SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "AGREEMENT"), dated as of May 6,
1999, by and among XXX-XXXXXXX TECHNOLOGIES INC., a Wyoming corporation (the
"COMPANY"), and each other person executing this Agreement as set forth on the
signature page hereto (each a "PURCHASER").
The Company wishes to sell to the Purchasers, and the Purchasers wish to
purchase, on the terms and subject to the conditions set forth in this
Agreement, such number of Units (collectively the "UNITS") set forth on EXHIBIT
A, each Unit being comprised of (i) 250,000 subordinate voting shares of the
Company (collectively the "SUBORDINATE SHARES"), and (ii) one warrant
(collectively the "WARRANTS") to purchase 125,000 subordinate voting shares of
the Company (collectively the "EXERCISE SHARES"). The Subordinate Shares,
Warrants and Exercise Shares are collectively referred to as the "SECURITIES."
The Company has agreed to grant certain registration rights to the
Purchaser under the Securities Act of 1933, as amended (the "SECURITIES ACT"),
pursuant to a Registration Rights Agreement of even date herewith by and between
the Company and the Purchasers (the "REGISTRATION RIGHTS AGREEMENT"). The sale
of the Units by the Company to the Purchasers will be effected in reliance upon
the exemption from securities registration afforded by the provisions of
Regulation D ("REGULATION D"), as promulgated by the Securities and Exchange
Commission (the "COMMISSION") under the Securities Act.
The Company and the Purchasers hereby agree as follows:
1. PURCHASE AND SALE OF UNITS.
1.1 AGREEMENT TO PURCHASE AND SELL. Upon the terms and subject to the
satisfaction of the conditions set forth herein, the Company agrees to sell on
the Closing Date (as defined below), and each Purchaser agrees to purchase,
severally but not jointly, such number of Units and at the purchase price
indicated opposite each Purchaser's name on EXHIBIT A hereto. Each Purchaser
shall pay the respective purchase price by wire transfer of immediately
available funds on the Closing Date.
1.2 CLOSING. The closing of the sale of the Units (the "CLOSING")
shall take place at the offices of Ungaretti & Xxxxxx, 0000 Xxxxx Xxxxx Xxxxxxxx
Xxxxx, Xxxxxxx, Xxxxxxxx 00000 at 9:00 a.m., Chicago time, on May 6, 1999, or
such other location or time as shall be mutually agreed upon by the parties (the
"CLOSING DATE").
2. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Each Purchaser hereby makes the following representations and warranties
to the Company and agrees with the Company that, as of the date of this
Agreement and as of the Closing Date:
2.1 ENFORCEABILITY. This Agreement has been duly authorized by all
necessary action on the part of such Purchaser, has been duly executed and
delivered by such Purchaser and constitutes Purchaser's valid and legally
binding obligation, enforceable in accordance with its terms, except as such
enforcement may be limited by (i) applicable bankruptcy, insolvency,
reorganization or other laws of general application relating to or affecting the
enforcement of creditors' rights generally and (ii) general principles of
equity.
2.2 LOCATION OF PRINCIPAL OFFICE, QUALIFICATION AS AN ACCREDITED
INVESTOR. The state in which the Purchaser's principal office (or domicile, if
such Purchaser is an individual) is located is the state set forth in such
Purchaser's address on EXHIBIT A. The Purchaser by execution of this Agreement
hereby represents that he, she or it qualifies as an "accredited investor" for
purposes of Regulation D promulgated under the Securities Act. The Purchaser
(i) is an investor in securities of companies in the development stage and
acknowledges that he, she or it is able to fend for himself, herself or itself,
and bear the loss of the Purchaser's entire investment in the Securities, and
(ii) has such knowledge and experience in financial and business matters that
the Purchaser is capable of evaluating the merits and risks of the investment to
be made by the Purchaser pursuant to this Agreement. If other than an
individual, the Purchaser also represents it has not been organized solely for
the purpose of acquiring the Securities.
2.3 INVESTMENT INTENT. The Purchaser is acquiring the Securities
for investment purposes only and for such Purchaser's own account and not
with the view to, or for resale in connection with, any distribution or
public offering thereof. The Purchaser has no current plan or intention to
engage in a sale, exchange, transfer, distribution, redemption, reduction in
any way of such Purchaser's risk of ownership by short sale or otherwise, or
other disposition, directly or indirectly of the Securities being acquired by
such Purchaser pursuant to this Agreement. The Purchaser is able to bear the
economic risk of his, her or its investment and has the knowledge and
experience in financial and business matters that he, she or it is capable of
evaluating the merits and risks of an investment in the Securities of the
Company. Notwithstanding the foregoing, in making such representation,
Purchaser does not agree, except as otherwise provided in the Shareholders
Agreement among the Company, Avi Xxx-Xxxxxxx, the Purchasers and certain
other stockholders of the Company (the "SHAREHOLDERS' AGREEMENT") and in the
Private Placement Questionnaire and Undertaking provided by Purchaser to the
Alberta Stock Exchange, to hold the Securities for any minimum or specific
term and reserves the right to sell, transfer or otherwise dispose of the
Securities at any time in accordance with the provisions of this Agreement
and with federal, provincial and state securities laws applicable to such
sale, transfer or disposition.
2.4 LIMITATIONS ON DISPOSITION. Purchaser acknowledges that,
except as provided in the Registration Rights Agreement, the Securities have
not been and are not being registered under the Securities Act or any state
securities laws by reason of their contemplated issuance in transactions
exempt from the registration requirements of the Securities Act pursuant to
Section 4(2) thereof and applicable state securities laws, and that the
reliance of the Company and others upon these exemptions is predicated in
part upon this representation by the Purchaser. The Purchaser further
understands that the Securities may not be transferred or resold without (a)
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registration under the Securities Act and any applicable state securities
laws, or (b) an exemption from the requirements of the Securities Act and
applicable state securities laws. The Purchaser understands that an
exemption from such registration is not presently available pursuant to Rule
144 promulgated under the Securities Act by the Securities and Exchange
Commission (the "Commission") and that in any event the Purchaser may not
sell any Securities acquired hereunder pursuant to Rule 144 prior to the
expiration of a one-year period (or such shorter period as the Commission may
hereafter adopt) after the Purchaser has acquired such securities. Such
Purchaser understands that any sales pursuant to Rule 144 can be made only in
full compliance with the provisions of Rule 144.
