SECURITIES PURCHASE AGREEMENT
This
Securities Purchase Agreement (together with all amendments, supplements,
changes, schedules and exhibits hereto, collectively, this “Agreement”)
is
dated as of January 10, 2007 by and among Xxxxx World Trade, Inc., a Nevada
corporation with its principal place of business at 000-00 000xx
Xxxxxx,
Xxxxxxx, XX 00000 (the “Company”),
and
the persons set forth on Schedule
1
annexed
hereto (each a “Purchaser,”
and,
collectively, the “Purchasers”).
WHEREAS,
subject
to the terms and conditions set forth in this Agreement and pursuant to
Section 4(2) of the Securities Act of 1933, as amended (the “Securities
Act”)
and
Rule 506 promulgated thereunder, the Company desires to issue and sell to
Purchasers, and Purchasers desire to purchase from the Company, 1,000,000 shares
of the Company’s 3% Series A Convertible Preferred Stock at a purchase price of
$0.50 per share ($500,000 in the aggregate).
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 and each of the Purchasers agree as
follows:
ARTICLE
I.
DEFINITIONS
1.1
Definitions.
In
addition to the terms defined elsewhere in 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(j).
“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.
“Board”
shall
mean the Company’s Board of Directors.
“Business
Day”
means
any day except Saturday, Sunday, any day which shall be a federal legal holiday
in the United States or any day on which banking institutions in the State
of
New York are authorized or required by law or other governmental action to
close.
“Certificate
of Designation”
means
the Company’s Certificate of Designation of Preferences, Rights and Limitations
of its Series A Convertible Preferred Stock.
“Closing”
means
the closing of the purchase and sale of the Shares pursuant to Section 2.1.
“Closing
Date”
means
the Business Day when all of the Transaction Documents needing to be executed
have been executed and delivered by the applicable parties thereto, and all
conditions precedent to (i) the Purchasers’ obligations to pay the Purchase
Price and (ii) the Company’s obligations to deliver the Shares have been
satisfied or waived.
“Common
Stock”
means
the common stock of the Company, par value $.001 per share, and any other class
of securities into which such securities may hereafter be reclassified or
changed into.
“Company
Counsel”
means
Scheichet & Xxxxx, P.C., the Company’s legal counsel, 000 Xxxxx Xxxxxx,
00xx
Xxxxx,
Xxx Xxxx, XX 00000.
“Director”
shall
mean a member of the Company’s Board of Directors.
“Disclosure
Schedules”
shall
have the meaning ascribed to such term in Section 3.1.
“Effective
Date”
means
the date that the Registration Statement filed by the Company pursuant to the
Registration Rights Agreement is first declared effective by the
SEC.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
“Exhibits”
shall
mean the following exhibits attached hereto and made a part of this
Agreement:
Exhibit
A
- Certificate
of Designation
Exhibit
B
- Registration
Rights Agreement
Exhibit
C
- Legal
Opinion of Company Counsel
“GAAP”
shall
have the meaning ascribed to such term in Section 3.1(i).
“Intellectual
Property Rights”
shall
have the meaning ascribed to such term in Section 3.1(n).
“Liens”
means
a
lien, charge, security interest, encumbrance, right of first refusal, preemptive
right or other restriction.
“Material
Adverse Effect”
shall
have the meaning assigned to such term in Section 3.1(b).
“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.
"Purchase
Price"
means
$0.50 per Share ($500,000 in the aggregate for all 1,000,000 Shares) in United
States dollars and in immediately available funds.
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“Registration
Rights Agreement”
means
the Registration Rights Agreement, dated the date hereof, among the Company
and
the Purchasers, in the form of
Exhibit B
attached
hereto.
“Registration
Statement”
means
a
registration statement meeting the requirements set forth in the Registration
Rights Agreement and covering the resale of the Shares the by Purchasers as
provided for in the Registration Rights Agreement.
“Required
Approvals”
shall
have the meaning ascribed to such term in Section 3.1(e).
“Rule
144”
means
Rule 144 promulgated by the SEC 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 SEC having substantially the same effect as such
Rule.
“SEC”
means
the Securities and Exchange Commission.
“SEC
Reports”
shall
have the meaning ascribed to such term in Section 3.1(h).
“Securities
Act”
means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated hereunder.
"Shares"
means
the shares of the Company’s 3% Series A Convertible Preferred Stock being issued
and sold by the Company to the Purchasers at the Closing, pursuant to this
Agreement..
