Exhibit (i)
PURCHASE AND SETTLEMENT AGREEMENT
THIS PURCHASE AND SETTLEMENT AGREEMENT (this "Agreement"), is made and entered
into as of the 29th day of April, 2004 to be effective as of May 4, 2004 (the
"Effective Date"), by and among JL Acquisitions Co., LLC, a Delaware limited
liability company ("Buyer"), ARB Investment Enterprises, Ltd., a Florida limited
partnership ("ARB"), Xxxxxxx Xxxxxxxxxx ("X. Xxxxxxxxxx"), Xxxxxxx Xxxxxxxxxx
("X. Xxxxxxxxxx" and together with ARB and X. Xxxxxxxxxx collectively referred
to herein as the "Burckhardts") and NexGen Vision, Inc., a Delaware corporation
(the "Company") (Buyer, the Burckhardts, and the Company are hereinafter
referred to collectively as the "Parties" and individually as a "Party".)
W I T N E S S E T H:
WHEREAS, ARB is the record owner of 1,956,250 shares of the Company's Class B
common stock, X. Xxxxxxxxxx is the record and beneficial owner of 12,383 shares
of the Company's Class A common stock, and X. Xxxxxxxxxx is the record and
beneficial owner of 55,000 shares of the Company's Class A common stock and
1,948,750 shares of the Company's Class B common stock (the Company shares owned
by ARB, X. Xxxxxxxxxx and X. Xxxxxxxxxx are referred to herein, collectively, as
the "Shares"); and
WHEREAS, the Burckhardts and the Company have mutually agreed to terminate their
relationship, the Burckhardts have agreed to sell to Buyer the Shares and Buyer
has agreed to purchase such Shares from the Burckhardts; and
WHEREAS, for good and valuable additional consideration, X. Xxxxxxxxxx and X.
Xxxxxxxxxx on the one hand and the Company on the other, desire to execute and
deliver to each other certain releases as more fully described herein.
NOW THEREFORE, in consideration of the mutual covenants and agreements contained
herein, the receipt and sufficiency of which is hereby acknowledged, the Parties
do mutually agree as follows:
1. Correctness of Recitals. The foregoing recitals are incorporated herein
by reference.
2. Sale and Purchase of Shares. Subject to the terms hereof, effective as
of the Effective Date, the Burckhardts shall sell, assign and transfer to Buyer
and Buyer shall purchase the Shares for an aggregate purchase price of Four
Hundred Thousand Dollars ($400,000) (the "Purchase Price") payable on the
Effective Date, by cash, wire transfer or certified check in accordance with
instructions as provided by the Burckhardts.
3. Warrants. For and in consideration of the releases to be given to the
Company by each of X. Xxxxxxxxxx and X. Xxxxxxxxxx pursuant to Section 12
herein, and subject to the terms thereof, on the Effective Date, the Company
shall issue to each of X. Xxxxxxxxxx and X. Xxxxxxxxxx a warrant to purchase up
to 100,000 shares of the Company's Class A common stock, at an exercise price of
$1.50 per share, and otherwise substantially in the form attached hereto as
Exhibit A (the "Warrants").
4. Shares in Escrow. Notwithstanding any provision herein to the contrary,
the Parties acknowledge and agree that 40,000 shares of the Company's Class B
common stock owned by ARB are subject to an Escrow Agreement dated February 10,
2003, between E. Xxxxxxx Xxxxxx and Xxxxxx & Xxxxxxx, LLP ("H&G") (a copy of
which is attached hereto as Exhibit B) pursuant to which H&G is holding such
shares, and such Escrow Agreement has been provided to Buyer. On the Effective
Date, X. Xxxxxxxxxx shall advise and instruct H&G of the sale of such 40,000
shares to Buyer and direct H&G or
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Exhibit (i)
any successor escrow agent, to deliver such 40,000 shares to Buyer or Buyer's
assigns, instead of ARB, upon their release from escrow.
5. Date of Separation. Subject to the terms and conditions hereinafter set
forth, the Burckhardts shall be deemed to have separated from, and terminated
their relationship with, the Company, effective immediately upon receipt by
Buyer of cleared funds pursuant to Section 9.3 (which receipt shall be promptly
confirmed to Buyer), with the exception of the mutual undertakings pursuant to
this Agreement. As of the Effective Date, (i) the Burckhardts shall no longer be
shareholders, officers, directors or employees of, or have any interest in or
rights relating to, the Company (other than rights set forth in the Warrants
issued pursuant to Section 3); (ii) any employment agreement entered into by and
between the Company or any of its affiliates on the one hand and X. Xxxxxxxxxx
or X. Xxxxxxxxxx on the other shall be deemed terminated; and (iii) the
Burckhardts waive any claim and/or right they may have to unpaid salary,
director's compensation, severance, bonus or payment of any kind from or by the
Company.
6. Representations of H Xxxxxxxxxx and X. Xxxxxxxxxx.
6.1 Representations of X. Xxxxxxxxxx. Subject to, and with the exception
of, any acts or omissions of Xxxx Xxxxxxxx or Xxx Xxxxxxxx, his wife, at any
time, in each of their corporate, allegedly corporate, or individual capacities
(provided that X. Xxxxxxxxxx has no knowledge of such act or omission), X.
Xxxxxxxxxx hereby represents and warrants to Buyer as follows:
(a) ARB is the record owner of 1,956,250 shares of the issued and
outstanding Class B common stock of the Company, free and clear of any and all
liens, encumbrances, claims, charges or third party rights thereon of every kind
and nature whatsoever and there are no restrictions on ARB's power to sell the
Shares, nor are there any other outstanding options, warrants or other rights to
purchase the Shares, other than the 40,000 Shares described in Section 4.
(b) X. Xxxxxxxxxx is the President of ARB Management Services, Inc. which
is the general partner of ARB and in such capacity has the power and authority
to vote the Shares on behalf of ARB and to cause the transfer of such Shares to
Buyer as contemplated by this Agreement.
