EXHIBIT 1
=====================================
PHOENIX INFORMATION SYSTEMS CORP.
=====================================
SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
=====================================
December 23, 1996
SERIES C CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
THIS SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE
AGREEMENT, dated December 23, 1996, is by and between
PHOENIX INFORMATION SYSTEMS CORP., a Delaware corporation
(the "Company"), and S-C PHOENIX PARTNERS, a New York
general partnership ("Purchaser").
WHEREAS, the Company desires to issue and sell a
total of 833,333 of its shares of Series C Convertible
Preferred Stock, par value $0.01 per share ("Series C
Shares"), with such designations as are set forth on the
Certificate of Designation (the "Certificate of
Designation") annexed hereto as Exhibit A, which are con-
vertible into shares of its common stock, par value $0.01
per share ("Common Stock"), on the terms and conditions
provided in the Certificate of Designation;
WHEREAS, Purchaser desires and has agreed to
purchase the Series C Shares subject to the terms and
conditions set forth herein; and
WHEREAS, the parties desire to set forth their
mutual agreements with respect to the sale and purchase of
the Series C Shares.
NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which is here-
by acknowledged, the parties agree as follows:
1. Sale and Purchase of the Series C Shares.
Subject to the terms and conditions hereof, the Company
hereby sells, transfers, assigns, conveys and delivers to
Purchaser, and Purchaser purchases from the Company, the
Series C Shares. Simultaneously herewith, the Company shall
deliver to Purchaser a stock certificate representing the
Series C Shares, duly executed by the Company against pay-
ment therefor in an amount equal to the $15,000,000 (or
$18.00 per share) by wire transfer of immediately available
funds to the Company's account as follows:
Account Name : Phoenix Information Systems
Corp.
Account No. : 1263680853
Bank : Xxxxxxx Bank of Pinellas
County
Address : Xxx Xxxxxxxx Xxxxx
000 Xxxxxxx Xxxxxx
Xx. Xxxxxxxxxx, XX 00000
(000) 000-0000
ABA No. : 000000000
or to such other account or accounts as the Company may
designate in writing.
2. Representations, Warranties and Covenants of
the Company. To induce Purchaser to enter into this Agree-
ment and to purchase the Series C Shares, the Company hereby
represents, warrants and covenants to Purchaser that:
2.1 Organization, Standing, etc. The Compa-
ny is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and
has the requisite corporate power and authority to issue the
Series C Shares and the shares of Common Stock issuable upon
conversion thereof (collectively, the "Securities") and to
otherwise perform its obligations hereunder and under the
Certificate of Designation and the Registration Rights
Agreement (the "Registration Rights Agreement") between the
Company and Purchaser being executed simultaneously herewith
in the form of Exhibit B hereto. The Company has all
requisite corporate power and authority to own, lease and
operate its business as presently conducted.
2.2 Corporate Acts and Proceedings. Each of
this Agreement and the Registration Rights Agreement has
been duly authorized by all necessary corporate action on
behalf of the Company, has been duly executed and delivered
by authorized officers of the Company, and is a valid and
binding agreement on the part of the Company that is
enforceable against the Company in accordance with its
terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, moratorium, fraudulent con-
veyance, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and to judicial
limitations on the enforcement of the remedy of specific
performance and other equitable remedies. All corporate
action necessary to the authorization, creation, issuance
and delivery of the Series C Shares has been taken by the
Company and the Certificate of Designation has been filed in
the office of the Secretary of State of the State of
Delaware. The 833,333 Series C Shares, when issued and
fully paid for pursuant to this Agreement, the Share
Dividends (as defined in the Certificate of Designation) on
the Series C Shares and the Common Stock, when issued upon
conversion of the Series C Shares in accordance with the
terms thereof, will be duly and validly issued and fully
paid and nonassessable and will not subject the holders
thereof to statutory personal liability by reason of being
such holders.
