EXHIBIT 2.1
STOCK EXCHANGE AGREEMENT
dated as of August 1, 2001
by and among
the Parties listed on Appendix A
and
INTERALLIED GROUP, INC.
ACQUISITION OF 7,905,414 SHARES
OF COMMON STOCK, PAR VALUE $0.01
STOCK EXCHANGE AGREEMENT
This Stock Exchange Agreement (the "Agreement"), dated as of
August 1, 2001, by and among the parties listed on Appendix A hereto
(individually, a "Shareholder" and collectively, the "Shareholders"), and
INTERALLIED GROUP, INC., a corporation organized under the laws of the State of
Nevada (the "Company").
W I T N E S S E T H:
WHEREAS, the Shareholders and the Company desire to enter into a
tax-free reorganization transaction under Section 368(a) of the Internal Revenue
Code of 1986, as amended, pursuant to which the Company transfers to the
Shareholders, upon the terms and conditions set forth herein, 7,905,414 shares
(the "Shares") of common stock of the Company, $0.01 par value (the "Common
Stock") in exchange for the number of shares of common stock of Pilot
Therapeutics, Inc. ("PTI"), $0.001 par value per share (the "PT Common Stock"),
set forth next to the name of each Shareholder on Appendix A hereto;
NOW THEREFORE, for the consideration herein stated and in further
consideration of the premises and the mutual agreements, covenants and
provisions herein contained, the parties hereto agree as follows:
1. The Transaction - Exchange of Shares.
(a) Transfer of Shares. Subject to the terms and
conditions herein contained, including the conditions set forth in
Section 6 hereof, and in reliance upon the Company's and Shareholders'
representations as set forth below, the Company agrees to transfer to
each Shareholder, and each Shareholder agrees to acquire from the
Company, on the Closing Date (as defined below), the number of Shares
set forth next to the name of each Shareholder on Appendix A hereto,
free and clear of any lien, encumbrance, equity or adverse claim, all
of which Shares, upon the issuance thereof in accordance herewith,
shall be fully paid and non-assessable.
(b) Exchange of Shares. As against the transfer by the
Company of the Shares on the Closing Date, each Shareholder agrees to
exchange the number of shares of PT Common Stock set forth next to the
name of each Shareholder on Appendix A hereto.
(c) Company Transaction. On or prior to the Closing
Date, the Company shall enter into one or more transactions
(collectively, "Company Transactions") pursuant to which its existing
obligations set forth on Appendix B will either be terminated or
assigned to third parties, including the assignment of certain
obligations and rights. The assignees of the Company's obligations
shall be issued the number of shares of Common Stock of the Company
set forth on Appendix B in consideration for such assignees'
assumption of the Company's obligations. All such
assignees shall jointly and severally agree to indemnify and hold the
Company harmless from all claims, liabilities and expenses arising
from the assumed obligations.
2. The Closing.
(a) Time and Place of Closings. The consummation of the
transfer of the Shares shall occur at a closing (the "Closing") to be
held at the offices of Hunton & Xxxxxxxx, Bank of America Plaza, 000
X. Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, X.X. 00000, at 10:00 A.M. on
August 24, 2001, or such other place, time and date as may be mutually
agreed upon by the Shareholders and the Company. Such date is herein
sometimes referred to as the "Closing Date".
(b) Action to Be Taken. Upon satisfaction of the
conditions of closing set forth in this Agreement, (i) the Company
shall execute and deliver to each Shareholder a duly executed stock
certificate, duly registered in the Shareholder's or the Shareholder's
designee name and dated the Closing Date, evidencing the Shares and
(ii) each Shareholder shall execute and deliver to the Company the
number of shares of PT Common Stock set forth next to each
Shareholder's name on Appendix A hereto along with an appropriately
executed stock power endorsed in the name of the Company.
(c) Termination of Amended and Restated Shareholders
Agreement and Investor Rights Agreement. Each Shareholder agrees that
upon consummation of the Closing, the Amended and Restated
Shareholders Agreement, dated as of February 28, 2001, among PTI and
the Shareholders (the "Shareholders Agreement") and the Amended and
Restated Investor Rights Agreement, dated as of December 11, 1998
among PTI and the Shareholders parties thereto (the "IR Agreement")
shall terminate and be of no further force and effect.
3. Representations and Warranties of the Company. The Company
represents and warrants to each Shareholder as follows:
(a) Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Nevada and is duly qualified to do business and in good standing in
each jurisdiction where such qualification is required. The Company has
all requisite corporate power and authority to conduct its business as
presently being conducted and as proposed to be conducted and to own
properties. The Company has all requisite corporate power and authority
to execute, deliver and perform all of its obligations under this
Agreement.
(b) Authority. The execution and delivery by the Company of
this Agreement, the performance of its obligations hereunder and the
consummation by the Company of the transactions contemplated or
referenced hereby:
(i) have been duly authorized by all necessary
corporate action, do not contravene any provision of the
Company's charter or by-laws, and do not require
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the Company to obtain any consents, approvals or authorizations which
have not been obtained;
(ii) do not violate any provision of any law, rule or
regulation;
(iii) do not and will not result in a breach or constitute a
default under any material agreement to which the Company is a party or
by which any of its properties are bound, including, without
limitation, any indenture, loan or credit agreement, lease, debt
instrument or mortgage; and
(iv) do not result in or require the creation or imposition
of any mortgage, deed of trust, pledge, lien, security interest or
other charge or encumbrance of any nature upon or with respect to any
of the Company's properties.
This Agreement has been duly executed and delivered by the Company and
constitutes the legal, valid and binding obligation of the Company enforceable
in accordance with its terms, subject to the effects of bankruptcy, insolvency,
reorganization, receivership, moratorium and other similar laws now or hereafter
in effect relating to or affecting creditors' rights or remedies generally.
(c) No Default. The Company (i) is not in material default under
any law, rule or regulation, order, writ, judgment, injunction, decree,
determination, award, indenture, loan or credit agreement, lease, debt
instrument or mortgage or any other material agreement of the Company, (ii) is
not aware of any fact, circumstance, condition or other state of affairs that,
with the giving of notice or the lapse of time, will constitute such material
default, and (iii) will not be in any such material default by virtue of the
transactions contemplated hereby.
(d) The Shares.
(i) The Shares will have been duly and validly authorized by
all necessary action on the part of the Company as of the Closing Date.
(ii) When issued and delivered pursuant to this Agreement,
the Shares will be duly and validly issued, fully paid and non-
assessable.
(iii) The issuance, sale and delivery of the Shares are not
subject to any preemptive right of stockholders of the Company arising
under law or the Certificate of Incorporation or By-laws or any
contractual right of first refusal or other right in favor of any
person.
(e) Authorized Capital. The authorized capital stock of the Company
consists of 20,000,000 shares of Common Stock and 5,000,000 shares of Preferred
Stock. Of such authorized capital stock, 1,863,537 shares of Common Stock and no
shares of
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Preferred Stock were validly issued and outstanding on the date hereof. There
are no existing options, warrants, contracts, calls, commitments, demands or
other agreements of any character to which the Company is a party relating to
the authorized and issued or unissued capital stock of the Company. All of the
Common Stock which is issued and outstanding is fully paid and non-assessable.
At no time has the Company issued any capital stock not duly authorized on the
date of issuance thereof. All outstanding shares of the Company's Common Stock
have been issued in compliance with all applicable federal and state securities
laws.
(f) Subsidiaries, Affiliates and Joint Ventures. After the
completion of the Company Transactions, on the Closing Date the Company shall
not own or control, directly or indirectly, any interest in, or any commitment
to acquire any such interest in, any corporation, firm, partnership or
organization and shall not be a party to any joint venture or similar
affiliation.
(g) Consents and Approvals. The execution and delivery by the
Company of this Agreement, the performance by the Company of its obligations
hereunder and the consummation by the Company of the transactions contemplated
hereby do not require the Company to obtain any consent, approval or action of,
or make any filing with or give any notice to, any corporation, person or firm
or any public, governmental or judicial authority.
(h) Litigation. There is no action, suit, claim, proceeding or
investigation pending or to the best of the Company's knowledge, threatened
against the Company that could either individually or in the aggregate have a
material adverse effect on the Company, or result in any change in the current
equity ownership of the Company. After reasonable inquiry of its employees and
consultants who have provided services to the Company during the 12-month period
prior to the date hereof, the Company is not aware of any fact which might
result in or form the basis for any such action, suit, claim, proceeding or
investigation. The Company is not a party to or subject to the provisions of any
order, writ, injunction, judgment or decree of any court or governmental agency
or instrumentality (whether federal, state, local or foreign) that could have a
material adverse effect on the Company, or result in any change in the current
equity ownership of the Company. There is no action, suit, proceeding or
investigation by the Company currently pending or that the Company intends to
initiate.
(i) Intellectual Property. The Company does not own any licenses,
patents (and applications therefor), patent disclosures, trademarks, service
marks, trade names, copyrights (and applications therefor), inventions,
discoveries, processes, know-how, scientific, technical, engineering and
marketing data, formulae and techniques (collectively, the "Intellectual
Property"). The conduct of the Company's business prior to the Closing Date has
not materially conflicted with or infringed on the patents, trademarks, service
marks, trade names, copyrights, trade secrets, proprietary rights and processes
of any other person. The Company has not granted any options, licenses or
agreements of any kind relating to any Intellectual Property, nor is the Company
bound
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by or a party to any options, licenses or agreements with respect to the
Intellectual Property of any other person or entity. The Company is not
currently obligated or under any existing liability to make royalty or other
payments to any owner of, licenser of, or other claimant to, any patent,
trademark, service names, trade names, copyrights, or other intangible asset,
with respect to the use thereof or in connection with the conduct of its
business as conducted prior to the Closing, or otherwise. The Company has not
received any claim or any written communications alleging that the Company has
violated or would violate any of the Intellectual Property of any other person
or entity. The Company is not aware that any of its employees is obligated under
any contract (including licenses, covenants or commitments of any nature) or
other agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would materially interfere with the use of the
employee's best efforts to promote the interests of the Company or that would
conflict with the Company's business. None of the execution or delivery of this
Agreement or any agreement contemplated hereby, or the operation of the
Company's business by the employees of the Company, or the conduct of the
Company, will conflict with or result in a breach of the terms, conditions or
provisions of or constitute a default under, any contract, covenant or
instrument under which any of such employees is so obligated.
