AGREEMENT
THIS AGREEMENT (this "Agreement") is entered into this ______ day
of September, 1995, by and among Xxxxxx-Xxxxx Incorporated, a
Nevada corporation (the "Company"), and Xxxxxx Xxxxx, Xxxxxx Xxxx,
Xxxxxxx Xxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxxxxx, Xxxxx Xxxxxx,
Xxxxxxx Xxxxx and Xxxxxxx Xxxxx (collectively referred to
herein as "Holders"), based on the following premises.
Premises
A. The Company and the Holders entered into a Stock Purchase
Agreement dated April 7, 1995 (the "Stock Purchase Agreement"),
pursuant to which the Company sold to the Holders an aggregate of
370,000 shares of common stock of the Company, par value $0.001
per share (the "Common Stock") and warrants to purchase an
aggregate of 500,000 shares of Common Stock at $2.50 per share at
any time prior to April 7, 1996 (the "$2.50 Warrants"), and
warrants to purchase an aggregate of 500,000 shares of Common
Stock at $3.50 per share at any time prior to April 7, 1997 (the
"$3.50 Warrants").
B. The Company and the Holders subsequently entered into an
Agreement dated August _____, 1995, pursuant to which the Company
agreed to issue warrants to purchase up to 500,000 shares of
Common Stock at $4.50 per share at any time prior to August 31,
1995 (the "$4.50 Warrants"), to those Holders exercising their
$2.50 Warrants prior to August 31, 1995.
C. The Company and the Holders have mutually agreed that in
consideration of the Holders exercising the $3.50 and $4.50
Warrants in accordance with the terms of this Agreement, the
Company will issue additional warrants to the Holders to purchase
up to 500,000 shares of Common Stock at $4.50 per share and
1,000,000 shares of Common Stock at $5.75 per share at any time
prior to November 1, 1997, all on the terms and conditions set
forth in this Agreement.
Agreement
NOW, THEREFORE, based on the stated premises, which are
incorporated herein by reference, and for and in consideration
of the mutual covenants and agreements hereinafter set forth and
the mutual benefit to the parties to be derived therefrom, and
other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, it is hereby agreed as follows:
Article I
Issuance of Warrants
1.1 Issuance of Warrants. On the terms and subject to the
conditions contained in this Agreement, the Company hereby agrees
to issue warrants to purchase up to 500,000 shares of Common Stock
at an exercise price of $4.50 per share at any time prior to
November 1, 1997 (the "$4.50 B Warrants") and warrants to purchase
up to 1,000,000 shares of Common Stock at an exercise price of
$5.75 per share at any time prior to November 1, 1997 (the "$5.75
Warrants") to those Holders who exercise, on or before October 1,
1995, the $3.50 Warrants held by them and, on or before the later
to occur of (i) November 1, 1995, or (ii) 30 days subsequent to
the effectiveness of a registration statement covering the resale
by the Holders of the Common Stock issuable on exercise of the
$4.50 Warrants, the $4.50 Warrants held by them. Each Holder who
meets the foregoing requirements shall receive a $4.50 B Warrant
to purchase the number of shares equal to the lesser of (i) the
number of shares of Common Stock acquired by the Holder on exercise
of the $3.50 Warrants on or before October 1, 1995, or (ii) the
number of shares of Common Stock acquired by the Holder on the
exercise of the $4.50 Warrants on or before November 1, 1995.
Each Holder entitled to receive $4.50 B Warrants shall also
receive $5.75 Warrants to acquire twice as many shares of Common
Stock as are subject to the $4.50 B Warrants issued to the Holder
in accordance with the preceding sentence. The foregoing
provisions are set forth in tabular form on Exhibit "A" attached
hereto and incorporated herein by this reference.
1.2 Exercise of Warrants. To exercise the $3.50 and $4.50
Warrants in accordance with the terms hereof, the Holders desiring
to exercise shall present and surrender to the Company the $3.50
or $4.50 Warrant, as the case may be, with the purchase form
attached thereto duly executed, and shall pay to the Company the
exercise price for the number of shares being purchased in cash
or immediately available funds by wire transfer, certified or
official bank check, or other means of payment acceptable to the
Company.
