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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2000
Commission file number 000-24623
New Generation Holdings, Inc.
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(Exact name of small business issuer as specified in its charter)
Delaware 13-4056896
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(State or other jurisdiction (IRS Employer Identification
of incorporation or organization) Number)
245 Park Avenue, 39th Floor
New York, New York 10167
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(Address of principal executive offices)
(212) 792-4104
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(Issuer's telephone number, including area code)
New Generation Plastic, Inc.
----------------------------------------------------
(Former Name, Former Address and Former Fiscal Year,
if changed Since Last Report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports)
Yes [x] No [ ], and (2) has been subject to such filing requirements for the
past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the Issuer's classes of common
equity, as of the latest practicable date:
As of March 31, 2000 the issuer had outstanding 11,837,828 shares of its
Common Stock, $0.001 par value.
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<PAGE>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements.
The unaudited financial statements of New Generation Holdings, Inc. (formerly
New Generation Plastic, Inc.), a Delaware corporation (the "Company")(A
Development Stage Company), as of, and for the three months ended, March 31,
2000, and for the period from April 15, 1999 (inception) through March 31, 2000,
were prepared by Management and commence on the following page. In the opinion
of Management, the financial statements fairly present the financial position,
and results of operations and cash flows of the Company.
<PAGE>
New Generation Holdings, Inc.
(A Development Stage Company)
Index
Part I. Financial Information
Consolidated Balance Sheets as of December 31, 1999 (unaudited)
and March 31, 2000 (unaudited) 1
Consolidated Statements of Operations for the three months ended
March 31, 2000 (unaudited) and for the period from April 15, 1999
(inception) through March 31, 2000 (unaudited) 2
Consolidated Statements of Cash Flows for the three months ended
March 31, 2000 (unaudited) and for the period from April 15, 1999
(inception) through March 31, 2000 (unaudited) 3
Notes to the Unaudited Consolidated Financial Statements 4
Management's Plan of Operation 8
Part II. Other Information
Changes in Securities 11
Exhibits and reports on Form 8-K 11
<PAGE>
New Generation Holdings, Inc.
(A Development Stage Company)
Consolidated Balance Sheets
<TABLE>
<CAPTION>
December 31, 1999 March 31, 2000
----------------- --------------
(unaudited)
<S> <C> <C>
Assets
Current assets:
Cash $ 3,708 $ 6,651
Prepaid expenses 159,554 62,716
Intangible assets, net 443,929 418,210
----------- -----------
Total assets $ 607,191 $ 487,577
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 487,798 $ 360,590
Accrued consulting expense 675,000 675,000
Due to shareholder 2,175,186 2,486,750
----------- -----------
Total liabilities 3,337,984 3,522,340
----------- -----------
Stockholders' equity (deficit):
Common Stock, $0.001 par value; 50,000,000 shares
authorized, 11,842,761 and 11,837,828 shares
outstanding as of December 31, 1999 and March 31,
2000 (unaudited), respectively. 11,843 11,838
Preferred Stock, $0.001 par value; 1,000,000 shares
authorized, none issued or outstanding -- --
Additional paid in capital 804,690 1,133,045
Deficit accumulated during the development stage (3,547,326) (4,179,646)
----------- -----------
Total stockholders' equity (deficit) (2,730,793) (3,034,763)
----------- -----------
Commitments and contingencies -- --
Total liabilities and stockholders' equity $ 607,191 $ 487,577
(deficit) =========== ===========
</TABLE>
See accompanying notes to the financial statements.
1
<PAGE>
New Generation Holdings, Inc.
(A Development Stage Company)
Consolidated Statements of Operations
<TABLE>
<CAPTION>
Period from
April 15, 1999
Three months (inception)
Ended through
March 31, 2000 March 31, 2000
------------- --------------
(unaudited) (unaudited)
<S> <C> <C>
Operating Expenses
General and Administrative $511,056 $2,558,038
Product Development 77,147 1,503,383
----------- -----------
Loss from operations (588,203) (4,061,421)
Interest Expense (44,117) (118,225)
----------- -----------
Loss before income taxes (632,320) (4,179,646)
Income Taxes -- --
Net Loss $(632,320) $(4,179,646)
=========== ===========
Basic and diluted net loss per common share $(0.05) --
Shares used to compute basic and diluted net loss per 11,837,828 --
common share
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
New Generation Holdings, Inc.
(A Development Stage Company)
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Period from
April 15, 1999
(inception)
Three Months Ended through
March 31, 2000 March 31, 2000
-------------- --------------
(unaudited) (unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net Loss $(632,320) $(4,179,646)
Adjustments to reconcile net loss to net cash
used in operating activities:
Amortization 25,719 98,989
Equity based compensation expense 328,350 328,350
Changes in operating assets and liabilities:
Increase in prepaid expenses 96,838 (62,716)
Increase in accounts payable (127,208) 360,590
Increase in accrued consulting expense 0 675,000
--------- -----------
Net cash used in operating activities (308,621) (2,779,433)
--------- -----------
Cash flows provided by financing activities:
Cash received from shareholder loans 311,564 2,486,750
Issuance of common stock -- 816,533
--------- -----------
Net cash provided by financing 311,564 3,303,283
activities --------- -----------
Cash flows used in investing activities:
Purchase of patents -- (517,199)
--------- -----------
Net cash used in investing activities -- (517,199)
--------- -----------
Net increase in cash and cash equivalents 2,943 6,651
Cash and cash equivalents, beginning of period 3,708 --
--------- -----------
Cash and cash equivalents, end of period $ 6,651 $ 6,651
========= ===========
</TABLE>
See accompanying notes to the financial statements.
3
<PAGE>
New Generation Holdings, Inc.
(A Development Stage Company)
Notes to Consolidated Financial Statements
(1) Organization
New Generation Holdings, Inc. (formerly, New Generation Plastic,
Inc.)(the "Company") was organized on April 15, 1999 under the laws of
the State of Delaware. During June 1999, the Company exchanged 262,761
shares of its common stock for all of the issued and outstanding common
stock of SW Ventures, Inc. ("SWV"). Concurrently, SWV changed its name
to New Generation Plastic, Inc. As of the date of the merger, the net
assets of the Company and SWV were determined to have nominal value.
Accordingly, the transaction has been recorded at the par value of the
stock exchanged. On May 17, 2000 the Company changed its name to New
Generation Holdings, Inc.
(2) Summary of Significant Accounting Policies
(a) Development Stage Enterprise
During the period from April 15, 1999 (inception) through
December 31, 1999, the Company devoted substantially all of
its efforts to develop and market the patented technology
designed to process two or more discrete plastic polymers
("NGP Process"). The Company believes the NGP Process is
capable of producing commercially usable plastic polymers from
a mixed stream of discrete virgin polymers or waste plastic.
Its planned principal operations have not commenced.
Effective January 25, 2000, the Board of Directors approved a
change in the business model of the Company to include the
development of and investment in Internet-related companies
primarily located in Europe. As part of this restructuring,
the Company formed a wholly owned subsidiary, New Generation
Partners, Inc., in the State of Delaware. Through this
subsidiary, the Company anticipates developing a collaborative
network of Internet companies involved in business-to-business
(B2B) e-commerce and ventures oriented towards new emerging
Internet infrastructure and wireless Internet applications.
Also as part of the restructuring, the Company formed another
wholly owned Delaware subsidiary, NG Plastic, Inc. On May 17,
2000, the stockholders approved a change in the name of the
Company to New Generation Holdings, Inc. and the transfer all
the assets and liabilities relating to the Company's NGP
Process and the related plastic business to NG Plastic, Inc.,
its wholly owned subsidiary. NG Plastic, Inc. was
simultaneously renamed New Generation Plastic, Inc.
(continued)
4
<PAGE>
New Generation Holdings, Inc.
(A Development Stage Company)
Notes to Consolidated Financial Statements
(b) Net Income (Loss) Per Share
The Company computes net income (loss) per share in accordance
with Statement of Financial Accounting Standard ("SFAS") No.
128, Earnings Per Share. Under the provisions of SFAS 128,
basic net income (loss) per share is computed by dividing the
net income (loss) for the period by the weighted average
number of common shares outstanding during the period. Diluted
net income (loss) per share is computed by dividing the net
income (loss) for the period by the weighted average number of
common and dilutive potential common shares outstanding during
the period. As the Company had a net loss during the period
presented, basic and diluted net income (loss) per share are
the same.
(3) Related Party Transactions
Bachkine & Meyer Industries, S.A. ("BMI"), a stockholder of the
Company, has been advancing funds to the Company pursuant to a line of
credit agreement dated April 15, 1999. As of March 31, 2000
(unaudited), $2,486,750 had been advanced to the Company under the
terms of this agreement. Under the terms of the agreement, principal
payments are due on demand after July 15, 2000. Interest is due
quarterly in arrears and is based upon the prime rate; 8.0 percent as
of December 31, 1999. BMI and the Company have agreed that BMI will
have the sole option to convert part or all of principal and interest
due under the line of credit into common stock of the Company at a rate
determined by an independent committee of the Board of Directors.
In addition to the line of credit agreement discussed above, B.A.M.I.
Consulting, S.A. ("BAMI"), a British Virgin Islands corporation and an
affiliate of BMI, was entitled to receive a monthly management
consulting fee of $75,000 in exchange for engineering expertise in the
development and commercialization of the NGP Process. For the period
ended December 31, 1999, $675,000 (nine months' fees) of such fee has
been accrued as general and administrative expense, but has not yet
been paid. On April 15, 2000, BAMI and the Company entered into a
Termination Agreement in which it was agreed that because of the change
in the business focus that BAMI would allow its rights to receive the
monthly management consulting fee under the Consulting Agreement to
terminate as of December 31, 1999. At BAMI's sole option, all or part
of the balance of accrued consulting fees may be converted into common
stock of the Company at a rate determined by an independent committee
of the Board of Directors.
