SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO 13d-1(a)
AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a)
(Amendment No. ___)1
Advanced Oxygen Technologies, Inc.
----------------------------------
(Name of Issuer)
Common Stock, par value $.001 per share
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(Title of Class of Securities)
007548-10-3
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(CUSIP Number)
Robert E. Wolfe
c/o Crossfield, Inc., Suite 1000
230 Park Avenue
New York, NY 10169
(212) 808-3061
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
December 18, 1997
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]
Note. Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
(Continued on following pages)
Page 1 of 14 Pages
The Exhibit Index appears on page ___
1 The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE>
SCHEDULE 13D
CUSIP No. 007548-10-3 Page 2 of 14 Pages
- --------------------------------------------------------------------------------
1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Eastern Star, Ltd.
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2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
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3) SEC USE ONLY
- --------------------------------------------------------------------------------
4) SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION
Bahamas
- --------------------------------------------------------------------------------
NUMBER 7) SOLE VOTING POWER
OF 5,937,500
SHARES ---------------------------------------------------------
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY -0-
EACH ---------------------------------------------------------
REPORTING 9) SOLE DISPOSITIVE POWER
PERSON 5,937,500
WITH ---------------------------------------------------------
10) SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,937,500
- --------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.0%
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14) TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 007548-10-3 Page 3 of 14 Pages
- --------------------------------------------------------------------------------
1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Crossland, Ltd. (Belize)
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2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
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3) SEC USE ONLY
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4) SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
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6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
NUMBER 7) SOLE VOTING POWER
OF 6,312,500
SHARES ---------------------------------------------------------
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY -0-
EACH ---------------------------------------------------------
REPORTING 9) SOLE DISPOSITIVE POWER
PERSON 6,312,500
WITH ---------------------------------------------------------
10) SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,312,500
- --------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
- --------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
21.3%
- --------------------------------------------------------------------------------
14) TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 007548-10-3 Page 4 of 14 Pages
- --------------------------------------------------------------------------------
1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Robert E. Wolfe
- --------------------------------------------------------------------------------
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3) SEC USE ONLY
- --------------------------------------------------------------------------------
4) SOURCE OF FUNDS*
PF
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5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION
USA
- --------------------------------------------------------------------------------
NUMBER 7) SOLE VOTING POWER
OF 50,000
SHARES ---------------------------------------------------------
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY -0-
EACH ---------------------------------------------------------
REPORTING 9) SOLE DISPOSITIVE POWER
PERSON 50,000
WITH ---------------------------------------------------------
10) SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
50,000
- --------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.2%
- --------------------------------------------------------------------------------
14) TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 0007548-10-3 Page 5 of 14 Pages
- --------------------------------------------------------------------------------
1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Triton International, Ltd.
- --------------------------------------------------------------------------------
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3) SEC USE ONLY
- --------------------------------------------------------------------------------
4) SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION
Bahamas
- --------------------------------------------------------------------------------
NUMBER 7) SOLE VOTING POWER
OF 375,000
SHARES ---------------------------------------------------------
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY -0-
EACH ---------------------------------------------------------
REPORTING 9) SOLE DISPOSITIVE POWER
PERSON 375,000
WITH ---------------------------------------------------------
10) SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
375,000
- --------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
- --------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.3%
- --------------------------------------------------------------------------------
14) TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 0007548-10-3 Page 6 of 14 Pages
- --------------------------------------------------------------------------------
1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Coastal Oil, Ltd.
- --------------------------------------------------------------------------------
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3) SEC USE ONLY
- --------------------------------------------------------------------------------
4) SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION
Belize
- --------------------------------------------------------------------------------
NUMBER 7) SOLE VOTING POWER
OF 5,937,500
SHARES ---------------------------------------------------------
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY -0-
EACH ---------------------------------------------------------
REPORTING 9) SOLE DISPOSITIVE POWER
PERSON 5,937,500
WITH ---------------------------------------------------------
10) SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,937,500
- --------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
- --------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.0%
- --------------------------------------------------------------------------------
14) TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 0007548-10-3 Page 7 of 14 Pages
- --------------------------------------------------------------------------------
1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Crossland, Ltd.
- --------------------------------------------------------------------------------
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3) SEC USE ONLY
- --------------------------------------------------------------------------------
4) SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION
Bahamas
- --------------------------------------------------------------------------------
NUMBER 7) SOLE VOTING POWER
OF 5,937,500
SHARES ---------------------------------------------------------
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY -0-
EACH ---------------------------------------------------------
REPORTING 9) SOLE DISPOSITIVE POWER
PERSON 5,937,500
WITH ---------------------------------------------------------
10) SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,937,500
- --------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
- --------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.03%
- --------------------------------------------------------------------------------
14) TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
ITEM 1. SECURITY AND ISSUER
This statement on Schedule 13D ("Statement") relates to the common stock,
par value $0.01, of Advanced Oxygen Technologies, Inc. ("AOXY"). The principal
executive offices are located at the following address: c/o Crossfield, Inc.,
230 Park Avenue, Suite 1000, New York, NY 10169.
ITEM 2. IDENTITY AND BACKGROUND
This Statement is filed jointly by (a) Crossland, Ltd. (Belize) ("CLB"),
(b) Coastal Oil, Ltd. ("Coastal"), (c) Crossland, Ltd. ("Crossland"), (d)
Eastern Star, Ltd. ("Eastern"), (e) Triton International, Ltd. ("Triton"), and
(f) Robert E. Wolfe ("Wolfe") (collectively the "Reporting Persons").
CLB is a Belize corporation, and has its principal place of business and
corporate office located at 60 Market Square, P.O. Box 364, Belize City, Belize,
Central America. The principal business of CLB invests in corporate securities
and real estate development projects. The President and Secretary of CLB is Mr.
Anthony J. R. Howorth. Mr. Howorth is a Bahamian citizen whose primary
occupation is President of Euro-Caribbean Ltd., and whose business address is
104b Saffrey Square, Nassau, Bahamas.
Coastal is a Belize corporation, and has its principal place of business
and corporate office located at 40 Santa Rita Road, Corazel, Belize, Central
America. The principal business of Coastal is investment in petroleum projects,
agricultural commodities, and corporate securities. The President of Coastal is
Dr. Margaret Noguera, who is a Belize citizen whose primary occupation is a
medical doctor, and whose business address is 40 Santa Rita Road, Corazel,
Belize, Central America.
Crossland is a Bahamas corporation, and has its principal place of business
and corporate office located at 104B Saffrey Square, Bank Lane and Bay Street,
Box N-1612, Nassau, Bahamas. The principal business of Crossland is investment
in corporate securities and project financing. The President and Vice President
of Crossland is L. H. Osterlolt. Mr. Osterlolt is a Bahamian citizen whose
primary occupation is director of Bahamas Company Services, Ltd., and whose
business address is 104B Saffrey Square, Nassau Bahamas.
Eastern is a Bahamas corporation, and has its principal place of business
and corporate office located at 104B Saffrey Square, Bank Lane and Bay Street,
Box N-1612, Nassau, Bahamas. The principal business of Eastern is investment in
corporate securities and real estate development projects. The President and
Vice President of Eastern is Robert A. Montgomery. Mr. Montgomery is a Bahamian
citizen whose primary occupation is corporate consulting, and whose business
address is 104B Saffrey Square, Nassau Bahamas.
Triton is a Bahamas corporation, and has its principal place of business
and corporate office located at Euro-Canadian House, Marlboro Street, Nassau,
Bahamas. The principal business of Triton is investment in corporate securities
and project financing . The executive officers of Triton are Sidney Morris,
President, and Jens S. Olsen is a Director. Mr. Morris is a
-8-
<PAGE>
Bahamian citizen whose primary address is Eurocanadian House, Marlboro St,
Nassau Bahamas. Mr. Morris is a consultant. Mr. Olsen is a Danish citizen whose
primary occupation is corporate consulting, and whose business address is
Lunderskovvej 15, 6640, Lunderskov, Denmark
Wolfe is a U.S. citizen, whose business address is c/o Crossfield, Inc.,
230 Park Avenue, Suite 1000, New York, NY 10169, and whose primary occupation is
President of Crossfield, Inc., company providing strategic business consulting.
He is also the President of AOXY since the commons stock acquisitions reported
in this Statement.
During the past five years, none of the persons named in this Item 2 has
been convicted in a criminal proceeding or subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to federal or state securities laws, or finding any
violations with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Common stock of AOXY was purchased on December 18, 1997 by the following
persons pursuant to the Stock Acquisition Agreement (Exhibit A) and the Purchase
Agreement (Exhibit B) as follows:
# of Shares Price Paid How Paid
Wolfe 50,000 $645 cash
Triton 375,000 $4,687.50 cash
CLB 1,500,000 $15,000 cash
375,000 $4,687.50 cash
4,437,500 $44,375 services
Crossland 1,500,000 $15,000 cash
4,437,500 $44,375 services
Coastal 1,500,000 $15,000 cash
4,437,500 $44,375 services
Eastern 1,500,000 $15,000 cash
4,437,500 $44,375 services
--------- -------
Total 24,550,000 $247,500
No part of the purchase price was represented by funds borrowed or
otherwise obtained for the purpose of acquiring, holding, trading or voting such
securities. Services rendered consisted of introductions to a certain number of
potential acquisition candidates.
ITEM 4. PURPOSE OF TRANSACTION.
There are no specific plans at the present time that relate to or would
result in any of the actions enumerated in Item 4 of Schedule 13D, although
there have been and continue to be discussions with several acquisition
candidates, sellers of assets and merger targets. In the normal course of
business, there may be in the future an acquisition, merger, purchase or sale
that would change the above conditions. The Reporting Persons reserve the right
to buy or sell securities of AOXY from time to time in open market or private
transactions.
-9-
<PAGE>
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) and (b) The following is the amount of common stock of AOXY
beneficially owned by the Reporting Persons:
# of Shares % of Common Stock
Robert E. Wolfe 50,000 0.17 %
Triton-International, Ltd. 375,000 1.26%
Crossland, Ltd. (Belize) 6,312,500 21.30%
Crossland, Ltd. 5,937,500 20.03%
Coastal Oil, Ltd. 5,937,500 20.03%
Eastern Star, Ltd. 5,937,500 20.03%
--------- ------
Total 24,550,000 82.83%
(b) Each of the persons above has sole power to vote and sole power to
dispose of the shares of AOXY listed opposite their name. The following persons
may be deemed to be indirect beneficial owners of the stock indicated by virtue
of the relationships described.
Margaret Noguera
Jens S. Olsen
Anthony JR Howorth
Sidney Morris
Robert Montgomery
LH Osterlolt
Each of the Reporting Persons hereby disclaims that it has any beneficial
ownership in the stock owned, directly or indirectly by any other entity.