2.3 Capitalization. As of December 5, 1996,
the authorized capital stock of the Company consisted of
125,000,000 shares of Common Stock, of which 48,214,739 are
issued and outstanding as of the date hereof, and 5,000,000
shares of preferred stock of which 1,250,000 shares are
designated as Series A Convertible Preferred Stock, par
value $.01 per share ("Series A Shares"), of which 818,750
which are issued and outstanding, 1,250,000 shares are
designated as Series B Convertible Preferred Stock, par
value $.01 per share ("Series B Shares"), all of which are
issued and outstanding, and 2,500,000 shares are designated
as Series C Shares, none of which are issued and
outstanding. The Common Stock, the Series A Shares, the
Series B Shares and the Series C Shares are collectively
referred to as the "Equity Securities." All outstanding
Equity Securities have been duly and validly issued and are
fully paid and nonassessable. Except as set forth on Sched-
ule 2.3, as of December 5, 1996, the Company has not issued
any options, warrants or other rights of any kind to acquire
shares of the Company's capital stock or securities convert-
ible into or exchangeable for such shares, or commit itself
to do any of the foregoing. Except as set forth on Sched-
ule 2.3, there are no contracts, commitments, agreements,
understandings, arrangements, registration rights, or
restrictions or preemptive rights to which the Company is a
party or by which it is bound relating to Equity Securities
or other securities of the Company, whether or not outstand-
ing.
2.4 Non-Contravention. Neither the execu-
tion, delivery and performance of this Agreement or the
Registration Rights Agreement nor the consummation of the
transactions contemplated herein or therein will violate or
be in conflict with any provision of the certificate of
incorporation or bylaws of the Company, or violate or be in
conflict with any material debt, note, bond, lease,
mortgage, indenture, license, obligation, contract, commit-
ment, franchise, permit, instrument or other agreement or
obligation to which the Company is a party, or violate or be
in conflict with any law, judgment, decree, order, regula-
tion or ordinance by which the Company is bound or affected.
2.5 Reports Under Securities Exchange Act of
1934. During the period that the Company has been subject
to the reporting requirements of the Securities Exchange Act
of 1934 ("1934 Act"), the Company has filed all reports re-
quired to be filed pursuant thereto (collectively,
"Reports"). As of their respective dates, all such Reports
filed by the Company (including all exhibits and schedules
thereto and documents incorporated by reference therein),
did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Purchaser shall be entitled to rely on all such Reports for
purposes of the transactions contemplated by this Agreement.
The Company covenants and agrees to continue to make all
required filings under the 1934 Act as may be necessary to
permit Purchaser to avail itself of the provisions of
Rule 144 promulgated under the Securities Act of 1933 ("1933
Act") at such time as Rule 144 shall become available to
Purchaser and to provide Purchaser with copies thereof prom-
ptly after filing. The Company has no knowledge of any
facts, particular to the Company, which are reasonably
likely to prevent or unreasonably delay the registration
under the 1933 Act of the Common Stock as contemplated by
the Registration Rights Agreement.
2.6 No Brokers or Finders. No person, firm
or corporation has or will have, as a result of any act or
omission by the Company, any right, interest or valid claim
against the Company or Purchaser for any commission, fee or
other compensation as a finder or broker, or in any similar
capacity, in connection with the transactions contemplated
by this Agreement except as set forth on Schedule 2.6. The
Company shall indemnify and hold Purchaser harmless against
any and all liability with respect to any such commission,
fee or other compensation which may be payable or which
shall be determined to be payable as a result of the actions
of the Company in connection with the transactions contem-
plated by this Agreement.
2.7 Governmental Authorization; Third Party
Consents. No approval, consent, compliance, exemption,
authorization or other action by, or notice to or filing
with, any governmental authority or any other entity, and no
lapse of a waiting period, is necessary or required in
connection with the execution, delivery or performance by
the Company, or enforcement against the Company, of this
Agreement and the Registration Rights Agreement or the
transactions contemplated hereby or thereby.