(c) X. Xxxxxxxxxx is the record and beneficial owner of 12,383 shares of
the issued and outstanding Class A common stock of the Company, free and clear
of any and all liens, encumbrances, claims, charges or third party rights
thereon of every kind and nature whatsoever and there are no restrictions on his
power to sell the Shares, nor are there any other outstanding options, warrants
or other rights to purchase the Shares.
(d) X. Xxxxxxxxxx and ARB have the right, power, and authority to enter
into this Agreement and all documents and instruments to be executed by each of
them hereunder, and to perform his or its obligations hereunder and thereunder.
This Agreement constitutes a valid and legally binding obligation of each of X.
Xxxxxxxxxx and ARB, enforceable against each of them in accordance with its
terms.
(e) Other than the Shares described in subsections 6.1(a) and 6.1(c) and,
with respect to X. Xxxxxxxxxx only, other than the Warrant described in Section
3, neither ARB nor X. Xxxxxxxxxx owns, beneficially or of record, any interest
in any equity securities of the Company (or in any debt convertible into equity
securities of the Company) nor is either a party to any contract or agreement
pursuant to which either of them has the right to purchase equity securities (or
debt securities convertible into equity securities) of the Company. The Shares
to be transferred by ARB and X. Xxxxxxxxxx pursuant to this Agreement have been
validly issued by the Company, are fully paid and non-assessable.
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Exhibit (i)
6.2 Representations of X. Xxxxxxxxxx. Subject to, and with the exception
of, any acts or omissions of Xxxx Xxxxxxxx or Xxx Xxxxxxxx, his wife, at any
time, in each of their corporate, allegedly corporate, or individual capacity
(provided that X. Xxxxxxxxxx has no knowledge of such act or omission), X.
Xxxxxxxxxx hereby represents and warrants to Buyer as follows:
(a) X. Xxxxxxxxxx is the record and beneficial owner of 1,948,750 shares
of the issued and outstanding Class B common stock of the Company and 55,000
shares of the issued and outstanding Class A common stock of the Company, free
and clear of any and all liens, encumbrances, claims, charges or third party
rights thereon of every kind and nature whatsoever and there are no restrictions
on his power to sell the Shares, nor are there any other outstanding options,
warrants or other rights to purchase the Shares.
(b) X. Xxxxxxxxxx has the right, power, and authority to enter into this
Agreement and all documents and instruments to be executed by him hereunder, and
to perform his obligations hereunder and thereunder. This Agreement constitutes
a valid and legally binding obligation of X. Xxxxxxxxxx, enforceable against him
in accordance with its terms.
(c) Other than the Shares set forth in subsection 6.2(a) and the Warrant
described in Section 3, X. Xxxxxxxxxx does not own, beneficially or of record,
any interest in any equity securities of the Company (or in any debt convertible
into equity securities of the Company) nor is he a party to any contract or
agreement pursuant to which he has the right to purchase equity securities (or
debt securities convertible into equity securities) of the Company. The Shares
to be transferred by X. Xxxxxxxxxx pursuant to this Agreement have been validly
issued by the Company, are fully paid and non-assessable.
(d) X. Xxxxxxxxxx currently serves as the duly authorized and appointed
President of the Company and as a duly elected Director of the Company, and has
the power and authority to execute this Agreement on behalf of the Company.
6.3 Representations of X. Xxxxxxxxxx and X. Xxxxxxxxxx. In addition to the
representations given above, and subject to, and with the exception of, any acts
or omissions of Xxxx Xxxxxxxx or Xxx Xxxxxxxx, his wife, at any time, in each of
their corporate, allegedly corporate, or individual capacities (provided that
neither X. Xxxxxxxxxx nor X. Xxxxxxxxxx has knowledge of such act or omission),
X. Xxxxxxxxxx and X. Xxxxxxxxxx hereby jointly and severally represent and
warrant to Buyer as follows:
(a) The Company is a corporation duly authorized, validly existing and in
good standing under the laws of the State of Delaware. True, correct and
complete copies of the Company's Certificate of Incorporation and Bylaws, each
as in effect on the date hereof, are attached hereto as Exhibit 6.3(a)(i) and
Exhibit 6.3(a)(ii), respectively (the "Certificate" and the "Bylaws",
respectively). The Company has two wholly-owned subsidiaries: (i) Cobra Vision,
Inc., a Georgia corporation and (ii) FB Optical Manufacturing, Inc., a Florida
corporation (collectively, the "Subsidiaries"). Each of the Subsidiaries is duly
authorized, validly existing and in good standing under the laws of the state of
its incorporation. Other than the Subsidiaries, the Company has no subsidiaries
or affiliated companies and does not otherwise own or control, directly or
indirectly, any equity interest in any corporation, association, partnership,
joint venture or other business entity.
(b) Immediately prior to the Effective Date, the authorized capitalization
of the Company consists of (i) 50,000,000 shares of Class A Common Stock, par
value $0.001 per share, 7,051,785 of which are issued and outstanding; (ii)
7,700,000 shares of Class B Common Stock, par value $0.001 per share, 7,455,000
of which are issued and outstanding; and (iii) 10,000,000 shares of preferred
stock, par value $0.001 per share, 487,500 of which are issued and outstanding.
Other than as disclosed in public filings with the Securities and Exchange
Commission and in this Agreement, the Company has not: (A)
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Exhibit (i)
issued any options, warrants or other rights to acquire shares of capital stock
of the Company; (B) executed any restrictive stock transfer, voting trust, or
other agreement or commitment relating to the transfer or voting of any equity
security of the Company (including the Shares); and (C) granted any preemptive
rights with respect to any of the Company's equity securities. Notwithstanding
the foregoing, neither X. Xxxxxxxxxx nor X. Xxxxxxxxxx express an opinion or
give a representation as to the shares referenced in Item 12 of the attached
Disclosure Schedule (the "Disclosure Schedule") and such shares are not included
in the numbers set forth above.
