EXECUTION COPY
SHARE EXCHANGE AND REORGANIZATION AGREEMENT, dated as of August 25, 2004
(the "Agreement"), between GREAT EXPECTATIONS AND ASSOCIATES, INC., a Colorado
corporation ("GXPT"); and ADVAXIS, INC., a Delaware corporation ("Advaxis"), and
the SHAREHOLDERS OF ADVAXIS set forth on Schedule A hereto, which shareholders
constitute all of the holders of capital stock of Advaxis as of the date hereof
and as of the Closing (as defined below) (the "Advaxis Shareholders").
INTRODUCTION
GXPT desires to acquire (i) all of the issued and outstanding shares of
Common Stock of Advaxis (the "Advaxis Common Stock"), and Series A Preferred
Stock of Advaxis (the "Advaxis Series A Preferred Stock;' together with the
Advaxis Common Stock, the "Advaxis Capital Stock") in exchange for an aggregate
of 15,597,723 shares (the "Purchase Shares") of authorized, but theretofore
unissued, shares of common stock, no par value, of GXPT (the "GXPT Common
Stock"), (ii) all of the issued and outstanding warrants to purchase Advaxis
Capital Stock (the "Advaxis Warrants"), in exchange for Warrants to purchase
584,885 shares of GXPT Common Stock (the "GXPT Warrants"), and (iii) all of the
issued and outstanding options to purchase Advaxis Capital Stock (the "Advaxis
Options") in exchange for an aggregate of 2,381,525 options to purchase GXPT
Common Stock (the "GXPT Options"); representing 96.25% of the fully diluted
outstanding GXPT Common Stock after giving effect to such issuances and the
issuance of shares of GXPT Common Stock referred to in Section 3.01(p) below,
all as more fully set forth on Schedule B hereto. The Advaxis Shareholders
desire to exchange their beneficially owned shares of Advaxis Capital Stock
solely for shares of GXPT Common Stock at a ratio of 352.1823361 as more fully
set forth on Schedule B hereto.
Prior to the date hereof, the respective boards of directors of each of
GXPT and Advaxis have, and the Advaxis Shareholders and the shareholders of GXPT
have, approved and adopted this Agreement and it is the intent of the parties
hereto that the transactions contemplated hereby be structured so as to qualify
as a tax-free exchange under Subchapter C of the Internal Revenue Code of 1986,
as amended (the "Code"), and the provisions of this Agreement will be
interpreted in a manner consistent with this intent.
There shall be an offering to sell up to 280 units (the "Units"), each
Unit consisting of 87,108 shares of GXPT Common Stock and Warrants to purchase
87,108 shares of GXPT Common Stock for an aggregate purchase price of up to
$7,000,000 (the "Offering"). In connection with the Offering all of the issued
and outstanding promissory notes of Advaxis which are convertible into shares of
Advaxis capital stock (the "Advaxis Notes") shall be exchanged for Units on the
same terms as in the Offering. As of the date hereof the aggregate principal
amount of the Advaxis Notes is $494,729.
After giving effect to (a) the acquisition of the Advaxis Capital Stock in
exchange for the Purchase Shares, (b) the issuance of shares of GXPT Common
Stock referred to in Section 3.01(p) below, and (c) the exchanges of the Advaxis
Warrants and Advaxis Options for GXPT Warrants and GXPT Options (but not giving
effect to the issuance and/or conversion of the Advaxis Notes, the Units or
shares of GXPT Common Stock or Warrants issuable to placement agents or to
consultants in connection with the Offering) there shall be outstanding
20,069,333 shares of common stock of GXPT, on a fully diluted basis. Such fully
diluted capitalization table is set forth on Schedule B hereto.
Upon the signing of this Agreement by all parties to this Agreement,
Advaxis shall advance to GXPT a nonrefundable payment of $7,500 by wire transfer
or by certified check. The closing of the transaction contemplated by this
Agreement (the "Closing") shall occur when $1,500,000 has been placed in escrow
in connection with the Offering; it being understood however that the date of
the Closing must occur on or prior to forty-five (45) days from the date hereof
(the "Initial Closing Date"). If Advaxis advances to GXPT a nonrefundable
payment of $15,000 on or prior to the Initial Closing Date, then the date of the
Closing shall be extended for an additional forty-five (45) day period. Such
advances shall be offset against the amount Advaxis shall pay to GXPT at Closing
as set forth in Section 1.03(e).
NOW, THEREFORE, in consideration of the premises and mutual
representations, warranties and covenants herein contained, the parties hereby
agree as follows:
ARTICLE I
ACQUISITION AND EXCHANGE OF SHARES
SECTION 1.01 THE AGREEMENT. The parties hereto hereby agree that GXPT
shall acquire all of the issued and outstanding shares of Advaxis Capital Stock,
Advaxis Warrants and Advaxis Options in exchange for the Purchase Shares, GXPT
Warrants and GXPT Options. The parties hereto agree that at the Closing Advaxis
will become a wholly-owned subsidiary of GXPT subject to the conditions and
provisions of Section 1.03 hereof.
SECTION 1.02 EXCHANGE OF SECURITIES.
(a) At the Closing, GXPT will cause to be issued and held for delivery to
the Advaxis Shareholders or their designees, as applicable, stock certificates
representing the Purchase Shares in exchange for all of the issued and
outstanding shares of Advaxis Capital Stock. At the Closing, Advaxis and the
Advaxis Shareholders will cause to be delivered to GXPT, stock certificates or
other evidence, as applicable, representing Advaxis Capital Stock. The shares of
GXPT Common Stock to be issued will be authorized, but theretofore unissued
shares of GXPT Common Stock, and will be issued to the respective Advaxis
Shareholders as set forth in Schedule B hereof.
(b) At the Closing, GXPT will cause to be issued and held for delivery to
the Advaxis Shareholders warrant agreements representing the GXPT Warrants in
exchange for all of the Advaxis Warrants, which will be delivered to GXPT at the
Closing. At the Closing, Advaxis and the Advaxis Shareholders will cause to be
delivered to GXPT, warrant agreements or other evidence, as applicable,
representing the Advaxis Warrants. The GXPT Warrants to be issued will be
authorized, but theretofore unissued GXPT Warrants, and will be issued to the
Advaxis Shareholders, as applicable, as set forth in Schedule B hereof.
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(c) At the Closing, GXPT will cause to be issued and held for delivery to
the Advaxis Shareholders option agreements representing GXPT Options in exchange
for all of the Advaxis Options, which Advaxis Options will be delivered to GXPT
at the Closing. At the Closing, Advaxis and the Advaxis Shareholders will cause
to be delivered to GXPT the option agreements or other evidence, as applicable,
representing the GXPT Options. The GXPT Options to be issued will be authorized,
but theretofore ungranted, and will be granted to the respective Advaxis
Shareholders as set forth in Schedule B hereof.
(d) All shares of GXPT Common Stock to be issued hereunder shall be deemed
"restricted securities" as defined in paragraph (a) of Rule 144 under the
Securities Act of 1933, as amended (the "Securities Act"). All shares of GXPT
Common Stock to be issued under the terms of this Agreement shall be issued
pursuant to an exemption from the registration requirements of the Securities
Act, under Section 4(2) of the Securities Act and the rules and regulations
promulgated thereunder. Certificates representing the shares of GXPT Common
Stock to be issued hereunder shall bear a restrictive legend in substantially
the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED
FOR SALE, SOLD, OR OTHERWISE DISPOSED OF, EXCEPT IN COMPLIANCE WITH
THE REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT TO AN EXEMPTION
FROM SUCH REGISTRATION PROVISIONS, THE AVAILABILITY OF WHICH IS TO
BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
SECTION 1.03 CLOSING. The Closing will take place at the offices of
Reitler Brown & Rosenblatt LLC ("Reitler Brown") on the date that $1,500,000 has
been placed in escrow pursuant to the Offering, or such other date and at such
other time and place to be mutually agreed upon by the parties hereto; provided
that such date will occur by the Initial Closing Date unless extended by Advaxis
in the manner set forth in the Introduction, and will be subject to the
provisions of Article IV of this Agreement. The date the Closing actually occurs
shall be deemed the "Closing Date". At the Closing:
(a) Advaxis will deliver to GXPT stock certificates, warrant certificates,
warrant agreements, option agreements, or other evidences representing the
Advaxis Capital Stock, Advaxis Warrants and Advaxis Options, duly endorsed or
accompanied by a properly executed stock power, so as to make GXPT the holder
thereof, free and clear of all liens, claims and other encumbrances, or an
affidavit of lost certificate or other evidence satisfactory to Advaxis that
such securities and/or agreements were lost or destroyed;
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(b) GXPT will deliver to the Advaxis Shareholders, in accordance with
Section 1.02 hereof, stock certificates representing the Purchase Shares, option
agreements representing the GXPT Options and warrant certificates representing
the GXPT Warrants;
(c) GXPT will deliver an Officer's Certificate as described in Sections
4.02(a) and 4.02(b) hereof, dated the Closing Date, certifying that all
representations, warranties, covenants, and conditions set forth herein by GXPT
are true and correct as of, or have been fully performed and complied with by,
the Closing Date;
(d) Advaxis will deliver an Officer's Certificate as described in Sections
4.01(a) and 4.01(b) hereof, dated the Closing Date, certifying that all
representations, warranties, covenants and conditions set forth herein by
Advaxis are true and correct as of, or have been fully performed and complied
with by, the Closing Date;
(e) Advaxis shall pay up to an aggregate of $90,000 less the aggregate
amount of payments Advaxis shall have made to GXPT prior to the Closing (as set
forth in the Introduction) (the "Advaxis Payment") to GXPT by wire transfer or
certified check. It being understood among the parties hereto that GXPT shall
pay the aggregate amount of the notes payable to the stockholders of GXPT as
stated in GXPT's most recent Form 10Q filing with the SEC and all reasonable
legal costs and expenses and auditor costs and expenses of GXPT out of such
Advaxis Payment; provided that GXPT shall have provided to Advaxis written
documentation of such costs and expenses prior to Closing; and.
(f) GXPT will prepare and file with the applicable governmental or
regulatory authorities any additional necessary documents that may be required
by applicable law or regulations of the State of Colorado, the Unities States of
America, or otherwise to effect the transactions contemplated hereby.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.01 REPRESENTATIONS AND WARRANTIES OF GXPT. GXPT hereby
represents and warrants to, and agrees with, Advaxis and the Advaxis
Shareholders as follows:
(a) Organization and Qualification. Other than as set forth in Section A
of the disclosure letter, of even date herewith, from GXPT to Advaxis and the
Advaxis Shareholders (the "GXPT Disclosure Letter"), GXPT does not have any
subsidiaries or affiliated corporations and does not own any interest in any
other enterprise (whether or not such enterprise is a corporation). GXPT is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Colorado, with all requisite power and authority, and all
necessary consents, authorizations, approvals, orders, licenses, certificates,
and permits of and from, and declarations and filings with, all federal, state,
local, and other governmental authorities and all courts and other tribunals, to
own, lease, license, and use its properties and assets and to carry on the
businesses in which it is now engaged and the businesses in which it
contemplates engaging. Other than as set forth in Section A of the GXPT
Disclosure Letter, GXPT is duly qualified to transact the businesses in which it
is engaged and is in good standing as a foreign corporation in every
jurisdiction in which its ownership, leasing, licensing, or use of property or
assets or the conduct of its businesses makes such qualification necessary.
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(b) Capitalization. Immediately prior to the Closing, the authorized
capital stock of GXPT consists of 500,000,000 shares of GXPT Common Stock, of
which 150,520,000 shares are outstanding. Prior to Closing, a majority of the
GXPT shareholders shall approve and caused to become effective the charter
amendments contemplated by Section 3.01 hereof. Each of such outstanding shares
of GXPT Common Stock is validly authorized, validly issued, fully paid, and
nonassessable, has not been issued and is not owned or held in violation of any
preemptive or similar right of stockholders. There is no commitment, plan, or
arrangement to issue, and no outstanding option, warrant, or other right calling
for the issuance of, any share of capital stock of GXPT or any security or other
instrument convertible into, exercisable for, or exchangeable for capital stock
of GXPT other than the Offering. There is outstanding no security or other
instrument convertible into, or exchangeable or exercisable for, capital stock
of GXPT.
(c) Financial Condition. GXPT has filed with the Securities and Exchange
Commission (the "SEC") and has provided to Advaxis true and correct copies of
the following: audited balance sheets of GXPT as of October 31, 2002 and 2003;
unaudited balance sheets of GXPT as of April 30, 2003 and 2004; audited
statements of income, statements of stockholders' equity, and statements of cash
flows of GXPT for the years ended October 31, 2002 and 2003; and the unaudited
statements of income, statements of stockholders' equity, and statements of cash
flows of GXPT for the six months ended April 30, 2003 and 2004. Each such
balance sheet shall present fairly the financial condition, assets, liabilities,
and stockholders' equity of GXPT as of its respective date; each such statement
of income and statement of stockholders' equity shall present fairly the results
of operations of GXPT for the period indicated; and each such statement of cash
flows shall present fairly the information purported to be shown therein. The
financial statements referred to in this Section 2.01(c) will have been prepared
in accordance with generally accepted accounting principles in the United States
("GAAP") consistently applied throughout the periods involved and shall be in
accordance with the books and records of GXPT. The financial statements referred
to in this Section 2.01(c) contain all certifications and statements required by
the SEC's Order, dated June 27, 2002, pursuant to Section 21(a)(1) of the
Exchange Act (File No. 4-460), Rule 13a-14 or 15d-14 under the Exchange Act, or
18 U.S.C. Section 1350 (Sections 302 and 906 of the Sarbanes-Oxley Act of 2002)
with respect to the report relating thereto. The financial statements referred
to in this Section 2.01(c) comply as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto, have been prepared in accordance with GAAP,
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto or, in the case of unaudited financial
statements, as permitted by the rules and regulations of the SEC) and fairly
present, subject in the case of the unaudited financial statements, to customary
year end audit adjustments, the financial position of GXPT as at the dates
thereof and the results of its operations and cash flows. Since April 30, 2004:
(i) There has at no time been a material adverse change in the
financial condition, results of operations, businesses, properties,
assets, liabilities, or future prospects of GXPT.
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(ii) GXPT has not authorized, declared, paid, or effected any
dividend or liquidating or other distribution in respect of its
capital stock or any direct or indirect redemption, purchase, or
other acquisition of any stock of GXPT.
(iii) The operations and businesses of GXPT have been
conducted in all respects only in the ordinary course, except as
described in filings made and to be made by GXPT to the SEC..
There is no fact known to GXPT which materially adversely affects or in the
future (as far as GXPT can reasonably foresee) may materially adversely affect
the financial condition, results of operations, businesses, properties, assets,
liabilities, or future prospects of GXPT; provided, however, that GXPT expresses
no opinion as to political or economic matters of general applicability. GXPT
has made known, or caused to be made known, to the accountants or auditors who
have prepared, reviewed, or audited the aforementioned consolidated financial
statements all material facts and circumstances which could affect the
preparation, presentation, accuracy, or completeness thereof.
(d) Tax and Other Liabilities. GXPT does not have any material liability
of any nature, accrued or contingent, including, without limitation, liabilities
for federal, state, local, or foreign taxes and penalties, interest, and
additions to tax ("Taxes"), and liabilities to customers or suppliers, other
than the following:
(i) Liabilities for which full provision has been made on the
balance sheet and the notes thereto (the "Last GXPT Balance Sheet")
as of April 30, 2004, (the "Last GXPT Balance Sheet Date") referred
to in Section 2.01(c); and
(ii) Other liabilities arising since the Last GXPT Balance
Sheet Date and prior to Closing in the ordinary course of business
(which shall not include liabilities to customers on account of
defective products or services) which are not inconsistent with the
representations and warranties of GXPT or any other provision of
this Agreement.