2.5 LEGEND. Purchaser understands that the certificates representing
the Securities may bear at issuance a restrictive legend in substantially the
following form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state, and may
not be offered or sold unless a registration statement under the
Securities Act and applicable state securities laws shall have
become effective with regard thereto, or an exemption from
registration under the Securities Act and applicable state
securities laws is available in connection with such offer or
sale. The securities represented by this certificate may not be
traded in Alberta until one year after issuance except as
permitted by the Securities Act (Alberta) and the rules made
thereunder. Such securities are issued subject to the provisions
of a Securities Purchase Agreement, dated as of May ______, 1999,
by and between the Company and the purchasers named therein
("Purchasers"), a Registration Rights Agreement, dated as of
May ______, 1999, by and between the Company and Purchasers, and a
Shareholders' Agreement, dated May ___, 1999, among the Company
and certain stockholders of the Company."
The Company shall make a notation regarding the restrictions on transfer of
the Securities in its books and the Securities shall be transferred on the
books of the Company only if transferred or sold pursuant to an effective
registration statement under the Securities Act covering the securities to be
transferred or an opinion of counsel satisfactory to the Company that such
registration is not required.
2.6 INFORMATION. The Company has provided Purchaser with a copy of
the Confidential Private Placement Memorandum dated March 19, 1999 and other
information regarding the business, operations and financial condition of the
Company, and has granted to Purchaser the opportunity to ask questions of and
receive answers from representatives of the Company, its officers, directors,
employees and agents concerning the Company and materials relating to the
terms and conditions of the purchase and sale of the Units hereunder.
Neither such information nor any other investigation conducted by Purchaser
or any of its representatives shall modify, amend or otherwise affect
Purchaser's right to rely on the Company's representations and warranties
contained in this Agreement.
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3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby makes the following representations and warranties to
the Purchasers and agrees with the Purchasers that, as of the date of this
Agreement and as of the Closing Date:
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. Each of the
Company and its Subsidiaries is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization
and has all requisite corporate power and authority to carry on its business as
now conducted. Each of the Company and its Subsidiaries is duly qualified to
transact business and is in good standing as a foreign corporation in each
jurisdiction in which the failure so to qualify would have a Material Adverse
Effect.
3.2 AUTHORIZATION; CONSENTS. The Company has the requisite corporate
power and authority to enter into and perform its obligations under (i) this
Agreement, (ii) the Registration Rights Agreement, (iii) the Warrants, (iv) the
Shareholders' Agreement and (v) all other agreements, documents, certificates or
other instruments executed and delivered by or on behalf of the Company at the
Closing (the instruments described in (i) through (v) inclusive being
collectively referred to herein as the "TRANSACTION DOCUMENTS"), and to issue
and sell the Units to the Purchasers in accordance with the terms hereof. All
corporate action on the part of the Company by its officers, directors and
stockholders necessary for the authorization, execution and delivery of, and the
performance by the Company of its obligations under, the Transaction Documents
has been taken, and, except as disclosed in SCHEDULE 3.2, no further consent or
authorization of the Company, its Board, its stockholders, any governmental
agency or organization (other than as may be required under the federal and
applicable state securities laws in respect of the Registration Rights
Agreement), or any other person or entity is required.
3.3 ENFORCEMENT. The Transaction Documents when executed and
delivered will be valid and legally binding obligations of the Company,
enforceable in accordance with their respective terms, except as such
enforcement may be limited by (i) applicable bankruptcy, insolvency,
reorganization or other laws of general application relating to or affecting the
enforcement of creditors' rights generally and (ii) general principles of
equity.
3.4 MINUTE BOOKS. The minute books of the Company contain in all
material respects a complete and correct summary of all meetings of the Board
and the Company's stockholders since the time of incorporation of the Company.
The minute books of each Subsidiary contain in all material respects a complete
and correct summary of all meetings of the Board of Directors of such Subsidiary
and such Subsidiary's stockholders since the time of formation of such
Subsidiary.
3.5 VALID ISSUANCE. The Subordinate Shares are duly authorized and,
when issued, sold and delivered in accordance with the terms hereof, (i) will be
duly and validly issued, fully paid and nonassessable, free and clear of any
taxes, liens, claims, preemptive or similar rights or encumbrances imposed by or
through the Company, (ii) based in part upon the representations of
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the Purchasers in this Agreement, will be issued, sold and delivered in
compliance with all applicable federal, provincial and state securities laws
and (iii) will be free of restrictions on transfer other than restrictions on
transfer under this Agreement and the other Transaction Documents and under
applicable federal, provincial and state securities laws. The Exercise
Shares are duly authorized and reserved for issuance and, when issued upon
exercise of the Warrants in accordance with the terms thereof, shall be duly
and validly issued, fully paid and nonassessable, free and clear of any
taxes, liens, claims, preemptive or similar rights or encumbrances imposed by
or through the Company, and will be free of restrictions on transfer other
than restrictions on transfer under this Agreement and the other Transaction
Documents and under applicable federal, provincial and state securities laws.
3.6 NO CONFLICT WITH OTHER INSTRUMENTS. Neither the Company nor
any of its Subsidiaries is in violation of any provisions of its charter,
By-laws or any other governing document as amended and in effect on and as of
the date hereof or in default (and no event has occurred which, with notice
or lapse of time or both, would constitute a default) under any provision of
any instrument or contract to which it is a party or by which it is bound, or
of any provision of any federal or state judgment, writ, decree, order,
statute, rule or governmental regulation applicable to the Company, which
would have a Material Adverse Effect. The (i) execution, delivery and
performance of this Agreement and the other Transaction Documents, and (ii)
consummation of the transactions contemplated hereby and thereby (including
without limitation, the issuance of the Units) will not result in any such
violation or be in conflict with or constitute, with or without the passage
of time and giving of notice, either a default under any such provision,
instrument or contract or an event which results in the creation of any lien,
charge or encumbrance upon any assets of the Company or any of its
subsidiaries which would have a Material Adverse Effect or the triggering of
any preemptive or anti-dilution rights or rights of first refusal or first
offer on the part of holders of the Company's securities.
3.7 CAPITALIZATION.
(a) The capitalization of the Company as of the date hereof,
including its authorized capital stock, the number of shares issued
and outstanding, the number of shares issuable and reserved for
issuance pursuant to the Company's stock option plans, the number of
shares issuable and reserved for issuance pursuant to securities
exercisable for, or convertible into or exchangeable for any shares of
capital stock of the Company is set forth on SCHEDULE 3.7(a) hereto.
All of such outstanding shares of capital stock have been, or upon
issuance will be, validly issued, fully paid and non-assessable. No
shares of the capital stock of the Company are subject to preemptive
rights or any other similar rights of the stockholders of the Company
or any liens or encumbrances created by or through the Company.