(c) Other than as disclosed on the Disclosure Schedule attached hereto,
the Company has not:
(A) incurred any debt, obligations and/or liabilities outside the
ordinary course of business in excess of $2,500 (each of the Burckhardts
acknowledges that any salary owing to him (and any interest and penalties
thereon) from the Company as of the Effective Date will not be paid and is
subject to the releases described in Section 12 below);
(B) authorized or issued any capital stock or other equity security
of any kind or debt security convertible into equity or granted any right
to purchase any equity security or convertible debt security;
(C) waived or compromised any material right or material debt owed
to it;
(D) entered into any employment, deferred compensation, severance,
retirement or other similar agreement with any employee, officer or
director of the Company or made any amendment to any such existing
agreement, or change in any compensation or other benefits payable to any
employee, officer or director of the Company pursuant to any severance or
retirement plan or policy;
(E) sold, transferred, assigned or permitted the imposition of any
encumbrance on any material assets of the Company other than the sale of
inventory in the ordinary course of business;
(F) made any change in any method of accounting or accounting
practice with respect to the business of the Company as disclosed in all
public documents filed with the SEC;
(G) made any loans or guarantees to or for the benefit of any
employee, officer or director of the Company or any members of their
immediate families;
(H) declared, set aside, paid or distributed any amounts in respect
of any of the Company's capital stock or directly or indirectly redeemed,
purchased or otherwise acquired any of its capital stock;
(I) been named as a party to any suit, action or proceeding or the
object of any investigation; or
(J) entered into any material contract or agreement.
(d) Neither the Company nor either of the Burckhardts (in their capacity
as current or former directors and/or officers of the Company) has made any
payment of Company funds prohibited by law and no Company funds have been set
aside for any payment prohibited by law.
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Exhibit (i)
(e) Neither of the Burckhardts nor any member of either of their immediate
family is indebted, directly or indirectly, to the Company nor is the Company or
either of the Subsidiaries indebted, directly or indirectly, (or committed to
make loans or extend or guarantee credit) to any of them (other than the payment
of salary by the Company to each of the Burckhardts for services rendered in the
ordinary course of business, which payments each of the Burckhardts will waive
pursuant to the releases described below). Except for this Agreement, there are
no agreements between the Company or either of the Subsidiaries on one hand and
either of the Burckhardts or any affiliated person or entity on the other, the
rights under which will not be waived by the Burckhardts upon delivery of the
releases described below.
7. Representations of Buyer. Buyer hereby represents and warrants to the
Burckhardts as follows:
7.1 Authorization. Buyer has full power and authority to enter into this
Agreement, and such agreement constitutes its valid and legally binding
obligation, enforceable in accordance with its terms, except (i) as limited by
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) to the extent the
indemnification provisions contained herein may be limited by applicable federal
or state securities laws.
7.2 Purchase Entirely for Own Accord. Buyer understands that this
Agreement is made with Buyer in reliance upon Buyer's representation that the
Shares to be received by Buyer will be acquired for investment for Buyer's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that Buyer has no present intention of
selling, granting any participation in or otherwise distributing the same.
7.3 Investment Experience. Buyer is an investor in securities of companies
in the development state and acknowledges that it is able to fend for itself,
can bear the economic risk of its investment, and has such knowledge and
experience in financial or business matters that it is capable of evaluating the
merits and risks of the investment in the Shares. Buyer has not been organized
for the purpose of acquiring the Shares.
7.4 Advice of Counsel. Buyer acknowledges that Buyer has had the
opportunity to review this Agreement, the Exhibits and Schedules attached hereto
and the transaction contemplated by this Agreement with Buyer's legal counsel.
7.5 Restricted Securities. Buyer acknowledges that the Shares being
purchased by Buyer hereunder may be "restricted securities" as contemplated by
the United States securities laws and Buyer understands that the Shares may be
resold under the Securities Act of 1933, as amended, only in certain limited
circumstances.
8. Representation and Covenant of the Company. The Company hereby
represents and warrants to the Burckhardts as follows:
8.1 Authorization. The Company has full power and authority to enter into
this Agreement, and such agreement constitutes its valid and legally binding
obligation, enforceable in accordance with its terms, except (i) as limited by
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) to the extent the
indemnification provisions contained herein may be limited by applicable federal
or state securities laws.
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Exhibit (i)
8.2 Covenant Regarding Indemnification. The Company hereby covenants that,
from and after the Effective Date, each of X. Xxxxxxxxxx and X. Xxxxxxxxxx will
be entitled to rely on the indemnification provisions in the Certificate and
Bylaws, as in effect on the Effective Date (to the extent such provisions
purport to indemnify directors and/or officers of the Company and to the extent
each of X. Xxxxxxxxxx and X. Xxxxxxxxxx would otherwise be entitled to the
benefit of such provisions), and to the extent the Company amends the
Certificate or Bylaws in the future to reduce or limit the indemnification
benefits enjoyed by the Company's directors or officers, such amendment shall
not affect the Company's indemnification obligations to either of X. Xxxxxxxxxx
or A Xxxxxxxxxx. For the avoidance of doubt, this covenant does not purport to
expand or limit the scope of indemnity currently available to either X.
Xxxxxxxxxx or X. Xxxxxxxxxx by the Company.
9. Closing; Procedure.
9.1 Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place immediately upon execution of this
Agreement by the Parties hereto.
9.2 Deliveries by the Burckhardts. At the Closing, the Burkhardts shall
deliver or cause to be delivered, to Buyer each of the following, duly executed
as appropriate:
(a) Receipt of the Purchase Price (to be delivered upon confirmation
of receipt of funds as contemplated by Section 2 herein);
(b) Original stock certificates representing the Shares being
purchased hereunder duly executed for transfer to Buyer or delivered with
appropriate stock powers executed in blank;
(c) Good Standing Certificates, dated no more than thirty (30) days
prior to the Closing, for each of the Company and each Subsidiary from
each such entity's respective State of incorporation;
(d) Releases in favor of the Company as contemplated by Section 12
herein;
(e) Counterparts of the Warrants to be delivered pursuant to Section
3 herein; and
(f) A copy of the instruction letter delivered to H&G as
contemplated by Section 4 herein and evidence of delivery.