Without limiting the generality of the foregoing, the amounts set up as
provisions for Taxes on the Last GXPT Balance Sheet are sufficient for all
accrued and unpaid Taxes of GXPT, whether or not due and payable and whether or
not disputed, under tax laws, as in effect on the Last GXPT Balance Sheet Date
or now in effect, for the period ended on such date and for all fiscal periods
prior thereto. The execution, delivery, and performance of this Agreement by
GXPT will not cause any Taxes to be payable (other than those that may possibly
be payable by the Advaxis Shareholders as a result of the contribution of their
shares of Advaxis Capital Stock to GXPT) or cause any lien, charge, or
encumbrance to secure any Taxes to be created either immediately or upon the
nonpayment of any Taxes other than on the properties or assets of the Advaxis
Shareholders. GXPT has filed all federal, state, local, and foreign tax returns
required to be filed by it; has delivered to the Advaxis Shareholders a true and
correct copy of each such return which was filed since incorporation; has paid
(or has established on the Last GXPT Balance Sheet a reserve for) all Taxes,
assessments, and other governmental charges payable or remittable by it or
levied upon it or its properties, assets, income, or franchises which are due
and payable; and has delivered to the Advaxis Shareholders a true and correct
copy of any report as to adjustments received by it from any taxing authority
since incorporation and a statement as to any litigation, governmental or other
proceeding (formal or informal), or investigation pending, threatened, or in
prospect with respect to any such report or the subject matter of such report.
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(e) Litigation and Claims. Except as described in Section E of the GXPT
Disclosure Letter, there is no litigation, arbitration, claim, governmental or
other proceeding (formal or informal), or investigation pending or, to the best
of GXPT's knowledge, threatened, or in prospect (or any basis therefor known to
GXPT) with respect to GXPT or any of its businesses, properties, or assets. GXPT
is not a "union shop" and is not a party to any collective bargaining agreement
or similar labor arrangement. GXPT is not affected by any present or threatened
strike or other labor disturbance nor to the knowledge of GXPT, is any union
attempting to represent any employee of GXPT as collective bargaining agent.
GXPT is not in violation of, or in default with respect to, any law, rule,
regulation, order, judgment, or decree which violation or default would have a
material adverse effect on GXPT; nor is GXPT required to take any action in
order to avoid such violation or default.
(f) Properties.
(i) GXPT owns no real property. GXPT has good title to all personal
properties and assets used in its businesses or owned by it and has valid
leasehold interests and licenses in and with respect to all real and other
properties and assets as are held pursuant to leases or licenses described in
Section B or C of the GXPT Disclosure Letter and used in its business, free and
clear of all liens, mortgages, security interests, pledges, charges, and
encumbrances (except such as are listed in Section F of the GXPT Disclosure
Letter).
(ii) Set forth in Section F of the GXPT Disclosure Letter is a true
and complete list of all tangible properties and assets owned by GXPT or leased
or licensed by GXPT from or to a third party (including inventory but not
including Intangibles (as hereinafter defined)), and with respect to such
properties and assets leased or licensed by GXPT from or to a third party, a
description of such lease or license, including the term interest and amounts
paid GXPT under such lease or license. All such properties and assets (including
Intangibles) owned by GXPT are reflected on the Last GXPT Balance Sheet (except
for acquisitions subsequent to the Last GXPT Balance Sheet Date and prior to the
Closing Date, which are set forth in Section F of the GXPT Disclosure Letter or
are approved in writing by Advaxis). All tangible properties and assets owned by
GXPT or leased or licensed by GXPT from or to a third party are in good and
usable condition (reasonable wear and tear which is not such as to affect
adversely the operation of the businesses of GXPT excepted). All such leases and
licenses to which GXPT is a party are in full force and effect.
(iii) To the best of GXPT's knowledge, no real property leased or
licensed by GXPT from or to a third party lies in an area which is, or will be,
subject to zoning, use, or building code restrictions which would prohibit, and,
to the best of GXPT's knowledge, no state of facts relating to the actions or
inaction of another person or entity or his or its ownership, leasing, or
licensing of any real or personal property exists or will exist which would
prevent, the continued effective ownership, leasing, or licensing of such real
property in the businesses in which GXPT is now engaged or the businesses in
which it contemplates engaging.
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(iv) The properties and assets (including Intangibles (as
hereinafter defined)) owned by GXPT (other than those leased or licensed by GXPT
to a third party) or leased or licensed by GXPT from a third party constitute
all such properties and assets which are necessary to the businesses of GXPT as
presently conducted.
(v) GXPT has not caused or permitted its businesses properties, or
assets to be used to generate, manufacture, refine, transport, treat, store,
handle, dispose of, transfer, produce, or process any Hazardous Substance (as
such term is defined in this Section 2.01(f)(v)) except in compliance with all
applicable laws, rules, regulations, orders, judgments, and decrees, and has not
caused or permitted the Release (as such term is defined in this Section
2.01(f)(v)) of any Hazardous Substance on or off the site of any property of
GXPT. The term "Hazardous Substance" shall mean any hazardous waste, as defined
by 42 U.S.C. ss.6903(5), any hazardous substance, as defined by 42 U.S.C.
ss.9601(14), any pollutant or contaminant, as defined by 42 U.S.C. ss.9601(33),
and all toxic substances, hazardous materials, or other chemical substances
regulated by any other law, rule, or regulation. The term "Release" shall have
the meaning set forth in 42 U.S.C. ss.9601(22).
(g) Contracts and Other Instruments. Section G of the GXPT Disclosure
Letter contains a true and correct statement of the information required to be
contained therein regarding material contracts, agreements, instruments, leases,
licenses, arrangements, or understandings with respect to GXPT. GXPT has
furnished to the Advaxis Shareholders (i) the certificate of incorporation (or
other charter document) and by-laws of GXPT and all amendments thereto, as
presently in effect, and (ii) the following: (A) true and correct copies of all
material contracts, agreements, and instruments referred to in Section G of the
GXPT Disclosure Letter; (B) true and correct copies of all material leases and
licenses referred to in Section G of the GXPT Disclosure Letter hereto; and (C)
true and correct written descriptions of all material supply, distribution,
agency, financing, or other arrangements or understandings referred to in
Section G of the GXPT Disclosure Letter. To the best of GXPT's knowledge,
neither GXPT nor (to the knowledge of GXPT) any other party to any such material
contract, agreement, instrument, lease, or license is now or expects in the
future to be in violation or breach of, or in default with respect to complying
with, any term thereof, and each such material contract, agreement, instrument,
lease, or license is in full force and is (to the best of GXPT's knowledge in
the case of third parties) the legal, valid, and binding obligation of the
parties thereto and (subject to applicable bankruptcy, insolvency, and other
laws affecting the enforceability of creditors' rights generally) is enforceable
as to them in accordance with its respective terms. Each such material supply,
distribution, agency, financing, or other arrangement or understanding is a
valid and continuing arrangement or understanding; neither GXPT nor any other
party to any such arrangement or understanding has given notice of termination
or taken any action inconsistent with the continuance of such arrangement or
understanding; and the execution, delivery, and performance of this Agreement
will not prejudice any such arrangement or understanding in any way. GXPT enjoys
peaceful and undisturbed possession under all material leases and licenses under
which it is operating. GXPT is not party to, or bound by, any contract,
agreement, instrument, lease, license, arrangement, or understanding, or subject
to any charter or other restriction, which has had or (to the knowledge of GXPT)
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may in the future have a material adverse effect on the financial condition,
results of operations, businesses, properties, assets, liabilities, or future
prospects of GXPT. GXPT has not engaged within the last five years in, is not
engaging in, and does not intend to engage in any transaction with, and has not
had within the last five years, does not now have, and does not intend to have
any material contract, agreement, instrument, lease, license, arrangement, or
understanding with, any stockholder of GXPT, any director, officer, or employee
of GXPT (except for employment agreements listed in Section G of the GXPT
Disclosure Letter and employment and compensation arrangements described in
Section H of the GXPT Disclosure Letter), any relative or affiliate of any
stockholder of GXPT or of any such director, officer, or employee, or any other
corporation or enterprise in which any stockholder of GXPT, any such director,
officer, or employee, or any such relative or affiliate then had or now has a 5%
or greater equity or voting or other substantial interest, other than those
listed and so specified in Section G of the GXPT Disclosure Letter. The stock
ledgers and stock transfer books relating to all issuances and transfers of
stock by GXPT and the minute book records of GXPT and all proceedings of the
stockholders and the Board of Directors and committees thereof of GXPT since
their respective incorporations made available to counsel to Advaxis and the
Advaxis Shareholders are the original stock ledgers and stock transfer books and
minute book records of GXPT or exact copies thereof. GXPT is not in violation or
breach of, or in default with respect to, any term of its certificate of
incorporation (or other charter document) or by-laws.
(h) Employees.
(i) GXPT does not have, or contribute to, any pension,
profit-sharing, option, other incentive plan, or any other type of Employee
Benefit Plan (as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), nor does GXPT have any obligation
to or customary arrangement with employees for bonuses, incentive compensation,
vacations, severance pay, sick pay, sick leave, insurance, service award,
relocation, disability, tuition refund, or other benefits, whether oral or
written, except as set forth in Section H of the GXPT Disclosure Letter. GXPT
has furnished to Advaxis and the Advaxis Shareholders: (A) true and correct
copies of all documents evidencing plans, obligations, or arrangements referred
to in Section H of the GXPT Disclosure Letter (or true and correct written
summaries, so initialed, of such plans, obligations, or arrangements to the
extent not evidenced by documents) and true and correct copies, so initialed, of
all documents evidencing trusts, summary plan descriptions, and any other
summaries or descriptions relating to any such plans; (B) the two most recent
annual reports (Form 5500's), if any, including all schedules thereto and the
most recent annual and periodic accounting of related plan assets with respect
to each Employee Benefit Plan; (C) the two most recent actuarial valuations with
respect to each Pension Plan (as defined in Section 3(2) of ERISA) subject to
Title IV of ERISA; and (D) the most recent determination letter issued by the
Internal Revenue Service with respect to each Pension Plan.
(ii) If any Employee Benefit Plan of GXPT were to be terminated on
the day prior to Closing Date, (A) no liability under Title IV of ERISA would be
incurred by GXPT or Advaxis and (B) all Accrued Benefits (as defined in this
Section 2.01(h)(ii)) to such day prior to the Closing Date (whether or not
vested) would be fully funded in accordance with the assumptions contained in
the regulations of the Pension Benefit Guaranty Corporation governing the
funding of terminated defined benefit plans. For purposes hereof, "Accrued
Benefits" shall include the value of disability, pre-retirement, death benefits,
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and all supplements, subsidized, ancillary, and optional forms of benefits. All
Accrued Liabilities (for contributions or otherwise) (as defined in this Section
2.01(h)(ii)) of GXPT as of the Closing Date to each Employee Benefit Plan and
with respect to each obligation to, or customary arrangement with, employees for
bonuses, incentive compensation, vacations, severance pay, sick pay, sick leave,
insurance, service award, relocation, disability, tuition refund, or other
benefits, whether oral or written, have been paid or accrued for all periods
ending prior to the Closing Date and no payment to any Employee Benefit Plan or
with respect to any such obligation or arrangement since the Last GXPT Balance
Sheet Date has been disproportionately large compared to prior payments. For
purposes hereof, "Accrued Liabilities" shall include a pro rata contribution to
each Employee Benefit Plan or with respect to each such obligation or
arrangement for that portion of a plan year or other applicable period which
commences prior to, and ends after, the Closing Date, and Accrued Liabilities
for any portion of a plan year or other applicable period shall be determined by
multiplying the liability for the entire such year or period by a fraction, the
numerator of which is the number of days preceding the Closing Date in such year
or period and the denominator of which is the number of days in such year or
period, as the case may be.
(iii) There has been no violation of the reporting and disclosure
requirements imposed either under ERISA or the Code for which a penalty has been
or may be imposed with respect to any Employee Benefit Plan of GXPT. There has
been no breach of fiduciary duty or responsibility with respect to any Employee
Benefit Plan of GXPT. No Employee Benefit Plan of GXPT or related trust has any
liability of any nature, accrued or contingent, including without limitation
liabilities for Taxes, other than for routine payments to be made in due course
to participants and beneficiaries, except as set forth in Section H of the GXPT
Disclosure Letter. GXPT does not have any formal plan or commitment, whether or
not legally binding, to create any additional or modify any existing Employee
Benefit Plan or benefit obligation or arrangement described in Section
2.01(h)(i)). Each Employee Benefit Plan of GXPT which is a group health plan
within the meaning of Section 5000(b)(1) of the Code is and has been maintained
in full compliance with the applicable requirements of Section 4980B of the
Code. Other than the health care continuation requirements of Section 4980B of
the Code, GXPT does not have any obligation to provide post-retirement medical
benefits or life insurance coverage or any deferred compensation benefits to any
present or former employees. There is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal), or investigation pending,
threatened, or (to the best of GXPT's knowledge) in prospect (or any basis
therefor known to GXPT) with respect to any Employee Benefit Plan of GXPT or
related trust or with respect to any fiduciary, administrator, or sponsor (in
its capacity as such) of any Employee Benefit Plan. No Employee Benefit Plan of
GXPT or related trust and no such obligation or arrangement is in violation of,
or in default with respect to, any law, rule, regulation, order, judgment, which
violation or default would have a material adverse effect thereon or decree nor
is GXPT, any Employee Benefit Plan of GXPT, or any related trust required to
take any action in order to avoid any such violation or default. No event has
occurred, or is (to the best of GXPT's knowledge) threatened or about to occur,
which would constitute a prohibited transaction under Section 406 of ERISA.
(iv) Each Pension Plan maintained for the employees of GXPT has been
qualified, from its inception, under Section 401(a) of the Code and any related
trust has been an exempt trust for such period under Section 501 of the Code.
10
Each Pension Plan has been operated in accordance with its terms. No Pension
Plan which is subject to Title IV of ERISA has an accumulated or waived funding
deficiency within the meaning of Section 412 of the Code. No investigation or
review by the Internal Revenue Service is currently pending or (to the knowledge
of GXPT) is contemplated in which the Internal Revenue Service has asserted or
may assert that any Pension Plan is not qualified under Section 401(a) of the
Code or that any related trust is not exempt under Section 501 of the Code.
Neither GXPT, nor any organization to which GXPT is a successor or parent
corporation, within the meaning of Section 4069(b) of ERISA, has divested itself
of any entity maintaining or with an obligation to contribute to any Pension
Plan which had an "amount of unfunded benefit liabilities," as defined in
Section 4001(a)(18) of ERISA, at the time of such divestiture. No assessment of
any federal taxes with respect to any Employee Benefit Plan of GXPT has been
made or (to the knowledge of GXPT) is contemplated against GXPT, or any related
trust of any Pension Plan of GXPT, and nothing has occurred which would result
in the assessment of unrelated business taxable income under the Code with
respect to any Employee Benefit Plan of GXPT. Form 5500's have been timely filed
with respect to all Pension Plans of GXPT. No event has occurred or (to the
knowledge of GXPT) is threatened or about to occur which would constitute a
reportable event within the meaning of Section 4043(b) of ERISA. No notice of
termination has been filed by the plan administrator pursuant to Section 4041 of
ERISA or issued by the Pension Benefit Guaranty Corporation pursuant to Section
4042 of ERISA with respect to any Pension Plan of GXPT.
(v) GXPT does not currently contribute to, and has not effectuated
either a complete or partial withdrawal from, any multiemployer Pension Plan
within the meaning of Section 3(37) of ERISA.
(vi) Section H of the GXPT Disclosure Letter contains a true and
correct statement of the names, relationship with GXPT, present rates of
compensation (whether in the form of salary, bonuses, commissions, or other
supplemental compensation now or hereafter payable), and aggregate compensation
for the fiscal years ended December 31, 2002 and 2003 of (A) each director,
officer, or other employee of GXPT whose aggregate compensation for the fiscal
years ended December 31, 2002 and 2003 exceeded US$25,000 or whose aggregate
compensation presently exceeds the rate of US$25,000 per annum and (B) all sales
agents, dealers, or distributors of GXPT. Since December 31, 2003, GXPT has not
changed the rate of compensation of any of its directors, officers, employees,
agents, dealers, or distributors, nor has any Employee Benefit Plan or program
of GXPT been instituted or amended to increase benefits thereunder. There is no
contract, agreement, plan, arrangement, or understanding covering any person
that, individually or collectively, could give rise to the payment of any amount
that would not be deductible by GXPT by reason of Section 280G of the Code.
