EXHIBIT 10.10
AMENDMENT NO. 3 TO STOCK PURCHASE AGREEMENT
THIS AMENDMENT NO. 3 TO STOCK PURCHASE AGREEMENT (the "AMENDMENT"),
effective as of October 31st, 2003 (the "EFFECTIVE DATE"), is made by and among
XX.XXX, INC., a Nevada corporation, f/k/a RIGL Corporation ("COMPANY"), XXXXXX &
XXXXXX, LTD., an Antigua corporation ("XXXXXX & XXXXXX") and XXXXXX AND XXXXXXX,
LTD., an Antigua corporation ("XXXXXX AND MARKSON" and, together with Xxxxxx &
Xxxxxx, the "SHAREHOLDERS"). Collectively, all of the parties to this Amendment
will be referred to as the "PARTIES."
BACKGROUND
The Parties executed that certain Stock Purchase Agreement, dated March 16,
1999 ("PURCHASE AGREEMENT"), whereby Company agreed to acquire all of the
outstanding shares of Telco, Inc., including those shares owned by Shareholders.
The Purchase Agreement provided the Shareholders with the right to "put" shares
of the Company owned by them back to the Company under certain circumstances.
In connection with the execution of the Purchase Agreement, the Parties executed
that certain Amendment to the Stock Purchase Agreement, dated March 16, 1999,
which cured a technical default under the Purchase Agreement.
Subsequently, the Parties executed that certain 2nd Amendment to Stock
Purchase Agreement, effective September 12, 2000 ("SECOND AMENDMENT") whereby
the "put" rights of the Shareholders were terminated in exchange for the
creation of revolving lines of credit for the benefit of the Shareholders.
Under the lines of credit, the Company agreed to lend up to $10,000,000 to each
Shareholder, subject to certain limitations (the "REVOLVERS").
The parties now desire to further amend the Purchase Agreement and the
Second Amendment by terminating the revolving lines of credit established under
the Second Amendment in exchange for the Company's agreement to: (a) make
final, predetermined advances to the Shareholders and (b) pay quarterly
dividends to all of the Company's shareholders, subject to applicable law and
the terms and conditions of this Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants, conditions,
representations and warranties herein contained, and for other valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
the Parties agree that Paragraph 1.4 of the Purchase Agreement, as amended by
the Second Amendment, is hereby further amended by replacing the provisions set
forth in the Second Amendment with the terms of this Amendment. All other terms
of the Purchase Agreement as previously amended remain in full force and effect.
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ARTICLE 1
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FINAL ADVANCES AND TERMINATION OF REVOLVERS
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1.1 ADVANCES. Subject to the terms and conditions of this Amendment,
the Company have loaned or will lend to the Shareholders the following amounts
(each, a "FINAL ADVANCE AMOUNT") as allocated and on the dates specified (each a
"FINAL ADVANCE" and, collectively, with all preexisting outstanding advances or
loans made to the Shareholders under the Revolvers or otherwise, the
"ADVANCES"):
FINAL ADVANCE AMOUNT ADVANCE DATE ALLOCATION
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$250,000.00 October 31, 2003 100,000.00 to Xxxxxx &
Markson and $150,000.00 to
Xxxxxx & Xxxxxx
$250,000.00 November 15, 2003 100,000.00 to Xxxxxx &
Markson and $150,000.00 to
Xxxxxx & Xxxxxx
$1,500,000.00 December 8, 2003 1,500,000.00 to Xxxxxx &
Xxxxxx
$325,000.00 January 30, 2004 275,000.00 to Xxxxxx &
Xxxxxx & $50,000.00 to
Xxxxxx & Markson
$400,000.00 February 27, 2004 300,000.00 to Xxxxxx &
Xxxxxx and $100,000.00 to
Xxxxxx & Xxxxxxx
$575,000.00 March 31, 2004 500,000.00 to Xxxxxx &
Xxxxxx and $75,000.00 to
Xxxxxx & Markson
$________ (an amount April 9, 2004 ________ to Xxxxxx &
sufficient to pay the Markson and $________ to
Shareholders' collective Xxxxxx & Xxxxxx
interest on all Advances by the
Company, which total
_________ the "PREEXISTING
DEBT"), for three years (the
"INTEREST ADVANCE"))
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1.1.1 GUARANTEE OF ADVANCES. As a material inducement by the
Company to effectuate this Amendment with the Shareholders, the Company
unconditionally guarantees to make the Advances listed in 1.1 above. Such
Guarantee(s) of payment will be separately evidenced by individual Certificates
of Guarantee for Payment (the "Certificates") in the form attached hereto as
Exhibit A [WE NEED A COPY OF IT!?]. The Certificates are freely assignable by
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the Shareholders without notice to or consent by the Company. The assignment of
the Certificates does not relieve the Shareholders of any of their obligations
under this Amendment.
