EXHIBIT 5
INVESTOR RIGHTS AGREEMENT
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This Investor Rights Agreement is made as of January 1, 2002 (the
"Effective Date") between SVI Solutions, Inc., a Delaware corporation (the
"Company"), and Softline Limited, a South African company ("Holder"), with
reference to the following facts:
WHEREAS, The Company and Holder are parties to the Purchase and
Exchange Agreement of even date hereof (the "Purchase Agreement") pursuant to
which Holder is acquiring shares of convertible Series A Preferred Stock (as
defined in the Purchase Agreement); and
WHEREAS, the Purchase Agreement contemplates that this Agreement be
executed to govern the rights of the parties with respect to the shares of
Common Stock issuable upon the conversion of the Series A Preferred Stock.
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein and for other consideration, the parties agree as follows:
1. REGISTRATION RIGHTS. The Company covenants and agrees as
follows: 1.1. DEFINITIONS. For purposes of this Section 1:
(a) "FORM S-3" means such form under the 1933 Act as
in effect on the date hereof or any registration form under the 1933 Act
subsequently adopted by the SEC that permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
(b) "HOLDER" means Softline Limited, a South African
corporation.
(c) "1933 ACT" means the Securities Act of 1933, as
amended.
(d) "1934 ACT" means the Securities Exchange Act of
1934, as amended.
(e) "REGISTER", "REGISTERED", and "REGISTRATION"
refer to a registration effected by preparing and filing
a registration statement or similar document in compliance with the 1933 Act,
and the declaration or ordering of effectiveness of such registration statement
or document.
(f) "REGISTRABLE SECURITIES" means the shares of the
Company's Common Stock issued or issuable upon the
conversion of the Series A Preferred Stock held by Holder.
(g) The number of shares of "Registrable Securities"
outstanding shall be determined by the number of
shares of Common Stock outstanding which have been issued, and the number of
shares of Common Stock issuable, upon the conversion of the Series A Preferred
Stock,
(h) "SEC" means the Securities and Exchange
Commission.
(i) Any other capitalized term not defined herein
shall have the meaning set forth in the Purchase
Agreement.
1.2. COMPANY REGISTRATION.
(a) If (but without any obligation to do so) the
Company proposes to register any of its stock (including
a registration effected by the Company for stockholders other than Holder) or
other securities under the 1933 Act in connection with the public offering of
such securities solely for cash (other than a registration relating solely to
the sale of securities to participants in a Company benefit plan, a
registration relating solely to a Commission Rule 145 transaction, a
registration on any form which does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of Registrable Securities such as a Form S-4 registration, or
a registration in which only Common Stock being registered is Common Stock
issuable upon the conversion of debt securities which are also being
registered), the Company shall, at such time, promptly give each Holder notice
of such registration. On the request of Holder given within thirty (30) days
after such notice by the Company, the Company shall, subject to the provisions
of Section 1.2(c) below, cause to be registered under the 1933 Act all of the
Registrable Securities that Holder has requested to be registered.
(b) The Company shall have the right to terminate or
withdraw any registration initiated by it under this
Section 1.2 prior to the effectiveness of such registration, whether or not
Holder shall have elected to include securities in such registration. The
expenses of such withdrawn registration shall be borne by the Company in
accordance with Section 1.6 hereof.
(c) In connection with any offering involving an
underwriting of shares of the Company's capital stock,
the Company shall not be required under this Section 1.2 to include Holder's
securities in such underwriting, unless Holder accepts the terms of the
underwriting as agreed between the Company and the underwriters selected by it
(or by other persons entitled to select the underwriters) and enters into an
underwriting agreement in customary form with the underwriter or underwriters
selected by the Company, and then only in such quantity as the underwriters
determine in their sole discretion will not jeopardize the success of the
offering by the Company. If the total amount of securities, including
Registrable Securities, requested by Holder to be included in such offering
exceeds the amount of securities sold other than by the Company that the
underwriters determine in their sole discretion is compatible with the success
of the offering, then the Company shall be required to include in the offering
only that number of such Registrable Securities that the underwriters determine
in their sole discretion will not jeopardize the success of the offering.