1.3 Delivery of Warrants. The Company will promptly issue to
each Holder meeting the terms of this Agreement $4.50 and $5.75
Warrants for the number of shares to which such Holder is entitled.
Article II
Representations, Covenants, and Warranties of the Company
As an inducement to, and to obtain the reliance of, Holders, the
Company represents and warrants as follows:
2.1 Organization of the Company. The Company is a corporation
duly organized, validly existing, and in good standing under laws
of the state of Nevada, and has the corporate power and is duly
authorized, qualified, franchised, and licensed under all
applicable laws, regulations, ordinances, and orders of public
authorities to own all of its properties and assets and to carry
on its business in all material respects as it is now being
conducted. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated by
this Agreement in accordance with the terms hereof will not,
violate any provision of the Company's certificate of
incorporation or bylaws. The Company has taken all action
required by law, its certificate of incorporation, its bylaws,
or otherwise to authorize the execution and delivery of this
Agreement and the consummation of the transactions herein
contemplated.
2.2 approval of Agreement. The board of directors of the Company
have authorized the execution and delivery of this Agreement by
the Company and has approved the consummation of the transactions
contemplated hereby. This Agreement is the legal, valid, and
binding agreement of the Company enforceable between the parties
in accordance with its terms.
2.3 Financial Information. Each of the financial statements
contained in the information referred to in section 2.4 present
fairly the financial condition of the Company as of the date of
such financial statement and the results of its operations for
the periods indicated. All such audited and unaudited financial
statements have been prepared in accordance with generally
accepted accounting principles consistently applied throughout
the periods involved as explained in the notes to such financial
statements and have been presented in accordance with the
requirements of Regulation S-X promulgated by the Securities and
Exchange Commission (the "SEC") regarding the form and content of
and requirements for financial statements to be filed with the SEC.
2.4 Information. The information concerning the Company set
forth in this Agreement, in the schedules delivered by the
Company pursuant to the Stock Purchase Agreement and this
Agreement, the report on form 8-K filed with the SEC on June 30,
1995, as amended, the report on form 8-K filed with the SEC on
June 30, 1994, as amended, the annual report on form 10-K filed
with the SEC for the year ended June 30, 1994, and all amendments
thereto, and the quarterly reports on form 10-Q for the quarters
ended September 30, and December 31, 1994, and March 31, 1995, is,
as of the date of the respective reports, complete and accurate in
all material respects and did not contain any untrue statement of
a material fact or omit to state a material fact required to make
the statements made, in light of the circumstances under which
they were made, not misleading.
2.5 Third-Party Consents. None of the contracts, agreements,
leases, or other commitments, written or oral, to which the Company
is a party or to which any of its properties or assets are subject
require the consent of any other party in order to consummate the
transactions herein contemplated, except where the failure to
obtain such consent would not have a material adverse effect on
the transactions contemplated herein. Except for the satisfaction
of requirements of federal and state securities and corporation
laws, no authorization, approval, consent, or order of, or
registration, declaration, or filing with, any court or other
governmental body is required in connection with the execution and
delivery by the Company of this Agreement and the consummation by
the Company of the transactions contemplated hereby.
2.6 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by
this Agreement will not result in the breach of any term or
provision of, or constitute an event of default under, any
indenture, mortgage, deed of trust, lease, or other contract,
agreement, or instrument to which the Company is a party or to
which any of its properties or operations are subject and the
breach of which would have a material adverse effect on the Company.
Article III
Representations, Covenants, and Warranties of Holders
As an inducement to, and to obtain the reliance of the Company,
each Holder represents and warrants as follows:
3.1 Binding Agreement. This Agreement is the legal, valid, and
binding obligation of each Holder enforceable in accordance with
its terms.
