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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) February 9, 2000
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LEXON Technologies, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 0-24721 87-0502701
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(State or Other Jurisdiction (Commission I.R.S. Employer
of Incorporation) File Number) Identification No.)
1401 Brook Drive, Downers Grove, Illinois 60515
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(Address of Principal Executive Offices) (Zip Code)
(630) 916-6196
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 1: CHANGES IN CONTROL OF REGISTRANT.
(a)
(1) On February 9, 2000, LEXON Technologies Inc., a Delaware
corporation, and Steven J. Peskaitis, LEXON's then Chairman and Chief Executive
Officer, consummated a transaction with Anthony Perino whereby Mr. Perino
acquired voting control over the majority of LEXON's issued and outstanding
common stock. LEXON is an Internet-based provider of geo- referenceable content
and data and offers specific content solutions to institutional, governmental,
corporate and public consumers through advanced software applications.
Under the terms of a Stock Purchase Agreement, dated February 9, 2000,
by and among LEXON, Mr. Peskaitis and Mr. Perino, Mr. Perino acquired (i)
1,000,000 shares of LEXON common stock from LEXON in exchange for $250,000 and
(ii) 2,000,000 shares of LEXON common stock from Mr. Peskaitis in exchange for
$500. Mr. Perino used cash from personal reserves to fund his investment in
LEXON. In addition, under a Voting Trust Agreement, Mr. Peskaitis and Stanley
Peskaitis appointed Mr. Perino Voting Trustee of 2,774,600 and 1,227,100 shares,
respectively, of LEXON common stock. The Voting Trust will terminate no later
than February 9, 2001.
As of February 9, 2000, LEXON had 12,541,561 shares of common stock
issued and outstanding. Prior to the transactions described above, Mr. Peskaitis
owned 6,774,600 shares of LEXON common stock, which was fifty-four percent (54%)
of LEXON's issued and outstanding common stock. At the close of these
transactions, Mr. Perino beneficially owned, directly or indirectly, 7,001,700
shares of LEXON's common stock or fifty-five percent (55%) of LEXON's issued and
outstanding common stock.
In addition, under the terms of the Stock Purchase Agreement, Mr.
Perino will, subject to certain conditions, purchase an additional 2,400,000
shares of LEXON common stock from LEXON and Mr. Peskaitis in exchange for a cash
payment of $100,500 on or around March 7, 2000.
Moreover, Mr. Perino received Warrants to purchase up to an additional
4,100,000 shares of LEXON common stock. The Warrants are exercisable at prices
from $0.25 per share to $0.50 per share and expire at certain times between
September 1, 2000 and August 9, 2001. If Mr. Perino exercises all of the
Warrants, LEXON will receive an additional $1,150,000 in equity capital.
Moreover, in connection with the Warrants, LEXON and Mr. Perino entered into a
Registration Rights Agreement which provides Mr. Perino with demand and
piggy-back registration rights with respect to the shares of LEXON common stock
subject to the Warrants.
(2) In connection with these transactions, under the terms of the
Stock Purchase Agreement, Mr. Peskaitis resigned as LEXON's Chief Executive
Officer and President, and Mr. Thomas Rieck resigned as a director of the
Company. Mr. Perino, Peter Haleas and Jerome Wolowicki were appointed to the
Company's Board of Directors and Mr. Perino was
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elected Chairman and Chief Executive Officer.
(b) Under a Post-Closing Agreement, dated February 9, 2000, by and
among Mr. Perino, Mr. Peskaitis and Stanley Peskaitis, the Voting Trust
Agreement described above will be amended to provide for (i) the deposit of an
additional 1,500,000 shares of the LEXON's common stock into the Voting Trust,
subject to the prior rights of the holders of certain liens with respect to such
shares and (ii) the release of shares from the Voting Trust to the extent such
released shares are not necessary for Mr. Perino to maintain voting control over
fifty-one percent (51%) of LEXON'S issued and outstanding common stock.
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS
10.1 Stock Purchase Agreement, dated February 9, 2000, by and among
LEXON Technologies, Inc., Steven J. Peskaitis and Anthony Perino.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: February 18, 2000 By: /s/ Anthony Perino
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Anthony Perino, Chief Executive Officer
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EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
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DATED FEBRUARY 9, 2000
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BY AND AMONG
ANTHONY PERINO
as Buyer
AND
LEXON TECHNOLOGIES, INC.
and
STEVEN J. PESKAITIS
as Sellers
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered into
this 9th day of February, 2000 by and among Anthony Perino, an individual, and
resident of the State of Illinois ("Buyer"), LEXON Technologies, Inc. a Delaware
corporation ("Lexon" or the "Company"), and Steven J. Peskaitis, an individual
and resident of the State of Illinois ("Peskaitis," with Lexon and Peskaitis
being hereinafter sometimes referred to individually as a "Seller" and
collectively as the "Sellers").
WITNESSETH:
WHEREAS, the Company desires to issue and sell 1,400,000 shares (the
"Company Shares") of its common stock, $0.001 par value per share (the "Common
Stock") upon the terms and conditions set forth herein; and
WHEREAS, Peskaitis desires to sell up to 4,000,000 shares (the "Peskaitis
Shares,"with the Company Shares and the Peskaitis Shares being hereinafter
sometimes collectively referred to as the "Shares") of Common Stock standing in
his name on the stock transfer records of the Company upon the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing, the mutual promises and
covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
CLOSING
1.1 Time and Place of Closing. The First Closing shall take place on
February 9, 2000, at the offices of Ross & Hardies, 150 North Michigan Avenue,
Suite 2500, Chicago, Illinois 60601, commencing at 9:00 a.m., or such other date
as may be agreed upon by the parties (the "First Closing Date"); provided that
all of the conditions precedent to the First Closing identified in Section 7
hereof have been satisfied. The Second Closing shall take place on March 7,
2000, at the offices of Ross & Hardies, 150 North Michigan Avenue, Suite 2500,
Chicago, Illinois 60601, commencing at 9:00 a.m. or such other date as may be
agreed upon by the parties (the "Second Closing Date"); provided that all of the
conditions precedent to the Second Closing identified in Section 7 hereof shall
have been satisfied.
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ARTICLE II
PURCHASE AND SALE OF STOCK
2.1 Sale and Purchase of Stock. Subject to the terms and provisions of
this Agreement, Sellers shall sell, transfer, assign and deliver to Buyer, and
Buyer shall purchase:
(a) At the First Closing
(i) 1,000,000 Shares of Common Stock from the Company (the
"First Closing Company Shares"); and
(ii) 2,000,000 shares of Common Stock from Peskaitis (the "First
Closing Peskaitis Shares," with the First Closing Company Shares
and the First Closing Peskaitis Shares being hereinafter
sometimes collectively referred to as the "First Closing
Shares")
(b) At the Second Closing
(i) 400,000 Shares of Common Stock from the Company (the "Second
Closing Company Shares"); and
(ii) 2,000,000 Shares of Common Stock from Peskaitis (the
"Second Closing Peskaitis Shares," with the Second Closing
Company Shares and the Second Closing Peskaitis Shares being
hereinafter sometimes collectively referred to as the "Second
Closing Share")
for the Purchase price set forth in Section 3.1 hereof.
2.2 Transfer and Sales Tax. Sellers shall bear and pay all stock transfer
taxes and sales taxes, if any, payable with respect to the transactions provided
for in this Agreement.
