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EXHIBIT 10.12
ICX XXXXXXXXXXX.XXX
SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT (the "Agreement"), is entered into as of the 25th
day of April, 2000, by and between ICX XXXXXXXXXXX.XXX, a corporation organized
and existing under the laws of the State of California (the "Company") and
MAGNECOMP INTERNATIONAL LIMITED, a corporation organized and existing under the
laws of the nation of Singapore (the "Investor").
WHEREAS, the Company has authorized twenty million (20,000,000) shares of
capital common stock, having no par value (the "Common Stock") and ten million
(10,000,000) shares of Preferred Stock, having no par value; and
WHEREAS, the Company has issued and outstanding (or reserved for
potential issuance), on a fully-diluted basis, approximately two million five
hundred thousand (2,500,000) shares of its Common and Preferred Stock, as of the
date hereof; and
WHEREAS, subject to the terms and conditions contained herein the
Investor desires to purchase, and the Company desires to sell to the Investor,
up to nine hundred twenty-five thousand (925,000) shares of Preferred Stock (the
"Shares") for the purchase price recited herein.
NOW, THEREFORE, in consideration of the foregoing premises and the
covenants and agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. SHARE PURCHASE BY THE INVESTOR. Subject to the terms and conditions
contained herein, the Investor agrees to purchase from the Company, and
the Company agrees to sell to the Investor, an aggregate amount of up to
nine hundred twenty-five thousand (925,000) Shares, representing
thirty-seven percent (37%) of the issued and outstanding equity of the
Company on a fully diluted basis as of the date hereof. The share
purchase by the Investor shall occur in three (3) tranches, in accordance
with the following schedule:
(a) Two hundred fifty thousand (250,000) Shares shall be delivered at
the closing of the Share Purchase Agreement, set to occur as of
April 25, 2000, for an aggregate purchase price of One Million
Dollars ($1,000,000);
(b) One hundred seventy-five thousand (175,000) Shares shall be
purchased, for an aggregate purchase price of Seven Hundred
Thousand Dollars ($700,000), upon the first closing of a financial
investment arranged by Xxxxxxxx Capital for no less than One
Million Dollars ($1,000,000) at a minimum price of Four Dollars
($4.00) per share (the "Xxxxxxxx Financing"); and
(c) pursuant to the exercise, at the sole selection of the Investor,
of a warrant in the form of Exhibit A attached hereto for the
purchase of five hundred thousand (500,000) Shares, for an
aggregate purchase price of Two Million Dollars ($2,000,000), out
of which, (a) 250,000 shares or a total of One Million Dollars
($1,000,000) shall be exercisable upon registration of ICX shares
for Initial Public Offers (IPO)
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(b) 250,000 shares or a total of One Million Dollars shall be
exercisable upon approval of the ICX shares for IPO. Subsequent to
the exercise of the Warrant, assuming that the Investor has
purchased nine hundred twenty five thousand (925,000) Shares as
contemplated herein, its ownership shall equal not less than
twenty percent (27%) of the issued and outstanding equity of the
Company on a fully-diluted basis.
(d) The Share purchases listed above shall be delivered in accordance
with the terms of this Agreement, and such Shares shall be issued
to the Investor promptly against receipt of the appropriate
Purchase Price therefor as set forth in Section 2 below. Such
Shares, once delivered to the Investor as set forth herein, shall
be validly issued, fully paid and non-assessable, shall be free
and clear of any and all liens, charges, pledges, liabilities or
other encumbrances, and shall be inscribed in the books and
records of the Company as issued to the Investor under the
specific terms and conditions herein contained.
(e) The parties agree that, except with the prior consent of the
Investor, the maximum number of Shares to be issued and
outstanding on a fully-diluted basis (the "Full Dilution Amount")
by the Company as of the specific events set forth below shall be
as indicated below:
(i) at the time of the Closing of this Agreement, without
giving effect to the purchase and sale contemplated herein,
the Full Dilution Amount shall be two million five hundred
thousand (2,500,000) shares of stock;
(ii) immediately subsequent to the closing of the last tranche
of the purchase and sale contemplated herein, the Full
Dilution Amount shall be three million four hundred
twenty-five thousand (3,425,000) shares of stock (without,
however, giving effect to the securities issued in the
Xxxxxxxx Financing); and
(iii) if the Investor elects to exercise the Warrant, then
immediately subsequent to such exercise, the Full Dilution
Amount would be four million six hundred twenty-five
thousand (4,625,000) shares of stock, including the
securities in the Warrant and/or the Xxxxxxxx Financing
shares offered to the public, and any incentive stock
options issued to employees, consultants, directors or
advisors of the Company.