1.1.2 PAYMENTS TO THIRD PARTIES. The Company will not make any
of the Advances to any third party except to a law firm designated in writing by
the Shareholder(s) to manage certain affairs of the Shareholder(s) or to the
assignees, if any, of the Certificates. As of the signing of this Amendment,
Xxxxxx & Xxxxxx designates the law firm Xxxxxxxxx Xxxxx, P.C. of Phoenix,
Arizona to receive the Advances listed above on its behalf in trust from
December 8, 2003, forward.
1.1.3 METHOD OF PAYMENT. The Advances shall be made by certified
check or wire transfer at the election of the Shareholders or the assignees, if
any, of the Certificates.
1.2 TERMINATION OF REVOLVERS. Upon payment of the Interest Advance,
the Revolvers will terminate and expire and will be of no further force or
effect. The Company will no longer be obligated to advance any funds to
Shareholders or any assignee of the Certificates, except as provided in this
Amendment and the Certificates. Notwithstanding the foregoing, however, the
Advances, including the outstanding advance amounts made to the Shareholders
under the Revolvers prior to this Amendment, will be subject to the terms of
this Amendment.
1.3 SECURITY.
1.3.1 The Shareholders' repayment and other obligations with
respect to the Advances will be secured by a lien on shares of common stock of
the Company, $.001 par value per share, held by the Shareholders ("PLEDGED
SHARES") on the terms and conditions for the pledge of shares as collateral
provided for under the Revolvers, as set forth in the Second Amendment.
Notwithstanding the foregoing, the Shareholders will pledge to the Company that
number of Pledged Shares sufficient to fully collateralize the Advances based on
the following per share valuation criteria ("VALUE CRITERIA"): a share of
Company common stock will be valued at the greater of: (i) 90% of the highest
closing price of one share of the Company's common stock during the 90-day
period immediately preceding the valuation date as quoted or listed on the
Over-the-Counter Bulletin Board or a national exchange or quotation system; or
(ii) a minimum of $1.00 per share. The aggregate value of the Pledged Shares
based on the Value Criteria as of the date of this Amendment will be the
"ORIGINAL COLLATERAL VALUE." At the end of each Company fiscal quarter, the
Company will reassess the value of the Pledged Shares. If the Value Criteria
produce an aggregate value that is in excess of the Original Collateral Value,
the Company will release that number of Pledged Shares necessary to reduce the
reassessed value to an amount equal to the Original Collateral Value. The
Shareholders will not be obligated to pledge any additional shares of Company
common stock if the Value Criteria produce an aggregate value that is less than
the Original Collateral Value in any future measurement period.
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1.3.2 All certificates or instruments representing or evidencing
the Pledged Shares will be held by the Shareholders for which a stop transfer
order will be enforced at the Company's transfer agent, and upon demand, after
an uncured Event of Shareholder Default (as defined below), shall be promptly
delivered to the Company, and will be in suitable form for transfer by delivery,
and will be accompanied by stock powers in the form of Exhibit B attached
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hereto, duly executed in blank by Shareholder, to be held by Company upon the
terms and conditions set forth in this Amendment. The Company will have the
right, at any time in its discretion and upon notice to Shareholders following
the occurrence of an Event of Shareholder Default (as defined below), to
transfer to or to register in the name of Company or any of its nominees any or
all of the Pledged Shares then remaining in the Shareholders' possession.
1.3.3 The Shareholders will, from time to time, promptly execute
and deliver all further instruments and documents and take all further action
that may be necessary or desirable, or that the Company may reasonably request,
in order to protect any security interest granted or purported to be granted
hereby, to enable the Company to exercise and enforce the rights and remedies of
the Company hereunder with respect to any Pledged Shares or to carry out the
provisions and purposes hereof.
1.3.4 So long as any Advance remains unpaid, neither Shareholder
will, without the consent of company:
(a) sell, transfer, assign or dispose of or create, incur,
assume or suffer to exist any security interest, lien or other encumbrance on
any of the Pledged Shares now owned or hereafter acquired other than pursuant to
this Amendment; or
(b) convert any of the Pledged Shares into other stock or
securities (including any warrants, options, subscriptions or other contractual
arrangements for the purchase of stock or securities convertible into stock).
1.3.5 Effective upon the occurrence of an Event of Shareholder
Default, the Shareholders hereby irrevocably appoint Company as their
attorney-in-fact with full authority in the place and stead of Shareholders and
in the name of Shareholders, Company or otherwise, from time to time in
Company's discretion to take any action and to execute any instrument that
Company may deem necessary or advisable to accomplish the purposes of this
Amendment, including an irrevocable proxy to vote the Pledged Shares. This
power of attorney is coupled with an interest and shall be irrevocable until all
obligations of Shareholders on the Advances and hereunder have been indefeasibly
paid and satisfied in full.
1.3.6. Effective upon the occurrence of an Event of Company
Default (as defined below) that remains uncured for 10 days, all of the Pledged
Shares shall be automatically released from any claims or liens by the Company
until such time as Company has cured the Event of Company Default.