(vii) GXPT has not extended or maintained credit, arranged for the
extension of credit, or renewed an extension of credit, in the form of a
personal loan to or for any director or executive officer (or equivalent
thereof) thereof.
11
(i) Patents, Trademarks, Et Cetera. GXPT does not own or have pending, and
is not licensed or otherwise permitted to use, any material patent, patent
application, trademark, trademark application, service mark, copyright,
copyright application, franchise, trade secret, computer program (in object or
source code or otherwise), or other intangible property or asset (collectively,
"Intangibles"), other than as described in Section I of the GXPT Disclosure
Letter. Each Intangible set forth in such Section I of the GXPT Disclosure
Letter is validly issued and is currently in force and uncontested in all
jurisdictions in which it is used or in which such use is contemplated by GXPT
and may reasonably be contemplated by GXPT after the effective date of this
Agreement and the closing of the Offering. Section I of the GXPT Disclosure
Letter contains a true and correct listing of: (i) all Intangibles which are
owned (either in whole or in part), used by, or licensed to GXPT or which
otherwise relate to the businesses of GXPT, and a description of each such
Intangible which identifies its owner, registrant, or applicant; (ii) all
contracts, agreements, instruments, leases, and licenses and identification of
all parties thereto under which GXPT owns or uses any Intangible (whether or not
under license from third parties), together with the identification of the
owner, registrant, or applicant of each such Intangible; (iii) all contracts,
agreements, instruments, leases, and licenses and identification of all parties
thereto under which GXPT grants the right to use any Intangible; (iv) all
validity, infringement, right-to-use, or other opinions of counsel (whether
in-house or outside) which concern the validity, infringement, or enforceability
of any Intangible owned or controlled by a party other than GXPT which relates
to the businesses, properties, or assets of GXPT. Except as specified in Section
I of the GXPT Disclosure Letter, to the knowledge of GXPT: (v) GXPT is the sole
and exclusive owner or licensee of, and (other than those exclusively licensed
by GXPT to a third party) has the right to use, all Intangibles; (vi) no
Intangible is subject to any order, judgment, decree, contract, agreement,
instrument, lease, or license restricting the scope of the use thereof; (vii)
during the last five years, GXPT has not been charged with, and has not charged
others with, unfair competition or infringement of any Intangible, or wrongful
use of confidential information, trade secrets, or secret processes; and (viii)
GXPT is not using any patentable invention, confidential information, trade
secret, or secret process of others. There is no right under any Intangible
necessary to the businesses of GXPT as presently conducted or as it contemplates
conducting, except such as are so designated in Section I of the GXPT Disclosure
Letter. Except as described in Section I of the GXPT Disclosure Letter, GXPT has
not infringed, is not infringing, and has not received notice of infringement in
respect of the Intangibles or asserted Intangibles of others, nor has GXPT been
advised by counsel or others that it is infringing or may infringe the
Intangibles or asserted Intangibles of others if any currently contemplated
business activity is effectuated. To the knowledge of GXPT, there is no
infringement by others of Intangibles of GXPT. As far as GXPT can reasonably
foresee, there is no Intangible or asserted Intangible of others that may
materially adversely affect the financial condition, results of operations,
businesses, properties, assets, liabilities, or future prospects of GXPT. All
material contracts, agreements, instruments, leases, and licenses pertaining to
Intangibles to which GXPT is a party, or to which any of its businesses,
properties, or assets are subject, are in compliance in all material respects
with all laws, rules, regulations, orders, judgments, and decrees binding on
GXPT or to which any of its businesses, properties, or assets are subject. GXPT
did not register any trademark, tradename or service mark, design, or name used
by GXPT to identify its products, businesses, or services. Neither any
stockholder of GXPT, any director, officer, or employee of GXPT, any relative or
affiliate of any stockholder of GXPT, any such director, officer, or employee,
nor any other corporation or enterprise in which any stockholder of GXPT, any
such director, officer, or employee, or any such relative or affiliate had or
now has a 5% or greater equity or voting or other substantial interest,
possesses any Intangible which relates to the businesses of GXPT.
12
(j) Questionable Payments. Neither GXPT, nor any director, officer, agent,
employee, or other person associated with, or acting on behalf of, GXPT, nor any
stockholder of GXPT has, directly or indirectly: used any corporate funds for
unlawful contributions, gifts, entertainment, or other unlawful expenses
relating to political activity; made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns from corporate funds; violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended; or made any bribe, rebate, payoff, influence
payment, kickback, or other unlawful payment.
(k) Authority. GXPT has all requisite power and authority to execute,
deliver, and perform this Agreement. All necessary corporate proceedings of GXPT
have been duly taken to authorize the execution, delivery, and performance of
this Agreement thereby. This Agreement has been duly authorized, executed, and
delivered by GXPT, constitutes the legal, valid, and binding obligation of GXPT,
and is enforceable as to GXPT in accordance with its terms. Except as otherwise
set forth in this Agreement, no consent, authorization, approval, order,
license, certificate, or permit of or from, or declaration or filing with, any
federal, state, local, or other governmental authority or any court or other
tribunal is required by GXPT for the execution, delivery, or performance of this
Agreement by GXPT. No consent of any party to any material contract, agreement,
instrument, lease, license, arrangement, or understanding to which GXPT is a
party, or to which it or any of its businesses, properties, or assets are
subject, is required for the execution, delivery, or performance of this
Agreement (except such consents referred to in Section K of the GXPT Disclosure
Letter); and the execution, delivery, and performance of this Agreement will not
(if the consents referred to in Section K of the GXPT Disclosure Letter are
obtained prior to the Closing) violate, result in a breach of, conflict with, or
(with or without the giving of notice or the passage of time or both) entitle
any party to terminate or call a default under, entitle any party to receive
rights or privileges that such party was not entitled to receive before this
Agreement was executed under, or create any obligation on the part of GXPT to
which it was not subject immediately before this Agreement was executed under,
any term of any such material contract, agreement, instrument, lease, license,
arrangement, or understanding, or violate or result in a breach of any term of
the certificate of incorporation (or other charter document) or by-laws of GXPT,
or (if the provisions of this Agreement are satisfied) violate, result in a
breach of, or conflict with any law, rule, regulation, order, judgment, or
decree binding on GXPT or to which any of its businesses, properties, or assets
are subject, which violation or breach would have a material adverse effect on
GXPT. Neither GXPT, nor any of its officers, directors, employees, or agents has
employed any broker or finder or incurred any liability for any fee, commission,
or other compensation payable by any person on account of alleged employment as
a broker or finder, or alleged performance of services as a broker or finder, in
connection with or as a result of this Agreement or the transactions
contemplated hereby and in connection herewith.
(l) Status of Shares of GXPT Common Stock To Be Issued. The shares of GXPT
Common Stock to be issued pursuant to Section 1.02(a) hereof, and, in any case,
the shares of GXPT Common Stock issuable pursuant to Section 3.01(p) hereof, are
validly authorized and, when the such shares of GXPT Common Stock have been duly
delivered pursuant to the terms of this Agreement, such shares of GXPT Common
Stock will be validly issued, fully paid, and nonassessable and will not have
been issued, owned or held in violation of any preemptive or similar right of
stockholder.
13
(m) Insurance. All policies of fire and other insurance against casualty
and other losses and public liability insurance carried by GXPT are described in
Section M of the GXPT Disclosure Letter (including the risks covered and limits
of such policies) and are in full force and effect. All premiums in respect of
such policies for which premium notices have been received have been paid in
full as the same become due and payable. GXPT has not failed to give any notice
or present any claim under any insurance policy in due and timely fashion. There
are no actual claims or claims threatened in writing against GXPT which could
come within the scope of such coverage nor are any such policies currently
threatened with cancellation. There are no outstanding requirements or
recommendations by any insurance company that issued a policy with respect to
any of the respective assets, the businesses, or operations of GXPT or by any
Board of Fire Underwriters or other body exercising similar functions or by any
governmental authority requiring or recommending any repairs or other work to be
done on, or with respect to, any of the assets of GXPT or requiring or
recommending any equipment or facilities to be installed on any premises from
which the businesses of GXPT is conducted or in connection with any of the
respective assets thereof. GXPT does not have any knowledge of any material
proposed increase in applicable insurance rates or of any conditions or
circumstances applicable to the businesses thereof that might result in such
increases. No such policy is terminable by virtue of the transactions
contemplated by this Agreement.
(o) Trading Matters. At the date hereof and at the Closing Date:
(i) the GXPT Common Stock is not actively traded and quoted in the
pink sheet market; and
(ii) GXPT has not, and shall not have taken any action that would
preclude, or otherwise jeopardize, the inclusion of the GXPT Common Stock for
quotation on the OTC Bulletin Board.
(p) Reorganization.
(i) GXPT has not taken, has not agreed to take and will not take any
action (other than actions contemplated by this Agreement) that could reasonably
be expected to prevent the transactions contemplated by this Agreement from
constituting a "reorganization" under section 368(b) of the Code or as an
acquisition of in excess of 80% of the stock of a corporation in exchange for
property under Section 351 of the Code. GXPT is not aware of any agreement, plan
or other circumstance that could reasonably be expected to prevent the
transactions contemplated by this Agreement from so qualifying.
(ii) GXPT has no plan or intention to reacquire, and, to GXPT's
knowledge, no person related to GXPT within the meaning of Treasury Regulations
Section 1.368-1 has a plan or intention to acquire, any of the GXPT Common Stock
pursuant to Section 1.02(a) hereof.
(q) Completeness of Disclosure. No representation or warranty by GXPT in
this Agreement, any of the financial statement or other instruments or written
statements provided to the Advaxis Shareholders hereunder or in connection
herewith, the GXPT Disclosure Letter or any Schedules or Exhibits attached
hereto are made a part hereof contains or, and at the Closing Date will contain,
an untrue statement of material fact or omits or, at the Closing Date, will omit
to state a material fact required to be stated therein or necessary to make the
statements made not misleading.
14
(r) Periodic Reporting.
(i) The GXPT Common Stock has been registered under Section 12 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") and GXPT is
subject to the periodic reporting requirements of Section 13 of the Exchange
Act. GXPT has heretofore provided or made available to Advaxis and the Advaxis
Shareholders true, complete, and correct copies of all forms, reports,
schedules, statements, and other documents required to be filed by it under the
Exchange Act since at least December 31, 2001 as such documents have been
amended since the time of the filing thereof (the "GXPT SEC Documents"). The
GXPT SEC Documents, including, without limitation, any financial statements and
schedules included therein, at the time filed or, if subsequently amended, as so
amended, (i) did not contain any untrue statement of a material fact required to
be stated therein or necessary in order to make the statements therein not
misleading and (ii) complied in all respects with the applicable requirements of
the Exchange Act and the applicable rules and regulations thereunder. The
financial statements included in the GXPT SEC Documents complied when filed as
to form in all material respects with applicable accounting requirements and
with the published rules and regulations of the SEC with respect thereto, have
been prepared in accordance with generally accepted accounting principles in the
United States, applied on a consistent basis during the periods involved (except
as may be indicated in the notes thereto or, in the case of unaudited financial
statements, as permitted by the rules and regulations of the Commission) and
fairly present, subject in the case of the unaudited financial statements, to
customary year end audit adjustments, the financial position of GXPT as at the
dates thereof and the results of its operations and cash flows.
(ii) Except as set forth in Section R of the GXPT Disclosure Letter,
the Company maintains disclosure controls and procedures required by Rule 13a-15
or 15d-15 under the Exchange Act; such controls and procedures are effective to
ensure that all material information concerning the Company and its subsidiaries
is made known on a timely basis to the individuals responsible for the
preparation of the Company's filings with the SEC and other public disclosure
documents. To the extent any exist, GXPT has delivered or made available to
Advaxis copies of, all written descriptions of, and all policies, manuals and
other documents promulgating, such disclosure controls and procedures. Except as
set forth in Section R of the GXPT Disclosure Letter, to GXPT's knowledge, each
director and executive officer thereof has filed with the SEC on a timely basis
all statements required by Section 16(a) of the Exchange Act and the rules and
regulations thereunder since January 1, 2002. As used in Section 2.01(r), the
term "file" shall be broadly construed to include any manner in which a document
or information is furnished, supplied or otherwise made available to the SEC.
(iii) Except as set forth in Section R of the GXPT Disclosure
Letter, the Chief Executive Officer and the Chief Financial Officer of GXPT have
signed, and the Company has furnished to the SEC, all certifications required by
Sections 302 and 906 of the Sarbanes-Oxley Act of 2002; such certifications
contain no qualifications or exceptions to the matters certified therein and
have not been modified or withdrawn; and neither GXPT nor any of its officers
has received notice from any governmental entity questioning or challenging the
accuracy, completeness, form or manner of filing or submission of such
certifications.
15
(iv) GXPT has heretofore has provided or made available to Advaxis
complete and correct copies of all certifications filed with the SEC pursuant to
Sections 302 and 906 of Sarbanes-Oxley Act of 2002 and hereby reaffirms,
represents and warrants to Advaxis the matters and statements made in such
certificates.
(s) Compliance with Law and Government Regulations.
(i) GXPT is in compliance with, and is not in violation of,
applicable federal, state, local or foreign statutes, laws and regulations
(including without limitation, any applicable building, zoning or other law,
ordinance or regulation) affecting its properties or the operation of its
business. GXPT is not subject to any order, decree, judgment or other sanction
of any court, administrative agency or other tribunal.
(ii) Each of GXPT, its directors and its senior financial officers
has consulted with GXPT's independent auditors and with GXPT's outside counsel
with respect to, and (to the extent applicable to GXPT) is familiar in all
material respects with all of the requirements of, Sarbanes-Oxley Act of 2002.
GXPT is in compliance with the provisions of such act applicable to it as of the
date hereof and has implemented such programs and has taken reasonable steps,
upon the advice of GXPT's independent auditors and outside counsel,
respectively, to ensure GXPT's future compliance (not later than the relevant
statutory and regulatory deadlines therefore) with all provisions of such act
which shall become applicable thereto after the date hereof.
(t) Legal Proceedings and History. GXPT hereby represents that, unless
otherwise disclosed herein or in Section T of the GXPT Disclosure Letter, no
officer, director or affiliate of GXPT, has been, within the five years ending
on the Closing Date, a party to any bankruptcy petition against such person or
against any business of which such person was affiliated; convicted in a
criminal proceeding or subject to a pending criminal proceeding (excluding
traffic violations and other minor offenses); subject to any order, judgment or
decree, not subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting their involvement in any type of business,
securities or banking activities; or found by a court of competent jurisdiction
in a civil action, by the SEC or the Commodity Futures Trading Commission to
have violated a federal or state securities or commodities law, and the judgment
has not been reversed, suspended or vacated.
SECTION 2.02 REPRESENTATIONS AND WARRANTIES OF ADVAXIS. Advaxis hereby
represents and warrants to, and agrees with, GXPT:
(a) Organization and Qualification. Other than as set forth in Section A
of the disclosure letter, of even date herewith, from Advaxis to GXPT (the
"Advaxis Disclosure Letter"), Advaxis has no subsidiaries or affiliated
corporation or owns any interest in any other enterprise (whether or not such
enterprise is a corporation). Advaxis is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Delaware with all
requisite power and authority, and all necessary consents, authorizations,
approvals, orders, licenses, certificates, and permits of and from, and
declarations and filings with, all federal, state, local, and other governmental
authorities and all courts and other tribunals, to own, lease, license, and use
its properties and assets and to carry on the businesses in which it is now
engaged and the businesses in which it contemplates. Advaxis is duly qualified
to transact the businesses in which it is engaged and is in good standing as a
foreign corporation in every jurisdiction in which its ownership, leasing,
licensing, or use of property or assets or the conduct of its businesses makes
such qualification necessary.
