1
AGREEMENT
AGREEMENT made this 2nd day of October, 1998 by and among XXXXXXX
INTERNATIONAL, LTD ("Xxxxxxx"), BANKBOSTON, N.A. (successor by merger to Bank
of Boston Connecticut ("BOB"), JUNE X. XXXXXX, XXXX X. XXXXXXX, XX., XXXXXX
X. XXXXXX and the UNITED STATES TRUST COMPANY OF NEW YORK, as Co-Executors of
the Estate of Xxxxxx X. Xxxxxx, late of New York, New York (the "Estate") and
XXXXXXX PARTNERS, LLC ("New Lender").
W I T N E S S E T H :
WHEREAS, Xxxxxxx is indebted to BOB under and pursuant to that certain
Revolving Loan and Security Agreement dated as of May 31, 1996 between Xxxxxxx
and BOB, as amended (the "Revolving Loan Agreement") which indebtedness is also
evidenced by a certain $1,750,000 Revolving Loan Note dated May 31, 1996 made by
Xxxxxxx to the order of BOB, as amended (the "Facility A Note") and a certain
$500,000 Revolving Loan Note dated March 17, 1997 made by Xxxxxxx to the order
of BOB, as amended (the "Facility B Note"); and
WHEREAS, pursuant to a Limited Guaranty Agreement (the "Guaranty") dated
as of May 31, 1996 made by Xxxxxx X. Xxxxxx ("Geneen") in favor of BOB, the
Estate is obligated to BOB with respect to a guaranty of the payment of the
Facility A Note and certain other "Liabilities" as defined in the Guaranty; and
WHEREAS, the obligations of the Estate under the Guaranty are secured by
the pledge of certain collateral owned by the Estate (the "Pledged Collateral")
pursuant to a certain Amended and Restated Pledge Agreement dated as of June 26,
1997 between Geneen and BOB (the "Pledge Agreement"); and
WHEREAS, Xxxxxxx has entered into a Settlement Agreement with DataCard
Corporation ("DataCard"), dated the date hereof, pursuant to which Xxxxxxx has
agreed to pay DataCard One Million Four Hundred Twenty-One Thousand Seven
Dollars and 30/100 ($1,421,007.30); and
WHEREAS, BOB, for the account of Xxxxxxx, has issued a $150,000 Letter of
Credit to a customer of Xxxxxxx and Xxxxxxx will be responsible for the
immediate reimbursement to BOB of any sums drawn upon such Letter of Credit (the
"Letter of Credit"); such Letter of Credit was issued as part of Facility B as
defined in the Revolving Loan Agreement; and
2
WHEREAS, New Lender is willing to make a Four Million Dollar ($4,000,000)
loan (the "New Loan") to Xxxxxxx under the terms and conditions set forth in
this Agreement to help enable Xxxxxxx to meet its present and projected
financial obligations and to provide Xxxxxxx with necessary working capital; and
WHEREAS, the parties hereto desire to have the New Lender make such loan
as provided herein.
NOW, THEREFORE, the parties hereto, for good and valuable consideration,
each to the other paid, the receipt and sufficiency of which are hereby
acknowledged, do hereby agree as follows:
1. Payment of the Facility A Note.
(a) BOB, the Estate and Xxxxxxx acknowledge that as of the date hereof,
the indebtedness of Xxxxxxx under the Facility A Note is $1,701,168.75 in
principal plus interest through October 2, 1998, of $437.11. On the date hereof,
the Estate and Xxxxxxx hereby authorize BOB to liquidate and BOB will liquidate
a sufficient amount of the Pledged Collateral to pay in full the aforesaid
indebtedness of Xxxxxxx under the Facility A Note. BOB agrees that upon such
liquidation of Pledged Collateral, the Estate shall be released from any further
obligations under the Guaranty or Pledge Agreement and any excess funds
collected from such liquidation and all remaining Pledged Collateral shall be
returned to the Estate. BOB shall also execute and deliver to the Estate any UCC
Termination Statements required to release of record any security interest BOB
had in the Pledged Collateral. Xxxxxxx and the Estate acknowledge and agree that
BOB's liquidation of the Pledged Collateral is a commercially reasonable sale of
the Pledged Collateral under the Connecticut Uniform Commercial Code and
applicable law.