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1.3.7. Effective upon the occurrence of the Loan Forgiveness (as
defined below), the Pledged Shares shall be automatically and permanently
released from any claims or lien by the Company.
1.4 INTEREST.
1.4.1 Each Shareholder acknowledges and agrees that the amount of
each Advance does not include a reserve or allocation for payment of interest
and that interest will be payable from the separate funds of each Shareholder.
1.4.2 Annual interest at eight percent (8%) will accrue on the
unpaid balance of each Advance, commencing on the date that the Advance was made
to the Shareholders. Subject to the provisions of Section 1.7 below, the
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interest on each Advance will be due and payable by the Shareholders quarterly
in arrears and, in any event, all such interest will become due and payable on
the "Maturity Date," as defined below. Interest on pre-existing advances for
periods prior to this Amendment, has been paid with advances by the Company to
the Shareholders and the principal amount of such advances has been aggregated
with the pre-existing Advances that the Parties have agreed are to be repaid
hereunder.
1.4.3 All payments of principal or interest on each Advance will
be made without offset or deduction of any sort including, but not limited to,
any present or future taxes, levies, imposts, deductions, charges or
withholdings, now or hereafter imposed or claimed, all of which amounts will be
paid by the Shareholder. Each Shareholder will pay all the amounts necessary
with respect to any Advance on which such Shareholder is the debtor such that
the gross amount of the principal and interest received by Company is not less
than that required by such Advance. All stamp and documentary transfer taxes,
if any, now or hereafter imposed on any of the Loans will be paid by each
Shareholder that is a debtor on such Advances. The foregoing to the contrary
notwithstanding, if Company, in Company's sole discretion, pays such taxes on
any of the Advances, each Shareholder that is a debtor on such Advances will
immediately reimburse Company for the amount paid. Each Shareholder will
furnish to Company, upon written request therefor by Company, official tax
receipts or other evidence of payment of all such stamp and documentary transfer
taxes, if any.
1.5 MATURITY DATE.
1.5.1 The unpaid principal balance of each Advance, including all
prior advances made under the Revolvers, together with all unpaid interest
accrued thereon and all other amounts payable by any Shareholder under the terms
of this Amendment will be due and payable on May 7, 2007 ("MATURITY DATE"). All
payments will be made in lawful money of the United States of America in same
day funds and received by Company not later than the close of Company's business
on the Maturity Date. Any payment received after the close of Company's
business on the Maturity Date will be deemed received by Company on the next
business day.
1.5.2 If the Maturity Date should fall on a day that is not a
business day, payment of the outstanding principal balance due and payable on
such Maturity Date will be made
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on the next succeeding business day and such extension of time will be included
in computing any interest in respect of such payment.
1.6 PREPAYMENT. The Advances may be prepaid, in whole or in part,
without any penalty whatsoever.
1.7 PREPAYMENT OF INTEREST. Shareholders will pay to Company an
amount at least equal to the Interest Advance (the "INTEREST PAYMENT") within
ten days of the receipt by Shareholders of the Interest Advance. The Interest
Payment will satisfy the Shareholders' interest obligations on the Advances
through the Maturity Date.
1.8 EVENT OF SHAREHOLDER DEFAULT. The occurrence of any of the
following will be deemed to be an event of Shareholder default ("EVENT OF
SHAREHOLDER DEFAULT"):
(a) default in the payment of all outstanding amounts of
principal or interest on the Maturity Date;
(b) the entry of an order for relief under the Federal
Bankruptcy Code or similar laws in Antigua or otherwise governing a Shareholder
as to a Shareholder or approving a petition in reorganization or other similar
relief under bankruptcy or similar laws in the United States of America, Antigua
or any other competent jurisdiction, and if such order, if involuntary, is not
satisfied or withdrawn within 60 days after entry thereof; or the filing of a
petition by a Shareholder seeking any of the foregoing, or consent thereto; or
the filing of a petition to take advantage of any Shareholder's act; or making a
general assignment for the benefit of the Company; or admitting in writing
inability to pay debts as they mature;
(c) if a court of competent jurisdiction enters an order or
decree under any bankruptcy law that (i) appoints a trustee, receiver, assignee,
liquidator or similar official for a Shareholder or substantially all of a
Shareholder's properties; or (ii) orders the liquidation of a Shareholder, and
in each case the order or decree is not dismissed within 60 days;
(d) the liquidation, termination, or winding up of a
Shareholder; or
(e) if a Shareholder or any affiliated party or entity of
Shareholder breaches any term or is in default under any provision of this
Amendment.
So long as any amount under an Advance shall remain unpaid, Shareholder will,
unless the Company otherwise consents in writing, promptly give written notice
to the Company in reasonable detail of the occurrence of any Event of
Shareholder Default or of any condition, event or act, which, with the giving of
notice or the passage of time or both, would or might constitute an Event of
Shareholder Default.
