STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement dated September 24, 1998 by and between
Multimedia Access Corp. ("MMAC") and Xxxxx Holdings Inc. ("THI").
RECITALS
A. MMAC designs, develops, manufactures and markets advanced,
standards-based video communications ("videocom") systems that provide
enterprise-wide solutions for business customers.
B. THI, through Astratek, Inc., will be engaged in the business of software
development and providing consulting services related thereto. C. THI and MMAC
and desire to develop a strategic relationship pursuant to which it is
contemplated THI will provide software development products and services for
MMAC and become a reseller, primarily to customers engaged in financial services
businesses, of MMAC products.
NOW THEREFORE, in consideration of the mutual promises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. On the "Closing", as hereinafter defined, MMAC will purchase that number
of shares of the common stock of THI, par value $.0001 per share, ("THI Common
Stock") determined in accordance with the formula set forth below, which shall
paid by the issuance to THI of that number of shares common stock of MMAC, par
value $.0001 per share, ("MMAC Common Stock") determined in accordance with a
formula set forth below. The number of shares of THI Common Stock to be
purchased and the number of shares of MMAC Common Stock to be issued in payment
thereof shall be determined, in each case, by dividing $2,000,000 by the average
closing price per share of the MMAC Common Stock or THI Common Stock, as the
case may be, for the five trading days ending one day prior to the "Closing
Date", as hereinafter defined.
2. THI represents and warrants to, and agrees with, MMAC that the following
representations and warranties are as of the date of this Agreement, and will
be, on the Closing Date, true correct and complete:
(A) THI is a corporation duly organized, validly existing and in good
standing in the laws of the State of Delaware and has all requisite corporate
power and authority under the laws of the State of Delaware and its certificate
of incorporation to hold or lease, and to operate, its properties presently
owned or conducted, and to carry on its business as now conducted and as
proposed to be conducted following the Closing.
(B) The execution, delivery and performance by THI of this Agreement and
the effectuation of transactions contemplated hereby are within its corporate
power and have been
duly authorized by all proceedings required to be taken under its certificate of
incorporation and the laws of the State of Delaware.
(C) This Agreement has been duly and validly executed and delivered and
constitutes the legal, valid and binding obligation of THI, enforceable against
THI in accordance with its terms, except as such enforceability may be (i)
limited by any applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and (ii)
subject to general principles of equity, regardless of whether that
enforceability is considered in a proceeding at law or in equity.
(D) The execution, delivery and performance by THI in accordance with the
terms of this Agreement does not, and will not (i) violate, breach or constitute
a default under the certificate of incorporation or bylaws of THI, any
governmental requirement applicable to THI or any material agreement to which
THI is a party or by which it or its assets is bound; (ii) result in the
acceleration or mandatory prepayment of any indebtedness of THI or afford any
holder of any indebtedness the right to require THI to redeem, purchase or
otherwise acquire, reacquire, or repay any of that indebtedness; (iii) cause or
result in the imposition of, or afford any person the right to obtain, any lien
upon the property or assets of THI; or (iv) result in the revocation,
cancellation, suspension or material, individually or in the aggregate,
modification, of any licenses or governmental approvals possessed by THI and
necessary for the ownership or lease and the operation of its properties or the
carrying out of its business as now conducted.
(E) THI has heretofore delivered to MMAC, THI's Form 10-K for the fiscal
year ended June 30, 1997 ("THI 10-K") and its Form 10-Qs for the quarters ended
September 30, 1997, December 31, 1997 and March 31, 1998 (collectively THI
10-Qs" and the HI 10K and THI 10-Qs collectively "THI SEC Filings"). As of their
respective dates, except for any information corrected or superseded by
subsequent filings with the SEC, the THI SEC Filings did not contain any untrue
statement of 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. The audited
consolidated financial statements of THI and its subsidiaries, and the notes and
thereto, certified by Feldman, Radin, included in the THI 10-K, have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis during the periods involved and present fairly the
consolidated financial position of THI and its subsidiaries as of the date
thereof and the results of their consolidated operations and changes in
financial position for the periods then ended. The unaudited consolidated
financial statements included in the THI 10-Qs comply as to form, in all
material respects, with the published rules and regulations of the SEC with
respective thereto; and such unaudited financial statements fairly present, in
conformity with generally accepted accounting principles, except as permitted by
Form 10-Q, applied on a basis substantially consistent with that of the audited
financial statements included in the THI 10-K, subject to year-end adjustments.
