Exhibit 10.1
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STOCK PURCHASE AGREEMENT
BETWEEN
CIRILIUM HOLDINGS, INC.
AND
▇▇▇▇▇▇▇ PARK INVESTMENTS PLC
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JULY 29TH, 2004
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TABLE OF CONTENTS
ARTICLE I CERTAIN DEFINITIONS.............................................................................1
1.1 Certain Definitions.............................................................................1
ARTICLE II PURCHASE AND SALE OF SHARES.....................................................................4
2.1 Purchase and Sale; Purchase Price...............................................................4
2.2 Execution and Delivery of Documents; The Closing................................................5
ARTICLE III REPRESENTATIONS AND WARRANTIES..................................................................5
3.1 Representations, Warranties and Agreements of the Target Company................................5
3.2 Representations and Warranties of ▇▇▇▇▇▇▇.......................................................8
ARTICLE IV OTHER AGREEMENTS OF THE PARTIES................................................................11
4.1 Manner of Offering.............................................................................11
4.2 Notice of Certain Events.......................................................................12
4.3 Blue Sky Laws..................................................................................12
4.4 Integration....................................................................................12
4.5 Furnishing of Rule 144(c) Materials............................................................12
4.6 Solicitation Materials.........................................................................12
4.7 Listing of Common Stock........................................................................13
4.8 Indemnification................................................................................13
4.9 Sale of ▇▇▇▇▇▇▇ Shares.........................................................................15
4.10 Lock Up by ▇▇▇▇▇▇▇.............................................................................15
4.11 London Stock Exchange..........................................................................15
ARTICLE V MISCELLANEOUS..................................................................................15
5.1 Fees and Expenses..............................................................................15
5.2 Entire Agreement...............................................................................15
5.3 Notices........................................................................................15
5.4 Amendments; Waivers............................................................................16
5.5 Headings.......................................................................................16
5.6 Successors and Assigns.........................................................................16
5.7 No Third Party Beneficiaries...................................................................17
5.8 Governing Law; Venue; Service of Process.......................................................17
5.9 Survival.......................................................................................17
5.10 Counterpart Signatures.........................................................................17
5.11 Publicity......................................................................................17
5.12 Severability...................................................................................17
5.13 Limitation of Remedies.........................................................................17
II
LIST OF SCHEDULES:
Schedule 3.1(a) Subsidiaries
Schedule 3.1(c) Capitalization and Registration Rights
Schedule 3.1(d) Equity and Equity Equivalent Securities
Schedule 3.1(e) Conflicts
Schedule 3.1(f) Consents and Approvals
Schedule 3.1(g) Litigation
Schedule 3.1(h) Defaults and Violations
LIST OF EXHIBITS:
Exhibit A Escrow Agreement
Exhibit B Officer's Certificate
III
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of July 29th, 2004, between Cirilium Holdings, Inc., a corporation
organized and existing under the laws of the State of Delaware (the "Target
Company"), and ▇▇▇▇▇▇▇ Park Investments PLC, a corporation organized under the
laws of England and Wales with its offices at ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ( "▇▇▇▇▇▇▇").
WHEREAS, subject to the terms and conditions set forth in this
Agreement, the Target Company desires to issue and sell to ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
desires to acquire from the Target Company the shares of the Target Company's
common stock, par value $.001 (the "Common Stock") for the Total Purchase Price
set forth in Section 2.1(b) below. The consideration to be paid by ▇▇▇▇▇▇▇ for
the Common Stock shall be subject to certain downside price protection (the
"Downside Price Protection") provided in Section 2 of the Escrow Agreement.
IN CONSIDERATION of the mutual covenants contained in this Agreement,
the Target Company and ▇▇▇▇▇▇▇ agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 Certain Definitions. As used in this Agreement, and unless the
context requires a different meaning, the following terms have the meanings
indicated:
"Affiliate" means, with respect to any Person, any Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlled by" and "under common control
with") shall mean the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities or by contract or otherwise.
"Agreement" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"Business Day" means any day except Saturday, Sunday, any day which
shall be a legal holiday or a day on which banking institutions in the State of
New York are authorized or required by law or other government actions to close.
"Closing" shall have the meaning set forth in Section 2.2(a) hereof.
"Closing Bid Price" shall mean the closing bid price for a share of
Common Stock on such date on the OTCBB (or such other exchange, market, or other
system that the Common Stock is then traded on), as reported on Bloomberg, L.P.
(or similar organization or agency succeeding to its functions of reporting
prices).
"Closing Date" shall have the meaning set forth in Section 2.2(a)
hereof.
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"Closing Price" shall be the Closing Bid Price of the Common Stock on
the day of Closing.
"Common Stock" shall have the meaning in the recital.
"Consideration Stock" shall have the meaning set forth in Section
2.1(a) hereof.
"Control Person" shall have the meaning set forth in Section 4.8(a)
hereof.
"Disclosure Documents" means the Target Company's reports filed under
the Exchange Act with the SEC.
"Downside Price Protection" shall have the meaning in the recital.
"Escrow Agent" means Gottbetter & Partners, LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇; Tel: ▇▇▇-▇▇▇-▇▇▇▇; Fax: ▇▇▇-▇▇▇-▇▇▇▇.
"Escrow Agreement" means the escrow agreement, dated the date hereof,
by and among the Target Company, ▇▇▇▇▇▇▇ and the Escrow Agent annexed hereto as
EXHIBIT A.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"G&P" means Gottbetter & Partners, LLP.
"Indemnified Party" shall have the meaning set forth in Section 4.8(b)
hereof.
"Indemnifying Party" shall have the meaning set forth in Section 4.8(b)
hereof.
"▇▇▇▇▇▇▇" shall have the meaning in the introductory paragraph.
"▇▇▇▇▇▇▇ Consideration Shares" shall have the meaning in Section 2.1(c)
hereof.
"▇▇▇▇▇▇▇ Escrow Shares" means the ▇▇▇▇▇▇▇ Consideration Shares
deposited into escrow by the Target Company under the terms of the Escrow
Agreement in EXHIBIT A.
"▇▇▇▇▇▇▇ Protection Shares" means the ▇▇▇▇▇▇▇ Escrow Shares that the
Target Company is required to sell to ▇▇▇▇▇▇▇ under the terms of the Escrow
Agreement in EXHIBIT A.
"▇▇▇▇▇▇▇ Shares" shall mean ordinary shares of 1.0p each in ▇▇▇▇▇▇▇.
"Losses" shall have the meaning set forth in Section 4.8(a) hereof.
"Material" shall mean having a financial consequence in excess of
$25,000.
"Material Adverse Effect" shall have the meaning set forth in Section
3.1(a) hereof.
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"NASD" means the National Association of Securities Dealers, Inc.
"Nasdaq" shall mean the Nasdaq Stock Market, Inc.(R)
"OTCBB" shall mean the NASD over-the counter Bulletin Board(R).
"Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"Private Placement Memorandum" shall have the meaning set forth in
Section 3.1(l) hereof.
"Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiaries" shall have the meaning set forth in Section 3.1(a)
hereof.