1.9 EVENT OF COMPANY DEFAULT. The occurrence of any of the following
will be deemed to be an event of Company default ("EVENT OF COMPANY DEFAULT"):
(a) the Company's failure to pay a Final Advance Amount on or
before the Advance Dates listed in Section 1.1;
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(b) the Company's failure to pay a permissible Dividend or a
Dividend Default Payment in accordance with the provisions in Article 2;
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(c) the entry of an order for relief under the Federal
Bankruptcy Code or similar laws otherwise governing the Company as to the
Company or approving a petition in reorganization or other similar relief under
bankruptcy or similar laws in the United States of America and if such order, if
involuntary, is not satisfied or withdrawn within 60 days after entry thereof;
or the filing of a petition by the Company seeking any of the foregoing, or
consent thereto; or the filing of a petition to take advantage of the Company's
act; or making a general assignment for the benefit of the Company; or admitting
in writing inability to pay debts as they mature;
(d) if a court of competent jurisdiction enters an order or
decree under any bankruptcy law that (i) appoints a trustee, receiver, assignee,
liquidator or similar official for the Company or substantially all of the
Company's properties; or (ii) orders the liquidation of the Company, and in each
case the order or decree is not dismissed within 60 days;
(e) the liquidation, termination, or winding up of the Company;
or
(f) if the Company or any affiliated party or entity of the
Company breaches any term or is in default under any provision of this
Amendment.
So long as Company is obligated to pay any Advances or declare any dividends,
pursuant to this Amendment, Company will, unless the Shareholders otherwise
consent in writing, promptly give written notice to the Shareholders in
reasonable detail of the occurrence of any Event of Company Default or of any
condition, event or act, which, with the giving of notice or the passage of time
or both, would or might constitute an Event of Company Default.
ARTICLE 2
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DIVIDENDS
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2.1 AGREEMENT TO ISSUE QUARTERLY DIVIDEND.
2.1.1 Subject to applicable laws under the Nevada Revised
Statutes and the Federal and State securities laws in effect from time to time,
the Company agrees, to the extent the Company and the Board of Directors are
permitted under the applicable laws, to declare and pay a cash dividend of at
least $.01 per share to all of its common stock shareholders within 60 days of
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the end of each fiscal quarter ("DIVIDEND DATE") commencing no later than April
30th, 2004 for the Company's fiscal quarter ended March 31, 2004, and for each
fiscal quarter thereafter based on the record date announced by the Board of
Directors (a "PERMISSIBLE DIVIDEND").
2.1.2 Shareholders acknowledge and understand that the Company
will be under no obligation to pay a dividend or make any distribution to its
shareholders under this Amendment or otherwise unless the declaration and
payment of such dividends or distributions is permitted under the provisions of
Nevada Revised Statutes Sec.78.288, or any successor statute, in
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effect as of a Dividend Date ("PERMITTED COMPANY DEFAULT"). A copy of Sec.
78.288 in existence as of the date of this Amendment is attached here as Exhibit
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C. Shareholders further acknowledge and agree that a Permitted Company Default
will not constitute an Event of Company Default or a breach of or default under
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any terms, conditions or provisions of this Amendment, the Purchase Agreement or
Revolvers.
2.2 FAILURE TO PAY A PERMISSIBLE DIVIDEND.
2.2.1 Except in circumstances where a Permitted Company Default
exists, the Shareholders will be entitled to the immediate payment from the
Company of $1,000,000.00 ("DIVIDEND DEFAULT PAYMENT") in the event: (a) the
Company fails to cause a Permissible Dividend to be declared and paid to its
shareholders by an applicable Dividend Date and (b) if such failure continues
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uncured for 25 days after the Company's receipt of a written notice by either
Shareholder ("DIVIDEND DEFAULT NOTICE").
2.2.2 Except in circumstances where a Permitted Company Default
exists, in addition to the Dividend Default Payment, the Shareholders will be
entitled to have the Advances currently outstanding, and all accrued interest,
if any, forgiven by the Company ("LOAN FORGIVENESS") in the event: (a) the
Company fails to cause a Permissible Dividend to be declared and paid to its
shareholders for two consecutive Dividend Dates and (b) such default continues
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uncured for 25 days after the Company's receipt of a second Dividend Default
Notice.
2.3 TERMINATION OF REQUIRED DIVIDENDS. Neither the Company nor its
officers, directors or shareholders will have any further obligations to the
Shareholders or any shareholders, either to pay Permissible Dividends or to make
Advances upon the earlier to occur of: (i) a Loan Forgiveness or (ii) the
Maturity Date.
ARTICLE 3
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SHAREHOLDERS ANNOUNCE THEIR INTENTION TO PURCHASE ADDITIONAL COMMON SHARES OF
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THE COMPANY.