(j) Agreements; Action. The Company is not a party to, or in any way
obligated under, nor is any property or asset of the Company subject to, any
contract, lease or other obligation, absolute or contingent. The Company has not
engaged in the past twelve months in any discussion with any representative of
any corporation or corporations regarding the consolidation or merger of the
Company with or into any such corporation or corporations, regarding the sale,
conveyance or disposition of all or substantially all of the assets of the
Company or a transaction in which more than 50% of the voting power of the
Company is disposed of or regarding any other form of acquisition, liquidation,
dissolution or winding up of the Company.
(k) Properties. The Company does not own or lease any properties
or assets.
(l) Licenses. The Company does not have any licenses and permits
(federal, state, foreign and local). Prior to the Closing, no violations have
been communicated to the Company in respect of any licenses or permits and no
proceeding is pending or, to the Company's knowledge, threatened toward the
revocation of any such licenses or permits.
(m) Financial Statements. The Company has delivered to the
Shareholders the audited consolidated balance sheet of the Company and
subsidiaries as of December 31, 2000 and the related audited consolidated
statements of operations, stockholders' equity (deficiency) and cash flows for
the years ended December 31, 2000 and 1999 and the unaudited condensed
consolidated balance sheet of the Company and subsidiaries as of June 30, 200l
and the related unaudited condensed consolidated statements of operations and
cash flows for the quarter ended June 30, 200l (together, the "Financial
Statements"). The Financial Statements present fairly the consolidated financial
position of the Company and subsidiaries as at the respective dates thereof and
the related
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statements of operations, stockholders' equity (deficiency) and cash flows for
the years ended on such dates fairly present the results of operations,
stockholders' equity and accumulated deficit, and cash flows for the respective
periods covered thereby. The Financial Statements, including the schedules and
notes thereto, were prepared in accordance with generally accepted accounting
principles ("GAAP") consistently applied throughout the periods indicated.
The books and records of the Company fairly reflect the assets,
liabilities and operations of the Company and the Financial Statements are in
conformity therewith.
Except as disclosed in Schedule 3(m) or as contemplated in this
Agreement, since the respective dates of the Financial Statements, there has
been no material adverse change in the financial condition or operations of the
Company nor has there been any event which has occurred on or prior to the date
hereof which in any way has or which will have such a material adverse effect.
(n) The Company is not a guarantor or indemnitor of any indebtedness
of any other person, firm or corporation. The Company maintains and will
continue to maintain a standard system of accounting established and
administered in accordance with GAAP.
(o) Undisclosed Liabilities. Except as and to the extent reflected
or reserved against in the Financial Statements, the Company did not have, as of
the respective dates of the Financial Statements, any material debts,
liabilities or obligations of any nature, whether accrned, absolute, contingent
or otherwise, and whether due or to become due, including, without limitation,
liabilities or obligations on account of taxes or other governmental charges or
penalties, interest or fines thereon or in respect thereof. Since the respective
dates of the Financial Statements, the Company has not incurred any liabilities
or obligations outside the ordinary course of business. The Company does not
know of any basis for the assertion against the Company of any debt, liability
or obligation not fully reflected or reserved against in the Financial
Statements.
(p) Intercompany and Affiliate Transactions; Insider Interests.
Except as disclosed in the Company's 10-KSB for the fiscal year ended December
31, 2000 and 10-QSB for the quarters ended March 31, 200l and June 30, 2001
filed by the Company with the Securities and Exchange Commission, there are no
material transactions, intercompany agreements or arrangements of any kind,
direct or indirect, between the Company and any director, officer, employee,
stockholder or relative or affiliate thereof, including, without limitation,
loans, guarantees or pledges to, by or for the Company from, to, by or for any
of such persons, that will be in effect on the Closing Date.
(q) Taxes. The Company has
(i) filed all tax returns required to be filed by any
jurisdiction to which it is or has been subject,
6
(ii) paid in full all taxes due and all taxes claimed to be
due by each such jurisdiction, and any interest and penalties with
respect thereto, subject to audit by the taxing authority of such
jurisdiction,
(iii) fully accrued on its books all taxes for any period
which are not yet due, and
(iv) made timely payments of the taxes required to be
deducted and withheld from the wages paid to its employees.
All federal, state, county and local tax returns, schedules, declarations and
other tax related documents filed by the Company correctly reflect income,
expense, deductions, credits and loss carryovers of the Company. The Company has
not received any notice of deficiency or assessment or proposed deficiency or
assessment from any federal, state, local or foreign taxing authority which has
not been paid. There are no agreements, consents or waivers by the Company for
the extension of the time for the assessment of any taxes or deficiencies
against the Company or with respect to its operations or assets, and no power of
attorney granted by the Company with respect to any matter relating to taxes is
currently in force. The Company is not a party to any agreement pursuant to the
Internal Revenue Code of 1986, as amended, to be treated as a Subchapter S
Corporation.
(r) Insurance. The Company has no contracts of insurance in force
on the Closing Date.
(s) Employee Benefit Plans. The Company does not maintain or
contribute to, and has not heretofore maintained or contributed to, any
"employee benefit plan", including, but not limited to, any option, bonus,
percentage compensation, profit sharing, deferred compensation, retirement,
pension or union plan, or any other agreement, policy or practice providing
pension or welfare benefits to current or former employees of the Company.
(t) Environmental Matters. Notwithstanding anything to the contrary
contained in this Agreement and in addition to the other representations and
warranties contained herein:
(i) The Company and its respective operations are in
material compliance with all applicable laws, regulations and other
requirements of governmental or regulatory authorities or duties under
the common law relating to toxic or hazardous substances, wastes,
pollution or to the protection of health, safety or the environment
(collectively, "Environmental Laws") and has obtained and maintained in
effect all licenses, permits and other authorizations or registrations
(collectively "Environmental Permits") required under all Environmental
Laws and are in material compliance with all such Environmental
Permits.
7
(ii) The Company has not performed or suffered any act which
could give rise to, or has otherwise incurred, liability to any person
(governmental or not) under the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. (S) 9601 et seq. ("CERCLA"),
-- ---
or any other Environmental Laws, nor has the Company received notice of
any such liability or any claim therefor or submitted notice pursuant
to Section 103 of CERCLA to any governmental agency with respect to any
of its assets.
(iii) To the best knowledge of the Company, no hazardous
substance, hazardous waste, contaminant, pollutant or toxic substance
(as such terms are defined in any applicable Environmental Law and
collectively referred to herein as "Hazardous Materials") has been
released, placed, dumped or otherwise come to be located on, at,
beneath or near any of the assets or properties owned or leased by the
Company or any surface waters or groundwaters thereon or thereunder in
violation of any Environmental Laws or that could subject the Company
to liability under any Environmental Laws.
(iv) The Company does not own or operate, and has never
owned or operated, aboveground or underground storage tanks.
(v) With respect to any or all of the real properties
leased by the Company, (1) there are no asbestos-containing materials,
urea formaldehyde insulation, polychlorinated biphenyls or lead-based
paints present at any such properties, and (2) there are no wetlands,
as defined under any Environmental Law, located on any such properties.
(vi) None of the real properties leased by the Company (1)
has been used or is now used by the Company for the generation,
transportation, storage, handling, treatment or disposal of any
Hazardous Materials (other than de minimis quantities of Hazardous
Materials used in the normal course of the Company's business and in
compliance with all applicable Environmental Laws), or (2) is
identified on a federal, state or local listing of sites which require
or might require environmental cleanup.
(vii) To the best of the Company's knowledge, no condition
exists on any of the real properties leased by the Company that upon
the failure to act, the passage of time or the giving of notice would
give rise to liability under any Environmental Law.
(viii) To the best of the Company's knowledge, there are no
ongoing investigations or negotiations, pending or threatened
administrative, judicial or regulatory proceedings, or consent decrees
or other agreements in effect that relate to environmental conditions
in, on, under, about or related to the Company, its operations or the
real properties leased by the Company.
8
(ix) Neither the Company nor its operations is subject to
reporting requirements under the federal Emergency Planning and
Community Right-to-Know Act, 42 U.S.C. (S) 11001 et seq., or analogous
-- ---
state statutes and related regulations.
(u) Labor Relations. The Company is not bound by or subject to any
written or oral contract, commitment or arrangement with any labor union,
and no labor union has requested or, to the knowledge of the Company, has
sought to represent any of the employees of the Company.
(v) Compliance with Applicable Laws. The operations of the Company
have been conducted in accordance with all applicable laws, regulations,
orders and other requirements of all courts and other governmental or
regulatory authorities having jurisdiction over the Company, and its
assets, properties and operations. The Company has not received notice of
any violation of any such law, regulation, order or other legal
requirements, or is in default with respect to any order, writ, judgment,
award, injunction or decree of any federal, state or local court or
governmental or regulatory authority or arbitrator, domestic or foreign,
applicable to the Company or any of its assets, properties or operations.
The Company has not knowledge of any proposed change in any such laws,
rules or regulations (other than laws of general applicability) that would
adversely affect the transactions contemplated by this Agreement.
(w) No Material Adverse Change. Except as contemplated by this
Agreement, since December 31,2000, there has been no change in the
business, properties, assets, condition (financial or otherwise),
prospects, liabilities or operations of the Company, which, individually or
in the aggregate has had, or is reasonably likely to have, a material
adverse effect on the business or financial condition of the Company. The
Company is not aware of any fact or facts which, individually or in the
aggregate, is or are reasonably likely to have a material adverse effect on
the business or financial condition of the Company.