ARTICLE III
PURCHASE PRICE
3.1 Purchase Price for Shares. Buyer shall pay to Sellers as consideration
for the Shares the amounts set forth below, at the time and in the manner
specified below:
(a) For the First Closing Company Shares, $0.25 per share, or an
aggregate of $250,000 (the "First Closing Company Payment"), payable
to the Company by wire transfer of immediately available funds;
(b) For the First Closing Peskaitis Shares, $0.00025 per share, or an
aggregate of $500 (the "First Closing Peskaitis Payment"), payable to
Peskaitis by check;
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(c) For the Second Closing Company Shares, $0.25 per share, or an
aggregate of $100,000 (the "Second Closing Company Payment"), payable
to the Company by wire transfer of immediately available funds; and
(d) For the Second Closing Peskaitis Shares, $0.00025 per share, or an
aggregate of $500 (the "Second Closing Peskaitis Payment," with the
First Closing Company Payment, the First Closing Peskaitis Payment,
the Second Closing Company Payment and the Second Closing Peskaitis
Payment being hereinafter sometimes collectively referred to as the
"Purchase Price") payable to Peskaitis by check
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Sellers hereby jointly and severally make the following representations
and warranties to Buyer, each of which (i) are true, correct and complete as of
the First Closing Date, and (ii) will be true, correct and complete as of the
Second Closing Date.
4.1 Organization and Qualification.
(a) Lexon is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has the corporate
power and authority to enter into this Agreement, to consummate the transactions
contemplated hereby, to own and lease the properties and other assets it
presently owns or leases and to carry on its business as presently conducted.
(b) The copy of the Articles of Incorporation, and all amendments
thereto, of the Company, as certified by the Secretary of State of the State of
Delaware, and of the By-Laws, as amended to date, of the Company, as certified
by its Secretary, delivered to Buyer at the First Closing are true, complete and
correct copies of the Articles of Incorporation and By-Laws of the Company, as
amended and presently in effect. All minutes for proceedings of the Company's
stockholders and directors are contained in the minute books of the Company.
There are no matters, events, actions or proceedings taken or omitted to be
taken by the directors or stockholders not included in the minute books, where
the taking or omission to take such action would have a material, adverse effect
on the Company, the rights of the Company to enter into
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the transactions contemplated by this Agreement or the realization by Buyer of
the benefits to be received by it hereunder.
(c) Lexon is duly licensed or qualified to do business as a foreign
corporation, and is in good standing, in the State of Illinois and in every
other domestic and foreign jurisdiction in which Lexon is required to be so
licensed or qualified.
4.2 Capitalization. The entire authorized capital stock of Lexon and the
number of shares thereof which are issued and outstanding are as follows:
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NUMBER OF
NUMBER OF SHARES ISSUED
AUTHORIZED SHARES CLASS AND OUTSTANDING
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10,000,000 Common Stock, $.001 par value 12,541,561
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All of the outstanding shares of capital stock of the Company are duly
authorized and validly issued and outstanding, fully paid and non-assessable,
and were not issued in violation of any preemptive rights. Except as set forth
in Schedule 4.2, there are no shares of capital stock in treasury, and there are
no shares of capital stock reserved for issuance. Except as set forth in
Schedule 4.2, there are no outstanding subscriptions, options, rights, warrants,
convertible securities or other agreements or commitments to issue, or contracts
or any other agreements obligating Lexon to issue, any shares of its capital
stock, or securities convertible into such stock. Except for this Agreement,
that certain Voting Trust Agreement, dated of even date herewith, by and among
Steven J. Peskaitis, Stanley Peskaitis and Anthony Perino, as (the "Voting Trust
Agreement"), and as otherwise set forth in Schedule 4.2 hereto, Peskaitis is not
a party to any contract or agreement which would require him to transfer title
to any shares of the Company's capital stock now owned by him or which he has
the right to acquire in the future. Except for this Agreement, the Voting Trust
and as disclosed on Schedule 4.2, there are no agreements or understandings with
respect to the voting, holding or selling of any shares of capital stock of
Lexon, or any contractual obligations of Lexon or Peskaitis with respect to
Lexon's capital stock. Except for that certain Registration Rights Agreement, of
even date herewith, by and between
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Lexon and Buyer (the "Registration Rights Agreement") and as otherwise set forth
in Schedule 4.2 hereto, no person has any right to require Lexon to register any
of its securities under the Securities Exchange Act of 1933, as amended (the
"1933 Act").
4.3 Status of Company Shares. The First Closing Company Shares and the
Second Closing Company Shares when issues and delivered in accordance with the
terms hereof, and the shares of Common Stock to be issued upon exercise of the
Common Stock Purchase Warrants to be issued by the Company to Buyer pursuant to
the terms hereof, when issued and delivered upon conversion of the Common Stock
Purchase Warrants, will be duly authorized, validly issued, fully-paid and
non-assessable and shall not have been issued in violation of any preemptive or
other right held by any person or entity.
4.4 Title to Shares. Except to the extent set forth in Schedule 4.4,
Peskaitis owns and has good and marketable title to the Peskaitis Shares and
those shares of Common Stock to be transferred by Peskaitis to Anthony Perino,
as Voting Trustee, pursuant to the Voting Trust Agreement (such shares of Common
Stock being hereinafter referred to as the "Peskaitis Voting Trust Shares"),
free and clear of any lien, pledge, claim, encumbrance, restriction or right of
any third party of any kind. Peskaitis has complete and unrestricted authority
to sell the Peskaitis Shares and to transfer the Peskaitis Voting Trust Shares
in accordance with the Voting Trust Agreement and there are no trust agreements,
shareholders' agreements, redemption agreements, buy-sell agreements,
restrictive stock transfer agreements, voting trusts, proxies or similar
agreements pertaining to the Peskaitis Shares or the Peskaitis Voting Trust
Shares which would preclude or require the consent of any person other than
Peskaitis to the sale of the Peskaitis Shares contemplated by this Agreement or
the transfer of the Peskaitis Voting Trust Shares as contemplated by the Voting
Trust Agreement or would give any person any right or interest in the Peskaitis
Shares or in the Voting Trust Agreement after the consummation of the
transactions contemplated herein. Peskaitis will convey to Buyer good and
marketable title to the Peskaitis Shares, free and clear of any lien, pledge,
claim, encumbrance, restriction or right of any third party of any kind.
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Stanley Peskaitis has complete and unrestricted authority to transfer those
shares of Common Stock to be transferred by him to Anthony Perino, as Voting
Trustee, pursuant to the Voting Trust Agreement (such shares of Common Stock
being hereinafter referred to as the "Additional Voting Trust Shares," with the
Peskaitis Voting Trust Shares and the Additional Voting Trust Shares being
sometimes hereinafter referred to collectively as the "Voting Trust Shares") and
there are not trust agreements, shareholders' agreements, redemption agreements,
buy-sell agreements, restrictive stock transfer agreements, voting trusts,
proxies or similar agreements pertaining to the Additional Voting Trust Shares
which would preclude or require the consent of any person other than Stanley
Peskaitis to the transfer of the Additional Voting Trust Shares as contemplated
by the Voting Trust Agreement or would give any person any right or interest in
the Additional Voting Trust Shares after the consummation of the transactions
contemplated in the Voting Trust Agreement.
4.5 Authority. Each of Peskaitis and Lexon has full power, capacity and
authority (corporate or otherwise) to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement, and the consummation of the transactions contemplated hereby,
have been duly and validly authorized by each of Peskaitis and Lexon, and no
other proceedings (corporate or otherwise) on the part of either Peskaitis or
Lexon are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by each of Peskaitis and Lexon, and constitutes a legal,
valid and binding agreement of each of Peskaitis and Lexon.