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Each of the Shareholders currently intend to purchase up to 1 million
additional common shares of the Company on the open market subject to all
applicable laws and regulations and their discretion within the next 24 months.
The Shareholders will do this as part of an organized plan of buying that will
allow the shareholders to buy whenever there is a softening of prices in the
market. Nevertheless, the Shareholders are under no obligation to purchase any
additional shares or to purchase shares at any specific time.
ARTICLE 4
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REPRESENTATIONS, WARRANTIES AND COVENANTS OF EACH SHAREHOLDER
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Knowing that the Company will be relying on the following representations,
warranties and covenants of the Shareholders as an inducement to execute this
Amendment, each Shareholder, jointly and severally, hereby represents, warrants
and covenants to Company as follows:
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4.1 There are no actions, suits, or proceedings pending or, to the
best of each Shareholders' knowledge after due diligence, threatened in any
court or before or by any governmental authority that materially and adversely
affects each Shareholders' ability to pay and perform each Shareholder's
obligations on the Advances or under this Amendment or that involve the
validity, enforceability, or priority of this Amendment.
4.2 This Amendment, and all other documents referred to herein to
which each Shareholder is a party, constitute valid and binding obligations of
each Shareholder enforceable in accordance with their terms. The consummation
of the transactions contemplated hereby and the performance of any of the terms
and conditions hereof will not result in a breach of or constitute a default
under any mortgage, deed of trust, promissory note, loan agreement, credit
agreement, or any other agreement to which either Shareholder is a party or by
which either Shareholder may be bound.
4.3 Each Shareholder has the full power and authority to execute,
deliver and perform its respective obligations under this Amendment and all
other documents referred to herein to which they are parties.
4.4 Each Shareholder is a corporation, duly formed, validly existing
and in good standing under the laws of Antigua and each has the full power and
authority to enter into this Amendment and to carry out the transactions
contemplated to be carried out by each Shareholder hereunder. The parties
signing this Amendment on behalf of each Shareholder have full power and
authority to do so. All necessary consents, approvals, resolutions and other
actions have been taken to duly authorize the execution and delivery of this
Amendment and the performance by each Shareholder of the covenants and
obligations to be performed and carried out by each Shareholder hereunder.
4.5 Each Shareholder is the legal, record, and beneficial owner of,
and has good and marketable title to, their respective Pledged Shares, free and
clear of all security interests, liens, claims, charges, or other encumbrances,
except the security interest contemplated by this Amendment, and no financing
statement covering the Pledged Shares is filed or recorded in any public office.
4.6 The security interest in the Pledged Shares granted to the
Company constitutes, and hereafter will constitute, a security interest of first
priority in favor of the Company.
4.7 There are no attachments, levies, executions, assignments for the
benefit of creditors, receiverships, conservatorships or voluntary or
involuntary proceedings in bankruptcy or pursuant to any other debt or relief
laws contemplated by either Shareholder or any of the officers, directors or
shareholders of either Shareholder, as applicable, or to the best of either
Shareholder's knowledge after due inquiry, currently pending in any judicial or
administrative proceeding against either Shareholder or any one or more of the
officers, directors or shareholders of either Shareholder, as applicable.
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4.8 Each Shareholder has full power and authority to own its
properties and to carry on its business as now being conducted.
4.9 The liens, security interests and assignments created by this
Amendment and the Second Amendment will be or are, as applicable, valid,
effective, properly perfected and enforceable liens, security interests and
assignments.
4.10 Each Shareholder will make all payments of interest and principal
on the Advances and will keep and comply with all terms, covenants, conditions
and provisions of this Amendment.
4.11 Each Shareholder will execute and deliver such additional
documents and do such other acts as Company may reasonably require in connection
with this Amendment.
4.12 Each Shareholder will execute and deliver to Company, from time
to time as requested by Company, such other documents as will be necessary to
provide the rights and remedies to Company granted or provided for in this
Amendment.
4.13 Each Shareholder will notify Company of the commencement of any
action, suit or proceeding: (i) against either Shareholder or (ii) involving the
validity or enforceability of this Amendment or the other documents or
agreements referred to herein or the priority of the liens and/or security
interests created hereby, within 24 hours following each Shareholder's receipt
of notice of any of the foregoing.
4.14 The Company may, but will not be obligated to, commence, appear
in, or defend any action or proceeding purporting to affect an Advance or the
respective rights and obligations of Company and each Shareholder under this
Amendment. The Company may, but will not be obligated to, pay all necessary
expenses, including reasonable attorney's fees and expenses incurred in
connection with such proceedings or actions, which each Shareholder agrees to
repay to Company upon demand, together with interest from the date such funds
are advanced until full repayment thereof.
4.15 Neither Shareholder will assign or transfer any interest under
this Amendment without the prior written consent of Company, and any such
purported assignment will be an Event of Shareholder Default hereunder and will
be void, except that each of the Shareholders may assign any of the Certificates
in accordance with Section 1.1.2.