9.3 Deliveries by Buyer. At the Closing, Buyer shall deliver, or cause to
be delivered, to the Burckhardts the Purchase Price as contemplated by Section 2
herein.
9.4 Deliveries by the Company. At the Closing, the Company shall deliver,
or cause to be delivered, to the Burckhardts each of the following, duly
executed:
(a) Releases in favor of X. Xxxxxxxxxx and X. Xxxxxxxxxx as
contemplated by Section 12; and
(b) The Warrant contemplated by Section 3 herein.
10. Advice of Counsel; Neutral Affect as to Draftsmanship. The Parties
represent that they have been represented by counsel of their own choosing,
which counsel have explained in detail all of their rights, obligations and
liabilities hereunder and with respect hereto; that none of them have entered
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Exhibit (i)
into this Agreement under duress or threat of any sort or kind; but to the
contrary their entry into this Agreement has been and is voluntary in all
respects. The Parties agree that in the interpretation of this Agreement, no
court or other tribunal shall construe this Agreement other than neutrally among
the Parties as a result of one or the other of the Parties or their counsel
having been the draftor hereof.
11. Conduct of the Parties Post-Closing. The Parties agree to cooperate
with each other and work together following the date hereof with respect to all
matters relating to the periods prior to the purchase of the Shares by Buyer,
including the execution of any and all documents which may be reasonably
required to accomplish the purposes of this Agreement.
12. Releases. (a) X. Xxxxxxxxxx and X. Xxxxxxxxxx on the one hand and the
Company on the other hand shall execute mutual general releases in favor of each
other at closing in the form attached hereto as Exhibit C, which releases shall
specifically exclude obligations under this Agreement.
(b) Each of X. Xxxxxxxxxx and X. Xxxxxxxxxx hereby acknowledges and agrees
that the Company may rely on the representations and warranties of each of X.
Xxxxxxxxxx and X. Xxxxxxxxxx as set forth in Sections 6.1, 6.2 and 6.3 above and
that the matters covered by such representations (as modified by any disclosure
made on the Disclosure Schedule) shall not be covered by the releases to be
given by the Company pursuant to this Section 12. The Company acknowledges and
agrees that its only claim against either of X. Xxxxxxxxxx and/or X. Xxxxxxxxxx
in connection with their acts or omission on behalf of the Company, in any
capacity, shall be limited to actions or claims brought for fraud, for a breach
of any representation in Section 6.1, 6.2 or 6.3, or for a failure by X.
Xxxxxxxxxx and/or X. Xxxxxxxxxx to perform any of his agreements as set forth
herein.
13. Restrictive Covenants.
13.1 Future Ownership / Control. Other than the Warrants granted pursuant
to Section 3 above, from and after the Effective Date, each of the Burckhardts
agrees that he or it shall not, and shall not cause any third party to, purchase
any debt or equity securities issued by the Company or otherwise attempt to
control or influence the management of the Company or the conduct of the
Company's business either directly or through a third party.
13.2 Non-competition / Non-solicitation. Commencing on the Effective Date
and continuing for a period of five (5) years thereafter, the Burckhardts shall
not, without the prior written consent of the Company, (i) solicit business (in
competition with the Company) from or compete with the Company for the business
of any customer of the Company as reflected on the books of the Company, (ii)
either directly or indirectly operate or perform any advisory or consulting
services for, invest in (other than stock in a publicly-held corporation which
is traded on a recognized securities exchange or over-the-counter, provided that
the ownership of such equity interest does not give the Burckhardts the right to
control or substantially influence the policy or operational decisions of such
corporation), or otherwise become associated with in any capacity (including as
an employee), any company, partnership, organization, proprietorship or other
entity anywhere in the world which develops, manufactures, sells or distributes
eyewear lenses using a process similar to or competitive with the process
utilized by the Company, or (iii) solicit any officer, employee, representative,
agent, or independent contractor of the Company, or any other person or entity
that has a business relationship with the Company, to alter or terminate his,
her or its employment or business relationship with the Company.
13.3 Confidentiality/Non-Disclosure. Each Party hereby agrees that he or
it shall hold all Confidential Information of each other Party in strict
confidence and solely for the benefit of such other Party, and that, he or it
shall not, directly or indirectly, disclose or use or otherwise authorize or
permit any third party to disclose or use any Confidential Information except as
required by law. As used herein,
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Exhibit (i)
"Confidential Information" means any and all confidential, proprietary or other
information in any form or media whatsoever, regardless of how originated or by
whom, which is in any way related to the past, present or future business of the
Company or any Party hereto and that is not generally known by or available to
the public.
13.4 Mutual Non-Disparagement. The Parties mutually agree not to disparage
each other, not to say anything to any third party which may injure each other
in their business dealings with customers, guests, patrons, employees, agents,
vendors, suppliers, or in any way disparage or injure each other's name and
reputation within the business community or to the public at large.
13.5 Remedies for Breach. In the event of a breach of the restrictive
covenants set out in Sections 13.1, 13.2, 13.3 or 13.4 (the "Restrictive
Covenants") it is agreed that the Parties, in addition to the other remedies
available, shall be entitled, as a matter of right, to injunctive relief in any
court of competent jurisdiction, along with reasonable attorneys' fees for
securing such relief. The Parties acknowledge that the restrictions set forth in
the above Restrictive Covenants have been carefully considered, negotiated and
agreed between the Parties hereto. Accordingly, the Parties agree that the
Restrictive Covenants set forth above are no greater than are reasonably
necessary to protect the legitimate interests of the respective Parties. The
Parties further agree that if the Restrictive Covenants are held in a final
judgment or determination of any court of law or administrative agency of
competent jurisdiction to be over-broad or otherwise unenforceable in any
respect, such provision shall be deemed to be amended and shall be binding upon
the Parties to the maximum extent deemed reasonable and enforceable by such
court or administrative agency. Without limitation of the foregoing, the Parties
agree that in the event any portion of the Restrictive Covenants is deemed to be
unreasonable, the remaining portion of the Restrictive Covenants shall be
enforced.