"Target Company" shall have the meaning set forth in the introductory
paragraph.
"Total Purchase Price" shall have the meaning set forth in Section
2.1(b).
"Trading Day" means (a) a day on which the Common Stock is quoted on
Nasdaq, the OTCBB or the principal stock exchange on which the Common Stock has
been listed, or (b) if the Common Stock is not quoted on Nasdaq, the OTCBB or
any stock exchange, a day on which the Common Stock is quoted in the
over-the-counter market, as reported by the Pinksheets LLC (or any similar
organization or agency succeeding its functions of reporting prices).
"Transaction Documents" means this Agreement and all exhibits and
schedules hereto and all other documents, instruments and writings required
pursuant to this Agreement.
"U.S." means the United States.
ARTICLE II
PURCHASE AND SALE OF SHARES
2.1 Purchase and Sale; Purchase Price.
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(a) Subject to the terms and conditions set forth herein, the
Target Company shall issue and sell and ▇▇▇▇▇▇▇ shall purchase Eight
Million (8,000,000) shares of the Target Company's Common Stock (the
"Consideration Stock").
(b) The total purchase price (the "Total Purchase Price")
shall be the number of shares of Consideration Stock multiplied by a
Price per share of Common Stock at seventy cents ($0.70).
(c) The Total Purchase Price shall be paid by delivery to the
Target Company of the number of ▇▇▇▇▇▇▇ Shares (the "▇▇▇▇▇▇▇
Consideration Shares") equal to the Total Purchase Price divided by the
conversion rate of the British Pound Sterling to purchase US Dollars as
determined below on the July 30, 2004. The ▇▇▇▇▇▇▇ Shares shall have a
value of (pound)1 per share. The number of ▇▇▇▇▇▇▇ Shares to be issued
will be based on the conversion rate of the British Pound Sterling to
the US Dollar in effect as of the close of business on the day
preceding the Closing Date, as quoted by ▇▇▇▇▇▇ & Co. as the commercial
rate it gives to purchase US Dollars. For example, if the effective
conversion rate is $1.80/(pound) 1 and the Total Purchase Price is
$8,000,000, then the number of ▇▇▇▇▇▇▇ Shares the Target Company will
receive shall equal the $8,000,000/$1.80, or 4,444,444 ▇▇▇▇▇▇▇ Shares.
The ▇▇▇▇▇▇▇ Consideration Shares shall be subject to the "Downside
Price Protection" provided in Section 2 of the Escrow Agreement.
2.2 Execution and Delivery of Documents; The Closing.
(a) The Closing of the purchase and sale of the shares of
Consideration Stock (the "Closing") shall take place by August 20, 2004
(the "Closing Date"). On the Closing Date,
(i) the Target Company shall execute and deliver to the Escrow
Agent certificates in the name of ▇▇▇▇▇▇▇ representing the shares of
Consideration Stock;
(ii) the Target Company shall execute and deliver to ▇▇▇▇▇▇▇ a
certificate of its President, in the form of EXHIBIT B annexed hereto,
certifying that attached thereto is a copy of resolutions duly adopted
by the Board of Directors of the Target Company authorizing the Target
Company to execute and deliver the Transaction Documents and to enter
into the transactions contemplated thereby;
(iii) the Target Company, ▇▇▇▇▇▇▇ and the Escrow Agent shall
execute and deliver to each other the Escrow Agreement;
(iv) ▇▇▇▇▇▇▇ shall execute and deliver to the Escrow Agent
certificates in the name of the Target Company representing the ▇▇▇▇▇▇▇
Consideration Shares to the Escrow Agent; and
(v) the Target Company shall wire the monies owed to G&P
pursuant to Section 5.1 hereof for legal fees with the following wire
instructions:
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Citibank, N.A.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇
ABA Routing No.: ▇▇▇▇▇▇▇▇▇
Account Name: Gottbetter & Partners, LLP
Account No. ▇▇▇▇▇▇▇▇
Reference: Cirilium Holdings, Inc.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations, Warranties and Agreements of the Target Company.
The Target Company hereby makes the following representations and warranties to
▇▇▇▇▇▇▇, all of which shall survive the Closing:
(a) Organization and Qualification. The Target Company is a
corporation, duly incorporated, validly existing and in good standing
under the laws of the jurisdiction of its formation, with the requisite
corporate power and authority to own and use its properties and assets
and to carry on its business as currently conducted. The Target Company
has no subsidiaries other than as set forth on SCHEDULE 3.1(A) attached
hereto (collectively, the "Subsidiaries"). Each of the Subsidiaries is
a corporation, duly incorporated, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, with the full
corporate power and authority to own and use its properties and assets
and to carry on its business as currently conducted. Each of the Target
Company and the Subsidiaries is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction in which
the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or
in good standing, as the case may be, would not, individually or in the
aggregate, have a material adverse effect on the results of operations,
assets, prospects, or financial condition of the Target Company and the
Subsidiaries, taken as a whole (a "Material Adverse Effect").
(b) Authorization, Enforcement. The Target Company has the
requisite corporate power and authority to enter into and to consummate
the transactions contemplated hereby and by each other Transaction
Document and to otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement and each of
the other Transaction Documents by the Target Company and the
consummation by it of the transactions contemplated hereby and thereby
has been duly authorized by all necessary action on the part of the
Target Company. Each of this Agreement and each of the other
Transaction Documents has been or will be duly executed by the Target
Company and when delivered in accordance with the terms hereof or
thereof will constitute the valid and binding obligation of the Target
Company enforceable against the Target Company in accordance with its
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of,
creditors' rights and remedies or by other equitable principles of
general application.
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(c) Capitalization. The authorized, issued and outstanding
capital stock of the Company is set forth on SCHEDULE 3.1(C). No shares
of Common Stock are entitled to preemptive or similar rights, nor is
any holder of the Common Stock entitled to preemptive or similar rights
arising out of any agreement or understanding with the Target Company
by virtue of this Agreement. Except as disclosed in SCHEDULE 3.1(C),
there are no outstanding options, warrants, script, rights to subscribe
to, registration rights, calls or commitments of any character
whatsoever relating to securities, rights or obligations convertible
into or exchangeable for, or giving any person any right to subscribe
for or acquire, any shares of Common Stock, or contracts, commitments,
understandings, or arrangements by which the Target Company or any
Subsidiary is or may become bound to issue additional shares of Common
Stock, or securities or rights convertible or exchangeable into shares
of Common Stock. Neither the Target Company nor any Subsidiary is in
violation of any of the provisions of its Certificate of Incorporation,
bylaws or other charter documents.
(d) Issuance of Securities. The shares of Consideration Stock
have been duly and validly authorized for issuance, offer and sale
pursuant to this Agreement and, when issued and delivered as provided
hereunder against payment in accordance with the terms hereof, shall be
valid and binding obligations of the Target Company enforceable in
accordance with their respective terms.