2.8 Litigation. Except as set forth in the
Reports, there are no legal actions, suits, proceedings,
claims or disputes pending, or to the knowledge of the
Company, overtly threatened, at law, in equity, in
arbitration or before any governmental authority against or
affecting the Company.
2.9 Compliance with Laws. The Company is in
compliance in all material respects with all laws,
ordinances, regulations and orders of all U.S. and foreign
governmental entities applicable to the Company, except as
disclosed in the Reports.
2.10 Intellectual Property. Except as
specifically set forth in the Reports, the Company owns or
is licensed or otherwise has the right to use all patents,
trademarks, service marks, trade names, copyrights, trade
secrets, licenses, franchises and other rights, all
products, processes and methods, computer software, computer
programs and similar intangible assets of the Company that
are material to the operation of its business as presently
conducted and as proposed to be conducted.
2.11 Taxes.
(a) Except as disclosed in the Reports, the
Company has filed all returns with respect to all
federal, state, county, local, foreign and other taxes,
whether or not measured in whole or in part by net
income (collectively, "Taxes"), required to be filed
through the date hereof in a manner consistent with
prior years. Except as disclosed in the Reports (and
any interest, additions to tax and penalties incurred
since the date of the last Report in connection with
matters disclosed therein), the Company has paid all
Taxes (including deficiencies, interest, additions to
tax and penalties with respect thereto) that are shown
as due through the date hereof, or that are claimed or
asserted by any taxing authority to be due through the
date hereof, with respect to the operations of the
Company in each case except for those Taxes that are
being contested in good faith by appropriate
proceedings and with respect to which adequate reserves
have been set aside. Except as disclosed in the
Reports (and any interest, additions to tax and
penalties incurred since the date of the Reports in
connection with matters disclosed therein), with
respect to any period for which Tax returns have not
yet been filed, or for which Taxes are not yet due or
owing, the Company has no liability for Taxes in each
case other than Taxes incurred in the ordinary course
of business or for which accruals are reflected in the
financial statements contained in the Reports.
(b) Except as disclosed in the Reports, no
audit or other proceedings by any court, taxing
authority, or similar entity is pending or, to the
knowledge of the Company, overtly threatened with
respect to any Taxes due from or with respect to the
operations of the Company or any Tax return filed by or
with respect to the operations of the Company. No
assessment of Taxes is proposed against the Company or
its assets.
2.12 Financial Condition. The Company has
furnished Purchaser with true and complete copies of its
latest Reports. The Company's financial statements con-
tained in the Reports fairly present the financial position
of the Company as of the dates thereof, and the results of
operations and cash flows of the Company for the periods set
forth therein, all in conformity with generally accepted ac-
counting principles consistently applied during the periods
involved, subject, with respect to quarterly periods, to
year-end adjustments.
2.13 Disclosure. This Agreement does not
contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make any
statement contained herein or therein, in the light of the
circumstances under which it was made, not misleading.
There is no fact known to the Company that has not been
disclosed to Purchaser orally or in writing or in the Re-
ports that materially adversely affects or, insofar as the
Company can reasonably foresee, will materially adversely
affect the Company or the ability of the Company to perform
its obligations under this Agreement or the Registration
Rights Agreement or to consummate the transactions
contemplated hereby or thereby; provided, however, that any
disclosure made herein with respect to any particular
representation or warranty shall be deemed a disclosure for
all purposes hereof.
2.14 Material Adverse Change. Since the date
of the last Report there has not been any material adverse
change nor, to the knowledge of the Company, is any such
change overtly threatened, in the assets, business,
operations or financial condition of the Company.
3. Representations of Purchaser. Purchaser
represents, warrants and covenants to the Company that:
3.1 Organization, etc. Purchaser is a
general partnership duly organized and validly existing
under the laws of the State of New York and has the requi-
site power and authority and has been duly authorized to
perform its obligations hereunder and under the Registration
Rights Agreement.
