EXHIBIT 2.1
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "Agreement") is dated as of
June 30, 2004, by and among Xxxx, Inc., a Colorado corporation (the "Company"),
Blue Ocean Technologies, LLC, a Texas limited liability company ("BOT"), and
OutBack Management Services, L.L.C., a Texas limited liability company
("OutBack").
WHEREAS, BOT and OutBack collectively own all of the issued and
outstanding common stock of Blue Ocean Wireless, Inc., a Texas corporation
("BOW"); and
WHEREAS, the Company has expressed a desire to acquire all of the
issued and outstanding common stock of BOW subject to the terms and conditions
set forth in this Agreement; and
WHEREAS, in consideration for such purchase, the Company has offered to
sell and issue to BOT and OutBack an aggregate of 30,000,000 shares of the
common stock of the Company.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company, BOT and OutBack agree as
follows:
ARTICLE I.
DEFINITIONS
1.1 Definitions. In addition to the terms defined elsewhere in this
Agreement, for all purposes of this Agreement, the following terms have the
meanings indicated in this Section 1.1:
"Action" shall have the meaning ascribed to such term in Section
3.1(i).
"Affiliate" means any Person that, directly or indirectly through one
or more intermediaries, controls or is controlled by or is under common control
with a Person as such terms are used in and construed under Rule 144.
"BOW Common Stock" means the common stock of BOW, $0.01 par value per
share.
"Closing" means the closing of the purchase and sale of the Company
Common Stock and the BOW Common Stock pursuant to Section 2.1.
"Closing Date" means the date of the Closing pursuant to Section 2.1
hereof.
"Commission" means the Securities and Exchange Commission.
"Company Common Stock" means the common stock of the Company, $0.01 par
value per share, to be issued and sold hereunder.
"Confidential Information" means all information concerning this
Agreement (including, without limitation, in any exhibits or schedules hereto),
the other Transaction Documents, the transactions contemplated hereby and
thereby, other confidential information regarding the Company or BOW delivered
in connection with the transactions and any information provided in response to
any notice requirement or other disclosure delivered pursuant to the Transaction
Documents.
"Disclosure Schedule" means the Disclosure Schedule attached as Exhibit
A hereto.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Intellectual Property Rights" shall have the meaning ascribed to such
term in Section 3.1(n).
"Liens" means a lien, charge, security interest, encumbrance or other
restriction.
"Material Adverse Effect" shall have the meaning ascribed to such term
in Section 3.1(a).
"Material Permits" shall have the meaning ascribed to such term in
Section 3.1(l).
"Person" means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof)
or other entity of any kind.
"Rule 144" means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
"SEC Documents" shall mean the SEC Reports, the press releases of the
Company and registration statements of the Company filed with the Commission
pursuant to the Securities Act (including any amendments thereto).
"SEC Reports" shall have the meaning ascribed to such term in Section
3.1(g).
"Securities Act" means the Securities Act of 1933, as amended.
"Trading Day" means (i) a day on which the Company Common Stock is
traded on the over-the-counter market, as reported by the OTC Bulletin Board, or
(ii) if the Company Common Stock is not quoted on the OTC Bulletin Board, a day
on which the Company Common Stock is quoted in the over-the-counter market as
reported by the National Quotation Bureau Incorporated (or any similar
organization or agency succeeding its functions of reporting prices); provided,
that in the event that the Company Common Stock is not listed or quoted as set
forth in (i) or (ii) hereof, then Trading Day shall mean a Business Day.
"Trading Market" means the following service on which the Common Stock
is quoted for trading on the date in question: the American Stock Exchange, the
New York Stock Exchange, the Nasdaq National Market or the Nasdaq SmallCap
Market.
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"Transaction Documents" means this Agreement and any other documents or
agreements executed in connection with the transactions contemplated hereunder.
ARTICLE II.
PURCHASE AND SALE
2.1 Closing. Upon satisfaction of the conditions set forth in Section
2.2, the Company agrees to sell and issue (a) 27,000,000 shares of Company
Common Stock to BOT and (b) 3,000,000 shares of Company Common Stock to OutBack
Management, in consideration of the sale to the Company of all of the issued and
outstanding shares of BOW Common Stock. BOT hereby agrees to sell to the Company
the shares of BOW Common Stock owned by BOT, and OutBack hereby agrees to sell
to the Company the shares of BOW Common Stock owned by OutBack, comprising in
total 100% of the outstanding shares of common stock of BOW. The closing of the
sale and purchase of the shares of Company Common Stock and the shares of BOW
Common Stock under this Agreement (the "Closing") shall occur at the offices of
Xxxxxx & Stone, LLP, located at 0000 Xxxxxx Xxxx, Xxxxx 0000, Xxxxxx, Xxxxx
00000, or at such other location as the parties shall mutually agree, on June
30, 2004 (the "Closing Date").