(x) Accuracy of Information. None of the representations, warranties
or statements of the Company contained in this Agreement, or in the
schedules or exhibits hereto, contains any untrue statement of a material
fact or omits to state any material fact necessary in order to make any of
such representations, warranties or statements not misleading. All
information relating to the Company which is known or would on reasonable
inquiry be known to the Company or to the Company's directors or officers
and which may be material to a purchaser for value of the Shares has been
disclosed in writing to the Shareholders and any such information arising
on or before the Closing Date will forthwith be disclosed in writing to the
Shareholders.
(y) Reports. The Company SEC Reports, as hereinafter defined,
complied, as of their dates of filing, in all material respects with all
applicable requirements of the Securities Act of 1993 (the "Act"), the
Exchange Act of 1934 (the "Exchange Act") and the rules and regulations of
the Securities and Exchange Commission ("SEC"). As of
9
their respective dates, none of such forms, reports or documents, including
without limitation any financial statements or schedules included therein,
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 not misleading in light of the circumstances under
which they were made. Each of the balance sheets (including the related
notes) included in the Company SEC Reports fairly presented the
consolidated financial position of the Company as of the respective dates
thereof, and the other related financial statements (including the related
notes) included therein fairly presented the results of operations and cash
flows of the Company for the respective fiscal periods or as of the
respective dates set forth therein. Each of the financial statements
(including the related notes) included in the Company SEC Reports (i)
complied as to form with the applicable accounting requirements and rules
and regulations of the SEC, and (ii) was prepared in accordance with GAAP
consistently applied during the periods presented. All material agreements,
contracts and other documents required to be filed as exhibits to any of
the Company SEC Reports have been so filed by the Company. "Company SEC
Reports" shall mean (a) the Company's Annual Reports on Form 10-KSB for the
fiscal years ended December 31,200O and 1999, and (b) all documents filed
by the Company with the SEC pursuant to Sections 13(a) and 13(c) of the
Exchange Act, any definitive proxy statements so filed pursuant to Section
14 of the Exchange Act and any report filed pursuant to Section 15(d) of
the Exchange Act and all other reports and registration statements under
the Act filed by the Company with the SEC, in each such case since December
31, 1999.
4. Representations and Warranties of the Shareholders. Each
Shareholder represents and warrants that:
(a) Necessary Authorization and Approval. The Shareholder has full
corporate or individual, as the case may be, power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. All acts and other proceedings required to be taken by or on the
part of the Shareholder to authorize it to carry out this Agreement and the
transactions contemplated hereby have been duly and properly taken. This
Agreement has been duly executed and delivered by the Shareholder and
constitutes the legal, valid and binding obligation of the Shareholder in
accordance with its terms, subject to the effects of bankruptcy,
insolvency, reorganization, receivership, moratorium and other similar laws
now or hereafter in effect relating to or affecting creditors' rights or
remedies generally. Neither the execution, delivery or performance of this
Agreement nor the consummation of the transactions contemplated hereby is
prohibited by, or requires the Shareholder to obtain any consent,
authorization, approval or registration under, any law, rule or regulation,
other than as contemplated hereby, or any judgment, order, writ, injunction
or decree, which is binding on the Shareholder or the terms of any contract
to which the Shareholder is a party.
(b) Securities Laws; Restricted Securities. Each Shareholder has been
advised that none of the Shares have been registered under the Act or applicable
state securities laws. Each Shareholder realizes that the Shares have not been
registered under
10
the Act, are characterized as "restricted securities" under the Act and,
therefore, cannot be sold or transferred unless subsequently registered
under the Act or an exemption from such registration is available. Each
Shareholder's financial condition is such that it is unlikely that it would
need to dispose of any of the Shares, in the foreseeable future. In this
connection, each Shareholder represents that it is familiar with Rule 144
of the SEC, as presently in effect, and understands the resale limitations
imposed thereby and by the Act.
(c) Acquisition Entirely for Own Account. The Shares will be acquired
by each Shareholder for investment for the Shareholder's own account, not
as a nominee or agent, and not with a view to reselling, granting any
participation in or otherwise distributing any of the Shares in a manner
contrary to the Act or any applicable federal or state securities law, and
no Shareholder has any contract, undertaking, agreement or arrangement with
any person to sell, transfer or grant participations to such person or to
any third person with respect to the Shares. Notwithstanding the foregoing,
each Shareholder may sell, transfer or assign all or any part of the Shares
to an affiliate.
(d) Due Diligence. Subject to Section 7(a), each Shareholder has been
solely responsible for its own due diligence investigation of the Company
and its analysis of the merits and risks of the investment made pursuant
to this Agreement, and is not relying on anyone else's analysis or
investigation of the merits and risks of the Shares other than
professional advisors employed specifically by the Shareholder to assist
the Shareholder.
(e) Access to Information. Each Shareholder has been given access to
information regarding the Company, including, in particular, the current
financial condition of the Company, and the risks associated therewith, and
has utilized such access to its satisfaction for the purpose of obtaining
information about the Company.
(f) Sophistication. Each Shareholder is a sophisticated investor, is
able to fend for itself in the transactions contemplated by this Agreement,
and has such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of the prospective
investment in the Shares.
(g) Suitability. Each investment in the Shares is suitable for each
Shareholder based upon its investment objectives and financial needs, and
each Shareholder has adequate net worth and means for providing for its
current financial needs and contingencies and has no need for liquidity of
investment with respect to the Shares. Each Shareholder's overall
commitment to investments that are illiquid or not readily marketable is
not disproportionate to its net worth, and investment in the Shares will
not cause such overall commitment to become excessive.
(h) Professional Advice. Each Shareholder has obtained its own
professional advice with respect to the risks inherent in the business of
the Company and an investment in the Shares, the condition (financial and
otherwise) of the Company and the
11
suitability of the investment in the Shares in light of the Shareholder's
financial condition and investment needs.
(i) Ability to Bear Risk. Each Shareholder is in a financial position
to purchase and hold the Shares and is able to bear the economic risk and
withstand a complete loss of its investment in the Shares.
(j) High Degree of Risk. EACH SHAREHOLDER RECOGNIZES THAT AN
INVESTMENT IN THE SHARES INVOLVES A HIGH DEGREE OF RISK.
(k) Stock Legend. Each Shareholder understands that the certificates
evidencing the Shares will bear a legend substantially as follows: "THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THE SHARES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE SECURITIES ACT OF
1933 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED."
(l) Accreditation. Each Shareholder represents and warrants that it
is an "accredited investor", as defined in Rule 501 under the Act.
(m) Organization. PTI is a corporation duly organized, validly
existing and in good standing under the laws of the State of North Carolina
and is duly qualified to do business and in good standing in each
jurisdiction where such qualification is required. PTI has all requisite
corporate power and authority to conduct its business as presently being
conducted and as proposed to be conducted and to own properties.
(n) Financial Budget and Projections. To the best knowledge of the
Shareholders, the summary of PTI's financial budget and projections for its
fiscal year ending December 3 1,200 1 delivered to the Company prior to the
execution and delivery of this Agreement is reasonable and consistent with
PTI's current and historical performance.
5. Delivery of Documentation by the Company to the Shareholders.
(a) Current Information to be Supplied. The Company has
delivered or made available to the Shareholders the following documents
relating to the Company and the business conducted by the Company. The
Company represents and warrants that such documents and schedules of
information are true, correct and complete.
(i) Charter and By-laws. Copies of (a) the Certificate of
Incorporation, as amended to date, of the Company, certified by the
Secretary of
12
State of Nevada and (b) the By-laws of the Company, certified as true,
correct and complete by an appropriate officer of the Company.
(ii) Minutes. Minutes of all meetings of, or other evidence of
action taken by, the shareholders, the Board of Directors or any
committee of the Board of Directors of the Company since the formation
of the Company.
(iii) Company SEC Reports. Copies of the Company's 10-KSB for
the fiscal year ended December 31,200O and 10-QSB for the quarters
ended March 31,200l and June 30,2001.
(b) Pre-Closing Agreements and Rights. The Company has
delivered or made available to the Shareholders the following documents and
schedules of information relating to the Company and the business of the
Company as conducted during the period prior to the Closing. The Company
represents and warrants that such documents and schedules of information
are true, correct and complete. The Company further represents, warrants
and covenants that, on or prior to the Closing the Company will have
terminated or assigned, in either case, without further recourse to the
Company, representation, warranty or liability, all agreements and
obligations described in the schedules and transferred, sold or otherwise
disposed of all rights, properties, interests and agreements described in
the schedules, without further recourse to the Company, representation,
warranty or liability with respect thereto, except such as the Shareholders
may expressly agree in writing may be retained by the Company, it being
understood that such agreement by the Shareholders may be given or withheld
by the Shareholders in their sole and absolute discretion. The Company
acknowledges that such terminations, assignments, transfers and
dispositions are a condition to the obligations of the Shareholders on the
Closing Date.
(i) Salaries and Employment Agreements; Employee Benefits. As
of the Closing Date, the Company will have no liabilities (i) to any
current or former directors, officers, employees or agents of, or any
consultant to, the Company or (ii) under any defined benefit and
defined contribution pension or retirement plan, stock ownership plan,
employment or consulting agreement, executive compensation plan, bonus
plan, incentive compensation plan or arrangement, deferred compensation
agreement or arrangement, agreement with respect to temporary employees
or leased employees, vacation pay, sickness, disability or death
benefit plan (whether provided through insurance, on a funded or
unfunded basis or otherwise), employee stock option or stock purchase
plan, severance pay plan, arrangement or practice, change in control
agreement, retention plan or agreement, retiree medical or life
insurance benefits plan, each other employee benefit plan, program or
arrangement ("Benefit Plans");
(ii) Insurance. As of the Closing Date, the Company will have
no insurance policies pertaining to the operations or business of the
Company currently in effect.
13
(iii) Leased Property. A list (referred to as Schedule
5(b)(iii)) together with copies if written or descriptions if oral of
all leases of real property and all material leases of personal
property to which the Company is a party, either as lessor or lessee,
including location or description of property; name of lessor;
termination date or notice requirement with respect to termination;
and annual rental and terms of payment.