(c) Except as set forth above, there has been no transaction by the
Reporting Persons in the common stock of Advanced Oxygen Technologies, Inc.
(d) Except as set forth above, no other person is known to have the right
to receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, the common stock of AOXY set forth in Item 5(a).
(e) Not Applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
-10-
<PAGE>
Except to the extent described in Items 2 and 5, none of the persons
identified in Items 2 and 5 is a party to any contract, arrangement,
understanding or relationship with respect to any securities of AOXY.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
EXHIBIT A: The Stock Acquisition Agreement dated as of December as of 18, 1997
EXHIBIT B: Purchase Agreement dated as of December 18, 1997
-11-
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of his or her knowledge and
belief, each of the undersigned certifies that the information set forth in this
Statement is true, complete and correct.
Dated: January 16, 1998
CROSSLAND, LTD. (Belize)
By: /s/ L.H. Osterlolt
Title: Vice President
Dated: January 16, 1998
CROSSLAND, LTD.
By: /s/ Anthony J.R. Howorth
Title: President
Dated: January 16, 1998
EASTERN STAR, LTD.
By: /s/ Roberta Montgomery
Title: Vice President
Dated: January 16, 1998
COASTAL OIL, LTD.
By: /s/ Dr. M. Noguera
Title: President
-12-
<PAGE>
Dated: January 16, 1998
TRITON INTERNATIONAL, LTD.
By: /s/ Jens S. Olsen
Title: Director
Dated: January 16, 1998
/s/ Robert E. Wolfe
-13-
<PAGE>
EXHIBIT INDEX
EXHIBIT A: The Stock Acquisition Agreement dated as of December as of 18, 1997
EXHIBIT B: Purchase Agreement dated as of December 18, 1997
-14-
<PAGE>
Exhibit A
Execution (iii)
STOCK ACQUISITION AGREEMENT
---------------------------
THIS AGREEMENT made as of the 18 day of December, 1997, (herein,
together with the Schedules attached hereto, referred to as "Agreement") by and
among ADVANCED OXYGEN TECHNOLOGIES, INC., a Delaware corporation, (herein
referred to as "AOXY") and Crossland, Ltd. (Belize), a registered company of
Belize, Eastern Star, Ltd., a Bahamas corporation, Costal Oil, Ltd., a
registered company of Belize, and Crossland Ltd., a Bahamas corporation (each
herein referred to as a "Purchaser" and, collectively, the "Purchasers").
In reliance upon the representations and warranties made herein and in
consideration of the mutual agreements herein contained the parties hereby agree
as follows:
SECTION 1. SALE AND PURCHASE OF STOCK.
1.01 Sale of Stock to Purchasers. (a) AOXY shall at the closing of the
transactions hereinafter provided sell, transfer, assign and deliver to
Purchasers an aggregate of 6,000,000 shares (the "Sale Shares") of the capital
stock of AOXY in the amounts set forth on Schedule 1.01 hereto.
(b) AOXY shall at the closing of the transactions hereinafter
provided sell, transfer, assign and deliver to Purchasers an aggregate of
17,750,000 shares (the "Consulting Shares") of the capital stock of AOXY in the
amounts set forth on Schedule 1.01 hereto. The Sale Shares and the Consulting
Shares are hereinafter referred to collectively as the "Shares."
1.02 Consideration for Stock. (a) In consideration of the sale of the
Sale Shares, Purchasers shall pay to AOXY the aggregate amount of US $60,000.00
(the "Purchase Price") by delivery to Kieffer and Hahn, as attorneys for AOXY,
the Purchase Price in the form of an official bank check or a certified check of
the Purchasers payable to "Kieffer and Hahn, IOLA account which funds shall be
used to pay certain creditors of AOXY.
(b) In consideration of the sale of the Consulting Shares,
Purchasers have previously provided services to AOXY by identifying potential
acquisition candidates.
1.03 Transactions on the Closing Date. (a) Delivery of Shares. At the
Closing, AOXY will deliver to Purchasers irrevocable instructions to the
transfer agent of AOXY for the issuance of stock certificates representing the
Shares; and
(b) Delivery of Consideration. At the Closing, Purchasers will
deliver to AOXY an official bank check or a certified check of the Purchasers in
the amount of the Purchase Price payable to "Kieffer and Hahn, IOLA account."
<PAGE>
(c) Resignations. Resignations of all of the directors and officers of
AOXY other than those designated in writing by Purchasers prior to the Closing
Date to remain on the board or in office; and
(d) Documents. Each of the documents contemplated by this Agreement.
SECTION 2. CLOSING. The Closing will take place at the offices of Kieffer
and Hahn, 111 Broadway, New York, New York 10006, at 10:00 A.M. on the date of
execution and delivery hereof by all of the parties.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF AOXY. AOXY represents and
warrants the following to the Purchasers:
(a) Organization and Standing. (1) AOXY is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware, the State of its incorporation, and is authorized to conduct business
in and is in good standing in each jurisdiction in which the character of the
properties owned by it or the nature of the business transacted by it makes such
license or qualification necessary.
(2) The certified copies heretofore delivered to AOXY, of the
certificate of incorporation, of all licenses to transact business and of the
by-laws of AOXY with all amendments to the date hereof are true, complete and
correct.
(3) AOXY has no subsidiaries.
(b) Capital Stock. (1) The capital stock of AOXY consists of (A) thirty
million (30,000,000) shares of common stock, par value one cent (US $0.01) per
share of which five million six hundred ninety-six thousand two hundred
fifty-two (5,696,252) shares have been validly issued and are fully paid and are
non-assessable and are fully transferable, three hundred fifty four thousand
(354,000) shares which shall be issued upon conversion of 177,000 shares of
preferred stock (172,000 shares of preferred stock shall be converted into
344,000 shares on the date of Closing) and one hundred forty five thousand
(145,000) shares of which shall be issued upon exercise of options and (B) ten
million (10,000,000) shares of preferred stock par value one cent (US $.Ol) per
share of which 177,000 (172,000 shares of preferred stock shall be converted
into 344,000 shares on the date of Closing) shares have been validly issued and
are fully paid and are non- assessable and are fully transferable.
(2) None of the issued and outstanding shares is subject to any
voting trust agreement or other agreement relating to the voting thereof.
(3) None of the authorized but unissued shares of AOXY are subject
to any warrants, obligations, subscriptions, options, convertible securities or
other commitments under
2
<PAGE>
which they are or may be required to be issued.
(4) No transfer tax will be payable with respect to the issuance
of AOXY's stock contemplated hereby.
(c) Stock Issuance. The Shares when issued shall be free and clear of
any encumbrances, liens or restrictions on sale, other than those applicable to
restricted securities as defined under the rules and regulations promulgated by
the Securities and Exchange Commission.
(d) Validity of Agreement Authority. This Agreement has been duly
executed and delivered by AOXY and (assuming valid execution and delivery by
each Purchaser) is a valid and binding obligation, enforceable in accordance
with its terms.
(e) Authority to take Action. (1) The execution and delivery of this
Agreement and delivery of the subject shares and the carrying out of the
provisions hereof will not contravene any provisions of law, any order, judgment
and/or decree of any court or other governmental agency or AOXY's certificate of
incorporation, by-laws, or any indenture, agreement or other instrument to which
a AOXY is a party or by which AOXY may be bound, or by which any property owned
by AOXY may be bound.
(2) All legal actions required to be taken in connection with this
Agreement pursuant to the laws of any State or other governmental authority have
been so taken.
(f) Accounts Receivable. AOXY has no accounts receivable.
(g) Liabilities of AOXY. AOXY has no liabilities or obligations of any
nature, whether accrued, absolute, contingent or otherwise, including, without
limitation, tax liabilities due or to become due, except for (1) approximately
$45,000 of accounts payable, (2) the fees and expenses of counsel in connection
herewith and (3) amounts due and payable to certain of its directors as
evidenced by Promissory Notes issued to such persons and the accrued interest
earned thereon which do not exceed $350,000 in the aggregate which are to be
spun-off to the liquidating trust as set forth in section .
(h) No Dividends or Distributions. Since June 30, 1995, AOXY has not
declared, set aside or paid to its stockholder any dividend or other
distribution in respect of its capital stock or redeemed or purchased or
otherwise acquired any of its capital stock or agreed to take any such action.
(i) Absence of Material Changes or Events. Except for matters publicly
disclosed on (1) AOXY's Proxy Statement in connection with the sale of its
oxygen control technology to W.R. Grace ("Grace") in February 1995; (2) AOXY's
Reports on Form 10-KSB with respect to AOXY's fiscal years ended June 30, 1993,
1994 and 1995 and (3) AOXY's Reports on form 10-Q for the quarters ending
September 30, 1995 and December 31, 1995 and AOXY's 8-K's filed prior
3
<PAGE>
hereto copies of which have been heretofore delivered to Purchasers, since June
30, 1995 there has been no event or condition of any character, materially and
adversely affecting AOXY's financial position, assets, liabilities (contingent
or otherwise), results of operation, business or business prospects, and AOXY
has not:
(1) Incurred any obligation or liability (absolute, accrued,
contingent, or otherwise) except in the ordinary course of business or except in
connection with the performance of this Agreement;
(2) Mortgaged, pledged or subjected to lien, charge or other
encumbrance, any of its assets, tangible or intangible;
(3) Sold or transferred any of its assets or canceled any debts or
claims, or waived any right of substantial value;
(4) Made or committed to make any single capital expenditure in
excess of five hundred dollars ($500.00), or capital expenditures in excess of
one thousand dollars ($ 1,000.00) in the aggregate or purchased or contracted to
purchase any land;
(5) Sustained any damage, destruction or loss of its property in
excess of five hundred dollars ($500.00) whether or not covered by insurance;
(6) Increased the compensation payable or to become payable by
AOXY to any of its officers, employees or agents, or any bonus payment or
arrangement made to or with any of them;
(7) Agreed to modify in any material respect any contract or other
instrument to which AOXY is a party except for the patent purchase agreement
with Grace;
(8) Increased or changed the medical insurance provided for the
benefit of its employees and their families.
(9) Increased or changed the amount of disability insurance
provided for the benefit of its employees;
(10) Entered into any transaction other than in the ordinary
course of business; or
(11) Made any material change in any method of accounting or any
accounting practice.
(j) Title of Property. AOXY has no material assets.
4
<PAGE>
(k) Building-Equipment and Motor Vehicles. AOXY is the owner of no
buildings, equipment or motor vehicles.