2.2 Closing Conditions.
(a) Conditions to BOT's and OutBack's Obligations.
The obligation of each of BOT and OutBack to purchase the
shares of Company Common Stock at the Closing is subject to
the fulfillment of the following conditions, any of which may
be waived by BOT and OutBack:
(i) At the Closing, the Company shall deliver or cause to
be delivered to BOT and OutBack, this Agreement duly executed by the
Company;
(ii) All representations and warranties of the Company
contained herein, as modified by the updated Disclosure Schedule delivered
to BOT and OutBack on the Closing Date, shall remain true and correct in
all material respects as of the Closing Date.
(iii) As of the Closing Date, there shall have been no
Material Adverse Effect with respect to the Company since the date hereof.
(b) Conditions to Company's Obligations. The
obligation of the Company to sell and issue the Company Common
Stock at the Closing is subject to the fulfillment to the
satisfaction of the Company, at or prior to the Closing Date,
of the following conditions, any of which may be waived by the
Company:
(i) At the Closing, each of BOT and OutBack shall deliver
or cause to be delivered to the Company, this Agreement duly executed by
each of BOT and OutBack;
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(ii) All representations and warranties of each of BOT and
OutBack contained herein shall remain true and correct in all material
respects as of the Closing Date.
(iii) As of the Closing Date, there shall have been no
Material Adverse Effect with respect to BOW since the date hereof.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. Except as set forth
in the corresponding section of the Disclosure Schedule set forth as Exhibit A
hereto, the Company hereby makes the following representations and warranties as
of the date hereof to each of BOT and OutBack:
(a) Organization and Qualification. The Company is an
entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the
jurisdiction of its incorporation, with the requisite power
and authority to own and use its properties and assets and to
carry on its business as currently conducted. The Company is
not in violation of any of the provisions of its certificate
or articles of incorporation or bylaws. The Company is duly
qualified to conduct business and is in good standing as a
foreign corporation or other entity in each jurisdiction in
which the nature of the business conducted or property owned
by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case
may be, would not have or reasonably be expected to result in
(i) a material adverse effect on the legality, validity or
enforceability of any Transaction Document, (ii) a material
adverse effect on the results of operations, assets, business
or financial condition of the Company, or (iii) adversely
impair the Company's ability to perform in any material
respect on a timely basis its obligations under any
Transaction Document (any of (i), (ii) or (iii), a "Material
Adverse Effect").
(b) Authorization; Enforcement. The Company has the
requisite corporate power and authority to enter into and to
consummate the transactions contemplated by each of the
Transaction Documents and otherwise to carry out its
obligations thereunder. The execution and delivery of each of
the Transaction Documents by the Company and the consummation
by it of the transactions contemplated thereby have been duly
authorized by all necessary action on the part of the Company
and no further action is required by the Company in connection
therewith. Each Transaction Document has been (or upon
delivery will have been) duly executed by the Company and,
when delivered in accordance with the terms hereof, assuming
the valid execution and delivery thereof by each of BOT and
OutBack, will constitute the valid and binding obligation of
the Company enforceable against the Company in accordance with
its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of
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general application affecting enforcement of creditors' and
contracting parties rights generally.
(c) No Conflicts. The execution, delivery and
performance of the Transaction Documents by the Company and
the consummation by the Company of the transactions
contemplated thereby do not and will not (i) conflict with or
violate any provision of the Company's certificate or articles
of incorporation or bylaws, or (ii) conflict with, or
constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both)
of, any agreement, credit facility, debt or other instrument
(evidencing a Company debt) to which the Company is a party or
by which any property or asset of the Company is bound or
affected, or (iii) result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which
the Company is subject (including federal and state securities
laws and regulations), or by which any property or asset of
the Company is bound or affected; except in the case of each
of clauses (ii) and (iii), such as would not have or
reasonably be expected to result in a Material Adverse Effect.
(d) Filings, Consents and Approvals. The Company is
not required to obtain any consent, waiver, authorization or
order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or
other governmental authority or other Person in connection
with the execution, delivery and performance by the Company of
the Transaction Documents, other than (a) any filing with the
Commission, and applicable Blue Sky filings, and (b) such
other filings as may be required following the Closing Date
under the Securities Act, the Exchange Act and state corporate
law.
(e) Issuance of the Company Common Stock. The shares
of Company Common Stock are duly authorized and, when issued
and paid for in accordance with the Transaction Documents,
will be duly and validly issued, fully paid and nonassessable,
free and clear of all Liens.