2. CONSIDERATION FOR AND ISSUANCE OF THE SHARES. As consideration for the
Shares, the Investor shall pay to the Company the sum of Four Dollars
($4.00) per Share, or Three Million Seven Hundred Thousand Dollars
($3,700,000) in the aggregate (the "Purchase Price"), in accordance with
the schedule of purchases set forth in Section 1 above. Such funds shall
be delivered by federal wire transfer deposited into an account
designated by the Company. Promptly upon the receipt of said funds, the
Company shall cause its counsel to file an appropriate Certificate of
Designation (the "Certificate") with the Secretary of the State of
California, and thereafter issue to the Investor a stock certificate
evidencing the Investor's ownership of such number of Shares as is
applicable in accordance with the purchase schedule set forth above.
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3. DESIGNATION OF PREFERENCE RIGHTS. Each Share will possess the rights and
other attributes set forth below, which shall be recited in the
Certificate:
(a) Voting Rights. The holders of Shares shall have voting rights
providing for one (1) vote per Share on all matters which are
properly subject to the vote of all holders of common stock of the
Company, and the right to vote as a class on all matters as
required by the California Corporations Code.
(b) Liquidation Rights. Upon any liquidation, dissolution, or winding
up of the Company, each holder of Shares shall be entitled to
receive a liquidation preference equal to Four Dollars ($4.00) per
Share for every Share owned out of the net funds of the Company
available for distribution at the time of such liquidation. Any
remaining funds available for distribution shall be apportioned
among the holders of the Company's common stock until they have
received an amount equal to Four Dollars ($4.00) per share of
common stock, and any remaining funds of the Company available for
distribution shall be shared equally, on a pro rata basis, among
all holders of Shares and common stock of the Company. No funds
shall be available for distribution by the Company unless and
until all debts and obligations of the Company have first been
fully-satisfied.
(c) Conversion Rights. Each Share shall automatically convert, without
further consideration and without further action by any party,
into one (1) share of the Company's common stock within ten (10)
business days after the earlier to occur of: (a) public sale of
the Company's common stock in an initial public offering (the
"IPO"); or (b) the acquisition of all or substantially all of the
assets or capital stock of the Company. In addition, at the sole
election of the holder, each Share shall convert into one (1)
share of Common Stock within ten (10) business days after such
conversion is requested by the holder of such Shares.
(d) Ratable Adjustments for Stock Splits and Combinations, Etc. In the
event that the Company shall authorize any forward or reverse
stock split, stock dividend, recapitalization or other similar
change in its common stock, it shall contemporaneously authorize
an equivalent adjustment to all Shares issued and existing as of
the date of such action.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to the Investor, as of the date hereof, the
following:
(a) the Company is a corporation duly organized and validly existing
under the laws of the State of California, and has full power and
authority to enter into, execute and perform this Agreement, which
Agreement, once so executed by the Company, shall be the valid and
binding obligation of such party, enforceable against it by any
court of competent jurisdiction in accordance with its terms;
(b) the individuals signing this Agreement on behalf the Company are
the duly elected executive officers of the Company so indicated,
and have full power and authority to enter into and execute this
Agreement for and on behalf of the Company;
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(c) the Company is not bound by or subject to any contract, agreement,
court order or judgment, administrative ruling, law, regulation or
any other item which prohibits or restricts such party from
entering into and performing this Agreement in accordance with its
terms, or requiring the consent of any third party prior to the
entry into or performance of this Agreement in accordance with its
terms by such party; and
(d) the financial statements of the Company previously provided to the
Investor fairly and accurately present the true financial
condition of the Company as of the dates, or for the periods, so
indicated in all material respects.
5. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR. The Investor hereby
represents and warrants to the Company, as of the date hereof, the
following:
(a) the Investor is a corporation duly organized and validly existing
under the laws of Singapore, and has full power and authority to
enter into, execute and perform this Agreement, which Agreement,
once executed by the Investor, shall be the valid and binding
obligation of such party, enforceable against such party by any
court of competent jurisdiction in accordance with its terms;
(b) the individuals signing this Agreement on behalf the Investor are
the duly elected executive officers of the Investor so indicated,
and have full power and authority to enter into and execute this
Agreement for and on behalf of the Investor;
(c) the Investor is not bound by or subject to any contract,
agreement, court order or judgment, administrative ruling, law,
regulation or any other item which prohibits or restricts such
party from entering into and performing this Agreement in
accordance with its terms, or requiring the consent of any third
party prior to the entry into or performance of this Agreement in
accordance with its terms by such party;
(d) with respect to the Shares being acquired by the Investor:
(i) the Investor is acquiring the Shares for its own account,
and not with a view toward the subdivision, resale,
distribution, or fractionalization thereof; the Investor
has no contract, undertaking, or arrangement with any
person to sell, transfer, or otherwise dispose of the
Shares (or any portion thereof hereby subscribed for), and
has no present intention to enter into any such contract,
undertaking, agreement or arrangement;
(ii) the subscription for Shares by the Investor is not the
result of any form of general solicitation or general
advertising; and
(iii) the Investor hereby acknowledges that: (A) the offering of
the Shares was made only through direct, personal
communication between the Investor and the Company; (B) the
Investor has had full access to material concerning the
Company's planned business and operations, which material
was furnished or made available to the Investor by officers
or representatives of the Company; (C) the Company has
given the Investor the opportunity to ask any questions and
obtain all additional information desired in order to
verify or supplement the material so furnished; and (D) the
Investor understands and acknowledges
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that a purchaser of the Shares must be prepared to bear the
economic risk of such investment for an indefinite period
because of: (I) the heightened nature of the risks
associated with an investment in the Company due to its
status as a development stage company; (II) illiquidity of
the Shares due to the fact that (1) the Shares have not
been registered under the Securities Act of 1933 (the
"Act") or any state securities act (nor passed upon by the
SEC or any state securities commission), and (2) the Shares
may not be registered or qualified by the Investor under
United States federal or state securities laws solely in
reliance upon an available exemption from such registration
or qualification, and hence such Shares cannot be sold
unless they are subsequently so registered or qualified, or
are otherwise subject to any applicable exemption from such
registration requirements; and (3) substantial restrictions
on transfer of the Shares, as set forth by legend on the
face or reverse side of every certificate evidencing the
ownership of the Shares;
(e) the Investor is an "accredited investor" as such term is defined
in Rule 501 of Regulation D promulgated by the United States
Securities and Exchange Commission (the "SEC") under the Act, and
has such level of business knowledge and experience as to enable
it to evaluate the merits and risks of an investment in the
Shares; and
(f) the Investor has been advised to consult with an attorney
regarding legal matters concerning the purchase and ownership of
the Shares, and with a tax advisor regarding the tax consequences
of purchasing such Shares.
6. CONFIDENTIALITY. By its execution hereof, the Investor acknowledges to
and agrees with the Company that in the exercise of the several rights
granted to it pursuant to this Agreement, and as a shareholder of the
Company generally, and to the extent that it may designate any person to
serve on the Company's Board of Directors, it may be or become familiar
with or aware of certain Confidential Information (as such term is
hereinafter defined) disclosed by the Company or one or more of its
officers, directors, employees, shareholders, partners, agents or
representatives (each of such relationships being defined herein as an
"Affiliate"). Accordingly, the Investor hereby agrees that any and all
Confidential Information disclosed or furnished to it, or to any of its
Affiliates, by the Company or any of its Affiliates is and shall remain
proprietary to the Company. Neither the Investor, nor any Affiliate of
the Investor, shall have any rights to distribute or divulge any of such
Confidential Information to any third party without the Company's prior,
written consent, or to use any of such Confidential Information in any
way detrimental to the Company or any of its Affiliates, or in any way
which would otherwise destroy, injure or impair any of the Company's or
its Affiliates' rights in or in respect of any such Confidential
Information including, without limitation, by using any of such
Confidential information to establish or assist any person or entity
which is, or will be, directly or indirectly in competition with the
Company. For purposes of this Agreement, the term "Confidential
Information" shall mean any and all proprietary information belonging to
the Company, whether tangible or intangible, written or oral, including,
without limitation, any intellectual property rights, books and records,
computer software and files, lists of (or proprietary information
concerning) its customers, suppliers, vendors and other business
relationships, and any other item which may properly be classified as a
protected trade secret under applicable law including, without
limitation, the California Trade Secrets Act, as amended. The Investor
expressly agrees and understands that its covenant to abide, and to cause
its Affiliates to abide, by the provisions of this
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Section 6 constitute a material part of the consideration inducing the
Company to make available the Shares hereunder, and that any violation of
such provisions could create immediate and irreparable harm to the
Company.
7. MISCELLANEOUS PROVISIONS.
(a) NOTICES. All notices, requests, demands and other communications
to be given hereunder shall be in writing and shall be deemed to
have been duly given on the date of personal service or
transmission by fax if such transmission is received during the
normal business hours of the addressee, or on the first business
day after sending the same by overnight courier service or by
telegram, or on the third business day after mailing the same by
first class mail, or on the day of receipt if sent by certified or
registered mail, addressed as set forth below, or at such other
address as any party may hereafter indicate by notice delivered as
set forth in this Section 7(a):
If to the Company: ICX Xxxxxxxxxxx.xxx
000 Xxxxxx xx Xxxxxxxx, Xxxxx X
Xxx Xxxxxxxx, Xxxxxxxxxx 00000
Xxxxxx Xxxxxx of America
Attn: Xx. Xxxx X. Xxxxxx
President/CEO
With a copy (which shall
not constitute notice) to: Xxxxxxxx, August & Xxxxxxxxx
000 Xxxxx Xxxx., Xxxxx 0000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Xxxxxx Xxxxxx of America
Attn: Xxxxxxx X. August, Esquire
Partner
If to the Investor: Magnecomp International Limited
(or nominee)
0 Xxxxxxxxx Xxxxx, #00-00
Xxxxxxxxx 000000
Attn: Xx. Xxx Xxxxxxxx
Chairman & CEO
With a copy (which shall
not constitute notice) to: Law Offices of Xxxxxxx Xxxxxxxxxx
0000 X. Xxxx Xxxxxx Xxxxx, Xxxxx 000
Palm Springs, CA 92264
United States of America
Attn: Xxxxxxx Xxxxxxxxxx, Esq.