(1) Tax Status. ( 1 ) AOXY has heretofore furnished to Purchasers true
and complete copies of all federal, state, local and foreign income tax returns
of AOXY filed for the three (3) years ended June 30, 1995. Said tax returns of
AOXY have not been audited by the applicable taxing authorities. No agreements
made by AOXY for an extension of time for the assessment of any tax are now in
effect. All taxes, including interest and penalties thereon, shown on said tax
returns to be due and payable by AOXY, or required to be withheld by AOXY on or
before the date hereof, have been paid or fully reserved for and withheld and no
formal written claim for any tax, assessment or levy for which AOXY may become
liable exists which has not been settled.
(2) All other taxes, due and payable at the Closing Date, of any
kind whatsoever, including, but not limited to, estimated income tax, franchise
tax, excise tax, doing business tax, payroll tax, personal property tax, use tax
and sales tax have been paid or fully reserved for and withheld.
(m) Status of Contracts. Except as reflected on Schedule 3(m). AOXY is
not a party to any written or oral (i) contract for the employment of any
officer or individual employee, or any pension, profit sharing, bonus,
retirement, stock option or similar incentive or deferred compensation plan or
arrangement in effect with its officers, employees or others; (ii) continuing
contract for the acquisition of real estate or fixed assets; (iii) financing
arrangement involving the mortgaging, pledging or other hypothecation of assets
or involving borrowing which may not be repaid in part or in full on not more
than thirty (30) days' notice with reference to unearned or amortized discount
and without premium or penalty; (iv) contract with any labor union; (v)
continuing contract for the future purchase of materials or supplies; (vi)
contract with any agent, representative or distributor; (vii) any instrument
evidencing or related to indebtedness for borrowed money, or pursuant to which
AOXY is obligated to borrow money; (viii) any contract, arrangement or
understanding under which AOXY has assumed, guaranteed, endorsed, or otherwise
become liable in connection with the obligation of any individual, partnership,
corporation or other entity; (ix) any contract not included in any of the
foregoing which involves payment by AOXY of more than five hundred dollars
($500.00). True and complete copies of all items listed in Schedule 3( , have
been delivered to AOXY. The parties to such instruments have complied with all
the provisions thereof, and they are not in default under any of them.
(n) Status of Leases. AOXY is not a party to any leases except for the
month to month lease of document storage space at Pacific Mini Storage, 1913
Sherman Street, Alameda, California.
(o) Directors and Officers Compensation: Banks. Schedule 3l0) hereto
contains a true an complete list showing (i) the names of all directors and
officers of AOXY; (ii) the names of all persons whose compensation from AOXY for
the period beginning July 1, 1995 and ending March 31, 1996 will equal or exceed
ten thousand dollars ($ 10,000.00) together with a statement of
5
<PAGE>
the full amount paid or payable to each such person for services rendered or to
be rendered in such period and the basis therefor; (iii) the name of each bank
in which AOXY has an account, or safe deposit box, and the names of all persons
authorized to draw thereon, or to have access thereto; (iv) the names of all
persons holding powers of attorney from AOXY, and a summary statement of the
terms thereof; and (v) all credit cards and similar accounts on which AOXY may
be liable.
(p) Status of Insurance. AOXY has no insurance.
(q) Permits and Licenses. AOXY is not required to have permits,
licenses, approvals, and authorization of all federal, state, local and foreign
authorities and is presently not conducting any business.
(r) Litigation. There is no action, suit, proceeding or investigation
pending, or to the knowledge of AOXY threatened, against or affecting AOXY
before any court, arbitrator or administrative or governmental body and AOXY is
not presently subject to or in default in respect of any order, injunction or
decree of any court or government instrumentality.
(s) Compliance with Laws. Except as reflected on Schedule 3(s), AOXY is
not in violation of any law, regulation or ordinance which violation would
materially and adversely affect it or its operations.
(t) Books of Accounts and Other Records. The books of account, and the
minute books, stock certificate books and ledgers of AOXY at the Closing Date
will, in all material respects, be correct and complete and such books of
account and ledgers will fairly present the operations of AOXY in accordance
with generally accepted accounting principles.
(u) Employee Benefit Plans. AOXY is not party to any bonus, incentive
compensation, profit-sharing, pension, retirement, stock purchase, stock option,
deferred compensation, hospitalization, group insurance, death benefit,
disability, collective bargaining and other fringe benefit plans, trust
agreements, arrangements or commitments.
(v) No Directed Selling Efforts in Regard to this Transaction. Neither
AOXY nor any distributor, if any, participating in the offering of the Shares
nor any person acting for AOXY or any such distributor has conducted any
"directed selling efforts" as that term is defined in Regulation S under the
Securities Act of 1933 ("Regulation S"). Such activity includes, without
limitation, the mailing of printed material to investors residing in the United
States, the holding of promotional seminars in the United States, the placement
of advertisements with radio or television stations broadcasting in the United
States or in publications with a general circulation in the United States, which
discuss the offering of the Shares.
(w) No Market Manipulation. AOXY has not taken, and will not take,
directly or indirectly, any action designed to, or that might reasonably be
expected to, cause or result in stabilization or manipulation of the price of
the its stock to facilitate the sale or resale of the Shares
6
<PAGE>
or affect the price at which the Shares are purchasable.
(x) Reporting Company. AOXY is a publicly-held company whose common
stock is (and has been for the past 90 days) registered pursuant to Section
12(g) of the Securities Exchange Act of 1934 (the "1934 Act"). Pursuant to the
provisions of the 1934 Act, AOXY has filed all reports and other materials
required to be filed thereunder with the Securities and Exchange Commission
during the preceding twelve months, except as otherwise disclosed herein and in
the Schedules annexed hereto and made a part hereof.
(y) Offer to Buy. No offer to buy the Shares was made to AOXY by any
person in the United States.
(z) Pre Arranged Transaction. The transactions contemplated by this
Agreement:
(1) have not been pre-arranged with a purchaser who is in the
United States or is a US Person; and
(2) are not part of a plan or scheme to evade the registration
provisions of the Securities Act of 1933 (the "1933 Act").
(aa) Stop Transfer. AOXY has not issued, and provided nothing comes to
AOXY's attention after the closing date that will cause it to believe in good
faith that the issuance of the Shares was in contravention with any United
States law, will not issue, any stop transfer order or other order impeding the
sale and delivery of the Shares, or any underlying shares except for a stop
order restricting the sale of the Shares into the United States or to, or for
the account or benefit of, US Persons during the Restricted Period, as
hereinafter defined.
SECTION 4. "REPRESENTATIONS AND WARRANTIES OF PURCHASERS. Each Purchaser, as
and for itself, severally and not jointly, represents and warrants to AOXY the
following:
(a) Organizing and Standing. (I) Each Purchaser is a corporation duly
organized, validly existing, and in good standing under the laws of the place of
its incorporation.
(2) The copy heretofore delivered to AOXY, of the certificate of
incorporation with all amendments to the date hereof are true, complete and
correct.
(3) Each Purchaser has no subsidiaries, except for those listed on
Schedule 4(a) hereto each of which is duly organized, validly existing, and in
good standing under the laws of the place of its incorporation or organization.
(b) Validity of Agreement Authority. This Agreement has been duly
executed and delivered by the Purchasers and (assuming valid execution and
delivery by the AOXY) is a valid and binding obligation enforceable in
accordance with its terms.
7
<PAGE>
(c) Authority to take Action. (1) The execution and delivery of this
Agreement and delivery of the subject shares and the carrying out of the
provisions hereof will not contravene any provisions of law, any order, judgment
and/or decree of any court or other governmental agency or each Purchaser's
certificate of incorporation or charter, by-laws or any indenture, agreement or
other instrument to which such Purchaser is a party or by which it may be bound,
or by which any property owned by it may be bound.
(2) All corporate and legal actions required to be taken in
connection with this Agreement pursuant to the laws of any State or other
governmental authority have been so taken.
(d) Compliance with Laws. No Purchaser has received notice of any
violation of any law, regulation or ordinance which violation would materially
and adversely affect it or its operations.
(e) Consents. No Purchaser requires consent, approval, registration,
qualification or filing with any United States federal, state or local
government authority or any foreign government authority in connection with such
Purchaser's execution of this Agreement or consummation of the transactions
contemplated hereby, other than the required filings with the United States
Securities and Exchange Commission.
(f) Information on Company. The Purchasers have been furnished with and
have read AOXY's registration statement on Form S-1 declared effective by the
Securities and Exchange Commission on July 7, 1993, and all of its Forms 10-Q
and 8-K reports filed subsequent thereto, (collectively, with exhibits thereto,
hereinafter referred to as the "Reports"). In addition, the Purchasers have
received from AOXY such other information concerning its operations, financial
condition and other matters as the Purchasers have requested, and considered all
factors the Purchasers deem material in deciding on the advisability of
investing in the Shares (such information in writing is collectively, the "Other
Written Information").
(g) Information on Purchasers. Each Purchaser is experienced in
investments and business matters, has made investments of a speculative nature
and with its representatives, has such knowledge and experience in financial,
tax and other business matters as to enable such Purchaser to utilize the
information made available by AOXY to evaluate the merits and risks of and to
make an informed investment decision with respect to the proposed purchase. Each
Purchaser has the authority and is duly and legally qualified to purchase and
own the Shares.
(h) Site and Condition of Sale. Each Purchaser is not a US Person (as
that term is defined in Exhibit A attached hereto). Each Purchaser acknowledges
that AOXY has not solicited this offer to purchase the Shares within the United
States and that the sale of the Note and conversion into the Shares will not
take place within the United States (for this purpose, the "United States" means
the Unites States of America, its territories and possessions, and any state of
the United States and the District of Columbia). Each Purchaser also
acknowledges that the Shares have not been registered under the laws of any
other country or jurisdiction and that AOXY takes no responsibility
8
<PAGE>
for complying with any such laws.
(i) Investment Intent. Each Purchaser is subscribing for the Shares for
its own account and benefit and not as a nominee or for the account of any other
person or entity. Each Purchaser has no present intention of selling or
distributing the Shares or any part thereof except for a sale in accordance with
Regulation S, if available. Each Purchaser has sufficient financial resources to
hold the Shares for an indefinite period of time.
(j) No Market Manipulation Short Sales. Each Purchaser has not taken,
and will not take, directly or indirectly, any action designed to, or that might
reasonably be expected to, cause or result in a manipulation of the price of
AOXY Shares (including making, or causing to be made, any short sales of AOXY's
common stock) in order to facilitate the sale or resale of AOXY Shares or affect
the price at which such shares are purchasable upon conversion of the Note.
(k) No Offer in United States. No offer to buy the Shares was made to
AOXY by any Purchaser in the United States.
(1) No Pre-Arranged Transaction. The transactions contemplated by this
Agreement with respect to the sale of the Shares to the Purchasers:
(1) have not been pre-arranged with a purchaser who is in the
United States or is a US Person; and
(2) are not part of a plan or scheme to evade the registration
provisions of the Securities and Exchange Act of I933 (the "Act").