3.2 Third-Party Consents. None of the contracts, agreements,
leases, or other commitments, written or oral, to which any Holder
is a party or to which any of its properties or assets are subject
require the consent of any other party in order to consummate the
transactions herein contemplated, except where the failure to
obtain such consent would not have a material adverse effect on
the transactions contemplated herein. No authorization,
approval, consent, or order of, or registration, declaration,
or filing with, any court or other governmental body is required
in connection with the execution and delivery by any Holder of
this Agreement and the consummation by any Holder of the
transactions contemplated hereby.
3.3 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated
hereby, will not result in the breach of any term or provision of,
constitute an event of default under, or require the consent or
approval of any third-party pursuant to, any material contract,
agreement, or instrument to which any Holder is a party or to
which any of their respective properties or operations are subject.
3.5 Information. The information concerning Holders set forth in
this Agreement and in the schedules delivered by Holders pursuant
hereto is complete and accurate in all material respects and does
not contain any untrue statement of a material fact or omit to
state a material fact required to make the statements made, in
light of the circumstances under which they were made, not misleading.
Article IV
Special Covenants
4.1 Indemnification by Holders. Each Holder will indemnify and
hold harmless the Company and its directors and officers, and each
person, if any, who controls the Company within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"), from
and against any and all losses, claims, damages, expenses,
liabilities, or actions to which any of them may become subject
under applicable law (including the Securities Act and the
Exchange Act) and will reimburse them for any legal or other
expenses reasonably incurred by them in connection with
investigating or defending any claims or actions, whether or not
resulting in liability, insofar as such losses, claims, damages,
expenses, liabilities, or actions arise out of or are based upon
any untrue statement or alleged untrue statement of a material
fact contained in any application or statement filed with a
governmental body or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to
be stated therein, or necessary in order to make the statements
therein not misleading, but only insofar as any such statement
or omission was made in reliance upon and in conformity with
information furnished in writing by any Holder expressly for use
therein. Holders agree at any time upon the request of the
Company to furnish to it a written letter or statement confirming
the accuracy of the information with respect to Holders contained
in any report or other application or statement referred to in
this Article IV, or in any draft of any such documents, and
confirming that the information with respect to Holders contained
in such document or draft was furnished by Holders, indicating
the inaccuracies or omissions contained in such document or draft
or indicating the information not furnished by Holders expressly
for use therein. The indemnity agreement contained in this
section 4.1 shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the
Company and shall survive the consummation of the transactions
contemplated by this Agreement.
4.2 Indemnification by the Company. The Company will indemnify
and hold harmless Holders from and against any and all losses,
claims, damages, expenses, liabilities, or actions to which any
of them may become subject under applicable law (including the
Securities Act and the Exchange Act) and will reimburse them for
any legal or other expenses reasonably incurred by them in
connection with investigating or defending any claims or actions,
whether or not resulting in liability, insofar as such losses,
claims, damages, expenses, liabilities, or actions arise out of
or are based upon any breach of this Agreement or any untrue
statement or alleged untrue statement of a material fact contained
in any application or statement filed with a governmental body or
arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein,
or necessary in order to make the statements therein not
misleading, but only insofar as any such statement or omission
was made in reliance upon and in conformity with information
furnished in writing by the Company expressly for use therein.
The Company agrees at any time upon the request of Holders to
furnish to them a written letter or statement confirming the
accuracy of the information with respect to the Company contained
in any report or other application or statement referred to in
this Article IV, or in any draft of any such document, and
confirming that the information with respect to the Company
contained in such document or draft was furnished by the Company,
indicating the inaccuracies or omissions contained in such
document or draft or indicating the information not furnished by
the Company expressly for use therein. The indemnity agreement
contained in this section 4.2 shall remain operative and in full
force and effect, regardless of any investigation made by or on
behalf of Holders and shall survive the consummation of the
transactions contemplated by this Agreement.
4.3 The Acquisition of Purchased Stock. The consummation of this
Agreement and the issuance of Common Stock to Holders contemplated
herein constitutes the offer and sale of securities as those terms
are defined under the Securities Act and applicable state statutes.