(f) Capitalization. The capitalization of the Company
is as described in the Company's most recent periodic report
filed with the Commission, as supplemented by the Disclosure
Schedule. No Person has any right of first refusal, preemptive
right, right of participation, or any similar right to
participate in the transactions contemplated by the
Transaction Documents, which right has not been complied with
prior to the Closing. The issuance and sale of the Company
Common Stock will not obligate the Company to issue shares of
its common stock or other securities to any Person and will
not result in a right of any holder of Company securities to
adjust the exercise, conversion, exchange or reset price under
such securities.
(g) SEC Reports; Financial Statements. To the best of
the Company's knowledge, the Company has filed all reports
required to be filed by
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it under the Securities Act and the Exchange Act, including
pursuant to Section 13(a) or 15(d) of the Exchange Act, for
the two years preceding the date hereof (or such shorter
period as the Company was required by law to file such
material) (the foregoing materials, including the exhibits
thereto, being collectively referred to herein as the "SEC
Reports" and, together with the Disclosure Schedule to this
Agreement, the "Disclosure Materials") on a timely basis or
has received a valid extension of such time of filing and has
filed any such SEC Reports prior to the expiration of any such
extension. To the best of the Company's knowledge, as of their
respective dates, the SEC Reports complied in all material
respects with the requirements of the Securities Act and the
Exchange Act and the rules and regulations of the Commission
promulgated thereunder, and none of the SEC Reports, when
filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not
misleading. The financial statements of the Company included
in the SEC Reports comply in all material respects with
applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in
effect at the time of filing. Such financial statements have
been prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods
covered ("GAAP"), except as may be otherwise specified in such
financial statements or the notes thereto and except that
unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects
the financial position of the Company and its consolidated
subsidiaries as of and for the dates thereof and the results
of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.
(h) Material Changes. Since January 1, 2004, (i)
there has been no event, occurrence or development that has
had or that could reasonably be expected to result in a
Material Adverse Effect, (ii) the Company has not incurred any
liabilities (contingent or otherwise) other than (A) trade
payables and accrued expenses incurred in the ordinary course
of business consistent with past practice and (B) liabilities
not required to be reflected in the Company's financial
statements pursuant to GAAP or required to be disclosed in
filings made with the Commission, (iii) the Company has not
altered its method of accounting, (iv) the Company has not
declared or made any dividend or distribution of cash or other
property to its stockholders or purchased, redeemed or made
any agreements to purchase or redeem any shares of its capital
stock and (v) except as set forth on the Disclosure Schedule,
the Company has not issued any equity securities to any
officer, director or Affiliate. The Company does not have
pending before the Commission any request for confidential
treatment of information.
(i) Litigation. Except as disclosed in the SEC
Reports, there is no action, suit, inquiry, notice of
violation, proceeding or investigation pending or, to the
knowledge of the Company, threatened against or affecting the
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Company or any of its properties before or by any court,
arbitrator, governmental or administrative agency or
regulatory authority (federal, state, county, local or
foreign) (collectively, an "Action") which (i) materially and
adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the
Company Common Stock or (ii) could, if there were an
unfavorable decision, have or reasonably be expected to result
in a Material Adverse Effect. Except as set forth on the
Disclosure Schedule, neither the Company, nor any director or
officer thereof, is or has been the subject of any Action
involving a claim of violation of or liability under federal
or state securities laws or a claim of breach of fiduciary
duty. There has not been, and to the knowledge of the Company,
there is not pending or contemplated, any investigation by the
Commission involving the Company or any current or former
director or officer of the Company. The Commission has not
issued any stop order or other order suspending the
effectiveness of any registration statement filed by the
Company or any Subsidiary under the Exchange Act or the
Securities Act.
(j) Labor Relations. Except as set forth on the
Disclosure Schedule, no material labor dispute exists or, to
the knowledge of the Company, is imminent with respect to any
of the employees of the Company which could reasonably be
expected to result in a Material Adverse Effect.
(k) Compliance. Except as disclosed in the SEC
Reports, the Company (i) is not in default under or in
violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would
result in a default by the Company under), nor has the Company
received notice of a claim that it is in default under or that
it is in violation of, any indenture, loan or credit agreement
or any other agreement or instrument to which it is a party or
by which it or any of its properties is bound (whether or not
such default or violation has been waived), (ii) is not in
violation of any order of any court, arbitrator or
governmental body, or (iii) is not in violation of any
statute, rule or regulation of any governmental authority,
including without limitation all foreign, federal, state and
local laws applicable to its business, except in the case of
clauses (i), (ii) and (iii) as would not have or reasonably be
expected to result in a Material Adverse Effect.