14. Indemnification. Each of the Burckhardts, the Company and Buyer shall
indemnify the others as set forth in this Section 14. The party entitled to such
indemnity is referred to herein as the "Indemnified Party" and the party
obligated to provide such indemnity is referred to herein as the "Indemnifying
Party". The Indemnifying Party shall indemnify and hold harmless the Indemnified
Party from and against any and all liabilities, losses, damages, claims, costs
or expenses (including reasonable attorneys' fees and disbursements)
(collectively, "Losses") that are incurred or suffered by such Indemnified Party
by reason of (i) the breach by the Indemnifying Party of any of his or its
representations and warranties contained herein or (ii) the failure of the
Indemnifying Party to perform or comply with any covenant or agreement contained
herein to be performed or complied with by him or it, provided that (i) no party
shall be entitled to indemnity pursuant to this Section unless and until the
aggregate amount of Losses incurred by such party as a result of the breach
and/or failure of the Indemnifying Party exceeds $10,000 and (ii) to the extent
the relevant breach or failure by the Indemnifying Party directly results in tax
or insurance proceeds actually received by the Indemnified Party, such proceeds
shall be netted against the amount payable by the Indemnifying Party hereunder.
15. No Advantage to Third Parties. The Parties mutually agree that this
Agreement is an agreement which, among other things, contains agreements of
compromise of matters that each Party deems private matters between and among
themselves. As such, the Parties agree that nothing herein shall serve as an
admission or concession of any sort or kind, in particular, with respect to any
third party, who may claim or seek to claim an advantage against any of the
Parties as a result of a reading or construction of any term or condition of
this Agreement. This Agreement is solely for the benefit of the parties hereto
and their respective successors, assigns and personal representatives and no
third party shall be a third party beneficiary hereof.
16. Return of Company Property. The Burckhardts agree to return to the
Company as soon as possible (and in no event, more than three (3) days from the
date hereof) all Company property in their
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Exhibit (i)
possession, including but not limited to documents, data, records, notebooks,
customer lists, prospect lists, working lists, proposals, quotes, price lists,
checks, invoices, bills, bank account information, competitive information and
comparisons, and computer data and similar repositories of information
containing any information about the Company, whether prepared by them or
others.
17. Miscellaneous. This Agreement shall be binding on and inure to the
benefit of the respective Parties hereto and their successors and assigns. This
Agreement may be executed in multiple counterparts, each of which shall
constitute an original Agreement, but all of which shall be deemed to constitute
one instrument. Each Party shall bear their own fees and costs incurred in
connection with any matter described herein and in the preparation and
negotiation of this Agreement. The terms and provisions of this Agreement cannot
be terminated or modified or amended orally or by course of conduct or dealing
or in any manner except in a writing that is signed by the Party against whom
enforcement is sought. This Agreement shall be construed in accordance with the
laws of the State of Delaware and any suit, action or proceeding arising out of
or relating to this Agreement may be commenced and maintained in any court of
competent subject matter jurisdiction in the County of New York, New York City,
New York or in Miami, Florida at the option of the Party initiating such suit,
action or proceeding and each Party waives objection to such jurisdiction and
venue. The provisions of this Agreement are severable, and any invalidity,
unenforceability or illegality in any provision or provisions hereof shall not
affect the remaining provisions of this Agreement. In any suit, action or
proceeding arising out of or in connection with this Agreement, the prevailing
Party shall be entitled to an award of the reasonable attorneys' fees and
disbursements incurred by such Party in connection therewith, including fees and
disbursements in administrative, regulatory, insolvency, bankruptcy and
appellate proceedings. All notices required or allowed hereunder shall be in
writing and shall be deemed given upon (i) hand delivery or (ii) delivery by
reputable overnight courier service, or (iii) delivery by facsimile with
confirmation of receipt, or (iv) deposit of same in the United States Certified
Mail, Return Receipt Requested, first class postage and registration fees
prepaid and correctly addressed to the Party for whom intended at their address
set forth in Exhibit D attached hereto, or such other address as is most
recently noticed for such Party as aforesaid. All references to gender or number
in this Agreement shall be deemed interchangeably to have a masculine, feminine,
neuter, singular or plural meaning, as the sense of the context requires. Any
failure by any Party to insist upon strict performance by any other Party of the
terms and provisions of this Agreement shall not be deemed a waiver of any of
the other terms or provisions of this Agreement. The Parties shall execute and
deliver any other instruments or documents and take any further actions after
the execution of this Agreement, which may be reasonably required for the
implementation of this Agreement and the transactions contemplated hereby.
18. Survival of Obligations. The Parties mutually agree and acknowledge
that the obligations contained in Sections 13 and 14 of this Agreement shall
survive any termination, cancellation, or expiration of this Agreement.
IN WITNESS WHEREOF, the Parties have entered into this Agreement as of the date
first set forth above.