(continued)
5
<PAGE>
New Generation Holdings, Inc.
(A Development Stage Company)
Notes to Consolidated Financial Statements
In connection with the Strategic Collaboration Agreement dated as of
March 31, 2000 by and between the Company and New Generation Partners,
Inc., on one hand, and Double Impact, Inc. ("DI"), on the other, BMI
agreed, pursuant to Share Transfer Agreement dated as of March 31, 2000
by and among BMI, DI and the Company, to transfer 500,000 shares of its
Company Common Stock to DI as soon as the transfer restrictions imposed
on the shares are no longer applicable. The Company has filed a Form
SB-2 registration statement (the "Form SB-2") with the Securities and
Exchange Commission (the "SEC") on March 10, 2000 to register for
resale approximately 4,500,000 shares of its Common Stock, including
500,000 shares owned by BMI to be transferred to DI. The registration
statement has not yet been declared effective.
(4) Warrants
The Company declared a pro-rata distribution to each holder of its
common stock of record on October 14, 1999 consisting of a warrant to
purchase one share of the Company's common stock at an exercise price
of $6.00 per share for each four shares of common stock owned by the
stockholder. These warrants are not exercisable until the shares
purchasable upon exercise of the warrants have been registered under
the Securities Act of 1933 and expire two years after the date upon
which they first become exercisable. As a result of this declaration,
2,960,706 warrants were issued.
The Company authorized the issuance of warrants to purchase an
aggregate of 165,000 shares with the following terms: warrants for
75,000 shares with an exercise price of $12.00 per share expiring on
February 24, 2004 (the "Feb. 2004 Warrants") and warrants for 90,000
shares with an exercise price of $12.00 per share expiring on March 5,
2004 (the "Mar. 2004 Warrants"). Concurrently, the Company issued
60,000 of the Mar. 2004 Warrants to 2 shareholders. These warrants are
not exercisable until the shares purchasable upon exercise of the
warrants have been registered under the Securities Act of 1933.
(5) Commitments and Contingencies
In conjunction with the incorporation of the Company, the Company
entered into consulting agreements with several third parties. Under
those agreements the Company is contractually obligated to issue, upon
the adoption of a stock option plan, options to purchase an aggregate
of 50,000 shares of the Company's common stock at exercise prices
ranging from $7.50 to $9.50.
(continued)
6
<PAGE>
New Generation Holdings, Inc.
(A Development Stage Company)
Notes to Consolidated Financial Statements
One of the Company's European patents related to the plastic technology
has been opposed by a third party. While the Company believes its
patent will be upheld in substantially the form it was issued, the
Company can provide no assurances that it will be successful in its
patent defense. An adverse determination with respect to the
enforceability of the Company's European patent could have a material
adverse effect on the Company's plastic business and financial
condition.
(6) Subsequent Events
On April 10, 2000, the Company issued 133,350 shares of common stock
and authorized and issued warrants to purchase an aggregate of 95,000
shares of the Company's common Stock at an exercise price of $8.00 per
share (the "2000 Warrants") to 2 of its existing shareholders in
exchange for $999,950. The 2000 Warrants are not exercisable until the
shares purchasable upon exercise have been registered under the
Securities Act of 1933 and they expire two years after the date upon
which they first become exercisable.
On April 15, 2000, BAMI and the Company entered into a Termination
Agreement in which it was agreed that because of the change in the
business focus that BAMI would allow its rights to receive the monthly
management consulting fee under the Consulting Agreement to terminate
as of December 31, 1999. The balance of accrued consulting fees may be
converted at BAMI's sole option into Common Stock of the Company at
rate determined by an independent committee of the Board of Directors.
On May 17, 2000 the stockholders elected seven (7) directors to the Board
of Directors and approved: (a) A change in name of the Company to New
Generation Holdings, Inc.; (b) The transfer of all the company's assets and
liabilities relating to its existing plastic business to NG Plastic, Inc.,
that was renamed New Generation Plastic, Inc.; (c) the adoption of the 2000
Stock Compensation Plan under which the Company may grant options,
restricted stock and stock appreciation rights with regard to up to
4,100,000 shares of its Common Stock to its employees, directors and
consultants and (d) the ratification of the appointment of KPMG LLP as
independent accountants for the Company for the year ended December 31,
2000.
7
<PAGE>
Item 2. MANAGEMENT'S PLAN OF OPERATION
You should read the following plan of operation in conjunction with the
financial statements and notes thereto contained elsewhere in this Form 10-QSB.
The following information contains forward-looking statements that are subject
to risks and uncertainties. If one or more of these risks and uncertainties
materialize, actual results may differ from those expressed or implied by the
forward-looking statements.
Overview
We are a development stage company that has not yet generated any
revenue. We have decided to restructure our existing plastic business and enter
into a new business involving development of primarily European Internet
businesses. These two businesses will be carried out in two of our subsidiaries
formed for those purposes. After the completion of the transactions, we will
become a holding company with no operations aside from the ownership of the
subsidiary corporations' stock.
Plastic Business
Over the course of the next twelve months, we anticipate that we will
engage in the following activities:
1. We expect that upon receipt of stockholder approval, we will
complete the transfer of all assets and liabilities relative to the
plastic business to a wholly owned subsidiary.
2. We expect to identify a master licensee and enter into an exclusive
master license agreement for use of our plastic technology. We
anticipate that our plastic subsidiary will receive royalty payments on
a per kilogram basis.
3. We expect to maintain patent and trademark filings.
4. We expect to provide any necessary administrative or technical
assistance to master licensee with regard to our plastic technology.
The foregoing activities reflect the fact that we will no longer be
directly responsible for continuing research and development costs and
capital expenditures with regard to the commercialization of selected
applications for the plastic technology. We expect that the master
licensee will be responsible for all such costs.
Internet Business
Over the course of the next twelve months, we anticipate that we
will engage in the following activities:
1. We expect to identify and establish strategic partnerships with
firms that provide expertise that will benefit Network Companies.
8
<PAGE>
2. We expect to establish initial incubator sites in London, Geneva and
Stockholm.
3. We anticipate hiring a Chief Investment Officer and Internet
Analyst.
4. We expect to identify candidates for development and direct
investment. It is expected that these candidates will be involved primarily in
B2B e-commerce, wireless Internet, or Internet infrastructure.
5. We anticipate entering into the initial development and or investing
in approximately 30 ventures.
6. We expect that we will provide seed capital investments on the order
of $500,000 to a number of ventures.
7. We anticipate that we will invest an average of $2,000,000 in select
Network Companies that we provided seed capital.
Liquidity and Capital Resources
As of the date of this Form 10-QSB, we have yet to generate any revenue
from our business operations. Consequently, we have been dependent upon
shareholder advances from Bachkine & Meyer Industries, S.A. to fund our cash
requirements.
As of March 31, 2000, we had total assets of $487,577 and total
liabilities of $3,522,340. The biggest components of the liabilities are the
loan due to shareholder of $2,486,750 and the accrued consulting fees of
$675,000, both of which may be converted into equity at the obligee's option.
On April 10, 2000, the Company issued 133,350 shares of common stock
and warrants to purchase 95,000 shares of common stock at $8.00 per share to two
of its existing shareholders for $999,950.
Plastic Business
For the next twelve months, we anticipate that we will require $150,000
in additional capital. We anticipate that these funds will either be provided by
additional loans from Bachkine & Meyer Industries, S.A. or from the proceeds of
a private placement of our equity securities. We do not plan to purchase any
significant equipment in the next twelve months.
9
<PAGE>
Internet Business
Our Internet business is in its initial stage of development. This
business has not generated any revenues to date and we do not expect any revenue
to be generated in the next twelve months. In order to operate this business in
accordance with our current business plan, we intend to raise a minimum of
$60,000,000 in the next twelve months. We anticipate that in the next 90 days,
we will raise approximately $10,000,000. We cannot guarantee that any new
capital will be available to us or that adequate funds for operations will be
available as or when needed, or on terms satisfactory to us. Our failure to
obtain adequate additional financing may require us to delay, curtail or scale
back some or all of our proposed activities and potentially to cease operations
in both the plastic and Internet businesses.
We expect that the Internet subsidiary will commit an aggregate of
approximately $50,000,000 to investments in Network and non-Network Companies.
In addition, we expect that we will incur $3,200,000 of corporate overhead
expenditures for salaries, rent, expenses, and legal and accounting expenses.
The anticipated expenses for establishing and operating the initial network of
development sites will be $9,000,000. Finally, we expect that we will expend
approximately $500,000 in legal, accounting and other expenses directly related
to investments in non-Network Companies.
YEAR 2000
Management believes that the Company's accounting and operational
systems are year 2000 compliant. The Company received verification from GE/Fanuc
that the process control software for the NGP Technology was year 2000
compliant. The Company has not yet experienced any material year 2000 operating
problems and does not expect to encounter any such problems.
FORWARD LOOKING STATEMENTS
When used in this Form 10-QSB, in filings by the Company with the
Securities and Exchange Commission (the "SEC"), in the Company's press releases
or other public or stockholder communications, or in oral statements made with
the approval of an authorized executive officer of the Company, the words or
phrases "would be," "will allow," "intends to," "will likely result," "are
expected to," "will continue," "is anticipated," "estimate," "project," or
similar expressions are intended to identify "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995.
The Company cautions readers not to place undue reliance on any forward
looking statements, which speak only as of the date made, are based on certain
assumptions and expectations which may or may not be valid or actually occur,
and which involve various risks and uncertainties. The Company's actual results
for future periods could differ materially from those anticipated or projected.
Unless otherwise required by applicable law, the Company does not
undertake, and specifically disclaims any obligation, to update any
forward-looking statements to
10
<PAGE>
reflect occurrences, developments, unanticipated events or circumstances after
the date of such statement.
