EXHIBIT 2
SUPPLEMENT TO SHARE EXCHANGE AGREEMENT
SUPPLEMENT TO SHARE EXCHANGE AGREEMENT, dated as of April 29, 2000 (this
"Supplement"), among Creative Master International, Inc., a Delaware
corporation (the "Company"), ▇▇▇▇▇▇▇▇▇▇.▇▇▇ LLC, a Minnesota limited
liability company ("PNC"), and the members of PNC and other persons and
entities listed on the signature pages hereto (collectively, the "Members").
RECITALS:
WHEREAS, the Company, PNC and certain of the Members have entered into
that certain Share Exchange Agreement dated as of February 17, 2000 (the
"Exchange Agreement"); and
WHEREAS, each of the Members owns or has the right to acquire membership
interests in PNC as set forth in Schedule 3.1(b) to this Supplement; and
WHEREAS, the parties desire to supplement the Exchange Agreement as set
forth in this Supplement to address certain matters not provided for in the
Exchange Agreement and to clarify certain of the terms and conditions thereof.
NOW, THEREFORE, in consideration of the premises, and in reliance on the
representations, warranties and covenants contained in the Exchange Agreement
and herein, the parties hereby agree as follows:
ARTICLE I
THE EXCHANGE
Section 1.1. EXCHANGE; EXCHANGE PROCEDURES. Sections 1.01, 1.02 and
1.04 of the Exchange Agreement are hereby deleted in their entirety and the
following new Sections 1.01 and 1.02 substituted therefor:
1.01 THE EXCHANGE.
(a) At the closing (the "Closing") of the transactions
contemplated by the Exchange Agreement, as amended and supplemented by
this Supplement, all membership interests ("MI's") issued and
outstanding immediately prior to the Closing shall be surrendered and
assigned to the Company by the Members in exchange for the Company's
sale and issuance to the Members, pro rata in accordance with their
relative ownership of MI's, of an aggregate of 21,500,000 shares (the
"Exchange Shares") of validly issued, fully paid and nonassessable
shares of common stock, $.0001 par value per share, of the Company
("Common Stock").
(b) If as a result of the foregoing any of the Members would
receive a fractional share of the Common Stock, such fractional share
shall be rounded up to the nearest whole share of the Common Stock.
(c) Prior to the Closing, the Company shall not effect any change
in its capital. For purposes of this Supplement, a "change" in the
capital of the Company shall include any issuance of capital stock,
options, warrants or other right to purchase shares of capital stock in
the Company (other than pursuant to the exercise of the currently
outstanding stock options and warrants enumerated in Section 2.1(b)
below) or any stock dividend, stock split, combination,
recapitalization, reorganization or similar event.
(d) All references in this Supplement to the Exchange means the
exchange of MI's by the Members for the Exchange Shares contemplated by
the Exchange Agreement and this Supplement.
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1.02 EXCHANGE PROCEDURES. At the Closing, the Company shall
deliver to the Members certificates representing the Exchange Shares to
which they are entitled as provided in Section 1.01(a), against the
Members' delivery to the Company of all of the issued and outstanding
MI's, free and clear of all liens, claims and encumbrances, by means of
a fully executed Assignment of Membership Interest pursuant to which
Members assign all of their right, title and interest in and to the MI's
to the Company.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF COMPANY
Section 2.1. CAPITAL STRUCTURE. Section 3.02 of the Exchange Agreement
is hereby deleted in its entirety and the following new Section 3.02
substituted therefor:
3.02 CAPITAL STRUCTURE OF THE COMPANY.
(a) Authorized and Outstanding Capital Stock. As of the date
hereof, the authorized capital stock of the Company consists of
50,000,000 shares of Common Stock, of which 4,999,322 shares are issued
and outstanding. All outstanding shares of Common Stock have been duly
authorized and validly issued and are fully paid and nonassessable and
free of preemptive rights. Except as provided in Section 3.02(b) below,
the Company has no outstanding securities convertible into or
exchangeable for Common Stock, no contracts, rights, options, warrants
or other agreements or commitments to purchase or otherwise issue any
shares of Common Stock or securities convertible into or exchangeable
therefor, or any shares reserved for issuance under any stock option,
employee benefit or other plans or otherwise. No security of the Company
is entitled to any preemptive or similar rights to purchase securities
from the Company.
(b) Capital Stock of Company at Closing. On the date of Closing,
and just prior to completion of the Exchange, (i) the authorized capital
stock of the Company will consist of 125,000,000 shares of Common Stock
and 5,000,000 shares of "blank check" preferred stock, (ii) the
Company will have 4,999,322 shares of Common Stock issued and
outstanding (plus any shares issued subsequent to the date hereof upon
the exercise of any of the options or warrants described in clause (iii)
that follows), and (iii) 462,607 shares (less any shares subject to
options or warrants that are exercised or terminated subsequent to the
date hereof) reserved for issuance pursuant to (A) options for the
purchase of an aggregate of 337,607 shares of Common Stock at an
exercise price of $5.00 per share and (B) warrants for the purchase of
125,000 shares of Common Stock at an exercise price of $8.25 per share.
Section 2.2. AUTHORITY. Section 3.03 of the Exchange Agreement is
hereby deleted in its entirety and the following new Section 3.03 substituted
therefor:
3.03 AUTHORITY. The Company's Board of Directors has, on or
prior to the date of this Supplement, subject to receipt of the fairness
opinion referred to in Section 6.3(e), (a) declared that as of such date
that the Exchange was advisable and in the best interests of the Company
and its stockholders, (b) approved the Exchange Agreement and this
Supplement and resolved to recommend the approval of the Exchange
Agreement and this Supplement and the transactions contemplated thereby
and hereby by the Company's stockholders, and (c) directed that the
Exchange Agreement and this Supplement and the transactions contemplated
thereby and hereby be submitted to the Company's stockholders for
approval. The Company has all requisite corporate power and authority to
enter into the Exchange Agreement and this Supplement and to consummate
the transactions contemplated hereby. The execution and delivery of the
Exchange Agreement and this Supplement by the Company and the
consummation by the Company of the transactions contemplated thereby and
hereby have been duly authorized by all necessary action on the part of
the Board of Directors of the Company, and (assuming the valid
authorization,
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execution and delivery of the Exchange Agreement and this
Supplement by PNC and the Members) the Exchange Agreement and this
Supplement constitute valid and binding obligations of the Company
enforceable against it in accordance with their respective terms. When
issued in accordance with the terms of the Exchange Agreement and this
Supplement, the Exchange Shares will be duly authorized, validly issued,
fully paid and nonassessable.