(iv) Real Property. A list and summary description (referred to
as Schedule 5(b)(iv)) of all real property owned by the Company or
which the Company has agreed to purchase or may be obligated to
purchase, including a description of all liens, mortgages, security
interests, rights of way, easements, restrictions, covenants,
contracts, agreements and other encumbrances, if any, affecting the
title of the Company to such real property, together with copies of
all deeds, surveys, documents of title, policies of title insurance,
title opinions and appraisals relating to such real property.
(v) Other Assets. A list (referred to as Schedule 5(b)(v)) of
all items of machinery, equipment, furniture, fixtures and leasehold
improvements having a cost per item in excess of $100 as recorded in
the books of account and records of the Company and reflected in the
Financial Statementss, and all additions made thereafter having a cost
per item in excess of $100.
(vi) Subsidiaries; Joint Ventures. A list (referred to as
Schedule 5(b)(vi)) of any stock or equity interest of the Company in,
or any commitment to acquire any such interest in, any corporation,
firm, partnership or organization, together with a list and copies of
any agency, joint venture, partnership or other agreements involving a
similar affiliation to which the Company is a party.
(vii) Contracts. A list (referred to as Schedule 5(b)(vii)),
together with copies if written or descriptions if oral of each
written or oral contract or agreement other than those described in
one of the other schedules delivered pursuant hereto which (A) will
involve from and after the respective dates of the Financial
Statements a present commitment for the receipt or expenditure by the
Company under any of the foregoing, of monies or value or more during
the current fiscal year or any future fiscal year, including a list of
all outstanding purchase and sale orders and commitments for personal
property and services (but excluding certain purchase and sale orders
or commitments for personal property or services entered into in the
ordinary course of business since the respective dates of the
Financial Statements) of the Company; or (B) is expected to involve
investment by any third party in the Company on or after the date
hereof.
(viii) Bank Accounts and Powers of Attorney, etc. A list
(referred to as Schedule 5(b)(viii)) of the name and address of each
bank, together with the name and number of each account, in which the
Company has an account or safe-deposit box, the names of all persons
authorized to draw thereon or to have
14
access thereto, and the names of any persons holding powers of
attorney with respect to the business of the Company and a summary of
the terms thereof.
(ix) Loan Agreements; Liens. A list (referred to as Schedule
5(b)(ix)) together with copies of: (A) agreements, notes, instruments
or other documents relating to indebtedness of or to the Company
(other than open accounts payable), or money borrowed, or money
loaned, or issued by or to the Company in satisfaction of obligations
of or to the Company, including all mortgages, loan, credit, surety,
guarantee, and lease-purchase arrangements or other financing
agreements to which the Company is a party; and (B) all conditional
sales contracts, chattel mortgages and other security agreements or
arrangements with respect to personal property used or owned by the
Company.
(x) Customers. A list (referred to as Schedule 5(b)(x)) of all
customers of the Company which purchased goods or services involving
revenue (before returns and allowances) to the Company to date during
the current fiscal year, the revenues contributed by such customers to
date during the current fiscal year and the forecasted revenues
expected to be contributed by such customers during the current fiscal
year, together with a description of any arrangements made by or on
behalf of the Company or any of its respective officers, directors or
stockholders in connection with the entrance into a contract with such
customers providing for (1) the payment of any consideration
(including, without limitation, shares of capital stock of the Company
or options, warrants or other similar rights to acquire capital stock
of the Company or options or warrants therefor) to a customer or its
officers, directors, stockholders or employees or (2) the sale to a
customer or its officers, directors, stockholders or employees of
shares of capital stock of the Company or options, warrants or other
similar rights to acquire capital stock or options or warrants
therefor. If any of such customers has furnished the Company with
notice that it intends to terminate or reduce, or has terminated or
reduced, its purchases from the Company with respect to an existing
contract or understanding, Schedule 5(b)(x) shall identify such
customers.
(xi) Product Complaints. A list (referred to as Schedule
5(b)(xi)) of all written product complaints (except routine service
complaints) or letters from dissatisfied customers or users received
by the Company, including, without limitation, any notice of loss of
quality control approvals and the current status of such notices,
together with copies of all such written non-routine service
complaints.
(xii) Trademarks, Patents, etc. A list (referred to as Schedule
5(b)(xii)) of all trademarks, service marks, trademark registrations
and applications for registration thereof, trade names, copyrights,
copyright registrations and applications for registration thereof,
inventions, trade secrets, patents. patent rights, patent applications
and patent licenses owned or used by, or licensed to, the Company (if
used in the business of the Company) by any of the
15
Company's shareholders. There shall be included in Schedule 5(b)(xii)
the date of expiration of any such patents or trademark registrations
of the Company, the name of the lincensor of, and the date of
expiration of any license under, any thereof, any known information
relating to possible infringement with respect to any of the foregoing
and a list of all licenses of the Company with respect to any of the
foregoing.
(xiii) Litigation and Certain Other Matters. A list together
with a summary (referred to as Schedule 5(b)(xiii)) of all litigation,
arbitration or administrative proceedings and governmental
investigations pending or, to the knowledge of the Company, threatened
against the Company or as to which the Company is a party.
(xiv) Certain Transactions. A list and description (referred to
as Schedule 5(b)(xiv)), together with a copy of any agreement, of all
transactions or any presently proposed transactions to which the
Company or any of its directors, officers or shareholders (or any
relative or spouse of any director, officer or shareholder of the
Company, or any relative of such spouse or my corporation,
partnership, trust or other entity in which any such director,
officer, shareholder, relative or spouse had or has a beneficial
interest) was or is to be a party.
(xv) Indemnification Agreements. A list (referred to as
Schedule 5(b)(xv)) and copies of any indemnification agreements and
insurance policies relating thereto to which officers and/or directors
of the Company in their capacities as such, are parties.
(xvi) Tax Returns. Complete and correct copies of all federal,
state and local income, franchise and other tax returns related to the
operations of the Company for each fiscal year since January 1, 1995,
together with complete and correct copies of all reports of tax
authorities relating to examinations of such returns.
(xvii) Licenses, Permits, etc. A list (referred to as Schedule
5(b)(xvii) together with copies of all licenses, permits,
certificates, approvals, authorizations and/or orders acquired by the
Company, including, without limitation, all licenses, permits,
certificates approvals, authorizations and orders, required to be
obtained from any federal, state or local government or governmental
agency or authority having jurisdiction over the disposal of waste,
the discharge of pollutants into the air or water or other
environmental matters, relating to the business of the Company or the
Subsidiary.
(c) Return of Documents. In the event that the Closing shall not
take place hereunder, each Shareholder agrees that it will return promptly
to the Company or cause to be destroyed all documents (including copies
thereof) which shall have been furnished to the Shareholder, or any of
their advisors or counsel in connection with the
16
transactions contemplated by this Agreement and will hold in strict
confidence and will not use or disclose to any third party any confidential
information concerning the Company obtained from such documents or
otherwise in connection with the transactions contemplated hereby (except
as may be required by law or regulations or unless and until such time as
the Company shall have advised the Shareholder that such information is not
confidential). In the event that the Shareholder elects to destroy such
documents, the Shareholder shall furnish certificates from appropriate
authorized representatives of the Shareholder, its advisors or counsel to
the effect that all such copies have been so destroyed.
6. Conditions of Closing.
(a) Conditions Precedent to the Closing Date Obligations of the
Shareholders Hereunder. All obligations of the Shareholders under this
Agreement with respect to the purchase of the Shares on the Closing Date
are subject to the fulfillment, prior to or at the Closing, of each of the
following conditions, except to the extent that the Shareholders may waive
any one or more thereof:
(i) The representations and warranties of the Company contained
in this Agreement (including the information contained in the
schedules delivered pursuant to this Agreement, collectively referred
to as the "Representations and Warranties") shall be true on and as of
the Closing Date, with the same effect as if said representations and
warranties had been made on and as of the Closing Date; the Company
shall have performed and complied with all agreements and conditions
required by this Agreement to be performed or complied with by it
prior to or at the Closing; except as disclosed in the Schedules
hereto, since the respective dates of the Financial Statements, there
shall have been no material adverse change in the business,
operations, results of operations or condition (financial or
otherwise) of the Company; and the Shareholders shall have been
furnished with a certificate of the Company, dated the Closing Date,
certifying (A) in such detail as any Shareholder may request, to the
fulfillment of the foregoing conditions and (B) that to the best of
its knowledge no fact or condition exists or is contemplated or
threatened which might result in the future in a material adverse
change in the business, operations, results of operations or condition
(financial or otherwise) or prospects of the Company.
(ii) Except as may otherwise have been approved by the Shareholder
in writing or as otherwise disclosed to the Shareholders, since the
respective dates of the Financial Statements, the business of the
Company shall have been conducted only in the ordinary course, and the
Shareholders shall have been furnished with a certificate of the
Company, dated the Closing Date, certifying, in such detail as any
Shareholder may request, to the fulfillment of the foregoing
conditions. In this regard, the Company shall deliver schedules
supplementary to the schedules delivered pursuant to Section 5(a)
hereof, which supplementary schedules shall be dated the Closing Date,
and shall show the changes, if any, to
17
the schedules delivered on or prior to the date of execution of this
Agreement, and indicate the authority for each such change.
(iii) The Company shall have obtained and delivered to the
Shareholder all necessary consents to the transactions contemplated by
this Agreement, which consents shall be in form and substance
satisfactory to the Shareholders. The Company shall have supplied or
made available all information referred to in Section 5(a).
(iv) On the Closing Date, (A) there shall be no injunction,
restraining order or order of any nature issued by any court of
competent jurisdiction which directs that this Agreement or any
material transaction contemplated hereby shall not be consummated as
herein provided or compels or would compel any Shareholder to dispose
of or discontinue the business or a portion of the business of the
Company as a result of the consummation of any of the transactions
contemplated hereby; and (B) there shall be no suit, action or other
proceeding by any person pending before any court or governmental
agency, or threatened to be filed or initiated, which, in the opinion
of the Shareholders, is likely to result in the restraint or
prohibition of the consummation of any transaction contemplated hereby
or the obtaining of an amount in payment of damages from or other
relief against any of the parties hereto or against any director or
officer of any Shareholder or any of its affiliates, in connection
with the consummation of any transaction contemplated hereby.