(b) Xxxxxxx and the Estate, on their own behalf and for their successors
and assigns, hereby waive, release and discharge BOB, and all officers,
employees, trustees and agents of BOB, from any and all claims, demands,
defenses, setoffs, counterclaims, actions or causes of action arising out of or
in any way relating to the Revolving Loan Agreement and any and all loan
documents executed in connection therewith, the Guaranty and the Pledge
Agreement, BOB's administration of the loans and the credit relationship between
BOB and Xxxxxxx and the Estate relative thereto, and any documents, agreements,
dealings or other matters connected therewith, including without limitation
-2-
3
all known and unknown matters, claims, transactions or things occurring prior to
the date of the execution of this Agreement and related to the subject matter
thereof.
(c) Notwithstanding anything to the contrary contained herein, if at any
time (i) payment of all or any portion of the indebtedness evidenced by the
Facility A Note including without limitation attorney's fees, and/or payment
under the Guaranty, or (ii) any mortgage, lien or security interest provided to
BOB, by Xxxxxxx or the Estate, pursuant to or in connection with this Agreement
or otherwise (including without limitation the Pledge Agreement and the
Revolving Loan Agreement) is rescinded, avoided, set aside, undone, rendered
unenforceable, or otherwise must be restored by BOB, to Xxxxxxx or the Estate or
to any of the creditors of Xxxxxxx or the Estate or any representative of
Xxxxxxx or the Estate or representative of Xxxxxxx'x or the Estate's creditors,
or otherwise, upon the insolvency, bankruptcy or reorganization of Xxxxxxx or
the Estate, or otherwise, then the Revolving Loan Agreement, the Facility A
Note, and the Guaranty shall continue to be effective and/or be reinstated, as
the case may be and the amounts which BOB is obligated to so restore or which
are so rescinded, shall automatically be due and payable by Xxxxxxx under the
Facility A Note and the Estate under the Guaranty, together with the amounts, if
any, then outstanding under the Facility A Note, and any and all obligations for
repayment of any payments so restored or rescinded shall be revived under the
Facility A Note, and the Guaranty, and in the case of any payment which must be
so restored by BOB, increase the amounts, if any, then owing under the Facility
A Note and the Guaranty, all as though such payments had not been made. BOB's
liens and security interests shall be restored to their former first priority
position, and the liens of the Estate and the New Lender as provided in this
Agreement shall be junior and subordinate to BOB's liens.
(d) Notwithstanding anything to the contrary contained herein, if at any
time (I) payment of all or any portion of the indebtedness evidenced by the
Facility B Note including without limitation attorney's fees, or (ii) any
mortgage, lien, or security interest provided to BOB, by Xxxxxxx, pursuant to or
in connection with this Agreement or otherwise (including without limitation the
Revolving Loan Agreement) is rescinded, avoided, set aside, undone, rendered
unenforceable, or otherwise must be restored by BOB, to Xxxxxxx or to any of the
creditors of Xxxxxxx or any representative of Xxxxxxx or representative of
Xxxxxxx'x creditors, or otherwise, upon the insolvency, bankruptcy or
reorganization of Xxxxxxx or
-3-
4
otherwise, the Revolving Loan Agreement and the Facility B Note shall continue
to be effective and/or be reinstated, as the case may be, and the amounts which
BOB is obligated to so restore or which are so rescinded shall automatically be
due and payable by Xxxxxxx under the Facility B Note, together with the amounts,
if any, then outstanding under the Facility B Note, and any and all obligations
for repayment of any payments so restored or rescinded shall be revived under
the Facility B Note, and in the case of any payment which must be so restored by
BOB, increase the amounts, if any, then owing under the Facility B Note, all as
though such payments had not been made. BOB's liens and security interests shall
be restored to their former first priority position, and the liens of the Estate
and the New Lender pursuant to this Agreement shall be junior and subordinate to
BOB's liens.
