Infinity Investors Limited
("Infinity")
October 23, 2000
Global Technology Value Partners Limited
("Purchaser")
Re: Proposed transfer of 6,869,854 shares of the
Common Stock of Edge Technology Group, Inc.
(formerly known as Visual Edge Systems Inc.)
currently held by Infinity to Purchaser.
Gentlemen:
Infinity proposes to sell to Purchaser in a single
negotiated transaction, and Purchaser desires to purchase from
Infinity, 6,869,854 shares of common stock (the "Infinity
Shares") of Edge Technology Group, Inc., a Delaware corporation
(the "Company"), for an aggregate purchase price of $5,500,000
(the "Purchase Price") or approximately $.80 per Share. The
Infinity Shares are being transferred to and acquired by the
Purchaser under the conditions and upon the representations
contained in this letter agreement (the "Letter Agreement").
Infinity hereby sells, transfers and delivers to Purchaser,
and Purchaser hereby purchases and accepts from Infinity, the
Infinity Shares in exchange for Purchaser's promise to pay the
Purchase Price in cash in full on or before June 30, 2001.
Purchaser may prepay the Purchase Price in whole or in part at
any time prior to June 30, 2001 without penalty.
Contemporaneous herewith, Infinity and Purchaser shall
execute a Pledge Agreement in the form set forth on Exhibit A
hereto pursuant to which Purchaser shall grant a security
interest in the Infinity Shares to Infinity to secure payment of
the Purchase Price. Infinity shall deliver certificates
representing the Infinity Shares, with a Stock Power duly
endorsed by Infinity in favor of Purchaser in the form set forth
on Exhibit B hereto, to the Company's Stock Transfer Agent,
accompanied by (i) the letter attached hereto as Exhibit C signed
by Infinity and countersigned by the Company, and (ii) an opinion
of counsel for Infinity addressed to the Company in the form
attached hereto as Exhibit D.
Purchaser hereby represents and warrants to each of the
Company and Infinity that:
(a) Purchaser is acquiring the Infinity Shares for its own
account and for investment purposes only.
(b) Purchaser is not acquiring the Infinity Shares with a
view to dividing its participation with others or with
a view to or in connection with any offering or
distribution in violation of Section 5 of the
Securities Act of 1933, as amended (the "Act"), or any
other applicable federal or state securities laws.
-1-
<PAGE>
(c) Purchaser has no contract, undertaking, arrangement or
agreement with any person to sell or transfer to any
such person or to have any such person sell for
Purchaser all or any of said Infinity Shares, and
Purchaser is not engaged in and does not within the
foreseeable future, plan to engage in any venture with
any person relative to the sale or transfer of any of
the said Infinity Shares.
(d) Purchaser has no present obligation, indebtedness or
commitment, nor are any circumstances in existence,
which will compel Purchaser to secure funds by the sale
of any of the said Infinity Shares, nor is Purchaser a
party to any plan or undertaking which would require or
contemplate that proceeds from the sale of all or a
part of said Infinity Shares be utilized in connection
therewith.
(e) Purchaser does not anticipate acquiring the Infinity
Shares for sale or other distribution upon the
occurrence or non-occurrence of some predetermined
event or upon the lapse of any particular period of
time.
(f) Purchaser has not been induced to acquire the Infinity
Shares by the use of advertisements or any form of
public solicitation by the Company, Infinity, or their
respective agents or representatives, and Purchaser has
not and does not intend to pay any commission or other
remuneration to any person in connection with its
acquisition of the Infinity Shares.
(g) The Infinity Shares will be held by Purchaser subject
to all applicable provisions of the Act, the Rules and
Regulations of the Securities and Exchange Commission
thereunder, and all applicable state securities laws
and rules thereunder.
(h) Purchaser understands that the Infinity Shares have not
been registered under the Act, or under the securities
laws of any state, and that the Infinity Shares cannot
be sold unless they are subsequently registered under
the Act and/or applicable state securities laws or
unless exemptions from such registration provisions are
available. Purchaser understands that the certificates
representing the Infinity Shares and any and all
securities issued in replacement therefor or exchanged
therefor shall bear the following legend, or one
substantially similar thereto:
THE SHARES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED PURSUANT TO THE
SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT
BE TRANSFERRED UNLESS THEY ARE SO REGISTERED
OR, IN THE OPINION OF COUNSEL ACCEPTABLE TO
THIS CORPORATION, SUCH TRANSFER IS EXEMPT
FROM REGISTRATION.
