Exhibit 5
XxXxxx Technologies, Inc.
Supplemental Common Stock and Five-Year Warrant
Purchase Agreement
This Agreement is made as of October 26, 1998 by and among XxXxxx
Technologies, Inc., a Delaware corporation (the "Company"), with an office at 00
Xxxxxxxxxx Xxxxxx, Xxxxx Xxxxxx Xxxxx, Xxx Xxxxxx, 00000, its principal
stockholders, Xxx Xxxxx and Xxxxxx Xxxxxxxxx (hereinafter referred to
individually as a "Principal Stockholder" and collectively as "Principal
Stockholders"), and the purchasers identified on Schedule 1 hereto (hereinafter
referred to individually as a "Supplemental Purchaser" and collectively as
"Supplemental Purchasers").
WHEREAS, pursuant to a Common Stock and Five-Year Warrant Purchase
Agreement dated as of June 15, 1998 among the Company, the Principal
Stockholders, and certain of the Supplemental Purchasers (the "Original
Agreement," the defined terms in which shall also be used here with their same
meanings), the Company agreed to issue and sell and the Supplemental Purchasers
agreed to purchase investment units consisting of Shares and Warrants the net
proceeds of which were to be used for the purposes set forth in Section 6.5 of
the Original Agreement, and
WHEREAS, the Company has not yet met the conditions for the Tranche 2
Closing or the Second Closing and requires additional financing of up to
$480,000 through March 31, 1999 to proceed with its current business plan, and
WHEREAS, the Supplemental Purchasers are willing to provide additional
financing of up to $480,000 through the purchase of additional investment units
consisting of Shares and Warrants subject to the terms and conditions hereof,
including an amendment of the Original Agreement,
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter contained, the parties hereto do hereby agree as follows:
1. Purchase and Sale.
1.1 Authorization. The Company has authorized the sale and issuance of
up to 960,000 Shares and five-year Warrants to purchase up to 2,400,000
additional Shares at an exercise price of $.50 per Share.
1.2 Sale of Shares and Warrants. Subject to the provisions of this
Agreement, including the form of Share Purchase Warrant attached as Exhibit A to
the Original Agreement, and on the closing dates set forth below, the Company
will sell to each of the Supplemental Purchasers, severally and not jointly, and
each of the Supplemental Purchasers, severally and not jointly, will purchase
from the Company, up to a total amount of 960,000 investment units each
consisting of 1 Share and Warrants to purchase 2.5 Shares in the number of
Shares and Warrants set forth opposite each Purchaser's name in Schedule 1
attached hereto at the purchase price of $.50 per investment unit or a maximum
purchase price of up to a total amount of $480,000.
2. Closings of Purchases and Sales. The Supplemental Purchasers hereby
agree to immediately wire transfer immediately available funds in an amount
equal to their respective maximum potential purchase price amounts to an account
designated by the Chief Financial Officer of the Tisch Family Interests who will
act as their agent (the "Agent") to make purchases of investment units on their
behalf at closings hereunder. In order to obtain any financing hereunder, the
Company must on or before March 31, 1999 give the Agent at least ten (10) days
written notice of its desire to obtain such financing setting forth in detail
each proposed expenditure required (the "Proposed Expenditure"), the purpose
therefor, the payee or payees and any other pertinent information. The Agent
must either accept or decline the Company's request to finance the Proposed
Expenditure by replying in writing within ten (10) days of receipt of the
Company's notice. Each purchase and sale shall be consummated at a closing on
the date set forth in the notice requesting the Proposed Expenditure. The
aggregate purchase price paid by the Agent on behalf of the Supplemental
Purchasers shall be an amount up to the total amount requested, and the total
number of investment units issued and sold to the Supplemental Purchasers shall
be two times the aggregate purchase price paid, allocated to each Supplemental
Purchaser pro rata according to percentages set forth in Schedule 1. The Agent
will pay the Company the purchase price for the investment units by wire
transfer of immediately available funds to a bank account designated by the
Company, with the Company being obligated to disburse such funds directly to the
payees listed in the request for the Proposed Expenditure which has been
accepted by the Agent on behalf of the Supplemental Purchasers, provided,
however, that the Agent reserves the right to make such payment by disbursing
funds directly to such payees. At any such closing, and as a condition thereto,
the Company will deliver to the Supplemental Purchasers (or the Agent on their
behalf) certificates representing the number of Shares and Warrants subject to
purchase, together with a copy of an opinion of counsel as provided in Section
2.1 of the Original Agreement and a bring-down certificate executed by each
Principal Stockholder and the Company stating (i) that the representations and
warranties set forth in Section 3 of the Original Agreement are true and correct
in all material respects on the date of such closing and (ii) that the Company
has performed and complied in all material respects with all covenants and
agreements provided in Section 6 required of it on or prior to the date of such
closing. The Agent for the Supplemental Purchasers will deliver to the Company a
certificate stating that the representations and warranties set forth in Section
4 of the Original Agreement are true and correct on the date of such closing.