2. Xxxxxxx'x Indebtedness to the Estate. In exchange for allowing the use
of a portion of the Pledged Collateral to pay Xxxxxxx'x obligations under the
Facility A Note, Xxxxxxx shall execute and deliver to the Estate a Promissory
Note in the form of the Note attached hereto as Exhibit A (the "Estate Note")
and shall secure the same by executing and delivering to the Estate a Security
Agreement in the form of the Security Agreement attached hereto as Exhibit B
(the "Estate Security Agreement"). Xxxxxxx shall also execute and deliver to the
Estate UCC Financing Statements which shall be necessary to perfect the Estate's
security interest in and to the collateral described in the Estate Security
Agreement in which a security interest can be perfected by filing. The Estate
acknowledges and agrees that in lieu of any right of subrogation, its entire
rights to be paid by Xxxxxxx for the use of a portion of the Pledged Collateral
as provided above to pay the Facility A Note are contained in the Estate Note
and the Estate Security Agreement as the same may be affected by the other
documents described herein to which the Estate shall become a party and that the
Estate shall not otherwise become subrogated to any rights which XXX xxx have
had against Xxxxxxx by virtue of such use of the Pledged Collateral. Each of the
undersigned Co-Executors of the Estate of Xxxxxx X. Xxxxxx does hereby authorize
and empower each other Co-Executor to execute and deliver on behalf of the
Estate any UCC-3 Subordination Statements contemplated by this Agreement and to
perform on behalf of the Estate any other act required or contemplated hereunder
or under the documents contemplated hereby.
3. Loan by New Lender.
(a) Simultaneously with its execution hereof, New Lender shall make a loan
to Xxxxxxx in the amount of Four
-4-
5
Million Dollars ($4,000,000). The proceeds of such loan shall be used as
follows:
(i) to fund Xxxxxxx'x obligation under the DataCard Agreement;
(ii) to fund and immediately provide to XXX xxxx collateral for
Xxxxxxx'x repayment obligations to BOB with respect to the Letter of
Credit and to fund and immediately pay the outstanding principal balance
and accrued interest under the Facility B Note and the Revolving Loan
Agreement;
(iii) to fund trade payables of Xxxxxxx;
(iv) to fund work in process of Xxxxxxx;
(v) to fund the costs of the transactions described in this
Agreement; and
(vi) the balance to fund the working capital needs of Xxxxxxx.
(b) To evidence and secure Xxxxxxx'x obligations to the New Lender with
respect to the New Loan, simultaneously with their execution hereof, the New
Lender and Xxxxxxx shall execute and deliver to each other a Loan and Security
Agreement in the form attached hereto as Exhibit C (the "Priority Loan
Agreement"). Xxxxxxx shall execute and deliver to the New Lender a Term Note in
the form attached hereto as Exhibit D (the "Priority Note"), and Xxxxxxx shall
execute and deliver to the New Lender UCC Financing Statements which shall be
necessary to perfect the New Lender's security interest in and to the collateral
described in the Priority Loan Agreement in which a security interest can be
perfected by filing.
4. Substitution of Collateral For Xxxxxxx'x Reimbursement Obligations
Under the Letter of Credit. Simultaneously with the execution hereof, Xxxxxxx
shall deliver $150,000 to BOB as cash collateral (the "Substitute Collateral")
for Xxxxxxx'x reimbursement obligations with respect to the Letter of Credit and
Xxxxxxx shall execute and deliver to BOB all documents and agreements required
to evidence such reimbursement obligations and security interest.