PART II OTHER INFORMATION
Item 2. Changes in Securities
(c) On February 21, 2000 the Company issued warrants for an
aggregate of 60,000 shares with an exercise price of $12.00
per share expiring on March 5, 2004 to two (2) of its
shareholders, Gommaire Verbruggen and Rudy Vunck in
consideration for services rendered to the Company.
On January 19, 2000, the Company issued 4,000 shares of its
Common stock, that are restricted under Regulation D of the
Securities Exchange Act of 1934, to Double Impact, Inc. ("DI")
in connection with a review of the Company's Internet business
plan and initial negotiations of a collaborative arrangement
with DI. Attached hereto as Exhibit 10(iv) is the Strategic
Collaboration Agreement dated as of March 31, 2000 that was
entered into by and between the Company and New Generation
Partners, Inc., on one hand, and DI, on the other.
On March 21, 2000, April 12, 2000 and May 12, 2000, the
Company issued 2,870, 3,641 and 2,015 shares, respectively, of
its Common stock, that are restricted under Regulation D of
the Securities Exchange Act of 1934, to WSDM LLC, an affiliate
of Westerman Shapiro Draghi & Miller, the Company's outside
counsel. Such shares were issued in partial payment for legal
fees due from the Company in the amounts of $21,250,
$28,443 and $16,120, respectively.
Item 6. Exhibits and Reports on Form 8-K.
(a) There following exhibits are included with this report.
4(v) Form of Warrant at $8.00 expiring two (2) years after
the Commencement Date
10(iv) Strategic Collaboration Agreement dated as of March
31, 2000 by and between the Company and New
Generation Partners, Inc., on one hand, and DI, on
the other
10(v) Share Transfer Agreement dated as of March 31, 2000
by and among Bachkine & Meyer Industries, S.A., DI
and the Company.
10(vi) Termination Agreement dated as of April 15, 2000 by
and between the Company and BAMI Consulting, S.A.
10(vii) Subscription Agreement dated as of April 10, 2000 by
and between the Company and Gauk Holding, Inc.
11
<PAGE>
10(vii) Subscription Agreement dated as of April 10, 2000 by
and between the Company and Mercer International S.A.
(b) Reports on Form 8-K
None
12
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
New Generation Holdings, Inc.
(Registrant)
Date: May 22, 2000 By: /s/ Paul Hokfelt
-------------------------------------
Paul Hokfelt
Chief Executive Officer
By: /s/ Anna Karin Portunato
------------------------------------
Anna Karin Portunato
Interim Chief Financial Officer
13
Exhibit 4(v)
Exhibit 4(v) Form of Warrant at $8.00 expiring two (2) years after the
Commencement Date
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THE WARRANT ("WARRANT SHARES") HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE "ACT") NOR UNDER ANY STATE SECURITIES LAW AND MAY NOT BE PLEDGED,
SOLD, ASSIGNED, EXERCISED OR OTHERWISE TRANSFERRED UNTIL (1) A REGISTRATION
STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAW HAS BECOME
EFFECTIVE WITH RESPECT THERETO OR (2) RECEIPT BY THE COMPANY OF AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER THE
ACT OR APPLICABLE STATE SECURITIES LAW.
W2000- No. of Shares-
WARRANT TO PURCHASE COMMON STOCK
OF
NEW GENERATION PLASTIC, INC.
This is to Certify that, FOR VALUE RECEIVED,__________________________,
("Holder"), is entitled to purchase, subject to the provisions of this Warrant,
from New Generation Plastic, Inc., a Delaware corporation ("Company"),
____________________________________ ___________________________ (__________)
fully paid, validly issued and nonassessable shares of Common Stock, par value
$0.001 per share, of the Company ("Common Stock") at a price of $8.00 per share
at any time or from time to time during the period beginning on the date that
this Warrant first becomes exercisable (the "Commencement Date"), and ending at
5:00 p.m. New York time on the date that is twenty four (24) months after the
Commencement Date (the "Expiration Date"). The shares of Common Stock issuable
upon such exercise are hereinafter sometimes referred to as "Warrant Shares" and
the exercise price of a share of Common Stock is hereinafter sometimes referred
to as the "Exercise Price." This Warrant shall not be exercisable until the
Warrant Shares have been registered under the Securities Act of 1933.
1. EXERCISE OF WARRANT. This Warrant may be exercised in whole or in
part at any time or from time to time on or after the Commencement Date and
until 5:00 p.m. New York time on the Expiration Date; provided, however, that if
such day is a day on which banking institutions in the State of New York are
authorized by law to close, then on the next succeeding day which shall not be
such a day. This Warrant may be exercised by presentation and surrender of the
original Warrant to the Company at its principal office, or at the office of its
stock transfer agent, if any, with the Purchase Form annexed hereto duly
executed and accompanied by payment, in the form of a certified or cashier's
check, of the Exercise Price for the number of Warrant Shares being purchased,
as specified in such form. As soon as practicable after each such exercise of
this Warrant,
-1-
<PAGE>
but not later than seven (7) days from the date of such exercise, the Company
shall issue and deliver to the Holder a certificate or certificate for the
Warrant Shares issuable upon such exercise, registered in the name of the
Holder. If this Warrant should be exercised in part only, the Company shall,
upon surrender of this Warrant for cancellation, execute and deliver a new
Warrant evidencing the rights of the Holder thereof to purchase the balance of
the Warrant Shares purchasable thereunder.
2. RESERVATION OF SHARES. The Company shall at all times reserve for
issuance and delivery upon exercise of this Warrant such number of shares of its
Common Stock as shall be required for issuance and delivery upon exercise in
full of the Warrants.
3. TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. Upon surrender of this
Warrant to the Company at its principal office or at the office of its stock
transfer agent, if any, with the Assignment Form annexed hereto duly executed
and funds sufficient to pay any transfer tax, the Company shall, without charge,
execute and deliver a new Warrant in the name of the assignee named in such
instrument of assignment and this Warrant shall promptly be canceled. The
Company may deem and treat the registered Holder of this Warrant at any time as
the absolute owner hereof for all purposes and shall not be affected by any
notice to the contrary. This Warrant may be divided or combined with other
warrants which carry the same rights upon presentation hereof at the principal
office of the Company or at the office of its stock transfer agent, if any,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued and signed by the Holder hereof. Upon receipt by
the Company of evidence satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification, and upon surrender and cancellation of
this Warrant, if mutilated, the Company will execute and deliver a new Warrant
of like tenor and date. Any such new Warrant executed and delivered shall
constitute an additional contractual obligation on the part of the Company,
whether or not this Warrant so lost, stolen, destroyed, or mutilated shall be at
any time enforceable by anyone.
4. RIGHTS OF THE HOLDER. No Holder of this Warrant, as such, shall be
entitled to vote, receive dividends, receive notice in respect of meetings of
stockholders or any other matter whatsoever as a stockholder of the Company or
be deemed to be a stockholder of the Company for any purpose, and the rights of
the Holder are limited to those expressed in this Warrant and are not
enforceable against the Company except to the extent set forth herein.
5. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF WARRANT SHARES. The
Warrant Price and the number of Warrant Shares shall be subject to adjustment
from time to time in accordance with the following provisions:
(a) In case the Company shall at any time subdivide the
outstanding shares of its Common Stock, the Exercise Price in effect immediately
prior to such subdivision shall be proportionately decreased, and in case the
Company shall at any time combine the outstanding shares of its Common Stock,
the Exercise Price in effect immediately prior to such combination shall be
proportionately increased, effective from and after the record date of such
subdivision or combination, as the case may be. Upon any adjustment in the
Exercise Price per share pursuant to this subparagraph (a), the Holder of this
Warrant shall thereafter be entitled to purchase, at the
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adjusted Exercise Price, the number of shares of Common Stock, calculated to the
nearest full share obtained by (X) multiplying the number of shares of Common
Stock purchasable hereunder immediately prior to such adjustment by the Exercise
Price in effect immediately prior to such adjustment, and (y) by dividing the
product thereof by the Exercise Price resulting from such adjustment.
(b) In the event of the issuance of additional shares of
Common Stock of the Company as a dividend on the Common Stock, from and after
the day that is the record day for the determination of stockholders entitled to
such dividend the Holder of this Warrant shall (until another adjustment) be
entitled to purchase the number of shares of Common Stock, calculated to the
nearest full share, obtained by multiplying the number of shares of Common Stock
purchasable hereunder immediately prior to said record date by the percentage
which the number of additional shares constituting any such dividend is of the
total number of shares of Common Stock outstanding immediately prior to said
record date plus the number of shares of Common Stock issuable upon conversion
of the outstanding convertible securities or upon exercise of any outstanding
warrants, options or rights (including those with respect to convertible
securities) and adding the result so obtained to the number of shares of Common
Stock purchasable hereunder immediately prior to said record date. Upon each
adjustment pursuant to this subparagraph (b), the Exercise Price in effect
immediately prior to such adjustment shall be reduced to an amount determined by
dividing (X) the product obtained by multiplying such Exercise Price by the
number of shares of Common Stock purchasable hereunder immediately prior to such
adjustment by (Y) the number of shares of Common Stock purchasable hereunder
immediately following such adjustment.
6. Reorganization, Reclassification, Consolidation or Merger. If at any
time while this Warrant is outstanding there shall be any reorganization or
reclassification of the Common Stock of the Company (other than a subdivision or
combination of shares provided for in paragraph 5 above) or any consolidation or
merger of the Company with another corporation effected in such a way that
holders of Common Stock shall be entitled to receive stock, securities or
property with respect to or in exchange for Common Stock, the Holder of this
Warrant shall thereafter be entitled to receive, during the term hereof and upon
payment of the Exercise Price, the number of shares of stock or other securities
or property of the Company or of the successor corporation resulting from such
consolidation or merger, as the case may be, to which a holder of the Common
Stock of the Company deliverable upon the exercise of this Warrant, would have
been entitled upon such reorganization, reclassification, consolidation or
merger if this Warrant had been exercised immediately prior to such
reorganization, reclassification, consolidation or merger; and in any such case,
appropriate adjustment (as determined in good faith by the Board of Directors of
the Company) shall be made in the application of the provisions herein set forth
with respect to the rights and interest thereafter of the Holder of this Warrant
to the end that the provisions set forth herein (including the adjustment of the
Exercise Price and the number of shares issuable upon the exercise of this
Warrant) shall thereafter be applicable, as near as reasonably may be, in
relation to any shares or other property thereafter deliverable upon the
exercise hereof.
