Exhibit 3
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT, dated as of May 8, 2001, between HONG KONG JADE
BIRD SCIENCE AND TECHNOLOGY LIMITED, a company incorporated under the laws of
Hong Kong (the "Purchaser") and each of the sellers listed on Exhibit A
attached hereto (each a "Seller" and, collectively, the "Sellers").
1. Sale of Stock. Subject to the terms and conditions contained herein, on
the Settlement Date (as defined below), each Seller hereby agrees to sell
and deliver to the Purchaser and the Purchaser hereby agrees to purchase
from each Seller the number of shares of Common Stock (the "Common
Shares") of Xxxx.xxx, Inc., a Delaware corporation (the "Company"), set
forth opposite such Seller's name on Exhibit A hereto, at a price equal
to US$1.68 per share of the Company's Common Shares (the "Purchase
Price").
2. Settlement. Subject to satisfaction of the conditions of settlement
specified in Section 3 of this Agreement, settlement of the sale and
purchase under Section 1 of this Agreement (the "Settlement") shall take
place at the offices of Xxxxxxxx & Xxxxxxxx, 21st Floor, Entertainment
Building, 00 Xxxxx'x Xxxx Xxxxxxx, Xxxx Xxxx, at 10:00 a.m. on May 18,
2001, or on such other date, time or place as the Purchaser and the
Sellers may mutually agree (the "Settlement Date"). On the Settlement
Date, each Seller shall cause to be delivered to the Purchaser a
certificate or certificates for the number of Common Shares set forth
opposite such Seller's name on Exhibit A hereto or shall deliver
appropriate instructions for book entry transfer, against delivery by the
Purchaser to such Seller of the Purchase Price for such Common Shares.
The Purchase Price shall be paid by wire transfer of immediately
available funds to such account or accounts as the Seller shall designate
in writing.
3. Conditions of Settlement.
A. The obligation of the Purchaser to purchase and pay for the
Common Shares is subject to satisfaction of the condition that all
representations and covenants of each Seller contained in Section 4
hereof shall be true, correct and satisfied in all respects on and as
of the Settlement Date, with the same force and effect as though such
representations and covenants had been made on and as of the
Settlement Date.
B. The obligation of each of the Sellers to sell and deliver its Common
Shares is subject to the satisfaction of each of the following
conditions: (i) all representations and covenants of the Purchaser
contained in Section 5 hereof shall be true, correct and satisfied in
all respects on and as of the Settlement Date, with the same force and
effect as though such representations and covenants had been made on
and as of the Settlement Date; (ii) the Purchaser shall have delivered
to the Sellers an executed Accredited Investor Certificate in form and
substance substantially as attached hereto as Exhibit B; (iii) the
Purchaser shall have delivered to the Sellers the full aggregate
Purchase Price for the Sellers' Common Shares on the Settlement Date,
in accordance with Section 2 of this Agreement, as consideration for
the Common Shares acquired hereunder; and (iv) the Purchaser shall
have complied with its confidentiality obligations under Section 9 of
this Agreement.
4. Representations and Covenants of Seller. Each of the Sellers represents,
warrants and agrees, severally and not jointly, that:
a) The Seller beneficially owns the Common Shares as set forth
opposite such Seller's name on Exhibit A hereto, free and clear of
all liens, claims, charges and other encumbrances. There are no
restrictions on the Seller's right to transfer such Common Shares
pursuant to this Agreement, except as may be restricted by laws of
general application, including without limitation the Securities Act
of 1933, as amended (the "Act").
b) The Seller has full right, power and authority to enter into
this Agreement and to transfer such Common Shares in accordance with
the terms of this Agreement and this Agreement constitutes a legal,
valid and binding obligation of the Seller.
c) The Seller's execution, delivery and performance of the
Agreement do not violate or conflict with any law applicable to it,
any agreement or instrument to which it is a party, any order or
judgment of any court or other agency of government applicable to it
or any of its assets, or any contractual restriction binding on or
affecting it or any of its assets.
d) The Seller is not an "affiliate" of the Company as such term is
defined in Regulation 230.501(b) under the Act.