(l) Regulatory Permits. The Company possesses all
certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory
authorities necessary to conduct its business ("Material
Permits"), except where the failure to possess such permits
would not have or reasonably be expected to result in a
Material Adverse Effect, and the Company has not received any
notice of proceedings relating to the revocation or
modification of any Material Permit.
(m) Title to Assets. The Company has good and
marketable title in fee simple to all real property owned by
it that is material to the businesses of the Company and good
and marketable title to all personal property
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owned by it that is material to the business of the Company,
free and clear of all Liens, except for Liens as do not
materially affect the value of such property and do not
materially interfere with the use made and proposed to be made
of such property by the Company and Liens for the payment of
federal, state or other taxes, the payment of which is neither
delinquent nor subject to penalties. To the knowledge of the
Company, any real property and facilities held under lease by
the Company are held by it under valid, subsisting and
enforceable leases with which the Company is in compliance.
(n) Patents and Trademarks. To the knowledge of the
Company (without having conducted a patent search), the
Company has, or has rights to use, all patents, patent
applications, trademarks, trademark applications, service
marks, trade names, copyrights, licenses and other similar
rights (collectively, the "Intellectual Property Rights") that
are necessary or material for use in connection with its
businesses as described in the SEC Reports and which the
failure to so have could have or reasonably be expected to
result in a Material Adverse Effect, other than intellectual
property rights generally available on commercial terms from
other sources. The Company has not received a written notice
that the Intellectual Property Rights used by the Company
violate or infringe upon the rights of any Person. The Company
has taken all steps reasonably required in accordance with
sound business practice and sound business judgment to
establish and preserve its ownership of such Intellectual
Property.
(o) Insurance. The Company is insured by insurers of
recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the
businesses in which the Company is engaged. The Company has no
reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be
necessary to continue its business without a significant
increase in cost.
(p) Internal Accounting Controls. The Company
maintains a system of internal accounting controls sufficient
to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's
general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with
respect to any differences. The Company has established
disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the Company and designed such
disclosure controls and procedures to ensure that material
information relating to the Company is made known to the
certifying officers by others within the Company, particularly
during the period in which the Company's Form 10-K or 10-Q, as
the case may be, is being prepared. The Company's certifying
officers
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have evaluated the effectiveness of the Company's controls and
procedures as of a date within 90 days prior to the filing
date of the Form 10-Q for the quarter ended March 31, 2004
(such date, the "Evaluation Date"). The Company presented in
its most recently filed Form 10-QSB the conclusions of the
certifying officers about the effectiveness of the disclosure
controls and procedures based on their evaluations as of the
Evaluation Date. Since the Evaluation Date, there have been no
significant changes in the Company's internal controls (as
such term is defined in Item 307(b) of Regulation S-K under
the Exchange Act) or, to the Company's knowledge, in other
factors that could significantly affect the Company's internal
controls.
(q) Certain Fees. No brokerage or finder's fees or
commissions are or will be payable by the Company to any
broker, financial advisor or consultant, finder, placement
agent, investment banker, bank or other Person with respect to
the transactions contemplated by this Agreement. The
Purchasers shall have no obligation with respect to any fees
or with respect to any claims made by or on behalf of other
Persons for fees of a type contemplated in this Section that
may be due under any agreement or arrangement entered into by
the Company in connection with the transactions contemplated
by this Agreement.
(r) Investment Company. The Company is not, and is
not an Affiliate of, an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(s) Listing and Maintenance Requirements. The Company
has not, in the 12 months preceding the date hereof, received
notice from the OTC Bulletin Board to the effect that the
Company is not in compliance with the requirements of the OTC
Bulletin Board to maintain quotation or listing of the Common
Stock.
(t) Application of Takeover Protections. To the
Company's knowledge, the Company and its Board of Directors
have taken all necessary action, if any, in order to render
inapplicable any non-statutory control share acquisition,
business combination, poison pill (including any distribution
under a rights agreement) or other similar anti-takeover
provision under the Company's certificate of incorporation or
the laws of its state of incorporation that is or could become
applicable to each of BOT and OutBack as a result of each of
BOT and OutBack and the Company fulfilling their obligations
under the Transaction Documents, including without limitation
the Company's issuance of the Company Common Stock and the
ownership of Company Common Stock by each of BOT and OutBack.