“Subsidiaries”
means
The Xxxxx Group of Georgia, Inc., The Xxxxx Group of Illinois, Inc. and the
Xxxxx Group of Los Angeles, Inc.
“Termination
Date”
shall
mean the earlier of (i) the sale of all of the Shares; (ii) mutual written
termination of this Agreement by the Company and the Purchasers, and (iii)
January 31, 2007, subject to a 30-day extension.
“Transaction
Documents”
means
this Agreement, the Certificate of Designation, the certificates for the Shares,
certificates for the Underlying Shares and the Registration Rights
Agreement.
“Underlying
Shares”
means
the shares of Common Stock issuable upon conversion of the Shares.
PURCHASE
AND SALE
2.1 Closing.
At the Closing, upon the terms and subject to the conditions set forth herein,
Purchasers shall purchase and the Company shall issue and sell to the Purchasers
1,000,000 Shares for the Purchase Price ($500,000 in the aggregate). The Company
may hold the Closing at any time after the conditions to Closing as specified
herein have been satisfied. The Closing (the “Closing”)
shall occur on or before the Termination Date at the offices of counsel to
the
Purchasers at 12:00 p.m. or such other time and/or location as the parties
shall
mutually agree.
3
2.2
Deliveries.
(a)
At the Closing, the Company shall deliver or cause to be delivered to Purchasers
the following:
(i)
this Agreement duly executed by the Company;
(ii)
the duly executed Certificate of Designation with official evidence from the
Secretary of State of the State of Nevada (the “Secretary”),
that such Certificate of Designation has been filed with the
Secretary;
(iii)
a legal opinion of Company Counsel, in the form of
Exhibit C
attached hereto;
(iv)
stock certificates for the Purchasers representing the Shares so purchased
by
such Purchasers, registered in the name of such Purchasers;
(v)
the Registration Rights Agreement duly executed by the Company;
(vi)
an Officer’s Certificate in a form reasonably acceptable to
Purchasers;
(vii)
a Secretary’s Certificate in a form reasonably acceptable to Purchasers, with
good standing certificates of the Company and each Subsidiary; and
(viii)
Board of Director Resolutions authorizing the Transaction Documents and all
transactions contemplated hereunder and thereunder.
(b)
At the Closing, Purchasers shall deliver or cause to be delivered to the Company
the following:
(i)
this Agreement duly executed by each Purchaser;
(ii)
the Purchase Price, in United States dollars, by wire or check of the Purchasers
(less the fees and expenses provided elsewhere herein); and
(iii)
the Registration Rights Agreement duly executed by Purchasers.
(iv)
an LLC Officer’s Certificate for each Purchaser in a form reasonably acceptable
to Company; and
(v)
an LLC Secretary’s Certificate for each Purchaser in a form reasonably
acceptable to Company, with good standing certificates of each of the
Purchasers.
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2.3
Closing Conditions.
(a)
The obligations of the Company hereunder in connection with the Closing are
subject to the following conditions being met:
(i)
the accuracy in all material respects when made and on the Closing Date of
the
representations and warranties of the Purchasers contained herein;
(ii)
all obligations, covenants and agreements of the Purchasers required to be
performed at or prior to the Closing Date shall have been performed;
and
(iii)
the delivery by the Purchasers of the items set forth in Section 2.2(b)
of this Agreement.
(b)
The respective obligations of the Purchasers hereunder in connection with each
Closing are subject to the following conditions being met:
(i)
the accuracy in all material respects on the Closing Date of the representations
and warranties of the Company contained herein;
(ii)
all obligations, covenants and agreements of the Company required to be
performed at or prior to the Closing Date shall have been
performed;
(iii)
the delivery by the Company of the items set forth in Section 2.2(a)
of this Agreement; and
(iv)
there shall have been no Material Adverse Effect with respect to the Company
since the date hereof.
REPRESENTATIONS
AND WARRANTIES
3.1
Representations and Warranties of the Company.
The Company hereby makes the representations and warranties set forth below
to
Purchasers.
(a)
Subsidiaries.
The Company owns, directly or indirectly, all of the capital stock or other
equity interests of each Subsidiary free and clear of any and all Liens, and
all
the issued and outstanding shares of capital stock of each Subsidiary are
validly issued and are fully paid, non-assessable and free of preemptive and
similar rights to subscribe for or purchase securities. The Company has no
other
direct or indirect subsidiaries other than the Subsidiaries.