16
(b) Capitalization. Immediately prior to the Closing, the authorized
capital stock of Advaxis consists of 100,000 shares of Advaxis Common Stock, par
value $0.001 per share, 40,000 of which shares are issued and outstanding and
50,000 shares of preferred stock, par value $0.001 per share, 6,000 shares of
preferred stock have been designated as Series A Preferred Stock, par value
$0.001 per share of which 3650.46 shares are issued and outstanding. Each of the
outstanding shares of Advaxis Capital Stock is validly authorized, validly
issued, fully paid, and nonassessable, has not been issued and is not owned or
held in violation of any preemptive right of stockholders and by the owners set
forth in Section A of the Advaxis Disclosure Letter, in each case free and clear
of all liens, security interests, pledges, charges, encumbrances, stockholders'
agreements, and voting trusts (other than the existing stockholders agreement to
be terminated prior to the Closing). Other than as set forth in Section A of the
Advaxis Disclosure Letter, there is no commitment, plan, or arrangement to
issue, and no outstanding option, warrant, or other right calling for the
issuance of, any share of Advaxis Capital Stock or any security or other
instrument convertible into, exercisable for, or exchangeable for Advaxis
Capital Stock. Other than as set forth in Section A of the Advaxis Disclosure
Letter, there is outstanding no security or other instrument convertible into or
exercisable or exchangeable for Advaxis Capital Stock.
(c) Financial Condition. Advaxis has delivered to GXPT true and correct
copies of the following: audited balance sheets of Advaxis as of December 31,
2002 and December 31, 2003 and unaudited balance sheets of Advaxis as of June
30, 2003 and June 30, 2004; and audited statements of operations, statements of
stockholders' equity, and statements of cash flows of Advaxis for the two years
ended December 31, 2002 and December 31, 2003 and unaudited statements of
operations, statements of stockholders' equity, and statements of cash flows of
Advaxis for the periods ended June 30, 2003 and June 30, 2004. Each such balance
sheet presents fairly the financial condition, assets, liabilities, and
stockholders' equity of Advaxis as of its date; each such statement of income
and consolidated statement of stockholders' equity presents fairly the results
of operations of Advaxis for the period indicated; and each such statement of
cash flows presents fairly the information purported to be shown therein. The
audited financial statements referred to in this Section 2.02(c) have been
prepared in accordance with GAAP in the United States consistently applied
throughout the periods involved and are in accordance with the books and records
of Advaxis. Except as set forth in Section C of the Advaxis Disclosure Letter,
since June 30, 2004:
(i) There has at no time been a material adverse change in the
financial condition, results of operations, business, properties, assets,
liabilities, or future prospects of Advaxis.
(ii) Advaxis has not authorized, declared, paid, or effected any
dividend or liquidating or other distribution in respect of its capital
stock or any direct or indirect redemption, puchase, or other acquisition
of any stock of Advaxis (other than the pay-in-kind dividend to holders of
Series A Preferred Stock as of August 15, 2004).
17
(iii) The operations and businesses of Advaxis have been conducted
in all respects only in the ordinary course, except for the transactions
contemplated hereby and in connection herewith.
(iv) There has been no accepted purchase order or quotation,
arrangement, or understanding for future sale of the products or services
of Advaxis that Advaxis expects will not be profitable.
(v) Advaxis has not suffered an extraordinary loss (whether or not
covered by insurance) or waived any right of substantial value.
There is no fact known to Advaxis which materially adversely affects or in the
future (as far as Advaxis can reasonably foresee) may materially adversely
affect the financial condition, results of operations, business, properties,
assets, liabilities, or future prospects of Advaxis; provided, however, that
Advaxis expresses no opinion as to political or economic matters of general
applicability. Advaxis has made known, or caused to be made known, to the
accountants or auditors who have prepared, reviewed, or audited the
aforementioned consolidated financial statements all material facts and
circumstances which could affect the preparation, presentation, accuracy or
completeness thereof. The statement of operations of Advaxis for the year ended
December 31, 2003 shall be audited in accordance with GAAP in the United States
consistently applied throughout the periods involved.
(d) Tax and Other Liabilities. Advaxis does not have any material
liability of any nature, accrued or contingent, including, without limitation,
liabilities for Taxes, and liabilities to customers or suppliers, other than the
following:
(i) Liabilities for which full provision has been made on the
balance sheet and the notes thereto, if any (the "Last Advaxis Balance
Sheet") as of June 30, 2004 (the "Last Advaxis Balance Sheet Date")
referred to in Section 2.02(c); and
(ii) Other liabilities arising since the Last Advaxis Balance Sheet
Date and prior to the Closing Date in the ordinary course of business
(which shall not include liabilities to customers on account of defective
products or services) or in connection with the transactions contemplated
hereby or in connection herewith which are not inconsistent with the
representations and warranties of Advaxis or any other provision of this
Agreement.
Without limiting the generality of the foregoing, the amounts set up as
provisions for Taxes on the Last Advaxis Balance Sheet are sufficient for all
accrued and unpaid Taxes of Advaxis, whether or not due and payable and whether
or not disputed, under tax laws, as in effect on the Last Advaxis Balance Sheet
Date or now in effect, for the period ended on such date and for all fiscal
periods prior thereto. The execution, delivery, and performance of this
Agreement by Advaxis will not cause any Taxes to be payable other than by the
stockholders of Advaxis or cause any lien, charge, or encumbrance to secure any
Taxes to be created either immediately or upon the nonpayment of any Taxes other
18
than on the properties or assets of the stockholders of Advaxis. Advaxis has
filed all federal, state, local, and foreign tax returns required to be filed by
it; has delivered to the GXPT a true and correct copy of each such return which
was filed since incorporation; has paid (or has established on the Last Advaxis
Balance Sheet a reserve for) all Taxes, assessments, and other governmental
charges payable or remittable by it or levied upon it or its properties, assets,
income, or franchises which are due and payable; and has delivered to the GXPT a
true and correct copy of any report as to adjustments received by it from any
taxing authority since incorporation and a statement as to any litigation,
governmental or other proceeding (formal or informal), or investigation pending,
threatened, or in prospect with respect to any such report or the subject matter
of such report.
(e) Litigation and Claims. There is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal), or investigation pending,
threatened, or, to the best of Advaxis's knowledge, in prospect (or any basis
therefor known to Advaxis), with respect to Advaxis or any of its businesses,
properties, or assets. Advaxis is not affected by any present or threatened
strike or other labor disturbance nor to the knowledge of Advaxis is any union
attempting to represent any employee of Advaxis as collective bargaining agent.
Advaxis is not in violation of, or in default with respect to, any law, rule,
regulation, order, judgment, or decree which violation or default would have a
material adverse effect upon Advaxis; nor is Advaxis required to take any action
in order to avoid such violation or default.
(f) Properties.
(i) Advaxis does not own any legal or equitable interest in any real
property. Advaxis has good title to all other properties and assets
material to Advaxis, used in its business or owned by it (except real and
other properties and assets as are held pursuant to leases or licenses
described in Section F of the Advaxis Disclosure Letter), free and clear
of all liens, mortgages, security interests, pledges, charges, and
encumbrances (except such as are listed in Section F of the Advaxis
Disclosure Letter).
(ii) All accounts and notes receivable reflected on the Last Advaxis
Balance Sheet, or arising since the Last Advaxis Balance Sheet Date, have
been collected, or are and will be good and collectible, in each case at
the aggregate recorded amounts thereof without right of recourse, defense,
deduction, return of goods, counterclaim, offset, or set off on the part
of the obligor, and, if not collected, can reasonably be anticipated to be
paid within 180 days of the date incurred.
(iii) All production in progress of Advaxis is usable, in current
production and marketable, on a normal basis in the existing business of
Advaxis.
(iv) Attached as Section F of the Advaxis Disclosure Letter is a
true and complete list of the classes of all tangible properties and
assets owned by Advaxis or leased or licensed by Advaxis from or to a
third party (including inventory but not including Intangibles, as defined
in Section 2.02(i)), and with respect to such properties and assets leased
or licensed by Advaxis from or to a third party, a description of such
lease or license. All such properties and assets (including Intangibles)
owned by Advaxis are reflected on the Last Advaxis Balance Sheet (except
for acquisitions subsequent to the Last Advaxis Balance Sheet Date and
prior to the Closing Date which are set forth in Section F of the Advaxis
Disclosure Letter or are approved in writing by GXPT). All real and other
tangible properties and assets owned by Advaxis or leased or licensed by
Advaxis from or to a third party are in good and usable condition
(reasonable wear and tear which is not such as to affect adversely the
operation of the business of Advaxis excepted).
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(v) To the best of Advaxis's knowledge, no real property owned by
Advaxis or leased or licensed by Advaxis from or to a third party lies in
an area which is, or will be, subject to zoning, use, or building code
restrictions which would prohibit, and, to the best of Advaxis's
knowledge, no state of facts relating to the actions or inaction of
another person or entity or his or its ownership, leasing, or licensing of
any real or personal property exists or will exist which would prevent,
the continued effective ownership, leasing, or licensing of such real
property in the businesses in which Advaxis is now engaged or the
businesses in which it contemplates engaging.
(vi) The properties and assets (including Intangibles) owned by
Advaxis (other than those leased or licensed by Advaxis to a third party)
or leased or licensed by Advaxis from a third party constitute all such
properties and assets which are necessary to the business of Advaxis as
presently conducted or as it contemplates conducting.
(vii) Advaxis has not caused or permitted its businesses properties,
or assets to be used to generate, manufacture, refine, transport, treat,
store, handle, dispose of, transfer, produce, or process any Hazardous
Substance (as such term is defined in Section 2.01(f)(v)) except in
compliance with all applicable laws, rules, regulations, orders,
judgments, and decrees, and has not caused or permitted the Release (as
such term is defined in Section 2.01(f)(v)) of any Hazardous Substance on
or off the site of any property of Advaxis.
(g) Contracts and Other Instruments. Section G of the Advaxis Disclosure
Letter contains a true and correct statement of the information required to be
contained therein regarding material contracts, agreements, instruments, leases,
licenses, arrangements, or understandings with respect to Advaxis. Advaxis has
furnished to GXPT: (i) the certificate of incorporation and by-laws of Advaxis
(or, in each case, the comparable charter documents, if any, under applicable
law) and all amendments thereto, as presently in effect, certified by the
Secretary or an authorized signatory of Advaxis and (ii) the following: (A) true
and correct copies of all material contracts, agreements, and instruments
referred to in Section G of the Advaxis Disclosure Letter; (B) true and correct
copies of all material leases and licenses referred to in Section G of the
Advaxis Disclosure Letter; and (C) true and correct written descriptions of all
material supply, distribution, agency, financing, or other arrangements or
understandings referred to in Section G of the Advaxis Disclosure Letter. Except
as set forth in Section G of the Advaxis Disclosure Letter, Advaxis is not party
to any employment agreement with any employee thereof. Except as set forth in
Section G of the Advaxis Disclosure Letter, to the best of Advaxis's knowledge,
none of Advaxis or any other party to any such contract, agreement, instrument,
lease, or license is now or expects in the future to be in violation or breach
of, or in default with respect to complying with, any term thereof, and each
such material contract, agreement, instrument, lease, or license is in full
force and is (to the best of Advaxis's knowledge in the case of third parties)
20
the legal, valid, and binding obligation of the parties thereto and (subject to
applicable bankruptcy, insolvency, and other laws affecting the enforceability
of creditors' rights generally) is enforceable as to them in accordance with its
terms. Each such material supply, distribution, agency, financing, or other
arrangement or understanding is a valid and continuing arrangement or
understanding; none of Advaxis or any other party to any such arrangement or
understanding has given notice of termination or taken any action inconsistent
with the continuance of such arrangement or understanding; and the execution,
delivery, and performance of this Agreement will not prejudice any such
arrangement or understanding in any way. Except as set forth in Section G of the
Advaxis Disclosure Letter, Advaxis enjoys peaceful and undisturbed possession
under all leases and licenses under which it is operating. Advaxis is not party
to or bound by any contract, agreement, instrument, lease, license, arrangement,
or understanding, or subject to any charter or other restriction, which has had
or, to the best of Advaxis's knowledge, may in the future have a material
adverse effect on the financial condition, results of operations, businesses,
properties, assets, liabilities, or future prospects of Advaxis and, following
the consummation of the transactions contemplated hereby, GXPT. Advaxis has not
engaged within the last five years in, is engaging in, or intends to engage in
any transaction with, or has had within the last five years, now has, or intends
to have any contract, agreement, instrument, lease, license, arrangement, or
understanding with, any stockholder of Advaxis, any director, officer, or
employee of Advaxis (except for employment agreements listed in Section G of the
Advaxis Disclosure Letter and employment and compensation arrangements described
in Section G of the Advaxis Disclosure Letter), any relative or affiliate of any
stockholder of Advaxis, any such director, officer, or employee, or any other
corporation or enterprise in which any stockholder of Advaxis, any such
director, officer, or employee, or any such relative or affiliate then had or
now has a 5% or greater equity or voting or other substantial interest, other
than those listed and so specified in Section G of the Advaxis Disclosure
Letter. The stock ledgers and stock transfer books and the minute book records
of Advaxis relating to all issuances and transfers of stock by Advaxis and all
proceedings of the stockholders and the Board of Directors and committees
thereof of Advaxis since its incorporation made available to GXPT are the
original stock ledgers and stock transfer books and minute book records of
Advaxis or exact copies thereof. Advaxis is not in violation or breach of, or in
default with respect to, any term of its certificate of incorporation or by-laws
(or the comparable charter document, if any, under applicable law).
(h) Employees.
(i) Advaxis does not have, or contribute to, any pension,
profit-sharing, option, other incentive plan, or any other type of
Employee Benefit Plan or has any obligation to or customary arrangement
with employees for bonuses, incentive compensation, vacations, severance
pay, sick pay, sick leave, insurance, service award, relocation,
disability, tuition refund, or other benefits, whether oral or written,
except as set forth in Section H of the Advaxis Disclosure Letter. Advaxis
has furnished to GXPT true and correct copies, of all documents evidencing
plans, obligations, or arrangements referred to in Section H of the
Advaxis Disclosure Letter (or true and correct written summaries of such
plans, obligations, or arrangements to the extent not evidenced by
documents) and true and correct copies, so initialed, of all documents
evidencing trusts, summary plan descriptions, and any other summaries or
descriptions relating to any such plans.
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(ii) Section H of the Advaxis Disclosure Letter contains a true and
correct statement of the names, relationship with Advaxis, present rates
of compensation (whether in the form of salary, bonuses, commissions, or
other supplemental compensation now or hereafter payable), and aggregate
compensation for the fiscal year ended December 31, 2003 of (A) each
director, officer, or other employee of Advaxis whose aggregate
compensation for the fiscal year ended December 31, 2003 exceeded
US$25,000 or whose aggregate compensation presently exceeds the rate of
US$25,000 per annum and (B) all sales agents, dealers, or distributors of
Advaxis. Since December 31, 2003, Advaxis has not changed the rate of
compensation of any of its directors, officers, employees, agents,
dealers, or distributors, nor has any Employee Benefit Plan or program of
Advaxis been instituted or amended to increase benefits thereunder.