Except as disclosed on SCHEDULE 3.7(a), or as contemplated herein,
there are no outstanding options, warrants, scrip, rights to subscribe
to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into or exercisable or exchangeable
for, any shares of capital stock of the Company, or arrangements by
which the Company is or may become bound to issue additional shares of
capital stock of the Company.
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(b) Each Subsidiary's authorized capital stock is as set
forth on SCHEDULE 3.7(b). As of the Closing Date, there shall be no
declared but unpaid dividends or undeclared dividend arrearages on any
shares of capital stock of any of the Subsidiaries. The Company owns
of record and beneficially all shares of capital stock issued and
outstanding of each Subsidiary and no Subsidiary has any shares of
capital stock reserved for issuance or committed to be issued. There
are no outstanding preemptive, conversion or other rights, options,
warrants or agreements granted or issued by or binding upon any
Subsidiary for the purchase or sale of any shares of its capital
stock. All outstanding securities of each Subsidiary were issued in
compliance with all federal, state and foreign securities laws. None
of the Subsidiaries has any stock appreciation rights, phantom stock
plan or similar rights outstanding.
3.8 FINANCIAL STATEMENTS. The Company has furnished the Purchasers
with (a) consolidated balance sheets (the balance sheet dated as of December
31, 1998, the "BALANCE SHEET") of the Company and its Subsidiaries as of
December 31, 1997 and 1998, together with the consolidated statement of
operations and consolidated statement of cash flows for the years ended
December 31, 1997 and 1998 (the "FINANCIAL STATEMENTS"). The Financial
Statements of the Company, together with the notes thereto, have been
prepared in accordance with GAAP. The Financial Statements fairly and
accurately present in all material respects the financial position of the
Company and its Subsidiaries, and the results of their operations, as of, and
for the periods, specified therein. The Financial Statements are accompanied
by audit reports of Deloitte & Touche, which reports have been delivered to
the Purchasers.
3.9 EVENTS SUBSEQUENT TO DATE OF BALANCE SHEET. Except as
otherwise reflected on SCHEDULE 3.9, since the date of the Balance Sheet, the
Company has not (i) issued any stock, bond or other corporate security, (ii)
borrowed any amount or incurred or become subject to any liability (absolute,
accrued or contingent), except as contemplated hereby, immaterial amounts and
current liabilities incurred and liabilities under contracts entered into in
the ordinary course of business, (iii) discharged or satisfied any lien or
encumbrance or incurred or paid any obligation or liability (absolute,
accrued or contingent) other than as contemplated hereby, immaterial amounts
and current liabilities shown on the Balance Sheet and current liabilities
incurred since the date of the Balance Sheet in the ordinary course of
business, (iv) declared or made any payment or distribution to stockholders
or purchased or redeemed any share of its capital stock or other security,
(v) mortgaged, pledged or subjected to lien any of its assets, tangible or
intangible, other than liens of current real property taxes not yet due and
payable and except in the ordinary course of business, (vi) sold, assigned or
transferred any of its material tangible assets except in the ordinary course
of business, or canceled any debt or claim, (vii) sold, assigned, transferred
or granted any exclusive license with respect to any patent, trademark, trade
name, service xxxx, copyright, trade secret or other intangible asset, (viii)
suffered any material loss of property or waived any right of substantial
value whether or not in the ordinary course of business, (ix) made any
material change in officer compensation except in the ordinary course of
business and consistent with past practice, (x) made any material change in
the manner of business or operations of the Company, (xi) entered into any
material transaction except in the ordinary course of business or as
otherwise contemplated hereby or (xii) entered into any material commitment
(contingent or otherwise) to do any of the foregoing.
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3.10 TAXES. The Company and each of its Subsidiaries has filed all
foreign, federal, state and local tax reports and returns required by any law
or regulation to be filed by it, and such returns are true and correct in all
material aspects. The Company and each of its Subsidiaries has paid all
taxes, interest and penalties, if any, reflected on such tax returns or
otherwise due and payable by it. The reserves, if any, for taxes reflected
on the balance sheets included in the Financial Statements are adequate in
amount for the payment of all liabilities for all taxes (whether or not
disputed) of the Company and its Subsidiaries accrued through the dates of
such balance sheets. Any deficiencies proposed as a result of any
governmental audits of such tax returns have been paid or settled, and there
are no present disputes or audits as to taxes payable by the Company or any
of its Subsidiaries. The Company and each of its Subsidiaries have withheld
and paid over to the appropriate taxing authority all taxes which it is
required to withhold and pay over from amounts paid or owing to any employee,
stockholder or holder of any other type of equity interest in the Company,
any Subsidiary, creditor or third party.
3.11 LITIGATION. Except as set out in SCHEDULE 3.11, there is no
material claim, litigation or administrative proceeding pending, or, to the
Company's knowledge, threatened or contemplated, against the Company or any
of its Subsidiaries, or against any officer, director or, in connection with
such person's employment therewith, employee of the Company or any
Subsidiary. Neither the Company nor any of its Subsidiaries is a party to or
subject to the provisions of, any order, writ, injunction, judgment or decree
of any court or government agency or instrumentality which could reasonably
be expected to have a Material Adverse Effect.
3.12 TITLE TO PROPERTIES. The Company has good and marketable title
to all of its properties and assets. All such properties and assets are free
and clear of mortgages, pledges, security interests, liens, charges, claims,
restrictions and other encumbrances, except for liens for current taxes not
yet due and payable and minor imperfections of title, if any, not material in
nature or amount and not materially detracting from the value or impairing
the use of the property subject thereto or impairing the operations or
proposed operations of the Company.
3.13 LEASEHOLD INTERESTS. Each lease or agreement to which the
Company is a party under which it is a lessee of any property, real or
personal, is a valid agreement without any material default of the Company
thereunder and, to the best of the Company's knowledge, without any material
default thereunder of any other party thereto. No event has occurred and is
continuing which, with due notice or lapse of time or both, would constitute
a material default or event of default by the Company under any such lease or
agreement or, to the best of the Company's knowledge, by any other party
thereto. The Company's possession of such property has not been disturbed
and, to the best of the Company's knowledge, no claim has been asserted
against the Company adverse to its rights in such leasehold interests.