Such transactions shall be consummated in reliance on certain
exemptions from the registration requirements of federal and state
securities laws, which depend, among other items, on the
circumstances under which such securities are acquired.
(a) In order to provide documentation for reliance upon such
exemptions, the Holders make the following representations and
warranties:
(i) Each Holder acknowledges that neither the SEC nor the
securities commission of any state or other federal agency has
made any determination as to the merits of acquiring the Warrants
or the shares of Common Stock issuable on exercise of the Warrants,
and that this transaction involves certain risks.
(ii) Each Holder has received and read this Agreement and
understands the risks related to the consummation of the
transactions herein contemplated.
(iii) Each Holder has such knowledge and experience in business
and financial matters that he or she is capable of evaluating
the Company and its business operations.
(iv) Each Holder has adequate means of providing for his or her
current needs and possible personal contingencies and has no need
now, and anticipates no need in the foreseeable future, to sell any
of the Warrants or the shares of Common Stock issuable on exercise
of the Warrants. Each Holder is able to bear the economic risks of
this investment, and, consequently, without limiting the generality
of the foregoing, is able to hold the Warrants and the shares of
Common Stock issuable on exercise of the Warrants for an indefinite
period of time, and has a sufficient net worth to sustain a loss of
the entire investment, in the event such loss should occur.
(v) The Holders have been provided with all information contained
in the Company's annual report on form 10-K for the year ended June
30, 1994, and all subsequent interim reports filed by the Company
with the Securities and Exchange Commission. The Holders'
representatives, including their legal counsel, have personally
met with the officers and directors of the Company and have
investigated the intellectual property assets of the Company.
Each Holder and their representatives have been given the
opportunity to meet with and ask questions of the officers and
directors of the Company and to obtain any additional information
they consider material to the acquisition of the Warrants and the
shares of Common Stock issuable on exercise of the Warrants.
(vi) Each Holder is acquiring the Warrants and the shares of
Common Stock issuable on exercise of the Warrants for his or her
own account and not for resale to others.
(vii) Each Holder confirms that he or she is an "accredited
investor" as defined under rule 501 of regulation D promulgated
under the Securities Act. Each Holder confirms that his or her
individual net worth, or joint net worth with that person's spouse,
at the time of his or her purchase exceeds $1,000,000, or he or she
had an individual income in excess of $200,000 in each of the two
most recent years or joint income with that person's spouse in
excess of $300,000 in each of those years and has a reasonable
expectation of reaching the same income level in the current year.
(viii) The Holder is a resident of the state set forth in the
address below the Holder's name on the signature pages hereto.
(ix) Each Holder understands that none of the Warrants or the
shares of Common Stock issuable on exercise of the Warrants has
been registered, but is being acquired by reason of a specific
exemption under the Securities Act as well as under certain state
statutes for transactions by an issuer not involving any public
offering and that any disposition of the Warrants and the shares
of Common Stock issuable on exercise of the Warrants may, under
certain circumstances, be inconsistent with this exemption and
may make the Holder an "underwriter" within the meaning of the
Securities Act. Each Holder further acknowledges that the
Warrants and the shares of Common Stock issuable on exercise of
the Warrants must be held and may not be sold, transferred, or
otherwise disposed of for value unless it is subsequently
registered under the Securities Act or an exemption from such
registration is available; the Company is under no obligation to
register the Warrants or the shares of Common Stock issuable on
exercise of the Warrants under the Securities Act or under
section 12 of the Exchange Act, except as provided herein or as
may be expressly agreed to by it in writing; if rule 144 is
available, and no assurance is given that it will be, initially
only routine sales of the Warrants and the shares of Common Stock
issuable on exercise of the Warrants in limited amounts can be
made in reliance on rule 144 in accordance with the terms and
conditions of that rule; the Company is under no obligation to
the undersigned to make rule 144 available, except as may be
expressly agreed to by it in writing; in the event rule 144 is not
available, compliance with regulation A or some other exemption
may be required before any Holder can sell, transfer, or otherwise
dispose of the Warrants or the shares of Common Stock issuable on
exercise of the Warrants without registration under the Securities
Act; the Company's registrar and transfer agent will maintain a
stop transfer order against the registration of transfer of the
Warrants and the shares of Common Stock issuable on exercise of
the Warrants; and the certificate(s) representing the Warrants and
the shares of Common Stock issuable on exercise of the Warrants
will bear a legend in substantially the following form so
restricting the sale of the Warrants and the shares of Common
Stock issuable on exercise of the Warrants:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD
OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE
SECURITIES ACT.