1.3. FORM S-3 REGISTRATION. If the Company receives from
Holder a request that the Company effect a registration on Form S-3 and any
related blue sky or similar qualification or compliance with respect to at
least 25% (or a lesser percentage if the requirements of Section 1.3(b)(i) are
met) of the Registrable Securities owned by Holder, the Company shall:
(a) cause, as soon as practicable, such Registrable
Securities to be registered for offering and sale on
Form S-3 and cause such Registrable Securities to be qualified in such
jurisdictions as Holder may reasonable request; provided that the Company shall
not be obligated to effect any such registration, qualification or compliance,
pursuant to this Section 1.3:
(i) if Holder proposes to sell Registrable
Securities and such other securities (if any) at an
aggregate price to the public of less than $5,000,000;
(ii) if the Company has, within the twelve
month period preceding the date of such request, already effected two
registrations on Form S-3 for Holder pursuant to this Section 1.3;
(iii) if the Company shall furnish to
Holder a certificate signed by the Chief Executive Officer
of the Company stating that in the good faith judgment of the Board of
Directors of the Company, it would be seriously detrimental to the Company and
its stockholders for such Form S-3 Registration to be effected at such time, in
which event the Company shall have the right to defer the filing of the Form
S-3 registration statement for a period of not more than ninety (90) days after
receipt of the request of Holder under this Section 1.3; provided that the
Company shall not utilize this right more than once in any twelve month period;
provided, further, that the Company shall not register shares for its own
account during such ninety (90) day period, but such prohibition shall not
apply to the registration of Company shares in connection with (x) a merger or
(y) registration of shares relating to a stock option, stock purchase or
similar plan; or
(iv) in any particular jurisdiction in
which the Company would be required to qualify to do
business or to execute a general consent to service of process in effecting
such registration, qualification or compliance.
(b) Subject to the foregoing, the Company shall file
a registration statement covering the Registrable
Securities and other securities so requested to be registered as soon as
practicable after receipt of the request of Holder.
1.4. OBLIGATIONS OF THE COMPANY. Whenever required under this
Section 1 to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and
use best efforts to cause such registration statement to become effective, and
keep such registration statement effective for a period of up to 120 days;
provided that (i) such 120-day period shall be extended for a period of time
equal to the period Holder refrains from selling any securities included in
such registration at the request of an underwriter of Common Stock (or other
securities) of the Company; and (ii) in the case of any registration of
Registrable Securities on Form S-3 (or any other Form, to the extent permitted
by law) that are intended to be offered on a continuous or delayed basis, such
120-day period shall be extended, if necessary, to keep the Registration
Statement effective until all such Registrable Securities are sold, provided
that Rule 415, or any successor rule under the Act, permits an offering on a
continued or delayed basis, and provided further that applicable rules under
the Act governing the obligation to file a post-effective amendment permit, in
lieu of filing a post-effective amendment which (I) includes any prospectus
required under Section 10(a)(3) of the Act or (II) reflects facts or events
representing a material or fundamental change in the information set forth in
the registration statement, the incorporation by reference of information
required to be included in the preceding sections (I) and (II) to be contained
in periodic reports filed pursuant to Section 13 or 15(d) of the 1934 Act in
the registration statement;
(b) prepare and file with the SEC such amendments
and supplements to such registration statement and the
prospectus used in connection with such registration statement as may be
necessary to comply with the 1933 Act with respect to the disposition of all
securities covered by such registration statement during the period of time
such registration statement remains effective;
(c) furnish to Holder such numbers of copies of a
prospectus, including a preliminary prospectus, in
conformity with the requirements of the 1933 Act, and such other documents as
they may reasonably request to facilitate the disposition of Registrable
Securities owned by it;
(d) use best efforts to register and qualify the
securities covered by such registration statement under
such other securities or Blue Sky laws of such jurisdictions as shall be
reasonably requested by Holder; provided that the Company shall not be required
in connection therewith or as a condition thereto to qualify to do business or
to file a general consent to service of process in any such states or
jurisdictions;
(e) in the event of any underwritten public
offering, enter into and perform its obligations under an underwriting
agreement, in usual and customary form, with the managing underwriter of such
offering;
(f) during the period of time such registration
statement remains effective, notify Holder of Registrable
Securities covered by such registration statement at any time when a prospectus
relating thereto is required to be delivered under the 1933 Act or the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing;
(g) cause all such Registrable Securities registered
hereunder to be listed on each securities exchange on
which securities of the same class issued by the Company are then listed;
(h) provide a transfer agent and registrar for all
Registrable Securities registered hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration; and
(i) furnish, at the request of Holder, on the date
that such Registrable Securities are delivered to the
underwriters for sale in connection with a registration pursuant to this
Section 1, if such securities are being sold through underwriters, or, if such
securities are not being sold through underwriters, on the date that the
registration statement with respect to such securities becomes effective, (i)
an opinion, dated such date, of the counsel representing the Company for the
purposes of such registration, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to Holder, and (ii) a "comfort" letter signed by the independent
public accountants who have certified the Company's financial statements
included in the registration statement, covering substantially the same matters
with respect to the registration statement (and the prospectus included
therein) and with respect to events subsequent to the date of the financial
statements, as are customarily covered in accountants' letters delivered to the
underwriters in underwritten public offerings of securities addressed to the
underwriters, if any, and to Holder.