(v) The Shareholder shall have received a favorable opinion,
dated the Closing Date, and addressed to it, of Parker, Duryee, Xxxxxx
& Haft, counsel for the Company, to the effect that:
A. The Company is a corporation duly incorporated and
organized, validly existing and in good standing under the laws
01 the State of Nevada. The Company has all requisite power and
authority to conduct its business as presently conducted and to
own properties. The Company has all requisite corporate power and
authority to execute, deliver and perform all of its obligations
under this Agreement.
B. This Agreement and each other agreement executed in
connection herewith has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation
of the Company, enforceable in accordance with their respective
terms, subject to the effects of bankruptcy, insolvency,
reorganization, receivership, moratorium and other similar laws
now or hereafter in effect relating to or affecting creditors'
rights or remedies generally.
C. The Shares have been duly and validly authorized by
all necessary action on the part of the Company. When issued and
delivered
18
pursuant to the Agreement, the Shares will be duly and validly
issued, fully paid and non-assessable.
D. The authorized capital stock of the Company consists
of 20,000,OOO shares of Common Stock and 5,000,OOO shares of
Preferred Stock. Of such authorized capital stock, 1,863,537
shares of Common Stock and no shares of Preferred Stock were
validly issued and outstanding on the date hereof. To the best
knowledge of such counsel, there are no existing options,
warrants, contracts, calls, commitments, demands or other
agreements of any character to which the Company is a party
relating to the authorized and issued or unissued capital stock
of the Company. All of the Common Stock which is issued and
outstanding is fully paid and non-assessable. At no time has the
Company issued any capital stock not duly authorized on the date
of issuance thereof.
E. The Company is not subject to or bound by any
provision of (a) any law, statute, rule, regulation or judicial
or administrative decision, (b) to the best knowledge of such
counsel. any mortgage. deed of trust, lease, note, shareholders'
agreement, bond, indenture, other instrument or agreement,
license, permit, trust, custodianship, other restriction, or (c)
to the best knowledge of such counsel any judgment, order, writ,
injunction or decree of any court, governmental body,
administrative agency or arbitrator, that would prevent or be
violated by or that would result in the creation of any lien or
encumbrance as a result of, or under which there would be a
default or right of termination as a result of, the execution,
delivery and performance by the Company of the Agreement and the
consummation of the transactions contemplated thereby. No
consent, approval or authorization of or declaration or filing
with any person is required for the valid execution, delivery and
performance by the Company of the Agreement and the consummation
of the transactions contemplated thereby. The consummation of the
transactions contemplated hereby do not conflict with any
provision of the Company's certificate of incorporation or by-
laws.
(vi) All proceedings, corporate or otherwise, to be taken by
the Company in connection with the transactions contemplated by this
Agreement, and all documents incident thereto, shall be satisfactory
in form and substance to the Shareholders and the Company shall have
made available to counsel for the Shareholders all records and
documents relating to the business and affairs of the Company which
such counsel may reasonably request in connection with its review as
aforesaid.
(vii) The Company shall have delivered to the Shareholders (a) a
copy of the Company's articles of incorporation, including all
amendments thereto certified by the Secretary of State of Nevada as of
the Closing Date, (b) a
19
certificate from the Secretary of State of the State of Nevada to the
effect that the Company is in existence in such jurisdiction and
listing all charter documents of such Company on file as of the
Closing Date, (c) a certificate from the Secretary of State or other
appropriate official in each state or other jurisdiction in which the
Company is qualified to do business to the effect that the Company is
in good standing in such state as of the Closing Date, and (d) a
certificate as to the tax status of the Company from the appropriate
officials in Nevada and each other state in which such Company is
qualified to do business, each as of the Closing Date.
(viii) The Board of Directors of the Company shall have approved
the consummation of the transactions contemplated by this Agreement
and appointed Xx. Xxxxx Xxxxxxx, Xxxxx X. Xxxxx, Xxxxx X. Xxxxxxx,
Xxxxx X. Xxxxx, Xxxx Xxxxxx Xxxxxxxx, Xxxx Xxxxxxx, Xxxxxxx X. Xxxxx
and Xxxxxxxx Xxxxxxxx new directors of the Company.
(ix) Xxx Xxxxxxxxx, Xxxxxxx Xxxxxxx and Xxxxxxx Xxxxxx shall
resign as directors and officers of the Company effective as of the
Closing Date.
(x) The Company shall deliver to the Shareholders copies of
all of the Company's minute books, files, documents, papers,
agreements, books of account and records pertaining to the business
conducted by the Company prior to the Closing Date.
(xi) The Company shall have terminated, assigned, transferred,
sold or otherwise disposed of each agreement, instrument, property,
right or interest listed in the Schedules to Section 5(b) and shall
have obtained consents or releases, in form and substance satisfactory
to Shareholders, from all applicable third parties.
(xii) The Company shall have no assets, liabilities, duties,
obligations or business activities other than such as shall be
expressly agreed by the Shareholders may be retained by the Company,
it being understood that Shareholders' agreement may be given or
withheld in Shareholders' sole and absolute discretion.
(xiii) The Shareholders shall have received documents (i)
evidencing (i) the termination of the Company's 51% interest in
Interallied Restaurant Group of Buffalo, LLC and 25% interest in
Interallied Restaurant Group of Rochester, LLC and (ii) the release of
the Company from any liabilities or indemnity obligations relating to
such joint ventures.
(xiv) The Shareholders shall have received Nevada and New York
Uniform Commercial Code lien and Orange County, New York County and
Albany County, New York and County, Nevada judgment searches and
Nevada, New York and federal tax lien searches against European
American Leasing
20
Corporation, Sunnyland Tours, Inc., Interallied Restaurant Group, Inc.
and Interallied Group, Inc. showing that there are no current liens or
judgments against any of such entities.
(xv) The Shareholders shall have received evidence that all
applicable blue sky filings required by the exchange of the Shares
shall have been made by the Company.
(xvi) The Shareholders shall have received an indemnity letter
from Benchmark Capital, dated the Closing Date, in form and substance
reasonably satisfactory to the Shareholders.
(xvii) The Shareholders shall have received a fairness opinion
from PMG Capital, in form and substance reasonably satisfactory to the
Shareholders, covering the exchange of Shares contemplated in this
Agreement.
(xviii) The Shareholders shall have received a copy of the Notice
of Sales of Securities on Form D, dated the Closing Date, for filing
with the United States Securities and Exchange Commission.
(xix) The Shareholders shall have received written confirmation
that (i) the agreement between the Company and Humadorables, dated
November 4, 1999, (ii) the agreement between the Company and Scarlen
Industries, dated July 20, 1999, (iii) the agreement between the
Company and H&H Cigar Company, dated November 24, 1999, (iv) the
agreement between the Company and Reliable Heat Products, Inc., dated
October 15, 1999, and (v) the agreement between the Company and L&L
Cigar Distributors, Inc., dated September 12, 1999, have been
terminated without liability to either party to such agreements.
(xx) The Shareholders shall have received written confirmation
that the lease between the Company and Cedar Brook Property Corp. for
the offices located at 0 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxx Xxxx
00000 has been terminated without liability to either party to such
lease.
(xxi) The Shareholders shall have received written evidence of
the transfer of all shares of Dining Experience, Inc., the Company's
only subsidiary, to a third party and such third party's release of
any obligations of the Company with respect to Dining Experience, Inc.
(xxii) The Company shall have filed with the SEC and delivered
to all holders of Common Stock the information required by Rule 14f-1
of the Exchange Act at least 10 days before the directors specified in
Section 6(a)(viii) take office.
21
(b) Condition Precedent to the Obligations of the Company
Hereunder. All obligations of the Company under this Agreement are
subject to: (i) the representations and warranties of the Shareholders
contained in this Agreement being true on and as of the Closing Date
with the same effect as if said representations and warranties had been
made on and as of the Closing Date; (ii) the Shareholders having
performed and complied with all agreements and conditions required by
this Agreement to be performed or complied with by them prior to or at
the Closing, including the delivery of the certificates of PT Common
Stock required to be delivered to the Company on the Closing Date: and
(iii) the fulfillment. prior to the Closing, of each of the following
conditions, except to the extent the Company may waive any one or more
thereof:
(i) PTI shall have delivered to the Company (a) a copy
of PTI's articles of incorporation, including all amendments
thereto certified by the Secretary of State of North Carolina as of
the Closing Date, (h) a certificate from the Secretary of State of
the State of North Carolina to the effect that PTI is in existence
in such jurisdiction and listing all charter documents of PTI on
file as of the Closing Date, (c) a certificate from the Secretary
of State or other appropriate official in each state or other
jurisdiction in which PTI is qualified to do business to the effect
that PTI is in good standing in such state as of the Closing Date,
and (d) a certificate as to the tax status of PTI from the
appropriate officials in North Carolina and each other state in
which PTI is qualified to do business, each as of the Closing Date;
(ii) PTI shall have delivered to the Company a letter,
dated the date of the Closing, stating that, upon consummation of
the Closing, the Shareholders Agreement and the IR Agreement shall
terminate and be of no further force and effect; and
(iii) All of PTI's Series A Preferred Stock and Series B
Preferred Stock shall have been converted into shares of PT Common
stock and all Warrants to purchase capital stock of PTI shall have
been exercised so that the only shares of capital stock of PTI
outstanding on the Closing Date shall be the shares of PT Common
Stock set forth on Appendix A hereto.
7 . Survival of Company's Representations and Warranties and
Covenants; Indemnification.