(e) No Conflicts. The execution, delivery and performance of
this Agreement and the other Transaction Documents by the Target
Company and the consummation by the Target Company of the transactions
contemplated hereby and thereby do not and will not (i) conflict with
or violate any provision of its Certificate of Incorporation or bylaws
(each as amended through the date hereof) or (ii) be subject to
obtaining any consents except those referred to in Section 3.1(f),
conflict with, or constitute a default (or an event which with notice
or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the
Target Company is a party, or (iii) result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the Target
Company or its Subsidiaries is subject (including, but not limited to,
those of other countries and the federal and state securities laws and
regulations), or by which any property or asset of the Target Company
or its Subsidiaries is bound or affected, except in the case of clause
(ii), such conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations as would not, individually
or in the aggregate, have a Material Adverse Effect. The business of
the Target Company and its Subsidiaries is not being conducted in
violation of any law, ordinance or regulation of any governmental
authority.
(f) Consents and Approvals. Except as specifically set forth
in SCHEDULE 3.1(F), neither the Target Company nor any Subsidiary is
required to obtain any consent, waiver, authorization or order of, or
make any filing or registration with, any court or other federal,
state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the Target
Company of this Agreement and each of the other Transaction Documents.
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(g) Litigation; Proceedings. Except as specifically disclosed
in SCHEDULE 3.1(G), there is no Proceeding threatened against or
affecting the Target Company or any of its Subsidiaries or any of their
respective properties before or by any court, governmental or
administrative agency or regulatory authority (federal, state, county,
local or foreign) which (i) relates to or challenges the legality,
validity or enforceability of any of the Transaction Documents or the
shares of Consideration Stock, (ii) could, individually or in the
aggregate, have a Material Adverse Effect or (iii) could, individually
or in the aggregate, materially impair the ability of the Target
Company to perform fully on a timely basis its obligations under the
Transaction Documents.
(h) No Default or Violation. Except as set forth in SCHEDULE
3.1(H) hereto, neither the Target Company nor any Subsidiary (i) is in
default under or in violation of any indenture, loan or credit
agreement or any other agreement or instrument to which it is a party
or by which it or any of its properties is bound, except such conflicts
or defaults as do not have a Material Adverse Effect, (ii) is in
violation of any order of any court, arbitrator or governmental body,
except for such violations as do not have a Material Adverse Effect, or
(iii) is in violation of any statute, rule or regulation of any
governmental authority which could (individually or in the aggregate)
(a) adversely affect the legality, validity or enforceability of this
Agreement, (b) have a Material Adverse Effect or (c) adversely impair
the Target Company's ability or obligation to perform fully on a timely
basis its obligations under this Agreement.
(i) Disclosure Documents. The Disclosure Documents are
accurate in all material respects and do not contain any untrue
statement of material fact or omit to state any material fact necessary
in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
(j) Non-Registered Offering. Neither the Target Company nor
any Person acting on its behalf has taken or will take any action
(including, without limitation, any offering of any securities of the
Target Company under circumstances which would require the integration
of such offering with the offering of the Consideration Stock under the
Securities Act) which might subject the offering, issuance or sale of
the Consideration Stock to the registration requirements of Section 5
of the Securities Act.
(k) Placing Agent. The Target Company accepts and agrees that
Dungarvon Associates, Inc. ("Dungarvon") is acting for ▇▇▇▇▇▇▇ and does
not regard any person other than ▇▇▇▇▇▇▇ as its customer in relation to
this Agreement, and that it has not made any recommendation to the
Target Company, in relation to this Agreement and is not advising the
Target Company, with regard to the suitability or merits of the ▇▇▇▇▇▇▇
Shares and in particular Dungarvon has no duties or responsibilities to
the Target Company for the best execution of the transaction
contemplated by this Agreement.
(l) Private Placement Representations. The Target Company (i)
has received and carefully reviewed such information and documentation
relating to ▇▇▇▇▇▇▇ that the Target Company has requested, including,
without limitation, ▇▇▇▇▇▇▇'▇ Confidential Private Offering Memorandum,
dated June 17, 2004 (the "Private Placement Memorandum"); (ii) has had
a reasonable opportunity to ask questions of and receive answers from
▇▇▇▇▇▇▇ concerning the ▇▇▇▇▇▇▇ Shares, and all such questions, if any,
have been answered to the full satisfaction of the Target Company;
(iii) has such knowledge and expertise in financial and business
matters that it is capable of evaluating the merits and risks involved
in an investment in the ▇▇▇▇▇▇▇ Shares; (iii) understands that ▇▇▇▇▇▇▇
has determined that the exemption from the registration provisions of
the Securities Act, provided by Section 4(2) of the Securities Act is
applicable to the offer and sale of the ▇▇▇▇▇▇▇ Shares, based, in part,
upon the representations, warranties and agreements made by the Target
Company herein; and (iv) except as provided herein and in the Private
Placement Memorandum, no representations or warranties have been made
to the Target Company by ▇▇▇▇▇▇▇ or any agent, employee or affiliate of
▇▇▇▇▇▇▇ and in entering into this transaction the Target Company is not
relying upon any information, other than the results of independent
investigation by the Target Company.
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▇▇▇▇▇▇▇ acknowledges and agrees that the Target Company makes no representation
or warranty with respect to the transactions contemplated hereby other than
those specifically set forth in Section 3.1 hereof.
3.2 Representations and Warranties of ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ hereby makes the
following representations and warranties to the Target Company, all of which
shall survive the Closing:
(a) Organization; Authority. ▇▇▇▇▇▇▇ is a corporation, duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation with the requisite power and authority to
enter into and to consummate the transactions contemplated hereby and
by the other Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder. The acquisition of the shares of
Consideration Stock to be purchased by ▇▇▇▇▇▇▇ hereunder has been duly
authorized by all necessary action on the part of ▇▇▇▇▇▇▇. This
Agreement has been duly executed and delivered by ▇▇▇▇▇▇▇ and
constitutes the valid and legally binding obligation of ▇▇▇▇▇▇▇,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to, or affecting
generally the enforcement of, creditors rights and remedies or by other
general principles of equity.
(b) Investment Intent. ▇▇▇▇▇▇▇ is acquiring the shares of
Consideration Stock to be purchased by it hereunder, for its own
account for investment purposes only and not with a view to or for
distributing or reselling such shares of Consideration Stock, or any
part thereof or interest therein, without prejudice, however, to
▇▇▇▇▇▇▇'▇ right, subject to the provisions of this Agreement, at all
times to sell or otherwise dispose of all or any part of such shares of
Consideration Stock in compliance with applicable federal and state
securities laws.
(c) Experience of ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇, either alone or together
with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of
evaluating the merits and risks of an investment in the shares of
Consideration Stock to be acquired by it hereunder, and has so
evaluated the merits and risks of such investment.
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(d) Ability of ▇▇▇▇▇▇▇ to Bear Risk of Investment. ▇▇▇▇▇▇▇ is
able to bear the economic risk of an investment in the Consideration
Stock to be acquired by it hereunder and, at the present time, is able
to afford a complete loss of such investment.