3.2 Representations and Warranties of BOT. BOT hereby represents and
warrants as of the date hereof and as of the Closing Date to the Company as
follows:
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(a) Organization; Authority; Conflicts. BOT is an
entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization with
full right, corporate or partnership power and authority to
enter into and to consummate the transactions contemplated by
the Transaction Documents and otherwise to carry out its
obligations thereunder. The execution, delivery and
performance by BOT of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate
action on the part of BOT. Each Transaction Document to which
it is party has been duly executed by BOT, and when delivered
by BOT in accordance with the terms hereof, will constitute
the valid and legally binding obligation of BOT, enforceable
against it in accordance with its terms. The execution,
delivery and performance by BOT of this Agreement and
compliance herewith and therewith will not result in any
violation of and will not conflict with, or result in a breach
of any of the terms of, or constitute a default under, any
provision of any mortgage, indenture, agreement, instrument,
judgment, decree, order, law, rule or regulation or other
restriction to which BOT is a party or by which it is bound,
which violation, conflict, breach or default would have a
material adverse effect upon the business or operations of
BOT, or result in the creation of any mortgage, pledge, lien,
encumbrance or charge upon any of the properties or assets of
BOT.
(b) Investment Intent. BOT understands that the
shares of Company Common Stock are "restricted securities" and
have not been registered under the Securities Act or any
applicable state securities law and BOT is acquiring its
pro-rata portion of the shares of Company Common Stock as
principal for its own account for investment purposes only and
not with a view to or for distributing or reselling such
shares of Company Common Stock or any part thereof, has no
present intention of distributing any of such shares of
Company Common Stock and has no arrangement or understanding
with any other persons regarding the distribution of such
shares of Company Common Stock (this representation and
warranty not limiting BOT's right to sell the shares of
Company Common Stock in compliance with applicable federal and
state securities laws). BOT does not have any agreement or
understanding, directly or indirectly, with any Person to
distribute any of the shares of Company Common Stock.
(c) Organization and Qualification of BOW. BOW is an
entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the
jurisdiction of its incorporation, with the requisite power
and authority to own and use its properties and assets and to
carry on its business as currently conducted. BOW is not in
violation of any of the provisions of its certificate or
articles of incorporation or bylaws. BOW is duly qualified to
conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the
nature of the business conducted or property owned by it makes
such qualification necessary, except where the failure to be
so qualified or in good standing, as the case may be, would
not have or reasonably be expected to result in) a material
adverse effect on the results of operations,
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assets, business or financial condition of BOW (a "BOW
Material Adverse Effect").
(d) Authorization; Enforcement. BOT has the requisite
corporate power and authority to enter into and to consummate
the transactions contemplated by each of the Transaction
Documents and otherwise to carry out its obligations
thereunder. The execution and delivery of each of the
Transaction Documents by BOT and the consummation by it of the
transactions contemplated thereby have been duly authorized by
all necessary action on the part of BOT and no further action
is required by BOT in connection therewith. Each Transaction
Document has been (or upon delivery will have been) duly
executed by BOT and, when delivered in accordance with the
terms hereof, assuming the valid execution and delivery
thereof by each of the Company and Outback, will constitute
the valid and binding obligation of BOT enforceable against
BOT in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors' and
contracting parties rights generally.
(e) No Conflicts. The execution, delivery and
performance of the Transaction Documents by BOT and the
consummation by BOT of the transactions contemplated thereby
do not and will not (i) conflict with or violate any provision
of BOT's certificate or articles of incorporation or bylaws,
or (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a
default) under, or give to others any rights of termination,
amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a BOT debt) to
which BOT is a party or by which any property or asset of BOT
is bound or affected, or (iii) result in a violation of any
law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to
which BOT is subject, or by which any property or asset of BOT
is bound or affected.
(f) Filings, Consents and Approvals. BOT is not
required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration
with, any court or other federal, state, local or other
governmental authority or other Person in connection with the
execution, delivery and performance by BOT of the Transaction
Documents.
(g) BOW Common Stock. The shares of BOW Common Stock
are duly and validly issued, fully paid and nonassessable,
free and clear of all Liens.
(h) Capitalization of BOW. The capitalization of BOW
is as set forth in its articles of incorporation. No Person
has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the
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transactions contemplated by the Transaction Documents, which
right has not been complied with prior to the Closing.
(i) Material Changes. Since January 1, 2004, (i)
there has been no event, occurrence or development that has
had or that could reasonably be expected to result in a BOW
Material Adverse Effect, (ii) BOW has not incurred any
liabilities (contingent or otherwise) other than (A) trade
payables and accrued expenses incurred in the ordinary course
of business consistent with past practice and (B) liabilities
not required to be reflected in BOW's financial statements
pursuant to GAAP, (iii) BOW has not altered its method of
accounting, (iv) BOW has not declared or made any dividend or
distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or
redeem any shares of its capital stock and (v) except as set
forth on the Disclosure Schedule, BOW has not issued any
equity securities to any officer, director or Affiliate.