(b) In order to more fully document reliance on the exemptions as
provided herein, each Holder shall execute and deliver to the
Company such further letters of representation, acknowledgment,
suitability, or the like, as the Company and its counsel may
reasonably request in connection with reliance on exemptions
from registration under such securities laws.
(c) The Company and Holders acknowledge that the basis for
relying on exemptions from registration or qualifications are
factual, depending on the conduct of the various parties, and
that no legal opinion or other assurance will be required or
given to the effect that the transactions contemplated hereby
are in fact exempt from registration or qualification.
Article V
Registration Rights
5.1 Registration Procedures. The Company shall use its best
efforts to prepare and file with the SEC as soon as practicable
after November 1, 1995, a Registration Statement that includes the
shares of Common Stock issuable on exercise of the $4.50 B Warrants
and the $5.75 Warrants and thereafter to use its best efforts to
cause such Registration Statement to become effective as soon as is
practicably possible and remain effective as provided herein. The
Company further agrees to:
(a) Prepare and file with the SEC such amendments and post-
effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective for a period
of not less than two (2) years, or such shorter period which will
terminate when all securities covered by such Registration
Statement have been sold or withdrawn; cause the prospectus which is
part of the Registration Statement to be supplemented by any
required prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 under the Securities Act; and comply with the
provisions of the Securities Act applicable to it with respect to
the disposition of all securities covered by such Registration
Statement during the applicable period in accordance with the
intended methods of disposition by the sellers thereof set forth
in such Registration Statement or supplement to the prospectus;
(b) Notify Holders at any time when a prospectus relating to
securities of any Selling Shareholder included in a Registration
Statement is required to be delivered under the Securities Act,
when the Company becomes aware of the happening of any event as a
result of which the prospectus included in such Registration
Statement (as then in effect) contains any untrue statement of a
material fact or omits to state a material fact necessary to make
the statements therein (in the case of the prospectus or any
preliminary prospectus, in light of the circumstances under which
they were made) not misleading and, as promptly as practicable
thereafter, prepare and file with the SEC and furnish to Holders
a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such securities, such prospectus
will not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading;
(c) Enter into customary agreements (including an underwriting
agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the
disposition of such securities;
(d) Use its best efforts to cause all securities of Holders
included in such Registration Statement to be listed, by the date
of the first sale of securities pursuant to such Registration
Statement, on each securities exchange on which the Company's
securities of the same class are then listed or proposed to be
listed, if any;
(e) On or prior to the date on which the Registration Statement
is declare effective, use its best efforts to register or qualify,
and cooperate with Holders, the underwriter or underwriters, if
any, and their counsel, in connection with the registration or
qualification of, the securities of Holders covered by the
Registration Statement for offer and sale under the securities or
blue sky laws of each state and other jurisdiction of the United
States as Holders or the underwriter reasonably requests in
writing, to use its best efforts to keep each such registration or
qualification effective, including through new filings, or
amendment or renewals, during the period such Registration
Statement is required to be keep effective and to do any and all
other acts or things necessary or advisable to enable the
disposition in all such jurisdictions of the securities of Holders
covered by the Registration Statement; provided that the Company
will not be required to (1) qualify generally to do business in
any jurisdiction where it would not otherwise be required to
qualify but for this paragraph (e), (2) consent to general service
of process in any such jurisdiction, or (3) subject itself to
general taxation in any such jurisdiction;
(f) Cooperate with Holders and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legends)
representing securities to be sold by Holders under the
Registration Statement, and enable such securities to be in such
denominations and registered in such names as the managing
underwriter or underwriters, if any, or Holders may request; and
(g) Use it best efforts to cause the securities of Holders covered
by the Registration Statement to be registered with or approved by
such other governmental agencies or authorities within the United
States as may be necessary to enable Holders or the underwriter or
underwriters, if any, to consummate the disposition of such
securities.