5. Representations and Covenants of Purchaser. The Purchaser represents,
warrants and agrees that:
a) The Purchaser is acquiring the Common Shares to be acquired
by it hereunder for its own account and not with a view to the
resale or distribution thereof, and will resell such Common Shares
only in transactions which would be permissible under the securities
laws of the United States of America or any state thereof.
b) The Purchaser is an "accredited investor" as such term is defined in
Regulation 230.501(a) under the Act.
c) The Purchaser is aware that, until the Company is reasonably
satisfied in accordance with industry practice that such legend is
not required, a legend similar to the following may appear on the
certificates representing the Common Shares: "These securities have
not been registered under the Securities Act of 1933 and may be
re-offered and sold only if so registered or if any exemption from
registration is available."
d) The Purchaser is a company duly organized, validly existing
and in good standing under the laws of Hong Kong, where it was
incorporated. The Purchaser has full right, power and authority to
enter into this Agreement, and to purchase the Common Shares from
the Seller on the terms described herein, and this Agreement
constitutes a legal, valid and binding obligation of the Purchaser.
e) The Purchaser's execution, delivery and performance of the
Agreement do not violate or conflict with any law applicable to it,
any agreement or instrument to which it is a party, any order or
judgment of any court or other agency of government applicable to it
or any of its assets, or any contractual restriction binding on or
affecting it or any of its assets.
f) The Purchaser acknowledges and represents that it has made its own
investigation into the merits and risks of entering into the
transaction contemplated by this Agreement and that it has the
capacity and financial experience to evaluate the same. To the
Purchaser's full satisfaction, the Purchaser has received all the
information it considers necessary or appropriate for deciding
whether to acquire the Common Shares and has had an opportunity to
secure all such information as it deems necessary regarding the
business, properties, prospects and financial condition of the
Company. Except as provided in this Agreement, no additional
representations or warranties have been made to the Purchaser by the
Seller.
g) The Purchaser understands that the Common Shares have not been
registered under the Act, nor qualified under any state securities
laws, and that they are being offered and sold pursuant to an
exemption from such registration and qualification based in part upon
the representations and covenants of the Purchaser contained herein.
The Purchaser understands that the Common Shares being purchased
hereunder are restricted securities within the meaning of Rule 144
under the Act and that the Common Shares are not registered and must
be held indefinitely unless they are subsequently registered or an
exemption from such registration is available. The Purchaser has
determined that the Common Shares are a suitable investment for the
Purchaser and that the Purchaser is able at this time, and in the
foreseeable future, to bear the full economic risk thereof.
6. Law Governing. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without reference to
choice of law doctrine.
7. Parties in Interest. All the terms and provisions of this Agreement shall
be binding upon and inure to the benefit of and be enforceable by the
respective heirs, representatives, successors, and assigns of the parties
hereto.
8. Investor Rights Agreement. Subject to the completion of the
Settlement, each of the Sellers transfers its rights to the Purchaser
pursuant to Section 4(1)(b) of the Xxxx.xxx, Inc. Third Amended and
Restated Investor Rights Agreement dated February 1, 2000, as amended
(the "Investor Rights Agreement") to the extent permitted and subject to
all the terms and conditions contained in the Investor Rights Agreement.
The Purchaser acknowledges that it will be subject to the terms and
conditions contained therein.
9. Publicity and Confidentiality. Based upon the advice of counsel, each of
the parties agrees that, under existing circumstances, it will not and
does not need to make any disclosure to any third party or to the public
of this Agreement, its terms or the transactions contemplated hereby
prior to the Settlement Date. Each of the parties agrees that it will
not, directly or indirectly, in any manner whatsoever, disclose to any
person, corporation, partnership or other entity any information
regarding this Agreement, its terms and the transactions contemplated
hereby, until the parties mutually agree upon the language and timing of
a press release or until such time as one such party determines, based
upon the advice of counsel, that a public announcement is required by
law, in which case the parties hereto shall in good faith attempt to
agree on any public announcements or publicity statements with respect
thereto.
10. Miscellaneous. This Agreement may be executed concurrently in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Each counterpart
may be delivered by facsimile transmission, which transmission shall be
deemed delivery of an originally executed document. The headings of the
Sections hereof are inserted for convenience only and shall not be deemed
to constitute a part hereof. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof
and supersedes all the previous agreements, promise or representations,
whether written or oral, between the parties.
11. Fees and Expenses. Each of the Purchaser and the Seller agrees to pay its
own expenses and disbursements incident to the performance of its
obligations hereunder.