7. Charges, Taxes and Expenses. The issuance of certificates for shares
of Common Stock upon any exercise of this Warrant shall be made without charge
to the Holder hereof for any tax or other expense in respect to the issuance of
such certificates, all of which taxes and expenses shall be paid by the Company,
and such certificates shall be issued in the name
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of, or in such name or names as may be directed by, the Holder of this Warrant;
provided, however, that in the event that certificates for shares of Common
Stock are to be issued in a name other than the name of the Holder of this
Warrant, this Warrant when surrendered for exercise shall be accompanied by an
instrument of transfer in form satisfactory to the Company, duly executed by the
Holder hereof in person or by an attorney duly authorized in writing and the
Holder shall pay all stock transfer taxes payable upon issuance of such stock
certificate.
8. MISCELLANEOUS.
(a) The terms of this Warrant shall be binding upon and shall
inure to the benefit of any successors or assigns of the Company and of the
Holder or Holders hereof.
(b) Notwithstanding any provision herein to the contrary, the
Holder hereof may not sell, transfer or otherwise assign this Warrant unless the
Company is provided with an opinion of counsel satisfactory in form and
substance to the Company, to the effect that such sale, transfer or assignment
does not violate the Securities Act of 1933 or any applicable state securities
laws.
(c) This Warrant contains the entire agreement between the
Holder hereof and the Company with respect to the purchase of shares of Common
Stock of the Company and supersedes all prior arrangements or understandings
with respect thereto.
(d) This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware.
(e) Any term or provision of this Warrant may be waived at any
time by the party which is entitled to the benefits thereof and any term or
provisions of this Warrant may be amended or supplemented at any time by
agreement of the Holder of this Warrant and the Company, except that any waiver
of any term or condition, or any amendment or supplementation, of this Warrant
must be in writing. A waiver of any breach of failure to enforce any of the
terms or conditions of this Warrant shall not in any way affect, limit or waive
a party's rights hereunder at any time to enforce strict compliance thereafter
with any term or condition of this Warrant.
(f) Any notice or other document required or permitted to be
given or delivered to the Holder of this Warrant shall be delivered personally,
or sent by certified or registered mail, to each such Holder at the last address
shown on the books of the Company for the registration of, and the registration
of transfer of, the Warrant or at any more recent address of which the Holder of
this Warrant shall have notified the Company in writing. Any notice or other
document required or permitted to be given or delivered to the Company, shall be
delivered personally at, or sent by certified or registered mail to, the office
of the Company at 245 Park Avenue, 39th Floor, New York, New York 10167,
Attention: Executive Vice President, or such other address as shall have been
furnished by the Company to the Holder of the Warrant.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its duly authorized officers and its corporate seal to be affixed
hereto.
Dated: April 10, 2000
[SEAL]
NEW GENERATION PLASTIC, INC.
Attest:
- ---------------------------------- By:
Thomas R. Marshall -------------------------------
Secretary Jacques Mot, Chairman
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<PAGE>
PURCHASE FORM
The undersigned, the holder of the foregoing Warrant, hereby
elects to exercise purchase rights represented by said Warrant for, and to
purchase thereunder, ________ shares of the Common Stock covered by said Warrant
and herewith makes payment in full therefor of $_______ by certified or
cashier's check payable to the order of the Company, and requests (a) that
certificates for such shares (and any securities or other property issuable upon
such exercise) be issued in the name of and delivered to ______________ whose
address is _________________________________ and (b) if such shares shall not
include all of the shares issuable as provided in said Warrant, that a new
Warrant of like tenor and date for the balance of the shares issuable thereunder
be delivered to the undersigned or that appropriate notation be made on the
Warrant which shall be returned to the undersigned.
-------------------------------
Dated:
Signature Guaranteed:
Signature Guaranteed:
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<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED,____________________________________ hereby sells,
assigns and transfers unto:
Name_________________________________________________________________________
(Please type or print in block letters)
Address_______________________________________________________________________,
the right to purchase Common Stock represented by this Warrant to the extent of
__________ shares of Common Stock as to which such right is exercisable and does
hereby irrevocably constitute and appoint
_______________________________________________________________ Attorney, to
transfer the same on the books of the Company with full power of substitution in
the premises.
Date____________________
Signature________________________________________
-7-
Exhibit 10(iv)
Exhibit 10(iv) Strategic Collaboration Agreement
STRATEGIC COLLABORATION AGREEMENT
THIS STRATEGIC COLLABORATION AGREEMENT (the "Agreement") is made and
entered into as of this 31st day of March, 2000, by and between New Generation
Plastic, Inc., a Delaware corporation, with an address of 245 Park Avenue, New
York, NY 10167 ("NGH") and New Generation Partners, Inc. with an address of 245
Park Avenue, New York, New York 10167 ("NGPartners"), on the one hand, and
Double Impact, Inc., a California corporation, with an address of 785 Market,
San Fransisco, CA 94103 ("DI"), on the other.
W I T N E S S E T H:
WHEREAS, NGH is executing a name change to New Generation Holdings,
Inc. and forming two private subsidiaries, New Generation Plastic, Inc. and
NGPartners. NGPartners will engage in the incubation of European Internet
companies to create a collaborative network of business to business e-commerce,
Internet infrastructure and wireless Internet companies; and
WHEREAS, DI is a global venture catalyst firm which helps to accelerate
the development of early stage Information Technology and Internet ventures; and
WHEREAS, NGH, NGPartners and DI desire to collaborate in developing the
business of NGPartners; and
WHEREAS, NGH, NGPartners and DI desire to set forth in this Agreement
the terms and conditions applicable to their collaboration.
NOW, THEREFORE, intending to be legally bound, the parties hereto agree
as follows:
ARTICLE I
NGPARTNERS RESPONSIBILITIES
1.1 Management of NGPartners. NGPartners and NGH will be responsible
for the overall management and operation of NGPartners, including organization,
planning, capitalization, staffing, recruitment of board members and advisors,
establishment of facilities and management of all operations.
1.2 Delivery of Information. NGPartners and NGH will also be
responsible for delivering to DI in a timely manner all information reasonably
required by DI to execute DI's responsibilities under this Agreement.
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ARTICLE II
DI RESPONSIBILITIES
2.1 NGPartners Advisory Services. DI will work closely with NGH and
NGPartners to achieve the goals and objectives of NGH and NGP's business plans.
DI will provide advisory services to NGH and NGPartners ("NGP Advisory") in the
areas of board of directors composition, board of advisors composition,
partnering, incubators structuring, incubator process, investment criteria and
process, deal flow generation, due diligence on incubator candidates and other
investment opportunities ("Direct Investments") and catalyst services for
incubator companies.
2.2 Portfolio Advisory Services. Once NGH or NGPartners has made an
investment in a "Direct Investment" company, DI will offer its services to these
companies directly ("Portfolio Advisory"), and will inform NGH of any
communications with the Direct Investment companies. If a Direct Investment
company desires to engage DI to perform services for them, DI will work with
such company pursuant to its normal and customary procedures. In the event such
Direct Investment company originates from Phase 1(a) or 1(b) NGP Incubation,
then DI shall consult with NGP prior to its offer of services and NGP shall have
right of approval with regards to the terms and compensation of DI for such
services. Such services shall be agreed to between DI and any such Direct
Investment company, although it is anticipated that the services to be performed
may include market and industry assessment, strategy review and development,
business model analysis, business development and partnering, valuation,
advisory on capital raising, M&A strategy/execution and referral to other
resources required by any such company. No other party shall be deemed a third
party beneficiary of any such contract that DI may enter into with a Direct
Investment company.
2.3 Limited non-compete. In the event DI has a potential incubatee
candidate or a potential investment opportunity, DI shall provide notice and a
reasonable opportunity to participate to NGH/NGP before making it available to
other competitive companies or service providers, namely other European
incubators. DI shall not directly take on another European incubator as a client
nor enter into a strategic alliance with such incubator without the prior
consent of NGH/NGP, such consent not to be unreasonably withheld.
ARTICLE III
COMPENSATION
3.1 Fees for NGPartners Advisory Services. DI will present to NGP no
later than March 20, 2000 a project plan outlining the specific NGP Advisory
Services to be performed for the remainder of Calendar Year 2000. This project
plan will be based upon the NGH/NGPartners business plan and assumptions. Based
upon this project plan, DI will receive cash fees for the services described
according to the following schedule. The parties hereto acknowledge and agree
that DI is providing the services described in this Section 3.1 at a discount to
its normal and ordinary rates.
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a. Corporate Advisory. Such services include advice relating to board
of directors composition, board of advisors composition, partnering, incubators
structuring, incubator process, investment criteria and process, and deal flow
generation. DI will provide these services for US$20,000 per month, payable in
advance, commencing on March 15, 2000. Payment of the first month's fee may be
deferred until the later of the time that NGH raises its initial $5,000,000
round of capital, or March 31st, 2000.
b. Review of Phase 1(A) Incubator Candidates. $1,000 per review,
payable upon completion of the review.
c. Catalyst Services for Phase 1(B) Companies. DI will perform catalyst
services for Phase 1(B) companies at the request of NGPartners. Such services
may include market landscape, industry landscape, general strategy, business
model analysis, business development strategy and/or capital advisory. The price
of such services shall be agreed on a case-by-case basis, but is anticipated to
be $20,000-$40,000 per month for three months for each company at a discounted
rate.
d. Due Diligence on Phase 1(B) ("Incubator Companies") and Phase 2 and
3 Companies ("Direct Investments"). This due diligence focuses on market
opportunities, business model, competition and management team, but does not
include legal or financial due diligence. These services will be priced at
$5,000, $10,000 or $15,000 per due diligence, depending on the nature and scope
required, the specifics of which are described in Exhibit B (which shall be
provided by DI not later than 10 days after the date of this Agreement), payable
upon completion of the review.
e. DI will not take direct equity stakes in the Incubator Companies,
but will instead satisfy its equity participation in these companies by virtue
of DI's equity ownership in NGH, as outlined below.
f. The project plan and associated fees can be adjusted by mutual
agreement between the parties.
g. The NGH Business Plan is attached hereto as Exhibit A, and is
incorporated by reference herein, including the terms "1(A) Incubator
Candidates," "1(B) Companies," and "Phase 2 and 3 Companies."
