AGREEMENT
This Agreement (this "Agreement") is made as of the 5th day
of September, 2000 by and between PURCHASE POOLING INVESTMENT
FUND, a Texas general partnership managed by HW Capital, L.P.
("Investor"), and EDGE TECHNOLOGY GROUP, INC., formerly known as
Visual Edge Systems Inc. (the "Company").
RECITALS:
WHEREAS, Investor desires to contribute the Preferred Stock
(as hereafter defined) to the Company in exchange for the
issuance by the Company to the Investor of 2,644,841 shares of
Company common stock, par value $.01 per share (the "Shares").
NOW, THEREFORE, in consideration of the foregoing premises
and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Investor and the
Company hereby agree as follows:
1. Subscription; Delivery of Shares. Investor hereby
irrevocably subscribes for and agrees to purchase 2,644,841
Shares upon the terms and conditions set forth herein, and
herewith tenders to the Company (i) 9,593,824 shares of
XxxxxxxxXxxxxxx.xxx, Inc. Series A Convertible Preferred Stock
(the "Preferred Stock"), par value $.0001 per share (the
"Purchase Payment"), and (ii) except as specifically set forth
herein, all contractual rights of Investor that are incidental to
the Preferred Stock under the Securities Purchase Agreement dated
as of May 1, 2000 (the "Securities Agreement"), the Voting
Agreement dated as of May 1, 2000, the Investors' Rights
Agreement dated as of May 1, 2000, and the Co-Sale and First
Refusal Agreement dated as of May 1, 2000, in each instance
governing the terms upon which the Preferred Stock was issued
(collectively, the "Ancillary Agreements"). The Purchase Payment
shall not include options (or warrants) granted under the
Ancillary Agreements to acquire 375,000 and 125,000 shares of
common stock of XxxxxxxxXxxxxxx.xxx, Inc. granted to Xxxx-CKH,
LLC or its designee and Xxxxxx Xxxxxxxx or his designee,
respectively (which items were granted for such parties'
participation on XxxxxxxxXxxxxxx.xxx, Inc.'s initial Board of
Directors).
2. Intentionally Omitted.
3. Representations and Warranties of Investor as to the
Shares. Investor hereby represents and warrants to the Company
as follows:
3.1 Shares for Account of Investor. The Shares are
being acquired for the account of Investor for investment
purposes only, and are not being purchased with a view to or
for the resale or distribution thereof, and Investor has no
contract, undertaking, agreement or arrangement with, and
has no present plan to enter into any contract, undertaking,
agreement or arrangement with any person to sell, transfer
or pledge the Shares or any portion thereof (provided,
nothing contained in this representation shall prohibit the
right of Investor to distribute all or a portion of the
Shares to the current partners of Investor).
3.2 Shares Not Registered Under Securities Laws.
Investor understands that the Shares have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), nor qualified under the securities laws
of any state in reliance upon exemptions from the
registration and qualification requirements of such
statutes.
3.3 Legend on Shares. Investor has been informed and
understands and agrees that certificates representing the
Shares shall bear a legend on their face, customary under
applicable United States federal law, restricting the sale,
pledge, hypothecation or other transfer of the Shares or any
interest therein, in the absence of registration and
qualification under any applicable United States federal and
state laws or an opinion of counsel, satisfactory in form
and content to the Company, that, under the specific
circumstances described therein, the proposed disposition is
exempt from such requirements.
3.4 Financial Ability of Investor. Investor (a) has
the financial ability to bear the economic risk of its
investment in the Shares (including the possible loss of the
entire amount thereof), (b) has adequate means for providing
for its current and future needs and personal contingencies
notwithstanding (i) Investor's investment in the Shares,
(ii) the unavailability of any tax, financial or other
benefits from Investor's investment in or ownership of the
Shares, or (iii) the complete loss of Investor's entire
investment in the Shares, and (c) has no need for liquidity
with respect to its investment in the Shares.
3.5 Investor Sophistication. Investor has such
knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of an
investment in the Shares and has obtained sufficient
information from the Company to enable it to evaluate the
risks of an investment in the Shares.
3.6 Offer Communicated Directly. The offer to sell
the Shares was directly communicated to Investor by the
Company by means of this Agreement. At no time was Investor
presented with, or solicited by or through, any leaflet,
public promotional meeting, television advertisement or any
other form of general advertising.
3.7 Representations Not Conflicting. Neither the
Company nor any person acting on behalf of the Company has
made any statement, assertion, representation, warranty or
other communication to Investor that was contrary to any
provisions of this Agreement.