(i) Patents, Trademarks, Et Cetera. Advaxis does not own or have pending,
and is not licensed or otherwise permitted to use, any material Intangible,
other than as described in Section I of the Advaxis Disclosure Letter. Except as
set forth in Section I of the Advaxis Disclosure Letter, each Intangible is
validly issued and is currently in force and uncontested in all jurisdictions in
which it is used or in which such use is contemplated. Section I of the Advaxis
Disclosure Letter contains a true and correct listing of: (i) all Intangibles
which are owned (either in whole or in part), used by, or licensed to Advaxis or
which otherwise relate to the businesses of Advaxis, and a description of each
such Intangible which identifies its owner, registrant, or applicant; (ii) all
contracts, agreements, instruments, leases, and licenses and identification of
all parties thereto under which Advaxis owns or uses any Intangible (whether or
not under license from third parties), together with the identification of the
owner, registrant, or applicant of each such Intangible; (iii) all contracts,
agreements, instruments, leases, and licenses and identification of all parties
thereto under which Advaxis grants the right to use any Intangible; and (iv) all
validity, infringement, right-to-use, or other opinions of counsel (whether
in-house or outside) which concern the validity, infringement, or enforceability
of any Intangible owned or controlled by a party other than Advaxis which
relates to the businesses, properties, or assets of Advaxis. Except as specified
in Section I of the Advaxis Disclosure Letter: (i) Advaxis is the sole and
exclusive owner or licensee of, and (other than those licensed by Advaxis to a
third party) has the right to use, all Intangibles; (ii) no Intangible is
subject to any order, judgment, decree, contract, agreement, instrument, lease,
or license restricting the scope of the use thereof; (iii) during the last five
years, Advaxis has not been charged with, and has not charged others with,
unfair competition, infringement of any Intangible, or wrongful use of
confidential information, trade secrets, or secret processes; and (iv) Advaxis
is not using any patentable invention, confidential information, trade secret,
or secret process of others. There is no right under any Intangible necessary to
the businesses of Advaxis as presently conducted or as it contemplates
conducting, except such as are so designated in Section I of the Advaxis
Disclosure Letter. Except as set forth in Section I of the Advaxis Disclosure
Letter, Advaxis has not infringed, is not infringing, and has not received
notice of infringement in respect of the Intangibles or asserted Intangibles of
others, nor has Advaxis been advised by counsel or others that it is infringing
or may infringe the Intangibles or asserted Intangibles of others if any
currently contemplated business activity is effectuated. To the knowledge of
Advaxis, there is no infringement by others of Intangibles of Advaxis. To the
knowledge of Advaxis, there is no Intangible or asserted Intangible of others
that may materially adversely affect the financial condition, results of
operations, businesses, properties, assets, liabilities, or future prospects of
22
Advaxis. All contracts, agreements, instruments, leases, and licenses pertaining
to Intangibles to which Advaxis is a party, or to which any of its businesses,
properties, or assets are subject, are in compliance with all laws, rules,
regulations, orders, judgments, and decrees binding on Advaxis or to which any
of its businesses, properties, or assets are subject. Except as set forth in
Section I of the Advaxis Disclosure Letter, there is no trademark, tradename or
service mark used by Advaxis to identify, respectively, its products,
businesses, or services. Except as set forth in Section I of the Advaxis
Disclosure Letter, none of the Advaxis Shareholders, any director, officer, or
employee of Advaxis, any relative or affiliate of any Advaxis Shareholder or any
such director, officer, or employee, nor any other corporation or enterprise in
which the Advaxis Shareholder, any such director, officer, or employee, or any
such relative or affiliate had or now has a 5% or greater equity or voting or
other substantial interest, possesses any Intangible which relates to the
businesses of Advaxis.
(j) Questionable Payments. Neither Advaxis, nor any director, officer,
agent, employee, or other person associated with, or acting on behalf of,
Advaxis, nor the Advaxis Shareholder, has, directly or indirectly: used any
corporate funds for unlawful contributions, gifts, entertainment, or other
unlawful expenses relating to political activity; made any unlawful payment to
foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns from corporate funds; violated any provision of
the Foreign Corrupt Practices Act of 1977, as amended; or made any bribe,
rebate, payoff, influence payment, kickback, or other unlawful payment.
(k) Authority. Advaxis has all requisite power and authority to execute,
deliver, and perform this Agreement. All necessary corporate proceedings of
Advaxis have been duly taken to authorize the execution, delivery, and
performance of this Agreement by Advaxis. This Agreement has been duly
authorized, executed, and delivered by Advaxis, constitutes the legal, valid,
and binding obligation of Advaxis, and is enforceable as to Advaxis in
accordance with its terms. Except as otherwise set forth in this Agreement, no
consent, authorization, approval, order, license, certificate, or permit of or
from, or declaration or filing with, any federal, state, local, or other
governmental authority or any court or other tribunal is required by Advaxis for
the execution, delivery, or performance of this Agreement by Advaxis. No consent
of any party to any material contract, agreement, instrument, lease, license,
arrangement, or understanding to which Advaxis is a party, or to which its or
any of its businesses, properties, or assets are subject, is required for the
execution, delivery, or performance of this Agreement (except such consents
referred to in Section K of the Advaxis Disclosure Letter); and the execution,
delivery, and performance of this Agreement will not (if the consents referred
to in Section K of the Advaxis Disclosure Letter are obtained prior to the
Closing) violate, result in a breach of, conflict with, or (with or without the
giving of notice or the passage of time or both) entitle any party to terminate
or call a default under, entitle any party to receive rights or privileges that
such party was not entitled to receive immediately before this Agreement was
executed under, or create any obligation on the part of Advaxis or GXPT to which
it was not subject immediately before this Agreement was executed under, any
term of any such material contract, agreement, instrument, lease, license,
arrangement, or understanding, or violate or result in a breach of any term of
the certificate of incorporation or by-laws of Advaxis (or the comparable
charter documents, if any, under applicable law), or (if the provisions of this
Agreement are satisfied) violate, result in a breach of, or conflict with any
law, rule, regulation, order, judgment, or decree binding on Advaxis or to which
any of its businesses, properties, or assets are subject. Except as set forth in
Section K of the Advaxis Disclosure Letter, neither Advaxis nor any of its
officers, directors, employees, or agents has employed any broker or finder or
incurred any liability for any fee, commission, or other compensation payable by
any person on account of alleged employment as a broker or finder, or alleged
performance of services as a broker or finder, in connection with or as a result
of this Agreement or the other transactions contemplated hereby and in
connection herewith.
23
(l) Insurance. All policies of fire and other insurance against casualty
and other losses and public liability insurance carried by Advaxis are described
in Section L of the Advaxis Disclosure Letter (including the risks covered and
limits of such policies) and are in full force and effect. A full and complete
copy of each such insurance policy has been provided to GXPT, and such policies
are summarized in Section L of the Advaxis Disclosure Letter. All premiums in
respect of such policies for which premium notices have been received have been
paid in full as the same become due and payable. Advaxis have not failed to give
any notice or present any claim under any insurance policy in due and timely
fashion. There are no actual claims or claims threatened in writing against
Advaxis which could come within the scope of such coverage nor are any such
policies currently threatened with cancellation. There are no outstanding
requirements or recommendations by any insurance company that issued a policy
with respect to any of the respective assets, the businesses, or operations of
Advaxis or by any Board of Fire Underwriters or other body exercising similar
functions or by any governmental authority requiring or recommending any repairs
or other work to be done on, or with respect to, any of the respective assets of
Advaxis or requiring or recommending any equipment or facilities to be installed
on any premises from which the respective businesses of Advaxis is conducted or
in connection with any of the respective assets thereof. Advaxis does not have
any knowledge of any material proposed increase in applicable insurance rates or
of any conditions or circumstances applicable to the respective businesses
thereof that might result in such increases. No such policy is terminable by
virtue of the transactions contemplated by this Agreement.
(m) Business Conducted in No Other Name. All business of Advaxis has been
conducted in its and for their benefit and there are no parties related or
affiliated with Advaxis, either directly or indirectly, which are competing for
the business of Advaxis.
(n) Customers and Suppliers. There has been no termination or cancellation
of any relationship between Advaxis and any material supplier, or any customer
or group of customers which, individually or in the aggregate, represented more
than five (5%) percent of the gross revenues of Advaxis taken as a whole during
the year ended December 31, 2003, nor is there any reason to believe that any
such terminations or cancellations of such magnitudes are pending or threatened.
(o) Completeness of Disclosure. No representation or warranty by Advaxis
in this Agreement contains, or at the Closing Date will contain, an untrue
statement of material fact or omits or at the Closing Date will omit to state a
material fact required to be stated therein or necessary to make the statements
made not misleading.
(p) Compliance with Law and Government Regulations. Advaxis is in
compliance in all material respects with, and is not in violation of, applicable
local or foreign statutes, laws and regulations (including without limitation,
any applicable building, zoning or other law, ordinance or regulation) affecting
its properties or the operation of its business. Advaxis is not subject to any
order, decree, judgment or other sanction of any court, administrative agency or
other tribunal.
24
SECTION 2.03 REPRESENTATIONS AND WARRANTIES OF THE ADVAXIS SHAREHOLDERS.
The Advaxis Shareholders, severally and not jointly, hereby represent and
warrant to, and agree with, GXPT as follows:
(a) Representations and Warranties of Advaxis. Those Advaxis Shareholders
who are also employees and members of the management of Advaxis (and no other
Advaxis Shareholder) represent and warrant that the representations and
warranties of Advaxis set forth in Section 2.02 hereof are true and correct in
all material respects. Nothing has come to the attention of such Advaxis
Shareholders that would lead such Advaxis Shareholders to believe that any
representation or warranty of Advaxis set forth on Section 2.02 hereof is untrue
or incorrect in any material respect.
(b) Authority. Each of the Advaxis Shareholders has approved this
Agreement and, if an entity, has duly authorized the execution and delivery
hereof. Each Advaxis Shareholder has full power and authority to execute,
deliver, and perform this Agreement and the transactions contemplated hereby and
in connection herewith. Each Advaxis Shareholder who is an individual has
reached the age of majority under applicable law.
(c) Ownership of Shares. Each of the Advaxis Shareholders owns
beneficially the shares of Advaxis Capital Stock set forth opposite such Advaxis
Shareholder's name on Schedule A. Each Advaxis Shareholder has full power and
authority to transfer his, her or its shares of Advaxis Capital Stock to GXPT
under, pursuant to, and in accordance with, this Agreement, and to the knowledge
of such Advaxis Shareholder, such shares are free and clear of any liens,
charges, mortgages, pledges or encumbrances and such shares are not subject to
any claims as to the ownership thereof, or any rights, powers or interest
therein, by any third party and are not subject to any preemptive or similar
rights of stockholders.
(d) Investment Representations and Covenants.
(i) Each Advaxis Shareholder represents that such Advaxis
Shareholder is acquiring the Purchase Shares to be issued pursuant to Section
1.02(a) hereof for his, her or its own account and for investment only and not
with a view to distribution or resale thereof within the meaning of such phrase
as defined under the Securities Act. The Advaxis Shareholders shall not dispose
of any part or all of such Purchase Shares in violation of the provisions of the
Securities Act and the rules and regulations promulgated under the Securities
Act by the SEC and all applicable provisions of state securities laws and
regulations.
(ii) Each Advaxis Shareholder acknowledges that the certificate or
certificates representing such Advaxis Shareholder's Purchase Shares shall bear
a legend in substantially the form set forth in Section 1.02(c) hereof.
25
(iii) Each Advaxis Shareholder acknowledges being informed that the
Purchase Shares to be issued pursuant to Section 1.02(a) hereof shall be
unregistered, shall be "restricted securities" as defined in paragraph (a) of
Rule 144 under the Securities Act, and must be held indefinitely unless (a) they
are subsequently registered under the Securities Act, or (b) an exemption from
such registration is available.
(iv) Each Advaxis Shareholder acknowledges that such Advaxis
Shareholder has been afforded access to all material information which such
Advaxis Shareholder has requested relevant to such Advaxis Shareholder's
decision to acquire the Purchase Shares and to ask questions of GXPT's
management and that, except as set forth herein, neither GXPT nor anyone acting
on behalf of GXPT has made any representations or warranties to such Advaxis
Shareholder which have induced, persuaded, or stimulated such Advaxis
Shareholder to acquire such Purchase Shares. Each Advaxis Shareholder shall
deliver to GXPT a completed investor representation letter in the form attached
hereto as Exhibit X.
(v) Either alone, or together with his, her or its investment
advisor(s), each Advaxis Shareholder has the knowledge and experience in
financial and business matters to be capable of evaluating the merits and risks
of the prospective investment in the Purchase Shares, and each Advaxis
Shareholder is and will be able to bear the economic risk of the investment in
such Purchase Shares.
ARTICLE III
COVENANTS
SECTION 3.01 COVENANTS OF GXPT. GXPT covenants and agrees that, after the
date hereof and through the earlier of the Closing or the date of the
termination of this Agreement pursuant to Article IV hereof (the earlier of such
times, the "Release Time"), unless Advaxis will otherwise approve in writing,
which approval will not be unreasonably withheld:
(a) (i) Until the Release Time, no dividend or liquidating or other
distribution or stock split shall be authorized, declared, paid, or effected by
GXPT in respect of the outstanding shares of GXPT Common Stock other than the 1
for 200 reverse stock split referenced in 3.01(l) below.
(ii) Until the Release Time, no share of capital stock of GXPT
or warrant for any such share, right to subscribe to or purchase any such share,
or security convertible into, or exchangeable or exercisable for, any such
share, shall be issued or sold by GXPT other than the Offering.
(b) Until the Release Time, GXPT will afford the officers,
directors, employees, counsel, agents, investment bankers, accountants, and
other representatives of Advaxis and the Advaxis Shareholders free and full
access to the plants, properties, books, and records of GXPT. GXPT will permit
them to make extracts from and copies of such books and records, and will from
time to time furnish Advaxis and the Advaxis Shareholders with such additional
financial and operating data and other information as to the financial
condition, results of operations, businesses, properties, assets, liabilities,
or future prospects of GXPT as Advaxis or the Advaxis Shareholders from time to
time may request. Until the Release Time, GXPT will cause the independent
certified public accountants of GXPT to make available to Advaxis, its
independent certified public accountants, and the Advaxis Shareholders, the work
papers relating to the audits of GXPT referred to in Section 2.01(c) of this
Agreement.
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(c) Until the Release Time, GXPT will conduct its affairs so that on
the Closing Date no representation or warranty of GXPT will be inaccurate, no
covenant or agreement of GXPT will be breached, and no condition in this
Agreement will remain unfulfilled by reason of the actions or omissions of GXPT.
Except as otherwise consented to by Advaxis in writing, until the Release Time,
GXPT will conduct its affairs in all respects only in the ordinary course.
(d) Until the Release Time, GXPT will immediately advise Advaxis and
the Advaxis Shareholders in a detailed written notice of any material fact or
occurrence or any pending or threatened material occurrence of which it obtains
knowledge and which (if existing and known at the date of the execution of this
Agreement) would have been required to be set forth or disclosed in or pursuant
to this Agreement or in the GXPT Disclosure Letter, which (if existing and known
at any time prior to or at the Closing) would make the performance by any party
of a covenant contained in this Agreement impossible or make such performance
materially more difficult than in the absence of such fact or occurrence, or
which (if existing and known at the time of the Closing) would cause a condition
to any party's obligations under this Agreement not to be fully satisfied.
(e) GXPT shall insure that all confidential information which GXPT
or any of its officers, directors, employees, counsel, agents, investment
bankers, or accountants may now possess or may hereafter create or obtain
relating to the financial condition, results of operations, businesses,
properties, assets, liabilities, or future prospects of Advaxis, any affiliate
of Advaxis, or any customer or supplier of Advaxis or any such affiliate shall
not be published, disclosed, or made accessible by any of them to any other
person or entity without the prior written consent of Advaxis; provided,
however, that the restrictions of this sentence shall not apply (i) as may
otherwise be required by law, (ii) as may be necessary or appropriate in
connection with the enforcement of this Agreement, or (iii) to the extent the
information shall have otherwise become publicly available. GXPT shall, and
shall cause all other such persons and entities to, deliver to Advaxis all
tangible evidence of the confidential information relating to Advaxis, any
affiliate of Advaxis, or (insofar as such confidential information was provided
by, or on behalf of, Advaxis, or any such affiliate of Advaxis) any customer or
supplier of any of them or any such affiliate to which the restrictions of the
foregoing sentence apply immediately after the termination of this Agreement
pursuant to Article IV or V hereof.
(f) Before GXPT releases any information concerning this Agreement
or any of the other transactions contemplated hereby or in connection herewith
which is intended for or may result in public dissemination thereof, GXPT shall
cooperate with Advaxis, shall furnish drafts of all documents or proposed oral
statements to Advaxis for comment, and shall not release any such information
without the written consent of Advaxis. Nothing contained herein shall prevent
GXPT from releasing any information if required to do so by law.
27
(g) GXPT shall not make any agreement or reach any understanding not
approved in writing by Advaxis as a condition for obtaining any consent,
authorization, approval, order, license, certificate, or permit required for the
consummation of the transactions contemplated by this Agreement.