1.5. INFORMATION FROM HOLDER. It shall be a condition
precedent to the obligations of the Company to take any action pursuant to this
Section 1 with respect to the Registrable Securities of Holder that Holder
shall furnish to the Company such information regarding Holder, the Registrable
Securities held by Holder, and the intended method of disposition of such
securities as shall be required to effect the registration of such Registrable
Securities.
1.6. EXPENSES OF REGISTRATION. All expenses (other than
underwriting discounts and commissions attributable to the Registrable
Securities) incurred in connection with registrations, filings or
qualifications pursuant to this Section 1, including (without limitation) all
registration, filing and qualification fees, printing fees and expenses,
accounting fees and expenses, fees and disbursements of counsel for the
Company, shall be borne by the Company. Notwithstanding the foregoing, the
Company shall not be required to pay for any expenses of any registration
proceeding begun pursuant to Section 1.3 if the registration request is
subsequently withdrawn at the request of Holder; provided that, if at the time
of such withdrawal, Holder shall have learned of a material adverse change in
the condition, business, or prospects of the Company from that known to Holder
at the time of its request and shall have withdrawn the request with reasonable
promptness following disclosure by the Company of such material adverse change,
then Holder shall not be required to pay any of such expenses and shall retain
its rights pursuant to Section 1.3.
1.7. INDEMNIFICATION. If any Registrable Securities are
included in a registration statement under this Section 1:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless Holder, the partners or
officers, directors and stockholders of Holder, legal counsel and accountants
for Holder, any underwriter (as defined in the ▇▇▇▇ ▇▇▇) for Holder and each
person, if any, who controls Holder or underwriter within the meaning of the
1933 Act or the 1934 Act, against any losses, claims, damages or liabilities
(joint or several) to which they may become subject under the 1933 Act, the
1934 Act or any other federal or state securities law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based on any of the following statements, omissions or violations
(collectively a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the 1933 Act, the 1934 Act, any state securities
law or any rule or regulation promulgated under the 1933 Act, the 1934 Act or
any state securities law; and the Company will reimburse Holder, underwriter or
controlling person for any legal or other expenses incurred, as incurred, in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided that the indemnity agreement in this Section
1.7(a) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Company (which consent shall not be unreasonably withheld or delayed),
nor shall the Company be liable in any such case for any such loss, claim,
damage, liability or action to the extent that it arises out of or is based on
a Violation that occurs in reliance on and in conformity with written
information furnished expressly for use in connection with such registration by
Holder, underwriter or controlling person.
(b) To the extent permitted by law, Holder will
indemnify and hold harmless the Company, each of its
directors, each of its officers who shall have signed the registration
statement, each person, if any, who controls the Company within the meaning of
the 1933 Act, legal counsel and accountants for the Company, any underwriter,
any other person selling securities in such registration statement and any
controlling person of any such underwriter or other seller, against any losses,
claims, damages or liabilities to which any of the foregoing persons may become
subject, under the 1933 Act, the 1934 Act or any other federal or state
securities law, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based on any Violation, in each
case to the extent (and only to the extent) that such Violation occurs in
reliance on and in conformity with written information furnished by Holder
expressly for use in connection with such registration; and Holder will
reimburse any person intended to be indemnified pursuant to this Section
1.7(b), for any legal or other expenses reasonably incurred, as incurred, by
such person in connection with investigating or defending any such loss, claim,
damage, liability or action; provided that the indemnity agreement in this
Section 1.7(b) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of Holder (which consent shall not be unreasonably withheld or
delayed).
(c) Promptly after receipt by an indemnified party
under this Section 1.7 of notice of the commencement of
any action (including any governmental action), such indemnified party will, if
a claim in respect thereof is to be made against any indemnifying party under
this Section 1.7, deliver to the indemnifying party notice of the commencement
thereof and the indemnifying party shall have the right to participate in, and,
to the extent that the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided that an indemnified
party (together with all other indemnified parties that may be represented
without conflict by one counsel) shall have the right to retain one separate
counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by
such counsel in such proceeding. The failure to notify the indemnifying party
within a reasonable time of the commencement of any such action, if prejudicial
to its ability to defend such action, shall relieve such indemnifying party of
any liability to the indemnified party under this Section 1.7, but the omission
so to notify the indemnifying party will not relieve it of any liability that
it may have to any indemnified party otherwise than under this Section 1.7.