5. BOB's Release of Security Interest. BOB acknowledges that excluding (i)
Xxxxxxx'x indebtedness to BOB under the Facility A Note which is provided for in
Section 1 above and (ii) Xxxxxxx'x reimbursement obligations with respect to the
-5-
6
Letter of Credit which will be secured by the Substitute Collateral as provided
in Section 4 above, Xxxxxxx is indebted to BOB under the Facility B Note and
under the Revolving Loan Agreement in the amount of $350,089.93 as of the date
hereof (such amount the "BOB Balance"). Upon (a) receipt of payment of the
Facility A Note as provided in Section 1 above; (b) receipt of the Substitute
Collateral and documents evidencing BOB's security interest therein and
Xxxxxxx'x reimbursement obligations, as provided in Section 4 above and (c)
receipt of payment of the BOB Balance from the proceeds of the New Loan as
provided in Section 3 above and (d) receipt of payment of BOB's attorney's fees
and expenses incurred in connection with the loans evidenced by the Facility A
Note and the Facility B Note, BOB shall (i) return to Xxxxxxx the originals of
the Revolving Loan Agreement, the Facility A Note and the Facility B Note, each
marked "Cancelled" and (ii) execute and deliver to Xxxxxxx any UCC Termination
Statements which shall be required to release of record any security interest
BOB had in property of Xxxxxxx other than the Substitute Collateral.
6. Priority of Security Interests. Xxxxxxx acknowledges that Connecticut
Innovations, Inc. ("CII") currently holds a perfected security interest in
Xxxxxxx'x personal property including but not limited to patents and trademarks
which are now owned or may hereafter be acquired by Xxxxxxx (such patents and
trademarks herein "Patents and Trademarks"). Xxxxxxx, the New Lender and the
Estate acknowledge that it is their intention that upon completion of the
transaction described in this Agreement (i) the New Lender should have a first
priority security interest in the personal property of Xxxxxxx whether now owned
or hereafter acquired other than Patents and Trademarks (such personal property
of Xxxxxxx other than Patents and Trademarks herein called the "Non-Patent and
Trademark Collateral") and a second priority security interest in the Patents
and Trademarks; (ii) the Estate should have a second priority security interest
in the Non-Patent and Trademark Collateral and a third priority security
interest in the Patents and Trademarks; and (iii) CII should have a first
priority security interest in Patents and Trademarks and a third priority
security interest in the Non-Patent and Trademark Collateral. In order to
arrange for the aforesaid priority, simultaneously with their execution of this
Agreement (i) Xxxxxxx shall cause CII to execute and deliver, to the New Lender
a Subordination Agreement in the form attached hereto as Exhibit E (the "CII-New
Lender Subordination") and a UCC-3 Subordination Statement in the form attached
hereto as Exhibit F; (ii) Xxxxxxx shall cause CII to execute and deliver to the
Estate a Subordination Agreement in the form attached hereto as Exhibit G (the
-6-
7
"CII-Estate Subordination") and a UCC-3 Subordination Statement in the form
attached hereto as Exhibit H; (iii) Xxxxxxx and the New Lender shall execute and
deliver to each other and to CII the CII-New Lender Subordination; (iv) Xxxxxxx
and the Estate shall execute and deliver to each other and to CII the CII-Estate
Subordination; (v) Xxxxxxx, the Estate and the New Lender shall execute and
deliver to each other a Subordination and Intercreditor Agreement in the form
attached hereto as Exhibit I; and (vi) the Estate shall execute and deliver to
the New Lender a UCC-3 Subordination Statement in the form attached hereto as
Exhibit J.