3.2 Fees for Portfolio Advisory Services for Phase 2 and 3 Companies.
The specific services to be provided by DI to Phase 2 and 3 Companies shall be
at the discretion of each individual Phase 2 and 3 Company's management, but
such services are anticipated to include market landscape, industry landscape,
general strategy, business model analysis, business development strategy,
business development, capital advisory, resource referral and/or strategy and
execution of mergers and acquisitions. Upon request of a Phase 2 and 3 Company's
management, DI will formulate customized proposals for services to be provided
to such company; provided, that the particular Phase 2 and 3 Company's operation
fits DI's client criteria. The specifics of each agreement with a Phase 2 and 3
Company will be negotiated with the management of each such company. All
agreements with Phase 2 and 3 Companies will be
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fully disclosed to NGH and NGPartners. DI's fees, including cash and equity,
will be set according to DI's normal and customary pricing in connection with
such investments. Cash fees shall be in the form of a prepaid monthly retainer.
DI reserves the right to receive equity fees upon a variety of terms and
conditions acceptable to DI. Success fees, which can be paid in a combination of
cash and equity, shall be tied to revenue generated by arrangements catalyzed by
DI and additional outside financing raised with DI's assistance. Although
agreements remain to be negotiated with such Phase 2 and 3 Companies, it is
anticipated that (a) the monthly retainer fees for the services to be provided
by DI shall be between $20,000-$40,000 per company per month for six to nine
months, (b) the equity fees shall be between 1%-3% of the Phase 2 and 3 Company,
measured as of the valuation of the most recent equity financing, and (c) the
success fees shall be 5%-15% of the gross revenue generated and/or approximately
5% of capital raised. In the case of Phase 2 and 3 Companies originating from
the NGH/NGP incubation, NGH/NGP shall have the right to exchange any DI equity
for a comparable amount of equity in NGH/NGP, the valuation of the DI equity
based on the fair value of the equity. In the case of non- originating incubator
Phase 2 and 3 investment companies, both parties shall consider exchanging any
equity DI may have acquired in the Phase 2 and 3 companies for NGH stock on a
case-by-case basis.
3.3 Equity Participation. In consideration of DI's contribution to the
co-founding of NGPartners, including the initial NGP Advisory, and ongoing
contribution to creating value in NGPartners, DI shall receive 500,000 shares of
NGH (NASDAQ BB: NGPX) as per a separate agreement among Bachkine & Meyer
Industries S.A., NGH and DI dated concurrently herewith. Six months after
signing of this Agreement, both parties will determine if they wish to continue
working together in the capacity outlined above. If so, DI shall receive an
additional 500,000 shares of NGH at that time. The exact terms and nature of
this stock participation will be determined as soon as possible by mutual
agreement, and the parties agree in good faith to work towards agreement that
minimizes the tax impact upon DI as a result of the consideration received under
this Section 3.3.
3.4 Bonus Payments. Not later than one year from the date of this
Agreement, depending on NGH's and NGPartner's performance and DI's contribution
thereto, NGH and/or NGP may, in its sole discretion, determine to make a further
bonus payment to DI of up to 500,000 shares of NGH and/or $500,000. DI's
contribution may be measured by NGH and NGPartners in the form of the deal flow
or financing contributed by DI, strategic relationships fostered by DI and/or in
others ways
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ARTICLE III
EMPLOYMENT TAXES AND BENEFITS
4.1 Compensation of DI's Personnel. DI shall bear sole responsibility
for payment of compensation to its employees and consultants. DI shall pay and
report, for all personnel assigned to NGH' work, income tax withholding,
workers' compensation, social insurance contributions, and unemployment
insurance applicable to such personnel as employees or consultants of DI. DI
shall bear sole responsibility for any health or disability insurance,
retirement benefits, other welfare or pension benefits, or dismissal indemnities
or any other type of payments to employees who leave the employment of DI, if
any, to which such personnel may be entitled. DI agrees to defend, indemnify,
and hold harmless NGH, its officers, directors, employees and agents, and the
administrators of NGH' benefit plans, from and against any claims, liabilities,
or expenses relating to such compensation, tax, insurance, or benefit matters,
including, but not limited to all claims under any applicable labor law
provisions, including, but not limited to claims concerning the dismissal of
personnel, provided, that NGH shall notify DI of each such claim and cooperate
with DI in the defense and resolution of such claim.
ARTICLE IV
TERM AND TERMINATION
5.1 Term. This Agreement will become effective on the date first shown
above and will continue in effect for an initial term of six (6) months (the
"Initial Term"), unless sooner terminated as provided herein or extended by
written agreement signed by both parties. At the end of the Initial Term the
parties will determine whether to continue this Agreement for an additional
period to be determined by the parties (the "Renewal Term").
5.2 Termination for Breach. In the event either party fails to perform
any material term in this Agreement (the "Defaulting Party") and fails to cure
such breach within thirty (30) days of receipt of written notice from the other
party specifically identifying the breach or breaches, the other party may,
without limitation of its other rights, and at its election, terminate this
Agreement, without further obligation or liability to the Defaulting Party
thereunder by giving at least ten (30) days advance written notice to the
Defaulting Party of the intended termination date.
5.3 Return of Materials. Upon the termination of this Agreement, each
party shall promptly return to the other all materials furnished by the other
party pursuant to this Agreement.
5.4 Survival. Articles 4 and 5 hereof shall survive termination or
expiration of this Agreement. In addition, all obligations of a party, including
payment obligations, incurred prior to the termination or expiration of this
Agreement shall survive such termination or expiration.
5.5 Independent Contractor. Each party expressly acknowledges and
agrees that for all purposes with respect to this Agreement, the status of the
parties hereto as between themselves is solely that of independent contractors.
This Agreement shall not constitute either
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party as the legal representative, employee, partner, joint venturer or agent of
the other, nor shall either party have the right or authority to assume, create,
or incur any liability or any obligation of any kind, express or implied,
against, or in the name of or on behalf of the other party.
ARTICLE V
GENERAL PROVISIONS
6.1 Board Participation. During the term of this Agreement, DI shall be
entitled to nominate one person to be elected to the Board of Directors of NGH.
NGH shall use its best efforts to see that such person is initially appointed by
the Board and when necessary recommend that such person be elected to the Board
by the shareholders. In the event that NGPartners has an initial public
offering, is merged with another entity or otherwise becomes an independent
entity, DI will receive one seat on its Board of Directors.
6.2 NGH/NGPartners Investment in DI. NGH and/or NGPartners will have
the right to invest $500,000 in the Series D round of DI, contingent upon making
a binding investment commitment no later than March 24, 2000 and paying in an
initial $100,000 no later than April 20, 2000 and the balance of $400,000 no
later than May 31, 2000. The Series D round is anticipated to close no later
than March 31, 2000. The terms and conditions of the investment will be the same
as those provided to other investors in the Series D round.
6.3 Notices. Any notices to be given hereunder by any party to the
other party may be effected either by personal delivery in writing or by
registered or certified mail (postage prepaid with return receipt requested),
overnight delivery service or facsimile (with a copy by registered mail). Mailed
notices shall be addressed to the parties at the addresses appearing in the
introductory paragraph of this Agreement, but each party may change such address
by written notice in accordance with this paragraph. The date upon which any
such notice is received at the designated address shall be deemed to be the date
of such notice.
6.4 Assignment. In view of the nature of the Services to be performed
by DI hereunder, this Agreement may not be assigned by either party without the
prior written consent of the other party.
6.5 Arbitration. In the event of a dispute between the parties arising
under this Agreement, the parties shall submit to binding arbitration in New
York County, New York, under the Commercial Arbitration Rules of the American
Arbitration Association ("AAA") before a single arbitrator chosen by the parties
(or, in the event that the parties are unable to agree on an arbitrator, by the
AAA) who is knowledgeable of the venture capital financial markets and the
internet industry. Pre-trial and trial procedures in the arbitration shall
generally be governed by the Federal Rules of Civil Procedure and the Federal
Rules of Evidence. The decision of the arbitrator shall be final and binding
with respect to the dispute subject to arbitration and shall be enforceable in
any court of competent jurisdiction. Each party shall bear its own expenses and
costs incurred in such arbitration. Nothing in this paragraph shall derogate
from the rights of the parties to seek preliminary injunctive relief before the
courts of New York to preserve the status quo.
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6.6 Waivers. Any delay or forbearance by either party in exercising any
right hereunder shall not be deemed a waiver of that right.
6.7 Entire Agreement. This Agreement, the attached schedules and
exhibits constitutes the entire agreement between the parties with respect to
the subject matter hereof and supersedes any and all agreements, either oral or
written, between the parties hereto with respect to the subject matter hereof.
Each party to this Agreement acknowledges that no representations, inducements,
promises, or agreements, orally or otherwise, have been made by any party, or
anyone acting on behalf of any party, that are not embodied herein, and that no
other agreement, statement, or promise not contained in this agreement shall be
valid or binding. Any modification of this Agreement will be effective only if
it is in writing signed by the party to be charged.