(d) If the indemnification provided in this Section
1.7 is held by a court of competent jurisdiction to be
unavailable to an indemnified party with respect to any loss, liability, claim,
damage or expense referred to herein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such loss, liability,
claim, damage or expense in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the statements or omissions that shall
have resulted in such loss, liability, claim, damage or expense, as well as any
other relevant equitable considerations. The relative fault of the indemnifying
party and of the indemnified party shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative
intent, knowledge, access to information, and opportunity to correct or prevent
such statement or omission.
(e) Notwithstanding the foregoing, to the extent
that the provisions on indemnification and contribution
contained in the underwriting agreement entered into in connection with the
underwritten public offering are in conflict with the foregoing provisions, the
provisions in the underwriting agreement shall control.
(f) The obligations of the Company and Holder under
this Section 1.7 shall survive the completion of any
offering of Registrable Securities in a registration statement under this
Section 1, and otherwise.
1.8. REPORTS UNDER 1934 ACT. With a view to making available
to Holder the benefits of Rule 144 promulgated under the 1933 Act and any other
rule or regulation of the SEC that may at any time permit Holder to sell
securities of the Company to the public without registration or pursuant to a
registration statement (including, without limitation, Form S-3), the Company
agrees to:
(a) make and keep public information available, as
those terms are used in SEC Rule 144, at all times;
(b) take such action as is necessary to enable
Holder to utilize Form S-3 for the sale of its Registrable
Securities;
(c) file with the SEC in a timely manner all reports
and other documents required of the Company under the
1933 Act and the 1934 Act; and
(d) furnish to Holder, so long as Holder owns any
Registrable Securities, forthwith on request, (i) a
written statement by the Company that it has complied with the reporting
requirements of SEC Rule 144, the 1933 Act and the 1934 Act, or that it
qualifies as a registrant whose securities may be resold pursuant to Form S-3,
(ii) a copy of the most recent annual or quarterly report of the Company and
such other reports and documents so filed by the Company, and (iii) such other
information as may be reasonably requested in availing Holder of any rule or
regulation of the SEC that permits the selling of any such securities without
registration or pursuant to such form.
1.9. NO ASSIGNMENT OF REGISTRATION RIGHTS. The rights of
Holder to cause the Company to register Registrable Securities pursuant to this
Section 1 may not be assigned to any person or entity.
1.10. TERMINATION OF REGISTRATION RIGHTS. Holder shall not be
entitled to exercise any right provided in this Section 1 with respect to a
Registrable Security (i) after the date on which that Registrable Security has
been sold under a registration statement filed in accordance with this
Agreement or (ii) if all Registrable Securities held by Holder (and any
affiliate of Holder with whom Holder must aggregate its sales under Rule 144)
can be sold in any three-month period without volume limitation and without
registration in compliance with Rule 144 under the 1933 Act.
2. COVENANTS.
2.1. CONFIDENTIAL INFORMATION. Holder covenants with the
Company that it confirms, acknowledges, and covenants that any information
which is furnished to it by the Company: (a) with respect to the Company
pursuant to this Agreement or with respect to the transactions described herein
or in the Purchase Agreement and (b) the terms of this Agreement and the
Purchase Agreement, is and shall be confidential and for Holder's use only, and
Holder will not use such information in violation of the securities laws, or
any other laws, or reproduce, disclose or disseminate such information to any
other person (other than Holder's employees, directors or agents having a need
to know the contents of such information and Holder's attorneys), except in
connection with the exercise of rights under this Agreement, unless: (i) the
Company has made such information available to the public generally, (ii) such
information has otherwise been made generally or publicly available, except by
Holder in breach of its confidentiality obligations to the Company, or (iii)
Holder is required to disclose such information by a governmental body or
pursuant to legal process, in which case Holder shall provide at least five (5)
days' prior notice of such proposed disclosure or such lesser notice as Holder
shall have received. 2.2. PRIVATE SALE OF SECURITIES. Subject to any transfer
restrictions set forth in this Agreement, in the Purchase Agreement or under
federal and state securities laws, Holder may sell or transfer any or all of
its shares any Registrable Securities to any third party in a private sale if:
(a) in the opinion of Company's counsel, such sale is exempt from registration
or qualification under the federal and securities laws, or (b) the securities
proposed to be sold are registered and/or qualified with the SEC and or under
Blue Sky laws of the appropriate jurisdictions; provided, however, that in each
instance a proposed sale shall be subject to a right of first refusal granted
by Holder to the Company in accordance with Section 2.3 below.