ARB INVESTMENT ENTERPRISES, LTD
a Florida limited partnership
By: ARB Management Services, Inc.,
general partner
By: ________________________________
Xxxxxxx Xxxxxxxxxx, President
9
Exhibit (i)
________________________________________
Xxxxxxx Xxxxxxxxxx, Individually
________________________________________
Xxxxxxx Xxxxxxxxxx, Individually
JL ACQUISITIONS CO., LLC
By:_____________________________________
Name:___________________________________
Title:__________________________________
NEXGEN VISION, INC., a Delaware
corporation
By: ____________________________________
Its:____________________________________
Attachments:
Disclosure Schedule
Exhibit A - Form of Warrant
Exhibit B - Copy of Escrow Agreement
Exhibit C - Form of Releases
Exhibit D - Notice Addresses
Exhibit 6.3(a)(i) - Company Certificate of Incorporation
Exhibit 6.3(a)(ii) - Company Bylaws
Exhibit (i)
Disclosure Schedule
1. as disclosed or reflected in filings made with the United States
Securities and Exchange Commission ("SEC")
2. the payment of attorney's fees to Xxxxxx & Xxxx, P.A of no more than
$85,000
3. the accrual of the Burckhardts' salaries
4. the accrual of other employees' salaries owing to: Xxx Xxxxxxxx, Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx, Xxxx Xxxxxx, Xxxxxxxx Xxxxxxx, Xxxx Xxxxxx, Xxxx
Xxxxxxxxxxxx, Xxx XxXxxxxx, Xxxxxx Xxxxx, Xxxx and Xxx Xxxxxxxx and no more than
three additional individuals
5. the termination of the purchase option under the F. B. Optical lease of
property in St. Xxxxxxx, Minnesota
6. the termination of the TRI license agreement
7. the circumstances surrounding the arbitration claim by Bluefin
Partners, an investor in the Company's PPM, against Xxxxxx & Xxxxxx, the
Company, and Xxxxx Xxxxxxxx, a stockbroker
8. the bulk sale of Cobra Vision inventory
9. threat of shareholder litigation for nonregistration of securities sold
by Xxxxxx & Xxxxxx under a private placement memorandum pursuant to XX Xxxxxxx
letter
10. Crossbow claim as vendor of eyeglass molds demand for approximately
$250,000 due and owing for period prior to October, 2003, as evidenced by that
certain letter from Xxxxxxx & Xxx to Xxxxxxx Xxxxxxxxxx, dated November 4, 2003,
and that certain letter from Xxxxxxx & Xxx to Xxxx X. Xxxxxxxx, dated October 6,
2003.
11. the proposed investment rescission referred to in that certain letter
from Blank Rome, LLP to Xxxxxxx Xxxxxxxxxx, dated February 10, 2004
12. the issuance of 25,000 Class A shares to Sunrise Securities
Corporation
13. the issuance of any shares or rights to shares in connection with the
2003 loan to NexGen by Xxxxxx & Xxxxxx
Exhibit (i)
EXHIBIT D
Notices
If to the Burckhardts: Xxxxxxx Xxxxxxxxxx or ARB Investment
Enterprises, Ltd.
__________________________
__________________________
__________________________
Facsimile: _______________
Xxxxxxx Xxxxxxxxxx
__________________________
__________________________
__________________________
Facsimile: _______________
Copy to: Xxxxxxxx X. Xxxxxxxx, Esq.
Xxxxxx & Xxxx, P.A.
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
if to the Company NexGen Vision, Inc.
__________________________
__________________________
__________________________
Facsimile: _______________
If to Buyer JL Acquisitions Co., LLC
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:_____________________
Facsimile: _______________
THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO SUCH SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
NEXGEN VISION, INC.
WARRANT TO PURCHASE COMMON STOCK
May 4, 2004
Void After May 4, 2009
THIS CERTIFIES THAT, for value received, Xxxxxxx Xxxxxxxxxx, or his
permitted assigns (the "Holder"), is entitled to subscribe for and purchase at
the Exercise Price (defined below) from NexGen Vision, Inc., a Delaware
corporation (the "Company") 100,000 shares of Class A Common Stock of the
Company, par value $0.001 per share (the "Common Stock").
1. Definitions. As used herein, the following terms shall have the
following respective meanings:
"Exercise Period" shall mean the period commencing on the date of this
Warrant and extending until 12:00 midnight on May 4, 2009.
"Exercise Price" shall mean $1.50 per share.
"Exercise Shares" shall mean the shares of the Company's Common Stock
issuable upon exercise of this Warrant.
2. Exercise of Warrant; Number of Shares.
(a) The right to purchase the Exercise Shares represented by this Warrant
may be exercised in whole or in part at any time during the Exercise Period, by
delivery of the following to the Company at its address set forth in Section 10
herein (or at such other address as it may designate by notice in writing to the
Holder): (i) an executed Notice of Exercise substantially in the form attached
hereto as Exhibit A (the "Notice of Exercise"); (ii) payment of the aggregate
Exercise Price for the Exercise Shares as to which the Warrant is then being
exercised; and (iii) this Warrant.
(b) Payment of the Exercise Price with respect to the Exercise Shares to
be purchased upon the exercise of all or any portion of the Warrant may, at the
election of the Holder, be made as follows: (i) by payment to the Company, in
cash, by check or wire transfer, of an amount equal to the Exercise Price
multiplied by the number of Exercise Shares being purchased; or (ii) by
surrender of the Warrant (together with a Notice of Exercise) to the Company in
exchange for a number of Exercise Shares equal to the product of (x) the number
of Exercise Shares as to which the Warrant is being exercised (as specified in
the Notice of Exercise) multiplied by (y) a fraction, the numerator of which is
the Current Market Price (as defined below) of the Common Stock less the
Exercise Price and the denominator of which is the Current Market Price.
(c) As used herein, "Current Market Price" on any day shall mean the
average daily closing price for the ten trading days immediately preceding such
day. The closing price for any day shall be the last reported sales price
regular way or, in case no such reported sale takes place on such day, the mean
between the closing bid and ask price regular way, in either case on the
principal national securities
1
exchange (including, for this purpose, Nasdaq) on which the Company's Common
Stock is listed or admitted to trading or, if the Common Stock is not listed or
admitted to trading on any national securities exchange or Nasdaq, the highest
reported bid price as furnished by the National Association of Securities
Dealers, Inc. (the "NASD") through the OTC Bulletin Board or a similar
organization if the NASD is no longer reporting such information. If on any such
date the Common Stock is not quoted by any such organization, the fair value of
a share of Common Stock on such date, as determined in good faith by the Board
of Directors of the Company, whose determination shall be conclusive absent
manifest error, shall be used.