(h) GXPT shall promptly prepare all required by law or, in the
reasonable opinion of the parties hereto, appropriate public disclosures and
regulatory filings, if any are legally required, relating to this Agreement and
the transactions contemplated hereby and in connection herewith. GXPT shall
furnish or cause to be furnished, for inclusion in such public disclosures and
regulatory filings, such information about GXPT, and GXPT's security holders as
may be required or as may be reasonably requested by Advaxis, and shall continue
to furnish or cause to be furnished such information as is necessary to keep
such information correct and complete in all material respects until the Release
Time. GXPT represents and warrants that the information that it has furnished to
date, taken as a whole, does not now, and will not at any time prior to the
Release Time, (i) contain an untrue statement of a material fact or (ii) omit to
state a material fact required to be stated therein or necessary to make the
statements therein not false or misleading. GXPT shall take any action required
to be taken by it under state "blue-sky," securities, or take-over laws in
connection with the issuance of GXPT Common Stock pursuant to the transactions
contemplated hereby and in connection herewith. The filings made by GXPT within
the past five years with the SEC were, if filed under the Exchange Act, prepared
in accordance with the then existing requirements of the Exchange Act and the
rules and regulations thereunder and, if filed under the Securities Act,
prepared in accordance with the then existing requirements of the Securities Act
and the rules and regulations thereunder. Such filings when filed, and the press
releases and other public statements GXPT has made subsequent to the last such
filing when considered together with such filings, did not at the time of filing
or issuance of the press releases or other public statements, as the case may
be, and (with respect to the press releases and other public statements, when
considered together with such filings) do not now (i) contain an untrue
statement of a material fact or (ii) omit to state a material fact required to
be stated therein or necessary to make the statements therein not false or
misleading.
(i) If, prior to the Release Time, GXPT Common Stock shall be
recapitalized or reclassified or GXPT shall effect any stock dividend, stock
split, or reverse stock split of GXPT Common Stock, other than the contemplated
1 for 200 reverse stock split, then the shares of GXPT Common Stock to be
delivered under this Agreement or upon exercise, conversion, or exchange of any
security to be delivered under this Agreement or assumed by GXPT as contemplated
by this Agreement shall be appropriately and equitably adjusted to the kind and
amount of shares of stock and other securities and property to which the holders
of such shares of GXPT Common Stock or such other security would have been
entitled to receive had such stock or such other security been issued and
outstanding as of the record date for determining stockholders entitled to
participate in such corporate event.
(j) GXPT shall timely prepare and file any declaration or filing
necessary to comply with any transfer tax statutes that require any such filing
before the Closing.
(k) Until the Release Time, GXPT shall not, and shall not authorize
or permit any officer, director, employee, counsel, agent, investment banker,
accountant, or other representative of GXPT, directly or indirectly, to
contemplate or enter into any transaction the effect of which may be to
prohibit, restrict, or delay the consummation of the transactions contemplated
by this Agreement or impair the contemplated benefits to GXPT's stockholders of
the transactions contemplated by this Agreement.
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(l) Effective at the Closing, GXPT shall cause its certificate of
incorporation to be amended to (i) cause the corporate name thereof to be
changed to "Advaxis Inc.", (ii) have a 1 for 200 reverse stock split and (iii)
authorize the number of shares of GXPT Common Stock to be at least 50,000,000
shares.
(m) Effective at the Closing, each officer of GXPT shall tender his
or her respective resignation and each member of the Board of Directors of GXPT
shall tender his or her respective resignation therefrom and GXPT shall appoint
the following individuals as the sole directors of GXPT: Roni Appel, J. Todd
Derbin, Scott Flamm, Thomas McKearn and Steve Roth.
(n) On or prior to the Closing Date, GXPT shall deliver to Advaxis
and the Advaxis Shareholders the completed GXPT Disclosure Letter, which letter
shall be correct and complete in all material respects.
(o) On or prior to the Closing Date, the Board of Directors and
shareholders of GXPT shall (i) adopt the 2004 Stock Option Plan (the "Plan"),
substantially in the form attached hereto as Exhibit C and (ii) reserve
2,381,525 shares of GXPT Common Stock for issuance under the Plan, to be
effective upon Closing.
(p) On the Closing Date, 752,600 new shares of GXPT Common Stock
shall be issued and delivered in certificated form to, or to the order of,
Sunrise Securities Corp. and/or their respective designees.
(q) Prior to the Closing Date, the Board of Directors and
shareholders of GXPT shall have authorized and approved the execution and
delivery of this Agreement and all transactions contemplated hereby, including
without limitation the 1 for 200 reverse stock split.
SECTION 3.02 COVENANTS OF ADVAXIS. Advaxis covenants and agrees that,
after the date hereof and through the Release Time, unless GXPT will otherwise
approve in writing, which approval will not be unreasonably withheld:
(a) Until the Release Time, no amendment will be made in the
certificate of incorporation or by-laws (or, in each case, the comparable
charter documents, if any, under applicable law) of Advaxis.
(b) Until the Release Time, no share of Advaxis Capital Stock,
option or warrant for any such share, right to subscribe to or purchase any such
share, or security convertible into, or exchangeable or exercisable for, any
such share, shall be issued or sold by Advaxis, other than the issuance of
convertible promissory notes and the issuance of warrants related thereto (which
convertible promissory notes and warrants shall be exchanged for Units on the
same terms as the Advaxis Notes), or otherwise than as contemplated by, or in
connection with, this Agreement. Such subscribers or purchasers will be required
to comply with all of the securities transaction exemption requirements imposed
on the Advaxis Shareholders under this Agreement.
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(c) Until the Release Time, no dividend or liquidating or other
distribution or stock split shall be authorized, declared, paid, or effected by
Advaxis in respect of the outstanding shares of Advaxis Capital Stock other than
in-kind dividends payable to holders of Advaxis Series A Preferred Stock of
Advaxis, as more fully described in Section C of the Advaxis Disclosure Letter.
Until the Release Time, no direct or indirect redemption, purchase, or other
acquisition shall be made by Advaxis of shares of Advaxis Capital Stock.
(d) Until the Release Time, except in the ordinary course of its
business, Advaxis shall not borrow money, guarantee the borrowing of money,
engage in any transaction, or enter into any material agreement other than in
connection with the transactions contemplated hereby or in connection herewith
or otherwise pursuant to any currently outstanding credit line of Advaxis, or
with respect to any agreements or modifications to agreements with the
University of Pennsylvania, or with respect to the incurrence of indebtedness
pursuant to the issuance of convertible promissory notes and the issuance of
warrants related thereto (which convertible promissory notes and warrants shall
be exchanged for Units on the same terms as the Advaxis Notes). For purposes of
this Agreement, references to "material", as well as correlative terms (e.g.,
materially, materiality, etc.), shall be deemed to refer to amounts of US$50,000
or more or effects or consequences of US$50,000 or more.
(e) Until the Release Time, Advaxis will afford the officers,
directors, employees, counsel, agents, investment bankers, accountants, and
other representatives of GXPT and lenders, investors, and prospective lenders
and investors free and full access to the plants, properties, books, and records
of Advaxis, will permit them to make extracts from and copies of such books and
records, and will from time to time furnish GXPT with such additional financial
and operating data and other information as to the financial condition, results
of operations, businesses, properties, assets, liabilities, or future prospects
of Advaxis as GXPT from time to time may request. Until the Release Time,
Advaxis will cause the independent certified public accountants of Advaxis to
make available to GXPT and its independent certified public accountants the work
papers relating to the audits of Advaxis referred to in Section 2.02(c) of this
Agreement.
(f) Until the Release Time, Advaxis will conduct its affairs so that
at the Closing, no representation or warranty of Advaxis will be inaccurate in
any material respect, no covenant or agreement of Advaxis will be breached, and
no condition in this Agreement will remain unfulfilled by reason of the actions
or omissions of Advaxis. Except as otherwise consented to by GXPT in writing,
until the Release Time, Advaxis will use its best efforts to preserve the
business operations of Advaxis intact, to keep available the services of its
present personnel, to preserve in full force and effect the contracts,
agreements, instruments, leases, licenses, arrangements, and understandings of
Advaxis, and to preserve the good will of its suppliers, customers, and others
having business relations with any of them. Until the Release Time, Advaxis will
conduct its affairs in all respects only in the ordinary course, other than in
connection with the matters referenced herein.
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(g) Until the Release Time, Advaxis will immediately advise GXPT and
the Advaxis Shareholders in a detailed written notice of any material fact or
occurrence or any pending or threatened material occurrence of which it obtains
knowledge and which (if existing and known at the date of the execution of this
Agreement) would have been required to be set forth or disclosed in or pursuant
to this Agreement or the Advaxis Disclosure Letter, which (if existing and known
at any time prior to or at the Closing) would make the performance by any party
of a covenant contained in this Agreement impossible or make such performance
materially more difficult than in the absence of such fact or occurrence, or
which (if existing and known at the time of the Closing) would cause a condition
to any party's obligations under this Agreement not to be fully satisfied.
(h) Advaxis shall use its commercially reasonable efforts to insure
that all confidential information which Advaxis or any of its respective
officers, directors, employees, counsel, agents, investment bankers, or
accountants may now possess or may hereafter create or obtain relating to the
financial condition, results of operations, businesses, properties, assets,
liabilities, or future prospects of GXPT, any affiliate thereof, or any customer
or supplier thereof or of any such affiliate shall not be published, disclosed,
or made accessible by any of them to any other person or entity at any time or
used by any of them except in the ordinary course of business and for the
benefit of Advaxis; provided, however, that the restrictions of this sentence
shall not apply (A) after this Agreement is terminated pursuant to Article IV or
V hereof or otherwise, (B) as may otherwise be required by law, (C) as may be
necessary or appropriate in connection with the enforcement of this Agreement,
or (D) to the extent the information shall have otherwise become publicly
available.
(i) Before Advaxis releases any information concerning this
Agreement or any of the transactions contemplated by this Agreement which is
intended for, or may result in, public dissemination thereof, Advaxis shall
cooperate with GXPT, shall furnish drafts of all documents or proposed oral
statements to GXPT for comment, and shall not release any such information
without the written consent of GXPT, which consent shall not be unreasonably
withheld. Nothing contained herein shall prevent Advaxis from releasing any
information if required to do so by law or in connection with the Offering.
(j) Advaxis shall not make any agreement or reach any understanding
not approved in writing by GXPT as a condition for obtaining any consent,
authorization, approval, order, license, certificate, or permit required for the
consummation of the transactions contemplated by this Agreement.
(k) Advaxis shall furnish, or cause to be furnished, for inclusion
in the public disclosures or regulatory filings of GXPT or otherwise or for
inclusion in GXPT's filings under state "blue-sky," securities, or take-over
laws, such information about Advaxis or the Advaxis Shareholder as may be
required or as may be reasonably requested by GXPT, and shall continue to
furnish or cause to be furnished such information as is necessary to keep such
information correct and complete in all material respect until the Release Time.
Advaxis represents and warrants that the information that it has furnished to
date, taken as a whole, does not now, and will not at any time prior to the
Release Time, (i) contain an untrue statement of a material fact or (ii) omit to
state a material fact required to be stated therein or necessary to make the
statements therein not false or misleading.
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(l) Advaxis shall timely prepare and file any declaration or filing
necessary to comply with any transfer tax statutes that require any such filing
before the Closing.
(m) On or prior to the Closing Date, Advaxis shall deliver to GXPT
the completed Advaxis Disclosure Letter, which letter shall be correct and
complete in all material respects.
(n) Prior to the Closing Date, the Board of Directors and
shareholders of Advaxis shall have authorized and approved the execution and
delivery of this Agreement and all transactions contemplated hereby.
SECTION 3.03 COVENANTS OF THE ADVAXIS SHAREHOLDERS. The Advaxis
Shareholders covenant and agree, severally and not jointly, that, after the date
hereof and through the Release Time, unless GXPT will otherwise approve in
writing, which approval will not be unreasonably withheld, as follows:
(a) Those Advaxis Shareholders who are employees and members of the
management of Advaxis will use best efforts to cause Advaxis to perform each
covenant thereof set forth herein on a timely basis.
(b) Until the earlier of the Release Time, no Advaxis Shareholder
shall take any action the result of which shall be to cause Advaxis to make any
amendment in the certificate of incorporation or by-laws (or, in each case, the
comparable charter documents, if any, under applicable law) thereof.
(c) Before any of the Advaxis Shareholders releases any information
concerning this Agreement or any of the transactions contemplated by this
Agreement which is intended for, or may result in, public dissemination thereof,
such Advaxis Shareholder shall cooperate with GXPT, shall furnish drafts of all
documents or proposed oral statements to GXPT for comment, and shall not release
any such information without the written consent of GXPT, which consent shall
not be unreasonably withheld. Nothing contained herein shall prevent the Advaxis
Shareholders from releasing any information if required to do so by law or in
connection with the Offering.
(d) Each Advaxis Shareholder shall furnish, or cause to be
furnished, for inclusion in the public disclosure in connection with the
transactions contemplated by this Agreement, or for inclusion in GXPT's filings
under state "blue-sky," securities, or take-over laws, such information about
the Advaxis Shareholder as may be required under applicable law, and shall
continue to furnish or cause to be furnished such information as is necessary to
keep such information correct and complete in all material respect until the
Release Time. Each Advaxis Shareholder represents and warrants, solely with
respect to himself, herself or itself, that the information in writing that he,
she or it has furnished to date regarding himself, herself or itself for
inclusion in any registration statement or other related public filings with the
SEC or in any of GXPT's filings under state securities laws, taken as a whole,
does not now, and will not at any time prior to the Release Time, (i) contain an
untrue statement of a material fact or (ii) omit to state a material fact
required to be stated therein or necessary to make the statements therein not
false or misleading.
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ARTICLE IV
CONDITIONS; ABANDONMENT AND TERMINATION
SECTION 4.01 RIGHT OF GXPT TO ABANDON. GXPT's Board of Directors shall
have the right to abandon or terminate this Agreement if any of the following
conditions shall not be true or shall not have occurred, as the case may be, as
of the specified date or dates:
(a) All representations and warranties of Advaxis and the Advaxis
Shareholders contained in this Agreement shall be accurate when made and, in
addition, shall be accurate as of the Closing Date as though such
representations and warranties were then made in exactly the same language by
Advaxis or the Advaxis Shareholders, as applicable, and regardless of knowledge
or lack thereof on the part of Advaxis or the Advaxis Shareholders (as
applicable) or changes beyond its control; as of the Closing Date, Advaxis and
the Advaxis Shareholders shall have performed and complied with all covenants
and agreements and satisfied all conditions required to be performed and
complied with by it at or before the Closing Date, respectively, by this
Agreement; and GXPT shall have received a certificate executed by the chief
executive officer and the chief financial officer of Advaxis and the Advaxis
Shareholders, dated the Closing Date, to that effect.
(b) GXPT shall have received at the Closing Date certificates
executed by the chief executive officer and the chief financial officer of
Advaxis to the effect that they have carefully examined the representations and
warranties made by Advaxis herein, as well as the documents delivered to GXPT
pursuant hereto, and, to the best of their knowledge, (i) neither such
representations and warranties, nor any such document so delivered (A) contains
an untrue statement of a material fact or (B) omits to state a material fact
required to be stated therein or necessary to make the statements therein not
false or misleading, and (ii) since the date hereof, no event with respect to
Advaxis or the Advaxis security holder has occurred which should have been set
forth in an amendment hereto which has not been set forth in such an amendment.
(c) Advaxis and the Advaxis Shareholders, as applicable, shall have
delivered to GXPT at or prior to the Closing Date such other documents
(including certificates of officers of Advaxis) as GXPT may reasonably request
in order to enable GXPT to determine whether the conditions to their obligations
under this Agreement have been met and otherwise to carry out the provisions of
this Agreement.
(d) All actions, proceedings, instruments, and documents required by
Advaxis and the Advaxis Shareholders to carry out this Agreement or incidental
thereto and all other related legal matters shall be subject to the reasonable
approval of counsel to GXPT, and Advaxis and the Advaxis Shareholders shall have
furnished such counsel such documents as such counsel may have reasonably
requested for the purpose of enabling them to pass upon such matters.