2.3. RIGHT OF FIRST REFUSAL. Holder hereby grants to the
Company the right of first refusal to purchase the Registrable Securities which
Holder may, from time to time, propose to sell and issue, subject to the
following provisions:
(a) In the event Holder proposes to undertake a sale
of Registrable Securities, it shall give the Company
written notice of its intention, their price and the general terms upon which
Holder proposes to issue the same. The Company shall have twenty (20) days
after any such notice is effective to agree to purchase all of the Registrable
Securities proposed to be sold for the price and upon the terms specified in
the notice by giving written notice to Holder.
(b) In the event the Company fail to exercise fully
the right of first refusal within said twenty (20)-day
period, Holder shall have thirty (30) days thereafter to sell or enter into an
agreement (pursuant to which the sale of the Registrable Securities covered
thereby shall be closed, if at all, within twenty (20) days from the date of
said agreement) to sell the Registrable Securities respecting which the
Company's right of first refusal option set forth in this Section 2.3 was not
exercised, at a price and upon terms no more favorable to the purchaser(s)
thereof than specified in Holder's notice to Company pursuant to Section
2.3(a). In the event the Holder has not sold within said 30-day period or
entered into an agreement to sell the Registrable Securities within said 30-day
period (or sold and issued Registrable Securities in accordance with the
foregoing within twenty (20) days from the date of said agreement), Holder may
not thereafter issue or sell any Registrable Securities, without first again
offering such securities to the Company in the manner provided in Section
2.3(a) above.
2.4. RESERVE FOR CONVERSION SHARES. The Company shall at all
times reserve and keep available out of its authorized but unissued shares of
Common Stock such number of shares of Common Stock as shall be sufficient to
enable it to issue the shares of Common Stock issuable upon the conversion of
the Series A Preferred Stock.
3. MISCELLANEOUS.
3.1. SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, this Agreement shall inure to the benefit of and bind the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer on any party other than the parties hereto any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
3.2. GOVERNING LAW. This Agreement shall be governed by and
construed and interpreted in accordance with the laws of the State of Delaware,
without giving effect to its conflicts of law principles. All disputes between
the parties hereto, whether sounding in contract, tort, equity or otherwise,
shall be resolved only by state and federal courts located in Wilmington,
Delaware. All parties hereto waive any objections to the location of the above
referenced courts, including but not limited to any objection based on lack of
jurisdiction, improper venue or forum non conveniens. Each party authorizes and
accepts service of process sufficient for personal jurisdiction in any action
against it as contemplated by this paragraph by registered or certified mail,
return receipt requested, postage prepaid, to its address for the giving of
notices set forth in this Agreement.
3.3. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
3.4. HEADINGS. The headings of sections and subsections in
this Agreement are used for convenience of reference only and are not to be
considered in construing or interpreting this Agreement.
3.5. NOTICES. Any request, consent, notice or other
communication required or permitted under this Agreement shall be in writing
and shall be deemed duly given and received when delivered personally or
transmitted by facsimile, one business day after being deposited for next-day
delivery with a nationally recognized overnight delivery service, or three days
after being deposited as first class mail with the United States Postal
Service, all charges or postage prepaid, and properly addressed to the party to
receive the same at the address indicated for such party on the applicable
signature page hereof, or at such other address as such party may designate by
ten days' advance notice to the other parties.
3.6. EXPENSES. If any action at law or in equity is necessary
to enforce or interpret any of the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees, costs and necessary
disbursements in addition to any other relief to which such party may be
entitled.
3.7. ENTIRE AGREEMENT: AMENDMENTS AND WAIVERS. This Agreement
constitutes the full and entire understanding and agreement among the parties
with regard to the subjects hereof and thereof. Any term of this Agreement may
be amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only with the consent of the Company and Holder.
3.8. SEVERABILITY. If any provision of this Agreement is held
by a court of competent jurisdiction to be unenforceable under applicable law,
such provision shall be excluded from this Agreement and the balance of the
Agreement shall be interpreted as if such provision were so excluded and shall
be enforceable in accordance with its terms.
[Signatures appear on the following page]
IN WITNESS WHEREOF, this Investors' Rights Agreement has been duly
executed by or on behalf of the parties hereto as of the date first above
written.
"COMPANY"
SVI SOLUTIONS, INC.
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President and Chief
Executive Officer
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ph: (760) 496-0280
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇ Seidenwurm & ▇▇▇▇▇
▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
"HOLDER"
SOFTLINE LIMITED,
a South African company
By: /s/ ▇▇▇ ▇▇▇▇▇▇
--------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: CFO