(j) Litigation. There is no Action which (i)
materially and adversely affects or challenges the legality,
validity or enforceability of any of the Transaction Documents
or the BOW Common Stock or (ii) could, if there were an
unfavorable decision, have or reasonably be expected to result
in a BOW Material Adverse Effect. Except as set forth on the
Disclosure Schedule, neither BOW, nor any director or officer
thereof, is or has been the subject of any Action involving a
claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty.
(k) Labor Relations. Except as set forth on the
Disclosure Schedule, no material labor dispute exists or, to
the knowledge of BOT, is imminent with respect to any of the
employees of BOW which could reasonably be expected to result
in a BOW Material Adverse Effect.
(l) Compliance. BOW (i) is not in default under or in
violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would
result in a default by BOW under), nor has BOW received notice
of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any
other agreement or instrument to which it is a party or by
which it or any of its properties is bound (whether or not
such default or violation has been waived), (ii) is not in
violation of any order of any court, arbitrator or
governmental body, or (iii) is not in violation of any
statute, rule or regulation of any governmental authority,
including without limitation all foreign, federal, state and
local laws applicable to its business, except in the case of
clauses (i), (ii) and (iii) as would not have or reasonably be
expected to result in a BOW Material Adverse Effect.
(m) Regulatory Permits. BOW possesses all Material
Permits, except where the failure to possess such permits
would not have or reasonably be expected to result in a BOW
Material Adverse Effect, and BOW has not received
12
any notice of proceedings relating to the revocation or
modification of any Material Permit.
(n) Title to Assets. BOW has good and marketable
title in fee simple to all real property owned by it that is
material to the businesses of BOW and good and marketable
title to all personal property owned by it that is material to
the business of BOW, free and clear of all Liens, except for
Liens as do not materially affect the value of such property
and do not materially interfere with the use made and proposed
to be made of such property by BOW and Liens for the payment
of federal, state or other taxes, the payment of which is
neither delinquent nor subject to penalties. To the knowledge
of BOT, any real property and facilities held under lease by
BOW are held by it under valid, subsisting and enforceable
leases with which BOW is in compliance.
(o) Patents and Trademarks. To the knowledge of BOT
(without having conducted a patent search), BOW has, or has
rights to use, all Intellectual Property Rights that are
necessary or material for use in connection with its business
and which the failure to so have could have or reasonably be
expected to result in a BOW Material Adverse Effect, other
than intellectual property rights generally available on
commercial terms from other sources. Neither BOT nor BOW has
received a written notice that the Intellectual Property
Rights used by BOW violate or infringe upon the rights of any
Person. BOW has taken all steps reasonably required in
accordance with sound business practice and sound business
judgment to establish and preserve its ownership of such
Intellectual Property.
(p) Insurance. BOW is insured by insurers of
recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the
businesses in which BOW is engaged. BOT has no reason to
believe that BOW will not be able to renew its existing
insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be
necessary to continue its business without a significant
increase in cost.
(q) Certain Fees. No brokerage or finder's fees or
commissions are or will be payable by BOT to any broker,
financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the
transactions contemplated by this Agreement. The Purchasers
shall have no obligation with respect to any fees or with
respect to any claims made by or on behalf of other Persons
for fees of a type contemplated in this Section that may be
due under any agreement or arrangement entered into by BOT in
connection with the transactions contemplated by this
Agreement.
3.3 Representations and Warranties of OutBack. OutBack hereby
represents and warrants as of the date hereof and as of the Closing Date to the
Company as follows:
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(a) Organization; Authority; Conflicts. OutBack is an
entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization with
full right, corporate or partnership power and authority to
enter into and to consummate the transactions contemplated by
the Transaction Documents and otherwise to carry out its
obligations thereunder. The execution, delivery and
performance by OutBack of the transactions contemplated by
this Agreement have been duly authorized by all necessary
corporate action on the part of OutBack. Each Transaction
Document to which it is party has been duly executed by
OutBack, and when delivered by OutBack in accordance with the
terms hereof, will constitute the valid and legally binding
obligation of OutBack, enforceable against it in accordance
with its terms. The execution, delivery and performance by
OutBack of this Agreement and compliance herewith and
therewith will not result in any violation of and will not
conflict with, or result in a breach of any of the terms of,
or constitute a default under, any provision of any mortgage,
indenture, agreement, instrument, judgment, decree, order,
law, rule or regulation or other restriction to which OutBack
is a party or by which it is bound, which violation, conflict,
breach or default would have a material adverse effect upon
the business or operations of OutBack, or result in the
creation of any mortgage, pledge, lien, encumbrance or charge
upon any of the properties or assets of OutBack.