(e) Access to Information. ▇▇▇▇▇▇▇ acknowledges that it has
been afforded (i) the opportunity to ask such questions as it has
deemed necessary of, and to receive answers from, representatives of
the Target Company concerning the terms and conditions of the
Consideration Stock offered hereunder and the merits and risks of
investing in such securities; (ii) access to information about the
Target Company and the Target Company's financial condition, results of
operations, business, properties, management and prospects sufficient
to enable it to evaluate its investment in the Consideration Stock; and
(iii) the opportunity to obtain such additional information which the
Target Company possesses or can acquire without unreasonable effort or
expense that is necessary to make an informed investment decision with
respect to the investment and to verify the accuracy and completeness
of the information that it has received about the Target Company.
(f) Reliance. ▇▇▇▇▇▇▇ understands and acknowledges that (i)
the shares of Consideration Stock being offered and sold to it
hereunder are being offered and sold without registration under the
Securities Act in a private placement that is exempt from the
registration provisions of the Securities Act under Section 4(2) of the
Securities Act and (ii) the availability of such exemption depends in
part on, and that the Target Company will rely upon the accuracy and
truthfulness of, the foregoing representations and ▇▇▇▇▇▇▇ hereby
consents to such reliance.
(g) Regulation ▇. ▇▇▇▇▇▇▇ understands and acknowledges that
(A) the shares of Consideration Stock have not been registered under
the Securities Act, are being sold in reliance upon an exemption from
registration afforded by Regulation S; and that such shares of
Consideration Stock have not been registered with any state securities
commission or authority; (B) pursuant to the requirements of Regulation
S, the shares of Consideration Stock may not be transferred, sold or
otherwise exchanged unless in compliance with the provisions of
Regulation S and/or pursuant to registration under the Securities Act,
or pursuant to an available exemption hereunder; and (C) the Target
Company is under no obligation to register the shares of Consideration
Stock under the Securities Act or any state securities law, or to take
any action to make any exemption from any such registration provisions
available.
▇▇▇▇▇▇▇ is not a U.S. Person and is not acquiring the shares of
Consideration Stock for the account of any U.S. Person; (B) no director or
executive officer of ▇▇▇▇▇▇▇ is a national or citizen of the United States; and
(C) it is not otherwise deemed to be a "U.S. Person" within the meaning of
Regulation ▇.
▇▇▇▇▇▇▇ was not formed specifically for the purpose of acquiring the
shares of Consideration Stock purchased pursuant to this Agreement.
▇▇▇▇▇▇▇ is purchasing the shares of Consideration Stock for its own
account and risk and not for the account or benefit of a U.S. Person as defined
in Regulation S and no other person has any interest in or participation in the
shares of Consideration Stock or any right, option, security interest, pledge or
other interest in or to the shares of Consideration Stock. ▇▇▇▇▇▇▇ understands,
acknowledges and agrees that it must bear the economic risk of its investment in
the shares of Consideration Stock for an indefinite period of time and that
prior to any such offer or sale, the Target Company may require, as a condition
to effecting a transfer of the shares of Consideration Stock, an opinion of
counsel, acceptable to the Target Company, as to the registration or exemption
therefrom under the Securities Act and any state securities acts, if applicable.
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▇▇▇▇▇▇▇ will, after the expiration of the Restricted Period, as set
forth under Regulation S Rule 903(b)(3)(iii)(A), offer, sell, pledge or
otherwise transfer the shares of Consideration Stock only in accordance with
Regulation S, or pursuant to an available exemption under the Securities Act
and, in any case, in accordance with applicable state securities laws. The
transactions contemplated by this Agreement have neither been pre-arranged with
a purchaser who is in the U.S. or who is a U.S. Person, nor are they part of a
plan or scheme to evade the registration provisions of the United States federal
securities laws.
The offer leading to the sale evidenced hereby was made in an "offshore
transaction." For purposes of Regulation S, ▇▇▇▇▇▇▇ understands that an
"offshore transaction" as defined under Regulation S is any offer or sale not
made to a person in the United States and either (A) at the time the buy order
is originated, the purchaser is outside the United States, or the seller or any
person acting on his behalf reasonably believes that the purchaser is outside
the United States; or (B) for purposes of (1) Rule 903 of Regulation S, the
transaction is executed in, or on or through a physical trading floor of an
established foreign exchange that is located outside the United States or (2)
Rule 904 of Regulation S, the transaction is executed in, on or through the
facilities of a designated offshore securities market, and neither the seller
nor any person acting on its behalf knows that the transaction has been
prearranged with a buyer in the U.S.
Neither ▇▇▇▇▇▇▇ nor any affiliate or any Person acting on ▇▇▇▇▇▇▇'▇
behalf, has made or is aware of any "directed selling efforts" in the United
States, which is defined in Regulation S to be any activity undertaken for the
purpose of, or that could reasonably be expected to have the effect of,
conditioning the market in the United States for any of the shares of
Consideration Stock being purchased hereby.
▇▇▇▇▇▇▇ understands that the Target Company is the seller of the shares
of Consideration Stock which are the subject of this Agreement, and that, for
purpose of Regulation S, a "distributor" is any underwriter, dealer or other
person who participates, pursuant to a contractual arrangement, in the
distribution of securities offered or sold in reliance on Regulation S and that
an "affiliate" is any partner, officer, director or any person directly or
indirectly controlling, controlled by or under common control with any person in
question. ▇▇▇▇▇▇▇ agrees that ▇▇▇▇▇▇▇ will not, during the Restricted Period set
forth under Rule 903(b)(iii)(A), act as a distributor, either directly or though
any affiliate, nor shall it sell, transfer, hypothecate or otherwise convey the
shares of Consideration Stock other than to a non-U.S. Person.
▇▇▇▇▇▇▇ acknowledges that the shares of Consideration Stock will bear a
legend in substantially the following form:
10
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN OFFERED AND SOLD IN AN
"OFFSHORE TRANSACTION" IN RELIANCE UPON REGULATION S AS PROMULGATED BY THE
SECURITIES AND EXCHANGE COMMISSION. ACCORDINGLY, THE SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT") AND MAY NOT BE TRANSFERRED OTHER THAN IN ACCORDANCE WITH
REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, THE
AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE CANNOT BE THE SUBJECT OF HEDGING
TRANSACTIONS UNLESS SUCH TRANSACTIONS ARE CONDUCTED IN COMPLIANCE WITH THE
SECURITIES ACT.
THE SALE OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS RESTRICTED PURSUANT TO
THE TERMS OF A STOCK PURCHASE AGREEMENT, DATED JULY __, 2004, BETWEEN THE
COMPANY AND ▇▇▇▇▇▇▇ PARK INVESTMENTS PLC, A COPY OF WHICH IS AVAILABLE UPON
REQUEST.
The Target Company acknowledges and agrees that ▇▇▇▇▇▇▇ makes no representations
or warranties with respect to the transactions contemplated hereby other than
those specifically set forth in this Section 3.2.
ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
4.1 Manner of Offering. The Consideration Stock are being issued
pursuant to section 4(2) of the Securities Act and Regulation S thereunder. The
▇▇▇▇▇▇▇ Consideration Shares are being issued pursuant to section 4(2) of the
Securities Act.