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ARTICLE 5
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REPRESENTATIONS, WARRANTIES AND COVENANTS OF COMPANY
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Knowing that the Shareholders will be relying on the following
representations, warranties and covenants of the Company as an inducement to
execute this Amendment, the Company hereby represents, warrants and covenants to
the Shareholders as follows:
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5.1 There are no actions, suits, or proceedings pending or, to the
best of the Company's knowledge after due diligence, threatened in any court or
before or by any governmental authority that materially and adversely affects
the Company's ability to pay and perform the Company's obligations under this
Amendment or that involve the validity, enforceability, or priority of this
Amendment.
5.2 This Amendment, and all other documents referred to herein to
which the Company is a party, constitute valid and binding obligations of the
Company enforceable in accordance with their terms. The consummation of the
transactions contemplated hereby and the performance of any of the terms and
conditions hereof will not result in a breach of or constitute a default under
any mortgage, deed of trust, promissory note, loan agreement, credit agreement,
or any other agreement to which the Company is a party or by which the Company
may be bound.
5.3 The Company has the full power and authority to execute, deliver
and perform its obligations under this Amendment and all other documents
referred to herein to which it is a party.
5.4 The Company is a corporation, duly formed, validly existing and
in good standing under the laws of Nevada and it has the full power and
authority to enter into this Amendment and to carry out the transactions
contemplated to be carried out by the Company hereunder. The person signing
this Amendment on behalf of the Company has full power and authority to do so.
All necessary consents, approvals, resolutions and other actions have been taken
to duly authorize the execution and delivery of this Amendment and the
performance by the Company of the covenants and obligations to be performed and
carried out by the Company hereunder.
5.5 There are no attachments, levies, executions, assignments for the
benefit of creditors, receiverships, conservatorships or voluntary or
involuntary proceedings in bankruptcy or pursuant to any other debt or relief
laws contemplated by the Company or any of the officers or directors of the
Company, as applicable, or to the best of the Company's knowledge after due
inquiry, currently pending in any judicial or administrative proceeding against
Company or any one or more of the officers or directors of the Company, as
applicable.
5.6 The Company has full power and authority to own its properties
and to carry on its business as now being conducted.
5.7 The Company will make all Advances and Permissible Dividend
payments and will comply with all terms, covenants, conditions and provisions of
this Amendment.
5.8 The Company will execute and deliver such additional documents
and do such other acts as the Shareholders may reasonably require in connection
with this Amendment.
5.9 The Company will execute and deliver to the Shareholders, from
time to time as requested by the Shareholders, such other documents as will be
necessary to provide the rights and remedies to the Shareholders granted or
provided for in this Amendment.
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5.10 The Company will notify Shareholders of the commencement of any
action, suit or proceeding: (i) against the Company or (ii) involving the
validity or enforceability of this Amendment or the other documents or
agreements referred to herein within 24 hours following the Company's receipt of
notice of any of the foregoing.
5.11 The Shareholders may, but will not be obligated to, commence,
appear in, or defend any action or proceeding purporting to affect the
respective rights and obligations of Company and each Shareholder under this
Amendment. The Shareholders may, but will not be obligated to, pay all
necessary expenses, including reasonable attorney's fees and expenses incurred
in connection with such proceedings or actions, which the Company agrees to
repay to the Shareholders upon demand, together with interest from the date such
funds are advanced until full repayment thereof.
5.13 The Company will not assign or transfer any interest under this
Amendment, other than to a wholly-owned subsidiary, without the prior written
consent of the Shareholders, and any such purported assignment will be an Event
of Company Default hereunder and will be void.
ARTICLE 6
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GENERAL TERMS AND CONDITIONS
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6.1 ENTIRE AGREEMENT. This Amendment, together with the exhibits
attached hereto and the Certificates executed pursuant to this Amendment, is
intended by the Parties as a final expression of their agreement with respect to
the matters covered hereby and is intended as a complete and exclusive statement
of the terms and conditions thereof and supersedes all prior representations,
warranties, agreements, arrangements, understandings and negotiations with
respect to the subject matter hereof.
6.2 NOTICES. All notices, demands, requests, and other
communications required or permitted hereunder will be in writing and will be
delivered by hand, telegram, facsimile or deposited with the United States
Postal Service postage prepaid, registered or certified mail, return receipt
requested, or delivered by courier or personal delivery addressed as follows:
If to Company:
XX.Xxx, Inc.
0000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxx, Xxxxxxx 00000-0000
Facsimile: 000-000-0000
Telephone: 000-000-0000
12
with a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Xxxxxx & Xxxxxxxx L.L.P.
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Facsimile: 000-000-0000
Telephone: 000-000-0000
If to Shareholders:
Xxxxxx & Xxxxxx, Ltd.
Xxxxx Centre
St. John's, Antigua, W.I.