Except as to the extent reflected or reserved against in balance sheet included
in the 10-K, in the notes thereto or disclosed in the THI 10-Qs or as covered by
valid collectible insurance or other collectible claim for reimbursement,
neither THI nor its subsidiaries had (i) any accrued or determined liability or
obligation which is material to THI or its subsidiaries taken as a whole or
(iii) any contingent liability or obligation which is material to THI or its
subsidiaries taken as a whole. Since March 31, 1998, there is been no material
adverse change in the business, prospects, properties or
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condition (financial or otherwise) of THI or its subsidiaries which is
materially adverse to THI or its subsidiaries taken as a whole.
(F) THI acknowledges that the MMAC Common Stock issued to it will not be
registered under the Securities Act of 1933, as amended ("Securities Act"), may
not be sold, transferred or otherwise distributed in the absence of such
registration or an applicable exemption therefrom and will bear an appropriate
legend. THI is an "accredited investor" as defined in Rule 501(A) promulgated
under the Securities Act, is able to bear the economic risk of an investment in
the MMAC Common Stock acquired pursuant to this Agreement, can afford to sustain
a total loss of that investment, has such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks of
the proposed investment in the MMAC Common Stock, has had an adequate
opportunity to ask questions and receive answers from the officers of MMAC
concerning any and all matters relating to the transactions contemplated hereby,
including the background experience of the current officers and directors of
MMAC and has asked all questions of the nature described in the preceding clause
and all those questions have been answered it to its satisfaction.
3. MMAC represents and warrants to, and agrees with, THI that the following
representations and warranties are as of the date of this Agreement, and will
be, on the Closing Date, true correct and complete:
(A) MMAC is a corporation duly organized, validly existing and in good
standing in the laws of the State of Delaware and has all requisite corporate
power and authority under the laws of the State of Delaware and its certificate
of incorporation to hold or lease, and to operate, its properties presently
owned, or conducted, and to carry on its business as now conducted and as
proposed to be conducted following the Closing.
(B) The execution, delivery and performance by MMAC of this Agreement and
the effectuation of transactions contemplated hereby are within its corporate
power and have been duly authorized by all proceedings required to be taken
under its certificate of incorporation and the laws of the State of Delaware.
(C) This Agreement has been duly and validly executed and delivered and
constitutes the legal, valid and binding obligation of MMAC, enforceable against
MMAC in accordance with its terms, except as such enforceability may be (i)
limited by any applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and (ii)
subject to general principles of equity, regardless of whether that
enforceability is considered in a proceeding at law or in equity.
(D) The execution, delivery and performance by MMAC in accordance with the
terms of this Agreement does not, and will not (i) violate, breach or constitute
a default under the certificate of incorporation or bylaws of MMAC, any
governmental requirement applicable to MMAC or any material agreement to which
MMAC is a party or by which it or its assets is bound; (ii) result in the
acceleration or mandatory prepayment of any indebtedness of MMAC or afford any
holder of any indebtedness the right to require MMAC to redeem, purchase or
otherwise acquire, reacquire, or repay any of that indebtedness; (iii) cause or
result in the imposition of, or afford any person the right to obtain, any lien
upon the property or assets of
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MMAC; or (iv) result in the revocation, cancellation, suspension or material,
individually or in the aggregate, modification of any licenses or governmental
approvals possessed by MMAC and necessary for the ownership or lease and the
operation of its properties or the carrying out of its business as now
conducted.