4.2 Notice of Certain Events. The Target Company shall, on a continuing
basis, (i) advise ▇▇▇▇▇▇▇ promptly after obtaining knowledge of, and, if
requested by ▇▇▇▇▇▇▇, confirm such advice in writing, of (A) the issuance by any
state securities commission of any stop order suspending the qualification or
exemption from qualification of the shares of Consideration Stock, for offering
or sale in any jurisdiction, or the initiation of any proceeding for such
purpose by any state securities commission or other regulatory authority, or (B)
any event that makes any statement of a material fact made by the Target Company
in Section 3.1 or in the Disclosure Documents untrue or that requires the making
of any additions to or changes in Section 3.1 or in the Disclosure Documents in
order to make the statements therein, in the light of the circumstances under
which they are made, not misleading, (ii) use its best efforts to prevent the
issuance of any stop order or order suspending the qualification or exemption
from qualification of the Consideration Stock under any state securities or Blue
Sky laws, and (iii) if at any time any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Consideration Stock under any such laws, and
use its best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
11
4.3 Blue Sky Laws. The Target Company agrees that it will execute all
necessary documents and pay all necessary state filing or notice fees to enable
the Target Company to sell the Consideration Stock to ▇▇▇▇▇▇▇.
4.4 Integration. The Target Company shall not and shall use its best
efforts to ensure that no Affiliate shall sell, offer for sale or solicit offers
to buy or otherwise negotiate in respect of any security (as defined in Section
2 of the Securities Act) that would be integrated with the offer or sale of the
Consideration Stock in a manner that would require the registration under the
Securities Act of the sale of the Consideration Stock to ▇▇▇▇▇▇▇.
4.5 Furnishing of Rule 144(c) Materials. The Target Company shall, for
so long as any of the Consideration Stock remain outstanding and during any
period in which the Target Company is not subject to Section 13 or 15(d) of the
Exchange Act, make available to any registered holder of the Consideration Stock
in connection with any sale thereof and any prospective purchaser of such
Consideration Stock from such Person, such information in accordance with Rule
144(c) promulgated under the Securities Act as is required to sell the
Consideration Stock under Rule 144 promulgated under the Securities Act.
4.6 Solicitation Materials. The Target Company shall not (i) distribute
any offering materials in connection with the offering and sale of the shares of
Consideration Stock other than the Disclosure Documents and any amendments and
supplements thereto prepared in compliance herewith or (ii) solicit any offer to
buy or sell the shares of Consideration Stock by means of any form of general
solicitation or advertising.
4.7 Listing of Common Stock. If the Common Stock is or shall become
listed on the OTCBB or on another exchange, the Target Company shall (a) use its
best efforts to maintain the listing of its Common Stock on the OTCBB or such
other exchange on which the Common Stock is then listed until two years from the
date hereof, and (b) shall provide to ▇▇▇▇▇▇▇ evidence of such listing.
4.8 Indemnification.
(a) Indemnification.
(i) The Target Company shall, notwithstanding termination of
this Agreement and for a period of six (6) years, indemnify and hold
harmless ▇▇▇▇▇▇▇ and its officers, directors, agents, employees and
Affiliates, each Person who controls or ▇▇▇▇▇▇▇ (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act)
(each such Person, a "Control Person") and the officers, directors,
agents, employees and Affiliates of each such Control Person, to the
fullest extent permitted by applicable law, from and against any and
all losses, claims, damages, liabilities, costs (including, without
limitation, costs of preparation and attorneys' fees) and expenses
(collectively, "Losses"), as incurred, arising out of, or relating to,
a breach or breaches of any representation, warranty, covenant or
agreement by the Target Company under this Agreement or any other
Transaction Document.
12
(ii) ▇▇▇▇▇▇▇ shall, notwithstanding termination of this
Agreement and for a period of six (6) years, indemnify and hold
harmless the Target Company, its officers, directors, agents and
employees, each Control Person and the officers, directors, agents and
employees of each Control Person, to the fullest extent permitted by
applicable law, from and against any and all Losses, as incurred,
arising out of, or relating to, a breach or breaches of any
representation, warranty, covenant or agreement by ▇▇▇▇▇▇▇ under this
Agreement or the other Transaction Documents, except for Losses solely
arising out of negligence, bad faith or breach of this Agreement by the
Target Company.
(iii) The Target Company and ▇▇▇▇▇▇▇ acknowledge that in the
SEC's opinion, directors, officers and persons controlling a company
subject to the Securities Act can not be indemnified for liabilities
arising under the Securities Act by such company.
(b) Conduct of Indemnification Proceedings. If any Proceeding
shall be brought or asserted against any Person entitled to indemnity
hereunder (an "Indemnified Party"), such Indemnified Party promptly
shall notify the Person from whom indemnity is sought (the
"Indemnifying Party") in writing, and the Indemnifying Party shall
assume the defense thereof, including the employment of counsel
reasonably satisfactory to the Indemnified Party and the payment of all
fees and expenses incurred in connection with defense thereof;
provided, that the failure of any Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except (and only) to the extent
that it shall be finally determined by a court of competent
jurisdiction (which determination is not subject to appeal or further
review) that such failure shall have proximately and materially
adversely prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel in
any such Proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party or
Parties unless: (1) the Indemnifying Party has agreed to pay such fees and
expenses; or (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party
and the Indemnifying Party, and such Indemnified Party shall have been advised
by counsel that a conflict of interest is likely to exist if the same counsel
were to represent such Indemnified Party and the Indemnifying Party (in which
case, if such Indemnified Party notifies the Indemnifying Party in writing that
it elects to employ separate counsel at the expense of the Indemnifying Party,
the Indemnifying Party shall not have the right to assume the defense of the
claim against the Indemnified Party but will retain the right to control the
overall Proceedings out of which the claim arose and such counsel employed by
the Indemnified Party shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in respect of
which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding.
13
All fees and expenses of the Indemnified Party to which the Indemnified
Party is entitled hereunder (including reasonable fees and expenses to the
extent incurred in connection with investigating or preparing to defend such
Proceeding in a manner not inconsistent with this Section) shall be paid to the
Indemnified Party, as incurred, within ten (10) Business Days of written notice
thereof to the Indemnifying Party.
No right of indemnification under this Section shall be available as to
a particular Indemnified Party if the Indemnifying Party obtains a
non-appealable final judicial determination that such Losses arise solely out of
the negligence, breach of agreement or bad faith of such Indemnified Party in
performing the obligations of such Indemnified Party under this Agreement or a
breach by such Indemnified Party of its obligations under this Agreement.