5.2 Cooperation by Holders.
(a) Holders shall furnish to the Company in writing such
information and affidavits as the Company may reasonably require
from Holders in connection with any registration, qualification
or compliance with respect to such securities. It shall be a
condition precedent to the obligations of the Company to take any
action pursuant to this Agreement with respect to the securities
of any selling Holder that such Holder shall furnish to the
Company such information regarding the Holder, the securities to
be registered and other securities in the Company held, and the
intended method of disposition of such securities as shall be
required to effect the registration of such Holder's securities.
(b) By exercising their Warrants, Holders shall be deemed to have
confirmed at the time of such exercise the continuing accuracy of
the information respecting their status as accredited investors and
the suitability of an investment in the Common Stock for them that
is contained herein, all except as such investors may then advise
the Company in writing. The Company may also require, as a
condition precedent to exercise, that the Holder complete and
deliver to the Company a suitability letter containing
representations and warranties regarding suitability of the
investment of like tenor to those contained herein.
(c) Holders, upon receipt of any notice from the Company of the
happening of any event of the kind described in paragraph (b) of
section 5.1, will forthwith discontinue disposition of the
securities until Holders' receipt of the copies of the supplemented
or amended prospectus contemplated by paragraph (b) of section 5.1
or until they are advised in writing (the "Advice") by the Company
that the use of the prospectus may be resumed, and have received
copies of any additional or supplemental filings which are
incorporated by reference in the prospectus, and, if so directed
by the Company, Holders will, or will request the managing
underwriter or underwriters, if any, to, deliver to the Company
all copies, other than permanent file copies then in Holders'
possession, of the prospectus covering such securities current at
the time of receipt of such notice. In the event the Company
shall give any such notice, the time period mentioned in paragraph
(a) of section 5.1 shall be extended by the number of days during
the period from and including the date of the giving of such notice
to and including the date when Holders shall have received the
copies of the supplemented or amended prospectus contemplated by
paragraph (b) of section 5.1 hereof or the Advice.
(d) At the end of any period during which the Company is obligated
to keep any Registration Statement current and effective as provided
by section 5.1 hereof (and any extensions thereof required by
paragraph (c) of this section 5.2), Holders shall discontinue sales
of securities pursuant to such Registration Statement upon receipt
of notice from the Company of its intention to remove from
registration the securities covered by such Registration Statement
which remain unsold, and Holders shall notify the Company of the
number of securities registered which remain unsold promptly after
receipt of such notice from the Company.
(e) The Holders acknowledge that the registration of the resale of
the securities or the availability of an exemption from registration
in certain states may impose certain limitations and conditions on
the manner and nature of such sales. The Company shall advise the
Holder in writing of such registration or exemption and the related
limitations and conditions from time to time. The Holders shall be
solely responsible for such Holders' own compliance with such
limitations and conditions.
5.3 Holdback Agreement. Holders, if requested by the managing
underwriter or underwriters for any underwritten registration, agree
not to effect any public sale or distribution of securities,
including a sale pursuant to Rule 144 (or any similar provision
then in force) under the Securities Act, during the 15 days prior
to, and during the 90-day period commencing on the effective date
of such registration (except as part of such registration). In the
event Holders are prohibited from effecting a sale of securities
pursuant to this section 5.3, the time period in paragraph (a) of
section 5.1 shall be extended by the number of days Holders are so
prohibited.