Section 2.3. SEC REPORTS. Section 3.04 of the Exchange Agreement is
hereby deleted in its entirety and the following new Section 3.04 substituted
therefor:
3.04 SEC REPORTS. The Company has filed all forms, reports and
documents required to be filed by it with the Securities and Exchange
Commission (the "SEC") since December 31, 1998 and has heretofore made
available to PNC and the Members, in the form filed with the SEC
(excluding any exhibits thereto), (i) its Annual Report on Form 10-KSB
for the fiscal year ended December 31, 1999, and (ii) all other forms,
reports, registration statements and other documents filed by the
Company with the SEC since December 31, 1997 (the forms, reports,
registration statements and other documents referred to in clauses (i)
and (ii) above being referred to herein, collectively, as the "Company
SEC Reports"). The Company SEC Reports and any other forms, reports and
other documents filed by the Company with the SEC after the date of this
Supplement (i) were or will be prepared in accordance with the
requirements of the Securities Act of 1933, as amended (the "Securities
Act"), and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as the case may be, and the rules and regulations
thereunder and (ii) did not at the time they were filed, or will not at
the time they are filed, contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of
the circumstances under which they were or are made, not misleading.
Section 2.4. ADDITIONAL REPRESENTATIONS AND WARRANTIES. In addition to
the representations and warranties under Article III of the Exchange
Agreement, the Company hereby represents and warrants to PNC and the Members
as follows:
(a) Consents and Approvals. No filing or registration with, or
authorization, consent or approval of, any domestic (federal and state),
foreign or supranational court, commission, governmental body,
regulatory agency, authority or tribunal (a "Governmental Entity") is
required by or with respect to the Company or any subsidiary of the
Company in connection with the execution and delivery of the Exchange
Agreement and this Supplement by the Company or is necessary for the
consummation of the transactions contemplated by the Exchange Agreement
and this Supplement, except for (i) the filing with the SEC of (A) the
proxy statement for the meeting of the Company's stockholders to be held
for the purpose of obtaining the approvals required for the transactions
contemplated hereby (the "Proxy Statement"); and (B) such reports and
information under the Exchange Act, as may be required in connection
with the Exchange Agreement and this Supplement and the transactions
contemplated thereby and hereby, (ii) such as may be required under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), (iii) applicable requirements, if any, of Blue Sky Laws,
National Association of Securities Dealers and Nasdaq Stock Market, and
(iv) such other consents, orders, authorizations, registrations,
declarations and filings the failure of which to be obtained or made
would not, individually or in the aggregate, have a material adverse
effect on the Company, or prevent or materially delay the consummation
of the Exchange.
(b) Brokers. Neither the Company, any of the Company subsidiaries
nor any of their respective directors, officers or employees has
employed any broker or finder or incurred any liability for any
financial advisory fees, brokerage fees, commissions or similar payments
in connection with the transactions contemplated by the Exchange
Agreement or this Supplement.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PNC AND THE MEMBERS
Section 3.1. JOINT REPRESENTATIONS AND WARRANTIES OF PNC AND THE
MEMBERS. In addition to the representations and warranties under Article II
of the Exchange Agreement, PNC and each of the Members hereby represent and
warrant to the Company as follows:
(a) PNC is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Minnesota
and has the requisite company power and authority to own, lease or
operate its properties and to carry on its business as now being
conducted. PNC owns no shares of capital stock or other equity interest
or investment in any corporation, limited liability company, joint
venture or other entity other than ▇▇▇▇▇▇▇▇▇▇.▇▇▇ Limited, a Hong Kong
company, and Grand Scheme Profits, Ltd, a British Virgin Islands company
(the "PNC subsidiaries"). PNC owns, of record and beneficially, all of
the outstanding shares of capital stock of the PNC subsidiaries as
described on Schedule 3.1(a), in each case, free and clear of all liens,
claims and encumbrances.
(b) The authorized and outstanding MI's are as set forth in
Schedule 3.1(b). Except as described in Schedule 3.1(b), PNC has no
outstanding securities convertible into or exchangeable for MI's, no
contracts, rights, options, warrants or other agreements or commitments
to purchase or otherwise issue any MI's or securities convertible into
or exchangeable therefor, or any MI's reserved for issuance under any
option, employee benefit or other plans or otherwise.
(c) PNC has all requisite company power and authority to enter
into the Exchange Agreement and this Supplement and to perform its
obligations thereunder and hereunder. The execution and delivery of the
Exchange Agreement and this Supplement by PNC and the performance of its
obligations thereunder and hereunder have been duly authorized by all
necessary company action on the part of PNC. The Exchange Agreement and
this Supplement have been duly executed and delivered by PNC and the
Members and (assuming the valid authorization, execution and delivery of
the Exchange Agreement and this Supplement by the Company) constitute
the valid and binding obligations of PNC and the Members enforceable
against PNC and the Members in accordance with their respective terms
except to the extent that (a) enforcement may be limited by or subject
to any bankruptcy, insolvency, reorganization, moratorium or similar
laws now or hereafter in effect relating to or limiting creditors'
remedies and (b) the remedy of specific performance and injunctive and
other forms of equitable relief are subject to certain equitable
defenses and to the discretion of the court or other tribunal before
which any proceeding therefor may be brought.