(b)
Organization and Qualification.
(i) The
Company is duly incorporated, validly existing and in good standing under the
laws of the state of Nevada, 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 duly qualified to conduct business and is in good
standing as a foreign corporation 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 a material adverse effect on the results of
operations, assets, business or condition (financial or otherwise) of the
Company and its Subsidiaries (a “Material
Adverse Effect”).
5
(ii) Each
of the Subsidiaries is an entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the jurisdiction of
its
incorporation or organization (as applicable), with the requisite power and
authority to own and use its properties and assets and to carry on its business
as currently conducted. Each of the Subsidiaries 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 a
Material Adverse Effect.
(c)
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 hereunder and thereunder. The
execution and delivery of each of the Transaction Documents by the Company
and
the consummation by it of the transactions contemplated hereby and thereby
have
been duly authorized by all necessary action on the part of the Company and
no
further action is required by the Company, its Board or its stockholders 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 and thereof, will constitute the valid and binding obligation
of the Company enforceable against the Company in accordance with its terms
except (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.
(d)
No Conflicts.
The execution, delivery and performance of the Transaction Documents by the
Company do not and will not: (i) conflict with or violate any provision of
the Company’s or any Subsidiary’s certificate or articles of incorporation,
bylaws or other organizational or charter documents, 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, result in the creation of any Lien upon any
of
the properties or assets of the Company or any Subsidiary, 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 or Subsidiary debt or otherwise) by which
any
property or asset of the Company or any Subsidiary is bound or affected, or
(iii) conflict with or 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 or any Subsidiary is subject
(including federal and state securities laws and regulations), or by which
any
property or asset of the Company or any Subsidiary is bound or affected; except
in the case of each of clauses (ii) and (iii), such as would not result in
a Material Adverse Effect.
6
(e)
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 (i) the filing with the SEC of the
Registration Statement, (ii) the filing of the Certificate of Designation with
the Secretary of State of Nevada and
(iii) the filing of Form D with the SEC and such filings as are required to
be made under applicable state securities laws (collectively, the “Required
Approvals”).
(f)
Issuance of Securities.
The Shares and Underlying Shares are duly authorized and, when issued and paid
for in accordance with the applicable Transaction Documents, will be duly and
validly issued, fully paid and nonassessable, free and clear of all Liens
imposed by the Company other than restrictions on transfer provided for in
the
Transaction Documents (including restrictions under federal and state securities
laws).
(g)
Capitalization.
The capitalization (including warrants, options, exchangeable and/or convertible
securities) of the Company as of September 30, 2006 is as set forth in the
Form
10-K Report filed by the Company with the SEC on December 29, 2006, which
remains true and correct as of and through the Closing Date. The Company has
not
issued any capital stock since its most recently filed periodic report under
the
Exchange Act except as set forth on Schedule
3.1(g).
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. All of the outstanding shares of
capital stock of the Company are validly issued, fully paid and
nonassessable.
(h)
SEC Reports.
The Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it under the Securities Act and the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof, for the one year
preceding the date hereof (or such shorter period as the Company was required
by
law or regulation to file such material) (the foregoing materials, including
the
exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the “SEC
Reports”).
As of their respective dates, the SEC Reports (including the financial
statements, exhibits and schedules thereto) complied in all material respects
with the requirements of the Securities Act and the Exchange Act and the rules
and regulations of the SEC promulgated thereunder, as applicable and did not
at
the time they were filed (or if amended or superseded by a filing prior to
the
date of this Agreement, then on the date of such filing) contain any untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary in order to made the statements therein, in light
of
the circumstances they were made, not misleading.
7
Each
of the financial statements (including, in each case, any related notes thereto)
contained in the SEC Reports (the "Company
Financials"),
including any SEC Reports filed after the date hereof until the Closing, as
of
their respective dates, (i) complied as to form in all material respects with
the published rules and regulations of the SEC with respect thereto, (ii) was
prepared in accordance with GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited interim financial statements, as may be permitted by the
SEC
on Form 10-Q under the Exchange Act) and (iii) fairly presented the financial
position of the Company at the respective dates thereof and the consolidated
results of its operations and cash flows for the periods indicated, except
that
the unaudited interim financial statements were or are subject to normal and
recurring year-end adjustments which were not, or are not expected to be,
material in amount. The balance sheet of the Company as of September 30, 2006
is
hereinafter referred to as the "Company
Balance Sheet."