3.8 Receipt of Other Information. Investor has had
the opportunity to ask questions of, and receive answers
from, the Company or its authorized representatives
pertaining to an investment in the Shares.
3.9 Suitability of Investment. Investor has
determined that the Shares are a suitable investment for it
and that, at this time, it is able to bear a complete loss
of its investment in the Shares.
3.10 Independent Investment Decision. In making a
decision to invest in the Shares, Investor has relied solely
upon independent investigations made by it and is not
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relying on the Company or its authorized representatives
with respect to tax or other economic considerations
involved in an investment in the Shares.
3.11 Accredited Investor. Each partner of Investor is
an accredited investor within the meaning of Rule 501 of
Regulation D of the Securities Act.
4. Representations and Warranties of Investor as to this
Agreement and the Preferred Stock. Investor hereby represents
and warrants to the Company as follows:
4.1 Authority. Investor is duly organized and validly
existing and has all requisite power to execute, deliver and
perform this Agreement and the transactions contemplated
hereby.
4.2 Authorization. Investor has duly authorized the
execution, delivery and performance of this Agreement.
4.3 Enforceability. This Agreement has been duly
executed and delivered by Investor, and constitutes the
valid and binding agreement of Investor, enforceable against
Investor in accordance with its terms, except as (i)
enforceability hereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or similar laws and general principles
of equity affecting creditors' rights generally, in each
case as now or hereafter in effect, and (ii) the
availability of equitable remedies may be limited by
equitable principles of general applicability.
4.4 Consents. The execution, delivery and performance
of this Agreement will not require Investor to obtain or
perform any (i) registration, filing, consent or approval
under any law, rule, regulation, judgment, order, writ,
decree, permit or license, or (ii) consent or approval of
any other party to the Securities Agreement or to any of the
Ancillary Agreements or any other person or entity.
4.5 Ownership of Preferred Stock. Investor is the
sole record and beneficial owner of the Preferred Stock,
free and clear of all liens, claims and encumbrances, and
the transfer of such Preferred Stock to the Company shall
vest in the Company ownership of such Preferred Stock, free
and clear of all liens, claims and encumbrances (in each
case, except for restrictions on transfer provided in the
Ancillary Agreements).
4.6 Litigation. There is no action, suit, claim,
proceeding or investigation pending or threatened against
Investor, at law or in equity, or before any federal, state,
municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or
foreign, which, if adversely determined, would question
Investor's ownership of the Preferred Stock or the validity
of, or prevent the consummation of, the transaction
contemplated by this Agreement.
4.7 Finders. Investor has not directly or indirectly
dealt with anyone acting in the capacity of a finder or
broker and has not incurred any obligation for any finder's
or broker's fee or commission in connection with the
transactions contemplated by this Agreement.
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5. Representations and Warranties of the Company as to the
Preferred Stock. The Company hereby represents and warrants to
the Investor as follows:
5.1 Preferred Stock for Account of the Company. The
shares of Preferred Stock are being acquired for the account
of the Company for investment purposes only, and are not
being purchased with a view to or for the resale or
distribution thereof, and the Company has no contract,
undertaking, agreement or arrangement with, and has no
present plan to enter into any contract, undertaking,
agreement or arrangement with any person to sell, transfer
or pledge the Preferred Stock or any portion thereof.
5.2 Preferred Stock Not Registered Under Securities
Laws. The Company understands that the Preferred Stock has
not been registered under the Securities Act of 1933, as
amended (the "Securities Act"), nor qualified under the
securities laws of any state in reliance upon exemptions
from the registration and qualification requirements of such
statutes.
5.3 Legend on Preferred Shares. The Company has been
informed and understands and agrees that the certificates
representing the Preferred Stock shall bear the following
legends:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS (COLLECTIVELY, THE "ACTS").
THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES
UNDER SUCH ACTS OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144
PROMULGATED UNDER THE SECURITIES ACT."
THE SHARES REPRESENTED HEREBY AND THE VOTING THEREOF
ARE SUBJECT TO CERTAIN RESTRICTIONS AND AGREEMENTS
CONTAINED IN A VOTING AGREEMENT AMONG THE HOLDER (OR
THE PREDECESSOR IN INTEREST TO THE SHARES), THE
COMPANY AND CERTAIN OTHER STOCKHOLDERS OF THE
COMPANY. THE COMPANY WILL UPON WRITTEN REQUEST
FURNISH A COPY OF THE VOTING AGREEMENT TO THE HOLDER
HEREOF WITHOUT CHARGE.
THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY
MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED,
OR IN ANY MANNER DISPOSED OF EXCEPT IN CONFORMITY
WITH THE TERMS OF A CO-SALE AND FIRST REFUSAL
AGREEMENT AMONG THE HOLDER (OR THE PREDECESSOR IN
INTEREST TO THE SHARES), THE CORPORATION AND CERTAIN
OTHER STOCKHOLDERS OF THE CORPORATION. THE
CORPORATION
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WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH
AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE.
5.4 Financial Ability of the Company. The Company (a)
has the financial ability to bear the economic risk of its
investment in the Preferred Stock (including the possible
loss of the entire amount thereof), (b) has adequate means
for providing for its current and future needs and personal
contingencies notwithstanding (i) the Company's investment
in the Preferred Stock, (ii) the unavailability of any tax,
financial or other benefits from the Company's investment in
or ownership of the Preferred Stock, or (iii) the complete
loss of the Company's entire investment in the Preferred
Stock, and (c) has no need for liquidity with respect to its
investment in the Preferred Stock.
5.5 Investor Sophistication. The Company has such
knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of an
investment in the Preferred Stock and has obtained
sufficient information from XxxxxxxxXxxxxxx.xxx, Inc. to
enable it to evaluate the risks of an investment in the
Preferred Stock.
5.6 Offer Communicated Directly. The offer to sell
the Preferred Stock was directly communicated to the Company
by Investor by means of this Agreement. At no time was the
Company presented with, or solicited by or through, any
leaflet, public promotional meeting, television
advertisement or any other form of general advertising.
5.7 Representations Not Conflicting. Neither
XxxxxxxxXxxxxxx.xxx, Inc., Investor nor any person acting on
behalf of either of them has made any statement, assertion,
representation, warranty or other communication to the
Company that was contrary to any provisions of this
Agreement.
5.8 Receipt of Other Information. The Company has had
the opportunity to ask questions of, and receive answers
from, XxxxxxxxXxxxxxx.xxx, Inc., Investor or its authorized
representatives pertaining to an investment in the Preferred
Stock.
5.9 Suitability of Investment. The Company has
determined that the shares of Preferred Stock are a suitable
investment for it and that, at this time, it is able to bear
a complete loss of its investment in the Preferred Stock.
5.10 Independent Investment Decision. In making a
decision to invest in the Preferred Stock, the Company has
relied solely upon independent investigations made by it and
is not relying on XxxxxxxxXxxxxxx.xxx, Inc., Investor or
their respective authorized representatives with respect to
tax or other economic considerations involved in an
investment in the Preferred Stock.
6. Representations and Warranties of the Company as to
this Agreement and to the Shares. The Company hereby represents
and warrants to Investor as follows:
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6.1 Authority. The Company is duly organized and
validly existing and has all requisite power to execute,
deliver and perform this Agreement and the transactions
contemplated hereby.
6.2 Authorization. The Company has duly authorized
the execution, delivery and performance of this Agreement.
6.3 Enforceability. This Agreement has been duly
executed and delivered by the Company, and constitutes the
valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as
(i) enforceability hereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or similar laws and general principles
of equity affecting creditors' rights generally, in each
case as now or hereafter in effect, and (ii) the
availability of equitable remedies may be limited by
equitable principles of general applicability.
6.4 Consents. The execution and delivery of this
Agreement will not require the Company to (i) obtain or
perform any registration, filing, consent or approval under
any such law, rule, regulation, judgment, order, writ,
decree, permit or license or (ii) consent or approval of any
other party to any material agreement of the Company.
6.5 Validly Issued. Upon receipt of the Purchase
Payment, the Shares shall be duly authorized, validly
issued, fully paid and nonassessable, free and clear of all
liens, claims and encumbrances (other than the restrictions
on transfer specified herein).
6.6 Litigation. There is no action, suit, claim,
proceeding or investigation pending or threatened against
the Company, at law or in equity, or before any federal,
state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality,
domestic or foreign, which, if adversely determined, would
question Investor's ownership of the Shares or the validity
of, or prevent the consummation of, the transaction
contemplated by this Agreement.
6.7 Finders. The Company has not directly or
indirectly dealt with anyone acting in the capacity of a
finder or broker and has not incurred any obligation for any
finder's or broker's fee or commission in connection with
the transactions contemplated by this Agreement.