3.2 Investment Intent. (a) The Securities
being acquired by it are being purchased for investment for
its own account and not with the view to, or for resale in
connection with, any distribution or public offering
thereof. Purchaser understands that such Securities have
not been registered under the 1933 Act or any state
securities laws by reason of their contemplated issuance in
transactions exempt from the registration requirements of
the 1933 Act pursuant to Section 4(2) thereof and applicable
state securities laws, and that the reliance of the Company
and others upon these exemptions is predicated in part upon
this representation by Purchaser. Purchaser further
understands that such Securities may not be transferred or
resold without (i) registration under the 1933 Act and any
applicable state securities laws, or (ii) an exemption from
the requirements of the 1933 Act and applicable state
securities laws.
(b) Purchaser understands that an exemption
from such registration is not presently available pursuant
to Rule 144 promulgated under the 1933 Act by the Securities
and Exchange Commission and that in any event Purchaser may
not sell any such Securities pursuant to Rule 144 prior to
the expiration of the period required under Rule 144 after
it has acquired such Securities. Purchaser understands that
any sales pursuant to Rule 144 can be made only in full
compliance with the provisions of Rule 144.
3.3 Location of Principal Office; Qualifica-
tions as an Accredited Investor. The address of Purchaser's
principal office is set forth in Section 7.1 hereof.
Purchaser qualifies as an "accredited investor" for purposes
of Regulation D promulgated under the 1933 Act. Purchaser
acknowledges that the Company has made available to it the
opportunity to ask questions and receive answers concerning
the terms and conditions of the sale of securities
contemplated by this Agreement and to obtain any additional
information (which the Company possesses or can acquire
without unreasonable effort or expense) as may be necessary
to verify the accuracy of the information furnished to it.
Purchaser (a) is able to bear the risk of loss of its entire
investment in the Securities being acquired by it without
any material adverse effect on its business, operations or
prospects, and (b) has such knowledge and experience in
financial and business matters that it is capable of evalu-
ating the merits and risks of the investment to be made by
it pursuant to this Agreement.
3.4 Acts and Proceedings. This Agreement
has been duly authorized by all necessary action on the part
of Purchaser. This Agreement, with respect to Purchaser,
has been duly executed and delivered. This Agreement is a
valid and binding agreement of Purchaser, enforceable
against it in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, fraudulent conveyance, reorganiza-
tion or other similar laws affecting the enforcement of
creditors' rights generally and to judicial limitations on
the enforcement of the remedy of specific performance and
other equitable remedies.
3.5 No Brokers or Finders. No person, firm
or corporation has or will have, as a result of any act or
omission by Purchaser, any right, interest or valid claim
against the Company for any commission, fee or other compen-
sation as a finder or broker, or in any similar capacity, in
connection with the transactions contemplated by this Agree-
ment, except as set forth on Schedule 2.6. Purchaser shall
indemnify and hold the Company harmless against any and all
liability with respect to any such commission, fee or other
compensation which may be payable or which shall be
determined to be payable as a result of the actions of
Purchaser in connection with the transactions contemplated
by this Agreement.
4. Additional Agreements and Covenants.
4.1 Financial Statements. The Company shall
provide to Purchaser unaudited monthly and quarterly
financial statements, within 30 days after the last day of
each calendar month and within 45 days after the last day of
each fiscal quarter, respectively. In addition, the Company
shall provide to Purchaser audited annual financial
statements within 90 days after the end of each fiscal year.
The Company shall provide to Purchaser such additional
information regarding its business and financial condition
as Purchaser shall reasonably request.
4.2 Press Releases. The Company and
Purchaser shall consult with each other with respect to any
press release or public announcement pertaining to this
Agreement or the Registration Rights Agreement, and shall
not issue such press release or make any such public
announcement prior to such consultation, except that (a) the
Company may issue any such release or make any such public
announcement as it shall determine, in its sole discretion,
may be required by applicable law after consultation with
Purchaser to the extent references to Purchaser shall be
required to be disclosed and (b) Purchaser and its
affiliates may make disclosure on any reports Purchaser or
its affiliates shall furnish to their investors.