12. Amendment and Waiver. This Agreement may be amended only by a
written agreement executed by each of the parties hereto. No amendment of
or waiver of, or modification of any obligation under this Agreement will
be enforceable unless set forth in a writing signed by the party against
which enforcement is sought. Any amendment effected in accordance with
this section will be binding upon all parties hereto and each of their
respective successors and assigns. No delay or failure to require
performance of any provision of this Agreement shall constitute a waiver
of that provision as to that or any other instance. No waiver granted
under this Agreement as to any one provision herein shall constitute a
subsequent waiver of such provision or of any other provision herein, nor
shall it constitute the waiver of any performance other than the actual
performance specifically waived.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
THE PURCHASER:
HONG KONG JADE BIRD SCIENCE AND TECHNOLOGY LIMITED
By:
----------------------------------------
Name:
Title:
THE SELLERS:
THE XXXXXXX XXXXX GROUP INC.
By:
----------------------------------------
Name:
Title:
XXXXX XXXXXX XXXX 0000, X.X.
by Stone Street 2000, L.L.C., its General Partner
By:
----------------------------------------
Name:
Title:
XXXXXX XXXXXX XXXXXXX XXXXXXXXXXXXX XXXX 0000, L.P.
by Bridge Street Special Opportunities 2000, L.L.C., its General Partner
By:
----------------------------------------
Name:
Title:
JOHO FUND LTD.
By:
----------------------------------------
Name:
Title:
JOHO PARTNERS L.P.
By:
----------------------------------------
Name:
Title:
AURORA INVESTMENTS II L.L.C.
By:
----------------------------------------
Name:
Title:
[SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]
EXHIBIT A
LIST OF SELLERS
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Number of Purchase
Name of Seller Common Shares Consideration (US$)
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The Xxxxxxx Xxxxx Group Inc. 1,201,568 $2,018,634.24
Xxxxx Xxxxxx Xxxx 0000, X.X. 89,782 $150,833.76
Bridge Street Special Opportunities Fund 89,782 $150,833.76
2000, L.P.
Joho Fund Ltd. 455,929 $765,960.72
Joho Partners L.P. 113,982 $191,489.76
Aurora Investments II L.L.C. 347,602 $583,971.36
TOTAL 2,298,645 $3,861,723.60
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EXHIBIT B
Form of Accredited Investor Certificate
ACCREDITED INVESTOR CERTIFICATE
The undersigned Investor hereby certifies that he is an Accredited Investor as
that term is defined in Regulation D adopted pursuant to the Securities Act of
1933 (the "Act"). The specific category(s) of Accredited Investor applicable
to the undersigned is checked below.
_____ a. an individual whose individual net worth, or joint net worth with
that individual's spouse, exceeds $1,000,000 (including the value of
homes, home furnishings and personal automobiles);
_____ b. an individual who had an individual income in excess of $200,000
in 1999 and 2000 or joint income with that person's spouse in excess
of $300,000 in each of those years and who reasonably expects to
reach the same income level in 2001. For purposes of this offering,
individual income shall equal adjusted gross income, as reported in
the investor's federal income tax return, less any income
attributable to a spouse or to property owned by the spouse, and as
may be further adjusted in accordance with the rules, regulations,
and releases of the Commission;
_____ c. a bank as defined in Section 3(a)(2) of the Act, or a savings and
loan association or other institution as defined in Section
3(a)(5)(A) of the Act, whether acting in its individual or fiduciary
capacity; an insurance company as defined in Section 2(13) of the
Act; an investment company registered under the Investment Company
Act of 1940 (the "1940 Act") or a business development company as
defined in Section 2(a)(48) of the 1940 Act; a Small Business
Investment Company licensed by the U.S. Small Business Administration
under Section 301(c) or (d) of the Small Business Investment Act of
1958; or an employee benefit plan within the meaning of Title I of
the Employee Retirement Income Security Act of 1974 ("ERISA"), if the
investment decision is made by a plan fiduciary, as defined in
Section 3(21) of ERISA, which is either a bank, savings and loan
association, insurance company or registered investment adviser, or
if the employee benefit plan has total assets in excess of $5,000,000
or if a self-directed plan, with investment decisions made solely by
persons that are accredited investors;
_____ d. a private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
_____ e. an organization described in Section 501(c)(3) of the Internal
Revenue Code, corporation, Massachusetts or similar business trust,
or partnership, not formed for the specific purpose of acquiring the
Shares, with total assets in excess of $5,000,000;
_____ f. an individual who is a director or executive officer of the
Company; or
_____ g. an entity in which all of the equity owners are accredited
investors as set forth above.
IN WITNESS WHEREOF, the undersigned has executed this Accredited
Investor Certificate this ___ day of May, 2001.
HONG KONG JADE BIRD SCIENCE AND
TECHNOLOGY LIMITED
By: ___________________________________
Name: ________________________________
Title: _______________________________