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(e) At the Closing, there shall not be pending any legal proceeding
relating to, or seeking to prohibit or otherwise challenge the consummation of,
the transactions contemplated by this Agreement, or to obtain substantial
damages with respect thereto.
(f) There shall not have been any action taken, or any law, rule,
regulation, order, judgment, or decree proposed, promulgated, enacted, entered,
enforced, or deemed applicable to the transactions contemplated by this
Agreement by any federal, state, local, or other governmental authority or by
any court or other tribunal, including the entry of a preliminary or permanent
injunction, which, in the reasonable judgment of GXPT, (i) makes this Agreement
or any of the transactions contemplated by this Agreement illegal, results in a
delay in the ability of Advaxis or GXPT to consummate the transactions
contemplated by this Agreement, (iii) requires the divestiture by GXPT of a
material portion of the business of either GXPT or of Advaxis, (iv) imposes
material limitations on the ability of GXPT effectively to exercise full rights
of ownership of shares of Advaxis including the right to vote such shares on all
matters properly presented to the Advaxis Shareholders, or (v) otherwise
prohibits, restricts or delays consummation of the transactions contemplated by
this Agreement or impairs the contemplated benefits to GXPT of this Agreement or
any of the other transactions contemplated by this Agreement.
(g) The parties to this Agreement shall have obtained at or prior to
the Closing Date all unconditional written approval to this Agreement and to the
execution, delivery, and performance of this Agreement by each of them of
relevant governmental authorities, if any, having jurisdiction over GXPT or
Advaxis or the subject matter of this Agreement.
(h) The parties to this Agreement shall have obtained at or prior to
the Closing Date all consents required for the consummation of the transactions
contemplated by this Agreement from any unrelated third party to any contract,
agreement, instrument, lease, license, arrangement, or understanding to which
any of them is a party, or to which any of them or any of their respective
businesses, properties, or assets are subject.
(i) There shall not have been any material adverse change in the
condition (financial or otherwise), operations, business, assets, liabilities,
earnings or prospects of Advaxis since the date hereof.
(j) GXPT shall conduct a due diligence review of Advaxis, including,
without limitation, a review of the Advaxis Disclosure Letter and the documents
referenced therein delivered prior to the Closing Date, and shall be reasonably
satisfied with the result of such review.
SECTION 4.02 RIGHT OF ADVAXIS AND THE ADVAXIS SHAREHOLDERS TO ABANDON. By
the election of the Advaxis Shareholders, or otherwise, Advaxis's Board of
Directors shall have the right to abandon or terminate this Agreement if any of
the following conditions shall not be true or shall not have occurred, as the
case may be, as of the specified date or dates:
(a) All representations and warranties of GXPT contained in this
Agreement shall be accurate when made and, in addition, shall be accurate as of
the Closing Date as though such representations and warranties were then made in
exactly the same language by GXPT and regardless of knowledge or lack thereof on
the part of GXPT or changes beyond its control; as of the Closing Date, GXPT
shall have performed and complied with all covenants and agreements and
satisfied all conditions required to be performed and complied with by them at
or before the Closing Date by this Agreement; and Advaxis shall have received
certificates executed by the chief executive officer and the chief financial
officer of GXPT, dated the Closing Date, to that effect.
34
(b) Advaxis and the Advaxis Shareholders shall have received at the
Closing Date certificates executed by the chief executive officer and the chief
financial officer of GXPT as of such date, to the effect that they have
carefully examined the representations and warranties made by GXPT made herein,
as well as the documents delivered to Advaxis pursuant hereto, and, to the best
of their knowledge, (i) neither such representations and warranties, nor any
such document so delivered (A) contains an untrue statement of a material fact
or (B) omits to state a material fact required to be stated therein or necessary
to make the statements therein not false or misleading, (ii) since the date
hereof, no event with respect to GXPT has occurred which should have been set
forth in an amendment hereto which has not been set forth in such an amendment,
(iii) any contract, agreement, instrument, lease or license regarding GXPT
required to by filed as an exhibit to any regulatory filing required by the SEC
has been filed as an exhibit to or has been incorporated as an exhibit by
reference into such regulatory filing and (iv) to the effect of clause (k) of
this Section 4.02.
(c) GXPT shall have delivered to Advaxis and the Advaxis
Shareholders at or prior to the Closing such other documents (including
certificates of officers of GXPT) as Advaxis and the Advaxis Shareholders may
reasonably request in order to enable Advaxis and the Advaxis Shareholders to
determine whether the conditions to GXPT's obligations under this Agreement have
been met and otherwise to carry out the provisions of this Agreement.
(d) All actions, proceedings, instruments, and documents required by
GXPT to carry out this Agreement or incidental thereto and all other related
legal matters shall be subject to the reasonable approval of counsel to Advaxis
and the Advaxis Shareholders, and GXPT shall have furnished such counsel such
documents as such counsel may have reasonably requested for the purpose of
enabling them to pass upon such matters.
(e) At the Closing Date, there shall not be pending any legal
proceeding relating to, or seeking to prohibit or otherwise challenge the
consummation of, the transactions contemplated by this Agreement, or to obtain
substantial damages with respect thereto.
(f) There shall not have been any action taken, or any law, rule,
regulation, order, judgment, or decree proposed, promulgated, enacted, entered,
enforced, or deemed applicable to the transactions contemplated by this
Agreement by any federal, state, local, or other governmental authority or by
any court or other tribunal, including the entry of a preliminary or permanent
injunction, which, in the reasonable judgment of Advaxis or the Advaxis
Shareholders, (i) makes this Agreement or any of the transactions contemplated
by this Agreement illegal, or (ii) results in a delay in the ability of GXPT or
Advaxis to consummate any of the transactions contemplated by this Agreement or
(iii) otherwise prohibits, restricts or delays consummation of the other
transactions contemplated by this Agreement or impairs the contemplated benefits
to the Advaxis Shareholders of this Agreement or any of the transactions
contemplated by this Agreement.
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(g) The parties to this Agreement shall have obtained at or prior to
the Closing Date all unconditional written approval to this Agreement and to the
execution, delivery, and performance of this Agreement by each of them of
relevant governmental authorities, if any, having jurisdiction over GXPT or
Advaxis or the subject matter of this Agreement.
(h) At or prior to the Closing Date, GXPT shall have made all
filings, and taken all actions, necessary to comply with all reporting
requirements under federal and state securities laws (including without
limitation, applicable "blue-sky" laws with regard to the issuance of GXPT
Common Stock as contemplated by this Agreement) other than the filing of Form D
up to 15 days following the Closing. Without limiting the generality of the
foregoing, any prescribed periods within which a "blue sky" or securities law
administrator may disallow GXPT's notice of reliance on an exemption from such
state's requirements, shall have elapsed at or prior to the Closing Date.
(i) The parties to this Agreement shall have obtained at or prior to
the Closing Date all consents required for the consummation of the transactions
contemplated by this Agreement from any unrelated third party to any contract,
agreement, instrument, lease, license, arrangement, or understanding to which
any of them is a party, or to which any of them or any of their respective
businesses, properties, or assets are subject.
(j) Advaxis shall conduct a due diligence review of GXPT, including,
without limitation, a review of the GXPT Disclosure Letter and the documents
referenced therein delivered prior to the Closing Date, and same shall be
satisfactory in the reasonable opinion of Advaxis.
(k) At the Closing Date, GXPT shall have no assets and no
liabilites, determined in accordance with GAAP in effect in the United States
applied on a basis consistent with that of the financial statements of GXPT
hereinabove referenced.
(l) At or prior to the Closing Date, a minimum investment of at
least $1,500,000 shall be placed in escrow with Continental Transfer and Trust
Company, the escrow agent, in connection with the Offering.
(m) At or prior to the Closing Date, the officers, directors, and
holders of 5% or more of the outstanding GXPT Common Stock immediately prior to
such date shall have executed and delivered to Advaxis an agreement mutually
acceptable in form and substance to each of such person or entity, on the one
hand, and Advaxis, on the other hand, providing for restrictions on resale and a
"leak-out" of securities for a 90 day period following the Closing Date.
SECTION 4.03 OPTIONAL ABANDONMENT. In addition to the provisions of
Section 4.01 and Section 4.02 above, the transactions contemplated by this
Agreement may be abandoned or terminated at or before the Closing
notwithstanding adoption and approval of this Agreement and the transactions
contemplated hereby by the stockholders of the parties hereto:
(a) by mutual agreement of the Boards of Directors of GXPT and
Advaxis;
36
(b) at the option of GXPT's Board of Directors, if facts exist which
render impossible compliance with one or more of the conditions set forth in
Section 4.01 and such are not waived by GXPT;
(c) at the option of Advaxis's Board of Directors or by the election
of the Advaxis Shareholders if facts exist which render impossible compliance
with one or more of the conditions set forth in Section 4.02 and such are not
waived by Advaxis; and
(d) at the option of Advaxis's Board of Directors and GXPT's Board
of Directors, if the Closing Date shall not have occurred on or before the
Initial Closing Date; provided, that if Advaxis pays GXPT $15,000 (such amount
is non-refundable) prior to the Initial Closing Date, then the Closing Date
shall be extended for an additional forty-five (45) day period.
SECTION 4.04 EFFECT OF ABANDONMENT. If the transactions contemplated by
this Agreement are abandoned or terminated as provided for in this Article IV,
except for Sections 3.01(e), 3.02(h), 4.01, 4.02 and 4.03, this Agreement shall
forthwith become wholly void and of no further force or effect without liability
on the part of either party to this Agreement or on the part of any officer,
director, controlling person (if any), employee, counsel, agent, or stockholder
thereof; provided, however, that nothing in this Section 4.04 shall release GXPT
or Advaxis or any officer, director, controlling person (if any), employee,
counsel, agent, or stockholder thereof from liability for a willful failure to
carry out its respective obligations under this Agreement.
ARTICLE V
MISCELLANEOUS
SECTION 5.01 EXPENSES. Whether or not the transactions contemplated in
this Agreement are consummated, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby, will be paid by
the party incurring such expense or as otherwise agreed to herein.
SECTION 5.02 BROKERS AND FINDERS. Except as set forth on Schedule 5.2,
each of the parties hereto represents, as to itself, that no agent, broker,
investment banker or firm or person is or will be entitled to any broker's or
finder's fee or any other commission or similar fee in connection with any of
the transactions contemplated by this Agreement, except as may be otherwise set
forth herein or by separate document.
SECTION 5.03 NECESSARY ACTIONS. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use all reasonable efforts to
take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
In the event at any time after the Closing, any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper executive
officers and/or directors of GXPT or Advaxis, as the case may be, or the
relevant Advaxis Shareholders or Advaxis Shareholders will take all such
necessary action.
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SECTION 5.04 EXTENSION OF TIME; WAIVERS. At any time prior to the Closing
Date:
(a) GXPT may (i) extend the time for the performance of any of the
obligations or other acts of Advaxis or any Advaxis Shareholders, (ii) waive any
inaccuracies in the representations and warranties of Advaxis or any Advaxis
Shareholders or, or contained herein or in any document delivered pursuant
hereto by Advaxis or any Advaxis Shareholders, and (iii) waive compliance with
any of the agreements or conditions contained herein to be performed by Advaxis
or any Advaxis Shareholders. Any agreement on the part of GXPT to any such
extension or waiver will be valid only if set forth in an instrument, in
writing, signed on behalf of GXPT.
(b) Advaxis and the Advaxis Shareholders (by action of the Advaxis
Shareholders), may (i) extend the time for the performance of any of the
obligations or other acts of GXPT, (ii) waive any inaccuracies in the
representations and warranties of GXPT contained herein or in any document
delivered pursuant hereto by GXPT and (iii) waive compliance with any of the
agreements or conditions contained herein to be performed by GXPT. Any agreement
on the part of Advaxis and to any such extension or waiver will be valid only if
set forth in an instrument, in writing, signed on behalf of Advaxis.
SECTION 5.05 NOTICES. Any notice to any party hereto pursuant to this
Agreement will be in writing and given by Certified or Registered Mail or by
facsimile, addressed as follows:
If to Advaxis: Advaxis, Inc.
212 Carnegie Center, Suite 206
Princeton, New Jersey 08540
Attention: J. Todd Derbin
Fax: (801) 459-3596
If to the Advaxis
Shareholders: At the addresses set forth on the signature page.
With a copy to: Reitler Brown & Rosenblatt LLC
800 Third Avenue, 21st Floor
New York, New York 10022
Attention: Edward G. Reitler, Esq.
Fax: (212) 371-5500
If to GXPT: Great Expectations and Associates, Inc.
4105 East Florida Avenue, Suite 100
Denver, Colorado 80222
(303) 756-5703
With a copy to: Francona, Joiner, Goodman
4750 Table Mesa Drive
Boulder, Colorado 80305
Attention: Gary Joiner, Esq.
Fax: 303-494-6309
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Additional notices are to be given as to each party, at such other address
as should be designated in writing complying as to delivery with the terms of
this Section 5.05. All such notices will be effective when received.
SECTION 5.06 PARTIES IN INTEREST. This Agreement will inure to the benefit
of and be binding upon the parties hereto and the respective successors and
assigns. Nothing in this Agreement is intended to confer, expressly or by
implication, upon any other person any rights or remedies under or by reason of
this Agreement.
SECTION 5.07 COUNTERPART. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all together will
constitute one document. The delivery by facsimile of an executed counterpart of
this Agreement will be deemed to be an original and will have the full force and
effect of an original executed copy.
SECTION 5.08 SEVERABILITY. The provisions of this Agreement will be deemed
severable and the invalidity or unenforceability of any provision hereof will
not affect the validity or enforceability of any of the other provisions hereof.
If any provisions of this Agreement, or the application thereof to any person or
any circumstance, is illegal, invalid or unenforceable, (a) a suitable and
equitable provision will be substituted therefor in order to carry out, so far
as may be valid and enforceable, the intent and purpose of such invalid or
unenforceable provision, and (b) the remainder of this Agreement and the
application of such provision to other persons or circumstances will not be
affected by such invalidity or unenforceability, nor will such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
SECTION 5.09 HEADINGS. The Article and Section headings are provided
herein for convenience of reference only and do not constitute a part of this
Agreement and will not be deemed to limit or otherwise affect any of the
provisions hereof.
SECTION 5.10 GOVERNING LAW. This Agreement will be deemed to be made in
and in all respects will be interpreted, construed and governed by and in
accordance with the law of the State of COLORADO, without regard to the conflict
of law principles thereof.
SECTION 5.11 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All terms,
conditions, representations and warranties set forth in this Agreement or in any
instrument, certificate, opinion, or other writing providing for in it, will
survive the Closing and the delivery of the shares of GXPT Common Stock to be
issued hereunder at the Closing for a period of two years after Closing,
regardless of any investigation made by or on behalf of any of the parties
hereto.
40
SECTION 5.12 ASSIGNABILITY. This Agreement will not be assignable by
operation of law or otherwise and any attempted assignment of this Agreement in
violation of this subsection will be void ab initio.
SECTION 5.13 AMENDMENT. This Agreement may be amended with the approval of
a majority of the Advaxis Shareholders and the boards of directors of each of
GXPT and Advaxis at any time. This Agreement may not be amended except by an
instrument, in writing, signed on behalf of each of the parties hereto.
SECTION 5.14. AGREEMENT TO INDEMNIFY. (a) To the extent permitted by law,
Advaxis agrees to indemnify and hold The Trustees of the University of
Pennsylvania harmless from and against all losses, claims, damages, liabilities
and obligations of any kind and description ("LOSSES"), including any reasonable
attorney fees incurred by The Trustees of the University of Pennsylvania in
investigating, defending or settling such Losses arising out of the Offering and
matters related thereto other than: (i) Losses arising out of the gross
negligence, willful misconduct or misrepresentations of The Trustees of the
University of Pennsylvania or (ii) Losses arising out of a decline in the value
of the GXPT Common Stock issuable to The Trustees of the University of
Pennsylvania. Notwithstanding the foregoing, Advaxis agrees to indemnify and
hold The Trustees of the University of Pennsylvania harmless from and against
any third party claims or suits against The Trustees of the University of
Pennsylvania in connection with a decline in value of the GXPT Common Stock held
by such third parties.