(m) No Directed Selling Efforts in Regard to this Transaction. To the
best knowledge of each Purchaser with respect to the sale of the Shares to such
Purchaser, neither AOXY nor any distributor, if any, participating in the
offering of the Shares nor any person acting for AOXY or any such distributor
has conducted any "directed selling efforts" as that term is defined in
Regulation S. Such activity includes, without limitation, the mailing of printed
material to investors residing in the United States, the holding of promotional
seminars in the United States, the placement of advertisements with radio or
television stations broadcasting in the United States or in publications with a
general circulation in the United States, which discuss the offering of the
Shares.
(n) To Other Representations. Except as set forth in this Agreement, no
representations or warranties, oral or otherwise, have been made to Purchasers,
including without limitation, any representations concerning the future
prospects of AOXY, by AOXY, by any agent of AOXY, any employees or affiliates of
AOXY or by any other person whether or not associated with this transaction and
in entering into this transaction Purchasers are not relying upon any
information.
9
<PAGE>
SECTION 5. REGULATION S OFFERING. The sale of Shares hereby is being made
pursuant to Rule 903(c)(2) of the Regulation S, and is intended to comply with
the provisions of Regulation S. The Shares have not been and will not be
registered under the 1933 Act or under the securities laws of any state or
jurisdiction of the United States ("State Laws").
SECTION 6. Transfer of Securities. The Shares may not be transferred or
resold to any US Person until the 41st day from the date a Purchaser purchases
the Shares (the "Restricted Period") and then only in accordance with the 1933
Act and applicable, State Laws. Each Purchaser agrees that it is solely
responsible for compliance therewith with respect to any such transfer or
resale.
SECTION 7. CONDITIONS PRECEDENT TO PURCHASERS' OBLIGATION TO COMPLETE THE
TRANSACTION. The obligation of each Purchaser to consummate the transactions
described in Section 1 hereof is subject to the fulfillment of each of the
following conditions prior to or at the Closing:
(a) Delivery of Shares. Purchasers shall have received delivery of the
Shares as contemplated herein.
(b) Spin-off AOXY shall have spun-off good and marketable title to its
rights to royalties from W. R. Grace (its only material asset) and certain
liabilities including only amounts due to former employees as a result of the
receipt of the royalties and notes payable to certain directors in the aggregate
principal amount of $275,000 plus the interest earned thereon.
(c) Other Creditors. AOXY shall have achieved settlement in an amount
and on terms reasonably satisfactory to Purchasers of all of the liabilities of
AOXY, including, without limitation, all accounts payable, if any, and other
accrued expenses, if any.
(d) Resignation of Directors and Officers. Upon appointment of
directors chosen by Purchasers to fill the existing vacancies on the board of
directors of AOXY, all directors and officers not so chosen by Purchasers shall
have tendered to AOXY their resignations as directors and/or officers of AOXY.
(e) Conversion of Preferred Stock. All of the issued and outstanding
preferred stock of AOXY shall have been converted to common stock of AOXY except
for 5,000 shares.
(f)Representations and Warranties of AOXY. The representations and
warranties made by AOXY herein shall be true and correct in all material
respects.
(g) No Actions or Proceeding. No action or proceeding shall be pending
or threatened on the Closing Date wherein an unfavorable judgment, decree or
order would prevent or make unlawful the carrying out of this Agreement or would
cause the transaction contemplated by this Agreement to be rescinded or would
require a Purchaser to divest itself of the shares to be acquired.
10
<PAGE>
It is understood that the certificates evidencing the Shares sold
pursuant hereto may bear legends in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN OFFERED
AND SOLD IN AN "OFFSHORE TRANSACTION" IN RELIANCE UPON
REGULATION S AS PROMULGATED BY THE SECURITIES AND EXCHANGE
COMMISSION. ACCORDINGLY, THE SHARES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT") AND MAY NOT BE OFFERED
FOR SALE, SOLD OR OTHERWISE TRANSFERRED IN THE UNITED STATES
OR TO A "US PERSON" (AS DEFINED UNDER REGULATION S) EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE
SATISFACTION OF THE COMPANY.
SECTION 8. CONDITIONS PRECEDENT TO AOXY'S OBLIGATIONS TO COMPLETE THE
TRANSACTION. The obligation of AOXY to consummate the transactions described m
Section 1 hereof is subject to the fulfillment of each of the following
conditions prior to or at the Closing:
(a) Purchase Price. AOXY shall have received the Purchase Price as
contemplated herein.
(b) Spin-off AOXY shall have spun-off good and marketable title to its
rights to royalties from W. R. Grace (its only material asset) and certain
liabilities including only amounts due to former employees as a result of the
receipt of the royalties and notes payable to certain directors in the aggregate
principal amount of $275,000 plus the interest earned thereon.
(c) Management Services Agreement. Within 30 days of the date hereof,
Purchasers, or their duly appointed agent, shall enter into a management
services agreement for a period of one year on terms and conditions acceptable
to AOXY.
(d) presentations and Warranties of Purchasers. The representations and
warranties made by the Purchasers herein shall be true and correct in all
material respects.
(e) No actions or proceedings. No action or proceeding shall be pending
or threatened on the Closing Date wherein an unfavorable judgment, decree or
order would prevent or make unlawful the carrying out of this Agreement or would
cause the transaction contemplated by this Agreement to be rescinded.
SECTION 9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
11
<PAGE>
representations and warranties contained herein or made in writing by the
parties in connection with the transactions contemplated hereby shall survive
the execution and delivery of this Agreement and the closing of the transactions
contemplated by this Agreement, regardless of any investigation made by or on
behalf of the parties or any payment for and acceptance of stock hereunder. All
statements contained in any certificate, list, letter or other instrument
delivered by or on behalf of the parties pursuant hereto or in connection with
the transactions contemplated hereby (including statements, letters or
certificates of independent parties such as public accountants or attorneys)
shall constitute representations and warranties by the parties hereunder.
SECTION 10. Indemnification. (a) Of AOXY. Each Purchaser agrees to defend,
indemnify and hold harmless AOXY, its current officers, directors and
stockholders against and in respect of (i) any and all losses, liabilities,
damages, deficiencies, costs or expenses (including, without limitation
reasonable attorneys fees and disbursements) resulting from (A) the breach of
any covenant, warranty or agreement hereunder by such Purchaser or (B) any
representations made by such Purchaser in this Agreement, not being complete and
correct or being false and misleading or containing any material misstatement of
fact or omitting any material fact required to be stated to make the statements
therein not misleading; and (ii) any and all actions, suits, proceeding, claims,
demands, assessments, judgments, costs and expenses (including, without
limitation, reasonable attorneys fees and disbursements) incident to any of the
foregoing; provided, however, that if any such action, suit or proceeding shall
be asserted against AOXY, its current officers, directors and stockholders in
respect of which AOXY, its current officers, directors and/or stockholders
propose to demand indemnification, the Purchaser or Purchasers from whom
indemnification is demanded, shall be promptly notified to that effect and shall
have the right to assume the control of the defense, compromise or settlement
thereof, including, at its or their own expense, employment of counsel
reasonably acceptable to the person against whom such indemnification is sought.
(b) Of Purchasers. AOXY agrees to defend, indemnify and hold harmless
each Purchaser, its officers, directors and stockholders, against and in respect
of (i) any and all losses, liabilities, damages, deficiencies, costs or expenses
(including, without limitation reasonable attorneys fees and disbursements)
resulting from (A) the breach of any covenant, warranty or agreement hereunder
by AOXY or (B) any representations made by AOXY in this Agreement, not being
complete and correct or being false and misleading or containing any material
misstatement of fact or omitting any material fact required to be stated to make
the statements therein not misleading; and (ii) any and all actions, suits,
proceeding, claims, demands, assessments, judgments, costs and expenses
(including, without limitation, reasonable attorneys fees and disbursements)
incident to any of the foregoing; provided, however, that if any such action,
suit or proceeding shall be asserted against a Purchaser in respect of which
such Purchaser, its officers, directors and/or stockholders, proposes to demand
indemnification, AOXY shall be promptly notified to that effect and AOXY shall
have the right to assume the control of the defense, compromise or settlement
thereof, including, at their own expense, employment of counsel reasonably
acceptable to such Purchaser.
(c) Payment. Any indemnification payments required pursuant to Section
10(a) and
12
<PAGE>
10(b) hereof shall be paid in FULL within ten (10) days after receipt of notice
specifying (i) the amount required to be paid and (ii) the nature of the event
or events giving rise to indemnification hereunder.
(d) Liability. The liability of the parties under this Section 10 shall
be without limitation, and the failure of either of them to withhold amounts
from any payments shall not act as a waiver of or diminish the obligations of
parties under this Section 10.
(e) Interest. Any and all amounts which may become due and payable
pursuant to this Section 10 shall bear interest from the date when due to the
date of payment at a percentage rate of twelve (12%) percent per annum.
SECTION 11. COMMISSIONS FEES AND EXPENSES. Purchasers and AOXY each
represent and warrant to the other that the negotiations relative to this
Agreement and the transactions contemplated hereby have been carried on by
Purchasers and AOXY directly and in such manner as not to give rise to any valid
claim against either for a brokerage commission, finder's fee or other like
payment except that AOXY is negotiating with Stephen Golub to compensate him as
a finder. AOXY is responsible for and shall pay at closing the fees of Kieffer
and Hahn, its counsel, in connection with the preparation an negotiation of the
documentation in connection herewith and in connection with the closing of this
transaction.
SECTION 12. APPLICABLE LAW. This Agreement shall be governed by, and
construed in accordance with, the law of the State of Delaware (other than its
law with respect to conflicts of laws), including all matters of construction,
validity and performance.
SECTION 13. NOTICES. All notices, requests, permissions, waivers, and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if signed by the respective persons giving them (in the case of any
corporation the signature shall be by an officer thereof and delivered by hand,
sent via facsimile transmission, nationally-recognized overnight courier service
or deposited in the United States mail (registered, return receipt requested),
properly addressed and postage prepaid to the intended recipient thereof to the
address for such person on the signature page(s) hereof. All such notices,
requests, consents and other communications shall be deemed to have been
delivered (a) in the case of personal delivery or delivery by telescope, on the
date of such delivery, (b) in the case of dispatch by nationally- recognized
overnight courier, on the next business day following such dispatch and (c) in
the case of mailing, on the third business day after the posting thereof Such
names and addresses may be changed by such notice.
SECTION 14. ENTIRE AGREEMENT; AMENDMENTS; HEADINGS; COUNTERPARTS . This
Agreement, including the Schedules hereto, all of which are a part hereof,
contains the entire understanding of the parties hereto with respect to the
subject matter contained herein and therein, supersedes and cancels all prior
agreements with respect hereto or thereto and may be amended only by a written
instruments executed by the parties or their respective successors or assigns.