7. Inducements to New Lender. As an inducement to the New Lender to make
the New Loan to Xxxxxxx, simultaneously with their execution hereof (i) Xxxxxxx
shall xxxxx to the New Lender one or more stock purchase warrants substantially
in the form attached hereto as Exhibit K (the "Warrants"), entitling the New
Lender in the aggregate, to purchase from Xxxxxxx upon exercise of the Warrants
a number of shares of the Common Stock of Xxxxxxx that is equal to thirty-five
percent (35%) of the pro forma, fully diluted number of shares of Common Stock
of Xxxxxxx as of the date of exercise; (ii) Xxxxxxx and the New Lender shall
enter into a Registration Rights Agreement in the form attached hereto as
Exhibit L; (iii) Xxxxxxx shall cause Park Investment Partners, Inc. ("Park") and
Xxxxxx X. Xxxxxx ("Xxxxxx") to execute and deliver to Xxxxxxx, the Estate and
the New Lender a Voting Agreement in the form attached hereto as Exhibit M (the
"Voting Agreement"); and (iv) Xxxxxxx, the Estate and the New Lender shall
execute and deliver to each other and to Park and Xxxxxx the Voting Agreement.
8. Purchase Price Allocation. Xxxxxxx and New Lender hereby agree that the
purchase price of the Priority Note evidencing the New Loan shall be Three
Million Six Hundred Fifty-Five Thousand Dollars ($3,655,000.00) and the purchase
price of the Warrants shall be Three Hundred Forty-Five Thousand Dollars
($345,000.00). Xxxxxxx and New Lender hereby agree to take reporting and other
positions with respect to the New Loan and the Warrants (collectively, the
"Securities") which are consistent with the purchase price of the Securities set
forth in the preceding sentence for all financial reporting purposes, unless
otherwise required by generally accepted accounting principles or the applicable
rules of the Securities and Exchange Commission.
9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
-7-
8
10. Exhibits. All Exhibits referred to herein are intended to be and
hereby are specifically made a part of this Agreement.
11. Execution by Telefacsimile Transmission. Telefacsimile transmissions
of any executed original document and/or retransmission of any executed
telefacsimile transmission shall be deemed to be the same as the delivery of an
executed original. At the request of any party hereto, the other parties shall
confirm telefacsimile transmissions by executing duplicate original documents
and delivering the same to the requesting party or parties.
[Rest of This Page Intentionally Left Blank.]
-8-
9
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
SIGNED, SEALED AND DELIVERED
IN THE PRESENCE OF: XXXXXXX INTERNATIONAL, LTD.
By: /s/ Xxxxx X. Xxxxxxx
Name: Name: Xxxxx X. Xxxxxxx
Title: President & CEO
Name:
BANKBOSTON, N.A.
[signature illegible] By: /s/ Xxxxxx X. Xxxx
Name: Name: Xxxxxx X. Xxxx
Title: Vice President
Name:
THE ESTATE OF
XXXXXX X. XXXXXX
/s/ Xxxxxx Xxxxx, II By: /s/ June X. Xxxxxx
Name: June X. Xxxxxx,
Its Co-Executor
[signature illegible]
Name:
/s/ Xxxxx X. Xxxx By: /s/ Xxxx X. Xxxxxxx, Xx.
Name: Xxxxx X. Xxxx Xxxx X. Xxxxxxx, Xx.
Its Co-Executor
/s/ Geert T.M.J. Raaijnakers
Name: Geert T.M.J. Raaijnakers
[signature illegible] By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx,
Its Co-Executor
[signature illegible]
Name:
-9-
SIGNATURE PAGE OMNIBUS AGREEMENT
10
By: UNITED STATES TRUST
COMPANY OF NEW YORK,
Its Co-Executor
[signature illegible] By: /s/ Xxxxxx Xxxxx Xxxxxxxxxxx
Name: Name: Xxxxxx Xxxxx Xxxxxxxxxxx
Title: Vice President
[signature illegible]
Name:
XXXXXXX PARTNERS, LLC
By: /s/ Xxxxxx X. Xxxxx
Name: Name: Xxxxxx X. Xxxxx
Title: Manager
Name:
STATE OF CONNECTICUT )
) ss. October __, 1998
COUNTY OF )
Personally appeared _________________________, signer and sealer of the
foregoing instrument personally known to me (or satisfactorily proven) who
acknowledged that he/she as ___________________ of XXXXXXX INTERNATIONAL, LTD.,
is duly authorized to execute said instrument and further acknowledged the same
to be his/her free act and deed as ___________________ of XXXXXXX INTERNATIONAL,
LTD., and the free act and deed of said XXXXXXX INTERNATIONAL, LTD., before me,
the undersigned officer
__________________________________
Name:
Commissioner of the Superior Court
Notary Public
My Commission Expires
-10-
SIGNATURE PAGE OMNIBUS AGREEMENT
11
STATE OF MASSACHUSETTS )
) ss:
COUNTY OF SUFFOLK )
Personally appeared Xxxxxx X. Xxxx, signer and sealer of the foregoing
instrument, personally known to me (or satisfactorily proven) who acknowledged
that he/she as Vice President of BANK BOSTON, N.A., is duly authorized to
execute said instrument and further acknowledged the same to be his/her free act
and deed as Vice President of BANK BOSTON, N.A., and the free act and deed of
said BANK BOSTON, N.A., before me, the undersigned officer.