4.6 Consents and Approvals. Except for required consents identified on
Schedule 4.6, there is no authorization, consent, order or approval of, or
notice to or filing with, any individual or entity required to be obtained or
given in order for Peskaitis, Lexon or any of the Subsidiaries (as hereinafter
defined) to consummate the transactions contemplated hereby and fully perform
their respective obligations hereunder.
4.7 Absence of Conflicts. The execution, delivery and performance by
Peskaitis and
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Lexon of this Agreement and the consummation by Peskaitis and Lexon of the
transactions contemplated hereby will not, with or without the giving of notice
or lapse of time, or both, (i) violate any provision of law, statute, rule or
regulation to which Peskaitis, Lexon or any of the Subsidiaries are subject,
(ii) violate any order, judgment or decree applicable to Peskaitis, Lexon, or
any of the Subsidiaries, (iii) conflict with or result in a breach or default,
or result in any event which would materially interfere with Peskaitis' or
Lexons' ability to consummate the transactions contemplated hereby, under any
term or condition of the Articles of Incorporation or By-Laws of Lexon, or any
bond, debenture, note, indenture, mortgage, deed of trust, loan or credit
agreement, contract, lease, judgment, decree, order, award or any other material
agreement or instrument to which any of Peskaitis, Lexon or any of the
Subsidiaries is a party or by which any of them or their assets is bound, or
(iv) cause, or give any person grounds to cause, the maturity of any debt,
liability or obligation of Peskaitis, Lexon or any of the Subsidiaries to be
accelerated, or the amount thereof to be increased.
4.8 Subsidiaries; Acquisitions; Dispositions.
(a) Except for those subsidiaries listed on Schedule 4.8(a)
(individually, a "Subsidiary" and, collectively, the "Subsidiaries"), Lexon does
not directly or indirectly control, and has never owned or controlled, any
corporation.
(b) Each of the Subsidiaries is duly organized, validly existing and
in good standing under the laws of their respective states of incorporation as
set forth on Schedule 4.8(b). The Subsidiaries have all necessary corporate
powers to own their properties and to operate their business as now owned and
operated. Complete copies of the Articles of Incorporation, By-laws, minutes and
stock transfer records of each such Subsidiary are in the possession and control
of Lexon.
(c) The authorized capital stock of each of the Subsidiaries is
disclosed on Schedule 4.8(c). All shares of capital stock of each of the
Subsidiaries have been validly issued, are fully paid and nonassessable, were
issued in compliance with applicable federal and state securities laws, and, are
wholly-owned by Lexon free and clear of any pre-emptive rights, claims,
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security interests encumbrances or restrictions of any kind. There are no
outstanding subscriptions, options, rights, warrants, convertible securities or
other agreements or commitments obligating any Subsidiary to issue or to
transfer from treasury any additional shares of capital stock or any securities
convertible into or which grant the holder the right to acquire any capital
stock of any Subsidiary.
(d) Schedule 4.8(d) lists the name of each business whose capital
stock or assets were acquired by Lexon or any Subsidiaries since the respective
dates of their formation. Complete copies of all agreements which effect those
acquisitions or were executed in connection therewith are in the possession and
control of Lexon.
(e) Schedule 4.8(e) lists each partnership, limited partnership,
limited liability company, joint venture or other business entity in which Lexon
has an investment and describes the nature and extent of that investment.
(f) Schedule 4.8(f) lists each Subsidiary, partnership, joint venture
or other business disposed of by Lexon or any Subsidiaries since the respective
dates of their formation.
(g) Each of the Subsidiaries is duly licensed or qualified to do
business as a foreign corporation, and is in good standing, in every domestic
and foreign jurisdiction in which such Subsidiary is required to be so licensed
or qualified, except where the failure to be so licensed or qualified would not
have a material adverse effect on such Subsidiary, its business or assets.
4.9 Financial Statements. Lexon has previously delivered to Buyer true
and correct copies of the audited consolidated financial statements, including
the accountants' reports thereon and all notes thereto, of Lexon as of December
31, 1997 and December 31, 1998, together with true and correct copies of the
unaudited interim consolidated financial statements, including notes thereto, of
Lexon as of June 30, 1999 and November 30, 1999 (collectively, the "Financial
Statements"). The Financial Statements (i) have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis, are
correct and complete and are in accordance with the books and records of Lexon,
(ii) present fairly the financial position and
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condition of Lexon and the related results of operations as at the dates and for
the periods then ended (subject, in the case of the unaudited statements, to
customary year-end adjustments, which adjustments shall not be material) and
(iii) contain no material misstatements or omissions which under generally
accepted accounting principals would be required to be disclosed for financial
statement purposes.
4.10 Absence of Undisclosed Liabilities. Except as and to the extent
accrued or reserved for in the Financial Statements, Lexon does not have any
liabilities or obligations, whether accrued, absolute or contingent, determined
or undetermined, known or unknown or whether due or to become due (including,
without limitation, obligations as a guarantor), which are not reflected in the
Financial Statements other than those incurred in the ordinary course of
business and consistent with past practice since November 30, 1999.
4.11 Absence of Certain Changes or Events. Except as set forth in
Schedule 4.11, since November 30, 1999 there has not been (a) any damage,
destruction or casualty loss to the assets of Lexon which has not been repaired,
replaced or corrected (whether covered by insurance or not); (b) any material
adverse change in the business, assets, properties, operations, prospects or
financial condition of Lexon, or any fact or condition which could reasonably be
expected to cause such a change; (c) any entry into any transaction, commitment
or agreement (including, without limitation, any borrowing) material to Lexon,
or outside the ordinary course of business; (d) any redemption, repurchase or
other acquisition for value by Lexon of its capital stock or any declaration,
setting aside or payment of any dividend or other distribution in cash, stock or
property with respect to Lexon's capital stock; (e) any increase in the rate or
terms of compensation payable or to become payable by Lexon to its directors,
officers or employees, or any increase in the rate or change in the terms of any
employment agreement or compensatory arrangement, or any bonus, pension,
insurance or other employee benefit plan, or any payment or
benefit made to or for any such director, officer or employee; (f) any sale,
transfer or other disposition of any asset of Lexon to any party, except for
payment of third-party obligations incurred in the ordinary course of business
in accordance with Lexon's regular payment practices;
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(g) any termination or waiver of any rights of material value to the business of
Lexon; (h) except as set forth on Schedule 4.11(h), any failure by Lexon to pay
its accounts payable or other obligations as and when the same became due and
payable and otherwise in the ordinary course of business consistent with past
practices; (i) any capital expenditure for additions to property or equipment by
Lexon in excess of $10,000; (j) any split, combination, exchange or
reclassification of shares of capital stock of Lexon; (k) other than this
Agreement, the Warrants, any issuance or any agreement executed with respect to
the future issuance of capital stock of Lexon or of securities convertible into
or rights to acquire any such capital stock; (l) any change in any method of
accounting or accounting practice, principle or procedure; (m) any action or
inaction which might cause Lexon to incur any tax liability not in the ordinary
course of business; (n) any pledge of any of the assets or properties of Lexon
or any action or inaction which would subject any such asset or property to any
lien, security interest, mortgage, pledge, claim, charge or other encumbrance;
(o) the incurrence of any liability or obligation by Lexon, except for
liabilities incurred in the ordinary course of business and consistent with past
practices; (p) any actual, or to Peskaitis' or the Company's knowledge
threatened, termination or cancellation of, or modification or change in, any
business relationship with any customer of Lexon; (q) any cancellation of a debt
due to or a claim of Lexon, other than by payment or other satisfaction; (r) any
failure of Lexon to perform, or any default by Lexon under, any agreement,
obligation or covenant to which Lexon is or was bound; or (s) any agreement,
whether in writing or otherwise, to take or which could reasonably be expected
to result in, any action, event or condition described in this Section 4.11.