(a) Representations and Warranties. The Representations
and Warranties contained herein and in any certificate, instrument
or schedule delivered on the Closing Date, or prior thereto shall
be deemed to have been relied upon notwithstanding any
investigation heretofore or hereafter made or omitted by the
Shareholders and shall continue in full force and effect for three
(3) years following the Closing Date.
22
(b) Survival of Covenants. All covenants made in this
Agreement which by their terms are to be performed after the
Closing shall survive the Closing, until they are performed.
(c) Indemnification by the Company. The Company shall
indemnify and hold harmless the Shareholders and their affiliates,
and all of their respective officers, directors, employees, agents,
members and shareholders (each an "Indemnitee") to the full extent
permitted in law and equity from and against any and all losses,
claims actions, costs, damages (including without limitation
consequential damages) or expenses (including without limitation
reasonable attorneys' fees and expenses) (collectively, "Losses")
resulting from, related to or in connection with (i) any
misrepresentations, or any non-fulfillment of any representation,
warranty, covenant, obligations or agreement by the Company
contained in or made pursuant to this Agreement or in any other
agreement, officer's certificate or other certificate delivered to
the Shareholders in connection with this Agreement, (ii) any
litigation, action, claim, proceeding or investigation by any third
party relating to or arising out of(x) the business or operations
of the Company (or any affiliate controlled by the Company) prior
to the Closing Date or (y) the transactions contemplated hereby,
and (iii) the enforcement by any Shareholder of its rights pursuant
to this Section 7, or any litigation, proceeding or investigation
relating to any of the foregoing. In addition, the Company shall
advance or reimburse to each Indemnitee, on demand and prior to a
final determination, any and all expenses reasonably incurred by
such Indemnitee in investigating, preparing for, defending or
taking any other action in respect of any such Loss or any
proceeding related thereto, whether or not such lndemnitee is a
party to such proceeding.
(d) None of the representations and warranties of the
Shareholders set forth in this Agreement shall effect or in any way
impair any Shareholder's ability to pursue any remedies available
to it under this Agreement.
8. Notice and Opportunity to Defend.
(a) Notice of Asserted Liability. Promptly after receipt
by any Indemnitee of notice of any demand, claim or circumstances
which, with the lapse of time, would give rise to a claim or the
commencement (or threatened commencement) of any action, proceeding
or investigation (an "Asserted Liability") that may result in a
Loss, the Indemnitee shall give notice thereof (the "Claims
Notice") (which shall also be given as to any claims resulting from
the inaccuracy of any of the Representations or Warranties or the
non-fulfillment of a covenant) to any other party (or parties)
obligated to provide indemnification pursuant to Section 7 (the
"Indemnifying Party"). The Claims Notice shall describe the
Asserted Liability in reasonable detail, and shall indicate the
amount (estimated, if necessary) of the Loss that has been or may
be suffered by the Indemnitee.
(b) Opportunity to Defend. The Indemnifying Party may
elect to compromise or defend, at its own expense and by its own
counsel, any Asserted Liability.
23
If the Indemnifying Party elects to compromise or defend such Asserted
Liability, it shall within 30 days (or sooner, if the nature of the
Asserted Liability so requires) notify the Indemnitee of its intent to
do so, and the Indemnitee shall cooperate with all reasonable requests,
in the compromise of, or defense against, such Asserted Liability. If
the Indemnifying Party elects not to compromise or defend the Asserted
Liability, fails to notify the Indemnitee of its election as herein
provided or contests its obligation to indemnify under this Agreement,
the Indemnitee may pay, compromise or defend such Asserted Liability. If
the Indemnifying Party chooses to defend any claim, the Indemnitee shall
make available to the Indemnifying Party any books, records, other
documents or personnel within its control that are necessary or
appropriate for such defense.
9. Waiver or Modification of Agreement. No provision of this
Agreement may be amended, waived or otherwise modified except by an instrument
in writing signed by the Shareholder's and the Company; provided, however, that
any party hereto which is entitled to the benefits of this Agreement may, and
has the right to, waive or modify in writing any term or condition hereof for
his or its benefit at any time on or prior to the Closing Date.
10. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
11. Finders, etc. The Company represents and warrants that
neither the Company nor anyone acting on behalf of the Company has made any
commitment or done any other act which would create any liability of any other
party to this Agreement or the Company for any brokerage, finder's or similar
fee or commission in connection with the transactions contemplated by this
Agreement. Each Shareholder represents and warrants that, neither it nor anyone
acting on its behalf has made any commitment or done any other act which would
create any liability for any brokerage, finder's or similar fee or commission in
connection with the transactions contemplated by this Agreement.
12. Press Releases, etc. Except as required by law, neither the
Shareholders nor the Company shall issue any press release or other information
to the press relating to this Agreement, without the prior written consent of
the other party.
13. Notices, etc. All notices, requests, demands and other
communications hereunder shall be given in writing (which includes telex,
telecopier, facsimile and other wire transmission):
(a) if to or the Shareholders, to the addresses set
forth in Appendix A hereto
with a copy to:
---------------
24
Hunton & Xxxxxxxx
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq. Fax:
212-309-l 100
(b) if to the Company, to
---------------------
Interallied Group, Inc.
Xxx Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxxxxxx
President
with a copy to:
---------------
Parker, Duryee, Xxxxxx & Haft
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Giovanno, Esq.
Fax: 000-000-0000/88
(or to such other address as such person shall specify by notice hereunder), and
shall be deemed to be effective when given in such manner, provided, that any
notice given other than in writing by registered or certified mail shall be
confirmed in writing by registered or certified mail.
14. Opinion of Counsel. The Company hereby acknowledges that it has
irrevocably instructed its counsel to deliver, to and for the benefit of the
addressees thereto, the opinion of such counsel referred to in and required by
Section 6 of this Agreement.
15. Section and Paragraph Headings. The section and paragraph headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
16. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
17. Expenses of Parties. Each of the parties hereto shall bear all
expenses incurred by such party in connection with this Agreement including,
without limitation, the charges of their respective counsel, financial advisors,
accountants and finders, if any.
25
18. Successors and Assigns. The respective rights and obligations
of the parties hereto shall not be assignable without the prior written consent
of the other party, except that the Shareholders may freely assign their rights
and obligations hereunder to any affiliate of the Shareholder without the prior
written consent of the Company. This Agreement shall be binding upon and inure
to the benefit of the heirs, distributees, successors and permitted assigns of
the parties hereto.
19. Stock Options. The Company and the Shareholders agree, that
upon the Closing Date, the Company shall assume PTI's 1998 Stock Option Plan
(the "PTI Option Plan") and all outstanding stock option grants made under that
Plan prior to the Closing Date. The Company agrees that as soon as reasonably
practical following the Closing Date, it shall (a) amend the PTI Option Plan to
provide for the grant of Company Common Stock in lieu of PT Common Stock, (b)
convert the stock that can be purchased under the assumed stock option grants
from PT Common Stock to Company Common Stock and (c) take such other actions as
shall bc ncccssary to convert the PTI Option Plan to a Company-sponsored plan
(the "Company Option Plan"), including, but not limited to, reserving Company
Common Stock for issuance under the Company Option Plan. The Shareholders and
the Company agree that PTI shall be a third party ben&ciary uf this Section 19.
Each outstanding stock option grant assumed by the Company under this
Agreement will continue to have, and be subject to, the same terms and
conditions as applied to those grants immediately prior to the Closing Date,
except that:
(i) each such stock option grant will be exercisable: (or
will become exercisable in accordance with its terms) for shares of Company
Common Stock equal to twice the number of shares of PT Common Stock
issuable (upon exercise) under the option immediately prior to the Closing
Date; and
(ii) the per share exercise price for the shares of Company
Common Stock issuable under such option (upon exercise) shall be equal to
one-half of the per share exercise price for PT Common Stock under the
option immediately prior to the Closing Date (rounded to the nearest whole
cent).
Notwithstanding (ii) above, the per share exercise price for Company Common
Stock under each assumed option that is intended to be an "incentive stock
option" (within the meaning of Code Section 422) under the PTI Plan shall be
adjusted as required by Code Section 424(a) so as not to constitute a
modification of the option within the meaning of Code Section 424(h).
20. Entire and Sole Agreement. This Agreement, including the
schedules referred to herein, constitutes the entire agreement between the
parties hereto and supersedes all yriur agrecmcnts, representations, warranties,
statements, promises, information, arrangements and understandings, whether oral
or written, express or implied, with respect to the subject matter hereof. None
of the parties hereto shall be bound by or charged with any oral or written
agreements, representations, warranties, statements, promises, information,
arrangements or
26
understandings not specifically set forth in this Agreement or in the schedules,
documents and instruments to be delivered on or before the Closing Date in
connection with this Agreement. The parties hereto further acknowledge and agree
that, in entering into this Agreement and in delivering the schedules, documents
and instruments to be delivered on or before the Closing Date they have not in
any way relied, and will not in any way rely, upon any oral or written
agreements, representations, warranties, statements, promises, information,
arrangements or understandings, express or implied, not specifically set forth
in this Agreement or in such schedules, documents or instruments.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
INTERALLIED GROUP, INC.