Except as disclosed in the Company Financials, the Company does not have any
liabilities
(absolute, accrued, contingent or otherwise) of a nature required to be
disclosed on a balance sheet or in the related notes to the consolidated
financial statements prepared in accordance with GAAP which are, individually
or
in the aggregate, material to the business, results of operations or financial
condition of the Company, except liabilities (i) provided for in the Company
Balance Sheet, or (ii) incurred since the date of the Company Balance Sheet
in
the ordinary course of business consistent with past practices and which would
not reasonably be expected to have a Material Adverse Effect.
(i)
Material Changes.
Since the date of the Company Balance Sheet, except as specifically disclosed
in
or contemplated by a subsequent SEC Report, (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 United States generally accepted
accounting principles applied on a consistent basis during the periods involved
(“GAAP”)
or disclosed in filings made with the SEC, (iii) 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, (iv) the Company has not issued any equity securities
to
any officer, director or Affiliate except as set forth on Schedule
3.1(i)
and (v) the Company has not made any changes to its accounting principals,
practices or methods, its disclosure controls and procedures or its internal
control over financial reporting. The Company does not have pending before
the
SEC any request for confidential treatment of information.
(j)
Litigation.
Except as set forth on Schedule
3.1(j),
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 Company, any Subsidiary or any of their respective 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) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Shares or
(ii) would, if there were an unfavorable decision, result in a Material
Adverse Effect.
(k)
Compliance.
Neither the Company nor any Subsidiary (i) is 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 or
any
Subsidiary under), 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), (ii) is in violation of any order of any court,
arbitrator or governmental body, or (iii) is in
violation of any statute, rule or regulation of any governmental authority,
except in each case as would not result in a Material Adverse
Effect.
8
(l)
Regulatory Permits.
The Company and each Subsidiary possess all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign regulatory
authorities necessary to conduct their respective businesses as described in
the
SEC Reports, except where the failure to possess such permits would not result
in a Material Adverse Effect (“Material
Permits”).
(m)
Title to Assets.
The Company and each Subsidiary have good and marketable title in fee simple
to
all real property (if any) owned by them that is material to the business of
the
Company and the Subsidiary and good and marketable title in all personal
property owned by them that is material to the business of the Company and
each
Subsidiary, in each case 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
each Subsidiary and Liens for the payment of federal, state or other taxes,
the
payment of which is neither delinquent nor subject to penalties.
(n)
Patents and Trademarks.
The Company and each Subsidiary have, or have rights to use, all patents, patent
applications, trademarks, trademark applications, service marks, trade names,
trade secrets, inventions, copyrights, licenses and other intellectual property
rights and similar rights necessary or material for use in connection with
their
respective businesses as described in the SEC Reports and which the failure
to
so would not result in a Material Adverse Effect (collectively, the
“Intellectual
Property Rights”).
Neither the Company nor any Subsidiary has received a notice (written or
otherwise) that the Intellectual Property Rights used by the Company or any
Subsidiary violates or infringes upon the rights of any Person. To the best
knowledge of the Company, all such Intellectual Property Rights are enforceable
and there is no existing infringement by another Person of any of the
Intellectual Property Rights. The Company and its Subsidiaries each have used
their respective best efforts using security measures to protect the secrecy,
confidentiality and value of all of their Intellectual Property Rights and
Intellectual Property, except where failure to do so would not have a Material
Adverse Effect.
(o)
Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as it believes
are prudent and customary in the businesses in which the Company and the
Subsidiaries are engaged, including, but not limited to, directors and officers
insurance coverage. Neither the Company nor any Subsidiary has
any 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)
Private Placement.
Assuming the accuracy of the Purchaser’s representations and warranties set
forth in Section 3.2,
no registration under the Securities Act is required for the offer and sale
of
the Shares by the Company to the Purchaser as contemplated hereby.
9
(q)
No General Solicitation.
Neither the Company nor any person acting on behalf of the Company has offered
or sold any of the Shares by any form of general solicitation or general
advertising. The Company has offered the Shares for sale only to the Purchaser,
an “accredited investor” within the meaning of Rule 501 under the Securities
Act.
3.2
Representations and Warranties of the Purchaser.