(c) Contribution. If a claim for indemnification under this
Section is unavailable to an Indemnified Party or is insufficient to
hold such Indemnified Party harmless for any Losses in respect of which
this Section would apply by its terms (other than by reason of
exceptions provided in this Section), then each Indemnifying Party, in
lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such
Losses in such proportion as is appropriate to reflect the relative
benefits received by the Indemnifying Party on the one hand and the
Indemnified Party on the other and the relative fault of the
Indemnifying Party and Indemnified Party in connection with the actions
or omissions that resulted in such Losses as well as any other relevant
equitable considerations. The relative fault of such Indemnifying Party
and Indemnified Party shall be determined by reference to, among other
things, whether there was a judicial determination that such Losses
arise in part out of the negligence or bad faith of the Indemnified
Party in performing the obligations of such Indemnified Party under
this Agreement or the Indemnified Party's breach of its obligations
under this Agreement. The amount paid or payable by a party as a result
of any Losses shall be deemed to include any attorneys' or other fees
or expenses incurred by such party in connection with any Proceeding to
the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was
available to such party.
(d) Non-Exclusivity. The indemnity and contribution agreements
contained in this Section are in addition to any obligation or
liability that the Indemnifying Parties may have to the Indemnified
Parties.
4.9 Sale of ▇▇▇▇▇▇▇ Consideration Shares. ▇▇▇▇▇▇▇ shall assist the
Target Company in setting up and maintaining a trading account at a registered
broker in the United Kingdom to facilitate the sale of the ▇▇▇▇▇▇▇ Consideration
Shares. Broker's commissions in the trading account shall not exceed one half
percent (0.5%).
14
4.10 Lock Up by ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ shall not sell, transfer or assign all
or any of the shares of Consideration Stock for a period of two (2) years
following the Closing, without the written consent of the Target Company, which
consent may be withheld in the Target Company's sole discretion.
ARTICLE V
MISCELLANEOUS
5.1 Fees and Expenses. Except as set forth in this Agreement, each
party shall pay the fees and expenses of its advisers, counsel, accountants and
other experts, if any, and all other expenses incurred by such party incident to
the negotiation, preparation, execution, delivery and performance of this
Agreement. The Target Company shall pay all stamp and other taxes and duties
levied in connection with the issuance of the shares of Consideration Stock
pursuant hereto. ▇▇▇▇▇▇▇ shall be responsible for any taxes payable by ▇▇▇▇▇▇▇
that may arise as a result of the investment hereunder or the transactions
contemplated by this Agreement or any other Transaction Document. The Target
Company agrees to pay $7,500 to G&P for legal fees associated with the
transactions contemplated by this Agreement at Closing. The Target Company shall
pay all costs, expenses, fees and all taxes incident to and in connection with:
(A) the issuance and delivery of the Consideration Stock, (B) the exemption from
registration of the Consideration Stock for offer and sale to ▇▇▇▇▇▇▇ under the
securities or Blue Sky laws of the applicable jurisdictions, and (C) the
preparation of certificates for the Consideration Stock (including, without
limitation, printing and engraving thereof), and (D) all fees and expenses of
counsel and accountants of the Target Company.
5.2 Entire Agreement This Agreement, together with all of the Exhibits
and Schedules annexed hereto, and any other Transaction Document contains the
entire understanding of the parties with respect to the subject matter hereof
and supersede all prior agreements and understandings, oral or written, with
respect to such matters. This Agreement shall be deemed to have been drafted and
negotiated by both parties hereto and no presumptions as to interpretation,
construction or enforceability shall be made by or against either party in such
regard.
5.3 Notices. Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be deemed to have been duly
given upon facsimile transmission (with written transmission confirmation
report) at the number designated below (if delivered on a Business Day during
normal business hours where such notice is to be received), or the first
Business Day following such delivery (if delivered other than on a Business Day
during normal business hours where such notice is to be received) whichever
shall first occur. The addresses for such communications shall be:
15
If to the Target Company: Cirilium Holdings, Inc.
If to ▇▇▇▇▇▇▇: ▇▇▇▇▇▇▇ Park Investments PLC
With copies to: Gottbetter & Partners, LLP
or such other address as may be designated hereafter by notice given pursuant to
the terms of this Section 5.3.
5.4 Amendments; Waivers. No provision of this Agreement may be waived
or amended except in a written instrument signed, in the case of an amendment,
by both the Target Company and ▇▇▇▇▇▇▇, or, in the case of a waiver, by the
party against whom enforcement of any such waiver is sought. No waiver of any
default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any other provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right accruing to it thereafter.
5.5 Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
5.6 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
permitted assigns. The assignment by a party of this Agreement or any rights
hereunder shall not affect the obligations of such party under this Agreement.
5.7 No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
5.8 Governing Law; Venue; Service of Process. The parties hereto
acknowledge that the transactions contemplated by this Agreement and the
exhibits hereto bear a reasonable relation to the State of New York. The parties
hereto agree that the internal laws of the State of New York shall govern this
Agreement and the exhibits hereto, including, but not limited to, all issues
related to usury. Any action to enforce the terms of this Agreement or any of
its exhibits, or any other Transaction Document shall be brought exclusively in
the state and/or federal courts situated in the County and State of New York. If
and only if New York declines jurisdiction within the State of New York, such
action shall be brought in the State and County where the Target Company's
principle place of business is situated. Service of process in any action by
▇▇▇▇▇▇▇ or the Target Company to enforce the terms of this Agreement may be made
by serving a copy of the summons and complaint, in addition to any other
relevant documents, by commercial overnight courier to the other party at its
principal address set forth in this Agreement.
16
5.9 Survival. The representations and warranties of the Target Company
and ▇▇▇▇▇▇▇ contained in Article III and the agreements and covenants of the
parties contained in Article IV and this Article V shall survive the Closing.
5.10 Counterpart Signatures. This Agreement may be executed in two or
more counterparts, all of which when taken together shall be considered one and
the same agreement and shall become effective when counterparts have been signed
by each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
5.11 Publicity. The Target Company and ▇▇▇▇▇▇▇ shall consult with each
other in issuing any press releases or otherwise making public statements with
respect to the transactions contemplated hereby and neither party shall issue
any such press release or otherwise make any such public statement without the
prior written consent of the other, which consent shall not be unreasonably
withheld or delayed, unless counsel for the disclosing party deems such public
statement to be required by applicable federal and/or state securities laws.
Except as otherwise required by applicable law or regulation, the Target Company
will not disclose to any third party (excluding its legal counsel, accountants
and representatives) the name of ▇▇▇▇▇▇▇.
5.12 Severability. In case any one or more of the provisions of this
Agreement shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be affected or impaired thereby and the parties will attempt to agree
upon a valid and enforceable provision which shall be a reasonable substitute
therefore, and upon so agreeing, shall incorporate such substitute provision in
this Agreement.
5.13 Limitation of Remedies. With respect to claims by the Target
Company or any person acting by or through the Target Company, or by ▇▇▇▇▇▇▇ or
any person acting through ▇▇▇▇▇▇▇, for remedies at law or at equity relating to
or arising out of a breach of this Agreement, liability, if any, shall, in no
event, include loss of profits or incidental, indirect, exemplary, punitive,
special or consequential damages of any kind.
[ SIGNATURE PAGE FOLLOWS ]
17
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first indicated above.
Target Company:
Cirilium Holdings, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman
▇▇▇▇▇▇▇:
▇▇▇▇▇▇▇ Park Investments Plc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Administrative Director
18
Schedules
Copies of the Schedules attached to the Stock Purchase Agreement are available
by written request to the Company.