(d) No filing or registration with, or authorization, consent or
approval of, any Governmental Entity is required by or with respect to
PNC, the PNC subsidiaries or any of the Members in connection with the
execution and delivery of the Exchange Agreement and this Supplement by
PNC or any of the Members or is necessary for the consummation of the
transactions contemplated by the Exchange Agreement and this Supplement,
except for (A) such as may be required under the HSR Act, and (B) such
consents, orders, authorizations, registrations, declarations and
filings the failure of which to be obtained or made would not,
individually or in the aggregate, have a material adverse effect on PNC,
the PNC subsidiaries, or prevent or materially delay the consummation of
the Exchange.
Section 3.2. SEVERAL REPRESENTATIONS AND WARRANTIES OF THE MEMBERS.
Each of the Members, for himself, herself or itself, but not on behalf of any
other Member, further represents and warrants to the Company, to the best of
such Member's knowledge, as follows:
(a) No claim is pending or threatened to the effect that the
present or past operations of PNC or the PNC subsidiaries infringes upon
or conflicts with the rights of others with respect to
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any intellectual property (including, without limitation, licenses,
patents, patent rights, patent applications, trademarks, trademark
applications, trade names, copyrights, drawings, trade secrets, know-how
and computer software) necessary to permit PNC and the PNC subsidiaries
to conduct their businesses as now operated (the "PNC Intellectual
Property") and no claim is pending or threatened to the effect that any
of the PNC Intellectual Property is invalid or unenforceable. PNC and
the PNC subsidiaries own, or have the right to use, all PNC Intellectual
Property material to the conduct of PNC's business as presently
conducted. No contract, agreement or understanding between PNC or the
PNC subsidiaries and any other party exists which would, following the
transactions contemplated hereby, impede or prevent the continued use by
the Company, PNC and the PNC subsidiaries of the entire right, title and
interest of PNC and the PNC subsidiaries in and to the PNC Intellectual
Property.
(b) Attached as Schedule 3.2(b) are the audited consolidated
financial statements of PNC as of and for the period ended December 31,
1999. The parties agree that all references in Section 2.10 of the
Exchange Agreement to the "financial statements of PNC' shall mean the
audited financial statements of PNC attached as Schedule 3.2(b) and that
the fourth sentence in Section 4.01 of the Exchange Agreement is hereby
deleted.
(c) Except as described in Schedule 3.2(c), neither PNC nor any of
the PNC subsidiaries is a party to (i) any lease, installment purchase
agreement or other contract with respect to any real property used or
proposed to be used in its operations, except, in each case, items
reflected in Schedule 3.2(c), (ii) any contract or agreement for the
purchase of any personal property, commodity, material, fixed asset or
equipment in excess of $100,000; (iii) any mortgage, lease, contract or
agreement creating an obligation of $100,000 or more; (iv) any contract
or agreement involving payments in excess of $100,000 which by its terms
does not terminate or is not terminable without penalty to it within one
year after the date hereof; (v) any loan agreement, indenture,
promissory note, conditional sales agreement or other similar type of
arrangement; or (vi) any material license agreement. Each of the
foregoing mortgages, leases, contracts, agreements and other
arrangements to which PNC or any of the PNC subsidiaries is a party are
valid and enforceable in accordance with their terms, except as such
enforceability may be limited by (i) bankruptcy laws and other similar
laws affecting creditors' rights generally and (ii) general principles
of equity, whether asserted in a proceeding in equity or at law; PNC and
the PNC subsidiaries and all other parties to each of the foregoing have
performed all material obligations required to be performed to date
thereunder; neither PNC nor any of the PNC subsidiaries, nor any such
other party is in default or in arrears under the terms of any of the
foregoing; and no condition exists or event has occurred which, with the
giving of notice or lapse of time or both, would constitute a default
under any of them.
(d) Neither PNC, the Members, any of the PNC subsidiaries nor any
of their respective governors, directors, officers, managers or
employees has employed any broker or finder or incurred any liability
for any financial advisory fees, brokerage fees, commissions or similar
payments in connection with the transactions contemplated by the
Exchange Agreement or this Supplement.
ARTICLE IV
ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MEMBERS
In addition to the representations and warranties under Article II of
the Exchange Agreement and Article III of this Supplement, each Member, for
himself, herself or itself, but not on behalf of any other Member, hereby
represents and warrants to, and covenants with, the Company as follows:
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Section 4.1. TITLE. Such Member is the beneficial and record owner of
the number of MI's listed opposite his/her/its name in Schedule 3.1(b) to
this Supplement and owns such MI's free and clear of all liens, claims,
encumbrances and restrictions, which MI's constitutes the Member's entire
ownership interest in PNC. Except as expressly contemplated in Schedule
3.1(b), such Member shall not sell, transfer, assign or convey any of such
MI's, or any interest therein.
Section 4.2. UNREGISTERED SECURITIES; INVESTMENT INTENT. Such Member
acknowledges and agrees that the Exchange Shares have not been, and will not
be, registered under the Securities Act or relevant foreign or state
securities laws pursuant to exemptions from registration under the Securities
Act and such laws, and that the Company's reliance upon such exemptions is
predicated in part on such Member's representations to the Company as
contained herein. Such Member understands and agrees that the Exchange Shares
must be held indefinitely unless they are subsequently registered for resale
under the Securities Act or unless transferred in reliance upon an available
exemption from such registration requirements. Such Member further
acknowledges and agrees that there is no understanding or agreement to
register the Exchange Shares. The Exchange Shares are being purchased for the
account of such Member for investment only and without the intention of
reselling, transferring or redistributing the same. Such Member has no
agreement for the transfer or disposition of any of the Exchange Shares.
Section 4.3. RESTRICTIONS ON TRANSFER. Such Member acknowledges that
the Company will place an appropriate restrictive legend on the
certificate(s) representing the Exchange Shares to be received by such Member
in the Exchange reflecting that such shares will constitute "restricted
securities" within the meaning of the Securities Act.