The Purchasers each hereby represent and warrant as of the date hereof and
as of
the Closing Date to the Company as follows:
(a)
Organization; Authority.
Purchaser is 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 hereunder and thereunder. The execution, delivery and performance
by
Purchaser of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate or similar action on the part of
Purchaser. Each Transaction Document to which it is a party has been duly
executed by Purchaser, and when delivered by Purchaser in accordance with the
terms hereof, will constitute the valid and legally binding obligation of
Purchaser, enforceable against it in accordance with its terms, except
(i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by
laws relating to the availability of specific performance, injunctive relief
or
other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.
(b)
Own Account.
Purchaser understands that the Shares are “restricted securities” and have not
been registered under the Securities Act or any applicable state securities
law,
and is acquiring the Shares as principal for its own account and not with a
view
to or for distributing or reselling such Shares or any part thereof in violation
of the Securities Act or any applicable state securities law, has no present
intention of distributing any of such Shares in violation of the Securities
Act
or any applicable state securities law, and has no direct or indirect
arrangement or understandings with any other persons to distribute or regarding
the distribution of such Shares (this representation and warranty not limiting
Purchaser’s right to sell the Shares pursuant to the Registration Statement or
otherwise in compliance with applicable federal and state securities laws)
in
violation of the Securities Act or any applicable state securities law.
Purchaser is acquiring the Shares hereunder in the ordinary course of its
business.
(c)
Purchaser
Status.
At the time such Purchaser was offered the Shares, it was, and at the date
hereof it is, an “accredited investor” as defined in Rule 501(a)(1), (a)(2),
(a)(3), (a)(7) or (a)(8) under the Securities Act.
(d)
General
Solicitation.
Purchaser is not purchasing the Shares as a result of any advertisement,
article, notice or other communication regarding the Shares published in any
newspaper, magazine or similar media or broadcast over television or radio
or
presented at any seminar or any other general solicitation or general
advertisement.
10
ARTICLE
IV.
OTHER
AGREEMENTS OF THE PARTIES
4.1
Transfer Restrictions.
(a)
The Shares and the Conversion Shares (collectively, the “Securities”)
may only be disposed of in compliance with state and federal securities laws.
In
connection with any transfer of Securities other than pursuant to an effective
registration statement or Rule 144, or to the Company or to an affiliate of
Purchasers, the Company may require the transferor thereof to provide to the
Company an opinion of counsel selected by the transferor and reasonably
acceptable to the Company (the cost of which will be borne by the transferor),
the form and substance of which opinion shall be reasonably satisfactory to
the
Company, to the effect that such transfer does not require registration of
such
transferred Securities under the Securities Act. As a condition of transfer,
any
such transferee shall agree in writing to be bound by the terms of this
Agreement and shall have the rights of a Purchaser under this Agreement and
the
Registration Rights Agreement.
(b)
The Purchasers agree to the imprinting, so long as is required by this
Section 4.1,
of a legend on any of the Securities in the following form:
THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
NOR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.
11
(c)
Certificates evidencing the Securities shall not be required to bear any legend
(including the legend set forth in Section 4.1(b)
hereof): (i) while a registration statement (including the Registration
Statement) covering the resale of such Securities is effective under the
Securities Act, or (ii) following any sale of such Securities pursuant to
Rule 144, or (iii) if such Securities are eligible for sale under Rule
144(k). If requested by a Person holding the Securities, the Company shall
take
action reasonably requested by the Purchasers (including, but not limited to,
causing Company counsel to issue a legal opinion to the Company’s transfer
agent) after the Effective Date if required by the Company’s transfer agent to
effect the removal of the legend hereunder, provided that the Person requesting
the removal of such legend shall have provided to such counsel such documents
as
it may reasonably request and are normally provided in accordance with industry
standards.
(d)
Purchasers agree that the removal of the restrictive legend from certificates
representing Securities as set forth in this Section 4.1
is predicated upon the Company’s reliance that the Purchaser will sell any
Securities pursuant to either the registration requirements of the Securities
Act, including any applicable prospectus delivery requirements, or an exemption
therefrom, and that if Securities are sold pursuant to a Registration Statement,
they will be sold in compliance with the plan of distribution set forth
therein.
4.2
Board
and Stockholder Meetings.
The Company agrees that the Board shall meet at least quarterly and it shall
hold an annual meeting of its stockholders on an annual basis.
4.3 SEC
Filings.
As long as Shares are outstanding, 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.