3.14 MATERIAL AGREEMENTS. SCHEDULE 3.14 sets forth a list of all
material agreements of any nature to which the Company is a party or by which
it is bound, including without limitation (a) each agreement which requires
future expenditures by the Company in excess of $25,000, (b) all employment
and consulting agreements, employee benefit, bonus, pension, profit sharing,
stock option, stock purchase and similar plans and arrangements, and
distributor and sales representative agreements, and (c) any agreement to
which any stockholder, officer or director of the Company, or
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any "affiliate" or "associate" of such persons (as such terms are defined in
the rules and regulations promulgated under the Securities Act), is presently
a party, including without limitation any agreement or other arrangement
providing for the furnishing of services by, rental of real or personal
property from, or otherwise requiring payments to, any such person or entity.
Except as set forth in SCHEDULE 3.14, the Company, and to the best of
the Company's knowledge, each other party thereto have in all material
respects performed all the obligations required to be performed by them to
date, have received no notice of default and are not in default in any
material respect (with due notice or lapse of time or both) under any
material lease, agreement or contract now in effect to which the Company is a
party or by which it or its property may be bound. The Company has no
present expectation or intention of not fully performing all its material
obligations under each such material lease, contract or other agreement, and
the Company has no knowledge of any breach or anticipated breach by the other
party to any contract or commitment to which the Company is a party. The
Company is in full compliance with all of the terms and provisions of its
charter and By-laws.
3.15 PATENTS, TRADEMARKS, ETC. SCHEDULE 3.15 contains a list and
brief description of all patents, patent rights, patent applications,
trademarks, trademark applications, service marks, service xxxx applications,
trade names and copyrights, and all applications for such which are in the
process of being prepared, owned by or registered in the name of the Company,
or of which the Company is a licensor or licensee or in which the Company has
any right, and in each case a brief description of the nature of such right.
The Company owns or possesses adequate licenses or other rights to use all
patents, patent applications, trademarks, trademark applications, service
marks, service xxxx applications, trade names, copyrights, manufacturing
processes, formulae, trade secrets and know how (collectively, "INTELLECTUAL
PROPERTY") necessary to the conduct of its business as conducted and no claim
is pending or, to the best of the Company's knowledge, threatened to the
effect that the operations of the Company infringe upon or conflict with the
asserted rights of any other Person under any Intellectual Property, and to
the best knowledge of the Company, there is no basis for any such claim
(whether or not pending or threatened). No claim is pending or, to the best
knowledge of the Company, threatened to the effect that any such Intellectual
Property owned or licensed by the Company, or which the Company otherwise has
the right to use, is invalid or unenforceable by the Company, and to the best
knowledge of the Company, there is no basis for any such claim (whether or
not pending or threatened). To the best of the Company's knowledge, all
technical information developed by and belonging to the Company which has not
been patented has been kept confidential. Except as set forth in SCHEDULE
3.15, the Company has not granted or assigned to any other person or entity
any right to manufacture, have manufactured, assemble or sell the products or
proposed products or to provide the services or proposed services of the
Company.
3.16 EMPLOYEE SALARIES. SCHEDULE 3.16 contains a true, correct and
complete list setting forth (i) the names and current salaries of the
employees of the Company or any of its Subsidiaries whose current annual
compensation and/or estimated annual compensation is $50,000 or more and (ii)
the names of independent contractors who render services on a regular basis
to the Company or any of its Subsidiaries whose current annual compensation
and/or estimated annual compensation is $50,000 or more. The Company is not
aware of any employee of the Company or any of its Subsidiaries that is
obligated under any contract (including licenses, covenants or commitments of
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any nature) or other agreement or arrangement, or subject to any judgment,
decree or order of any court or administrative agency, that would interfere
with the use of his or her best efforts to promote the interest of the
Company and its Subsidiaries or that would conflict with the business of the
Company or any of its Subsidiaries as conducted or as proposed to be
conducted or that would prevent any such employee from assigning inventions
to the Company or any of its Subsidiaries. The Company does not believe that
it is or will be necessary for the Company or any of its Subsidiaries to
utilize any inventions of its employees (or Persons the Company or any of its
Subsidiaries currently intends to hire) made prior to their employment by the
Company or any of its Subsidiaries except for inventions that have been
assigned to the Company.
3.17 PERSONNEL CONTRACTS, AGREEMENTS, PLANS AND ARRANGEMENTS. Except
for agreements listed in SCHEDULE 3.14 and the Company's stock option plans,
neither the Company nor any of its Subsidiaries is a party to or obligated in
connection with their business, with respect to any (a) material contracts with
employees, agents, consultants, advisers, salesmen or agents (b) collective
bargaining agreements or contracts or contracts with any labor union or other
representative of employees or any employee benefits provided for by any such
agreement. No strike, union organizational activity, allegation, charge or
complaint of employment discrimination or other similar occurrence occurred
during the past five completed fiscal years, or is pending or, to the Company's
knowledge, threatened against the Company or any of its Subsidiaries that has
had or may have a Material Adverse Effect, nor does the Company know any basis
for any such allegation, charge or complaint. Except as set forth in SCHEDULE
3.17, the Company is not aware that any officer or key employee, or that any
group of key employees, intends to terminate their employment with the Company,
nor does the Company have a present intention to terminate the employment of any
of the foregoing. Except as set forth on SCHEDULE 3.17, the employment of each
officer and employee of the Company is terminable at the will of the Company,
and no severance pay is due in connection with any such termination. To the
best of its knowledge, the Company has complied in all material respects with
all applicable federal and state equal employment opportunity and other laws
related to employment.
3.18 RELATED-PARTY TRANSACTIONS. No employee, officer or director
of the Company or member of his or her immediate family is indebted to the
Company, nor is the Company indebted (or committed to make loans to or extend
or guarantee credit) to any of them. Except as set forth in SCHEDULE 3.18,
to the best of the Company's knowledge, none of such Persons has any direct
or indirect ownership interest in any firm or company with which the Company
is affiliated or with which the Company has a business relationship, or any
firm or corporation that competes with the Company, except that employees,
officers or directors of the Company and members of their immediate families
may own stock in publicly traded companies that may compete with the Company.
No member of the immediate family of any officer or director of the Company
is directly or indirectly interested in any material contract with the
Company.
3.19 INSURANCE. The Company and its Subsidiaries carry insurance
with financially sound reputable insurance companies, in such amounts, with
such deductibles and covering such risks as are customarily carried by
companies engaged in similar businesses.
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3.20 SOFTWARE. The Company and each of its Subsidiaries has
conducted an analysis of, and developed a compliance program (the "COMPLIANCE
PROGRAM") with respect to the effect of Year 2000 (including the correct
processing and calculation of dates prior to, during and after the Year 2000)
upon the software, tradeware, telecommunications and automated processes of
the Company and its Subsidiaries. The Compliance Program adequately and
fully resolves the Year 2000 issues and the Compliance Program will be
implemented in a timely manner so that the Year 2000 will not have a Material
Adverse Effect.