(b) To the extent permitted by law, Advaxis agrees to indemnify and hold
the officers, directors and principal shareholder of GXPT harmless from and
against any and all Losses incurred by GXPT in investigating, defending or
settling such Losses arising out of the Offering and matters related thereto
other than Losses arising out of the gross negligence, willful misconduct or
misrepresentations of GXPT's officers, directors or principal shareholder.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
41
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement in a manner legally binding upon them as of the date first above
written.
GREAT EXPECTATIONS AND ASSOCIATES, INC.
BY /s/ Fred Mahlke
-------------------------------------
NAME: Fred Mahlke
TITLE: President
ATTEST:
/s/ Daniel A. Unrein
- ------------------------------
NAME: Daniel A. Unrein
TITLE: Secretary
ADVAXIS, INC.
BY /s/ J. Todd Derbin
-------------------------------------
NAME: J. TODD DERBIN
TITLE: CHIEF EXECUTIVE OFFICER
ATTEST:
/s/ Roni Appel
- ------------------------------
NAME: Roni Appel
TITLE: CFO
ADVAXIS SHAREHOLDERS:
TECHVECTORS, LLC
BY: /s/ Roni Appel
------------------------------------
NAME: Roni Appel
TITLE:
ADDRESS: c/o Roni Appel
22 Ruth Lane
Demarest, NJ 07627
42
THE TRUSTEES OF THE
UNIVERSITY OF PENNSYLVANIA
BY: /s/ Louis Berneman
------------------------------------
NAME: Louis Berneman
TITLE: Managing Director
ADDRESS: University Of Pennsylvania
Center for Technology
Transfer
3160 Chestnut Street
Suite 200
Philadelphia, PA 19104
CRESTWOOD, LLC
BY: /s/ Ron Nizan
------------------------------------
NAME: Ron Nizan
TITLE: Manager
ADDRESS: 109 Boulevard Drive
Danbury, CT 06810
FLAMM FAMILY PARTNERS, LP
BY: /s/ Scott Flamm
------------------------------------
NAME: Scott Flamm
TITLE: President
ADDRESS: c/o Scott Flamm
70 West Road
Short Hills, NJ 07078
TRINITA LLC
BY: /s/ Morton Kielland
------------------------------------
NAME: Morton Kielland
TITLE: President
ADDRESS: c/o Morten Kielland,
22 Painters Lane,
Chesterbrook, PA 19087
43
/s/ Yvonne Paterson
---------------------------------------
YVONNE PATERSON
ADDRESS: 323 Johnson Pavilion
36th St. and Hamilton Walk
Philadelphia, PA 19104-6076
/s/ James Patton
---------------------------------------
JAMES PATTON
ADDRESS: c/o Millennium Oncology
Management
250 West Lancaster Avenue
Suite 100
Paoli, PA 19301
/s/ Roni Appel
---------------------------------------
RONI APPEL
ADDRESS: 22 Ruth Lane
Demarest, NJ 07627
/s/ William Kahn
---------------------------------------
WILLIAM KAHN
ADDRESS: 7903 Long Meadow Road
Baltimore, MD 21208
/s/ Richard Yelovich
---------------------------------------
RICHARD YELOVICH
ADDRESS: C/O Millennium Oncology
Management
250 West Lancaster Avenue
Suite 100
Paoli, PA 19301
/s/ Charles Kwon
---------------------------------------
CHARLES KWON
ADDRESS: 834 Monroe Street
Evanston, IL 60202
/s/ Tracy Yun
---------------------------------------
TRACY YUN
ADDRESS: 90 LaSalle Street
Apt. #13G
New York, NY 10027
/s/ Thomas McKearn
---------------------------------------
THOMAS MCKEARN
ADDRESS: 6040 Lower Mountain Road
New Hope, PA 18938
44
SCHEDULE A
NAME NUMBER OF SHARES*
TechVectors, LLC 7,043,647
The Trustees of the University of Pennsylvania 6,339,282
Yvonne Paterson 704,365
Crestwood, LLC 151,887
Flamm Family Partner, LP 243,019
James Patton 330,785
Roni Appel 121,509
William Kahn 151,517
Trinita LLC 151,289
Richard Yelovich 151,289
Charles Kwon 60,197
Tracy Yun 60,197
Thomas McKearn 88,741
* Numbers reflect the Post-Closing Amounts
TechVectors, LLC, the current shareholder of Advaxis will distribute its shares
of Advaxis to its members at Closing. Its member are:
Flamm Family Partners, LP
Roni Appel
James Patton
Open Ventures LLC
45
SCHEDULE B
POST CLOSING / PRE FINANCING FULLY DILUTED CAPITALIZATION TABLE
- --------------------------------------------------------------------------------
TOTAL ON A
FULLY
NAME: OPTIONS WARRANTS SHARES DILUTED BASIS
- --------------------------------------------------------------------------------
GXPT previous owners 752,600 752,600
- --------------------------------------------------------------------------------
Sunrise Securities Corp. and/or
its designees 752,600 752,600
- --------------------------------------------------------------------------------
Flamm Family Partners, LP* 8,910 2,585,094 2,594,004
- --------------------------------------------------------------------------------
Roni Appel* 14,449 2,463,584 2,478,033
- --------------------------------------------------------------------------------
James Patton* 56,349 36,551 2,672,860 2,765,760
- --------------------------------------------------------------------------------
Open Ventures, LLC* 17,422 17,422
- --------------------------------------------------------------------------------
The Trustees of the University
of Pennsylvania 6,339,282 6,339,282
- --------------------------------------------------------------------------------
Yvonne Paterson 169,048 704,365 873,413
- --------------------------------------------------------------------------------
Crestwood, LLC 22,274 151,887 174,161
- --------------------------------------------------------------------------------
William Kahn 151,517 151,517
- --------------------------------------------------------------------------------
Trinita LLC 151,289 151,289
- --------------------------------------------------------------------------------
Richard Yelovich 151,289 151,289
- --------------------------------------------------------------------------------
Charles Kwon 8,910 60,147 69,107
- --------------------------------------------------------------------------------
Tracy Yun 60,197 60,197
- --------------------------------------------------------------------------------
Thomas McKearn 82,763 22,274 88,741 193,778
- --------------------------------------------------------------------------------
Marilyn Mendell 31,184 31,184
- --------------------------------------------------------------------------------
J. Todd Derbin 1,172,767 73,049 1,245,816
- --------------------------------------------------------------------------------
Carmel Ventures, Inc. 70,436 57,913 128,349
- --------------------------------------------------------------------------------
Scott Flamm 70,436 31,184 101,620
- --------------------------------------------------------------------------------
Jonnas Grossman 8,910 8,910
- --------------------------------------------------------------------------------
Kerry Propper 22,274 22,274
- --------------------------------------------------------------------------------
Gina Ferarri 8,910 8,910
- --------------------------------------------------------------------------------
Adele Pfenninger 4,455 4,455
- --------------------------------------------------------------------------------
Gene Mancino 142,555 142,555
- --------------------------------------------------------------------------------
Port of technology 46,956 46,956
- --------------------------------------------------------------------------------
Fern 8,910 8,910
- --------------------------------------------------------------------------------
Cornucopia Pharmaceutical 35,218 35,218
- --------------------------------------------------------------------------------
Thorsten Verch 56,348 56,348
- --------------------------------------------------------------------------------
Christian Peters 228,919 228,919
- --------------------------------------------------------------------------------
Pentegram 35,639 35,639
- --------------------------------------------------------------------------------
Joy Cavagnaro 84,524 84,524
- --------------------------------------------------------------------------------
Bruce Mackler 52,827 52,827
- --------------------------------------------------------------------------------
Madison Keats 28,175 28,175
- --------------------------------------------------------------------------------
DNA Bridges 16,200 16,200
- --------------------------------------------------------------------------------
46
Pramod Srivastava 58,110 58,110
- --------------------------------------------------------------------------------
Steve Roth 82,763 82,763
- --------------------------------------------------------------------------------
Dr. Lorber 58,110 58,110
- --------------------------------------------------------------------------------
Carl June 58,110 58,110
- --------------------------------------------------------------------------------
TOTALS: 2,381,525 584,885 17,102,923 20,069,333
- --------------------------------------------------------------------------------
* TechVectors, LLC, the current shareholder of Advaxis will distribute its
shares of Advaxis to its members at Closing as follows:
Flamm Family Partners, LP: 2,341,320
Roni Appel: 2,341,320
James Patton: 2,341,320
Open Ventures LLC: 17,422
47
Section 5.02
Pursuant to the terms of the Investment Banking Agreement between Advaxis and
Sunrise Securities Corp., Sunrise Securities Corp. and/or its designees are to
receive 752,600 shares of common stock of GXPT
48
EXHIBIT X
FORM OF INVESTOR REPRESENTATION LETTER
GREAT EXPECTATIONS AND ASSOCIATES, INC.
To the Board of Directors of
Great Expectations and Associates, Inc.
The undersigned (the "Investor") represents that:
(i) He, she or it is acquiring the shares of common stock (the
"Shares"), of Great Expectations and Associates, Inc., a Colorado corporation
(the "Company") to be issued pursuant to the Share Exchange and Reorganization
Agreement, among the Company, Advaxis, Inc., a Delaware corporation ("Advaxis"),
and the shareholders of Advaxis (the "Agreement") for his, her or its own
account and for investment only and not with a view to distribution or resale
thereof within the meaning of such phrase as defined under the Securities Act of
1933, as amended (the "Securities Act"). The Investor shall not dispose of any
part or all of such Shares in violation of the provisions of the Securities Act
and the rules and regulations promulgated under the Securities Act by the
Securities and Exchange Commission (the "SEC"), and all applicable provisions of
state securities laws and regulations.
(ii) If the Investor is a natural person, the Investor has reached
the age of maturity in the jurisdiction in which the Investor resides, has
adequate means of providing for the Investor's current financial needs and
contingencies, is able to bear the substantial economic risks of an investment
in the Shares for an indefinite period of time, has no need for liquidity in
such investment and, at the present time, could afford a complete loss of such
investment.
(iii) The Investor acknowledges that he, she or it has been afforded
access to all material information which it has requested relevant to its
decision to acquire the Shares and to ask questions of the Company's management
and that, neither the Company nor anyone acting on behalf of the Company has
made any representations or warranties to the Investor which have induced,
persuaded, or stimulated the Investor to acquire the Shares.
(iv) Either alone, or together with its investment advisor(s), the
Investor has the knowledge and experience in financial and business matters to
be capable of evaluating the merits and risks of the prospective investment in
the Shares, and each the Investor is and will be able to bear the economic risk
of the investment in the Shares.
(v) The Investor acknowledges that the certificate or certificates
representing the Shares shall bear a legend in substantially the form as
follows:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED
FOR SALE, SOLD, OR OTHERWISE DISPOSED OF, EXCEPT IN COMPLIANCE WITH
THE REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT TO AN EXEMPTION
FROM SUCH REGISTRATION PROVISIONS, THE AVAILABILITY OF WHICH IS TO
BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
49
(vi) The Investor acknowledges being informed that the Shares to be
issued pursuant to the Agreement shall be unregistered, shall be "restricted
securities" as defined in paragraph (a) of Rule 144 under the Securities Act,
and must be held indefinitely unless (a) they are subsequently registered under
the Securities Act, or (b) an exemption from such registration is available.
(vii) The following information should be provided by the person
making the investment decision whether on his own behalf or on behalf of an
entity:
(1) Name of Investor: Age:
----------------------------------- -------
(2) Name of person making investment decision
Age:
----------------------------------------------------- -------
(Print)
(3) Principal residence address and telephone number: (___) ________
----------------------------------------------------------------
Email Address:
----------------------------------------------------------------
(4) Secondary residence address and telephone number: (___) ________
----------------------------------------------------------------
----------------------------------------------------------------
The undersigned has no present intention of becoming a resident of
any other state or jurisdiction.
(5) Name, address, telephone number and facsimile number of
employer or business:
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
(i) Nature of business
------------------------------------------
(ii) Position and nature of responsibilities
-----------------------------------------------------------
(6) Length of employment or in current position
---------------------
50
(7) Prior employment, positions or occupations during the past five
years (and the inclusive dates of each) are as follows:
Nature of Employment,
or Occupation Position/Duties From/To
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
Attach additional pages to answer any questions in greater detail,
if necessary.
The undersigned should answer the following questions, which pertain
to income, tax rate, net worth, liquid assets, and non-liquid assets by
including spousal contribution even though the investment shall be held in
single name.
(8) Business or professional education and the degree(s) received
are as follows:
School Degree Year Received
----------------------------------------------------------------
----------------------------------------------------------------
(viii) ACCREDITED INVESTOR REPRESENTATIONS. Initial all appropriate
spaces on the following pages indicating the basis upon which the undersigned
qualifies as an accredited investor (please initial only where appropriate).
[MUST INITIAL ONE]
For Individual Investors Only:
(1) ____ I certify that I am an accredited investor because I have
an individual net worth, or my spouse and I have combined net
worth, in excess of $1,000,000. For purposes of this question,
"net worth" means the excess of total assets at fair market
value, including home, home furnishings and automobiles, over
total liabilities.
(2a) ____ I certify that I am an accredited investor because I had
individual income (exclusive of any income attributable to my
spouse) of more than $200,000 in 2002 and 2003 and I
reasonably expect to have an individual income in excess of
$200,000 this year.
51
(2b) ____ Alternatively, my spouse and I have joint income in
excess of $300,000 in each applicable year.
(3) ____ I am a director or executive officer of the Company.
Other Investors:
(4) ____ The undersigned certifies that it is one of the
following: any bank as defined in Section 3(a)(2) of the
Securities Act whether acting in its individual or fiduciary
capacity; any broker or dealer registered pursuant to section
15 of the Securities Exchange Act of 1934; insurance company
as defined in Section 2(13) of the Securities Act; investment
company registered under the Investment Company Act of 1940 or
a business development company as defined in Section 2(a)(48)
of that Act; Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d)
of the Small Business Investment Act of 1958; any plan
established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or
its political subdivisions, for the benefit of its employees,
if such plan has total assets in excess of $5,000,000;
employee benefit plan within the meaning of Title I of the
Employee Retirement Income Security Act of 1974, if the
investment decision is made by a plan fiduciary, as defined in
Section 3(21) of such Act, which is either a bank, savings and
loan association, insurance company, or registered investment
advisor, or if the employee benefit plan has total assets in
excess of $5,000,000, or if a self-directed plan, with
investment decisions made solely by persons that are
accredited investors.
(5) ____ The undersigned certifies that it is a private business
development company as defined in Section 202(a)(22) of the
Investment Advisors Act of 1940.
(6) ____ The undersigned certifies that it is a organization
described in Section 501(c)(3) of the U.S. Internal Revenue
Code, corporation, Massachusetts or similar business trust or
partnership, not formed for the specific purpose of acquiring
the securities offered, with total assets in excess of
$5,000,000.
(7) ____ The undersigned certifies that it is a trust, with total
assets in excess of $5,000,000, not formed for the specific
purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person as described in Rule
506(b)(2)(ii) of the Securities Act.
(8) ____ The undersigned certifies that it is an entity in which
all of the equity owners are accredited investors.
52
Individual Investors:
- --------------------------------------------------------------------------------
Social Security Number Print Name of Investor No. 1
----------------------------------------
Signature of Investor No. 1
- --------------------------------------- ----------------------------------------
Social Security Number Print Name of Investor No. 2
----------------------------------------
Signature of Investor No. 2
Manner in which Shares are to be held:
_____ Individual Ownership _____ Partnership
_____ Tenants-in-Common _____ Trust
_____ Joint Tenant With Right of Survivorship _____ Corporation
_____ Community Property _____ Employee Benefit Plan
_____ Separate Property _____ Other (please indicate)
Corporate or Other Entity:
- ----------------------------------- -----------------------------------
Federal ID Number Print Name of Entity
By:
-------------------------------------
Signature, Title
DATED: _______________, 2004
53