Partner
(b) BINDING AGREEMENT; ASSIGNMENT. This Agreement shall constitute the
binding agreement of the parties hereto, enforceable against each
of them in accordance with its terms. This Agreement shall inure
to the benefit of each of the parties hereto, and their respective
successors and permitted assigns; provided, however, that this
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Agreement may not be assigned (whether by contract or by operation
of law) by the Investor without the prior written consent of the
Company.
(c) ENTIRE AGREEMENT. This Agreement constitutes the entire and final
agreement and understanding between the parties with respect to
the subject matter hereof and the transactions contemplated
hereby, and supersedes any and all prior oral or written
agreements, statements, representations, warranties or
understandings between the parties, all of which are merged herein
and superseded hereby.
(d) CURRENCY. All references to currencies in this Agreement shall be
to the legal tender of the United States of America.
(e) WAIVER. No waiver of any provision of this Agreement shall be
deemed to be or shall constitute a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver shall be binding unless executed in
writing by the party making the waiver.
(f) HEADINGS. The headings provided herein are for convenience only
and shall have no force or effect upon the construction or
interpretation of any provision hereof.
(g) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
(h) FURTHER DOCUMENTS AND ACTS. Each party agrees to execute such
other and further documents and to perform such other and further
acts as may be reasonably necessary to carry out the purposes and
provisions of this Agreement.
(i) GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of California
applicable to the performance of such contracts wholly within the
State, without giving effect to the principles of conflicts of
laws applied thereby. In the event of any dispute between the
parties arising out of or resulting from this Agreement, the
parties hereby agree to accept the exclusive jurisdiction of the
Courts of the State of California sitting in and for the County of
Orange. Notwithstanding the foregoing, any such dispute (or any
judgment rendered by a United States Court in connection with any
such dispute) may also be submitted by the Company for enforcement
by any court of competent jurisdiction sitting in Singapore. In
the event either party shall be forced to bring any legal action
to protect or defend its rights hereunder, then the prevailing
party in such proceeding shall be entitled to reimbursement from
the non-prevailing party of all fees, costs and other expenses
(including, without limitation, the reasonable expenses of its
attorneys) in bringing or defending against such action.
(j) SPECIFIC PERFORMANCE; REMEDIES CUMULATIVE. The parties hereby
agree with each other that, in the event of any breach of this
Agreement by any party where such breach may cause irreparable
harm to any other party, or where monetary damages may not be
sufficient or may not be adequately quantified, then the affected
party or parties shall be entitled to specific performance,
injunctive relief or such other equitable remedies as may be
available to it, which remedies shall be cumulative and
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non-exclusive, and in addition to such other remedies as such
party may otherwise have at law or in equity.
(k) SURVIVAL. The parties hereby agree with each other that the
provisions of Sections 5, 6, and 7 shall expressly survive the
closing of the purchase and share transaction contemplated herein,
and shall be enforceable against the parties thereafter, whether
or not any such transaction shall be consummated as contemplated
herein.
(l) SEVERABLE PROVISIONS. The provisions of this Agreement are
severable, and if any one or more provisions is determined to be
illegal, indefinite, invalid or otherwise unenforceable, in whole
or in part, by any court of competent jurisdiction, then the
remaining provisions of this Agreement and any partially
unenforceable provisions to the extent enforceable in the
pertinent jurisdiction, shall continue in full force and effect
and shall be binding and enforceable on the parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
THE COMPANY:
ICX XXXXXXXXXXX.XXX WITNESS:
By: /s/ XXXX X. XXXXXX By: /s/ XXXX XXX HOON
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Xxxx X. Xxxxxx Xxxx Xxx Hoon
President/CEO
THE INVESTOR:
MAGNECOMP INTERNATIONAL LIMITED WITNESS:
By: /s/ XXXXXX X. BURKHRAT By: /s/ XXXX XXX HOON
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Xxxxxx X. Xxxxxxxx Xxxx Xxx Hoon
Chairman & CEO
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