5.4 Registration and Selling Expenses. All of the costs and
expenses of registration provided for herein will be borne by the
Company, including the fees and expenses of the counsel and
accountants for the Company (including the expenses of any special
audit and "cold comfort" letters required by or incident to such
performance), and all other costs and expenses of the Company
incident to the preparation, printing, and filing under the
Securities Act of the Registration Statement (and all amendments
and supplements thereto) and furnishing copies thereof and of the
prospectus included therein, and the costs and expenses incurred
by the Company in connection with the qualification of the
Purchased Stock and shares of Common Stock received on exercise
of Warrants under the state securities or blue sky laws of
various jurisdictions; provided that the Company shall not bear
the costs and expenses of Holders comprising underwriters'
commissions, brokerage fees, transfer taxes, or the fees and
expenses of any counsel, accountant, or other representative
retained by Holders.
5.5 Rule 144. The Company agrees that it will use its best
efforts to file in a timely manner all reports required to be
filed by it pursuant to the Exchange Act and, at any time and upon
request of Holders, will furnish Holders with such information
generated by the Company in the ordinary course of business as
may be reasonably necessary to enable Holders to effect sales of
Common Stock received on exercise of Warrants without registration
pursuant to Rule 144 under the Securities Act. Notwithstanding
the foregoing, the Company may deregister any class of its
securities under section 12 of the Exchange Act or suspend its
duty to file reports with respect to any class of its securities
pursuant to section 15(d) of the Exchange Act if it is then
permitted to do so pursuant to the Exchange Act and the rules and
regulations thereunder.
5.6 Participation in Underwritten Registrations. Holders may not
participate in any underwritten registration hereunder unless
Holders (a) agree to sell shares of Common Stock received on
exercise of Warrants on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve
such arrangements, and (b) complete and execute all
questionnaires, powers of attorney, underwriting agreements and
other documents customarily required under the terms of such
underwriting arrangements.
Article VI
Miscellaneous
6.1 No Brokers. Holders and the Company agree that no third
person has in any way brought the parties together or been
instrumental in the negotiation, execution, or consummation of
this Agreement. Notwithstanding the foregoing, the Company has
agreed to pay a three percent finder's fee to Xxxx X. Xxxxxxxx
and Xxxxxxx Xxxxxxx who were instrumental in the prior transaction
between the parties. Holders and the Company each agree to
indemnify the other against any claim by any third person for any
commission, brokerage, finder's fee, or other payment with respect
to this Agreement or the transactions contemplated hereby based
upon any alleged agreement or understanding between such party
and such third person, whether expressed or implied, arising from
the actions of such party. The covenants set forth in this
section 6.1 shall survive the date hereof and the consummation
of the transactions herein contemplated.
6.2 Governing Law. This Agreement shall in all respects,
including all matters of construction, validity, and performance,
be governed by, and construed and enforced in accordance with,
the laws of the state of Utah applicable to contracts entered into
in that state between citizens of that state and to be performed
wholly within that state without reference to any rules governing
conflicts of laws
6.3 Notices. All notices, demands, requests, or other
communications required or authorized hereunder shall be deemed
given sufficiently if in writing and if personally delivered; if
sent by facsimile transmission, confirmed with a written copy
thereof sent by overnight express delivery; if sent by registered
mail or certified mail, return receipt requested and postage
prepaid; or if sent by overnight express delivery:
If to the Company, to: Xxxxxx Xxxxx Incorporated
Attn: Xxxxx X. Xxxxxx, President
0000 Xxxx 000 Xxxxx
Xxxxx, Xxxx 00000
Facsimile Transmission: (000) 000-0000
Confirmation: (000) 000-0000
With copies to: Xxxxx X. Xxxx, Esq.
Xxxxx, Xxxxx & Xxxxxxx, L.L.C.
Eighth Floor, Bank Xxx Xxxxx
00 Xxxx Xxxxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Facsimile Transmission: (000) 000-0000
Confirmation: (000) 000-0000
If to Holders: At the address set forth below their
respective names on the signature
pages hereto.