4.12 Real and Personal Property. Schedule 4.12(a) hereto sets forth a list
of all of Lexon's real property, or interests in Real Property, all of Lexon's
material tangible and intangible personal property, all of Lexon's material
tangible and intangible personal property, and all of Lexon's other assets. The
real and personal property and other assets of Lexon identified in Schedule
4.12(a) are all of the assets necessary for Lexon to conduct its business as
currently conducted.
Schedule 4.12(b) hereto is a list of each lease of, or other agreement
pursuant to which
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Lexon rents, occupies or uses, the real property identified in Schedule 4.12(a).
Schedule 4.12(c) hereto is a list of each lease, license or other agreement
pursuant to which Lexon possesses, uses or has any other right with respect to
the tangible and intangible personal property and other assets identified in
Schedule 4.12(a).
Schedule 4.12(d) hereto lists each mortgage, lien, pledge, conditional
sales contract, security interest or other encumbrance or restriction, other
than matters identified in Schedules 4.12(b) and 4.12(c) hereto, pertaining to
the ownership, possession, control or use of the real and personal property and
other assets of Lexon.
Except as identified in Schedule 4.12(b), 4.12(c) or 4.12(d) hereto, Lexon
has good and marketable title to and absolute and unconditional control over its
use of, all of its assets free and clear of any encumbrance, restriction or
claim.
Except as set forth in Schedule 4.12(e) hereto, no claims, charges or
notices of violations has been filed, served or made, or to the best of
Peskaitis's or Lexon's knowledge, threatened, orally or in writing, with respect
to any lease or other agreement identified in Schedule 4.12(b), 4.12(c) or
4.12(d).
4.13 Intellectual Property. Except as set forth on Schedule 4.13 hereto,
Lexon and the Subsidiaries own or have a license or otherwise have the right to
use, in all jurisdictions in which they carry on business, all patents
(including all applications, renewals, reissues, extensions, divisions,
continuations and extensions thereof), trademarks (including both registered and
unregistered trademarks and applications therefor), service marks, trade names,
copyrights (including all registrations, renewals, modifications and extensions
thereof), know-how and trade secrets (including inventions, computerized data
and information, computer codes and programs, other software, business records,
files and data, discoveries, formulae, production outlines, product designs,
technical information, processes and techniques, testing and quality control
processes and techniques, drawings, designs and customer lists), used in the
conduct of their businesses as currently conducted (collectively, the
"Intellectual Property") without violating or conflicting with the rights of
others. Schedule 4.13 hereto lists all patents, all registered and
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material unregistered trademarks, service marks and trade names and all
registered copyrights, and all applications for any of the foregoing, that are
owned by Lexon or any of the Subsidiaries. Except as set forth on Schedule 4.13
hereto, none of the Intellectual Property is subject to any encumbrance. Except
as disclosed on Schedule 4.13 hereto, Lexon is not obligated to pay any amount,
whether as a royalty, license fee or other payment, to any person in order to
use any of the Intellectual Property. There has not been any material
infringement or alleged infringement by Lexon or any of the Subsidiaries of the
Intellectual Property rights of any person or any infringement by any person of
any of the Intellectual Property rights of Lexon or any of the Subsidiaries.
4.14 Insurance. Lexon keeps all its businesses, operations and properties
and those of the Subsidiaries insured against all losses, damages and claims of
third parties, and in such amounts as are adequate and appropriate in accordance
with customary business practice for the industries in which Lexon and the
Subsidiaries are engaged. Except as disclosed on Schedule 4.14, all insurance
policies of Lexon and the Subsidiaries provide claims made coverage, is in force
and the premiums with respect thereto are fully paid. No insurer has denied
coverage or reserved rights for any claim made by Lexon or any of the
Subsidiaries or any other individual or entity under any insurance policies
applicable to Lexon or any of the Subsidiaries.
4.15 Contracts and Commitments.
4.15.1 Schedule 4.15.1 hereto lists each contract, commitment or
agreement, whether oral or written, which can or may provide for the payment by
or to Lexon or any of the Subsidiaries of an amount in excess of $5,000 per
annum, as well as any contract, commitment or agreement entered into by Lexon or
any Subsidiary outside the ordinary course of business (collectively, the
"Contracts"). True, correct and complete copies of all written Contracts, and
true, correct and complete written descriptions of all oral Contracts, listed on
the Schedules hereto are in the possession and control of Lexon. All such
Contracts are valid and binding obligations of Lexon or one of the Subsidiaries,
as the case may be, enforceable by and against Lexon or one of the Subsidiaries,
as the case may be, in accordance with their respective terms,
<PAGE> 14
and are in full force and effect; and Lexon or one of the Subsidiaries, as the
case may be, is in compliance therewith. None of the Contracts relating to
payments to Lexon or one of the Subsidiaries, as the case may be, for the
provision of services to its customers fail to provide to Lexon consideration
not constituting a profit upon commercially reasonable terms and conditions, and
none have, or could reasonably be expected to have, a material adverse effect on
Lexon's assets, properties, businesses, financial condition or prospects. No
allegation or notice of default has been received by Lexon or any Subsidiaries,
or to the best of Peskaitis's or the Company's knowledge, threatened with
respect to the Contracts, and to the best of Peskaitis' and Lexons' knowledge,
no other party to any of the Contracts is in default or breach thereof in any
material respect.
4.15.2 Schedule 4.15.2 hereto sets forth a list of all current
warranties with respect to any products or services currently sold, distributed,
offered, or licensed by Lexon and the Subsidiaries. Except as set forth in
Schedule 4.15.2, and other than those which are or may be provided by applicable
law, there are no express or implied warranties outstanding with respect to any
products or services created, sold, distributed, offered or licensed by Lexon
and the Subsidiaries.
4.16 Litigation and Administrative Proceedings. Except as set forth in
Schedule 4.16 hereto, there is no claim, action, suit, proceeding or
investigation in any court or before any governmental or regulatory authority
pending or, to the best of Peskaitis' or Lexon's knowledge, threatened against
or affecting Lexon or any of the Subsidiaries or any of their respective assets
or properties or which seeks to enjoin or obtain damages in respect of the
transactions contemplated hereby. There is no basis, or reason to know of any
basis, for any such claim, action, suit, proceeding or investigation. No claim,
action, suit, proceeding or investigation set forth in Schedule 4.16 could, if
adversely decided, have a material adverse effect on the consolidated business,
properties, condition (financial or otherwise) or prospects of Lexon.
4.17 Tax Matters.
4.17.1 All Returns Filed. Except as set forth in Schedule 4.17.1, all
federal, state,
<PAGE> 15
local and foreign income, franchise, sales, use, excise, real and personal
property, employment (including FICA and other payroll) and other tax returns,
reports and declarations of every kind and nature (collectively, "Returns")
required to be filed by or on behalf of Lexon and the Subsidiaries on or before
the First Closing Date and the Second Closing Date have been or will be filed
and such Returns are complete and accurate and disclose all taxes (and other
charges) expected to be due for the periods covered thereby. No extension of
time in which to file any such Returns is currently in effect and there are no
outstanding agreements or waivers extending the statutory period of limitation
applicable to any such Returns.