3.21 ENVIRONMENTAL AND SAFETY LAWS. To the best of its knowledge,
the Company is not in violation of any applicable statute, law or regulation
relating to the environment or occupational health and safety which would
have a Material Adverse Effect, and to the best of its knowledge, no material
expenditures are or will be required in order to comply with any such
existing statute, law or regulation.
3.22 REGISTRATION RIGHTS; RIGHTS OF PARTICIPATION. Except as
provided in the Transaction Documents or in SCHEDULE 3.22, the Company has
not granted or agreed to grant to any person or entity any rights (including
"piggy-back" registration rights) to have any securities of the Company
registered with the Commission or any other governmental authority which has
not been satisfied and no person or entity, including, but not limited to,
current or former stockholders of the Company, underwriters, brokers, agents
or other third parties, has any right of first refusal, preemptive right,
right of participation, or any similar right to participate in the
transactions contemplated by this Agreement or the other Transaction
Documents which has not been waived.
3.23 FEES. The Company is not obligated to pay any compensation or
other fee, cost or related expenditure to any underwriter, broker, agent or
other representative in connection with the transactions contemplated hereby.
3.24 TRADING ON ALBERTA STOCK EXCHANGE. The subordinate voting
shares of the Company are listed on the Alberta Stock Exchange and trading in
such shares on such market has not been suspended. The Company is in full
compliance with the continued listing criteria of the Alberta Stock Exchange,
and does not reasonably anticipate that the subordinate voting shares will be
delisted from the Alberta Stock Exchange, whether by reason of the
transactions contemplated by this Agreement or the other Transaction
Documents and is not aware of any inquiry by or received any notice from the
Alberta Stock Exchange regarding any failure or alleged failure by the
Company to comply with such requirements which has not been favorably
resolved prior to the date hereof.
3.25 REGULATORY PERMITS. The Company and its Subsidiaries possess
all material certificates, authorizations and permits issued by the
appropriate federal, state or foreign regulatory authorities necessary to
conduct their respective businesses, and neither the Company nor any such
Subsidiary has received any notice of proceedings relating to the revocation
or modification of any such certificate, authorization or permit.
-10-
3.26 DISCLOSURE. Neither this Agreement nor any Schedule or Exhibit
to this Agreement contains an untrue statement of a material fact or omits a
material fact necessary to make the statements contained herein or therein
not misleading. None of the statements, documents, certificates or other
items prepared or supplied by the Company with respect to the transactions
contemplated hereby contains an untrue statement of a material fact or omits
a material fact necessary to make the statements contained therein not
misleading. There is no fact which the Company has not disclosed to the
Purchasers and, if applicable, their counsel in writing and of which the
Company is aware which materially and adversely affects or could materially
and adversely affect the business, financial condition, operations, property
or affairs of the Company.
4. COVENANTS OF THE COMPANY.
Subject to the provisions of SECTION 6, the Company covenants and
agrees as follows:
4.1 CORPORATE EXISTENCE. The Company shall maintain its corporate
existence in good standing and shall pay all taxes owed by it when due except
for taxes which the Company reasonably disputes and for which it maintains
adequate reserves.
4.2 FINANCIAL STATEMENTS. The Company shall provide each Purchaser:
(i) as soon as practicable after the end of each fiscal year
of the Company, and in any event within one hundred forty (140) days
thereafter (provided, however, that if any Person other than the
Purchasers is entitled to receive the information described in this
SECTION 4.2(i) any earlier than one hundred forty (140) days from the
end of each fiscal year, each Purchaser shall also be entitled to such
information within such earlier period), consolidated balance sheets
of the Company and its Subsidiaries, as of the end of such year, and
consolidated statements of operations and cash flow of the Company and
its Subsidiaries, for each such fiscal year, prepared in accordance
with GAAP and setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail and
accompanied by the audit report of the Company's independent certified
public accountants; and
(ii) as soon as practicable after the end of each fiscal
quarter, other than the end of the fiscal year, of the Company, and in
any event within sixty (60) days thereafter (provided, however, that
if any Person other than the Purchasers is entitled to receive the
information described in this SECTION 4.2(ii) any earlier than sixty
(60) days from the end of each fiscal quarter, each Purchaser shall
also be entitled to such information within such earlier period),
consolidated balance sheets of the Company and its Subsidiaries, as of
the end of such quarter, and consolidated statements of operations and
cash flow of the Company and its Subsidiaries, for each such fiscal
quarter, prepared in accordance with GAAP (except for footnote
disclosure), subject to changes resulting from normal year-end audit
adjustments, all in reasonable detail.
4.3 FORM D; BLUE-SKY QUALIFICATION. The Company agrees to file a
Form D with respect to the Units as required under Regulation D and to
provide a copy thereof to the
-11-
Purchasers promptly after such filing. The Company shall, on or before the
Closing Date, take such action as is necessary to qualify the Units for sale
under applicable state or "blue-sky" laws or obtain an exemption therefrom,
and shall provide evidence of any such action to the Purchasers at or prior
to the Closing.
4.5 USE OF PROCEEDS. The Company shall use the proceeds from the
sale of the Units for general corporate purposes only, in the ordinary course
of its business and consistent with past practice.
4.6 TRANSACTIONS WITH AFFILIATES. The Company agrees that any
transaction or arrangement between it or any of its subsidiaries and any
affiliate or employee of the Company shall be effected on an arms' length
basis in accordance with customary commercial practice and shall be approved
by a majority of the Company's outside directors.
5. CONDITIONS TO CLOSING.
5.1 CONDITIONS TO PURCHASERS' OBLIGATIONS AT CLOSING. Each
Purchaser's obligations at the Closing, including without limitation its
obligation to purchase Units, are conditioned upon the fulfillment (or waiver
by such Purchaser) of each of the following events as of the Closing Date:
5.1.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company set forth in this Agreement shall be true and
correct in all material respects as of such date as if made on such date.
5.1.2 PERFORMANCE. The Company shall have complied with or
performed in all material respects all of the agreements, obligations and
conditions set forth in this Agreement that are required to be complied
with or performed by the Company on or before the Closing.
5.1.3 COMPLIANCE CERTIFICATE. The Company shall have delivered
to such Purchaser a certificate, signed by an officer of the Company,
certifying that the conditions specified in paragraphs 5.1.1, 5.1.2 and
5.1.11 have been fulfilled as of the Closing.