By: /s/ Xxxxxxx Xxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
/s/ Xxxxx X. Xxxxxxx
---------------------------------
Xx. Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
Xxxxxx Xxxxxx Xxxxxxx Asset Management Trust
Xxxxx Xxx Xxxxxxx Asset Management Trust
Xxxxx Xxxx Xxxxxxx Asset Management Trust
Xxxxxxx Xxxxx Xxxxxxx Asset Management Trust
By: Xxxxx X. Xxxxxxx
-----------------------------
Xx. Xxxxx X. Xxxxxxx
Attorney-in-Fact
/s/ X. Xxxxxxxx X. Xxxxxxxx
----------------------------------
X. Xxxxxxxx X. Xxxxxxxx
/s/ Xxxxx X. Xxxxxxxx
----------------------------------
Xxxxx X. Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------
Xx. Xxxxxxx X. Xxxxxxxxx
[signatures continue on next page]
27
WAKE FOREST UNIVERSITY
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: VP Health Affairs Finance
and Administration
XXXXX XXXXXXX UNIVERSITY
By: /s/ Xxxxxxx X. Few, PhD
---------------------------------------
Name: Xxxxxxx X. Few, PhD
Title: Assistant Xxxx and Executive
Director, Licensing and
Business Development
BOARD OF TRUSTEES OF THE ENDOWMENT
FUND OF NORTH CAROLINA STATE
UNIVERSITY
By: /s/ Xxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Treasurer
CENTENNIAL VENTURE PARTNERS, LLC
By: Centennial Venture Management, LLC,
Manager
By: /s/ Xxxxx X. Xxxxx
---------------------------------------
Xxxxx X. Xxxxx, Managing Director
and Manager
FIRST FLIGHT VENTURE FUND, LLC
By: /s/ Xxxxx Xxxxxx
---------------------------------------
Xxxxx Xxxxxx, Manager
[signatures continue on next page]
28
ACADEMY VENTURE FUND, LLC
By: Academy Ventures, LLC
By: /s/ Xxxxx X. Xxxxx
--------------------------------------
Xxxxx X. Xxxxx, Manager
/s/ Xxxxxxx XxXxxx
------------------------------------------
Xxxxxxx XxXxxx
/s/ Xxxxxx XxXxxx
------------------------------------------
Xxxxxx XxXxxx
/s/ Xxxxxx Xxxxxxxx
------------------------------------------
Xxxxxx Xxxxxxxx
/s/ Xxxxxxxxx Xxxxxxxx
------------------------------------------
Xxxxxxxxx Xxxxxxxx
/s/ Xxxxxxx Childress
------------------------------------------
Xxxxxxx Childress
/s/ Xxxxx Childress
------------------------------------------
Xxxxx Childress
/s/ Xxxxxx Xxxxxxx
------------------------------------------
Xxxxxx Xxxxxxx
/s/ Xxxxx Xxxxxxxx
------------------------------------------
Xxxxx Xxxxxxxx
JK VENTURES, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
/s/ Xxxx Xxxxxx Xxxxxxxx
------------------------------------------
Xxxx Xxxxxx Xxxxxxxx
[signatures continue on next page]
29
/s/ Xxxxxxx X. Few
------------------------------------------
Xxxxxxx X. Few
/s/ Xxxxxx X. Xxxxxxx
------------------------------------------
Xxxxxx X. Xxxxxxx
/s/ Xxxxxxxx Xxxxxx
------------------------------------------
Xxxxxxxx Xxxxxx
/s/ Xxxxxxx X. Xxxxxxxxx
------------------------------------------
Xxxxxxx X. Xxxxxxxxx
/s/ Xxxxxxx Xxxxxx
------------------------------------------
Xxxxxxx Xxxxxx
/s/ Xxxxx Xxxxxxx
------------------------------------------
Xxxxx Xxxxxxx
/s/ Xxxxxxx Xxxxx
------------------------------------------
Xxxxxxx Xxxxx
/s/ Xxxxx Xxxxx
------------------------------------------
Xxxxx Xxxxx
/s/ Xxxxxxx X. Xxxxx
------------------------------------------
Xxxxxxx X. Xxxxx
/s/ Xxxx X. Xxxxx
------------------------------------------
Xxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxxx
------------------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxx Xxxxxx
------------------------------------------
Xxxxxx Xxxxxx
/s/ Xxxxxx Xxxxxx
------------------------------------------
Xxxxxx Xxxxxx
/s/ Xxxxxxx X. Xxxxxxx
------------------------------------------
Xxxxxxx X. Xxxxxxx
[signatures continue on next page]
30
/s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Xxxxx X. Xxxxxxx
/s/ L. Xxx Xxxxx
-----------------------------------------
L. Xxx Xxxxx
/s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Xxxxxxx X. Xxxxx
/s/ Xxxxxxxx X. Xxxxx
-----------------------------------------
Xxxxxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Xxxxx X. Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxxxx
/s/ Xxxx Xxxxxxx
-----------------------------------------
Xxxx Xxxxxxx
/s/ Xxxxxx Xxxxxxx
-----------------------------------------
Xxxxxx Xxxxxxx
/s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxxx
/s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Xxxxxxx X. Xxxxx
/s/ Xxxxxx Xxxxx
-----------------------------------------
Xxxxxx Xxxxx
/s/ S. Xxxxx Xxxxx
-----------------------------------------
S. Xxxxx Xxxxx
/s/ W. Xxxxx Xxxxx
-----------------------------------------
W. Xxxxx Xxxxx
/s/ Xxxxxx X. Xxxxx
-----------------------------------------
Xxxxxx X. Xxxxx
/s/ Xxxx Xxxxxxxxxx
-----------------------------------------
Xxxx Xxxxxxxxxx
[signatures continue on next page]
31
/s/ Xxxxxx Xxxxxxx
--------------------------------------------
Xxxxxx Xxxxxxx
/s/ Xxxxxxx Xxxxx
--------------------------------------------
Xxxxxxx Xxxxx
/s/ Xxxxxx X. Stimoson
--------------------------------------------
Xxxxxx X. Stimoson
/s/ Xxxxx Xxxxxxx-Xxxxxxx
--------------------------------------------
Xxxxx Xxxxxxx-Xxxxxxx
/s/ C. Xxxx Xxxx
--------------------------------------------
C. Xxxx Xxxx as Custodian for C. Xxxxxxxxx
Xxxx, XX Under the Georgia Transfers to Minor
Act
32
SCHEDULES TO STOCK PURCHASE AGREEMENT
Schedule 5(b)(iii)
None.
Schedule 5(b)(iv)
None.
Schedule 5(b)(v)
None.
Schedule 5(b)(vi)
None.
Schedule 5(b)(vii)
None.
Schedule 5(b)(viii)
None.
Schedule 5(b)(ix)
None.
Schedule 5(b)(x)
None.
Schedule 5b(xi)
None.
Schedule 5(b)(xii)
None.
Schedule 5(b)(xiii)
None.
Schedule 5(b)(xiv)
None.
Schedule 5(b)(xv)
None.
Schedule 5(b)(xvii)
None.
Appendix A
----------------------------------------------------------------------------------------------------------
Name and Address of No. of Shares of No. of Shares of PT
-------------------
Shareholder Common Stock* Common Stock*
----------- ------------- -------------
------------------------------------------------------------------------------------------------------
Xx. Xxxxx X. Xxxxxxx 1,527,500 763,750
Pilot Therapeutics, Inc.
Xxxxxx Xxxx
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx-Xxxxx, XX 00000
------------------------------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx 7,500 3,750
c/o Xx. Xxxxx X. Xxxxxxx
Pilot Therapeutics, Inc.
Xxxxxx Xxxx
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx-Xxxxx, XX 00000
------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Xxxxxxx Asset 100,000 50.000
Management Trust
c/o Xx. Xxxxx X. Xxxxxxx
Pilot Therapeutics, Inc.
Xxxxxx Xxxx
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx-Xxxxx, XX 00000
------------------------------------------------------------------------------------------------------
Xxxxx Xxx Xxxxxxx Asset 100,000 50,000
Management Trust
c/o Xx. Xxxxx X. Xxxxxxx
Pilot Therapeutics, Inc.
Xxxxxx Xxxx
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx-Xxxxx, XX 00000
------------------------------------------------------------------------------------------------------
Xxxxx Xxxx Xxxxxxx Asset 100,000 50,000
Management Trust
c/o Xx. Xxxxx X. Xxxxxxx
Pilot Therapeutics, Inc.
Xxxxxx Xxxx
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx-Xxxxx, XX 00000
------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxx Xxxxxxx Asset 100,000 50,000
Management Trust
c/o Xx. Xxxxx X. Xxxxxxx
Pilot Therapeutics, Inc.
Xxxxxx Xxxx
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx-Xxxxx, XX 00000
------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------
Name and Address of No. of Shares of No. of Shares of PT
-------------------
Shareholder Common Stock* Common Stock*
----------- ------------- -------------
----------------------------------------------------------------------------
Xxxx X. Xxxxxxx 15,000 7,500
c/o Xx. Xxxxx X. Xxxxxxx
Pilot Therapeutics, Inc.
Xxxxxx Xxxx
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx-Xxxxx, XX 00000
----------------------------------------------------------------------------
Wake Forest University 1,125,000 000,000
Xxxxxxx Xxxxxx Xxxxxxxxx
Xxxxxxx-Xxxxx, XX 00000
----------------------------------------------------------------------------
Xxxxx X. Xxxxxxxx 67,292 33,646
Stonemarker Enterprises, Inc.
000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx-Xxxxx, XX 00000
----------------------------------------------------------------------------
Xxxxx Xxxxxxx University 63,250 31,625
Asthma & Allergy Center
0000 Xxxxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
----------------------------------------------------------------------------
Xx. Xxxxxxx X. Xxxxxxxxx 333,334 166,667
Pilot Therapeutics, Inc.