6.8 Severability. If any provision of this Agreement shall be held to
be invalid or unenforceable in any jurisdiction in which this Agreement is being
performed, then the meaning of such provision shall be construed so as to render
it enforceable, to the extent feasible; and if no feasible interpretation would
save such provision, it shall be severed from this Agreement and the remainder
shall remain in full force and effect. However, in the event such provision is
considered an essential element of this Agreement, the parties shall promptly
negotiate a replacement thereof
6.9 Partial Invalidity. If any provision in this Agreement is held by a
court of competent jurisdiction to be invalid, void, or unenforceable, the
remaining provisions will nevertheless continue in full force without being
impaired or invalidated in any way.
6.10 Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York, without regard to conflicts
of law principles.
6.11 Public Announcements. The parties agree to cooperate in the
preparation of any public announcement or communication with any news media in
respect of this Agreement or the services performed.
6.12 Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the parties, their successors, and permitted assigns.
6.13 Negotiated Agreement. This Agreement is the result of negotiations
between the parties. Accordingly, no party to this Agreement shall be deemed to
be the author of this Agreement and there shall be no presumption that this
Agreement is to be construed for or against any party to this Agreement on the
basis of the authorship of this Agreement.
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6.14 Headings. The headings in this Agreement are inserted merely for
the purpose of convenience and shall not affect the meaning or interpretation of
this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first written above.
NEW GENERATION PLASTIC,INC.
By: /s/ Paul Hokfelt
-------------------------------
Name: Paul Hokfelt
Title: Chief Executive Officer
NEW GENERATION PARTNERS, INC.
By: /s/ Paul Hokfelt
-------------------------------
Name: Paul Hokfelt
Title: Chief Executive Officer
DOUBLE IMPACT, INC.
By: /s/ D. Randall Boyer
-------------------------------
Name: D. Randall Boyer
Title: President
8
Exhibit 10(v)
Exhibit 10(v) Share Transfer Agreement
SHARE TRANSFER AGREEMENT
THIS SHARE TRANSFER AGREEMENT (the "Agreement") is made and entered
into as of this 31st day of March, 2000, by and among Bachkine & Meyer
Industries, S.A., a British Virgin Islands corporation, with an address at Rue
de la Rotisserie 29, 1204 Geneva, Switzerland ("BMI"), Double Impact, Inc., a
California corporation, with an address at 785 Market, San Fransisco, CA 94103
("DI"), and New Generation Plastic, Inc., a Delaware corporation, with an
address at 245 Park Avenue, 39th Floor, New York, New York 10167 ("NGH").
W I T N E S S E T H:
WHEREAS, BMI is a majority shareholder of NGH, that is executing a name
change to New Generation Holdings, Inc. and forming two private subsidiaries,
New Generation Plastic, Inc. and New Generation Partners, Inc. ("NGPartners").
NGPartners will engage in the incubation of European Internet companies to
create a collaborative network of business to business e-commerce, Internet
infrastructure and wireless Internet companies; and
WHEREAS, DI is a global venture catalyst firm which helps to accelerate
the development of early stage Information Technology and Internet ventures; and
WHEREAS, NGH, NGPartners and DI have entered into that certain
Strategic Collaboration Agreement dated of even date herewith (the "SC
Agreement") to collaborate in developing the business of NGPartners; and
WHEREAS, BMI has agreed to transfer shares of common stock of NGH in
accordance with first sentence of Section 3.3 of the SC Agreement; and
WHEREAS, the parties desire to set forth in this Agreement the terms
and conditions applicable to this Agreement.
NOW, THEREFORE, intending to be legally bound, the parties hereto agree
as follows:
<PAGE>
ARTICLE I
BMI TO TRANSFER SHARES
1.1 Transfer of Shares. BMI agrees that in consideration of DI's
contribution to the co-founding of NGPartners, including the initial NGP
Advisory, and its contribution to creating value in NGPartners, it shall
transfer to DI 500,000 shares of NGH (NASDAQ BB: NGPX) common stock as soon as
the transfer restrictions presently imposed on the shares are no longer
applicable. NGH will fully cooperate in such transfer between BMI and DI.
1.2 Registration Statement. BMI has been informed by NGH that a Form
SB-2 registration statement was filed by NGH on March 10, 2000 for the resale of
approximately 4,500,000 shares of NGH common stock by the holders thereof and
that 500,000 shares owned by BMI are included in the shares to be registered.
BMI and NGH shall take all necessary actions to prosecute such filing promptly
to conclusion.
1.3 BMI and NGH Representations in Connection with Transfer. BMI and
NGH represent and warrant to DI that, upon the aforementioned shares' issuance
to DI, all such shares will be validly issued, fully paid, and nonassessable,
and DI will acquire good title to the shares, free and clear of any lien or
other encumbrance. Such parties also represent and warrant that all necessary
actions have been taken by BMI and NGH to duly authorize and approve such
transaction.
1.4 Further Actions. The parties agree to execute such further
instruments and to take such further actions as may be necessary to carry out
the intent of this Agreement.
ARTICLE II
GENERAL PROVISIONS
2.1 Notices. Any notices to be given hereunder by any party to the
other party may be effected either by personal delivery in writing or by
registered or certified mail (postage prepaid with return receipt requested),
overnight delivery service or facsimile (with a copy by registered mail). Mailed
notices shall be addressed to the parties at the addresses appearing in the
introductory paragraph of this Agreement, but each party may change such address
by written notice in accordance with this paragraph. The date upon which any
such notice is received at the designated address shall be deemed to be the date
of such notice.
2.2 Assignment. This Agreement may not be assigned by any party without
the prior written consent of the other parties.
2.3 Arbitration. In the event of a dispute between the parties arising
under this Agreement, the parties shall submit to binding arbitration in New
York County, New York, under the Commercial Arbitration Rules of the American
Arbitration Association ("AAA") before a single arbitrator chosen by the parties
(or, in the event that the parties are unable to
2
<PAGE>
agree on an arbitrator, by the AAA) who is knowledgeable of the venture capital
financial markets and the internet industry. Pre-trial and trial procedures in
the arbitration shall generally be governed by the Federal Rules of Civil
Procedure and the Federal Rules of Evidence. The decision of the arbitrator
shall be final and binding with respect to the dispute subject to arbitration
and shall be enforceable in any court of competent jurisdiction. Each party
shall bear its own expenses and costs incurred in such arbitration. Nothing in
this paragraph shall derogate from the rights of the parties to seek preliminary
injunctive relief before the courts of New York to preserve the status quo.
2.4 Waivers. Any delay or forbearance by either party in exercising any
right hereunder shall not be deemed a waiver of that right.
2.5 Entire Agreement. This Agreement, the attached schedules and
exhibits constitutes the entire agreement between the parties with respect to
the subject matter hereof and supersedes any and all agreements, either oral or
written, between the parties hereto with respect to the subject matter hereof.
Each party to this Agreement acknowledges that no representations, inducements,
promises, or agreements, orally or otherwise, have been made by any party, or
anyone acting on behalf of any party, that are not embodied herein, and that no
other agreement, statement, or promise not contained in this agreement shall be
valid or binding. Any modification of this Agreement will be effective only if
it is in writing signed by the party to be charged.
2.6 Severability. If any provision of this Agreement shall be held to
be invalid or unenforceable in any jurisdiction in which this Agreement is being
performed, then the meaning of such provision shall be construed so as to render
it enforceable, to the extent feasible; and if no feasible interpretation would
save such provision, it shall be severed from this Agreement and the remainder
shall remain in full force and effect. However, in the event such provision is
considered an essential element of this Agreement, the parties shall promptly
negotiate a replacement thereof
2.7 Partial Invalidity. If any provision in this Agreement is held by a
court of competent jurisdiction to be invalid, void, or unenforceable, the
remaining provisions will nevertheless continue in full force without being
impaired or invalidated in any way.
2.8 Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York, without regard to conflicts
of law principles.
2.9 Public Announcements. The parties agree to cooperate in the
preparation of any public announcement or communication with any news media in
respect of this Agreement or the services performed.
2.10 Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the parties, their successors, and permitted assigns.
3
<PAGE>
2.11 Negotiated Agreement. This Agreement is the result of negotiations
between the parties. Accordingly, no party to this Agreement shall be deemed to
be the author of this Agreement and there shall be no presumption that this
Agreement is to be construed for or against any party to this Agreement on the
basis of the authorship of this Agreement.
2.12 Headings. The headings in this Agreement are inserted merely for
the purpose of convenience and shall not affect the meaning or interpretation of
this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first written above.
BACHKINE & MEYER INDUSTRIES, S.A DOUBLE IMPACT, INC.
By: /s/ Jacques Mot By: /s/ D. Randall Boyer
------------------------------ ------------------------------
Name: Jacques Mot Name: D. Randall Boyer
Title: Chairman Title: President
NEW GENERATION PLASTIC, INC
By: /s/ Paul Hokfelt
------------------------------
Name: Paul Hokfelt
Title: Chief Executive Officer
4
Exhibit 10(vi)
Exhibit 10(vi) Termination Agreement
TERMINATION OF CONSULTING AGREEMENT
This AGREEMENT, dated as of April 15, 2000, by and between
B.A.M.I. CONSULTING, S.A., a British Virgin Islands corporation (the
"Consultant"), and New Generation Plastic, Inc., a Delaware corporation ("NGP")
(the "Company").
RECITALS
WHEREAS, the Consultant and the Company entered into that
certain Consulting Agreement dated as of April 15, 1999 (the "Consulting
Agreement"), under which the Company agreed to pay the Consultant a fee of
$75,000 per month for services rendered thereunder; and
WHEREAS, the Company is reorganizing its business and the
parties desire to terminate the Consulting Agreement; and
WHEREAS, the termination of the Consulting Agreement shall
become effective pursuant to the terms hereinafter set forth;
NOW THEREFORE, the parties hereby agree as follows:
1. Termination The Consultant and the Company agree that the Consulting
Agreement shall be deemed terminated as of December 31, 1999.