(b) Investment Intent. OutBack understands that the
shares of Company Common Stock are "restricted securities" and
have not been registered under the Securities Act or any
applicable state securities law and OutBack is acquiring its
pro-rata portion of the shares of Company Common Stock as
principal for its own account for investment purposes only and
not with a view to or for distributing or reselling such
shares of Company Common Stock or any part thereof, has no
present intention of distributing any of such shares of
Company Common Stock and has no arrangement or understanding
with any other persons regarding the distribution of such
shares of Company Common Stock (this representation and
warranty not limiting OutBack's right to sell the shares of
Company Common Stock in compliance with applicable federal and
state securities laws). OutBack does not have any agreement or
understanding, directly or indirectly, with any Person to
distribute any of the shares of Company Common Stock.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
4.1 Transfer Restrictions.
(a) The Company Common Stock may only be disposed of
in compliance with state and federal securities laws. In
connection with any transfer of Company Common Stock other
than pursuant to a sale under an effective registration
statement, the Company may require the transferor thereof to
provide to the Company an opinion of counsel, the form and
substance of which opinion shall be reasonably satisfactory to
the Company, to the effect that
14
such transfer does not require registration of such
transferred Company Common Stock under the Securities Act.
(b) BOT and OutBack agree to the imprinting, so long
as is required by this Section 4.1(b), of a legend on any of
the Company Common Stock substantially in the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"). THE SECURITIES MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS REGISTERED UNDER
THE SECURITIES ACT AND QUALIFIED UNDER APPLICABLE STATE
SECURITIES LAWS OR UNLESS SUCH SALE, TRANSFER, ASSIGNMENT OR
HYPOTHECATION IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND THE QUALIFICATION REQUIREMENTS OF
APPLICABLE STATE SECURITIES LAWS AND THE COMPANY RECEIVES AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
(c) Certificates evidencing the Company Common Stock
shall not contain any legend (including the legend set forth
in Section 4.1(b)), (i) following any sale of such Company
Common Stock pursuant to Rule 144, or (ii) if such Company
Common Stock is eligible for sale under Rule 144(k), or (iii)
if such legend is not required under applicable requirements
of the Securities Act (including judicial interpretations and
pronouncements issued by the Staff of the Commission). The
Company agrees that at such time as such legend is no longer
required under this Section 4.1(c), it will, no later than
seven Trading Days following the delivery to the Company or
(with concurrent notice to the Company) the Company's transfer
agent of a certificate representing Company Common Stock
issued with a restrictive legend (together with any
documentation required in the Company's reasonable judgment to
establish the facts permitting the removal of legends
hereunder) (such date, the "Legend Removal Date"), deliver or
cause to be delivered a certificate representing such Company
Common Stock that is free from all restrictive and other
legends. The Company may not make any notation on its records
or give instructions to any transfer agent of the Company that
enlarge the restrictions on transfer set forth in this
Section.
4.2 Furnishing of Information. As long as either of BOT or OutBack owns
shares of Company Common Stock, the Company covenants to timely file (or obtain
extensions in respect thereof and file within the applicable grace period) all
reports required to be filed by the Company after the date hereof pursuant to
the Exchange Act. Upon the request of either of BOT or OutBack, the Company
shall deliver to such holder a written certification of a duly authorized
officer as to whether it has complied with the preceding sentence. As long as
either of BOT or OutBack owns Company Common Stock, if the Company is not
required to file reports pursuant to such laws, it will prepare and furnish to
BOT and OutBack and make publicly
15
available in accordance with Rule 144 such information as is required for BOT
and OutBack to sell the Company Common Stock under Rule 144. The Company further
covenants that it will take such further action as either of BOT or OutBack may
reasonably request, all to the extent required from time to time to enable BOT
and/or OutBack to sell such Company Common Stock without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144.
4.3 Quotation/Listing of Common Stock. The Company hereby agrees to use
its reasonable best efforts to maintain the quotation or listing of the Company
Common Stock on the OTC Bulletin Board. The Company further agrees, if the
Company applies to have the Company Common Stock traded on any other Trading
Market, it will include in such application the Company Common Stock, and will
take such other action as is necessary to cause the Company Common Stock to be
listed on such other Trading Market as promptly as possible. The Company will
take commercially reasonable actions necessary to continue the quotation or
listing of the Company Common Stock on the OTC Bulletin Board and will comply in
all respects with the Company's reporting, filing and other obligations under
the bylaws or rules of the OTC Bulletin Board.
4.4 Confidentiality. Each of BOT and OutBack agrees with the Company to
keep strictly confidential all Confidential Information. Each of BOT and OutBack
understands that the Confidential Information is strictly confidential and
proprietary to the Company and has been prepared, in large part, from the
Company's publicly available documents and other information and is being
submitted to each of BOT and OutBack solely for their confidential use. Each of
BOT and OutBack hereby acknowledges that it is prohibited from reproducing
and/or distributing the Confidential Information, or any other offering
materials or other information provided by the Company in connection with their
consideration of an investment in the Company, in whole or in part, or divulging
or discussing any of their contents to third parties. Further, each of BOT and
OutBack understands that the existence and nature of all conversations and
presentations, if any, regarding the Company and the Transaction Documents must
be kept strictly confidential. Each of BOT and OutBack understands that United
States Federal and state securities laws impose restrictions on trading based on
information regarding the transactions contemplated by the Transaction
Documents. In particular, each of BOT and OutBack hereby acknowledges that
disclosure of information regarding the transactions contemplated in the
Transaction Documents or the disclosure of other Confidential Information may
cause the Company to violate Regulation FD and agrees not to engage in any such
unauthorized disclosure. The restrictions in this subsection shall survive until
the earlier of (i) two (2) years after the Closing Date and (ii) such time as
such Confidential Information is publicly disclosed by the Company.
ARTICLE V.
MISCELLANEOUS
5.1 Fees and Expenses. Except as otherwise set forth in this Agreement,
each party shall pay the fees and expenses of its advisers, counsel, accountants
and other experts, if any, and all other expenses incurred by such party
incident to the negotiation, preparation, execution, delivery and performance of
this Agreement.
16
5.2 Entire Agreement. The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.
5.3 Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
specified on the signature pages attached hereto prior to 5 p.m. (Dallas, Texas
time) on a Trading Day, (b) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number specified on the signature pages attached hereto on a day that is not a
Trading Day or later than 5 p.m. (Dallas, Texas time) on any Trading Day, (c)
the Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (d) upon actual receipt by the party to
whom such notice is required to be given. The address for such notices and
communications shall be as set forth on the signature pages attached hereto.
5.4 Amendments; Waivers. Without the written consent of each of the
parties hereto, the terms of this Agreement may not be waived or amended. No
waiver of any default with respect to any provision, condition or requirement of
this Agreement shall be deemed to be a continuing waiver in the future or a
waiver of any subsequent default or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of either party to
exercise any right hereunder in any manner impair the exercise of any such
right.
5.5 Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.
5.6 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns.
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided by this Agreement.
5.7 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
Texas, without regard to the principles of conflicts of law thereof. Each party
agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the City of
Dallas, Texas. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of Dallas,
Texas for the adjudication of any dispute hereunder or in connection herewith
17
or with any transaction contemplated hereby or discussed herein (including with
respect to the enforcement of any of the Transaction Documents), and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is improper. Each party hereto
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
via overnight delivery (with evidence of delivery) 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. Each party hereto (including its
affiliates, agents, officers, directors and employees) hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any legal proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby. If either party shall
commence an action or proceeding to enforce any provisions of a Transaction
Document, then the prevailing party in such action or proceeding shall be
reimbursed by the other party for its attorneys' fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
action or proceeding.
5.8 Survival. The representations and warranties contained in Section
3.1 and 3.2 shall survive the Closing and the delivery and exercise of the
Securities, as applicable for a period of one (1) year. The agreements and
covenants contained herein and in the Transaction Documents shall survive the
Closing, as to each Purchaser, until such Purchaser no longer holds any
Securities (except for such provisions with a stated duration which will survive
for such duration).
5.9 Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.
5.10 Severability. If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefore, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
(Signature Page Follows)
18
IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
BLUE OCEAN TECHNOLOGIES, LLC Address for Notice:
Blue Ocean Technologies, LLC
0000 Xxxxxx Xxxxxx
By: Xxxxxx, XX 00000
---------------------------------
Name: Kit Xxxxxxxx Attn: Kit Xxxxxxxx
Title: President Tel: (000) 000-0000
Fax: (000) 000-0000
OUTBACK MANAGEMENT
SERVICES, L.L.C. Address for Notice:
OutBack Management Services, L.L.C.
0000 Xxx Xxxxx
By: Xxxxxx Xxxxx, XX 00000
---------------------------------
Name: Xxxx Xxxxx Attn: Xxxx Xxxxx
Title: Member Tel: (000) 000-0000
Fax: (000) 000-0000
XXXX, INC. Address for Notice:
Xxxx, Inc.
000 Xxxxx Xxx Xxxxxx, Xxxxx X
By: Xxxxxxx, XX 00000
---------------------------------
Name: Xxxxx X. Xxxxxxxxx Attn: Xxxxx X. Xxxxxxxxx
Title: Chief Executive Officer Tel: (000) 000-0000
Fax: (000) 000-0000
19
EXHIBIT A
DISCLOSURE SCHEDULE
20