Xxxxxx Xxxx, Suite 254
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx-Xxxxx, XX 00000
----------------------------------------------------------------------------
Board of Trustees of the 50,000 25,000
Endowment Fund of North Carolina
State University
North Carolina State University
Office of Major Giving Programs
Xxxxxxx, XX 00000
----------------------------------------------------------------------------
X. Xxxxxxxx X. Xxxxxxxx 227,092 113,546
000 Xxxxxxxx Xxxx
Xxxx Xxxxx, Xxxxx Xxxxxxxx 00000
----------------------------------------------------------------------------
Xxxx Xxxxxx Xxxxxxxx 253,378 126,689
000 Xxxx Xxxxx
Xxxxxxx, XX 00000
----------------------------------------------------------------------------
Xxxxxxx Childress 15,000 7,500
000 Xxxxxxxx Xxxxxx Xxxx
Xxxxx Xxxxxxxx, XX 00000
----------------------------------------------------------------------------
Centennial Venture Partners, LLC 1,554,346 777,173
0 Xxxxx Xxxxx
Xxxxxxxx Xxxxxxxx Xxxx, XX 00000
----------------------------------------------------------------------------
2
-----------------------------------------------------------------------------
Name and Address of No. of Shares of No. of Shares of PT
-------------------
Shareholder Common Stock* Common Stock*
----------- ------------- -------------
-----------------------------------------------------------------------------
Academy Venture Fund, LLC 916,748 458,374
00000 Xxxxx Xxxxxxxxx Xxxxx
Xxxx,
Xxxxx 000
Xxxxxxxxx, XX 00000
-----------------------------------------------------------------------------
First Flight Venture Fund, LLC 360,000 180,000
0 Xxxxx Xxxxx
PO Box 13169
Research Xxxxxxxx Xxxx, XX
00000-0000
-----------------------------------------------------------------------------
Xxxxxx Xxxxxxx 29,482 14,741
00000 Xxx Xxxxx #000
Xxx Xxxxxxx, XX 00000
-----------------------------------------------------------------------------
Xxxxx Xxxxxxxx 29,482 14,741
00000 Xxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
-----------------------------------------------------------------------------
JK Ventures, Inc. 29,482 14,741
7 South 000 Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
-----------------------------------------------------------------------------
Xxxxxxx X. Few 29,482 14,741
0000 Xxxxx Xxxx
Xxxxxxx, XX 00000
-----------------------------------------------------------------------------
Xxxxxx X. Xxxxxxx 44,222 22,111
0000 Xxxxxxxx Xxxx
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx
00000
-----------------------------------------------------------------------------
Xxxxxxxx Xxxxxx 28,940 14,470
% Pinehall Brick Co., Inc.
Xxxx Xxxxxx Xxx 00000
Xxxxxxx-Xxxxx, XX 00000
-----------------------------------------------------------------------------
Xxxxxxx and Xxxxxx XxXxxx 58,960 29,480
000 Xxxxxx Xxxxx Xxxxx
Xxxxxxx-Xxxxx, XX 00000
-----------------------------------------------------------------------------
Xxxxxx and Xxxxxxxxx Xxxxxxxx 58,960 29,480
0000 Xxxxxxx Xxxx
Xxxxxxx-Xxxxx, XX 00000
-----------------------------------------------------------------------------
Xxxxxxx and Xxxxx Childress 58,960 29,480
000 Xxxxxxxx Xxxxxx Xxxx
Xxxxx Xxxxxxxx, XX 00000
-----------------------------------------------------------------------------
3
-----------------------------------------------------------------------------
Name and Address of No. of Shares of No. of Shares of PT
-------------------
Shareholder Common Stock* Common Stock*
----------- ------------- -------------
-----------------------------------------------------------------------------
Xxxxxxx X. Xxxxxxxxx 13,332 6,666
000 Xxxxx'x Xxxxxxxx Xxxxx
Xxxxxxx-Xxxxx, XX 00000-0000
-----------------------------------------------------------------------------
Xx. Xxxxxxx Xxxxxx 53,032 26,516
000 Xxxxxxxxxxx Xxxxx
Xx. Xxxx, XX 00000
-----------------------------------------------------------------------------
Xxxxx Xxxxxxx 26,516 13,258
0000 XX 00/xx/ Xxx
Xxxxxxxx, XX 00000
-----------------------------------------------------------------------------
Xxxxxxx & Xxxxx Xxxxx 26,516 13,258
000 Xxxxxx Xxxx
Xxxxx Xxxxxxxx, XX 00000
-----------------------------------------------------------------------------
Xxxxxxx X. & Xxxx X. Xxxxx 26,516 13,258
000 Xxxxxx Xxxx
Xxxxx Xxxxxxxx, XX 00000
-----------------------------------------------------------------------------
Xxxxxx X. & Xxxxxx Xxxxxx 26,516 13,258
000 Xxxxxxxxxx Xxxxx
Xxxxxxx-Xxxxx, XX 00000
-----------------------------------------------------------------------------
Xxxxxx Xxxxxx 26,516 13,258
Xxxx Xxxxxx Xxx 0000
Xxxx, XX 00000
-----------------------------------------------------------------------------
Xxxxxxx X. & Xxxxx X. Xxxxxxx 53,032 26,516
0000 Xxxxxx Xxxx
Xxxxxxxx, XX 00000
-----------------------------------------------------------------------------
L. Xxx Xxxxx 26,516 13,258
0000 Xxxxx Xxxx Xxxxx
Xxxxxx Xxxx, XX 00000
-----------------------------------------------------------------------------
Xx. Xxxxxxx 26,516 13,258
S. & Xxxxxxxx X. Xxxxx
Xxxx Xxxxxx Xxx 0000
Xxxxx Xxxxxxxx, XX 00000
-----------------------------------------------------------------------------
Xxxxx X. & Xxxxxxx X. Xxxxxxxx 26,516 13,258
000 Xxxxxxx Xxxxx Xxxx
Xxxxxx, XX 00000
-----------------------------------------------------------------------------
Xxxx & Xxxxxx Xxxxxxx 39,774 19,887
000 Xxxxxxxxx Xxxx
Xxxxx Xxxxxxxx, XX 00000
-----------------------------------------------------------------------------
Xxxxxx X. Xxxxxxx 39,774 19,887
000 Xxxxxxx Xxxx
Xxxxxxx-Xxxxx, XX 00000
-----------------------------------------------------------------------------
4
-----------------------------------------------------------------------------
Name and Address of No. of Shares of No. of Shares of PT
-------------------
Shareholder Common Stock* Common Stock*
----------- ------------- -------------
-----------------------------------------------------------------------------
Xxxxxxx X. & Xxxxxx Xxxxx 26,516 13,258
000 Xxx Xxxxxx Xxxx
Xxxxxxxx, XX 00000
-----------------------------------------------------------------------------
S. Xxxxx Xxxxx 26,516 13,258
0000 Xxxxx Xxxxxxxx Xxxx
Xxxxxx Xxxx, XX 00000
-----------------------------------------------------------------------------
W. Xxxxx & Xxxxxx X. Xxxxx 26,516 13,258
000 Xxxxxxxx Xxxxx
Xx. Xxxx, XX 00000
-----------------------------------------------------------------------------
Xxxxxx Xxxxxxx 26,110 13,055
c/o Quality Oil Company
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxx-Xxxxx, XX 00000
-----------------------------------------------------------------------------
Xxxx Xxxxxxxxxx 13,054 6,527
0000 Xxxxxxxx Xxxx Xxxx, Xxxxx
000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
-----------------------------------------------------------------------------
Xxxxxx X. Xxxxxxx 20,000 10,000
0000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
-----------------------------------------------------------------------------
XxXxx Xxxxxxx 20,000 10,000
0000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
-----------------------------------------------------------------------------
Xxxxxxx Xxxxx 26,110 13,055
000 Xxxxxxx
Xxxxxxx Xxxxx, Xxxxxxxx 00000
-----------------------------------------------------------------------------
Mr. C. Xxxx Xxxx as Custodian for 26,110 13,055
C. Xxxxxxxxx Xxxx, XX, Under the
Georgia Transfers to Minors Act
0000 Xxxx Xxxx
Xxxxxx, Xxxxxxx 00000
-----------------------------------------------------------------------------
Total: 7,905,414 3,952,707
-----------------------------------------------------------------------------
*The number of shares of PT Common Stock owned by each Shareholder, and the
corresponding number of Shares of Common Stock shown for each Shareholder in
Appendix A, assumes the prior (i) conversion of all shares of PT Series A
Preferred Stock and PT Series B Preferred Stock owned by such Shareholder and
(ii) exercise of all warrants to purchase shares of PT Common Stock owned by
such Shareholder with the aggregate exercise price therefor paid by withholding
shares of PT Common Stock otherwise issuable.
5
Appendix B
EXISTING OBLIGATIONS OF COMPANY
Amount of Shares of
Company Common Stock to
Amount of Obligation Description of Obligation be received by Assignee
-------------------- ------------------------- -----------------------
$168,000 Legal fees, accounting fees 48,000
printing fees, lease and loans.
Appendix C
CURRENT OUTSTANDING PTI OPTIONS
NAME DATE OF NO. OF SHARES
---- ------- -------------
GRANT
-----
Xxxxxxx-Xxxxx 6/1/99 75,000
Xxxxxxxx 6/1/99 (restated on 7,500
12/29/00)
Xxxxx 6/1/99 15,000
X. Xxxxxxxx 6/1/99 10,834
Xxxxxxx 12/10/99 40,000
Koumenis 12/10/99 15,000
Century Capital Associates 3/9/00 10,000
Costa 1/14/00 15,000
Xxxxxxxx 3/16/00 (restated on 15,552
12/29/00)
Xxxxxxxxx 3/16/00 18,000
Xxxxxxx-Xxxxx 3/16/00 15,000
Xxxxxxx 3/16/00 12,000
Koumenis 3/16/00 5,000
Xxxxxxxxx 3/14/01 (eff. 1/8) 50,000
Xxxxx 3/8/01 15,000
Xxxxxxxx 3/8/01 15,000
Xxxxxxxx 3/8/01 15,000
Costa 3/8/01 15,000
Xxxxxxx 4/10/01 15,000
Trampsoch 4/10/01 15,000
Xxxxxxx 4/10/01 10,000
Xxxxxxx-Xxxxx 4/10/01 10,000
Koumenis 4/10/01 7,000
Xxxxx 4/10/01 10,000
Xxxxxx 4/10/01 2,000
Xxxxxxxx 4/10/01 5,000
Childress 5/1/01 (restated 21,000
7/3/01)
Higson 5/1/01 7,200
Xxxxxxxx 5/10/01 15,000
Xxxxxx 6/15/01 6,400
Higson 6/26/01 4,000
Xxxxxx* 8/6/01 30,000
Xxxxxx* 8/6/01 (eff. 8/13/01) 10,000
Various Optionees** 8/9/01 43,210
*agreements evidencing options not yet executed
**options granted to various employees and directors, conditional on closing of
the stock exchange contemplated by this Stock Exchange Agreement; agreements
evidencing options not yet executed
2