2. Payment of Accrued Consulting Fees Notwithstanding the foregoing,
at the sole option of the Consultant all or part of the amount of the accrued
and unpaid consulting fees due under the Consulting Agreement may be satisfied
by the issuance by the Company of its common stock at a per share value
determined by an independent committee of the Board of Directors. The parties
hereby agree that the amount of consulting fees due is $675,000, which
represents the amount accrued through December 31, 1999.
3. Miscellaneous
a. Assignment. This Agreement may not be assigned by any party without
the prior written consent of the other parties.
b. Waivers. Any delay or forbearance by either party in exercising any
right hereunder shall not be deemed a waiver of that right.
c. Entire Agreement. This Agreement and the Consulting Agreement
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersedes any and all agreements, either oral or written,
between the parties hereto with respect to the subject matter hereof. Each party
to this Agreement acknowledges that no representations, inducements, promises,
or agreements, orally or otherwise, have been made by any party, or anyone
acting on behalf of any party, that are not embodied herein, and that no other
agreement, statement, or promise not contained in this agreement shall be valid
or binding. Any modification of this Agreement will be effective only if it is
in writing signed by the party to be charged.
<PAGE>
d. Severability. If any provision of this Agreement shall be held to be
invalid or unenforceable in any jurisdiction in which this Agreement is being
performed, then the meaning of such provision shall be construed so as to render
it enforceable, to the extent feasible; and if no feasible interpretation would
save such provision, it shall be severed from this Agreement and the remainder
shall remain in full force and effect. However, in the event such provision is
considered an essential element of this Agreement, the parties shall promptly
negotiate a replacement thereof.
e. Partial Invalidity. If any provision in this Agreement is held by a
court of competent jurisdiction to be invalid, void, or unenforceable, the
remaining provisions will nevertheless continue in full force without being
impaired or invalidated in any way.
f. Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York, without regard to conflicts
of law principles.
g. Binding Effect. This Agreement shall be binding upon and shall inure
to the benefit of the parties, their successors, and permitted assigns.
h. Negotiated Agreement. This Agreement is the result of negotiations
between the parties. Accordingly, no party to this Agreement shall be deemed to
be the author of this Agreement and there shall be no presumption that this
Agreement is to be construed for or against any party to this Agreement on the
basis of the authorship of this Agreement.
i. Headings. The headings in this Agreement are inserted merely for the
purpose of convenience and shall not affect the meaning or interpretation of
this Agreement.
j. Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument. This Agreement may be
executed by facsimile signatures.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day and year first above written.
Consultant:
B.A.M.I. CONSULTING, S.A.
By: /s/ Jacques Mot
-------------------------------
Name: Jacques Mot
Title: Chairman
Company:
NEW GENERATION PLASTIC, INC.
By: /s/ Paul Hokfelt
-------------------------------
Name: Paul Hokfelt
Title: Chief Executive Officer
-2-
Exhibit 10(vii)
Exhibit 10(vii) Subscription Agreement dated as of April 10, 2000 (Gauk)
SUBSCRIPTION AGREEMENT
April 10, 2000
New Generation Plastic, Inc.
245 Park Avenue
New York, New York 10167
Gentlemen:
The undersigned investor (the "Investor") hereby agrees with you as
follows:
1. The Investor hereby agrees to purchase (x) 66,675 shares (the
"Shares") of Common Stock, par value $.001 per share, of New Generation Plastic,
Inc., a Delaware corporation (the "Company"), and (y) warrants to purchase
45,700 shares of Common Stock ("Warrants", and together with the Shares, the
"Securities") for an aggregate purchase price of $499,975.
2. In connection with its purchase the Investor shall deliver (or has
delivered), in addition to two (2) executed copies of this Agreement, its check,
subject to collection, for the full amount of the purchase price of the
Securities payable to the order of "New Generation Plastic, Inc." in the amount
set forth at the end of this Agreement. In lieu of delivery of a check, the
Investor may send a wire transfer of immediately available funds and can get
appropriate wire transfer instructions from the Company. The Investor agrees and
acknowledges that this Subscription Agreement is and shall be irrevocable and
that the purchase price is due and payable upon execution hereof.
3. The Investor represents, warrants and agrees as follows, and the
Investor acknowledges that the Investor has full knowledge that the Company
intends to rely on such representations, warranties and agreements:
(a) The Investor understands that this transaction has not
been reviewed or passed upon by any governmental agency, Federal or state; that
the Investor must bear the economic risk of all or part of its investment for an
indefinite period; that the Securities have not been registered under the United
States Securities Act of 1933, as amended (the "1933 Act") and, therefore,
cannot be resold or otherwise disposed of unless subsequently registered under
the 1933 Act or unless an exemption from such registration is available; that
the Investor is purchasing the Securities for investment for the account of the
Investor and not with any view toward resale or other distribution thereof; that
the Investor agrees not to resell or otherwise dispose of all or any part of the
Securities, except as permitted by law, including, without limitation, any and
all applicable regulations under the 1933 Act. For the foregoing reasons, an
Investor will be required to retain ownership of the Securities and bear the
economic risk of its investment for an indefinite period.
(b) The Investor has no need for liquidity in connection with
its purchase of the Securities.
<PAGE>
(c) The Investor was not organized for the specific purpose of
acquiring the Securities.
(d) The Investor currently has and had immediately prior to
receipt of any offer regarding the Company such knowledge and experience in
financial and business matters as to be able to evaluate the merits and risks of
an investment in the Securities.
(e) The Investor is not acquiring the Securities with a view
to realizing any benefits under United States Federal income tax laws, and no
representations have been made to the Investor that any such benefits will be
available as a result of the Investor's acquisition, ownership, or disposition
of the Securities.
(f) One or more of the categories set forth below correctly
and in all respects describes each Investor, and the Investor has so indicated
by signing its name, or by directing its duly authorized representatives to sign
in its name and on its behalf, by circling the category or categories which so
describe it or, if no such categories are applicable, it has so indicated by
signing its name in the blank line that immediately follows:
(i) The Investor is a natural person whose net worth,
either individually or jointly with such person's spouse, at the time of its
purchase, exceeds $1,000,000.
(ii) The Investor is a natural person who had
individual income in excess of $200,000 (or joint income with the Investor's
spouse in excess of $300,000) in 1998 and 1999 and reasonably expects to have
individual income in excess of $200,000 (or joint income with the Investor's
spouse in excess of $300,000) in 2000.
(iii) The Investor is a director or executive of the
Company.
(iv) The Investor is an entity which falls within one
of the following categories of institutional accredited investors set forth in
Rule 501(a) of Regulation D ("Regulation D") under the 1933 Act (sign on blank
line following category of institutional accredited investor which describes the
Investor):
(A) A bank as defined in Section 3(a)(2) of
the 1933 Act or a savings and loan or other institution as defined in Section
3(a)(5)(A) of the 1933 Act, whether acting in regard to this investment in its
individual or a fiduciary capacity.
(B) An insurance company as defined in
Section 2(13) of the 1933 Act.
(C) An investment company registered under
the Investment Company Act of 1940.
(D) A business development company as
defined in Section 2(a)(48) of the Investment Company Act of 1940.
<PAGE>
(E) A 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.
(F) An employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of 1974, if
the investment decision regarding this investment was made by a bank, insurance
company or registered investment adviser, acting as a plan fiduciary, as defined
in Section 3(21) of such act.
(G) An employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of 1974 with
total assets in excess of $5,000,000, whether or not the investment decision
regarding this investment was made by a bank, insurance company or registered
investment adviser.
(H) Private Business Development Company as
defined in Section 202(a)(22) of the Investment Advisers Act of 1940.
(I) An organization described in Section
501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar
business trust, or partnership, not formed for the specific purpose of acquiring
the Securities, with total assets in excess of $5,000,000.
(J) The Investor is an entity in which all
of the equity holders are accredited investors as set forth in Rule 501(a)(8) of
Regulation D and described in one or more of the categories set forth above in
the subparagraphs of this Paragraph.
4. The Investor understands that its answers to the questions set forth
herein will be kept confidential by the Company. However, the Investor agrees
that the Company may present this Subscription Agreement to those parties that
it deems appropriate if called upon to establish the Company's entitlement to a
limited or private offering exemption under the 1933 Act or any applicable state
securities law.
5. The Investor agrees that upon the request of the Company, at any
time prior to closing of the transactions contemplated hereby, the Investor
shall promptly execute and deliver to the Company any agreements or instruments
as it may reasonably request in order to effect the purchase and issuance of the
Securities.
6. The Company shall have the right, in its sole discretion, to imprint
upon the Securities any legends relating to the 1933 Act or state securities law
or other applicable law as it deems necessary or advisable; provided, however,
that the Company agrees to remove such legend and bear all costs and expenses of
removal upon the registration of the Securities or upon the applicability of an
exemption from registration with respect to such Securities.
7. The representations, warranties and agreements herein contained are
made and given for the benefit of the Company and to induce the Company to sell
and issue the Securities to the Investor and each constitutes a material portion
of the consideration therefor. The undersigned shall not be entitled to cancel,
terminate or revoke this subscription except as permitted by applicable law.
<PAGE>
8. Each party hereto will pay its own expenses relating to this
Subscription Agreement and the purchase of the Securities by the Investor
hereunder.
9. This Subscription Agreement or any term hereof may not be changed,
waived, discharged or terminated except with the prior written consent of the
Investor and the Company.
10. This Subscription Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to
principles of conflicts of law applicable thereto.
11. This Subscription Agreement (i) shall be binding upon the Investor
and the legal representatives, successors and assigns of the Investor, (ii)
shall survive the closing of the transactions contemplated hereby and (iii)
shall, if the Investor consists or more than one person, be the joint and
several obligation of all such persons. This Subscription Agreement may be
executed in one or more duplicate originals which shall, either singly or
together, serve to represent one agreement between the parties.