19
EXHIBIT A
ESCROW AGREEMENT
ESCROW AGREEMENT (this "Agreement"), dated as of July 29th, 2004, by
and between Cirilium Holdings, Inc., a Deleware corporation with its principal
place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(the "Target Company"); Gottbetter & Partners, LLP with its principal place of
business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Escrow Agent"); and
▇▇▇▇▇▇▇ Park Investments Plc, a corporation organized under the laws of England
and Wales with its offices at ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ("▇▇▇▇▇▇▇").
RECITALS
A. Simultaneously with the execution of this Agreement,
▇▇▇▇▇▇▇ and the Target Company entered into a Stock Purchase Agreement (the
"Stock Purchase Agreement"), dated as of the date hereof and incorporated herein
by reference, pursuant to which the Target Company has agreed to issue to
▇▇▇▇▇▇▇ the Consideration Stock in exchange for the ▇▇▇▇▇▇▇ Consideration
Shares.
B. The parties have agreed that the Consideration Stock and
the ▇▇▇▇▇▇▇ Consideration Shares shall be deposited into escrow pursuant to this
Agreement, including fifty percent (50%) of the ▇▇▇▇▇▇▇ Consideration Shares to
be deposited into escrow as Downside Price Protection (the "▇▇▇▇▇▇▇ Escrow
Shares").
C. The Escrow Agent is willing to act as escrow agent pursuant
to the terms of this Agreement with respect to the purchase of the shares of
Consideration Stock.
D. All capitalized terms used but not defined herein shall
have the meanings ascribed thereto in the Stock Purchase Agreement.
NOW, THEREFORE, IT IS AGREED:
1. DEPOSIT INTO ESCROW. At Closing, the parties shall deposit
into escrow (i) the ▇▇▇▇▇▇▇ Consideration Shares and (ii) the Consideration
Stock. The Escrow Agent shall hold the ▇▇▇▇▇▇▇ Consideration Shares and the
Consideration Stock in escrow when delivered.
2. TERMS OF ESCROW. (a) If the Market Value of the Common
Stock on the date occurring two years after Closing (the "Two Year Anniversary")
is less than the Closing Price, the Target Company shall sell to ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ shall purchase the number of ▇▇▇▇▇▇▇ Escrow Shares (the "▇▇▇▇▇▇▇
Protection Shares") equal to (a) the ▇▇▇▇▇▇▇ Consideration Shares multiplied by
(b) the Percentage Decrease, at a purchase price of 1p per ▇▇▇▇▇▇▇ Consideration
Share (the "Escrow Purchase Price"). The "Percentage Decrease" shall be equal to
1 - Market Value/the Closing Price. "Market Value" shall be the average of the
ten (10) closing bid prices per share of the Common Stock during the ten (10)
trading days immediately preceding the Two Year Anniversary.
20
Within three (3) Business Days of the Two Year Anniversary of the
Closing, ▇▇▇▇▇▇▇ shall (i) send a notice ("Sale Notice") to the Target Company
and the Escrow Agent of the ▇▇▇▇▇▇▇ Protection Shares to be sold by the Target
Company to ▇▇▇▇▇▇▇, if any, and (ii) deposit the Escrow Purchase Price with the
Escrow Agent, if necessary. Within fourteen (14) Business Days of the Target
Company's and the Escrow Agent's receipt of the Sale Notice and Escrow Agent's
receipt of the Escrow Purchase Price, the Escrow Agent is authorized and
directed simultaneously (i) to pay the Escrow Purchase Price to the Target
Company, if any, (ii) to deliver the ▇▇▇▇▇▇▇ Protection Shares, if any, to
▇▇▇▇▇▇▇ and (iii) to deliver the remaining ▇▇▇▇▇▇▇ Escrow Shares, if any, to the
Target Company.
(b) If at any time before September 30, 2004, the Escrow Agent
receives written notice (the "LSE Notice") from ▇▇▇▇▇▇▇ that the ▇▇▇▇▇▇▇
Consideration Shares are listed on the London Stock Exchange plc (the "London
Exchange"), the Escrow Agent is authorized and directed to distribute, within
fourteen (14) Business Days of receipt of such LSE Notice, (i) the Consideration
Stock to ▇▇▇▇▇▇▇ and (ii) fifty percent (50%) of the ▇▇▇▇▇▇▇ Consideration
Shares to the Target Company. If the Escrow Agent does not receive such LSE
Notice by September 30, 2004, the Escrow Agent is authorized and directed to
distribute, no later than October 5, 2004, (i) the Consideration Stock to the
Target Company and (ii) the ▇▇▇▇▇▇▇ Consideration Shares to ▇▇▇▇▇▇▇; provided,
however, that the Target Company shall have the option to extend the September
30, 2004 deadline by providing written notice to the Escrow Agent with a written
acknowledgement from ▇▇▇▇▇▇▇.
3. DUTIES AND OBLIGATIONS OF THE ESCROW AGENT.
(a) The parties hereto agree that the duties and obligations
of the Escrow Agent shall be only those obligations herein specifically provided
and no other. The Escrow Agent's duties are those of a depositary only, and the
Escrow Agent shall incur no liability whatsoever, except as a direct result of
its willful misconduct or gross negligence in the performance of its duties
hereunder;
(b) The Escrow Agent may consult with counsel of its choice,
and shall not be liable for any action taken, suffered or omitted to be taken by
it in accordance with the advice of such counsel;
(c) The Escrow Agent shall not be bound in any way by the
terms of any other agreement to which ▇▇▇▇▇▇▇ and the Target Company are
parties, whether or not the Escrow Agent has knowledge thereof, and the Escrow
Agent shall not in any way be required to determine whether or not any other
agreement has been complied with by ▇▇▇▇▇▇▇ and the Target Company, or any other
party thereto. The Escrow Agent shall not be bound by any modification,
amendment, termination, cancellation, rescission or supersession of this
Agreement unless the same shall be in writing and signed jointly by ▇▇▇▇▇▇▇ and
the Target Company and agreed to in writing by the Escrow Agent;
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(d) If the Escrow Agent shall be uncertain as to its duties or
rights hereunder or shall receive instructions, claims or demands which, in its
opinion, are in conflict with any of the provisions of this Agreement, the
Escrow Agent shall be entitled to refrain from taking any action other than
keeping safely the Consideration (as defined below) or taking certain action
until the Escrow Agent is directed otherwise in writing jointly by ▇▇▇▇▇▇▇ and
the Target Company or by a final judgment of a court of competent jurisdiction;
(e) The Escrow Agent shall be fully protected in relying upon
any written notice, demand, certificate or document which the Escrow Agent, in
good faith, believes to be genuine. The Escrow Agent shall not be responsible
for the sufficiency or accuracy of the form, execution, validity or genuineness
of documents or securities now or hereafter deposited hereunder or of any
endorsement thereon, or for any lack of endorsement thereon, or for any
description therein; nor shall the Escrow Agent be responsible or liable in any
respect on account of the identity, authority or rights of the persons executing
or delivering or purporting to execute or deliver any such document, security or
endorsement;
(f) The Escrow Agent shall not be required to institute legal
proceedings of any kind and shall not be required to defend any legal
proceedings which may be instituted against it or in respect of the
Consideration;
(g) If the Escrow Agent at any time, in its sole discretion,
deems it necessary or advisable to relinquish custody of any of the securities
(to the extent delivered to the Escrow Agent pursuant hereto, the
"Consideration"), it may do so by delivering the same to another Person that
agrees to act as escrow agent hereunder and whose substitution for the Escrow
Agent is agreed upon in writing by ▇▇▇▇▇▇▇ and the Target Company; provided,
however, that such successor Escrow Agent must be resident in the United States.