7. Registration Rights. Reference is hereby made to that
certain Registration Rights Agreement dated June 13, 1997 by and
among the Company and certain stockholders of the Company
(including Glacier Capital Limited and Xxxxxxx Capital Limited,
collectively "G&S"), as subsequently amended (the "Registration
Rights Agreement"). The Company hereby grants to Investor
piggyback or incidental registration rights associated with the
Shares (including each partner of Investor upon any distribution
of the Shares to such partners) as contemplated by Section 2.2 of
the Registration Rights Agreement in connection with any
registration rights requested by G&S under the Registration
Rights Agreement on the terms specified therein.
8. Right to Participate in Financing. In addition to and
not in lieu of the preemptive rights granted to the holder of the
Preferred Stock under the Ancillary Agreements, Investor hereby
represents and warrants to the Company that it has obtained the
agreement of
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XxxxxxxxXxxxxxx.xxx, Inc. to afford the Company a right to
acquire up to twenty percent (20%) of the securities issuable by
XxxxxxxxXxxxxxx.xxx, Inc. in the next round of equity financing
contemplated by XxxxxxxxXxxxxxx.xxx, Inc., subject to the
agreement attached hereto.
9. Reliance on Representations and Warranties. It is
understood and agreed that the Company has relied and will rely
upon the representations and warranties of Investor contained in
this Agreement for purposes of determining whether Investor meets
the investor suitability standards imposed under state and
federal securities laws and regulations in order to enable the
Company to decide whether the offer and sale of the Shares may be
made without registration under applicable federal and state
securities laws and regulations in reliance upon exemptions
provided thereunder. It is understood and agreed that Investor
has relied and will rely upon the representations and warranties
of the Company contained in this Agreement for purposes of
determining whether the Company meets the investor suitability
standards imposed under state and federal securities laws and
regulations in order to enable Investor to decide whether the
offer and sale of the Preferred Stock may be made without
registration under applicable federal and state securities laws
and regulations in reliance upon exemptions provided thereunder.
10. No Assignment. Neither party may transfer or assign
this Agreement or any right, title or interest in, to or under
this Agreement without the prior written consent of the other
party, and any attempted assignment without such consent shall he
void and without effect.
11. Governing Law. This Agreement shall be governed by and
controlled in accordance with the laws substantive of the State
of Texas without regard to conflict of law provisions.
12. Headings. The headings of the sections of this
Agreement are for reference only and shall not limit or otherwise
affect the interpretation or effect of any term or provision.
13. Binding Agreement. Except as expressly set forth to
the contrary, this Agreement shall be binding upon and inure to
the benefit of the successors and permitted assigns of the
parties hereto.
14. Indemnification.
(a) Investor acknowledges its understanding of the
representations, warranties and covenants set forth herein
and that the Company relied upon such representations,
covenants and warranties and Investor agrees to indemnify,
defend and save harmless the Company, its directors,
officers, agents, and employees, and each of them, from and
against any and all loss, liability, claim, damage, and
expense (including, but not limited to, any and all expenses
reasonably incurred in investigating, preparing or defending
against any litigation commenced or threatened or any claim
whatsoever), arising out of or based upon any false
representation or warranty or breach or failure by Investor
to comply with any covenant or agreement made by Investor
herein or in any other document furnished by Investor to any
of the foregoing in connection with Investor's investment in
the Shares.
(b) The Company acknowledges its understanding of the
representations, warranties and covenants set forth herein
and that Investor relied upon such
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representations, covenants and warranties and Investor
agrees to indemnify, defend and save harmless Investor, its
partners, managers, agents, and employees, and each of them,
from and against any and all loss, liability, claim, damage,
and expense (including, but not limited to, any and all
expenses reasonably incurred in investigating, preparing or
defending against any litigation commenced or threatened or
any claim whatsoever), arising out of or based upon any
false representation or warranty or breach or failure by the
Company to comply with any covenant or agreement made by the
Company herein or in any other document furnished by the
Company to any of the foregoing in connection with the
Company's investment in the Preferred Stock.
15. Survival of Terms. All representations, warranties,
acknowledgments and agreements contained herein shall survive the
closing of this Agreement.
(signature page follows)
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PURCHASE POOLING INVESTMENT FUND,
a Texas general partnership
By: HW Capital, LP,
its Investment Manager
By: HW Capital GP LLC, its general
partner
By: /s/ J. Xxxxx Xxxxxxxx
------------------------
Name: J. Xxxxx Xxxxxxxx
------------------------
Title: Vice President
----------------------
EDGE TECHNOLOGY GROUP, INC.
(formerly known as Visual Edge Systems,
Inc.)
By: /s/ Xxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxx
----------------------------------
Title: Chief Executive Officer
---------------------------------