Section 4.4. WAIVERS. Such Member hereby agrees, concurrent with and
conditioned upon the consummation of the transactions contemplated by the
Exchange Agreement and this Supplement, to waive (i) any provision of law and
any and all contract rights which grant or granted to such Member a
preemptive right to purchase any MI's or other interest in PNC; (ii) any
rights of first refusal and similar rights to purchase any MI of any other
Member; and (iii) any and all provisions of the Articles of Organization or
Member Control Agreement of PNC and any other contract or agreement, the
operation of which would impair or impede or prevent the Exchange as
contemplated by the Exchange Agreement and this Supplement.
ARTICLE V
ADDITIONAL PROVISIONS
Section 5.1. CERTAIN REFERENCES. References to "Shares,"
"Shareholders" and "corporate" in the Exchange Agreement, and in
particular, Article II thereof, when referring to PNC or the Members, were
erroneous and unintended, and should be read as referring to MI's, the
Members of PNC and actions by a limited liability company, as the case may be.
Section 5.2. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties of the Company, PNC and the Members contained
herein shall survive the Closing for a period of two years.
Section 5.3. COMPANY STOCKHOLDER MEETING. The Company shall call its
Annual Meeting of stockholders as promptly as practicable for the purpose of
having the stockholders of the Company vote with respect to: (a) approving
the transactions contemplated hereby, including, but not limited to, the
issuance of the Exchange Shares; (b) changing the name of the Company to a
name to be specified by PNC prior to the initial filing of the Proxy
Statement; (c) approving an increase in the number of authorized shares of
Common Stock to 125,000,000 shares and authorizing the issuance of up to
5,000,000 shares of "blank check" preferred stock, $.0001 par value per
share, of the Company; (d) approving an appropriate amendment to the
Company's 1998 Stock Option Plan to increase the number of shares available
for issuance thereunder from 650,000 to 5,000,000; and (e) approving such
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other matters as the Company's Board of Directors shall determine. The
Company shall, as soon as is practicable after the execution of this
Supplement, prepare and file with the SEC the Proxy Statement for the purpose
of soliciting proxies for the matters brought before the Annual Meeting.
Subject to its prior receipt of the fairness opinion contemplated in Section
6.3(e), the Company will, through the Company's Board of Directors, recommend
to its stockholders approval of such matters and shall not withdraw such
recommendation; provided, however, that the Company's Board of Directors or
any committee thereof shall not be required to make, or if already made shall
be entitled to withdraw, such recommendation if and only if the Company's
Board of Directors or any committee thereof concludes in good faith on the
basis of the advice of counsel that the making of, or the failure to
withdraw, such recommendation might violate the fiduciary obligations of the
Company's Board of Directors or any committee thereof under applicable law;
provided further, however, that in no case shall any change in the trading
price of Common Stock be used as the sole basis for any such conclusion. No
withdrawal of the recommendation by the Company's Board of Directors or any
committee thereof that is permitted by this Section 5.3, shall affect the
Company's obligation to call the Annual Meeting as provided in this Section
5.3; provided, however, that PNC and the Members acknowledge and agree that
the Company will not be obligated to call its Annual Meeting for the purposes
referenced above, file the Proxy Statement or recommend to its stockholders
the transactions contemplated by the Exchange Agreement and this Supplement
unless and until it shall have received the opinion of its fairness advisor
as contemplated in Section 6.3(e).
Section 5.4. EXERCISE OF FIDUCIARY DUTIES. Nothing in the Exchange
Agreement or this Supplement shall prohibit or restrict the Company and its
Board of Directors from taking such actions as the Board of Directors of the
Company determines in good faith, after consultation with counsel, are
necessary in order to comply with its fiduciary duties to the Company or the
Company's stockholders under applicable law, including, without limitation,
(i) responding to, or negotiating or entering into agreements with respect
to, alternative proposals that the Board of Directors determines have a
reasonable likelihood of resulting in a more favorable transaction for the
Company and its stockholders than the Exchange and (ii) making any
disclosures to the Company's stockholders regarding such alternative
proposals, or otherwise, which, if not made, could be inconsistent with the
fiduciary duties of the Board of Directors to the Company or its stockholders
or its obligations under applicable law.
Section 5.5. PREPARATION OF THE PROXY STATEMENT.
(a) The Company shall use its reasonable best efforts to prepare
and file with the SEC a Proxy Statement and related proxy which meets
the requirements of Regulation 14A of the Exchange Act. The Proxy
Statement shall solicit proxies in respect to the matters described in
Section 5.3 above.
(b) Each of the Company and PNC, as to itself and its
subsidiaries, and each of the Members agree to cooperate in the
preparation of the Company's Proxy Statement and that none of the
information supplied or to be supplied by it for inclusion or
incorporation by reference in the Proxy Statement and any amendment or
supplement thereto will, at the date of mailing to the Company
stockholders, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
Section 5.6. FEES AND EXPENSES OF PNC. All expenses incurred by or on
behalf of PNC and the Members in connection with the Exchange and related
transactions shall be expenses of PNC and PNC shall pay the same.
Section 5.7. PUBLIC ANNOUNCEMENTS. PNC and the Company each shall
consult with the other prior to issuing any press releases or otherwise
making public announcements with respect to the Exchange and the other
transactions contemplated by the Exchange Agreement and this Supplement
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and prior to making any filings with any third party and/or any Governmental
Entity with respect thereto, except as may be required by law or by
obligations pursuant to any listing agreement with or rules of Nasdaq.
