has the capacity to
protect Purchaser's own interests. Purchaser must bear the
economic risk of this investment indefinitely unless and until
the Shares are registered pursuant to the Securities Act, or
an exemption from registration is available;
(b) Acquisition For Own Account. Purchaser is acquiring the Shares
for Purchaser's own account;
(c) Purchaser Can Protect Its Interest. Purchaser represents that
by reason of Purchaser's business or financial experience,
Purchaser has the capacity to protect Purchaser's own
interests in connection with the transactions contemplated in
this Agreement. Further, Purchaser is aware of no requirement
to publish any advertisement in connection with the
transactions contemplated in the Agreement;
(d) Accredited Investor. Purchaser represents that Purchaser is an
"accredited investor" as that term is defined in Rule 501(a)
of Regulation D promulgated under the Securities Act;
(e) Company Information. Purchaser has received and read the SEC
Filings and has had an opportunity to discuss with the Seller
the Company's business, management and financial affairs.
Purchaser has also had the
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opportunity to ask questions of and receive answers from, the
Seller and its management regarding the terms and conditions
of this investment;
5. Closing Conditions and Deliveries. The obligations of Purchaser to
purchase the Shares and of the Seller to sell the Shares shall be subject
to the following:
5.1 Representations and Warranties True; Performance of Obligations. The
representations and warranties made by the Seller in Section 3
hereof shall be true and correct in all material respects as of the
Closing Date, and the Seller shall have performed in all material
respects all obligations and conditions herein required to be
performed or observed by it on or prior to the Closing Date.
5.2 Stock Certificates. The stock certificates representing the Shares
shall have been delivered to the Purchaser.
5.3 Forgiveness of Debt. Prior to the Closing Date, all monies owed to
Seller by the Company shall be forgiven, and the Company shall be
released from any further obligations or liabilities to the Seller.
5.4 Due Diligence. The completion to Purchaser's satisfaction, which
shall not be unreasonable, of an investigation of all documents
pertaining to the Company shall be completed by August 2, 2002.
5.5 Termination Date. The purchase of the Shares must be completed by
August 30, 2002, unless extended by mutual written agreement of the
parties hereto.
5.6 Representations and Warranties True. The representations and
warranties made by Purchaser in Section 4 shall be true and correct
at the date of the Closing, and the Purchaser shall have performed
all obligations and conditions herein required to be performed or
observed by it on or prior to the Closing Date.
5.7 Form 14F-1. The filing of a Form 14F-1 and its delivery, at least
ten (10) days prior to the Closing Date, to all shareholders of
record of the Company's common stock.
5.8 General Release. Delivery of a General Release from the Company in
favor of the Company's existing directors and officers in form and
substance satisfactory to such directors and officers.
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6. Miscellaneous.
6.1 Governing Law. This Agreement shall be governed by, construed in
accordance with, and enforced under, the laws of the state of New
York, without regard to the principles of conflicts of law of such
state.
6.2 Survival. The representations, warranties, covenants and agreements
made herein shall not survive the Closing Date. All statements as to
factual matters contained in any certificate or other instrument
delivered by or on behalf of the Seller pursuant hereto in
connection with the transactions contemplated hereby shall be deemed
to be representations and warranties by the Seller hereunder solely
as of the date of such certificate or instrument.
6.3 Successors and Assigns. This agreement may not be assigned by a
party hereto without the written consent of the other party. Subject
to the foregoing, the provisions hereof shall inure to the benefit
of, and be binding upon, the successors, permitted assigns, heirs,
executors and administrators of the parties hereto.
6.4 Entire Agreement. This Agreement, the exhibits and schedules hereto,
and the other documents delivered pursuant hereto constitute the
full and entire understanding and agreement between the parties with
regard to the subjects hereof and no party shall be liable or bound
to any other in any manner by any representations, warranties,
covenants and agreements except as specifically set forth herein and
therein.
6.5 Severability. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
6.6 Amendment and Waiver. This Agreement may be amended or modified only
upon the written consent of both parties.
6.7 Publicity. All press releases, announcements or other publicity
pertaining to the transactions contemplated hereby must be approved
by the Purchaser and the Seller prior to release, provided that such
approvals may not be unreasonably withheld. The Purchaser and the
Seller each understand and agree that copies of this Agreement may
be filed with the SEC in connection with Form 8-K and Form 13D
filings.