5.1.4 SECRETARY'S CERTIFICATE. The Company shall have delivered
to such Purchaser a certificate, signed by the Secretary of the Company,
attaching a copy of the Articles of Incorporation and By-laws of the
Company currently in effect and a copy of the resolutions of the Board
authorizing the transactions contemplated hereby, and certifying that
such copies are true and correct as of the Closing Date and that such
resolutions have not been modified or rescinded since the date of their
adoption by the Company's Board.
5.1.5 LEGAL OPINION. The Company shall have delivered to
Purchaser an opinion of counsel for the Company, dated as of such date,
in form reasonably acceptable
-12-
to the Purchasers, and covering such additional matters as may
reasonably be requested by the Purchasers.
5.1.6 CERTIFICATES. The Company shall have delivered duly
executed certificates representing the Subordinate Shares being purchased
by such Purchaser.
5.1.7 WARRANTS. The Company shall have executed and delivered to
such Purchaser the applicable Warrant in the form of EXHIBIT B hereto.
5.1.8 REGISTRATION RIGHTS AGREEMENT. The Company shall have
executed and delivered to such Purchaser the Registration Rights
Agreement in the form of EXHIBIT C hereto.
5.1.9 SHAREHOLDERS AGREEMENT. The Company, Avi Xxx-Xxxxxxx and
the other stockholders shall have executed and delivered to such
Purchaser the Shareholders' Agreement in the form of EXHIBIT D hereto.
5.1.10 ALBERTA STOCK EXCHANGE. The Alberta Stock Exchange shall
have accepted notice of the issuance of the Units. The subordinate
voting shares of the Company shall be quoted on the Alberta Stock
Exchange and trading in such shares on such exchange shall not have been
suspended.
5.1.11 NO MATERIAL ADVERSE CHANGE. There shall have been no
Material Adverse Change since the date of the Balance Sheet.
5.1.12 EMPLOYMENT AGREEMENTS. The Company and each of Xxxxxxx
Xxxxx ("XXXXX") and Xxxxxxx Xxxxxxxxx ("XXXXXXXXX") shall have entered
into amendments to Xxxxx' and Donenberg's Employment Agreements dated
January 21, 1998 and June 11, 1998, respectively, in the forms of EXHIBIT
E-1 AND E-2 hereto.
5.2 CONDITIONS TO COMPANY'S OBLIGATIONS AT CLOSING. The Company's
obligations at the Closing are conditioned upon the fulfillment (or waiver by
the Company) of each of the following events as of the Closing Date:
5.2.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of each Purchaser shall be true and correct in all material
respects as of such date as if made on such date.
5.2.2 PERFORMANCE. The Purchasers shall have complied with or
performed all of the agreements, obligations and conditions set forth in
this Agreement that are required to be complied with or performed by the
Purchasers on or before the Closing.
5.2.3 PRIVATE PLACEMENT QUESTIONNAIRE. Each Purchaser shall have
executed and delivered to the Company a Private Placement Questionnaire
and Undertaking as required by the Alberta Stock Exchange.
-13-
5.2.4 NO LITIGATION OR LEGISLATION. No statute, rule,
regulations, decree, ruling or injunction shall have been enacted or
entered, and no litigation, proceeding government inquiry or
investigation shall be pending, which challenges, prohibits, restricts,
or seeks to prohibit or restrict, the consummation of the transactions
contemplated by this Agreement or other agreements referred to herein, or
restricts or impairs the ability of the Purchasers to own an equity
interest in the Company.
6. TERMINATION OF CERTAIN COVENANTS:
The obligations of the Company under SECTION 4 of this Agreement,
notwithstanding any provisions hereof apparently to the contrary, shall
terminate and shall be of no further force or effect on the closing date of a
bona fide, firmly underwritten public offering of the Company's capital stock,
registered under the Securities Act pursuant to a registration statement on Form
S-1 (or a similar successor form). Furthermore, the obligations of the Company
under SECTION 4 of this Agreement shall terminate and shall be of no further
force or effect on the date that the Purchasers or any of them sell or transfer
any shares of capital stock if, following such sale or transfer, the Purchasers
(and any Permitted Transferees (as defined in the Shareholders' Agreement) and
entities controlled by them), in the aggregate, own less than ten percent (10%)
of the outstanding shares of capital stock originally issued or issuable
pursuant to this Agreement and the Warrants.
7. DEFINITIONS.
7.1 DEFINITIONS. In addition to the capitalized terms defined
elsewhere in this Agreement, the following capitalized terms have the following
meanings when used in this Agreement:
"AFFILIATE" means, as applied to any Person, (i) any other Person, directly or
indirectly controlling, controlled by, or under common control with, that
Person, (ii) any other Person that owns or controls (A) ten percent (10%) or
more of any class of equity securities of that Person or any of its Affiliates
or (B) ten percent (10%) or more of any class of equity securities (including
equity securities issuable upon the exercise of any option or convertible
security) of that Person or any of its Affiliates or (iii) any director,
executive officer or relative of such Person. The term "control" (including,
with correlative meanings, the terms "controlling," "controlled by" and "under
common control with"), as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of that Person, whether through ownership of voting securities, by
contract or otherwise. For purposes of this Agreement, each Subsidiary of the
Company shall be deemed an "Affiliate" of the Company.
"BOARD" means the Board of Directors of the Company.
-14-
"BUSINESS DAY" means any day on which the Alberta Stock Exchange and
commercial banks in the City of Chicago, Illinois are open for business.
"GAAP" means generally accepted accounting principles, consistently applied.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the business,
assets or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole.
"PERSON" means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust , a joint venture, an
unincorporated organization or a governmental entity or any department, agency
or political subdivision thereof.
"SUBSIDIARY" means any corporation, association or other entity of which
securities or other ownership interests representing more than fifty percent
(50%) of the ordinary voting power are, at the time as of which any
determination is being made, owned or controlled by the Company and/or any one
or more Subsidiaries of the Company.