4.17.2 All Taxes Paid. All taxes (and other charges) shown on the
Returns or otherwise required to be paid, and any deficiency assessments,
penalties, interest and other charges with respect thereto, have been paid or
reserved or accrued for in the Financial Statements, and there is otherwise no
current liability for any unpaid taxes (or other charges) due which has not been
paid or reserved or accrued for in connection with such Returns or otherwise.
There are no tax liens (other than for taxes not yet due) on any of the assets
or properties of Lexon or any of the Subsidiaries and, no basis exists for the
imposition of any such liens.
4.17.3 Examinations, Etc. None of the Returns for tax years that
remain open under any applicable statute of limitations have been examined by
the IRS or other pertinent tax authorities and no deficiencies have been
asserted or assessments made as a result of any such examinations (including all
penalties and interest). No issues have been raised by (or are currently pending
before) the IRS or any other taxing authority in connection with any of the
Returns which could reasonably be expected to have a material adverse effect on
the financial condition of Lexon and the Subsidiaries, taken as a whole, if
decided adversely to Lexon, nor are there any such issues which have not been so
raised but, if so raised by the IRS or any other taxing authority in connection
with any of the Returns could, in the aggregate, reasonably be expected to have
a material adverse effect on the consolidated financial condition of Lexon.
4.17.4 Withholding. Lexon has withheld from its employees and others
(and timely remitted to the appropriate taxing authorities) proper and accurate
amounts for all periods
<PAGE> 16
in compliance with all tax withholding provisions of applicable federal, state,
foreign, local and other laws (including, without limitation, income,
withholding, social security, employment and other payroll taxes).
4.17.5 Parachute Payments. Lexon has not made, has not become
obligated to make nor will, as a result of any event connected with the
acquisition of the Shares by Buyer or any other transaction contemplated herein,
make or become obligated to make any "excess parachute payment" as defined in
Section 280G of the Internal Revenue Code of 1986, as amended from time to time
(the "Code").
4.17.6 Prior Consolidated Groups. Lexon is not, and has never been, an
includible corporation in an affiliated group of corporations within the meaning
of Section 1504 of the Code.
4.18 Compliance with Laws. Neither Lexon nor any of the Subsidiaries has in
the past been, nor is presently, in violation of, in respect of its operations,
real property, machinery,equipment, all other property, practices and all other
aspects of its businesses, any applicable law (whether statutory or otherwise),
rule, regulation, order, ordinance, judgment or decree of any governmental
authority (federal, state, local or otherwise) (collectively, "Laws"). Lexon has
not received any notification of any asserted present or past failure of Lexon
to comply with any of such Laws.
4.19 Employee Benefits; Employment Contracts. Attached hereto as
Schedule 4.19 is a list of all written or oral employment agreements as well as
all written or oral agreements and commitments relating to employee benefits
with respect to which Lexon or the Subsidiaries has incurred or may incur any
future or contingent obligations, including, without limitation, all plans,
agreements or arrangements relating to deferred compensation, pensions, profit
sharing, retirement income or other benefits, stock purchase, stock ownership
and stock option plans, stock appreciation rights, bonuses, severance
arrangements, health and welfare benefits, insurance benefits and all other
employee benefits or fringe benefits (collectively referred to as the "Plans").
Lexon and the Subsidiaries do not, nor have they ever, maintained any Plans
which were subject
<PAGE> 17
to, or which would subject Lexon or any of the Subsidiaries to, regulation
pursuant to the Employee Retirement Income Security Act of 1974, as amended
("ERISA"). Lexon and the Subsidiaries do not, nor have they ever, contributed to
any multi-employer plan within the meaning of Section 4001(a)(3) of ERISA, nor
is Lexon or any of the Subsidiaries or any of their shareholders affiliated with
any entity such that Lexon or any of the Subsidiaries has, or might have in the
future, any multi-employer plan withdrawal liability under Subtitle E of Part IV
of ERISA.
4.20 Licenses and Permits. Lexon and the Subsidiaries have all governmental
licenses and permits and other governmental authorizations and approvals
currently required for the conduct of their businesses as presently conducted
("Permits"). Schedule 4.20 hereto includes a list of all Permits.
4.21 Relations with Suppliers and Customers. None of Lexon or any of the
Subsidiaries are required to provide any bonding or other financial security
arrangements in connection with any transaction with any customer or supplier.
No customer has notified Lexon or any of the Subsidiaries that it will nor to
the best of Peskaitis' or Lexon's knowledge does any customer intend to or,
except as described on Schedule 4.21 hereto, have the right to cease to do
business with Lexon or the Subsidiaries after the consummation of the
transactions contemplated hereby, to the extent that the failure to continue
such business would have a material, adverse effect on Lexon's business or
assets when taken as a whole.
4.22 Interest in Competitors, Suppliers, Customers, Related Party
Transactions. Except as disclosed in Schedule 4.22 hereto, no officer or
director of Lexon or any affiliate of any such officer or director has any
ownership interest in any competitor, supplier or customer of Lexon or any
property used in the operation of Lexon's business. Except as set forth on
Schedule 4.22, neither Lexon nor any of the Subsidiaries has made or entered
into any loan, contract, lease, commitment, arrangement or understanding with
any officer, director, employee, or shareholder of Lexon or the Subsidiaries or
with any affiliate or associate of any of the foregoing, under which Lexon or
the Subsidiaries have continuing obligations and except for normal compensation
<PAGE> 18
arrangements with Lexon's officers and employees.
4.23 Discrimination; Occupational Safety; Labor. No person or party
(including, but not limited to, governmental or regulatory authorities of any
kind) has any claim presently pending, or a reasonable basis for any action or
proceeding, against Lexon or the Subsidiaries arising out of any statute,
ordinance or regulation relating to discrimination in employment or employment
practices or occupational safety and health standards (including, but without
limiting the foregoing, The Fair Labor Standards Act, as amended; Title VII of
the Civil Rights Act of 1964, as amended; 42 U.S.C. 1981 or the Age
Discrimination in Employment Act of 1967, as amended), which, if upheld, would
have an adverse effect on the assets, properties, business or condition,
financial or otherwise, of Lexon and the Subsidiaries. There is no pending, or
to the best of Peskaitis' and Lexon's knowledge threatened, federal or state
equal employment opportunity enforcement action or labor dispute, strike, or
work stoppage affecting Lexon's or the Subsidiaries' businesses. Neither Lexon
nor the Subsidiaries have any collective bargaining or similar agreements, nor
do they have any obligation to bargain with any labor organization as the
representative of Lexon's or the Subsidiaries' employees, and there is neither
pending, nor to the best of Peskaitis' or Lexon's knowledge threatened, any
labor dispute, strike or work stoppage which affects or which may affect the
business of Lexon or the Subsidiaries or which may interfere with the continued
operation of Lexon or the Subsidiaries. No present or former employee of Lexon
or the Subsidiaries has any claim against Lexon for (a) overtime pay, other than
overtime pay for the current payroll period, (b) wages or salary (excluding
bonuses and amounts accruing under pension and profit sharing plans) for any
period other than the current payroll period, (c) vacation, time off or pay in
lieu of vacation or time off, other than that earned in respect of the current
fiscal year or carried over from prior years, or (d) any violation of any
statute, ordinance or regulation relating to minimum wages or maximum hours of
work.
4.24 Brokers and Finders. Neither Peskaitis and the Company nor Lexon
(nor any of their respective officers, directors, employees, affiliates,
associates, or family members) has employed any broker, finder or investment
banker, or incurred any liability for any brokerage fees,
<PAGE> 19
commissions or finders' fees in connection with this Agreement or the
transactions contemplated hereby.