6.8 Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party upon any
breach, default or noncompliance by another party under this
Agreement shall impair any such right, power or remedy, nor shall it
be construed to be a waiver of any such breach, default or
noncompliance, or any acquiescence therein, or of or in any similar
breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent or approval of any kind or
character on any of Purchaser's or Seller's part of any breach,
default
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or noncompliance under this Agreement or any waiver on such party's
part of any provisions or conditions of the Agreement must be in
writing and shall be effective only to the extent specifically set
forth in such writing. All remedies, either under this Agreement, by
law, or otherwise afforded to any party, shall be cumulative and not
alternative.
6.9 Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal
delivery to the party to be notified, (b) when sent by confirmed
telex or facsimile if sent during normal business hours of the
recipient, if not, then on the next business day, or two (2)
business days after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written verification of
receipt. All communications shall be sent to the Seller or Purchaser
at the address set forth on the signature page hereof, or at such
other address as the Seller or Purchaser may designate by ten (10)
days advance written notice to the other party hereto.
6.10 Expenses. The Purchaser and the Seller shall each bear their own
costs and expenses incurred with respect to the negotiation,
execution, delivery and performance of the Agreement provided,
however, that Purchaser shall reimburse Seller for all expenses
relating to the mailing of the Form 14F-1 to the Company's
stockholders.
6.11 Arbitration. Any controversy or claim relating to this Agreement, or
its breach, or to the relationship created by this Agreement, shall
be settled by an arbitration proceeding in New York, New York
pursuant to the rules then prevailing of the American Arbitration
Association. The decision of a majority of the arbitrators shall be
final and binding on all the parties hereto, and judgment may be
entered in any court of competent jurisdiction.
6.12 Titles and Subtitles. The titles of the sections and subsections of
the Agreement are for convenience of reference only and are not to
be considered in construing this Agreement.
6.13 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
6.14 Confidentiality. Subject to Section 6.7 hereof, each party hereto
agrees that, except with the prior written consent of the other
party, it shall at all times keep confidential and not divulge,
furnish or make accessible to anyone any confidential information,
knowledge or data concerning or relating to the business or
financial affairs of the other parties to which such party has been
or shall become privy by reason of this Agreement, discussions or
negotiations relating to
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this Agreement, the performance of its obligations hereunder or the
ownership of the Shares purchased hereunder. The provisions of this
Section 6.14 shall be in addition to, and not in substitution for,
the provisions of any separate nondisclosure agreement executed by
the parties hereto.
6.15 Further Assurances. At any time and from time to time after the
Closing Date, each party will execute such additional instruments
and take such actions as may be reasonably requested by the other
party to carry out the intent and purposes of this Agreement.
7. Indemnification.
(a) The Seller shall indemnify and hold harmless the Purchaser,
its subsidiaries, employees, officers and directors and the
Company and its new officers and directors against any losses,
damages, claims, costs, expenses, interest, awards, judgments,
including reasonable attorneys' fees and expenses and costs of
investigation, but excluding consequential damages, punitive
damages, lost profits, diminution in value, damage to
reputation or the like (collectively "Losses") suffered or
incurred by them arising out of or resulting from (i) the
breach of any representation or warranty made by the Seller in
this Agreement, or (ii) any obligations or payables of the
Company existing at the Closing Date or arising from events
prior to the Closing Date, including any threatened claims or
actions regarding a patent infringement against the Company.
(b) The Purchaser shall indemnify and hold harmless the Seller,
its subsidiaries, employees, officers and directors and the
Company's prior officers and directors against any Losses
suffered or incurred by them arising out of or resulting from
(i) the breach of any representation or warranty made by the
Purchaser in this Agreement, or (ii) any obligations or
payables of the Company arising from events after the Closing
Date.
[SIGNATURE PAGE FOLLOWS ON NEXT PAGE]
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[SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have executed this SECURITIES
PURCHASE AGREEMENT as of the date set forth in the first paragraph hereof.
FRANKLIN ELECTRONIC PUBLISHERS, INC.,
"SELLER" a Pennsylvania corporation
By:
--------------------------------
Chief Executive Officer
Address:
Franklin Electronic Publishers, Inc.
Xxx Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
BELLE GROUP, LTD.,
"PURCHASER" a Nevada Limited Liability Company
By:
--------------------------------
Yale Xxxxx, Manager
Address:
Belle Group, Ltd.
00000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
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SCHEDULE 3.7
As reflected in the Company's SEC filings, in December 1999 the Company was
notified by the patent holder of a filed lawsuit in the Unites States District
Court for the District of Massachusetts (Civil Action No. 99-CV-12468) alleging
infringement of U.S. Patent 5,969,496. No further action has been taken by the
patent holder.