7.2 RULES OF CONSTRUCTION. The following provisions shall be applied
wherever appropriate herein:
(a) "herein," "hereby," "hereunder," "hereof" and other
equivalent words shall refer to this Agreement as an entirety and not
solely to the particular portion of this Agreement in which any such word
is used;
(b) all definitions set forth herein shall be deemed applicable
whether the words defined are used herein in the singular or the plural;
(c) wherever used herein, any pronoun or pronouns shall be
deemed to include both the singular and plural and to cover all genders;
(d) all accounting terms not specifically defined herein shall
be construed in accordance with GAAP;
(e) all references herein to "Dollars" or "$" shall refer to
currency of the United States of America;
(f) neither this Agreement nor any other agreement, document or
instrument referred to herein or executed and delivered in connection
herewith shall be construed against either party as the principal
draftsperson hereof or thereof;
(g) all references or citations in this Agreement to statutes
or regulations or statutory or regulatory provisions shall generally be
considered citations to such statutes, regulations or provisions as in
effect on the date hereof, except that when the context otherwise
requires, such references shall be considered citations to such statutes,
regulations or provisions as in effect from time to time, including any
successor statutes,
-15-
regulations or provisions directly or indirectly superseding such
statutes, regulations or provisions;
(h) any references herein to a particular Section, Part,
Exhibit or Schedule means a Section or Part of, or an Exhibit or Schedule
to, this Agreement unless another agreement is specified; and
(i) the Exhibits and Schedules attached hereto are incorporated
herein by reference and shall be considered part of this Agreement.
8. MISCELLANEOUS.
8.1 SURVIVAL; SEVERABILITY. The representations, warranties,
covenants and indemnities made by the parties herein shall survive the Closing
notwithstanding any due diligence investigation made by or on behalf of the
party seeking to rely thereon. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided that in such case the parties shall
negotiate in good faith to replace such provision with a new provision which is
not illegal, unenforceable or void, as long as such new provision does not
materially change the economic benefits of this Agreement to the parties.
8.2 SUCCESSORS AND ASSIGNS. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors of the parties. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors any rights, remedies, obligations or liabilities under or
by reason of this Agreement, except as expressly provided in this Agreement.
This Agreement may not be assigned by any party hereto without the express
written consent of all other parties hereto.
8.3 GOVERNING LAW; JURISDICTION. This Agreement shall be governed by
and construed under the laws of the State of Illinois without regard to the
conflict of laws provisions thereof. Each party hereby irrevocably submits to
the non-exclusive jurisdiction of the state and federal courts sitting in the
City of Chicago, Illinois, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address in effect for notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law.
8.4 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
-16-
8.5 HEADINGS. The headings used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
8.6 NOTICES. Any notice, demand or request required or permitted to
be given by any party to any other party pursuant to the terms of this Agreement
shall be in writing and shall be deemed given (i) when delivered personally or
by verifiable facsimile transmission (with an original to follow) on or before
5:00 p.m., Chicago time, on a Business Day or, if such day is not a Business
Day, on the next succeeding Business Day, (ii) on the next Business Day after
timely delivery to a nationally-recognized overnight courier and (iii) on the
third Business Day after deposit in the U.S. mail (certified or registered mail,
return receipt requested, postage prepaid), addressed to the parties as follows:
If to the Company:
Xxx-Xxxxxxx Technologies, Inc.
000 Xxxx Xxxx Xxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
Tel: 000-000-0000
Fax: 000-000-0000
with a copy to:
Xxxxxx & Xxxxxx
Scotia Plaza, Suite 4100
40 King Street West
Toronto, Canada M5H 3Y4
Attn: Xxxx Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
and if a Purchaser, to such address as indicated on EXHIBIT A
hereto
with a copy to:
Ungaretti & Xxxxxx
0000 Xxxxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
8.8 EXPENSES. The Company and the Purchasers each shall pay all costs
and expenses that they incur in connection with the negotiation, execution,
delivery and performance of this
-17-
Agreement; provided, however, that the Company shall reimburse the Purchasers
for all reasonable legal fees and expenses incurred by the Purchasers in
connection with its due diligence investigation of the Company and the
negotiation, preparation, execution, delivery and performance of this
Agreement and the other Transaction Documents in an amount not to exceed (i)
twenty-five thousand dollars ($25,000) if any Purchaser does not purchase
Units and (ii) seventy-five thousand dollars ($75,000) if any Purchaser does
purchase Units.
8.9 ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the other
Transaction Documents constitute the entire agreement between the parties with
regard to the subject matter hereof and thereof, superseding all prior
agreements or understandings, whether written or oral, between or among the
parties. Except as expressly provided herein, neither this Agreement nor any
term hereof may be amended except pursuant to a written instrument executed by
the Company and the Purchasers, and no provision hereof may be waived other than
by a written instrument signed by the party against whom enforcement of any such
waiver is sought.
[signature page attached]
-18-
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first-above written.
XXX-XXXXXXX TECHNOLOGIES INC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------------
Xxxxxxx X. Xxxxx, President and
Chief Executive Officer
/s/ Xxxxxx X. Xxxxxx Revocable Trust
------------------------------------------
/s/ Xxxxxxxx X. Xxxxxx Trust
------------------------------------------
/s/ Xxxxxxx X. Xxxxx Trust
------------------------------------------
/s/ Couderay Partners
------------------------------------------
/s/ Xxxxxx Xxxx, Xx. Revocable Trust
------------------------------------------
/s/ Xxxx Xxxxxxx
------------------------------------------
/s/ Morningstar Trust by Xxxx Xxxxxxxxxxx,
Trustee
------------------------------------------
/s/ Xxxxxx Xxxxxxxxxxx
------------------------------------------
/s/ Resolute Partners by Xxxxxx Xxxxxxxxxxx
------------------------------------------