4.25 Books and Records. The books and records of Lexon have been maintained
in accordance with commercially reasonable business and bookkeeping practices
and consistent with past practice, and accurately reflect in all respects the
business, assets, properties, rights, obligations, liabilities and operations of
Lexon and the Subsidiaries.
4.26 Bank Accounts; Safe Deposit Boxes. Schedule 4.26 hereto sets forth the
names and locations of all banks in which Lexon or the Subsidiaries has an
account or safe deposit box and the names of all persons authorized to draw
thereon or to have access thereto.
4.27 Full Disclosure. Peskaitis and Lexon have disclosed in writing in, or
pursuant to, this Agreement all facts material to the business, operations,
assets or condition (financial or otherwise) of Lexon and the Subsidiaries. No
representation or warranty made to Buyer or pursuant to this Agreement, contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements herein not misleading in light of the
circumstances which they were made.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
As of each of the First Closing Date and the Second Closing Date, Buyer
represents and warrants to Peskaitis and the Company as follows:
5.1 Authority. Buyer has full power, capacity and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by Buyer,
and no other proceedings on the part of Buyer are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by Buyer, and constitutes a
legal, valid and binding agreement of Buyer.
5.2 Consents and Approvals. There is no authorization, consent, order or
approval of,
<PAGE> 20
or notice to or filing with, any individual or entity required to be obtained or
given in order for Buyer to consummate the transactions contemplated hereby and
fully perform its obligations hereunder, excluding, however, any authorization,
consent, order, approval or filing which shall have been obtained or made by
Buyer prior to the Closing.
5.3 Absence of Conflicts. The execution, delivery and performance by Buyer
of this Agreement and the consummation by Buyer of the transactions contemplated
hereby will not, with or without the giving of notice or the lapse of time, or
both, (i) violate any provision of law, statute, rule or regulation to which
Buyer is subject, (ii) violate any order, judgment or decree applicable to Buyer
or (iii) conflict with, or result in a material breach or default under, any
term or condition of any material agreement or other instrument to which Buyer
is a party or by which Buyer is bound.
5.4 Litigation and Administrative Proceedings. There is no claim, action,
suit, proceeding or investigation in any court or before any governmental or
regulatory authority pending or, to the best knowledge of Buyer, threatened
against or affecting Buyer which seeks to enjoin or obtain damages in respect of
the transactions contemplated hereby. To the best knowledge of Buyer, there is
no basis for any such claim, action, suit, proceeding or investigation.
5.5 Brokers and Finders. Buyer has not employed any broker, finder or
investment banker, or incurred any liability for any brokerage fees, commissions
or finders' fees in connection with this Agreement or the transactions
contemplated by this Agreement.
ARTICLE VI
SURVIVAL; INDEMNIFICATION
6.1 Survival. All representations and warranties contained herein, or made
in writing by any party in connection herewith, shall survive the consummation
of the transactions contemplated hereby until February 7, 2002. All covenants
contained herein and all other obligations of the parties hereto shall survive
the consummation of the transactions contemplated hereby until fully performed.
6.2 Sellers' Indemnification. Subject to the limitations contained in
Section 6.5 hereof,
<PAGE> 21
Peskaitis shall indemnify Buyer and hold Buyer harmless from and against any and
all damages, losses, costs, liabilities and expenses (including reasonable
attorneys' fees and disbursements) resulting from or arising out of any breach
of any of the representations, warranties, covenants and agreements made by
Sellers herein or in any Exhibit or Schedule hereto or certificate or other
document delivered pursuant hereto.
6.3 Buyer's Indemnification. Buyer shall indemnify Sellers and hold Sellers
harmless from and against the payment by Sellers of any loss, liability, cost or
expense (including all reasonable attorneys' fees and disbursements) based upon
or arising out of any breach of any of the representations, warranties,
covenants or agreements of Buyer contained in this Agreement or any other
certificate or document delivered pursuant hereto.
6.4 Notice; Right to Contest. If any claim against which indemnification is
provided hereunder ("Claim") shall be asserted against a person entitled to
indemnification hereunder ("Indemnified Party") in respect to which it proposes
to demand indemnification, the Indemnified Party shall notify the person
obligated to provide indemnification hereunder ("Indemnifying Party") thereof.
Such notice shall specify in detail the nature of and basis for the Claim and
amount thereof. Subject to rights of or duties to any insurer or other third
person having liability therefor, the Indemnifying Party shall have the right
promptly after receipt of such notice to assume the control of the defense,
compromise or settlement of any such Claim, including, at its own expense,
employment of counsel. Notwithstanding the preceding sentence, in the defense,
compromise or settlement of such Claim, the Indemnified Party shall have the
right to retain its own separate counsel, but the fees and expenses of such
counsel shall be at the Indemnified Party's expense unless (a) the Indemnifying
Party has failed within a reasonable time to retain counsel reasonably
satisfactory to the Indemnified Party, or (b) the named party in any such
proceeding (including any impleaded parties) includes both the Indemnified Party
and the Indemnifying Party and representation of both parties by the same
counsel could be inappropriate due to actual or potential differing interests
between them. In any matter described above where the Indemnified Party has
obtained counsel to represent it in addition to counsel obtained by the
<PAGE> 22
Indemnifying Party, counsel selected by the Indemnifying Party shall be required
to cooperate fully with counsel selected by the Indemnified Party in such
matter. So long as the Indemnifying Party is defending in good faith any Claim
for which indemnification is sought, the Indemnifying party shall not be liable
for any Claim settled without its consent, which consent may not be unreasonably
withheld. In the event that a Claim for indemnification is made by an
Indemnified Party, which Claim is unrelated to a third party's claim against the
Indemnified Party, which claim is contested by an Indemnifying Party and such
dispute is finally resolved by a final, nonappealable order of a court of
competent jurisdiction, the losing party shall pay the prevailing party the
reasonable fees and disbursements of counsel incurred in connection with the
prosecution or defense of such Claim.
6.5 Limitation of Peskaitis Indemnification. The indemnity obligations of
Peskaitis set forth in Section 6.2 above shall be limited to the Market Value
(as hereinafter defined) of the shares of Common Stock owned by Peskaitis at the
time a claim for indemnification is made hereunder. For purposes of this
Agreement, the Market Value of the shares of Common Stock owned by Peskaitis and
subject to claims for indemnification shall be determined as follows:
If the Common Stock is publicly traded at the time of determination,
the average of the closing prices for such Common Stock on all domestic
securities exchanges on which such Common Stock may at the time be listed (it
being understood that, for these purposes, the NASDQ National Market is deemed
an "exchange"), in each such case averaged over a period of ten (10) business
days consisting of the day immediately before the day as of which the Market
Value of the Common Stock is being determined and nine (9) consecutive business
days prior to such day (a "business day" being a day that is not a legal holiday
or other day on which banking institutions or any national securities exchanges
are authorized by law or executive order to close), or, if there have been no
sales on any such exchange on any relevant day, the average of the highest bid
and lowest asked prices on all such exchanges at the end of such prior business
day, or if on any relevant day such Common Stock is not so listed, the average
of the representative bid and asked prices quoted on the NASDAQ Small Cap Market
as of 4:00 p.m.,
<PAGE> 23
New York time, on such day in the domestic over-the-counter market as reported
by the National Quotation Bureau, Incorporated, or any similar successor
organization, in each such case averaged over a period of twenty-one (21) days
consisting of the day immediately before the day as of which the Market Value of
the Common Stock is being determined and twenty (20) consecutive business days
prior to such day. To the extent the Common Stock is not then listed or traded
in a public forum or exchange, the Market Value of the Common Stock shall be as
agreed between Peskaitis and Buyer. In the absence of such agreement, Buyer
shall give Peskaitis a written offer of a Market Value (an "Offered Price), and
Peskaitis may demand that the Market Value of such Common Stock shall be
determined by an independent, qualified appraiser selected by Buyer. Such
appraiser must perform such valuation within ten (10) days thereafter (the price
as so determined, the "Appraised Price"). The Market Value shall be deemed to be
the Appraised Price. The costs incurred in connection with performance of such
appraiser shall be borne as follows: (i) if the Appraised Price is equal to or
less than the Offered price, such costs shall be borne by Peskaitis; (ii) if the
Appraised Price is greater than the Offered Price but not more than 110% of the
Offered Price, such costs shall be split equally between Peskaitis and Buyer;
and (iii) if the Appraised Price is more than 110% of the Offered Price, such
costs shall be borne by Buyer.
