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EXHIBIT 10.65
PROMPTUS COMMUNICATIONS, INC.
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement dated as of March 24, 1997 is by and
among GTI Corporation, a Delaware corporation with a principal place of
business at 0000 Xxxxxxxx Xxxx Xxxxxx, Xxx Xxxxx, Xxxxxxxxxx ("GTI"), Promptus
Communications, Inc., a Rhode Island corporation with a principal place of
business at 207 High Point Avenue, Portsmouth, Rhode Island ("Promptus"), and
Xxxxxxx Xxxxx, as Agent (the "Agent") for the individuals listed on Schedule I
attached hereto (the "Management Shareholders"), each with an address as set
forth on said Schedule I.
RECITALS
WHEREAS, GTI is the owner of 4,024,598 shares of Promptus Common Stock
(the "GTI Shares") and the Management Shareholders are the owners of 1,555,300
shares of Promptus Common Stock (the "Management Shares"); and
WHEREAS, GTI, Promptus and the Management Shareholders are parties to
a Management Shares Agreement dated as of January 6, 1995 (the "Management
Shares Agreement") pursuant to which GTI has certain rights and obligations to
acquire the Management Shares; and
WHEREAS, the Management Shareholders have executed an Indemnification
and Agency Agreement dated as of January 6, 1995 (the "Agency Agreement")
appointing Xxxxxxx Xxxxx as Agent to act on their behalf in connection with
matters arising under the Management Shares Agreement; and
WHEREAS, pursuant to an Asset Purchase Agreement dated as of the date
hereof by and between VideoServer, Inc. ("VideoServer") and Promptus, Promptus
intends to sell to VideoServer its Network Access Card business (the "NAC
Sale"); and
WHEREAS, in connection with the consummation of the NAC Sale, GTI
desires to transfer the GTI Shares to Promptus and to terminate its obligations
under the Management Shares Agreement; and
WHEREAS, Promptus has agreed to repurchase the GTI Shares and the
Agent, on behalf of the Management Shareholders, has agreed to amend the
Management Shares Agreement to terminate GTI's obligations thereunder on the
terms and conditions set forth herein; NOW, THEREFORE, in consideration
of the mutual promises and agreements set forth herein, and intending to be
legally bound hereby, the parties hereby agree as follows:
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ARTICLE I
DEFINITIONS
1.01 Certain Terms Defined. In addition to other words and terms
defined elsewhere in this Agreement, as used herein the following words and
terms shall have the following meanings, unless the context expressly or by
necessary implication otherwise requires:
"Actual Liabilities Adjustment" shall have the meaning assigned to
that term in Section 2.02(b)(ii) hereof.
"Additional Payment" shall mean an amount equal to the lesser of (i)
72.1267% of the amount, if any, by which the Market Value of the VideoServer
Common Stock delivered as the Stock Portion (as such term is defined in the NAC
Purchase Agreement) of the NAC Purchase Price exceeds $6,428,370.00 and (ii)
$288,506.80; provided, however, that in the event that the amount determined
pursuant to subpart (i) above is less than $0.00, then the amount of the
Additional Payment shall be $0.00.
"Additional SERP Contribution" shall mean the amount required to be
contributed to the Promptus Communications, Inc. Supplemental Employee
Retirement Plan and Trust (the "Promptus SERP") to fund in full Promptus'
benefit obligations thereunder accrued through the Closing Date, assuming a
monthly benefit of $9,652.43 payable over 10 years based upon an annual net
investment return rate of 7% (compounded monthly).
"Affiliate" shall mean any Person which directly or indirectly
controls, is controlled by or is under common control with another Person. The
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
"Agency Agreement" shall have the meaning set forth in the Recitals.
"Agreement" or "this Agreement" shall mean this Stock Purchase
Agreement as originally executed and delivered, or, if amended or supplemented,
as so amended or supplemented.
"Business Day" shall mean any day other than a Saturday, Sunday,
public holiday under the laws of the State of Rhode Island or other day on
which banking institutions are authorized or obligated to close in Providence,
Rhode Island.
"Cash Portion" shall have the meaning set forth in the NAC Purchase
Agreement.
"Claim" shall have the meaning assigned to that term in Section
7.03(a) hereof.
"Closing" shall have the meaning assigned to that term in Section
2.06 hereof.
"Closing Date" shall have the meaning assigned to that term in Section
2.06 hereof.
"Closing Date Liabilities Adjustment" shall have the meaning assigned
to that term in Section 2.02(a)(i) hereof.