Section 5.8. STATE TAKEOVER LAWS. If any "fair price," "business
combination" or "control share acquisition" statute or other similar
statute or regulation shall become applicable to the transactions
contemplated hereby, the Company and PNC and their Board of Directors and
Board of Governors, respectively, shall use their commercially reasonable
efforts to grant such approvals and take such actions as are necessary so
that the transactions contemplated hereby by the Exchange Agreement and this
Supplement may be consummated as promptly as practicable on the terms
contemplated hereby and otherwise act to minimize the effects of any such
statute or regulation on the transactions contemplated hereby
Section 5.9. INSURANCE. After the Closing, the Company shall maintain
in effect, without modification, until the normal expiration of the policy
term ending December 23, 2001, its current policy (policy number NDA 0151652)
of directors and officers liability insurance with Reliance Insurance Company
of Illinois (Reliance National Risk Specialists, Inc.). Neither the Company
nor PNC or any of the Members will take any action which would have the
effect of limiting the coverage available under such policy to the directors
or officers or former directors or former officers of the Company or
rendering such coverage unavailable to such persons, each of whom is an
intended beneficiary of this Section 5.9.
Section 5.10. TRANSFER TAXES. All transfer, documentary, sales, use,
registration, value-added and other similar taxes and related fees (including
any penalties, interest an additions to tax) (collectively, "Transfer
Taxes") incurred by any party hereto in connection with this Supplement and
the transactions contemplated hereby shall be paid by the Company. The
Company and the Members shall cooperate in timely making all filings,
returns, reports and forms as may be required to comply with the provisions
of such Transfer Tax laws.
Section 5.11. COMPANY STOCK OPTIONS. Notwithstanding any provision of
the Exchange Agreement and this Supplement to the contrary, PNC and the
Members understand and agree that the Board of Directors of the Company has
resolved to accelerate the vesting of all of the stock options currently
outstanding under the Company's 1998 Stock Option Plan, such that all such
options shall immediately vest and become exercisable three business days
following the Closing.
Section 5.12. CERTAIN TRANSACTIONS. Prior to the Closing, PNC shall
not sell or issue any MI's or other ownership interest in PNC or any option,
warrant or other right to purchase or acquire any MI's or other ownership
interest in PNC, or any securities convertible into or exchangeable for MI's,
unless (a) PNC provides at least three days prior written notice to the
Company and (b) the recipient of such MI's or other ownership interest, or
option, warrant, or other right, enters into an appropriate amendment or
supplement to the Exchange Agreement and this Supplement by which it (i)
agrees to be a party to the Exchange Agreement and this Supplement, (ii)
makes the same representations and warranties to the Company as are made by
the Members under the Exchange Agreement and this Supplement, (iii) agrees to
sell and assign to the Company at the Closing in exchange for its pro rata
share of the Exchange Shares as provided in Section 1.01(a) of the Exchange
Agreement, as amended by this Supplement, any and all MI's it may own or have
the right to acquire. The notice required by this Section shall not apply to
the issuance of any MI's pursuant to any currently outstanding option or
other commitment described in Schedule 3.1(b) attached hereto. Not later than
three days prior to the Closing, PNC and the Members shall update Schedule
3.1(b) as of the Closing and deliver the updated Schedule 3.1(b) to the
Company, which updated Schedule shall be true and complete as of the date of
the Closing.
Section 5.13. NO DIVIDENDS, DISTRIBUTIONS OR SPECIAL PAYMENTS. Prior
to the Closing, neither the Company nor PNC will (a) declare or pay any
dividends or make other distributions with respect to its
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Common Stock or MI's or (b) pay or become obligated to pay in the future any
bonuses, consulting fees or other compensation outside the recurring,
ordinary course of business to or for the benefit of any shareholder, Member,
director, governor, management person or other, unless such compensation is
pursuant to an agreement disclosed in the Proxy Statement.
Section 5.14. QUARTERLY FINANCIAL INFORMATION. Prior to the Closing,
the Company and PNC shall deliver to the other copies of quarterly unaudited
consolidated financial statements as of and for the three months ended March
31, 2000 and such other financial information as the other reasonably
requests. Such unaudited quarterly financial statements will be prepared from
the respective books of the Company and PNC, will be in compliance with U. S.
generally accepted accounting principles consistently applied and will
contain and reflect all adjustments and disclosures necessary for a fair
presentation of financial condition and results of operation.
ARTICLE VI
CONDITIONS PRECEDENT TO CLOSING
Section 6.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
EXCHANGE. The respective obligations of each party to effect the Exchange
shall be subject to the fulfillment at or prior to the Closing of the
conditions contained in Article IV of the Exchange Agreement and the
following additional conditions, each of which may be waived only with the
consent in writing of each party not obligated to satisfy the condition:
(a) The Exchange Agreement and this Supplement and the Exchange
shall have been duly approved by the requisite vote of stockholders of
the Company in accordance with applicable law and the Certificate of
Incorporation and Bylaws of the Company.
(b) The Exchange Shares shall have been authorized for listing on
the Nasdaq National Market upon official notice of issuance.
(c) The waiting period applicable to the consummation of the
Exchange under the HSR Act shall have expired or been terminated. All
authorizations, consents, orders, declarations or approvals of, or
filings with, any Governmental Entity, which the failure to obtain, make
or occur would have the effect of making the Exchange or any of the
transactions contemplated hereby illegal or would have a material
adverse effect on either of the Company or PNC (assuming the Exchange
had taken place), shall have been obtained or shall have been made.
(d) There shall not be instituted or pending any suit, action or
proceeding by a Governmental Entity or any other person as a result of
this Supplement or the Exchange Agreement or any of the transactions
contemplated herein or therein which would have a material adverse
effect on either the Company or PNC (assuming for purposes of this
paragraph (d) that the Exchange shall have occurred) or which seeks to
prevent or restrict the consummation of the Exchange or seeks monetary
damages in connection therewith.
(e) No court or other Governmental Entity having jurisdiction over
PNC or the Company, or any of their respective subsidiaries, shall have
enacted, issued, promulgated, enforced or entered any law, rule,
regulation, executive order, decree, injunction or other order (whether
temporary, preliminary or permanent) which is then in effect and has the
effect of making this Supplement, the Exchange Agreement, the Exchange
or any of the transactions contemplated hereby or thereby illegal.