The Agent for the Supplemental Purchasers may at any time upon ten (10) days
written notice to the Company on or before March 31, 1999 elect to purchase the
balance of investment units not purchased prior to the date of such notice at a
closing to be held ten (10) days from the date of such notice subject to all of
the terms and conditions hereof. No Supplemental Purchaser shall have any
liability or obligation to the Company or any other party for any amount
requested which is declined by the Agent on behalf of the Supplemental
Purchasers. The Agent shall return to the Supplemental Purchasers any amounts
not used to purchase investment units on or before March 31, 1999.
3. Representations and Warranties of the Company and its Principal
Stockholders. Each of the Company's Principal Stockholders and the Company
hereby represents and warrants to each of the Supplemental Purchasers that the
representations and warranties set forth in Section 3 of the Original Agreement
are true and correct in all material respects as of the date hereof.
4. Representations and Warranties of Each Supplemental Purchaser. Each
Supplemental Purchaser severally represents and warrants that the
representations and warranties set forth in Section 4 of the Original Agreement
are true and correct in all material respects as of the date hereof.
5. Survival of Representations and Warranties and Indemnification.
5.1 Survival of Representations and Warranties. The representations and
warranties of each Principal Stockholder and the Company and each Supplemental
Purchaser which are set forth in Sections 3 and 4, respectively, shall survive
each closing and remain in full force and effect until the expiration of any
applicable limitations period.
5.2 Indemnification by Principal Stockholder and the Company. Each of
Xxx Xxxxx and the Company will indemnify, defend, save and hold harmless each
Supplemental Purchaser from and against any and all damage, liability, loss,
penalty, expense, assessment, judgment or deficiency of any nature whatsoever
(including, without limitation, reasonable attorney's fees and expenses incident
to any suit, action or proceeding) whether upon the occurrence thereof or
thereafter (collectively, "Losses") incurred or sustained by such Supplemental
Purchaser which shall arise out of or result from any breach of any
representation, warranty or agreement given or made by such indemnifying party.
5.3 Indemnification by Each Supplemental Purchaser. Each Supplemental
Purchaser, severally and not jointly, will indemnify, defend, save and hold
harmless the Company from and against any and all Losses incurred or sustained
by the Company which shall arise out of or result from any breach of any
representation or warranty given or made by such Supplemental Purchaser herein.
6. Further Agreements, Assurances, and Covenants. The Company hereby
confirms that it has performed and complied in all material respects with all
covenants and agreements provided in Section 6 of the Original Agreement which
are required of it on or prior to the date hereof. The Company agrees that it
will take all necessary action as soon as is reasonably possible, including
holding a meeting of stockholders or obtaining written consents of stockholders,
to amend the Certificate of Incorporation to authorize a sufficient number of
shares to provide for the issuance of shares upon the exercise of all
outstanding warrants and convertible debentures, including the Warrants for
which a sufficient number of authorized but unissued Shares must be reserved.
The Company agrees that all legal fees and expenses incurred by the Supplemental
Purchasers in connection with entering into and accomplishing the transactions
under this Agreement and any incurred in connection with disputes regarding this
Agreement brought about by inaccuracies, misrepresentations or breach of any of
the above will be paid for by the Company. The Company also agrees that the
Supplemental Purchasers shall have the registration rights with respect to the
Shares and Warrants set forth in the Registration Rights Agreement attached to
the Original Agreement.
7. Salary Deferral. Xxx Xxxxx hereby agrees to defer and subordinate
his salary from the Company from the date hereof through March 31, 1999 or such
earlier date as the Company shall have available cash flow from revenues.
8. Amendment of Purchase Price. The Company hereby agrees to amend
Section 2.1(b) and Section 2.2 of the Original Agreement to provide that the
purchase price for each investment unit will be reduced from $.90 to $.75 and
the exercise price of each Warrant will be reduced from $1.00 to $.75 per Share.
9. Miscellaneous.
9.1 Notices. All notices, requests, consents and other communications
herein shall be in writing and shall be mailed by registered or certified mail,
postage prepaid, or personally delivered, as follows:
(a) If to the Company or any Principal Stockholder,
addressed to such party at:
XxXxxx Technologies, Inc.
00 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx Xxxxx, XX 00000
Attn: President
With a copy to:
Xxxxxx X. Xxxxxx, P.A.
0 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
(b) If to the Supplemental Purchasers:
at their respective addresses set forth on
Schedule 2 hereto
or such other addresses as each of the parties hereto may provide from time to
time in writing to the other parties.
9.2 Modifications; Waiver. Neither this Agreement nor any provision
hereof may be changed, waived, discharged or terminated orally or in writing.