And:
Xxxxxx and Xxxxxxx, Ltd.
Xxxxx Centre
St. John's, Antigua, W.I.
with a copy to:
Xxxxx X. Xxxxxxx, Esq.
Xxxxxxxxx Xxxxx
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
All notices sent within the United States shall be deemed delivered two business
days after deposit with the United States Postal Service, or if delivered by
facsimile, telegram, courier or by personal delivery, then notice is deemed
delivered upon the date and time of actual receipt or refusal of delivery by the
representative's agents and employees of the each Shareholder. All notices sent
outside of the United States shall be deemed delivered 15 business days after
deposit with the United States Postal Service, or if delivered by facsimile,
telegram, courier or by personal delivery, then notice is deemed delivered upon
the date and time of actual receipt or refusal of delivery by the
representative's agents and employees of the each Shareholder. Any party may
designate a different address or person to whom such notices should be sent by
giving notice thereof as provided herein, which change of address will be
effective upon receipt.
6.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of each Shareholder contained in this Amendment will survive the
execution and
13
delivery of this Amendment, and will continue until the obligations of each
Shareholder on the Advances under this Amendment have been satisfied in full.
The representations and warranties of the Company contained in this Amendment
will survive the execution and delivery of this Amendment, and will continue
until the obligations of the Company under this Amendment have been satisfied in
full.
6.4 AMENDMENTS; MODIFICATIONS. No provision of this Amendment may be
amended or modified, except by instrument in writing executed by the party
against whom such amendment or modification is sought to be enforced.
6.5 NO WAIVER AND STANDARD FOR CONSENTS.
6.5.1 No waiver by Company of any of Company's rights or remedies
under this Amendment or otherwise will be considered a waiver of any other or
subsequent right or remedy of Company; no delay or omission in the exercise or
enforcement by Company of any rights or remedies will be construed as a waiver
of any other right or remedy of Company; and, to the extent permitted by
applicable law, no exercise or enforcement of any such rights or remedies will
be held to exhaust any right or remedy of Company.
6.5.2 No waiver by a Shareholder of any of the Shareholder's
rights or remedies under this Amendment or otherwise will be considered a waiver
of any other or subsequent right or remedy of the Shareholder; no delay or
omission in the exercise or enforcement by a Shareholder of any rights or
remedies will be construed as a waiver of any other right or remedy of the
Shareholder; and, to the extent permitted by applicable law, no exercise or
enforcement of any such rights or remedies will be held to exhaust any right or
remedy of a Shareholder.
6.5.3 Any provision of this Amendment to the contrary
notwithstanding, if Company's consent or approval is required or sought by
either Shareholder, Company will be entitled to give or withhold Company's
consent or approval as Company, in Company's sole discretion, may determine.
6.5.4 Any provision of this Amendment to the contrary
notwithstanding, if a Shareholder's consent or approval is required or sought by
the Company, the Shareholder will be entitled to give or withhold the
Shareholder's consent or approval as the Shareholder, in the Shareholder's sole
discretion, may determine.
6.6 CONTROLLING AGREEMENT. In the event of any conflict between this
Amendment and any other agreement or document, this Amendment will govern and
control.
6.7 NO THIRD PARTY BENEFICIARY. This Amendment is for the sole
benefit of Company and each Shareholder and is not for the benefit of any third
party, except that the assignee of any Certificate may enforce its rights under
the Certificate directly against the Company.
14
6.8 NUMBER AND GENDER. Whenever used herein, the singular number
will include the plural and the singular, and the use of any gender will be
applicable to all genders, unless the context requires otherwise.
6.9 CAPTIONS. The captions and headings used in this Amendment are
for convenience only and do not in any way affect, limit, amplify, or modify the
terms and provisions hereof or thereof.
6.10 GOVERNING LAW/JURISDICTION/VENUE/WAIVER OF JURY TRIAL. This
Amendment and the Advances will be governed by and construed in accordance with
the laws of the State of Arizona, without giving effect to conflict of laws
principles. In regard to any litigation that may arise in regard to this
Amendment, the Parties will and do hereby submit to the jurisdiction of and the
Parties hereby agree that the proper venue will be in the United States District
Court for the District of Arizona in Phoenix or in the Superior Court of Arizona
in Maricopa County, Arizona. To the extent permitted by law, each of the
Parties hereby waives the right to a jury trial.
6.11 TIME OF THE ESSENCE. Time is of the essence with respect to each
and every term and condition of this Amendment.
6.12 ATTORNEYS' FEES. If any party breaches its representations or
warranties under this Amendment or fails to fulfill or perform any of its
covenants or obligations in this Amendment, that party will pay all costs,
including without limitation, reasonable attorneys' fees and expert witness
fees, that may be incurred by other parties to enforce the terms, covenants,
conditions and provisions of this Amendment, or that may be incurred as a result
of the default under or breach of this Amendment, whether or not legal action is
commenced.