(d) Upon the exercise of the rights represented by this Warrant, a
certificate or certificates for the Exercise Shares so purchased, registered in
the name of the Holder, shall be issued and delivered to the Holder within a
reasonable time (but no later than ten (10) days) after the rights represented
by this Warrant shall have been so exercised. The Holder shall be deemed to have
become the holder of record of the applicable Exercise Shares on the date on
which this Warrant was surrendered and payment of the Exercise Price was made,
irrespective of the date of delivery of such certificate or certificates, except
that, if the date of such surrender and payment is a date when the stock
transfer books of the Company are closed, the Holder shall be deemed to have
become the holder of such Exercise Shares at the close of business on the next
succeeding date on which the stock transfer books are open.
(e) This Warrant may be exercised in part, and promptly (but no later than
ten (10) days) after the delivery hereof to the Company the Holder shall be
entitled to receive a new warrant, which shall be dated as of the date of this
Warrant and shall be in substantially the form hereof, covering the number of
shares in respect of which this Warrant shall not have been exercised.
3. Covenants of the Company.
(a) The Company covenants and agrees that all Exercise Shares that may be
issued upon the exercise of the rights represented by this Warrant will, upon
issuance, be validly issued and outstanding, fully paid and non-assessable, and
free from all taxes, liens, claims and encumbrances with respect to the issuance
thereof. The Company further covenants and agrees that the Company will, at all
times during the Exercise Period, have authorized and reserved, free from
preemptive rights, a sufficient number of shares of its Common Stock to provide
for the exercise of the rights represented by this Warrant. If at any time
during the Exercise Period the number of authorized but unissued shares of
Common Stock shall not be sufficient to permit exercise of this Warrant, the
Company will take such corporate action as may, in the opinion of its counsel,
be necessary to increase its authorized but unissued shares of Common Stock to
such number of shares as shall be sufficient for such purposes.
(b) Except and to the extent waived or consented to by the Holder, the
Company will not, by amendment of its Certificate of Incorporation or through
any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Company, but will at all times in good faith assist
in the carrying out of all the provisions of this Warrant.
4. Representation and Covenant of Holder. (a) Holder hereby represents and
warrants to, and agrees with, the Company that the Warrant is, and any Exercise
Shares issued upon its exercise will be, purchased by Holder for his own account
and not with a view to the public distribution thereof and will not be
transferred except in a transaction registered or exempt from registration under
the Securities Act of 1933, as amended (the "Securities Act") and a legend to
such effect as set forth in Section 9 shall be noted on the certificates
representing such Exercise Shares.
2
5. Adjustments. (a) In the event of changes in the outstanding Common
Stock of the Company by reason of stock dividends, distributions, split-ups,
recapitalizations, reclassifications, combinations, reverse splits or exchanges
of shares, separations, reorganizations, liquidations or the like, the number
and class of shares available under the Warrant in the aggregate and the
Exercise Price shall be correspondingly adjusted to give the Holder on exercise,
for the same aggregate Exercise Price, the total number, class and kind of
shares as the Holder would have owned had the Warrant been exercised prior to
the event and had the Holder continued to hold such shares until after the event
requiring adjustment.
(b) Whenever there shall be an adjustment as provided in Section 5(a), the
Company shall promptly cause written notice thereof to be sent to the Holder,
which notice shall be accompanied by an officer's certificate setting forth the
number of Exercise Shares purchasable upon the exercise of this Warrant and the
Exercise Price after such adjustment and setting forth a brief statement of the
facts requiring such adjustment and the computation thereof, which officer's
certificate shall be conclusive evidence of the correctness of any such
adjustment absent manifest error.
(c) The form of this Warrant need not be changed because of any adjustment
in the number of Exercise Shares subject to this Warrant.
6. Business Combinations.
(a) In the event of, at any time during the Exercise Period, (i) a sale,
lease or other disposition of all or substantially all of the Company's assets,
or (ii) the Company's merger into or consolidation with any other corporation or
other entity, or any other corporate reorganization, in which the holders of the
Company's outstanding voting stock immediately prior to such transaction own,
immediately after such transaction, securities representing less than fifty
percent (50%) of the voting power of the Company or other entity surviving such
transaction, then and in the case of each such transaction, proper provision
shall be made so that, upon the basis and the terms and in the manner provided
in this Warrant, the Holder of this Warrant, upon the exercise hereof at any
time after the consummation of such transaction, shall be entitled to receive
(at the aggregate Exercise Price then in effect), in lieu of the Common Stock or
other securities issuable upon such exercise prior to such consummation, the
highest amount of securities, cash or other property to which the Holder would
actually have been entitled as a shareholder of the Company upon such
consummation if the Holder had exercised the rights represented by this Warrant
immediately prior thereto (subject to any applicable further adjustments
subsequent to such consummation as nearly equivalent as possible to the
adjustments provided in Section 5(a)).
(b) In the event of any transaction described in Section 6(a), each person
(other than the Company) which may be required to deliver any stock, securities,
cash or property upon the exercise of this Warrant as provided herein, shall
assume in writing (i) the obligations of the Company under this Warrant (and, if
the Company shall survive the consummation of such transaction, such assumption
shall be in addition to, and shall not release the Company from, any continuing
obligations of the Company under this Warrant) and (ii) the obligation to
deliver to the Holder such shares of stock, securities, cash or property as, in
accordance with the foregoing provisions of this Section 6, the Holder may be
entitled to receive.
7. Transfer.
(a) Neither the Warrant nor the Exercise Shares have been registered under
the Securities Act. The Holder will not transfer this Warrant or the Exercise
Shares unless (i) there is an effective registration statement covering such
Warrant or Exercise Shares, as the case may be, under the Securities
3
Act and applicable state securities laws; or (ii) the proposed transfer is
exempt from registration under the Securities Act and under all applicable state
securities laws.
(b) Prior to any proposed transfer that satisfies the requirements of
Section 7(a)(ii) other than a transaction effected pursuant to Rule 144 under
the Securities Act, and as a condition thereto, the Holder will deliver to the
Company (i) an agreement by the proposed transferee that the restrictive
investment legend substantially similar to that set forth in Section 9 be placed
on the certificate or certificates representing the securities acquired by such
transferee; and (ii) an agreement by such transferee that the Company may place
a "stop transfer order" with its transfer agent or registrar with respect to the
Warrant and the Exercise Shares.