Peskaitis agrees that he will, within ten (10) business days of the
final determination of the number of shares of Common Stock to which Buyer is
entitled pursuant to this Article VI, deliver to Buyer a certificate or
certificates representing at least such number of shares of Common Stock, with
any required stock transfer stamps attached, duly endorsed for transfer or with
stock powers duly executed in blank attached, in good form for delivery.
6.6 Sole and Exclusive Remedy. Except as otherwise provided in this
Agreement, subsequent to The First Closing, the indemnification obligations of
Buyer and Seller shall constitute the sole and exclusive remedy of the
Indemnified Party.
ARTICLE VII
CLOSING DELIVERIES AND REQUIREMENTS
The following deliveries and conditions shall be made or satisfied prior to
the First Closing
<PAGE> 24
(unless specifically identified below as applicable only to the Second Closing)
and such conditions shall continue to be satisfied as of the Second Closing
unless waived in writing or subject to a post-Closing agreement:
7.1 Conditions Precedent to Buyer's Obligation to Close. Buyer's
obligations to consummate the transactions hereunder are subject to the
satisfaction of the following conditions, compliance with which or the
occurrence of which may be waived in writing, in whole or in part, by Buyer
prior to the First Closing and/or the Second Closing, as the case may be.
(a) As of each of the First Closing Date and the Second Closing Date
(i) all of the representations and warranties made by Peskaitis and the Company
herein and in any Schedule or Exhibit hereto shall, in all material respects, be
true and correct, (ii) all of the obligations of Peskaitis and the Company to be
performed on or before the First Closing Date and/or the Second Closing Date, as
the case may be, shall have been performed, and (iii) Buyer shall have received
a certificate from each of Peskaitis and the Company, dated as of the First
Closing Date and the Second Closing Date, as the case may be, as to the effect
of the matters listed in subsections (i) and (ii) hereof.
(b) Peskaitis and the Company, as the case may be, shall have executed
and delivered to Buyer each of the agreements, certificates and other documents
to be delivered to Buyer pursuant to Section 7.3 hereof.
(c) All registrations, filings, applications, notices, transfers,
consents, approvals, orders, qualifications, waivers and other actions listed on
the Schedules hereto or otherwise required of any persons or governmental
authorities or private agencies in connection with the consummation of the
transactions contemplated this Agreement shall have been made or obtained and
all applicable waiting periods shall have expired or been terminated.
(d) As of the First Closing Date and Second Closing Date,
respectively, Lexon shall have provided Buyer with evidence, satisfactory to
Buyer, that that certain Cooperative Research and Development Agreement, dated
March 26, 1999, by and between Chicago Map Corporation (a wholly owned
subsidiary of the Company) and the National Mapping Division of
<PAGE> 25
the United States Geological Survey shall remain in full force and effect
following the consummation of the transactions contemplated hereby.
(e) Effective simultaneous with the First Closing, Steven J. Peskaitis
shall resign as the President and Chief Executive Officer of the Company and the
Company's Board of Directors (the "Board") shall take each of the following
actions:
(i) The Board shall amend Article 2, Section 2.2 of the Company's
By-laws to provide that the number of directors that shall
constitute the whole Board shall be 7;
(ii) The Board shall appoint Anthony J. Perino, Peter J. Haleas
and Jerome A. Wolowicki as directors of the Company;
(iii) The Board shall elect Anthony J. Perino as Chairman of the
Board and Chief Executive Officer of the Company.
(f) As of each of the First Closing Date and the Second Closing Date,
no action, suit or proceeding shall have been instituted or threatened by any
person or entity, or by any governmental agency or body, before a court or
governmental body, to restrain or prevent the consummation of the transactions
contemplated by, or the performance by the parties hereto of their respective
obligations under this Agreement or which seeks other relief with respect to any
of such transactions or which could reasonably be expected to have a materially
adverse effect on the business, results of operations, assets, financial
condition or prospects of the Company.
(g) Buyer's obligation to purchase the Second Closing Company Shares
shall be subject to the additional condition that the Company shall have entered
into or, to the extent already existing, amended, if necessary, employment
agreements with the Company's key employees (the identity of such key employees
to be identified by Buyer in the exercise of its reasonable discretion) on terms
and conditions reasonably acceptable to Buyer.
7.2 Conditions Precedent to Sellers' Obligation to Close. The Sellers'
obligations to consummate the transactions hereunder are subject to the
satisfaction of the following conditions, compliance with which or the
occurrence of which may be waived in writing, in whole or in part, by the
Sellers prior to the First Closing and/or Second Closing, as the case may be,
provided,
<PAGE> 26
however, that no waiver of any condition contained within this Section 7.2 shall
be effective unless duly authorized, executed and delivered by both Peskaitis
and Lexon.
(a) As of the First Closing Date and the Second Closing Date (i) all
of the representations and warranties made by Buyer herein and in any Schedule
or Exhibit hereto shall, in all material respects, be true and correct, (ii) all
of the obligations of Buyer to be performed on or before the First Closing Date
and/or the Second Closing Date, as the case may be, shall have been performed
and (iii) each of the Sellers shall have received a certificate from Buyer,
dated as of the First Closing Date and the Second Closing Date, as the case may
be, as to the effect of the matters listed in subsections (i) and (ii) hereof.
(b) Buyer shall have executed and delivered to the Sellers each of the
agreements, certificates and other documents to be delivered to the Sellers
pursuant to Section 7.4 hereof.
(c) As of each of the First Closing Date and the Second Closing Date,
no action, suit or proceeding shall have been instituted or threatened by any
person or entity, or any governmental agency or body, before a court or
governmental body, to restrain or prevent the consummation of the transactions
contemplated by, or the performance by the parties hereto of their obligations
under, this Agreement.
(d) Peskaitis' obligation to sell the Second Closing Peskaitis Shares
shall be subject to the additional condition that no Qualified Offering shall
have occurred on or prior to the Closing Date. For purposes of this Agreement,
the terms "Qualified Offering" shall mean the sale by the Company of Common
Stock or securities convertible into Common Stock in a single transaction or
series of related transactions consummated on or before February 21, 2000 and in
which the Company receives net proceeds of at least $10,000,000.