4.3 Confidentiality. Purchaser shall keep
confidential any and all confidential information regarding
the Company, including its business, financial condition,
operations, assets, employees and properties, except as may
be required by law.
4.4 Further Assurances. The Company, on the
one hand, and Purchaser, on the other hand, agree from time
to time after the date hereof, upon the request of the
other, to do, execute, acknowledge and deliver, or cause to
be done, executed, acknowledged or delivered, all such
further acts, documents and assurances as may be necessary
or appropriate to carry out the terms of this Agreement.
4.5 Additional Payments. At the option of
any Holder (as defined in the Certificate of Designation),
such Holder shall have the right to pay additional
consideration upon any conversion, liquidation or issuance
of Series C Shares or Common Stock to the extent necessary
to permit such conversion, liquidation or issuance to comply
with applicable law, but any such payment pursuant to such
option shall not in any way reduce the obligation of the
Company under this Agreement if such payment were not to be
made.
5. Restriction on Transfer of Securities
5.1 Restrictions. The Securities are only
transferable pursuant to (a) an offering registered under
the 1933 Act, (b) Rule 144 promulgated thereunder (or any
similar rule then in effect) if such rule is available, or
(c) subject to the conditions specified elsewhere in this
Section 5, any other legally available means of transfer.
5.2 Legend. Each certificate evidencing
Securities shall be endorsed with the following legend:
"THE SECURITIES REPRESENTED HEREBY HAVE BEEN ISS-
UED WITHOUT REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES
LAWS, AND MAY NOT BE SOLD, TRANSFERRED OR PLEDGED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATE-
MENT UNDER APPLICABLE FEDERAL AND STATE SECURITIES
LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT THE TRANSFER IS EXEMPT FROM REGISTRA-
TION UNDER APPLICABLE FEDERAL AND STATE SECURITIES
LAWS."
5.3 Removal of Legend. Any legend endorsed
on a certificate pursuant to Section 5.2 hereof shall be re-
moved, and the Company shall issue a Security without such
legend to the holder of such Security, if such Security is
being disposed of pursuant to a registration under the 1933
Act or pursuant to Rule 144 or any similar rule then in
effect or if such holder provides that Company with an
opinion of counsel satisfactory to the Company to the effect
that a transfer of such Security may be made without regis-
tration. In addition, if the holder of such Security deliv-
ers to the Company an opinion of such counsel to the effect
that no subsequent transfer of such Security shall require
registration under the 1933 Act, the Company shall promptly
upon such contemplated transfer deliver new Securities that
shall not bear the legend set forth in Section 5.2.
6. Indemnification.
6.1 Indemnitors; Indemnified Persons. For
purposes of this Section 6, each party which, pursuant to
this Section 6, agrees to indemnify any other person or
entity shall be referred to, as applicable, as the
"Indemnitor" with respect to such persons and entities, and
each such person and entity which shall be indemnified by
the Indemnitor shall be referred to as the "Indemnified
Person."
6.2 Company Indemnity. The Company hereby
agrees to indemnify and hold harmless Purchaser and its
directors, officers, controlling persons (within the meaning
of Section 15 of the 1933 Act or Section 20(a) of the 1934
Act), agents and employees from and against any and all
claims, liabilities, losses, damages and expenses incurred
by such Indemnified Person (including reasonable attorneys'
fees and disbursements) which shall be caused by or related
to or arise out of any material breach of any representa-
tion, warranty, covenant or agreement of the Company con-
tained in this Agreement, and shall reimburse such Indem-
nified Person for all costs and expenses (including
reasonable attorneys' fees and disbursements) as they shall
be incurred, in connection with investigating, preparing
for, or defending any action, claim, investigation, inquiry
or other proceeding, whether or not in connection with
pending or threatened litigation, which shall have been
caused by or related to or arise out of such breach, whether
or not such Indemnified Person shall be named as a party
thereto and whether or not any liability shall result there-
from. The Company shall not, however, be responsible for
any claims, liabilities, losses, damages, or expenses pursu-
ant to this Section 6.2 or otherwise which shall be finally
judicially determined to have resulted primarily from an
Indemnified Person's bad faith, willful misconduct or gross
negligence, or any material breach by Purchaser of this
Agreement. The Company further agrees that the Company
shall not, without the prior written consent of Purchaser,
settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action, suit or proceed-
ing in respect of which indemnification may be sought
hereunder unless such settlement, compromise or consent
shall include an unconditional release of each Indemnified
Person hereunder from all liability arising out of such
claim, action, suit or proceeding.