There are no restrictions, promises, representations, warranties, agreements or
undertakings of any party hereto
13
<PAGE>
with respect to the transactions under this Agreement other than those set forth
herein or made hereunder in the documents delivered at each Closing. The section
and paragraph headings contained in this Agreement and the description of
exhibits attached hereto are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement. This Agreement may be
executed in one or more counterparts and each counterpart shall be deemed to be
an original.
SECTION 15. PARTIES IN INTEREST. Except with the express written consent of
the other parties hereto, this Agreement shall not be assignable or otherwise
transferred in whole or in part. This Agreement shall inure to the benefit of
and be binding upon the parties and their respective successors. Nothing in this
Agreement, express or implied, is intended to confer upon any other person any
rights or remedies under or by reason of this Agreement.
SECTION 16. SEVERABILITY. The invalidity of any portion hereof shall not
affect the validity, force or effect of the remaining portions hereof.
SECTION 17. FURTHER ASSURANCES. AOXY and Purchasers shall execute and
deliver or cause to be executed and delivered such additional instruments, and
take such other actions as the other party may reasonably request in writing in
order to effectuate the purposes of this Agreement.
[Remainder of Page Intentionally Blank]
14
<PAGE>
[Counterpart Signature Page to Purchase Agreement of December 18, 1997]
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
PURCHASERS:
---------------------------------------------
[print name]
ATTEST: By:
------------------------------------------
Name:
- ----------------------------- Title:
Secretary
Address for Notices:
---------------------------------------------
---------------------------------------------
---------------------------------------------
ADVANCED OXYGEN TECHNOLOGIES, INC.
By: /s/ Harry Edelson
------------------------------------------
Name: Harry Edelson
Title: Chairman
Address for Notices
c/o ETP
300 Tice Boulevard, Woodcliffe Lake, NJ
Telecopier: (201) 930-8899
15
<PAGE>
[Counterpart Signature Page to Purchase Agreement of December 18, 1997]
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
PURCHASERS:
Crossland Ltd. (Belize)
---------------------------------------------
[print name]
ATTEST: By: /s/ L.H. Osterlolt
------------------------------------------
Bahamas Company Services Ltd. Name: L.H. Osterlolt
Title: Vice President
/s/ Annabel Howorth
- -------------------------------
Secretary
Address for Notices:
Crossland, Ltd. (Belize)
104B Saffrey Square
Bank Lane and Bay Street
Box N-1612
Nassau, Bahamas
ADVANCED OXYGEN TECHNOLOGIES, INC.
By:
------------------------------------------
Name: Harry Edelson
Title: Chairman
Address for Notices
c/o ETP
300 Tice Boulevard, Woodcliffe Lake, NJ
Telecopier: (201) 930-8899
15
<PAGE>
[Counterpart Signature Page to Purchase Agreement of December 18, 1997]
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
PURCHASERS:
Coastal Oil, Ltd.
---------------------------------------------
[print name]
ATTEST: By: /s/ Dr. M. Noguera
------------------------------------------
Illegible Name: M. Noguera
- ----------------------------- Title: President
Secretary
Address for Notices:
Coastal Oil, Ltd.
40 Santa Rita Road
Corozal, Belize, Central America
ADVANCED OXYGEN TECHNOLOGIES, INC.
By:
------------------------------------------
Name: Harry Edelson
Title: Chairman
Address for Notices
c/o ETP
300 Tice Boulevard, Woodcliffe Lake, NJ
Telecopier: (201) 930-8899
15
<PAGE>
[Counterpart Signature Page to Purchase Agreement of December 18, 1997]
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
PURCHASERS:
Easternstar Ltd.
---------------------------------------------
[print name]
ATTEST: By: /s/ Roberta Montgomery
------------------------------------------
Bahamas Company Services Ltd. Name: Roberta Montgomery
Illegible Title: Vice President
- --------------------------------
Secretary
Address for Notices:
Eastern Star, Ltd.
104B Saffrey Square
Bank Lane and Bay Street
Box N-1612
Nassau, Bahamas
ADVANCED OXYGEN TECHNOLOGIES, INC.
By:
------------------------------------------
Name: Harry Edelson
Title: Chairman
Address for Notices
c/o ETP
300 Tice Boulevard, Woodcliffe Lake, NJ
Telecopier: (201) 930-8899
15
<PAGE>
[Counterpart Signature Page to Purchase Agreement of December 18, 1997]
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
PURCHASERS:
Crossland Ltd. (Belize)
---------------------------------------------
[print name]
ATTEST: By: /s/ Anthony J.R. Howorth
------------------------------------------
Bahamas Company Services Ltd. Name: Anthony J.R. Howorth
Title: President
/s/ Pauline Cox
- --------------------------------
Secretary
Address for Notices:
Crossland, Ltd. (Belize)
60 Market Street
P.O. Box 364
Belize City, Belize, Central America
ADVANCED OXYGEN TECHNOLOGIES, INC.
By:
------------------------------------------
Name: Harry Edelson
Title: Chairman
Address for Notices
c/o ETP
300 Tice Boulevard, Woodcliffe Lake, NJ
Telecopier: (201) 930-8899
15
<PAGE>
[Counterpart Signature Page to Purchase Agreement of December 18, 1997]
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
PURCHASERS:
---------------------------------------------
[print name]
ATTEST: By:
------------------------------------------
- ------------------------------- Name:
Secretary Title:
Address for Notices:
---------------------------------------------
---------------------------------------------
---------------------------------------------
ADVANCED OXYGEN TECHNOLOGIES, INC.
By: /s/ Harry Edelson
------------------------------------------
Name: Harry Edelson
Title: Chairman
Address for Notices
c/o ETP
300 Tice Boulevard, Woodcliffe Lake, NJ
Telecopier: (201) 930-8899
15
<PAGE>
EXHIBIT A
---------
US PERSON
1. "US Person" means:
(i) Any natural person resident in the United States;
(ii) Any partnership or corporation organized or incorporated under the
laws of the United States;
(iii) Any estate of which any executor or administrator is a US person;
(iv) Any trust of which any trustee is a US person;
(v) Any agency or branch of a foreign entity located in the United
States;
(vi) Any non-discretionary account or similar account (other than an
estate or trust) held by a dealer or other fiduciary for the benefit
or account of a US person;
(vii) Any discretionary account or similar account (other than an estate
or trust) held by a dealer or other fiduciary organized,
incorporated, or (if an individual) resident in the United States;
and
(viii) Any partnership or corporation if: (A) organized or incorporated
under the laws of any foreign jurisdiction; and (B) formed by a US
person principally for the purpose of investing in securities not
registered under the Act, unless it is organized or incorporated,
and owned, by accredited investors (as defined in Rule 501(a)) who
are not natural persons, estates or trusts.
2. Notwithstanding paragraph I of this rule, any discretionary account or
similar account (other than an estate or trust) held for the benefit or account
of a non-US person by a dealer or other professional fiduciary organized,
incorporated, or (if an individual) resident in the United States shall not be
deemed a "US person."
3. Notwithstanding paragraph 1, any estate of which any professional fiduciary
acting as executor or administrator is a US person shall not be deemed a US
person if:
(i) An executor or administrator of the estate who is not a US person
has sole or shared investment discretion with respect to the assets
of the estate; and
(ii) The estate is governed by a foreign law.
4. Notwithstanding paragraph I, any trust of which any professional fiduciary
acting as Trustee,
<PAGE>
is a US person shall not be deemed a US person if a trustee who is not a US
person has sole or shared investment discretion with respect to the trust
assets, and no beneficiary of the trust (and no settler if the trust is
revocable) is a US person.
5. Notwithstanding paragraph 1, an employee benefit plan established and
administered in accordance with the law of a country other than the United
States and customary practices and documentation of such country shall not be
deemed a US person.
6. Notwithstanding paragraph 1, any agency or branch of a US person located
outside the United States shall not be deemed a "US person" if:
(i) The agency or branch operates for valid business reasons; and
(ii) The agency or branch is engaged in the business of insurance or
banking and is subject to substantive insurance or banking
regulation, respectively, in the jurisdiction where located.
7. The International Monetary Fund, the International Bank for Reconstruction
and Development, the Inter-American Development Bank, the Asian Development
Bank, the African Development Bank, the United Nations, and their agencies,
affiliates and pension plans, and any other similar international organizations,
their agencies, affiliates and pension plans shall not be deemed "US persons."
<PAGE>
Schedule 4(a)
Purchasers' Subsidiaries
------------------------
NONE
<PAGE>
Schedule 3(s)
Compliance with Laws
--------------------
AOXY has not held an annual meeting since October, 1993. AOXY's qualification to
transact business in California has not been maintained.
<PAGE>
Schedule 3(o)
Directors:
Harry Edelson
Emile A. Battat
Richard O. Jacobson
Albert James
Officers:
Harry Edelson Chairman of the Board and
Chief Executive Officer, President, Chief
Financial Officer and Director
Banks:
None
<PAGE>
Schedule 3(m)
Contracts of AOXY
-----------------
In August 1995 in order to retain senior management, AOXY agreed to pay Mr.
Kopetz, Ms. Castle and David Overmyer, AOXY's controller, a bonus if AOXY
successfuly completed a sale of AOXY or its technology by May 31, 1995. The
bonus would equal 55 of the first million dollars of the gross proceeds from the
Patent Sale, 4% of the next million dollars of such gross proceeds, 3% of the
third million, 2% of the fourth million and 1% of all amounts received from the
Patent Sale over 4 million. This bonus is shared equally by Mr. Kopetz, Ms.
Castle and Mr. Overmyer. Upon the closing, they received, in the aggregate
$16,750.00 or $5,583.33 each. As no other royalties have been received to date
from W.R. Grace, no additional sums have been paid. All such bonus is payable
only from the Grace royalty. At closing, the above mentioned liabilities of AOXY
shall have been assigned to and assumed by AOXY Liquidation Inc. with the
consent of the creditors.
<PAGE>
Schedule 1.01
Purchasers
----------
Number of Number of
Name $ Amount Sale Shares Comp.Shares
- ------------------------------------ ---------- ----------- -----------
Crossland, Ltd. (Belize) $15,000.00 1,500,000 4,437,500
60 Market Square
PO Box 364
Belize City, Belize, Central America
Eastern Star, Ltd. $15,000.00 1,500,000 4,437,500
104B Saffrey Square
Bank Lane and Bay Street
Box N-1612
Nassau, Bahamas
Costal Oil, Ltd. $15,000.00 1,500,000 4,437,500
40 Santa Rita Road
Corazal, Belize, Central America
Crossland, Ltd. 104B Saffrey Square $15,000.00 1,500,000 4,437,500
Bank Lane and Bay Street
Box N-1612
Nassau, Bahamas
<PAGE>
Exhibit B
Execution (iii)
PURCHASE AGREEMENT
------------------
THIS AGREEMENT made as of the 18th day of December, 1997, (herein,
together with the Schedules attached hereto, referred to as "Agreement") by and
among the persons listed on Schedule 1 hereto (herein referred to collectively
as "Purchasers" and each a "Purchaser") and the persons listed on Schedule 2
hereto (herein referred to collectively as "Sellers" and each a "Seller").