(i) Purchaser understands that, although an exemption from
registration under Rule 144 under the Act may become
available for certain resales of the Infinity Shares,
various significant conditions of Rule 144 must be
satisfied prior to any sale in reliance thereon.
-2-
<PAGE>
(j) Purchaser understands that ownership of the Infinity
Shares involves substantial risk. Purchaser
acknowledges that Purchaser has evaluated such risk and
has determined that the Infinity Shares are suitable
investments. Purchaser considers itself sophisticated
in financial and business matters and is capable of
evaluating the merits and risks of an investment of
this type and of protecting its own interests in
connection with this transaction.
(k) Purchaser represents that it is an "accredited
investor" as such term is defined in Rule 501(a) of the
Act.
(l) Purchaser understands that each of the Company and
Infinity are relying on the accuracy of the
representations made herein and, but for the existence
of this letter, Infinity would not sell the Infinity
Shares and the Company would not consent to the
transfer thereof.
(m) Purchaser or its representatives have been provided
access to business and financial information regarding
the Company and have had the opportunity to attend a
meeting with representatives of the Company for the
purpose of asking questions of and receiving answers
from the officers and directors of the Company,
concerning the Company's financial position, valuation,
opportunities and/or business and to discuss such
information with Purchaser's advisors to enable
Purchaser to make an informed investment decision
regarding the acquisition of the Infinity Shares.
Infinity hereby represents and warrants to each of the
Company and Purchaser that:
(a) Infinity has good and marketable title in and to the
Infinity Shares, free and clear of any charge, claim,
encumbrance, lien, option, pledge, security interest,
right of first refusal or restriction of any kind,
except for the restrictions required by the Act.
(b) Infinity has full right, power and authority to sell
the Infinity Shares as contemplated by this Letter
Agreement.
(c) The Infinity Shares have not been sold, assigned,
endorsed, transferred or otherwise disposed of by
Infinity.
(d) Infinity did not purchase the Infinity Shares from the
Company with a view to distribution of such Infinity
Shares.
(e) Infinity is not offering the Infinity Shares in
connection with any distribution.
Miscellaneous
(a) Infinity and Purchaser Representations. Infinity and
Purchaser each hereby acknowledge and agree that a copy of this
Letter Agreement may be delivered to the Company and that the
representations and warranties set forth herein may be relied
upon by the Company in connection with the Company's issuance of
-3-
<PAGE>
any instructions to the Company's Stock Transfer Agent with
regards to the sale of the Infinity Shares.
(b) Governing Law. This Letter Agreement shall be governed
by and construed in accordance with the laws of the
State of Delaware, without regard to principles of
conflicts of law.
(c) Complete Agreement. This Letter Agreement represents
the entire agreement between the parties with respect
to the transaction described herein and, except as
provided herein, supersedes all previous negotiations,
commitments and writings with respect to such
transaction.
(d) Indemnity. Purchaser hereby agrees to defend,
indemnify and hold harmless Infinity from and against
any and all damages, losses, costs, liabilities and
expenses (including reasonable attorneys' fees) arising
out of or related to any breach of the representations,
warranties or covenants of Purchaser under this Letter
Agreement. Infinity hereby agrees to defend, indemnify
and hold harmless Purchaser from and against any and
all damages, losses, costs, liabilities and expenses
(including reasonable attorneys' fees) arising out of
or related to any breach of the representations,
warranties or covenants of Infinity under this Letter
Agreement.
(signature page follows)
-4-
<PAGE>
INFINITY INVESTORS LIMITED
By:/s/ James A. Loughran
-------------------------------
Name: James A. Loughran
-----------------------------
Title: Director
----------------------------
ACKNOWLEDGED AND AGREED:
GLOBAL TECHNOLOGY VALUE PARTNERS LIMITED
By: /s/ Benjamin R. N. Warner
-------------------------------------
Name: Benjamin R. N. Warner
------------------------------------
Title: Director
------------------------------------
COMPANY:
EDGE TECHNOLOGY GROUP, INC
(formerly known as Visual Edge Systems Inc.)
By: /s/ Pierre Koshakji
-------------------------------------------
Name: Pierre Koshakji
----------------------------------------
Title: Chief Executive Officer
---------------------------------------
<PAGE>
EXHIBIT A
---------
PLEDGE AGREEMENT
<PAGE>
EXHIBIT B
--------
STOCK POWER
<PAGE>
EXHIBIT C
----------
TRANSFER AGENT LETTER
<PAGE>
EXHIBIT D
---------
OPINION OF INFINITY'S COUNSEL