9.3 Entire Agreement. This Agreement, including the Schedules, contains
the entire agreement between the parties with respect to the transactions
contemplated hereby, and supersedes all negotiations, agreements,
representations, warranties, commitments, whether in writing or oral, prior to
the date hereof.
9.4 Effectiveness. This Agreement shall become effective only when
executed by the Supplemental Purchasers, the Principal Stockholders and the
Company.
9.5 Successors and Assigns. All of the terms of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto.
9.6 No Third-Party Beneficiaries. Nothing in this Agreement will be
construed as giving any person, firm, corporation or other entity, other than
the parties hereto and their successors and permitted assigns, any right, remedy
or claim under or in respect of this Agreement or any provision hereof.
9.7 Execution and Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed an original, and such counterparts together shall constitute one
instrument. Each party shall receive a duplicate original of the counterpart
copy or copies executed by it and by the Company.
9.8 Governing Law and Severability. This Agreement shall be governed by
and construed and interpreted in accordance with the laws of the State of New
Jersey without reference to principles of conflict of laws or choice of laws. In
the event any provision of this Agreement or the application of any such
provision to any party shall be held by a court of competent jurisdiction to be
contrary to law, the remaining provisions of this Agreement shall remain in full
force and effect.
9.9 Headings. The descriptive headings of the Sections hereof and of
the Schedules and Exhibits hereto are inserted for convenience only any do not
constitute a part of this Agreement.
9.10 Execution by Telefacsimile Transmission. Telefacsimile
transmissions of any executed original document and/or retransmission of any
executed telefacsimile transmission shall be deemed to be the same as the
delivery of an executed original. At the request of any party hereto, the other
parties shall confirm telefacsimile transmissions by executing duplicate
original documents and delivering the same to the requesting party or parties.
COUNTERPART SIGNATURE PAGE
SUPPLEMENTAL COMMON STOCK AND FIVE-YEAR WARRANT PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
The Company Supplemental Purchasers
XxXxxx Technologies, Inc. NF Partners, LLC
By:__________________________ By:__________________________
Xxxxxx X. Xxxxx, Manager
JMC Investments LLC
Principal Stockholders By:__________________________
Xxxx Xxxxxxx,_______________
______________________________
Xxx Xxxxx Ravitch Rice & Company LLC
By:_________________________
______________________________ Xxxxxx X. Xxxx, Managing Dir.
Xx. Xxxxxx Xxxxxxxxx
____________________________
Xxxxx X. Xxxxx
____________________________
Xxxx X. Xxxxxx
____________________________
Xxxxxx X. Xxxxxx
____________________________
Xxxxx Xxxxxxx
____________________________
Xxxxxx X. Xxxxxxxxx
SCHEDULE 1
Supplemental Purchasers and Maximum Potential Purchase Amounts
Supplemental Purchaser # Shares # Warrants Maximum Potential Pro Rata Percentage
---------------------- -------- ---------- ------------------ -------------------
Purchase Price
--------------
NF Partners, LLC 625,455 1,563,638 $312,727.50 65.1516%
JMC Investments, LLC 29,091 72,727 14,545.50 3.0303
Ravitch Rice & Company LLC 14,545 36,363 7,272.50 1.5151
Xxxxx X. Xxxxx 26,182 65,455 13,091.00 2.7273
Xxxx X. Xxxxxx 29,091 72,727 14,545.50 3.0303
Xxxxxx X. Xxxxxx 203,636 509,090 101,818.00 21.2121
Xxxxx Xxxxxxx 5,818 14,545 2,909.00 0.6060
Xxxxxx X. Xxxxxxxxx 26,182 65,455 13,091.00 2.7273
-------- ----------- ------------- ----------
Totals 960,000 2,400,000 $480,000.00 100.0000%
Schedule 2
Supplemental Purchaser's Addresses
NF Partners, LLC Xxxxx Xxxxxxx
000 Xxxxxxx Xxxxxx 000 Xxxx Xxx Xxxxxx, #0X
Xxx Xxxx, XX 00000 Xxx Xxxx, XX 00000
Attn: Xx. Xxxxxx X. Xxxxx S.S.# ###-##-####
EIN# 00-0000000
JMC Investments LLC Xxxxxx X. Xxxxxxxxx
000 Xxxxx Xxxx 000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000 Xxxxxxx Xxxx, XX 00000
Attn: Xx. Xxxx Xxxxxxx S.S.#556-155293
EIN#00-0000000
Ravitch Rice & Company LLC
000 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxxx X. Xxxx
EIN# 00-0000000
Xxxxx X. Xxxxx
00 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
S.S. ####-##-####
Xxxx X. Xxxxxx
0000 Xxxxxxxxxx Xxxxxx - Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
S.S.####-##-####
Xxxxxx X. Xxxxxx
000 Xxxx Xxxxxx, Xxx. 0X
Xxx Xxxx, XX 00000
S.S.####-##-####