7.3 Closing Deliveries of The Company and the Sellers. Peskaitis or the
Company, as the case may be, shall deliver, or cause to be delivered, the
following documents:
(a) At the First Closing:
(i) Peskaitis shall deliver to Buyer
certificates representing the First
<PAGE> 27
Closing Peskaitis Shares, with any required
stock transfer stamps affixed, duly endorsed
for transfer or with stock powers duly
executed in blank attached, in good form for
delivery;
(ii) The Company shall deliver to Buyer
certificates representing the First Closing
Company Shares, with any required stock
transfer stamps affixed, duly endorsed for
transfer or with stock powers duly executed
in blank attached, in good form for
delivery;
(iii) Peskaitis shall deliver to "Anthony Perino,
as Voting Trustee under Voting Trust
Agreement dated February 9, 2000"
certificates representing the SJP
Contributed Stock (as that term is defined
in the Voting Trust Agreement attached
hereto as Exhibit A (the "Voting Trust
Agreement'), with any required stock
transfer stamps affixed, duly endorsed for
transfer or with stock powers duly executed
in blank attached, in good form for
delivery;
(iv) Stanley Peskaitis shall deliver to "Anthony
Perino, As Voting Trustee under Voting Trust
Agreement dated February 9, 2000"
certificates representing the SP Contributed
Stock (as that term is defined in the Voting
Trust Agreement) with any required stock
transfer stamps affixed, duly endorsed for
transfer or with stock powers duly executed
in blank attached, in good form for
delivery;
(v) Each of Peskaitis and Stanley Peskaitis
shall execute and deliver to the Voting
Trustee (as that term is defined in the
Voting Trust Agreement) the Voting Trust
Agreement;
(vi) The Company shall execute and deliver to
Buyer the Common Stock Purchase Warrants
attached hereto as Exhibit C, Exhibt D and
Exhibit E (the "Warrants");
(vii) The Company shall execute and deliver to
Buyer the Registration
<PAGE> 28
Rights Agreement attached hereto as Exhibit
B (the "Registration Rights Agreement");
(viii) The Company shall deliver to Buyer the
Company's Articles of Incorporation, as
amended to the First Closing Date, certified
by the Secretary of State of the State of
Delaware, the Company's By- laws, as amended
to the First Closing Date, certified by the
Company's secretary, resolutions of the
Board (a) authorizing the execution and
delivery of this Agreement and each of the
other agreements, instruments, certificates
and other documents to be
delivered by the Company pursuant hereto and
(b) taking those actions specified in
Section 7.1(a) hereof, certified by the
Company's secretary, and good standing
certificates from the States of Delaware and
Illinois;
(ix) Peskaitis shall deliver to the Company his
resignation as President and Chief Executive
Officer of the Company, effective as of the
First Closing Date;
(x) Thomas Rieck shall deliver his resignation
as a director of the Company, effective as
of the First Closing Date;
(xi) Peskaitis shall deliver to Buyer the
certificate identified in Section 7.1
(a)(iii) hereof; and
(xii) The Company shall deliver to Buyer the
certificate identified in Section
7.1(a)(iii) hereof.
(b) At the Second Closing:
(i) Peskaitis shall deliver to Buyer
certificates representing the Second Closing
Peskaitis Shares, with any required stock
transfer stamps affixed, duly endorsed for
transfer or with stock powers duly executed
in blank attached, in good form for
delivery;
<PAGE> 29
(ii) The Company shall deliver to Buyer
certificates representing the Second Closing
Company Shares, with any required stock
transfer stamps affixed, duly endorsed for
transfer or with stock powers duly executed
in blank attached, in good form for
delivery;
(iii) Peskaitis shall deliver to Buyer the
certificate identified in Section
7.1(a)(iii) hereof; and
(iv) The Company shall deliver to Buyer the
certificate identified in
Section 7.1(a)(iii).
7.4 Closing Deliveries of Buyer. Buyer shall deliver, or cause to be
delivered, the following:
(a) At the First Closing:
(i) Buyer shall deliver the First Closing
Company Payment to the Company in accordance
with the terms of Section 3.1(a) hereof;
(ii) Buyer shall deliver the First Closing
Peskaitis Payment to Peskaitis
in accordance with the terms of
Section 3.1(b) hereof;
(iii) The Voting Trustee shall execute and deliver
the Voting Trust Agreement to each of
Peskaitis and Stanley Peskaitis;
(iv) Buyer shall execute and deliver the
Registration Rights Agreement to the
Company; and
(v) Buyer shall deliver the certificate
identified in Section 7.2(a)(iii)
hereof to each of Peskaitis and the Company.
(b) At the Second Closing:
(i) Buyer shall deliver the Second Closing
Company Payment to the Company in accordance
with the terms of Section 3.1(c) hereof;
(ii) Buyer shall deliver the Second Closing
Peskaitis Payment to Peskaitis in accordance
with the terms of Section 3.1(d) hereof; and
(iii) Buyer shall deliver the certificate
identified in Section 7.1(a)(iii)
<PAGE> 30
hereof to each of Peskaitis and the Company.
ARTICLE VIII
MISCELLANEOUS
8.1 Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void, or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such which may be hereafter declared invalid, void or unenforceable.
8.2 Entire Agreement. This Agreement (including the documents attached as
Exhibits and Schedules hereto) contains the entire understanding of the parties
with respect to the trans actions contemplated hereby.
8.3 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement.
8.4 Notices. All notices to be given with respect to this Agreement shall
be in writing. Each notice shall be sent by registered or certified mail,
postage prepaid and return receipt requested, to the party to be notified at the
address set forth below, or at such other address as either party may from time
to time designate in writing. Every notice shall be deemed to have been given
five (5) days after it shall be deposited in the United States mail in the
manner prescribed herein. Nothing contained herein shall be construed to
preclude personal service of any notice in the manner prescribed for personal
service of a summons or other legal process.
If to Peskaitis:
LEXON Technologies Inc.
1401 Brook Drive
Downer's Grove, Illinois 60515
If to the Company:
<PAGE> 31
LEXON Technologies Inc.
1401 Brook Drive
Downer's Grove, Illinois 60515
Attn: Chief Executive Officer
If to Buyer
Anthony Perino
720 Plainfield Road
Suite 200
Willowbrook, Illinois 60521
or to such other address as any party may, from time to time, designate in a
written notice given in a like manner.
8.5 Amendments. This Agreement may not be waived, changed, modified or
discharged orally, but only by an agreement in writing signed by the party or
parties against whom enforcement of any waiver, change, modification or
discharge is sought or by parties with the right to consent to such waiver,
change, modification or discharge on behalf of such party.
8.6 Cooperation. Buyer and Sellers agree to take, or cause to be taken, all
such further or other actions as shall reasonably be necessary to make effective
and consummate the transactions contemplated by this Agreement (including the
documents attached as Exhibits hereto).
8.7 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Illinois without regard to
its conflicts of law doctrine.
8.8 Expenses. Each of the parties hereto shall pay its own expenses
incurred in connection with the authorization, preparation and performance of
this Agreement and obtaining any necessary regulatory approvals, including,
without limitation, all fees and expenses of their respective counsel,
accountants, agents and representatives.
8.9 Exhibits and Schedules. All Exhibits and Schedules to this Agreement
are incorporated into this Agreement as if set out in full at the first place in
this Agreement that reference is made thereto.
<PAGE> 32
IN WITNESS WHEREOF, the parties hereto have executed, or caused their duly
authorized representatives to execute, this Agreement as of the day and year
first above written.
LEXON TECHNOLOGIES INC.
By: /s/ Steven J. Peskaitis
-------------------------------------------
Its: President
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STEVEN J. PESKAITIS
/s/ Steven J. Peskaitis
-------------------------------------------
ANTHONY PERINO
/s/ Anthony Perino
-------------------------------------------