(f) Sections 2.11 and 3.11 of the Exchange Agreement are deleted
in their entirety and the following new Sections 2.11 and 3.11
substituted therefor:
2.11 [3.11] NO ADVERSE CHANGE. There shall have been no material
adverse change in the assets, as a whole, or the business, prospects,
financial condition or results of operations of PNC and the PNC Subsidiaries
taken as a whole since December 31, 1999.
B-9
Section 6.2. ADDITIONAL CONDITIONS TO OBLIGATIONS OF THE MEMBERS TO
EFFECT THE EXCHANGE. In addition to the conditions contained in Section 6.01
of the Exchange Agreement, the obligation of the Members to effect the
Exchange shall be subject to the fulfillment at or prior to the Closing of
the following additional conditions, each of which may be waived by the
Members in writing:
(a) The Company shall have performed in all material respects each
of its agreements contained in the Exchange Agreement and this
Supplement required to be performed on or prior to the date of Closing,
each of the representations and warranties of the Company contained in
the Exchange Agreement and this Supplement shall be true and correct in
all material respects on and as of the date of Closing as if made on and
as of such date in each case except as contemplated or permitted by the
Exchange Agreement or this Supplement, and the Members shall have
received a certificate signed on behalf of the Company by its Chief
Executive Officer and its Chief Financial Officer to such effect.
(b) The Company's Certificate of Incorporation shall be amended to
adopt the changes to the Company's capital structure contemplated in
Section 5.3 of this Supplement.
(c) ▇▇▇▇ & ▇▇▇▇▇ shall have delivered to the Members its opinion,
in form and content satisfactory to PNC, to the effects set forth in
Exhibit 1 to this Supplement.
Section 6.3. ADDITIONAL CONDITIONS TO OBLIGATIONS OF THE COMPANY TO
EFFECT THE EXCHANGE. The obligations of the Company to effect the Exchange
shall be subject to the fulfillment at or prior to the date of Closing of the
conditions contained in Section 6.02 of the Exchange Agreement and the
following additional conditions, each of which may be waived by the Company
in writing:
(a) PNC and the Members shall have performed in all material
respects each of their agreements contained in the Exchange Agreement
and this Supplement required to be performed by them on or prior to the
date of Closing, each of the representations and warranties of PNC and
the Members contained in the Exchange Agreement and this Supplement
shall be true and correct in all material respects on and as of the date
of Closing as if made on and as of such date in each case except as
contemplated or permitted by the Exchange Agreement or this Supplement,
and the Company shall have received a certificate signed on behalf of
PNC by its President and Chief Executive Officer and its Vice President
of Finance and Operations to such effect.
(b) Any and all securities convertible into or exchangeable for
MI's, and any and all other contracts, rights, options, warrants and
other rights to purchase or otherwise acquire any MI's or securities
convertible into or exchangeable therefor (including, without
limitation, those set forth on Schedule 3.1(b)) shall have been
exercised in full or shall have been terminated without any liability on
the part of PNC.
(c) All necessary third-party consents, waivers, approvals and
authorizations set forth hereto shall have been obtained.
(d) ▇▇▇▇▇▇ and ▇▇▇▇▇▇, P.A. shall have delivered to the Company
its opinion, in form and content satisfactory to the Company, to the
effects set forth in Exhibit 2 to this Supplement, and the Company shall
have received such opinions of counsel to the Members as it may
reasonably request with respect to the due authorization, execution and
delivery of the Exchange Agreement and this Supplement and the
enforceability thereof and hereof against the Members.
(e) The Board of Directors of the Company shall have received, as
of the date of the Proxy Statement referred to in Section 5.3 of this
Supplement and as of the Closing, the advice and written opinion, in
form and content satisfactory to it, of ▇▇▇▇ Capital Partners, its
fairness adviser, to the effect that the Exchange is fair to the
stockholders of the Company from a financial point of view.
(f) All outstanding indebtedness of the Members to PNC shall have
been repaid in full.
B-10
ARTICLE VII
TERMINATION
Section 7.1. TERMINATION. The Exchange Agreement and this Supplement
may be terminated at any time prior to the Closing, whether before or after
any approval of the matters presented in connection with the Exchange by the
stockholders of the Company:
(a) by mutual written consent of the Company, PNC and all the
Members; and
(b) by the Company on the one hand, or PNC or the Members holding,
in aggregate, a majority of the MI's on the other hand, if the Exchange
has not been effected on or prior to the close of business on September
30, 2000 (the "Termination Date"); provided, however, that the right
to terminate this Supplement pursuant to this Section 7.1(b) shall not
be available to any party whose failure to fulfill any of its
obligations contained in the Exchange Agreement and this Supplement has
been the cause of, or resulted in, the failure of the Exchange to have
occurred on or prior to the aforesaid date.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1. ENTIRE AGREEMENT. The Exchange Agreement is hereby
incorporated herein by this reference. In the event of any conflict or
inconsistency between the terms of the Exchange Agreement and this
Supplement, the terms of this Supplement shall control. Except as expressly
set forth in this Supplement, the Exchange Agreement shall remain in full
force and effect.
Section 8.2. COUNSEL TO PNC. ▇▇▇▇▇▇ and ▇▇▇▇▇▇, P.A. has served as
counsel to PNC in connection with this Supplement. ▇▇▇▇▇▇ and ▇▇▇▇▇▇, P.A.
does not represent or advise, or undertake to represent or advise, any Member
of PNC in connection with the Exchange Agreement or this Supplement or the
transactions contemplated thereby or hereby.