6.3 Purchaser Indemnity. Purchaser hereby
agrees to indemnify and hold harmless each of the Company
and its directors, officers, controlling persons (within the
meaning of Section 15 of the 1933 Act or Section 20(a) of
the 1934 Act), agents, including without limitation Xxxxxx
Xxxxxxx, and employees from and against any and all claims,
liabilities, losses, damages and expenses incurred by such
Indemnified Person (including reasonable attorneys' fees and
disbursements) which shall be caused by or related to or
arise out of such Purchaser's material breach of any
representation, warranty, covenant or agreement of such
Purchaser contained in this Agreement, and shall reimburse
such Indemnified Person for all costs and expenses
(including reasonable attorneys' fees and disbursements) as
they shall be incurred, in connection with investigating,
preparing for, or defending any action, claim,
investigation, inquiry or other proceeding, whether or not
in connection with pending or threatened litigation, which
shall be caused by or related to or arise out of such
breach, whether or not such Indemnified Person shall be
named as a party thereto and whether or not any liability
results therefrom. Purchaser shall not, however, be respon-
sible for any claims, liabilities, losses, damages, or
expenses pursuant to this Section 6.3 or otherwise which
shall be finally judicially determined to have resulted
primarily from an Indemnified Person's bad faith, willful
misconduct or gross negligence, or any material breach by
the Company of this Agreement. Purchaser further agrees
that it shall not, without the prior written consent of the
Company, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought
hereunder unless such settlement, compromise or consent
shall include an unconditional release of each Indemnified
Person hereunder from all liability arising out of such
claim, action, suit or proceeding.
6.4 Defense. Promptly after receipt by an
Indemnified Person of notice of the commencement of any
action or proceeding with respect to which indemnification
may be sought hereunder, such person shall notify the
Indemnitor of the commencement of such action or proceeding,
but failure so to notify the Indemnitor shall not relieve
the Indemnitor from any liability which the Indemnitor may
have hereunder or otherwise, unless the Indemnitor shall be
materially prejudiced by such failure. If the Indemnitor
shall so elect, the Indemnitor shall assume the defense of
such action or proceeding, including the employment of
counsel reasonably satisfactory to such Indemnified Person
and shall pay the fees and disbursements of such counsel.
In the event, however, that such Indemnified Person
reasonably shall determine in its judgment that having com-
mon counsel would present such counsel with a conflict of
interest or alternative defenses shall be available to an
Indemnified Person or if the Indemnitor shall fail to assume
the defense of the action or proceeding in a timely manner,
then such Indemnified Person may employ separate counsel to
represent or defend it in any such action or proceeding, and
the Indemnitor shall pay the reasonable fees and dis-
bursements of such counsel; provided, however, that the
Indemnitor shall not be required to pay the fees and
disbursements of more than one separate counsel for all
Indemnified Persons in any jurisdiction in any single action
or proceeding. In any action or proceeding the defense of
which the Indemnitor shall assume, the Indemnified Person
shall have the right to participate in such litigation and
to retain its own counsel at such Indemnified Person's own
expense, so long as such participation shall not interfere
with the Indemnitor's control of such litigation.