(E) MMAC has heretofore delivered to THI MMAC's Form 10-KSB for the fiscal
year ended December 31, 1997 ("MMAC 10-K") and its Form 10-QSBs for the quarters
ended March 31, 1998 and June 30, 1998 (collectively MMAC 10-Qs" and the MMAC
10-K and MMAC 10-Qs collectively "MMAC SEC Filings"). As of their respective
dates, except for any information corrected or superseded by subsequent filings
with the SEC, the MMAC SEC Filings did not contained any untrue statement of
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. The audited consolidated financial
statements of MMAC and its subsidiaries, and the notes and thereto, certified by
Ernst & Young, included in the MMAC 10-K, have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis during
the periods involved and present fairly the consolidated financial position of
MMAC and its subsidiaries as of the date thereof and the results of their
consolidated operations and changes in financial position for the periods then
ended. The unaudited consolidated financial statements included in the MMAC
10-Qs comply as to form, in all material respects, with the published rules and
regulations of the SEC with respective thereto; and such unaudited financial
statements fairly present, in conformity with generally accepted accounting
principles, except as permitted by Form 10-Q., applied on a basis substantially
consistent with that of the audited financial statements included in the MMAC
10-K, subject to year-end adjustments. Except as to the extent reflected or
reserved against in balance sheet included in the 10-K, in the notes thereto or
disclosed in the MMAC 10-Qs or as covered by valid collectible insurance or
other collectible claim for reimbursement, neither MMAC nor its subsidiaries had
(i) any accrued or determined liability or obligation which is material to MMAC
or its subsidiaries taken as a whole or (iii) any contingent liability or
obligation which is material to MMAC or its subsidiaries taken as a whole. Since
June 30, 1998, there is been no material adverse change in the business,
prospects, properties or condition (financial or otherwise) of MMAC or its
subsidiaries which is materially adverse to MMAC or its subsidiaries taken as a
whole.
(F) MMAC acknowledges that the THI Common Stock issued to it will not be
registered under the Securities Act, may not be sold, transferred or otherwise
distributed in the absence of such registration or an applicable exemption
therefrom and will bear an appropriate legend. MMAC is an "accredited investor"
as defined in Rule 501(A) promulgated under the Securities Act of 1933, as
amended, is able to bear the economic risk of an investment in the THI Common
Stock acquired pursuant to this Agreement, can afford to sustain a total loss of
that investment, has to such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of the proposed
investment in the THI Common Stock, has had an adequate opportunity to ask
questions and receive answers from the officers of THI concerning any and all
matters relating to the transactions contemplated hereby, including the
background experience of the current officers and directors of THI and has asked
all questions of the nature described in the preceding clause and all those
questions have been answered it to its satisfaction.
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4. THI acknowledges that it has had in the past, currently has and in the
future may have access to confidential information of MMAC. THI agrees that it
will keep confidential all such confidential information furnished to it and,
except with the specific prior written consent of MMAC will not disclose such
confidential information to any person except (A) representatives of MMAC, (B)
its own representatives, provided that such representatives (other than counsel)
agree to the confidentiality provisions of this section and provided further,
confidential information shall not include (i) such information which becomes
known to the public generally through no fault of THI, (ii) information required
to be disclosed by law or the order of any governmental authority under color of
law, provided, the prior to disclosing any information pursuant to this clause
(ii), THI shall, if possible, give prior written notice thereof to MMAC and
provide MMAC with the opportunity to contest such disclosure, (iii) THI
reasonably believes that such disclosure is required in connection with the
defense of the lawsuit against it; or (iv) information THI determines it needs
to disclose pursuant to the Securities Act or the Securities Exchange Act of
1934, as amended. Nothing herein shall be construed as prohibiting MMAC from
pursuing any other available remedy for such or threatened breach , including
the recovery of damages.
5. MMAC acknowledges that it has had in the past, currently has and in the
future may have access to confidential information of THI. MMAC agrees that it
will keep confidential all such confidential information furnished to it and,
except with the specific prior written consent of THI will not disclose such
confidential information to any person except (A) representatives of THI, (B)
its own representatives, provided that such representatives (other than counsel)
agree to the confidentiality provisions of this section and provided further,
confidential information shall not include (i) such information which becomes
known to the public generally through no fault of MMAC, (ii) information
required to be disclosed by law or the order of any governmental authority under
color of law, provided, the prior to disclosing any information pursuant to this
clause (ii), MMAC shall, if possible, give prior written notice thereof to THI
and provide THI with the opportunity to contest such disclosure, (iii) MMAC
reasonably believes that such disclosure is required in connection with the
defense of the lawsuit against it or (iv) information MMAC determines it needs
to disclose pursuant to the Securities Act or the Securities Exchange Act of
1934, as amended. Nothing herein shall be construed as prohibiting THI from
pursuing any other available remedy for such breach or threatened breach,
including the recovery of damages.