If no such escrow agent is selected within three (3) days after the Escrow Agent
gives notice to ▇▇▇▇▇▇▇ and the Target Company of the Escrow Agent's desire to
so relinquish custody of the Consideration and resign as Escrow Agent, then the
Escrow Agent may do so by delivering the Consideration to the clerk or other
proper officer of a state or federal court of competent jurisdiction situate in
the state and county of New York. The fee of any court officer shall be borne by
the Target Company. Upon such delivery, the Escrow Agent shall be discharged
from any and all responsibility or liability with respect to the Consideration
and this Agreement and each of the Target Company and ▇▇▇▇▇▇▇ shall promptly pay
all monies it may owe to the Escrow Agent for its services hereunder, including,
but not limited to, reimbursement of its out-of-pocket expenses pursuant to
paragraph (i) below;
(h) This Agreement shall not create any fiduciary duty on the
Escrow Agent's part to ▇▇▇▇▇▇▇ or the Target Company, nor disqualify the Escrow
Agent from representing either party hereto in any dispute with the other,
including any dispute with respect to the Stock Purchase Agreement; provided,
however, that in the event of such dispute, the Escrow Agent shall have the
right to commence an interpleader action in any court of competent jurisdiction
of the state of New York or of the United States located in the county and state
of New York, deposit the Consideration with such court;
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(i) The parties acknowledge and agree that the Escrow Agent is
counsel to ▇▇▇▇▇▇▇. The parties agree to, and agree not to object to, the Escrow
Agent's engagement as Escrow Agent hereunder;
(j) Upon the full performance of this Agreement, the Escrow
Agent shall be deemed released and discharged of any further obligations
hereunder.
4. INDEMNIFICATION.
(a) ▇▇▇▇▇▇▇ hereby indemnifies and holds free and harmless the
Escrow Agent from any and all losses, expenses, liabilities and damages
(including but not limited to reasonable attorney's fees, and amounts paid in
settlement) resulting from claims asserted by the Target Company against the
Escrow Agent with respect to the performance of any of the provisions of this
Agreement;
(b) The Target Company hereby indemnifies and holds free and
harmless the Escrow Agent from any and all losses, expenses, liabilities and
damages (including but not limited to reasonable attorney's fees, and amount
paid in settlement) resulting from claims asserted by ▇▇▇▇▇▇▇ against the Escrow
Agent with respect to the performance of any of the provisions of this
Agreement;
(c) ▇▇▇▇▇▇▇ and the Target Company, jointly and severally,
hereby indemnify and hold the Escrow Agent harmless from and against any and all
losses, damages, taxes, liabilities and expenses that may be incurred by the
Escrow Agent, arising out of or in connection with its acceptance of appointment
as the Escrow Agent hereunder and/or the performance of its duties pursuant to
this Agreement, the Purchase Agreement and the securities, including, but not
limited to, all legal costs and expenses of the Escrow Agent incurred defending
itself against any claim or liability in connection with its performance
hereunder, provided that the Escrow Agent shall not be entitled to any indemnity
for any losses, damages, taxes, liabilities or expenses that directly result
from its willful misconduct or gross negligence in its performance as Escrow
Agent hereunder
(d) In the event of any legal action or Proceeding involving
any of the parties to this Agreement which is brought to enforce or otherwise
adjudicate any of the rights or obligations of the parties hereunder, the
non-prevailing party or parties shall pay the legal fees of the prevailing party
or parties and the legal fees, if any, of the Escrow Agent.
5. MISCELLANEOUS.
(a) All notices, including Notices of Conversion and Notices
of Exercise, objections, requests, demands and other communications sent to any
party hereunder shall be deemed duly given if (x) in writing and sent by
facsimile transmission to the Person for whom intended if addressed to such
Person at its facsimile number set forth below or such other facsimile number as
such Person may designate by notice given pursuant to the terms of this Section
5 and (y) the sender has confirmation of transmission:
(i) If to the Target Company: Cirilium Holdings, Inc.
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(ii) If to ▇▇▇▇▇▇▇: ▇▇▇▇▇▇▇ Park Investments PLC
(iii) If to the Escrow Agent: Gottbetter & Partners, LLP
(b) This Agreement has been prepared, negotiated and delivered
in the state of New York and shall be governed by and construed and enforced in
accordance with the laws of the state of New York applicable to contracts
entered into and performed entirely within New York, without giving effect to
the principles of New York law relating to the conflict of laws.
(c) This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
(d) This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted assigns. The
assignment by a party of this Agreement or any rights hereunder shall not affect
the obligations of such party under this Agreement.
6. TERMINATION OF ESCROW. The term of this Escrow Agreement shall begin
upon the date hereof and shall continue until terminated upon the earlier to
occur of (i) the ▇▇▇▇▇▇▇ Escrow Shares are fully distributed or (ii) the written
agreement of the parties to terminate this Agreement. Upon the termination of
this Escrow Agreement pursuant to subsection (ii), the Escrow Agent shall
distribute any of the ▇▇▇▇▇▇▇ Escrow Shares then held by it pursuant to the
terms of the written agreement of the parties.
[ SIGNATURE PAGE FOLLOWS ]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed the day and year first above written.
The Target Company:
Cirilium Holdings, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman
▇▇▇▇▇▇▇:
▇▇▇▇▇▇▇ Park Investments Plc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Administrative Director
Escrow Agent:
Gottbetter & Partners, LLP
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇
Title: Managing Partner
25
EXHIBIT B
CIRILIUM HOLDINGS, INC.
OFFICER'S CERTIFICATE
I, ▇▇▇▇▇▇ ▇. ▇▇▇▇, being the Chief Executive Officer of Cirilium
Holdings, Inc., a Deleware corporation (the "Target Company"), pursuant to
Section 2.2(a)(ii) of that certain Stock Purchase Agreement (the "Purchase
Agreement"), dated as of July 29th, 2004, by and between the Target Company and
▇▇▇▇▇▇▇ Park Investments PLC, do hereby certify on behalf of the Target Company
that attached hereto is a copy of the resolutions duly adopted by the Board of
Directors of the Target Company authorizing the Target Company to execute and
deliver the Transaction Documents, as such term is defined in the Purchase
Agreement and to enter into the transactions contemplated thereby.
IN WITNESS WHEREOF, I have executed this Officer's Certificate on
behalf of the Target Company this 29th day of July, 2004.
Cirilium Holdings, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇, Chief Executive Officer