/s/ Xxxxxxxxx X. Xxxxxxxxx
Name:
Commissioner of the Superior Court
Notary Public
My Commission Expires: Aug. 5, 0000
XXXXX XX XXX XXXXXXXXX )
) ss:
COUNTY OF GRAFTON )
On this 1 day of October, 1998, before me, the undersigned officer,
personally appeared JUNE X. XXXXXX, personally known to me (or satisfactorily
proven) who acknowledged herself to be the person whose name subscribed to the
within instrument and acknowledged that she executed the same for the purposes
therein contained.
In witness whereof I hereunto set my hand.
/s/ Xxxxxxx X. Xxxxx
Name:
Notary Public
My Commission Expires April 2, 2002
-11-
SIGNATURE PAGE OMNIBUS AGREEMENT
12
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On this 1st day of October, 1998, before me, the undersigned officer,
personally appeared XXXX X. XXXXXXX, XX., personally known to me (or
satisfactorily proven) who acknowledged himself to be the person whose name
subscribed to the within instrument and acknowledged that he executed the same
for the purposes therein contained.
In witness whereof I hereunto set my hand.
/s/ Xxxxx Xxxxx
Name:
Notary Public
My Commission Expires: 3/30/99
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On this 1st day of October, 1998, before me, the undersigned officer,
personally appeared XXXXXX X. XXXXXX, personally known to me (or satisfactorily
proven) who acknowledged himself to be the person whose name subscribed to the
within instrument and acknowledged that he executed the same for the purposes
therein contained.
In witness whereof I hereunto set my hand.
/s/ Xxxx X. Xxxxxxxx
Name:
Notary Public
My Commission Expires: July 6, 2000
-12-
SIGNATURE PAGE OMNIBUS AGREEMENT
13
STATE OF NEW YORK )
) ss:
COUNTY OF )
On this __ day of October, 1998, before me, the undersigned officer,
personally appeared Xxxxxx Xxxxx Xxxxxxxxxxx, Vice President of UNITED STATES
TRUST COMPANY OF NEW YORK, personally known to me (or satisfactorily proven) who
acknowledged himself to be the person whose name subscribed to the within
instrument and acknowledged that he executed the same for the purposes therein
contained.
In witness whereof I hereunto set my hand.
/s/ Xxxx X. Xxxxxxxxx
Name:
Notary Public
My Commission Expires: Nov. 13, 0000
XXXXX XX XXX XXXX )
) ss. October 1, 0000
XXXXXX XX XXX XXXX )
Personally appeared Xxxxxx X. Xxxxx, signer and sealer of the foregoing
instrument personally known to me (or satisfactorily proven) who acknowledged
that he is the Manager of XXXXXXX PARTNERS, LLC, is duly authorized to execute
said instrument and further acknowledged the same to be his free act and deed as
Manager of XXXXXXX PARTNERS, LLC, and the free act and deed of said limited
liability company, before me, the undersigned officer
/s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Notary Public
My Commission Expires: Aug. 2, 1999
-13-
SIGNATURE PAGE OMNIBUS AGREEMENT