6.13 COUNTERPARTS. This Amendment may be executed in counterparts and
by facsimile, each of which will be deemed an original, and all of which
together will be deemed one and the same document.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
15
IN WITNESS WHEREOF, this Amendment is executed and delivered as of the
Effective Date by the Parties.
XX.XXX, INC.
By:/S/ XxXxx Xxxxxxx
-------------------------
XxXxx Xxxxxxx
Secretary, Director
XXXXXX & XXXXXX, LTD.
By:/S/ Xxxx Xxxxxx
-------------------------
AMT, Director
XXXXXX AND XXXXXXX, LTD.
By:/S/ Xxxx Xxxxxx
-------------------------
AMT, Director
[SIGNATURE PAGE TO AMENDMENT NO. 3]
16
EXHIBIT
CERTIFICATE OF GUARANTY
EXHIBIT B
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
__________ shares of the common stock of XX.XXX, INC., a Nevada corporation (the
"Company"), to XX.XXX, INC., which shares are represented by Certificate No.
_____, standing in the name of the undersigned on the books of the Company. The
undersigned hereby irrevocably constitutes and appoints
_________________________________________ as its attorney to transfer said stock
on the books of the Company with full power of substitution in the premises.
Dated: ___________________
[XXXXXX & XXXXXX/XXXXXX AND
MARKSON], LTD., an Antiguan corporation
By: ____________________________________
Its:____________________________________
EXHIBIT C
NEVADA REVISED STATUTES SEC.78.288
NRS 78.288 DISTRIBUTIONS TO STOCKHOLDERS.
1. Except as otherwise provided in subsection 2 and the articles of
incorporation, a board of directors may authorize and the corporation may make
distributions to its stockholders, including distributions on shares that are
partially paid.
2. No distribution may be made if, after giving it effect:
(a) The corporation would not be able to pay its debts as they become due
in the usual course of business; or
(b) Except as otherwise specifically allowed by the articles of
incorporation, the corporation's total assets would be less than the sum of its
total liabilities plus the amount that would be needed, if the corporation were
to be dissolved at the time of distribution, to satisfy the preferential rights
upon dissolution of stockholders whose preferential rights are superior to those
receiving the distribution.
3. The board of directors may base a determination that a distribution is
not prohibited pursuant to subsection 2 on:
(a) Financial statements prepared on the basis of accounting practices
that are reasonable in the circumstances;
(b) A fair valuation, including, but not limited to, unrealized
appreciation and depreciation; or
(c) Any other method that is reasonable in the circumstances.
4. The effect of a distribution pursuant to subsection 2 must be
measured:
(a) In the case of a distribution by purchase, redemption or other
acquisition of the corporation's shares, as of the earlier of:
(1) The date money or other property is transferred or debt incurred
by the corporation; or
(2) The date upon which the stockholder ceases to be a stockholder
with respect to the acquired shares.
(b) In the case of any other distribution of indebtedness, as of the date
the indebtedness is distributed.
(c) In all other cases, as of:
(1) The date the distribution is authorized if the payment occurs
within 120 days after the date of authorization; or
(2) The date the payment is made if it occurs more than 120 days
after the date of authorization.
5. A corporation's indebtedness to a stockholder incurred by reason of a
distribution made in accordance with this section is at parity with the
corporation's indebtedness to its general unsecured creditors except to the
extent subordinated by agreement.
6. Indebtedness of a corporation, including indebtedness issued as a
distribution, is not considered a liability for purposes of determinations
pursuant to subsection 2 if its terms provide that payment of principal and
interest are made only if and to the extent that payment of a distribution to
stockholders could then be made pursuant to this section. If the indebtedness is
issued as a distribution, each payment of principal or interest must be treated
as a distribution, the effect of which must be measured on the date the payment
is actually made.
(Added to NRS by 1991, 1187; A 2001, 1369, 3199)
---- ----
NRS 78.300 LIABILITY OF DIRECTORS FOR UNLAWFUL DISTRIBUTIONS.
1. The directors of a corporation shall not make distributions to
stockholders except as provided by this chapter.
2. Except as otherwise provided in subsection 3 and NRS 78.138, in case
----------
of any violation of the provisions of this section, the directors under whose
administration the violation occurred are jointly and severally liable, at any
time within 3 years after each violation, to the corporation, and, in the event
of its dissolution or insolvency, to its creditors at the time of the violation,
or any of them, to the lesser of the full amount of the distribution made or of
any loss sustained by the corporation by reason of the distribution to
stockholders.
3. The liability imposed pursuant to subsection 2 does not apply to a
director who caused his dissent to be entered upon the minutes of the meeting of
the directors at the time the action was taken or who was not present at the
meeting and caused his dissent to be entered on learning of the action.
[75:177:1925; A 1931, 415; 1949, 158; 1943 NCL Sec. 1674]-(NRS A 1987, 83;
1991, 1229; 2001, 3174)
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