6. Because of the difficulty in measuring economic losses as a result of
the breach of the covenants contained in Paragraphs 4 or 5, and because of the
immediate and irreparable damage that would be clause that to the party entitled
to confidentiality for which would have no other adequate remedy, the party
receiving such disclosure agrees that the party making such disclosure may
enforce provisions of such paragraph by injunctions and restraining orders
against a party who breaches any such provisions. The obligations called the
parties under Paragraphs 4, 5 and 6 of this Agreement shall survive the
termination of this Agreement.
7. The consummation of the transaction herein contemplated ("Closing")
shall be deemed to occur simultaneously with the execution hereof ("Closing
Date"). Promptly following the Closing the parties shall determine the number of
shares of their respective stock to be issued and shall Exchange Certificates
therefor.
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8. Each party represents and warrants to the other that such person has not
directly or indirectly employed or become obligated to pay any broker, finder or
similar agent in connection with the transactions contemplated hereby and agree
to indemnify the other party against all claims arising claims for fees and
commissions of brokers or similar agents employed or promised payment by such
person.
9. This Agreement and the rights of the parties hereunder may not be
assigned voluntarily or by operation of law, without due prior consent of the
other party and shall be binding upon and enure to the benefit of the parties
hereto and any permitted successes or assigns. This Agreement is not intended
nor shall be construed, deemed or interpreted, to confer on any person not party
hereto any rights or remedies hereunder.
10. This Agreement constitutes the entire agreement and understanding
between the parties on the subject matter hereof and supersedes all prior
agreements and understandings, both written and oral, relating to the subject
matter of this Agreement. This Agreement may be amended, modified or
supplemented, and any right hereunder may be waived, if, but only if, that
amendment, modification, supplement or waiver is in writing and signed up by the
party sought to be charged therewith. The waiver of any of the terms and
conditions hereof shall not be construed or interpreted as, or deemed to be, a
waiver of any other term or condition hereof.
11. This Agreement may be executed in multiple counterparts, each of which
will be an original, but all of which together will constitute one and the same
instrument.
12. Each party will pay all fees, costs and expenses incurred by it
connection with the transactions contemplated herein, including, without
limitation, the fees and expenses of attorneys, accountants and other persons,
and no portion thereof shall be or paid by the other party hereto, except if
otherwise specifically provided herein.
13. All notices required or permitted hereunder shall be in writing, and
shall be deemed to be delivered and received:
(A) If personally delivered or addressed by telex telegram, facsimile or
courier service, when actually received by the party to whom notice addressed;
or
(B) If delivered by mail (whether actually received or not), at the close
of business on the third business day next following the day when placed in the
mail, postage prepaid, certified or registered, addressed to the appropriate
party at the address of such party set forth above (or such other addresses as
such party may designate by written notice given in accordance with this
paragraph):
(i) if to THI, address to it at:
00000 Xxxxxxxxxx Xxxx
Xxxxx 0
Xxxxxxx, XX 00000
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(ii) if to MMAC, addressed to it at:
0000 Xxxxx Xxxxx Xxxxx
Xxxxxx, XX 00000
Fax: 000-000-0000
14. This Agreement, and the rights and obligations of the parties hereto,
shall be governed and construed and enforced accordance with the substantive
laws of the State of New York without regard to the conflicts of laws provisions
thereof.
15. Except as otherwise provided herein, no delay or omission in the
exercise of any right, power or remedy accruing to any party hereto as result of
any breach fault hereunder by any other party hereto shall impair any such
right, power or remedy, or shall be construed, deemed or interpreted as a waiver
of or acquiescence in any such breach or default, or any similar breach or
default occurring later; nor shall any waiver of any single breach or default be
construed, deemed or interpreted as the waiver of any other breach or default
hereunder occurring before or after that waiver.
16. If any provision of this Agreement is invalid, illegal or
unenforceable, that provision shall, to the extent possible, be modified in such
manner as to be valid, legal and enforceable but so as to most nearly retain the
intent of the parties hereto as expressed herein, and if such modification is
not possible, that provision shall be deemed severed from this Agreement, and in
either case the validity, legality and enforceability of the remaining
provisions of this Agreement shall not anyway be affected or impaired thereby.
17. No right, remedy or election given by any term of this Agreement shall
be deemed exclusive, but each shall be cumulative with all other rights,
remedies and elections available at law or in equity.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
XXXXX Holdings Inc.
By: /s/ Xxxxx Xxxxxxxxxx
MultiMedia Access Corporation
By____________________________
Xxxxx Xxxxx
Chairman
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