In reliance upon the representations and warranties made herein and in
consideration of the mutual agreements herein contained the parties hereby agree
as follows:
SECTION 1. SALE AND PURCHASE OF STOCK.
1.01 Sale of Stock to Purchasers. Sellers shall at the closing of the
transactions hereinafter provided sell, transfer, assign and deliver to
Purchasers an aggregate of eight hundred thousand (800,000) shares (the
"Shares") of the capital stock of Advanced Oxygen Technologies, Inc., a Delaware
Corporation, ("AOXY") in an amount to each Purchaser as set forth on Schedule 2
hereto.
1.02 Consideration for Stock. In consideration of the sale of the
Shares, (a) Purchasers shall pay to Sellers the aggregate amount of US$10,000
(the "Purchase Price") in the form of an official bank check or a certified
check of the Purchasers payable to each Seller in the amount specified on
Schedule 1 hereto and (b) Seller shall be retained by AOXY as a consultant for
one month on an "as available" basis in consideration of 450,000 shares of
common stock of AOXY delivered by AOXY to Seller at the Closing which shares
shall be registered by AOXY on Form S-8, or such other form as available, as
soon as practicable after Closing, and shall have full "piggyback" registration
rights in any other registration of securities of AOXY.
1.03 Transactions on the Closing Date. (a) Delivery of Shares. At the
Closing, Sellers will deliver to Purchasers stock certificates, representing the
shares duly endorsed for transfer with their respective signatures guaranteed in
form acceptable to the transfer agent of AOXY; and
(b) Delivery of Consideration. At the Closing, Purchasers will
deliver to each Seller an official bank check or a certified check of the
Purchasers payable to each Seller in the amount of the Purchase Price payable to
such Seller as set forth on Schedule 1.
(c) Resignations. Resignations of all of the directors and
officers of AOXY other than those designated in writing by Purchasers prior to
the Closing Date to remain on the board or in office; and
(d) Documents. Each of the documents contemplated by this
Agreement.
<PAGE>
SECTION 2. CLOSING. The Closing will take place at the offices of Kieffer
and Hahn, 111 Broadway, New York, New York 10006, at 10:00 A.M. on the date of
execution and delivery hereof by all of the parties.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLERS. Each Seller, as and
for himself or itself, severally and not jointly, represents and warrants the
following to the best of his or its knowledge without independent investigation:
(a) Organization and Standing. (1) AOXY is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware, the State of its incorporation, and is authorized to conduct business
in and is in good standing in each jurisdiction in which the character of the
properties owned by it or the nature of the business transacted by it makes such
license or qualification necessary.
(2) The certified copies heretofore delivered to AOXY, of the
certificate of incorporation, of all licenses to transact business and of the
by-laws of AOXY with all amendments to the date hereof are true, complete and
correct.
(3) AOXY has no subsidiaries.
(b) Capital Stock. (1) The capital stock of AOXY consists of (A) thirty
million (30,000,000) shares of common stock, par value one cent (US $0.01) per
share of which five million six hundred ninety-six thousand two hundred
fifty-two (5,696,252) shares have been validly issued and are fully paid and are
non-assessable and are fully transferable, three hundred fifty four thousand
(354,000) shares which shall be issued upon conversion of 177,000 shares of
preferred stock (172,000 shares of preferred stock shall be converted into
344,000 shares on the date of Closing) and one hundred forty five thousand
(145,000) shares of which shall be issued upon exercise of options and (B) ten
million (10,000,000) shares of preferred stock par value one cent (US $.01) per
share of which 177,000 (172,000 shares of preferred stock shall be converted
into 344,000 shares on the date of Closing) shares have been validly issued and
are fully paid and are non-assessable and are fully transferable.
(2) None of the issued and outstanding shares is subject to any
voting trust agreement or other agreement relating to the voting thereof.
(3) None of the authorized but unissued shares of AOXY are subject
to any warrants, obligations, subscriptions, options, convertible securities or
other commitments under which they are or may be required to be issued.
(4) No transfer tax will be payable with respect to the issuance
of AOXY's stock contemplated hereby.
2
<PAGE>
(c) Stock Ownership. Each Seller shall issue to Purchasers at Closing
authorized common stock of AOXY which is free and clear of any encumbrances,
liens or restrictions on sale, other than those applicable to restricted
securities as defined under the rules and regulations promulgated by the
Securities and Exchange Commission.
(d) Validity of Agreement; Authority. This Agreement has been duly
executed and delivered by each Seller and (assuming valid execution and delivery
by Purchasers) is a valid and binding obligation, enforceable in accordance with
its terms.
(e) Authority to take Action. (1) The execution and delivery of this
Agreement and delivery of the subject shares and the carrying out of the
provisions hereof will not contravene any provisions of law, any order, judgment
and/or decree of any court or other governmental agency or each Seller's
certificate of incorporation, by-laws, charter, partnership agreement, if any,
or any indenture, agreement or other instrument to which a Seller is a party or
by which a Seller may be bound, or by which any property owned by a Seller may
be bound.
(2) All legal actions required to be taken in connection with this
Agreement pursuant to the laws of any State or other governmental authority have
been so taken.
(f) Accounts Receivable. AOXY has no accounts receivable.
(g) Liabilities of AOXY. AOXY has no liabilities or obligations of any
nature, whether accrued, absolute, contingent or otherwise, including, without
limitation, tax liabilities due or to become due, except for (1) approximately
US$45,000 of accounts payable, (2) the fees and expenses of counsel in
connection herewith and (3) amounts due and payable to certain of its directors
as evidenced by Promissory Notes issued to such persons in the aggregate
principal amount of $275,000 plus the interest accrued thereon which are to be
spun-off to the liquidating trust as set forth in section.
(h) No Dividends or Distributions. Since June 30, 1995, AOXY has not
declared, set aside or paid to its stockholder any dividend or other
distribution in respect of its capital stock or redeemed or purchased or
otherwise acquired any of its capital stock or agreed to take any such action.
(i) Absence of Material Changes or Events. Except for matters publicly
disclosed on (1) AOXY's Proxy Statement in connection with the sale of its
oxygen control technology to W.R. Grace ("Grace") in February 1995; (2) AOXY's
Reports on Form 10-KSB with respect to AOXY's fiscal years ended June 30, 1993,
1994 and 1995 and (3) AOXY's Reports on Form 10-Q for the quarters ending
September 30, 1995 and December 31, 1995 and AOXY's 8-K's filed prior hereto
copies of which have been heretofore delivered to Sellers, since June 30, 1995
there has been no event or condition of any character, materially and adversely
affecting AOXY's financial position, assets, liabilities (contingent or
otherwise), results of operation, business or business prospects, and AOXY has
not:
3
<PAGE>
(1) Incurred any obligation or liability (absolute, accrued,
contingent, or otherwise) except in the ordinary course of business or except in
connection with the performance of this Agreement;
(2) Mortgaged, pledged or subjected to lien, charge or other
encumbrance, any of its assets, tangible or intangible;
(3) Sold or transferred any of its assets or canceled any debts or
claims, or waived any right of substantial value;
(4) Made or committed to make any single capital expenditure in
excess of five hundred dollars ($500.00), or capital expenditures in excess of
one thousand dollars ($1,000.00) in the aggregate or purchased or contracted to
purchase any land;
(5) Sustained any damage, destruction or loss of its property in
excess of five hundred dollars ($500.00) whether or not covered by insurance;
(6) Increased the compensation payable or to become payable by
AOXY to any of its officers, employees or agents, or any bonus payment or
arrangement made to or with any of them;
(7) Agreed to modify in any material respect any contract or other
instrument to which AOXY is a party except for the patent purchase agreement
with Grace;
(8) Increased or changed the medical insurance provided for the
benefit of its employees and their families.
(9) Increased or changed the amount of disability insurance
provided for the benefit of its employees;
(10) Entered into any transaction other than in the ordinary
course of business; or
(11) Made any material change in any method of accounting or any
accounting practice.
(j) Title to Property. AOXY has no material assets.
(k) Buildings, Equipment and Motor Vehicles. AOXY is the owner of no
buildings, equipment or motor vehicles.
(l) Tax Status. (1) AOXY has heretofore furnished to Sellers true and
complete copies of all federal, state, local and foreign income tax returns of
AOXY filed for the three (3) years
4
<PAGE>
ended June 30, 1995. Said tax returns of AOXY have not been audited by the
applicable taxing authorities. No agreements made by AOXY for an extension of
time for the assessment of any tax are now in effect. All taxes, including
interest and penalties thereon, shown on said tax returns to be due and payable
by AOXY, or required to be withheld by AOXY on or before the date hereof, have
been paid or fully reserved for and withheld and no formal written claim for any
tax, assessment or levy for which AOXY may become liable exists which has not
been settled.
(2) All other taxes, due and payable at the Closing Date, of any
kind whatsoever, including, but not limited to, estimated income tax, franchise
tax, excise tax, doing business tax, payroll tax, personal property tax, use tax
and sales tax have been paid or fully reserved for and withheld.
(m) Status of Contracts. Except as reflected on Schedule 3(m). AOXY is
not a party to any written or oral (i) contract for the employment of any
officer or individual employee, or any pension, profit sharing, bonus,
retirement, stock option or similar incentive or deferred compensation plan or
arrangement in effect with its officers, employees or others; (ii) continuing
contract for the acquisition of real estate or fixed assets; (iii) financing
arrangement involving the mortgaging, pledging or other hypothecation of assets
or involving borrowing which may not be repaid in part or in full on not more
than thirty (30) days' notice with reference to unearned or amortized discount
and without premium or penalty; (iv) contract with any labor union; (v)
continuing contract for the future purchase of materials or supplies; (vi)
contract with any agent, representative or distributor; (vii) any instrument
evidencing or related to indebtedness for borrowed money, or pursuant to which
AOXY is obligated to borrow money; (viii) any contract, arrangement or
understanding under which AOXY has assumed, guaranteed, endorsed, or otherwise
become liable in connection with the obligation of any individual, partnership,
corporation or other entity; (ix) any contract not included in any of the
foregoing which involves payment by AOXY of more than five hundred dollars
($500.00). True and complete copies of all items listed in Schedule 3(m) have
been delivered to AOXY. The parties to such instruments have complied with all
the provisions thereof, and they are not in default under any of them.
(n) Status of Leases. AOXY is not a party to any leases except for the
lease of document storage space at Pacific Mini Storage, 1913 Sherman Street,
Alameda, California.