Section 8.3. CONTROLLING LAW. Section 7.06 of the Exchange Agreement
is deleted. The parties hereby agree that the Exchange Agreement and this
Supplement and all questions relating to their validity, interpretation,
performance and enforcement, shall be governed by and construed in accordance
with the laws of the State of Delaware, notwithstanding any Delaware or other
conflict-of-law provisions to the contrary. Any legal action or other legal
proceeding relating to this Supplement or the enforcement of any provision of
the Exchange Agreement and this Supplement may be brought or otherwise
commenced in any state or federal court located either in California or
Minnesota. Each party to the Exchange Agreement and this Supplement (i)
expressly and irrevocably consents and submits to the nonexclusive
jurisdiction of each state and federal court located in either California or
Minnesota (and each appellate court located in either such state in
connection with any such legal proceeding); (ii) agrees that each state and
federal court located in either such state shall be deemed to be a convenient
forum; and (iii) agrees not to assert (by way of motion, as a defense or
otherwise) in any such legal proceeding commenced in any state or federal
court located in either such state, any claim that such party is not subject
personally to the jurisdiction of such court, that such legal proceeding has
been brought in an inconvenient forum, that the venue of such proceeding is
improper or that this Supplement or the subject matter of the Exchange
Agreement and this Supplement may not be enforced in or by such court.
B-11
IN WITNESS WHEREOF , the parties hereto have executed or have caused
this Supplement to be executed by their respective duly authorized officers
all as of the date first written above.
PNC: COMPANY:
▇▇▇▇▇▇▇▇▇▇.▇▇▇ LLC CREATIVE MASTER INTERNATIONAL, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
----------------------------- -------------------------------
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
President and Chief Executive Chairman and Chief Executive
Officer Officer
MEMBERS:
/s/ ▇▇▇▇ ▇▇▇▇ /s/ Wan ▇▇▇▇ ▇▇▇*
--------------------------------- -----------------------------------
Tong I, ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇
/s/ ▇▇▇ ▇▇* /s/ ▇▇▇▇▇ ▇▇▇▇▇▇*
--------------------------------- -----------------------------------
▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇* /s/ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇*
--------------------------------- -----------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇ ▇▇▇▇
Pure Technology International Limited /s/ ▇▇▇▇▇ ▇▇▇*
-----------------------------------
▇▇▇▇▇ ▇▇▇
Fortune E-Commerce Limited B2B Limited
By: * By: *
----------------------------- -------------------------------
Name: Name:
Title: Title:
B-12
Sino Mart Management Ltd. Eastern Road Group Limited
By: * By: *
----------------------------- -------------------------------
Name: Name:
Title: Title:
Green Plant, Inc. Asia Pulp & Paper
By: * By: *
----------------------------- -------------------------------
Name: Name:
Title: Title:
Alpha One Limited /s/ ▇▇▇▇▇ ▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇
By: * /s/ ▇▇▇▇▇▇▇▇▇ Ma
----------------------------- -----------------------------------
Name:
Title:
*By ▇▇▇▇ ▇. ▇▇▇▇, Attorney-in-Fact.
B-13
SCHEDULE 3.1(a)
PNC JOINT VENTURE OWNERSHIP
PNC China Holding I, has been renamed "▇▇▇▇▇▇▇▇▇▇.▇▇▇ China Limited"
("PNC China") and is a joint venture funded/owned 51% by PNC and 49% by APP
China Group, Ltd., a company established under the laws of Bermuda ("APP
China"). PNC China was formed to provide electronic commerce and website
development services and information technology services initially to APP
China and thereafter to third parties located in the People's Republic of
China ("PRC").
PNC II Joint Venture ("PNC II") is a joint venture yet to be formed
which the parties anticipate will be funded/owned 20% by PNC and 80% by APP
China. PNC II will be formed to act as a holding company for another foreign
company which will own two wholly-owned subsidiaries in Shanghai China, "PNC
China B2B" and "PNC China Logistics". PNC China B2B will initially develop
and operate an electronic commerce website for use by APP China, its
suppliers and customers, and subsequently offer these services to third
parties in the PRC. PNC China Logistics would provide back-end electronic
commerce services to APP China initially and third parties in PRC
subsequently.
B-14
SCHEDULE 3.1(b)
A. OUTSTANDING MEMBERSHIP INTERESTS IN PNC:
Membership Interests
------------------------
Name and Address of Member Number Percentage
-------------------------- ------- ----------
▇▇▇▇ ▇. ▇▇▇▇ ............................................. 800,000 8.62%
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Sino Mart Management Ltd.................................. 800,000 8.62%
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Wickhams Cay I
Road Town, Tortola, British Virgin Islands
Wan Sang ▇▇▇, ▇▇▇▇▇▇▇..................................... 300,000 3.23%
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇ ▇▇▇, ▇▇▇▇▇............................................. 100,000 1.08%
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Green Plant, Inc.......................................... 730,000 7.86%
c/o Caribbean Corporate Services Limited
Third Floor, ▇▇▇▇ ▇▇▇▇▇ Building
Wickams Cay I
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Alpha One Limited......................................... 500,000 5.38%
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ House
▇▇ ▇▇▇▇▇'▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
Pure Technology International Ltd......................... 300,000 3.23%
▇.▇. ▇▇▇ ▇▇▇
Offshore Incorporation Centre
Road Town, Tortola, British Virgin Islands
Fortune E-Commerce Ltd.................................... 1,320,000 14.22%
▇▇▇▇ ▇▇▇▇-▇
15/F Tower A, Regent Centre
63 Wo Yi Hop Road
▇▇▇▇ ▇▇▇▇▇, N.T., Hong Kong
B2B Ltd................................................... 3,000,000 32.31%
▇▇/▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇
B-15
Membership Interests
------------------------
Name and Address of Member Number Percentage
-------------------------- ------- ----------
Oei Hong ▇▇▇▇▇............................................ 1,000,000 10.77%
▇/▇ ▇▇/▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ Tower
▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ Group Limited................................ 285,714 3.08%
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ Tower
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇.............................................. 50,000 0.54%
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇.............................................. 100,000 1.08%
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------- ------
9,285,714 100.0%
B. Options, rights and other commitments to issue membership interests
in PNC:
Number of Vesting
Name of Rights Holder Type MIs Exercise Price Schedule
--------------------- ------- ---------- -------------- ------------
▇▇▇▇ ▇. ▇▇▇▇................... options 150,000 $2.50 fully vested
▇▇▇▇▇▇▇ ▇▇▇.................... options 150,000 $2.50 fully vested
▇▇▇▇▇ ▇▇▇...................... options 50,000 $2.50 fully vested
▇▇▇▇ ▇▇▇▇...................... options 100,000 $2.50 fully vested
B2B Ltd........................ options 1,000,000 $2.50 fully vested
Oei Hong ▇▇▇▇▇................. options 150,000 $2.50 fully vested
APP China Group Limited........ options 1,000,000 (1) fully vested
▇▇▇▇▇ ▇▇▇...................... options 100,000 $2.50 fully vested
Li ▇▇▇▇ ▇▇▇.................... options 100,000 $2.50 fully vested
▇▇▇▇▇ ▇▇▇...................... options 100,000 $2.50 fully vested
▇▇▇▇▇▇▇▇▇ Ma................... options 100,000 $2.50 fully vested
-------------------
(1) APP China Group Limited has the right to exercise its options at an
exercise price equal to $5.00 per unit payable in cash and stock of APP.