4.4
Lock-up.
Without the express prior written consent of the Purchasers owning no less
than
a majority of the Stated Value (as defined in the Certificate of Designation)
of
the then issued and outstanding Shares, none of the Company’s or the
Subsidiary’s current or future respective officers or directors will offer,
sell, contract to sell or grant any option to purchase or otherwise dispose
of,
directly or indirectly, conduct or announce the offering of, any shares of
capital stock of the Company, or any securities convertible into, or
exchangeable for or containing rights to purchase, shares of capital stock
of
the Company, during the period beginning on the date hereof and ending nine
(9)
months after the Effective Date (the “Lock-up
Period”).
4.5 Use
of Proceeds.
The Company shall use the net proceeds from the sale of the Shares for its
general working capital purposes.
4.6
Information
Rights.
For so long as any Shares are issued and outstanding, Purchasers and/or their
respective representatives will be granted reasonable access to Company
facilities and personnel during normal business hours, provided however that
such access does not result in the disruption of normal business operations,
and
with reasonable advance notification. The Company will deliver to each Purchaser
annual, quarterly financial statements and copies of other financial and other
documents and/or information reasonably requested by each Purchaser to monitor
the Company and Purchasers’ investment in the Shares.
12
4.7 Form
D; Blue Sky Filings.
The Company agrees to timely file a Form D with respect to the Shares as
required under Regulation D and to provide a copy thereof, promptly upon request
of any Purchaser. The Company shall take such action as the Company shall
reasonably determine is necessary in order to obtain an exemption for, or to
qualify the Shares for, sale to the Purchaser at the Closing under applicable
securities or “Blue Sky” laws of the states of the United States, and shall
provide evidence of such actions promptly upon request of any
Purchaser.
4.8 Public
Disclosure.
Except for the timely filing of reports required by applicable SEC rules and
regulations, the Company shall not issue any press release or otherwise make
any
public statement with respect to this Agreement and will not issue any such
press release or make any such public statement without the prior consent of
Purchaser, which shall not be unreasonably withheld.
ARTICLE
V.
MISCELLANEOUS
5.1 Termination. On
the Termination Date, this Agreement shall be automatically
terminated.
5.2 Fees
and Expenses.
Other than as set forth in Section
5.14
hereof, this Section
5.2
and in the Registration Rights Agreement, each party shall pay all of its own
fees and expenses in connection with the sale of the Shares. The parties
acknowledge that the Company shall pay (which amount shall be automatically
deducted from the Purchase Price and paid directly to the Purchasers’ legal
counsel) legal fees of up to $10,000 (based upon time and charges including
all
actual and accountable expenses) in connection with such legal representation
of
Purchasers in the Offering. The Company shall pay all transfer agent fees,
stamp
taxes and other taxes and duties levied in connection with the delivery of
the
Shares to the Purchasers.
5.3 Entire
Agreement.
The Transaction Documents together with the exhibits and schedules hereto and
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.
5.4 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 (accompanied by
confirmation of receipt of transmission), if such notice or communication is
delivered via facsimile at the facsimile number or via e-mail at the e-mail
address respectively set forth on the signature pages attached hereto prior
to
5:30 p.m. (New York City time) on a Business Day, (b) the next Business Day
after the date of transmission (accompanied by confirmation of receipt of
transmission), if such notice or communication is delivered via facsimile at
the
facsimile number or via e-mail at the e-mail address respectively set forth
on
the signature pages attached hereto on a day that is not a Business Day or
later
than 5:30 p.m. (New York City time) on any Business Day, (c) the
2nd
Business 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.
13
5.5 Amendments;
Waivers.
No provision of this Agreement may be waived, modified, supplemented or amended
except in a written instrument signed, in the case of an amendment, by the
Company and Purchasers or, in the case of a waiver, by the party against whom
enforcement of any such waived provision is sought. 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 any party to exercise any right hereunder in
any
manner impair the exercise of any such right.
5.6 Headings.
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.
5.7 Successors
and Assigns.
This Agreement shall be binding upon and inure to the benefit of the parties
and
their successors and permitted assigns. The Company may not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of Purchaser (other than by merger). Purchaser may assign any or all
of
its rights under this Agreement to any Person to whom Purchaser assigns or
transfers any Shares, provided such transferee agrees in writing to be bound,
with respect to the transferred Shares, by the provisions of this Agreement
and
the Transaction Documents that apply to the Purchaser.