(o) Directors and Officers; Compensation; Banks. Schedule 3(o) hereto
contains a true an complete list showing (i) the names of all directors and
officers of AOXY; (ii) the names of all persons whose compensation from AOXY for
the period beginning July 1, 1995 and ending March 31, 1996 will equal or exceed
ten thousand dollars ($10,000.00) together with a statement of the full amount
paid or payable to each such person for services rendered or to be rendered in
such period and the basis therefor; (iii) the name of each bank in which AOXY
has an account, or safe deposit box, and the names of all persons authorized to
draw thereon, or to have access thereto; (iv) the names of all persons holding
powers of attorney from AOXY, and a summary statement of the terms thereof; and
(v) all credit cards and similar accounts on which AOXY may be liable.
5
<PAGE>
(p) Status of Insurance. AOXY has no insurance.
(q) Permits and Licenses. AOXY is not required to have permits,
licenses, approvals, and authorization of all federal, state, local and foreign
authorities and is presently not conducting any business.
(r) Litigation. There is no action, suit, proceeding or investigation
pending, or to the knowledge of AOXY threatened, against or affecting AOXY
before any court, arbitrator or administrative or governmental body and AOXY is
not presently subject to or in default in respect of any order, injunction or
decree of any court or government instrumentality.
(s) Compliance with Laws. Except as reflected on Schedule 3(s), AOXY is
not in violation of any law, regulation or ordinance which violation would
materially and adversely affect it or its operations.
(t) Books of Accounts and Other Records. The books of account, and the
minute books, stock certificate books and ledgers of AOXY at the Closing Date
will, in all material respects, be correct and complete and such books of
account and ledgers will fairly present the operations of AOXY in accordance
with generally accepted accounting principles.
(u) Employee Benefit Plans. AOXY is not party to any bonus, incentive
compensation, profit-sharing, pension, retirement, stock purchase, stock option,
deferred compensation, hospitalization, group insurance, death benefit,
disability, collective bargaining and other fringe benefit plans, trust
agreements, arrangements or commitments.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF PURCHASERS. Each Purchaser, as
and for itself or himself, severally and not jointly, represents and warrants
the following:
(a) Organization and Standing. (1) Each corporate Purchaser is a
corporation duly organized, validly existing, and in good standing under the
laws of the place of its incorporation.
(2) The copy heretofore delivered to Sellers, of the certificate
of incorporation or charter of each corporate Purchaser with all amendments to
the date hereof are true, complete and correct.
(3) Each corporate Purchaser has no subsidiaries, except as set
forth on Schedule 4(a).
(b) Validity of Agreement; Authority. This Agreement has been duly
executed and delivered by the Purchasers and (assuming valid execution and
delivery by the Sellers) is a valid and binding obligation of each Purchaser,
enforceable in accordance with its terms.
(c) Authority to take Action. (1) The execution and delivery of this
Agreement and
6
<PAGE>
delivery of the subject shares and the carrying out of the provisions hereof
will not contravene any provisions of law, any order, judgment and/or decree of
any court or other governmental agency or any corporate Purchaser's certificate
of incorporation or charter, by-laws or any indenture, agreement or other
instrument to which any Purchaser is a party or by which it may be bound, or by
which any property owned by it may be bound.
(2) All corporate and legal actions required to be taken in
connection with this Agreement pursuant to the laws of any State or other
governmental authority have been so taken.
(c) Compliance with Laws. No Purchaser has received notice of any
violation of any law, regulation or ordinance which violation would materially
and adversely affect it or its operations.
(d) Consents. No Purchaser is required to obtain consent, approval,
registration, qualification or filing with any United States federal, state or
local government authority or any foreign government authority in connection
with such Purchaser's execution of this Agreement or consummation of the
transactions contemplated hereby, other than the required filings with the
United States Securities and Exchange Commission.
(e) Investment Purposes. Each Purchaser is acquiring the Shares for
investment, for its own account, and not with a view to, or for resale in
connection with, any distribution of any part thereof. Each Purchaser
acknowledges that each Seller is selling the Shares hereunder in reliance upon
an exemption from the registration provisions of the Securities Act of 1933, as
amended (the "Act") which depends upon, among other things, the bona fide nature
of the investment intent and accuracy of such Purchaser's representations as
expressed herein. Each Purchaser is able to fend for itself, can bear the
economic risk of this investment and has such knowledge and experience in
financial or business matters that it can evaluate the merits and risks of the
investment. Each Purchaser, except for Robert E. Wolfe, is an "accredited
investor" within the meaning of Rule 501(a) of Regulation D promulgated under
the Securities Act.
Except as set forth in this Agreement, no representations or
warranties, oral or otherwise, have been made to Purchasers, including without
limitation, any representations concerning the future prospects of AOXY, by any
Seller, by any agent of any Seller, any employees or affiliates of any Seller or
by any other person whether or not associated with this transaction and in
entering into this transaction Purchaser is not relying upon any information.
Without in any way limiting the representations set forth above,
Purchaser further agrees not to make any disposition of all or any portion of
the Shares that constitutes "restricted securities" delivered pursuant hereto
unless (1) there is then in effect a Registration Statement under the Act
covering the proposed disposition and disposition is made according to the
Registration Statement; or (2) the transferee has agreed in writing for the
benefit of AOXY to be bound by the restrictions set forth in this section, to
the extent applicable; and each Purchaser has furnished AOXY with an opinion of
counsel, reasonably satisfactory to AOXY, that such disposition will not
7
<PAGE>
require registration of the shares under the Act.
SECTION 5. CONDITIONS PRECEDENT TO PURCHASERS' OBLIGATION TO COMPLETE THE
TRANSACTION. The obligation of each Purchaser to consummate the transactions
described in Section 1 hereof is subject to the fulfillment of each of the
following conditions prior to or at the Closing:
(a) Delivery of Shares. Each Purchaser shall have received delivery of
the Shares as contemplated herein.
(b) Spin-off. AOXY shall have spun-off good and marketable title to its
rights to royalties from W. R. Grace (its only material asset) and certain
liabilities including only amounts due to former employees as a result of the
receipt of the royalties and notes payable to certain directors in the aggregate
principal amount of $275,000 plus the interest earned thereon.
(c) Other Creditors. AOXY shall have achieved settlement in an amount
and on terms reasonably satisfactory to each Purchaser of all of the liabilities
of AOXY, including, without limitation, all accounts payable, if any, and other
accrued expenses, if any.
(d) Resignation of Directors and Officers. Upon appointment of
directors chosen by Purchasers to fill the existing vacancies on the board of
directors of AOXY, all directors and officers not so chosen by Purchasers shall
have tendered to AOXY their resignations as directors and/or officers of AOXY.
(e) Conversion of Preferred Stock. All of the issued and outstanding
preferred stock of AOXY shall have been converted to common stock of AOXY except
for 5,000 shares.
(f) Stock Acquisition Agreement. The transaction contemplated in the
Stock Acquisition Agreement, dated the date hereof, among AOXY and the
purchasers, parties thereto, related to the sale by AOXY of 23,750,000 shares of
the common stock of AOXY shall have closed simultaneously herewith.
(g) Representations and Warranties of Sellers. The representations and
warranties made by each Seller herein shall be true and correct in all material
respects.
(h) No actions or proceedings. No action or proceeding shall be pending
or threatened on the Closing Date wherein an unfavorable judgment, decree or
order would prevent or make unlawful the carrying out of this Agreement or would
cause the transaction contemplated by this Agreement to be rescinded or would
require a Purchaser to divest itself of the shares to be acquired.
It is understood that the certificates evidencing the Shares sold
pursuant hereto may bear legends in substantially the following form:
8
<PAGE>
THE SECURITIES REPRESENTED BY THIS CERTIFICATION HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, THESE
SECURITIES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF SAID ACT AND UPON OBTAINING AN OPINION OF COUNSEL (WHICH MAY BE
COUNSEL TO THE COMPANY) SATISFACTORY TO THE COMPANY THAT SUCH
DISPOSITION MAY BE MADE WITHOUT REGISTRATION UNDER SAID ACT, OR UNLESS
SOLD PURSUANT TO RULE 144.
SECTION 6. CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO COMPLETE THE
TRANSACTION. The obligation of each Seller to consummate the transactions
described in Section 1 hereof is subject to the fulfillment of each of the
following conditions prior to or at the Closing:
(a) Purchase Price. Each Seller shall have received the purchase price
to which each such Seller is entitled hereunder.
(b) Spin-off. AOXY shall have spun-off good and marketable title to its
rights to royalties from W. R. Grace (its only material asset) and certain
liabilities including only amounts due to former employees as a result of the
receipt of the royalties and notes payable to certain directors in the aggregate
principal amount of $275,000 plus the interest earned thereon.
(c) Representations and Warranties of Purchasers. The representations
and warranties made by the Purchasers herein shall be true and correct in all
material respects.
(d) No actions or proceedings. No action or proceeding shall be pending
or threatened on the Closing Date wherein an unfavorable judgment, decree or
order would prevent or make unlawful the carrying out of this Agreement or would
cause the transaction contemplated by this Agreement to be rescinded.
SECTION 7. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties contained herein or made in writing by the parties in connection
with the transactions contemplated hereby shall survive the execution and
delivery of this Agreement and the closing of the transactions contemplated by
this Agreement, regardless of any investigation made by or on behalf of the
parties or any payment for and acceptance of stock hereunder. All statements
contained in any certificate, list, letter or other instrument delivered by or
on behalf of the parties pursuant hereto or in connection with the transactions
contemplated hereby (including statements, letters or certificates of
independent parties such as public accountants or attorneys) shall constitute
representations and warranties by the parties hereunder.
9
<PAGE>
SECTION 8. INDEMNIFICATION. (a) Of Sellers and AOXY. Each Purchaser agrees
to defend, indemnify and hold harmless Sellers and AOXY against and in respect
of (i) any and all losses, liabilities, damages, deficiencies, costs or expenses
(including, without limitation reasonable attorneys fees and disbursements)
resulting from (A) the breach of any covenant, warranty or agreement hereunder
by such Purchaser or (B) any representations made by such Purchaser in this
Agreement, not being complete and correct or being false and misleading or
containing any material misstatement of fact or omitting any material fact
required to be stated to make the statements therein not misleading; and (ii)
any and all actions, suits, proceeding, claims, demands, assessments, judgments,
costs and expenses (including, without limitation, reasonable attorneys fees and
disbursements) incident to any of the foregoing; provided, however, that if any
such action, suit or proceeding shall be asserted against Sellers and AOXY in
respect of which Sellers or AOXY propose to demand indemnification, such
Purchaser shall be promptly notified to that effect and shall have the right to
assume the control of the defense, compromise or settlement thereof, including,
at their own expense, employment of counsel reasonably acceptable to Sellers.