12. The Company agrees that the proceeds in respect of the subscription
for the Securities shall be contributed by the Company to the Company's
wholly-owned subsidiary, New Generation Partners, Inc. for use by such
subsidiary for general working capital purposes.
13. This Subscription Agreement shall not bind the Company until
accepted by it.
<PAGE>
IN WITNESS WHEREOF, the Investor has executed this
Subscription Agreement on the day and year first above written.
GAUK HOLDING, INC.
(Name of Entity)
/s/ Sylvie Challande
- --------------------------------
By: Sylvie Challande
(Signature of Officer)
The Investor hereby agrees to purchase shares of Common Stock and Warrants for
an aggregate purchase price of $499,975.
THE FOREGOING SUBSCRIPTION AGREEMENT IS HEREBY AGREED TO BY THE COMPANY:
NEW GENERATION PLASTIC, INC.
By: /s/ Paul Hokfelt Dated: April 10, 2000
------------------------- ---------------------
Name: Paul Hokfelt
Title: CEO
Exhibit 10(viii)
Exhibit 10(viii) Subscription Agreement dated as of April 10, 2000 (Mercer)
SUBSCRIPTION AGREEMENT
April 10, 2000
New Generation Plastic, Inc.
245 Park Avenue
New York, New York 10167
Gentlemen:
The undersigned investor (the "Investor") hereby agrees with you as
follows:
1. The Investor hereby agrees to purchase (x) 66,675 shares (the
"Shares") of Common Stock, par value $.001 per share, of New Generation Plastic,
Inc., a Delaware corporation (the "Company"), and (y) warrants to purchase
45,700 shares of Common Stock ("Warrants", and together with the Shares, the
"Securities") for an aggregate purchase price of $499,975.
2. In connection with its purchase the Investor shall deliver (or has
delivered), in addition to two (2) executed copies of this Agreement, its check,
subject to collection, for the full amount of the purchase price of the
Securities payable to the order of "New Generation Plastic, Inc." in the amount
set forth at the end of this Agreement. In lieu of delivery of a check, the
Investor may send a wire transfer of immediately available funds and can get
appropriate wire transfer instructions from the Company. The Investor agrees and
acknowledges that this Subscription Agreement is and shall be irrevocable and
that the purchase price is due and payable upon execution hereof.
3. The Investor represents, warrants and agrees as follows, and the
Investor acknowledges that the Investor has full knowledge that the Company
intends to rely on such representations, warranties and agreements:
(a) The Investor understands that this transaction has not
been reviewed or passed upon by any governmental agency, Federal or state; that
the Investor must bear the economic risk of all or part of its investment for an
indefinite period; that the Securities have not been registered under the United
States Securities Act of 1933, as amended (the "1933 Act") and, therefore,
cannot be resold or otherwise disposed of unless subsequently registered under
the 1933 Act or unless an exemption from such registration is available; that
the Investor is purchasing the Securities for investment for the account of the
Investor and not with any view toward resale or other distribution thereof; that
the Investor agrees not to resell or otherwise dispose of all or any part of the
Securities, except as permitted by law, including, without limitation, any and
all applicable regulations under the 1933 Act. For the foregoing reasons, an
Investor will be required to retain ownership of the Securities and bear the
economic risk of its investment for an indefinite period.
(b) The Investor has no need for liquidity in connection with
its purchase of the Securities.
<PAGE>
(c) The Investor was not organized for the specific purpose of
acquiring the Securities.
(d) The Investor currently has and had immediately prior to
receipt of any offer regarding the Company such knowledge and experience in
financial and business matters as to be able to evaluate the merits and risks of
an investment in the Securities.
(e) The Investor is not acquiring the Securities with a view
to realizing any benefits under United States Federal income tax laws, and no
representations have been made to the Investor that any such benefits will be
available as a result of the Investor's acquisition, ownership, or disposition
of the Securities.
(f) One or more of the categories set forth below correctly
and in all respects describes each Investor, and the Investor has so indicated
by signing its name, or by directing its duly authorized representatives to sign
in its name and on its behalf, by circling the category or categories which so
describe it or, if no such categories are applicable, it has so indicated by
signing its name in the blank line that immediately follows:
(i) The Investor is a natural person whose net worth,
either individually or jointly with such person's spouse, at the time of its
purchase, exceeds $1,000,000.
(ii) The Investor is a natural person who had
individual income in excess of $200,000 (or joint income with the Investor's
spouse in excess of $300,000) in 1998 and 1999 and reasonably expects to have
individual income in excess of $200,000 (or joint income with the Investor's
spouse in excess of $300,000) in 2000.
(iii) The Investor is a director or executive of the
Company.
(iv) The Investor is an entity which falls within one
of the following categories of institutional accredited investors set forth in
Rule 501(a) of Regulation D ("Regulation D") under the 1933 Act (sign on blank
line following category of institutional accredited investor which describes the
Investor):
(A) A bank as defined in Section 3(a)(2) of
the 1933 Act or a savings and loan or other institution as defined in Section
3(a)(5)(A) of the 1933 Act, whether acting in regard to this investment in its
individual or a fiduciary capacity.
(B) An insurance company as defined in
Section 2(13) of the 1933 Act.
(C) An investment company registered under
the Investment Company Act of 1940.
(D) A business development company as
defined in Section 2(a)(48) of the Investment Company Act of 1940.
<PAGE>
(E) A 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.
(F) An employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of 1974, if
the investment decision regarding this investment was made by a bank, insurance
company or registered investment adviser, acting as a plan fiduciary, as defined
in Section 3(21) of such act.
(G) An employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of 1974 with
total assets in excess of $5,000,000, whether or not the investment decision
regarding this investment was made by a bank, insurance company or registered
investment adviser.
(H) Private Business Development Company as
defined in Section 202(a)(22) of the Investment Advisers Act of 1940.
(I) An organization described in Section
501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar
business trust, or partnership, not formed for the specific purpose of acquiring
the Securities, with total assets in excess of $5,000,000.
(v) The Investor is an entity in which all of the
equity holders are accredited investors as set forth in Rule 501(a)(8) of
Regulation D and described in one or more of the categories set forth above in
the subparagraphs of this Paragraph.
4. The Investor understands that its answers to the questions set forth
herein will be kept confidential by the Company. However, the Investor agrees
that the Company may present this Subscription Agreement to those parties that
it deems appropriate if called upon to establish the Company's entitlement to a
limited or private offering exemption under the 1933 Act or any applicable state
securities law.
5. The Investor agrees that upon the request of the Company, at any
time prior to closing of the transactions contemplated hereby, the Investor
shall promptly execute and deliver to the Company any agreements or instruments
as it may reasonably request in order to effect the purchase and issuance of the
Securities.
6. The Company shall have the right, in its sole discretion, to imprint
upon the Securities any legends relating to the 1933 Act or state securities law
or other applicable law as it deems necessary or advisable; provided, however,
that the Company agrees to remove such legend and bear all costs and expenses of
removal upon the registration of the Securities or upon the applicability of an
exemption from registration with respect to such Securities.
7. The representations, warranties and agreements herein contained are
made and given for the benefit of the Company and to induce the Company to sell
and issue the Securities to the Investor and each constitutes a material portion
of the consideration therefor. The undersigned shall not be entitled to cancel,
terminate or revoke this subscription except as permitted by applicable law.
<PAGE>
8. Each party hereto will pay its own expenses relating to this
Subscription Agreement and the purchase of the Securities by the Investor
hereunder.
9. This Subscription Agreement or any term hereof may not be changed,
waived, discharged or terminated except with the prior written consent of the
Investor and the Company.
10. This Subscription Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to
principles of conflicts of law applicable thereto.
11. This Subscription Agreement (i) shall be binding upon the Investor
and the legal representatives, successors and assigns of the Investor, (ii)
shall survive the closing of the transactions contemplated hereby and (iii)
shall, if the Investor consists or more than one person, be the joint and
several obligation of all such persons. This Subscription Agreement may be
executed in one or more duplicate originals which shall, either singly or
together, serve to represent one agreement between the parties.
12. The Company agrees that the proceeds in respect of the subscription
for the Securities shall be contributed by the Company to the Company's
wholly-owned subsidiary, New Generation Partners, Inc. for use by such
subsidiary for general working capital purposes.
13. This Subscription Agreement shall not bind the Company until
accepted by it.
<PAGE>
IN WITNESS WHEREOF, the Investor has executed this
Subscription Agreement on the day and year first above written.
MERCER INTERNATIONAL SA
GAUK HOLDING, INC.
(Name of Entity)
/s/ Sylvie Challande
- -----------------------------------
By: Sylvie Challande
(Signature of Officer)
The Investor hereby agrees to purchase shares of Common Stock and Warrants for
an aggregate purchase price of $499,975.
THE FOREGOING SUBSCRIPTION AGREEMENT IS HEREBY AGREED TO BY THE COMPANY:
NEW GENERATION PLASTIC, INC.
By: /s/ Paul Hokfelt Dated: April 10, 2000
---------------------------- -------------------
Name: Paul Hokfelt
Title: CEO
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S UNAUDITED FINANCIAL STATMENTS FOR THE PERIOD ENDED MARCH 31, 2000, AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
[To be completed]
</LEGEND>
<CIK> 0001024605
<NAME> New Generation Holdings, Inc.
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1.000
<CASH> 6,651
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 69,376
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 504,676
<CURRENT-LIABILITIES> 3,522,339
<BONDS> 0
0
0
<COMMON> 11,838
<OTHER-SE> 804,695
<TOTAL-LIABILITY-AND-EQUITY> (3,017,197)
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 242,754
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 44,117
<INCOME-PRETAX> (286,871)
<INCOME-TAX> 0
<INCOME-CONTINUING> (286,871)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (286,871)
<EPS-BASIC> 0.02
<EPS-DILUTED> 0.02
</TABLE>