5.8 No
Third-Party Beneficiaries.
This Agreement is intended for the benefit of the parties hereto and their
respective successors and permitted assigns and is not for the benefit of,
nor
may any provision hereof be enforced by, any other Person.
5.9 Governing
Law.
All questions concerning the construction, validity, enforcement and
interpretation of the Transaction Documents shall be governed by and construed
and enforced exclusively in accordance with the internal laws of the State
of
New York, 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 New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York,
borough of Manhattan for the adjudication of any dispute hereunder or in
connection herewith 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
or is an inconvenient venue for such proceeding. Each party hereby irrevocably
waives personal service of process and consents to process being served in
any
such suit, action or proceeding by mailing a copy thereof via registered or
certified mail or 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 other manner permitted by law. The parties hereby waive
all rights to a trial by jury. If either party shall commence an action or
proceeding to enforce any provisions of the Transaction Documents, then the
prevailing party in such action or proceeding shall be reimbursed by the other
party for its reasonable attorneys’ fees and other reasonable costs and expenses
incurred with the investigation, preparation and prosecution of such action
or
proceeding.
14
5.10 Survival.
The representations, warranties, covenants and other agreements contained herein
shall survive the Closing and the delivery, exercise and/or conversion of the
Shares, as applicable for the applicable statue of limitations.
5.11 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 or by e-mail delivery of a “.pdf” format data file, 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 or “.pdf” signature page were an original thereof.
5.12 Severability.
If any term, provision, covenant or restriction of this Agreement is held by
a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may
be
hereafter declared invalid, illegal, void or unenforceable.
5.13 Construction.
The parties agree that each of them and/or their respective counsel has reviewed
and had an opportunity to revise the Transaction Documents and, therefore,
the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of the Transaction Documents or any amendments hereto.
5.14 Advisory
Fee.
The Company shall pay to the Purchasers (and/or their designees) an advisory
fee
of $2,000 per month for twelve (12) consecutive months, $24,000 in the aggregate
(the “Advisory
Fee”),
on the first day of each month, with the first $2,000 payment being due and
payable March 1, 2007.
(Signature
Pages Follow)
15
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.
|
XXXXX
WORLD TRADE, LTD.
|
Address
for Notice:
|
|
|
|
|
|
|
By:
|
Name:Xxxxx
X. Xxxxxxxx
Title:
Executive Vice President and Chief Executive Officer
|
000-00
000xx
Xxxxxx
Xxxxxxx,
XX 00000
Fax:
000 000-0000
Email:
xxxxxxxxx@xxxxxxxxxx.xxx
|
With
a copy to (which shall not constitute notice):
Xxxxxxx
X. Xxxxx, Esq.
Scheichet
& Xxxxx, P.C.
000
Xxxxx Xxxxxx - 00xx
Xxxxx
Xxx
Xxxx, XX 00000
Fax:
000 000-0000
Email:
xxxxxxx@xxxxxxxxxxxxxx.xxx
[SIGNATURE
PAGE FOR PURCHASER FOLLOWS]
16
[PURCHASER
SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]
IN
WITNESS WHEREOF, the undersigned has caused this Securities Purchase Agreement
to be duly executed by their respective authorized signatories as of the date
first indicated above.
|
|
|
Name
of Purchaser: NAME
REDACTED
|
|
|
|
Signature
of Authorized Signatory of Purchaser:/s/NAME
REDACTED
|
|
|
|
Name
of Authorized Signatory:NAME
REDACTED
|
|
|
|
Title
of Authorized Signatory: Chief
Operating Officer
|
|
|
|
Email
Address of Purchaser: Address
Redacted
|
|
|
|
Facsimile
Number of Purchaser: Number
Redacted
|
|
|
|
Address
for Notice of Purchaser: Address
Redacted
|
Address
for Delivery of Shares for Purchaser (if not same as above):
Aggregate
Purchase Price: $500,000.00
Shares:
1,000,000
Warrants:
-0-
17
SCHEDULE
3.1(g)
Capitalization
The
Company has previously committed to issue an aggregate of 950,000 shares to
three employees in the event of the Company’s securities being listed on the AIM
or a domestic exchange, and to execute a transaction by which Xxxxx X. Xxxxxxxx
will cash-out a portion of his shareholdings in the Company.
SCHEDULE
3.1(j)
Litigation