(b) Of Purchasers. Each Seller, severally and not jointly, agrees to
defend, indemnify and hold harmless Purchasers against and in respect of (i) any
and all losses, liabilities, damages, deficiencies, costs or expenses
(including, without limitation reasonable attorneys fees and disbursements)
resulting from (A) the breach of any covenant, warranty or agreement hereunder
by such Seller or (B) any representations made by such Seller in this Agreement,
not being complete and correct or being false and misleading or containing any
material misstatement of fact or omitting any material fact required to be
stated to make the statements therein not misleading; and (ii) any and all
actions, suits, proceeding, claims, demands, assessments, judgments, costs and
expenses (including, without limitation, reasonable attorneys fees and
disbursements) incident to any of the foregoing; provided, however, that if any
such action, suit or proceeding shall be asserted against a Purchaser in respect
of which such Purchaser proposes to demand indemnification, all Sellers shall be
promptly notified to that effect and the Seller or Sellers against whom
indemnification is sought shall have the right to assume the control of the
defense, compromise or settlement thereof, including, at their own expense,
employment of counsel reasonably acceptable to such Purchaser.
(c) Payment. Any indemnification payments required pursuant to Section
8(a) and 8(b) hereof shall be paid in full within ten (10) days after receipt of
notice specifying (i) the amount required to be paid and (ii) the nature of the
event or events giving rise to indemnification hereunder.
(d) Liability. The liability of the parties under this Section 8 shall
be without limitation, and the failure of either of them to withhold amounts
from any payments shall not act as a waiver of or diminish the obligations of
parties under this Section 8.
(e) Interest. Any and all amounts which may become due and payable
pursuant to this Section 8 shall bear interest from the date when due to the
date of payment at a percentage rate of twelve (12%) percent per annum.
SECTION 9. COVENANT OF PURCHASERS. Purchasers covenant and agree that in
the
10
<PAGE>
event that within 36 months of the date of the Closing 1,400,000 shares of
common stock of AOXY (being the approximate number of shares retained by all of
the Sellers as at the Closing Date) do not have an aggregate market value for
any 10 consecutive day period (being the closing price for 10 consecutive
trading days of the securities on the NASDAQ or any other National Securities
Exchange on which the common stock of AOXY, or its successor in interest, is
traded) equal to or greater than US$750,000 less the "value" of any dividends
paid per share on 1,400,000 shares of common stock of AOXY (the "value" of any
such dividends being determined on the date of distribution of any such
dividend, if in cash - at the cash value or, if in securities - at the per share
closing price of the securities on the date of distribution and, if none, then
at the per share closing bid price on the date of distribution), then AOXY, or
its successor in interest, or the Purchasers, on a pro rata basis, shall deliver
to the AOXY Management Trust, a New Jersey trust, the number of shares of common
stock of AOXY, or its successor in interest, to bring the value of 1,400,000
plus the value (as defined above) of any dividends per share paid on $1,400,000
shares of common stock of AOXY, to US$750,000, whether or not any of such shares
are then held by any Seller.
SECTION 10. COMMISSIONS, FEES AND EXPENSES. Purchasers and Sellers each
represent and warrant to the other that the negotiations relative to this
Agreement and the transactions contemplated hereby have been carried on by
Purchaser and Sellers directly and in such manner as not to give rise to any
valid claim against either for a brokerage commission, finder's fee or other
like payment. AOXY is responsible for and shall pay at closing the fees and
disbursements of Kieffer and Hahn, its counsel, in connection with this
Agreement and the closing of the transactions contemplated herein.
SECTION 11. APPLICABLE LAW. This Agreement shall be governed by, and
construed in accordance with, the law of the State of Delaware (other than its
law with respect to conflicts of laws), including all matters of construction,
validity and performance.
SECTION 12. NOTICES. All notices, requests, permissions, waivers, and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if signed by the respective persons giving them (in the case of any
corporation the signature shall be by an officer thereof) and delivered by hand,
sent via facsimile transmission, nationally-recognized overnight courier service
or deposited in the United States mail (registered, return receipt requested),
properly addressed and postage prepaid to the intended recipient thereof to the
address for such person on the signature page(s) hereof. All such notices,
requests, consents and other communications shall be deemed to have been
delivered (a) in the case of personal delivery or delivery by telecopy, on the
date of such delivery, (b) in the case of dispatch by nationally-recognized
overnight courier, on the next business day following such dispatch and (c) in
the case of mailing, on the third business day after the posting thereof. Such
names and addresses may be changed by such notice.
SECTION 13. ENTIRE AGREEMENT; AMENDMENT; HEADINGS; COUNTERPARTS. This
Agreement, including the Schedules hereto, all of which are a part hereof,
contains the entire understanding of the parties hereto with respect to the
subject matter contained herein and therein,
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<PAGE>
supersedes and cancels all prior agreements with respect hereto or thereto and
may be amended only by a written instrument executed by the parties or their
respective successors or assigns. There are no restrictions, promises,
representations, warranties, agreements or undertakings of any party hereto with
respect to the transactions under this Agreement other than those set forth
herein or made hereunder in the documents delivered at each Closing. The section
and paragraph headings contained in this Agreement and the description of
exhibits attached hereto are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement. This Agreement may be
executed in one or more counterparts and each counterpart shall be deemed to be
an original.
SECTION 14. PARTIES IN INTEREST. Except with the express written consent of
the other parties hereto, this Agreement shall not be assignable or otherwise
transferred in whole or in part. This Agreement shall inure to the benefit of
and be binding upon the parties and their respective successors. Nothing in this
Agreement, express or implied, is intended to confer upon any other person any
rights or remedies under or by reason of this Agreement.
SECTION 15. SEVERABILITY. The invalidity of any portion hereof shall not
affect the validity, force or effect of the remaining portions hereof.
SECTION 16. FURTHER ASSURANCES. Sellers and Purchasers shall execute and
deliver or cause to be executed and delivered such additional instruments, and
take such other actions as the other party may reasonably request in writing in
order to effectuate the purposes of this Agreement.
[Remainder of Page Intentionally Blank]
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<PAGE>
[Counterpart Signature Page to Purchase Agreement of dated December 18, 1997]
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
PURCHASERS:
Robert E. Wolfe
-------------------------------
[print name]
ATTEST: By: /s/ Robert E. Wolfe
-------------------------------
Name: Robert E. Wolfe
Title: Individual
Angela Nevarez
- -----------------------
Witness
Address for Notices:
Robert E. Wolfe
476 Main Street
Maybrook, NY 12543
-------------------------------
SELLERS:
-------------------------------
[print name]
------------------------------
Address for Notices:
--------------------------------
--------------------------------
--------------------------------
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<PAGE>
[Counterpart Signature Page to Purchase Agreement of dated December 18, 1997]
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
PURCHASERS:
CROSSLAND LTD. (BELIZE)
-------------------------------
[print name]
ATTEST: By: /s/ Anthony J.R. Howorth
-------------------------------
Bahamas Company Services Ltd. Name: Anthony J.R. Howorth
Title: President
Pauline Cox
- -----------------------
Secretary
Address for Notices:
Crossland, Ltd. (Belize)
60 Market Square
P.O. Box 364
Belize City, Belize, Central America
-------------------------------
SELLERS:
-------------------------------
[print name]
------------------------------
Address for Notices:
--------------------------------
--------------------------------
--------------------------------
13
<PAGE>
[Counterpart Signature Page to Purchase Agreement of dated December 18, 1997]
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
PURCHASERS:
Triton International Ltd.
-------------------------------
[print name]
ATTEST: By: /s/ Jens S. Olsen
-------------------------------
Name: Jens S. Olsen
Title:
Illegible
- -----------------------
Secretary
Address for Notices:
Triton International, Ltd.
Euro-Canadian House
Marlboro Street
Nassau, Bahamas
-------------------------------
SELLERS:
-------------------------------
[print name]
------------------------------
Address for Notices:
--------------------------------
--------------------------------
--------------------------------
13
<PAGE>
[Counterpart Signature Page to Purchase Agreement of dated December 18, 1997]
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
PURCHASERS:
-------------------------------
[print name]
ATTEST: By:
-------------------------------
Name:
Title:
- -----------------------
Witness
Address for Notices:
-------------------------------
-------------------------------
-------------------------------
SELLERS:
Edelson Technology Partners II, L.P.
------------------------------------
[print name]
/s/ Harry Edelson
-----------------------------------
Harry Edelson, General Partner
Address for Notices:
300 Tice Boulevard
Woodcliff Lake, NJ 07675
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<PAGE>
Schedule 1
Purchasers
Name $ Amount # of Shares
- ---- -------- -----------
Robert E. Wolfe $ 625.00 50,000
476 Main Street
Maybrook, NY 12543
Trion International, Ltd. $4,687.50 375,000
Euro-Canadian House
Marlboro Street
Nassau, Bahamas
Crossland, Ltd. (Belize) $4,687.50 375,000
60 Market Square
P.O. Box 364
Belize City, Belize, Central America
<PAGE>
Schedule 2
Sellers
Name $ Amount # of Shares
- ---- -------- -----------
Edelson Technology Partners II, L.P. $10,000 800,000
300 Tice Boulevard
Woodcliff Lake, NJ
Telecopier: (201) 930-8899
<PAGE>
Schedule 3(s)
Compliance with Laws (Purchaser)
Purchaser has not held an annual meeting since October, 1993. Purchaser's
qualification to transact business in California has not been maintained.
<PAGE>
Schedule 4(a)
Subsidiaries of Purchasers
NONE
<PAGE>
Schedule 3(o)
Directors:
Harry Edelson
Emile A. Battat
Richard O. Jacobson
Albert James
Officers:
Harry Edelson Chairman of the Board and
Chief Executive Officer, President, Chief
Financial Officer and Director
Banks:
None
<PAGE>
Schedule 3(m)
Contracts of AOXY
In August 1995 in order to retain senior management, AOXY agreed to pay Mr.
Kopetz, Ms. Castle and David Overmyer, AOXY's controller, a bonus if AOXY
successfully completed a sale of AOXY or its technology by May 31, 1995. The
bonus would equal 5% of the first million dollars of the gross proceeds from the
Patent Sale, 4% of the next million dollars of such gross proceeds, 3% of the
third million, 2% of the fourth million and 1% of all amounts received from the
Patent Sale over 4 million. This bonus is shared equally by Mr. Kopetz, Ms.
Castle and Mr. Overmyer. Upon the closing, they received, in the aggregate
$16,750.00 or $5,583.33 each. As no other royalties have been received to date
from W.R. Grace, no additional sums have been paid. All such bonus is payable
only from the Grace Royalty. At closing, the above mentioned liabilities of AOXY
shall have been assigned to and assumed by AOXY Liquidation Inc. with the
consent of the creditors.