/s/ Xxxxxxxxx Asset Management
------------------------------------------
/s/ Xxxxxxxx Xxxxxxxxx
------------------------------------------
/s/ Xxxxxx X. Xxxxx, Xxxxx Xxxxx, Trustee
------------------------------------------
/s/ Xxxxx X. Xxxx Trust, Xxxxx X. Xxxx,
Trustee
------------------------------------------
/s/ Xxxxxx Xxxx
------------------------------------------
/s/ Xxxxxx X. Xxxx Revocable Trust,
Xxxxxx X. Xxxx, Trustee
------------------------------------------
/s/ Xxxxxx X. Xxxx
------------------------------------------
-19-
/s/ Xxxx X. Xxxxxx
------------------------------------------
/s/ Xxxxxx X. Xxxxxxx
------------------------------------------
/s/ Xxxxx Xxxxxx
------------------------------------------
/s/ JO & Co. by Xxxx X. Xxxxxxx,
Partner
------------------------------------------
/s/ Xxxxxxx Xxxxxxxxx
------------------------------------------
/s/ The Xxxxxxxxxx & Xxxxxxx Profit
Sharing Plan & Trust by Xxxx X. Xxxxxxxxxx,
Trustee
------------------------------------------
/s/ Xxxxxxxx X. Xxxxxx Trust, Xxxxxxxx
X. Xxxxxx, Trustee
------------------------------------------
/s/ Xxxxxxx X. Xxxxx
------------------------------------------
/s/ Xxxxxxx X. Xxxxx
------------------------------------------
/s/ Xxxxxx Xxxxxxx
------------------------------------------
/s/ Hans Xxxxxxx Xxxxxx
------------------------------------------
/s/ King Xxx Xxxx
------------------------------------------
/s/ Xxxxxxx Xx
------------------------------------------
-20-
EXHIBIT A
TO SECURITIES PURCHASE AGREEMENT
TOTAL
PURCHASE
STARBOW INVESTORS ADDRESS UNITS PRICE
--------------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxx Revocable Trust 0 X. XxXxxxx Xxxxxx, Xxxxx 000 3.0 $141,811
Xxxxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------
Xxxxxxxx X. Xxxxxx Trust 0 X. XxXxxxx Xxxxxx, Xxxxx 000 1.5 70,905
Xxxxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------
Xxxxxxx X. Xxxxx Trust 0 X. XxXxxxx Xxxxxx, Xxxxx 000 2.0 94,541
Xxxxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------
Couderay Partners 0 X. XxXxxxx Xxxxxx, Xxxxx 000 2.0 94,541
Xxxxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxx, Xx. Revocable Trust 0 X. XxXxxxx Xxxxxx, Xxxxx 000 0.5 23,635
Xxxxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------
Xxxx Xxxxxxx 0 X. XxXxxxx Xxxxxx, Xxxxx 000 1.0 47,270
Xxxxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------
Morningstar Trust by Xxxx Xxxxxxxxxxx, Trustee 000 Xxxx Xxxxxx 2.0 94,541
Xxxxxxxx Xxxx, XX 00000
--------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxxxxxxx 000 Xxxx Xxxxxx 6.0 283,622
Xxxxxxxx Xxxx, XX 00000
--------------------------------------------------------------------------------------------------------------
Resolute Partners 000 Xxxx Xxxxxx 2.0 94,541
Xxxxxxxx Xxxx, XX 00000
--------------------------------------------------------------------------------------------------------------
Xxxxxxxxx Asset Management 00000 Xxxxxx Xxxx, Xxxxx 000 0.5 23,635
Xxxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------
Xxxxxxxx Xxxxxxxxx 00000 Xxxxxx Xxxx, Xxxxx 000 0.5 23,635
Xxxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxx, Custodian for Xxxx Xxxxx 0000 Xxxxxxxx Xxxx 0.5 23,635
Xxxxxxxx Xxxx, XX 00000
--------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxx 0000 Xxxxxxxx Xxxx 0.5 23,635
Xxxxxxxx Xxxx, XX 00000
--------------------------------------------------------------------------------------------------------------
Xxxxx X. Xxxx Trust, Xxxxx X. Xxxx Trustee 0000 X. Xxxxxxxx Xxxxxx 1.0 47,270
Xxxxxxxx Xxxx, XX 00000
--------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxx 000 Xxxxx Xxxxx 1.0 47,270
Xxxxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxx Revocable Trust, Xxxxxx X. Xxxx 1935A X. Xxxxxx 1.0 47,270
Trustee Xxxxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxx c/o Harris Associates 2.0 94,541
0 X. XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------
Xxxx X. Xxxxxx 2349 Wood Path 1.0 47,270
Xxxxxxxx Xxxx, XX 00000
--------------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxxx 0000 X. Xxxxxxxx Xxx. 0.5 23,635
Xxxxx 000
Xxxxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxx 2233 X. Xxxxxxx 6.0 283,622
Xxxxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------
JO & Co. 000 X. Xxxxxxxxx Xxxx. 30.0 1,418,108
Xxxxx 000
Xxxxx Xxxx, XX 00000
--------------------------------------------------------------------------------------------------------------
Sherwin and Xxxxx Xxxxxxxxx 0000 Xxxxx Xx. 3.0 141,811
Xxxxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------
The Xxxxxxxxxx & Xxxxxxx Profit Sharing Plan & Trust c/o Ungaretti & Xxxxxx 1.0 47,270
by Xxxx X. Xxxxxxxxxx 0000 Xxxxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------
Xxxxxxxx X. Xxxxxx Trust, Xxxxxxxx X. Xxxxxx Trustee 000 Xxxxxxxxx Xx. 1.5 70,905
Xxxxxxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------
Xxxxxxx X. Xxxxx 000 Xxxxxxxxx Xxxxx 0.5 23,635
Xxxxxxxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------
Xxxxxxx X. Xxxxx 175 Old Half Day Rd. 1.0 47,270
Xxxxxxxxxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxxx 0000 Xxxxxx Xxxxx Xxxxx 1.0 47,270
Xx Xxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------
TOTAL 72.5 $3,427.094
--------------------------------------------------------------------------------------------------------------
EXHIBIT A
TO SECURITIES PURCHASE AGREEMENT
--------------------------------------------------------------------------------------------------------------
TOTAL
PURCHASE
HONG KONG INVESTORS ADDRESS UNITS PRICE
--------------------------------------------------------------------------------------------------------------
Hans Xxxxxxx Xxxxxx 31/F. Xxxxxxxx Center 6.0 283,622
00 Xxx Xxxx Xxxx
Xxxxxxxx Xxx, Xxxx Xxxx
--------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx 31/F. Xxxxxxxx Center 2.0 94,540
00 Xxx Xxxx Xxxx
Xxxxxxxx Xxx, Xxxx Xxxx
--------------------------------------------------------------------------------------------------------------
King Xxx Xxxx Room 2101 6.0 283,622
Xxxxxxxxx Xxxxx
Xxx Xxxxxxxxx Xxxxxxx Xxxxxxx
Xxxx Xxxx
--------------------------------------------------------------------------------------------------------------
Xxxxxxx Xx 1 Repulse Bay 6.0 283,622
Hong Kong
--------------------------------------------------------------------------------------------------------------
TOTAL 20 $945,406
--------------------------------------------------------------------------------------------------------------
EXHIBIT B
TO SECURITIES PURCHASE AGREEMENT
FORM OF WARRANT
See Tab No. 9
EXHIBIT C
TO SECURITIES PURCHASE AGREEMENT
FORM OF REGISTRATION RIGHTS AGREEMENT
See Tab No. 5
EXHIBIT D
TO SECURITIES PURCHASE AGREEMENT
FORM OF SHAREHOLDERS' AGREEMENT
See Tab No. 4
EXHIBIT E-1 AND E-2
TO SECURITIES PURCHASE AGREEMENT
FORM OF AMENDED EMPLOYMENT AGREEMENT
OF
XXXXXXX XXXXX
AND
XXXXXXX XXXXXXXXX
See Tab No. 10