(c) This Warrant may only be assigned or transferred in accordance with
the provisions of this Section 7. Upon surrender of this Warrant to the Company
together with a duly executed copy of an Assignment Form substantially in the
form attached hereto as Exhibit B, and upon compliance with the foregoing
provisions, the Company shall without charge, execute and deliver a new warrant
in the name of the assignee named on such instrument of assignment, and this
Warrant shall promptly be cancelled. An assignment, transfer, pledge,
hypothecation or other disposition of this Warrant attempted contrary to the
provision of this Warrant, or any levy of execution, attachment or other process
attempted upon this Warrant, shall be null and void and without effect.
8. Notice of Certain Proposed Events. In case at any time the Company
shall publicly propose:
(a) to pay any dividend or make any distribution on shares of Common
Stock in shares of Common Stock or make any other distribution to all holders of
Common Stock; or
(b) to issue any rights, warrants, or other securities to all
holders of Common Stock entitling them to purchase any additional shares of
Common Stock or any other rights, warrants, or other securities; or
(c) to effect any consolidation, merger, sale, reorganization or
reclassification described in Section 6; or
(d) to effect any liquidation, dissolution, or winding-up of the
Company; or
(e) to subdivide the outstanding Common Stock or combine the
outstanding Common Stock into a smaller number of shares;
then, and in any one or more of such cases, the Company shall give written
notice thereof to the Holder, mailed at least (i) 10 business days prior to the
date as of which the holders of record of shares of Common Stock entitled to
receive any such dividend, distribution, rights, warrants, or other securities
are to be determined, or (ii) 20 business days prior to the date on which any
such combination, subdivision, consolidation, merger, sale, reorganization or
reclassification, liquidation, dissolution, or winding-up is expected to become
effective, and the date as of which it is expected that holders of record of
shares of Common Stock shall be entitled to exchange their shares or warrants
for securities or other property, if any, deliverable in connection with any
such event.
9. Legend. The certificate or certificates evidencing any securities
issued upon exercise of the Warrant shall bear the following legend:
4
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE TRANSFERRED
EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
AND SUCH REGISTRATION OR QUALIFICATION AS MAY BE REQUIRED UNDER THE
SECURITIES LAWS OF ANY STATE OR (ii) AN EXEMPTION FROM REGISTRATION UNDER
THE ACT OR SUCH SECURITIES LAWS.
10. Notices. All notices, demands and other communications which may or
are required to be given or made by either party to the other in connection with
this Warrant shall be in writing (including telex, fax or other similar writing)
and shall be deemed to have been duly given or made: (a) if sent by registered
or certified mail, five (5) days after the posting thereof with first class
postage attached; (b) if sent by hand or overnight delivery, upon the delivery
thereof (with confirmation of delivery received); and (c) if sent by telex or
fax, upon confirmation of receipt of such telex or fax, in each case addressed
to the respective parties as follows:
if to the Company:
NexGen Vision, Inc.
---------------------
---------------------
---------------------
Attention:_______________
Fax No.:________________
if to the Holder:
Xxxxxxx Xxxxxxxxxx
0000 XX 00 Xxxxxxx
Xxxxx, Xxxxxxx 00000
with a copy to:
Xxxxxxxx X. Xxxxxxxx, Esq.
Xxxxxx & Xxxx, P.A.
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Fax: 000.000.0000
11. Taxes. The issuance of any shares or warrants or other securities upon
the exercise of this Warrant, and the delivery of certificates or other
instruments representing such shares, warrants or other securities, shall be
made without charge to the Holder for any tax or other charge solely in respect
of such issuance. The Company shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the issue and
delivery of any certificate in a name other than that of the Holder, and the
Company shall not be required to issue or deliver any such certificate unless
and until the person or persons requesting the issue thereof shall have paid to
the Company the amount of such tax or shall have established to the satisfaction
of the Company that such tax has been paid.
5
12. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost,
stolen, mutilated or destroyed, the Company may, on such terms as to indemnity
or otherwise as it may reasonably impose (which shall, in the case of a
mutilated Warrant, include the surrender thereof), issue a new Warrant of like
denomination and tenor as the Warrant so lost, stolen, mutilated or destroyed.
Any such new Warrant shall constitute an original contractual obligation of the
Company, whether or not the allegedly lost, stolen, mutilated or destroyed
Warrant shall be at any time enforceable by anyone.
13. Governing Law. This Warrant and all rights, obligations and
liabilities hereunder shall be governed by and construed in accordance with the
laws of the State of Delaware. IN WITNESS WHEREOF, the parties have caused this
Warrant to be executed as of the date first written above.
NEXGEN VISION, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
HOLDER
____________________________________
Xxxxxxx Xxxxxxxxxx
6
EXHIBIT A
NOTICE OF EXERCISE
TO NEXGEN VISION, INC.
The undersigned hereby exercises his rights to purchase Exercise Shares covered
by the within Warrant and hereby (i) tenders payment herewith in the amount of
$______________ or (ii) surrenders this Warrant in such number of Exercise
Shares as shall equal $______________, in payment of the Exercise Price in
accordance with the terms thereof, and requests that certificates for such
securities be issued in the name of, and delivered to:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print Name, Address and Social Security or Tax Identification Number)
and, if such number of Exercise Shares shall not be all the Exercise Shares
covered by the within Warrant, that a new Warrant for the balance of the
Exercise Shares covered by the within Warrant be registered in the name of, and
delivered to, the undersigned at the address stated below.
By:________________________ Address: ________________________
Name:______________________ ________________________
Date:______________________ ________________________
EXHIBIT B
WARRANT ASSIGNMENT FORM
FOR VALUE RECEIVED, ____________________________ hereby sells,
assigns, and transfers unto _________________________________ his right to
purchase up to _________ shares of Common Stock represented by this Warrant and
does hereby irrevocably constitute and appoint _______________________________
as attorney to transfer the same on the books and records of the Company, with
full power of substitution.
Dated:_____________________
_______________________________