With copies to: Xxxxxxx Xxxxxxx, Esq.
Xxxxxxx Xxxxxxxx & Xxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile Transmission: (000) 000-0000
Confirmation: (000) 000-0000
or such other addresses and facsimile numbers as shall be furnished
in writing by any party in the manner for giving notices hereunder,
and any such notice, demand, request, or other communication shall
be deemed to have been given as of the date personally delivered or
on the first business day after a legible copy sent by facsimile
transmission is received, three days after the date mailed by
registered or certified mail, or on the first business day after
the date sent by overnight delivery.
6.4 Attorneys' Fees. In the event that any party institutes and
prevails in any action or suit to enforce this Agreement or to
secure relief from any default hereunder or breach hereof, the
defaulting or breaching party or parties shall reimburse the
nonbreaching party or parties for all costs, including reasonable
attorneys' fees, incurred in connection therewith and in enforcing
or collecting any judgment rendered therein.
6.5 Best Knowledge. Whenever any representation is made to the
"best knowledge" of any party, it shall be deemed to be a
representation that an officer or director of such party, after
reasonable investigation, has any current actual knowledge of such
matters.
6.6 Entire Agreement. This Agreement, together with the documents
to be delivered pursuant hereto, represents the entire agreement
between the parties relating to the subject matter hereof. There
are no other courses of dealing, understanding, agreements,
representations, or warranties, written or oral, except as set
forth herein.
6.7 Survival; Termination. The representations, warranties,
and covenants of the respective parties as set forth in this
Agreement shall survive the closing and consummation of the
transactions contemplated by this Agreement for a period of two
years from the date of this Agreement. The Company's cumulative
liability to Holders for breaches of this Agreement shall not
exceed the Purchase Price.
6.8 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all
of which taken together shall be but a single instrument.
6.9 Amendment or Waiver. Every right and remedy provided herein
shall be cumulative with every other right and remedy, whether
conferred herein, at law, or in equity, and may be enforced
concurrently herewith, and no waiver by any party of the
performance of any obligation by the other shall be construed as
a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. This Agreement may be amended
by a writing signed by all parties hereto, with respect to any of
the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance thereof may be
extended by a writing signed by the party or parties for whose
benefit the provision is intended.
6.10 Third-Party Beneficiaries. This Agreement is solely between
the Company and Holders and no director, officer, stockholder,
employee, agent, independent contractor, or any other person or
entity shall be deemed to be a third-party beneficiary of this
Agreement.
6.11 No Public Announcement. None of the parties to this
Agreement shall, without the approval of each other party, make
any press release or other public announcement concerning the
transactions contemplated by this Agreement without first providing
a copy of such press release or public announcement to the other
parties to this Agreement at least five days prior to release.
Nothing contained herein shall prohibit any party from making any
pubic disclosure or announcement which is required by law.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the date first above written.
The Company:
Xxxxxx-Xxxxx Incorporated
By /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx, President
Holders:
/s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
Address: 000 Xxxxxxxx Xxxxxx
Xxxx Xxxxxxxx, Xxx Xxxx 00000
/s/ Xxxxxx Xxxx
Xxxxxx Xxxx
Address: 000 Xxxxxxxx Xxxxxx
Xxxx Xxxxxxxx, Xxx Xxxx 00000
/s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx
Address: 000 Xxxxxxxx Xxxxxx
Xxxx Xxxxxxxx, Xxx Xxxx 00000
/s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx
Address: 000 Xxxxxxxx Xxxxxx
Xxxx Xxxxxxxx, Xxx Xxxx 00000
/s/ Xxxxx Xxxxxxxxx
Xxxxx Xxxxxxxxx
Address: 000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
/s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
Address: 000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
/s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx
Address: 000 Xxxxxxxx Xxxxxx
Xxxx Xxxxxxxx, Xxx Xxxx 00000
/s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx
Address: 000 Xxxxxxxx Xxxxxx
Xxxx Xxxxxxxx, Xxx Xxxx 00000