Total cash to be paid is $2.5 million.
B-16
SCHEDULE 3.2( )
AUDITED CONSOLIDATED FINANCIAL STATEMENTS
OF ▇▇▇▇▇▇▇▇▇▇.▇▇▇ LLC
B-17
SCHEDULE 3.2(c)
SCHEDULE OF CONTRACTS OR AGREEMENTS IN EXCESS OF $100,000
Description Remaining Commitment
------------------------------------------------------------------------------------ --------------------
PNC subsidiary is party to a noncancelable office lease for Hong Kong office
space through 2001............................................................... $183,000
PNC has a funding commitment for APP China Joint Venture pursuant to that
certain Subscription Agreement dated as of 3/31/00 between APP China Group
Limited and PNC. Funding required subsequent to 4/30/00.......................... $510,000
PNC has a funding commitment for North America Trade Center in a quarterly
amount of $100,000 beginning 7/1/00.............................................. $400,000
B-18
EXHIBIT 1
[Form of ▇▇▇▇ & ▇▇▇▇▇ Opinion]
Based upon the foregoing, but subject to the qualifications and
limitations which follow, we are of the opinion that:
(a) The Company is validly existing and in good standing under the laws
of the State of Delaware and has the requisite corporate power and authority
to own, lease and operate its properties and to carry on its business as
presently conducted.
(b) The Company has the requisite corporate power and authority to
execute and deliver the [Acquisition Documents] and to carry out the
transactions contemplated thereby, and the execution, delivery and
performance of the [Acquisition Documents] by the Company have been duly
authorized by all requisite corporate action of the Company.
(c) Each of the [Acquisition Documents] to which the Company is a party
has been duly executed and delivered by the Company and constitutes the
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms.
(d) The capitalization of the Company is as described in the Proxy
Statement and, to such counsel's knowledge, there are no outstanding options,
warrants or other rights to subscribe for or purchase any shares of capital
stock of the Company other than as described in the Proxy Statement.
(e) All of the outstanding shares of common stock of the Company have
been duly authorized and are validly issued, fully-paid and non-assessable.
(f) The sale, assignment, and transfer to the Members of the Exchange
Shares pursuant to the [Acquisition Documents] does not (i) conflict with or
violate the Certificate of Incorporation or By-laws of the Company or any
agreement known to such counsel to which the Company is a party or by which
it or its assets or the Exchange Shares are bound or affected, or (ii) give
rise to any preemptive or similar right on the part of any person or entity.
* * *
The foregoing opinions will be subject to usual and customary
qualifications.
B-19
EXHIBIT 2
[Form of ▇▇▇▇▇▇ and ▇▇▇▇▇▇ Opinion]
Based upon the foregoing, but subject to the qualifications and
limitations which follow, we are of the opinion that:
(a) PNC and ▇▇▇▇▇▇▇▇▇▇.▇▇▇, Ltd. is validly existing under the laws of
its jurisdiction of organization and has the requisite company power and
authority to own, lease and operate its properties and to carry on its
business as presently conducted.
(b) [PNC has the requisite corporate power and authority to execute and
deliver the [Acquisition Documents] and to carry out the transactions
contemplated thereby, and the execution, delivery and performance of the
[Acquisition Documents] by PNC have been duly authorized by all requisite
company action of PNC.
(c) *Each of the [Acquisition Documents] to which PNC is a party has
been duly executed and delivered by PNC and constitutes the legal, valid and
binding obligation of PNC, enforceable against PNC in accordance with its
terms.
(d) The [MI's] constitute all of the outstanding membership interests in
PNC and, to such counsel's knowledge, there are no outstanding options,
warrants or other rights to subscribe for or purchase any membership interest
in PNC other than the [PNC Employee Options].
(e) The [MI's] have been duly authorized and are validly issued,
fully-paid and non-assessable.
(f) Except for such conflicts, violations and rights as have been
validly waived, the sale, assignment, and transfer to the Company of the
[MI's] pursuant to the [Acquisition Documents] does not (i) conflict with or
violate the Articles of Organization or Member Control Agreement or other
charter document of PNC or any agreement known to such counsel to which PNC
is a party or by which it or its assets or MI's are bound or affected, or
(ii) give rise to any preemptive or similar right on the part of any person
or entity.
* * *
The foregoing opinions will be subject to usual and customary
qualifications.
-------------------
* ▇▇▇▇▇▇ and ▇▇▇▇▇▇ need not express the opinions under these paragraphs
with respect to the Exchange Agreement or the Supplement to Exchange
Agreement.
B-20