7. Miscellaneous.
7.1 Notices. All notices, requests, demands
and other communications required or permitted hereunder
shall be made in writing and shall be deemed to have been
duly given and effective: (i) on the date of delivery, if
delivered personally; (ii) on the earlier of the fourth
(4th) day after mailing or the date of the return receipt
acknowledgement, if mailed, postage prepaid, by certified or
registered mail, return receipt requested; or (iii) on the
date of transmission if sent by facsimile, telecopy, tele-
graph, telex or other similar telegraphic communications
equipment,
(a) if to Purchaser, at 000 Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attn: Xxxxx Xxxxxxx, Esq.;
facsimile number: (000) 000-0000 or at such other
address or facsimile number as the Purchaser may
specify by written notice to the Company, or
(b) if the Company at 000 Xxxxxx Xxxxxx
Xxxxx, Xxxxx 0000, Xx. Xxxxxxxxxx, Xxxxxxx 00000, At-
tention: Xxxxxx X. Xxxxxx, Chairman or Xxxx X. Xxxxx,
Director; facsimile number: (000) 000-0000 or at such
other address or facsimile number as the Company may
specify by written notice to Purchaser.
7.2 Benefit of Agreement. All terms and
provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective
successors and assigns.
7.3 Governing Law. This Agreement and the
legal relations among the parties hereto shall be governed
by and construed in accordance with the internal law of the
State of New York (without regard to the laws of conflict
that might otherwise apply) as to all matters including
without limitation matters of validity, construction,
effect, performance and remedies.
7.4 Headings. The headings of the Sections
of this Agreement have been inserted for convenience of
reference only and do not constitute a part of this
Agreement.
7.5 Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall
constitute one and the same instrument.
7.6 Entire Agreement. This Agreement repre-
sents the entire agreement among the parties with respect to
the subject matter hereof superseding all prior agreements
and understandings, written or oral.
7.7 Expenses. Each party shall be
responsible and shall pay for all expenses incurred by it in
connection with the preparation, negotiation and execution
of this Agreement and the Registration Rights Agreement and
the consummation of the transactions contemplated herein and
therein; provided, however, that the Company shall reimburse
Purchaser for reasonable attorneys' fees which shall
actually be incurred by it in connection herewith (including
fees incurred in connection with the preparation,
negotiation and execution and delivery of this Agreement) up
to a maximum amount of $30,000.
7.8 Arbitration. Any dispute hereunder or
otherwise arising out of relating to this Agreement (except
for disputes directly relating to a third party claim for
which indemnification may be required to the extent an
action shall have been commenced by a third party in a court
or other forum) shall be resolved only by arbitration by a
single arbitrator. The arbitration shall be held in New
York, New York and shall be conducted by the American
Arbitration Association (the "AAA") pursuant to its
Commercial Arbitration Rules. The arbitrator shall be
selected by the Company and Purchaser, or, failing such
selection within ten days after any party shall have
requested such arbitration, shall be selected by the AAA.
The decision of the arbitrator shall be final and binding
upon the parties, and the judgment upon the arbitral award
may be entered by any court of competent jurisdiction, in
law or in equity. Such decision shall include an award to
the prevailing party of all costs and expenses (including,
without limitation, reasonable attorney's fees) incurred in
connection with the resolution of any such dispute. Any
award shall include interest payable thereon at a rate of
ten percent per annum from the date of the commencement of
the arbitration. The parties expressly agree that the
arbitrator shall have the power to incorporate injunctive
relief or require specific performance as part of any award.
7.9 Schedules. All Schedules referred to
herein refer to information provided in a separate
disclosure document but shall be deemed to be a part hereof
for purposes of representations and covenants herein.
Next Page is Signature Page
IN WITNESS WHEREOF, the parties have caused
this Agreement to be executed by their duly authorized
representatives as of the day and year first stated above.
PHOENIX INFORMATION
SYSTEMS CORP.
By:______________________________
Title:
S-C PHOENIX PARTNERS
By:______________________________
Name:
Title:
