xXXXXXXXXXX.XXX
AGREEMENT WITH CERTAIN SECURITIES HOLDERS
This Agreement With Certain Securities Holders (this "Agreement") is
made effective as of May 31, 2000 (the "Effective Date"), by and among
xXxxxxxxxxx.xxx, Inc. (the "Company"), CALP II Limited Partnership (CALP), Fetu
Holdings Ltd. ("Fetu"), TK Holdings Ltd. ("TKH"), VC Advantage Limited
Partnership ("VC Advantage"), VMH International Ltd. ("VMH"), Xxxxx Xxxxxx
("Xxxxxx") and Thomson Kernaghan & Co. Limited ("TK"). CALP, Fetu, TKH VC
Advantage VMH, Badger and TK are referred to individually as a "Securities
Holder" and collectively as the "Securities Holders."
Recitals
This Agreement is made with reference to the following facts and
circumstances:
(a) Each of the Securities Holders owns shares of the Company's common
stock, par value $.001 per share ("Common Stock").
(b) Certain of the Securities Holders also own securities issued by the
Company ("Other Securities") that are convertible into, or exercisable
or exchangeable for, shares of Common Stock.
(c) On May 31, 2000, as the result of a merger, the Common Stock became
registered under Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
(f) Two executive officers of TK (including its Chairman) also are
executive officers of the general partner of VC Advantage and, and of
VMH, which is the general partner of CALP. An executive officer of TK
my be deemed to have a beneficial interest in Fetu, and Badger is an
officer and Director of TK. Accordingly, the Securities Holders may be
considered a group which beneficially owns all of the shares of Common
Stock beneficially owned by any of them.
(g) At the time that the Company issued Common Stock and Other
Securities to the Securities Holders, the Company and the Securities
Holders intended and agreed that each Securities Holder was acquiring
those securities as a passive investment only, and that the Securities
Holders, individually and collectively, were not acquiring those
securities for the purpose or with the intent of having the power to
control the Company, as the term "control" is defined under the
Securities Act of 1933, as amended (the "Securities Act"), and the
rules and regulations (collectively, the "Rules") of the Securities and
Exchange Commission (the "SEC"), or to obtain Company information by
reason of their ownership of those securities. Accordingly, the Company
and the Securities Holders agreed that none of the Securities Holders
would have the ability to acquire an amount of Common Stock pursuant to
Other Securities that would cause the Securities Holders, considered as
a group, to be deemed to beneficially own (as defined in Rule 13d-3
under the Exchange Act) 9.99% or more of the Common Stock outstanding
from time to time.
In order to further evidence and document their purposes and intent set
forth in the foregoing recitals, the parties have agreed as follows:
1. Restrictions on Right and Power to Acquire Common Stock.
1.1. Any provision in any of the Other Securities or any other document
to the contrary notwithstanding, no Securities Holder shall have the right or
power, directly or indirectly, either alone or in concert with others, to (i)
convert any of the Other Securities into Common Stock, or (ii) exercise or
exchange any of the Other Securities for Common Stock, or (iii) exercise any
other right or power to acquire Common Stock, and any attempt to exercise any of
the foregoing rights or powers shall be null and void, if, after having given
effect to the exercise of that right or power, the Securities Holders,
considered as a group, shall be or shall be deemed to beneficially own (as
defined in Rule 13d-3 under the Exchange Act) more than 9.99% of the then
outstanding Common Stock.
1.2. To the extent the limitation contained in Section 1.1 applies, the
determination of whether any of the Other Securities are convertible,
exercisable or exchangeable for Common Stock, respectively (in relation to other
securities owned by a Securities Holder), and of which portion of such
securities are convertible, exercisable or exchangeable for Common Stock, shall
be in the sole discretion of the Securities Holder, and the submission of a
notice or request to convert, exercise or exchange any Other Securities for
Common Stock shall be deemed to be such Securities Holder's determination of
whether such securities are convertible or exercisable (in relation to other
securities owned by a Securities Holder) and of which portion of such securities
are convertible or exercisable, in each case subject to such aggregate
percentage limitation, and the Company shall have no obligation to verify or
confirm the accuracy of such determination. Nothing contained herein shall be
deemed to restrict the right of the Securities Holders to convert, exercise or
exchange any Other Securities for Common Stock at such time as such conversion,
exercise or exchange will not violate the provisions of Section 1.1.
2. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Florida, without reference to its
principles of conflicts of laws.
3. Amendments. Any amendments to this Agreement must be made in writing and duly
executed by an authorized representative of each of the parties.
4. Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, and all such counterparts shall constitute but one
instrument.
Each party has caused this Agreement to be duly executed on its behalf
as of the date first written above.
xXxxxxxxxxx.xxx, Inc. CALP II Limited Partnership
VMH Investment Management Ltd., its
General Partner
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By: Xxxx X.X. Xxxxxx, President
Fetu Holdings Ltd. VC Advantage Limited Partnership
By VC Advantage Limited, General
Partner
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By By
VMH International Ltd.
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By Xxxx Xxxxxx
Thomson Kernaghan & Co. Limited
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By