"Closing Date Payment" shall have the meaning assigned to that term
in Section 2.02(a)(i) hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Collar Adjustment" shall mean 16.724% of the product of (i) the
Market Value of the VideoServer Common Stock and (ii) the difference between
(x) the number of shares of VideoServer Common Stock that would have been
issued as part of the NAC Purchase Price if the lower amount set forth in
Section 2.1(b) of the NAC Purchase Agreement were $30.50 rather than $33.50 and
(y) the number of shares of VideoServer Common Stock actually issued as part of
the NAC Purchase Price.
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"Escrow Distributions" shall mean any amounts distributed to Promptus
pursuant to the NAC Escrow Agreement, net of any legal fees, Indemnity Claims
or Appraisal Claims incurred by Promptus in connection with disputing any
claims asserted by VideoServer or VSVR Acquisition under the NAC Escrow
Agreement which are in excess of such amounts as reflected in the calculation
of the Actual Liabilities Adjustment pursuant to Section 2.02(b)(ii) hereof.
"Final Returns" shall have the meaning assigned to such term in
Section 2.02(b)(ii) hereof.
"Final Statement" shall have the meaning assigned to such term in
Section 2.02(b)(ii).
"Full Payment" shall mean the sum of (a) 72.1267% of the sum of (i)
the Net Cash Proceeds and the Net Stock Proceeds, minus (ii) the amount (if
any) by which the Actual Liabilities Adjustment exceeds the Closing Date
Liabilities Adjustment, plus (iii) the amount (if any) by which the Closing
Date Liabilities Adjustment exceeds the Actual Liabilities Adjustment, plus (b)
the Taxes Adjustment and the Additional Payment minus, (c) the Collar
Adjustment.
"GTI Loan" shall mean the aggregate amount of indebtedness owed by
Promptus to GTI, which amount has been agreed to by the parties as being
$7,686,593.87 as of February 7, 1997 and shall be adjusted to reflect advances
and payments together with interest accrued on such indebtedness at 9.5% per
annum.
"GTI Profit-Sharing Plan" shall have the meaning assigned to such term
in Section 3.06 hereof.
"GTI Shares" shall have the meaning set forth in the Recitals.
"Governmental Authority" shall mean any government or political
subdivision or any agency, authority, bureau, commission department or
instrumentality of either, or any court, tribunal, grand jury or arbitrator, in
every case whether foreign or domestic.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended.
"Initial Stock Payment" shall mean an amount equal to (i) 72.1267% of
the Net Stock Proceeds, minus (ii) the sum of the Reserve Amount and the Collar
Adjustment.
"Liabilities Adjustment" shall mean the sum of the following amounts:
(i) All Taxes imposed on Promptus (A) arising by result
of the transactions contemplated by the NAC Purchase Agreement or this
Agreement (including any gain or loss realized on the sale of the VideoServer
Common Stock, calculated as if such gain or loss had been realized on the
Closing Date, and, in the event that less than all of the VideoServer Common
Stock is sold pursuant to an order to sell less than all of such stock,
assuming, when calculating such gain or loss, that all of the VideoServer
Common Stock had been sold at the average price per share realized on the sale
of at least 72.1267% of the VideoServer Common Stock); (B) with respect to or
relating to any period ending on or before the Closing Date, or, in the case of
any taxable period that includes, but does not end on the Closing Date, the
portion of such period ending on the Closing Date; or (C) resulting from
Promptus ceasing to be affiliated with GTI.
(ii) The amount of the GTI Loan;
(iii) The Additional SERP Contribution;
(iv) The aggregate amount of all severance payments due to
Promptus employees whose employment with Promptus is terminated in connection
with the NAC Sale (the "Severance Obligations") plus the aggregate amount
payable by Promptus as lessee under outstanding leases which are not assumed by
VideoServer in connection with the NAC Sale minus the aggregate rentals due on
equipment and office space required by Promptus for its operations following
the Closing Date (the "Lease Obligations"), the total of which Severance
Obligations and Lease Obligations has been agreed to by the parties as being
$300,000.00;
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(v) All Transaction Expenses; and
(vi) Any amounts paid or reserved for payment to Promptus
shareholders seeking appraisal or dissenters' rights ("Appraisal Claims") and
any amounts paid or reserved to indemnify VideoServer for any losses related to
any such Appraisal Claims or any claims challenging Promptus' authority to
enter into the NAC Purchase Agreement or the fairness of the NAC Sale or any
claims for rescission of the NAC Sale or to indemnify the Agent for any losses
related to any claims challenging the Agent's authority to enter into this
Agreement or the Management Shares Amendment ("Indemnity Claims").
"License Fees" means all costs, expenses, license fees and other
payments incurred by Promptus (i) in connection with Promptus' obligation to
obtain any consent to the assignment and transfer of the Acquired Assets (as
defined in the NAC Purchase Agreement) to VideoServer under the NAC Purchase
Agreement, or (ii) in connection with obtaining any consents or licenses
necessary to implement the provisions of the NAC Technology Agreement.
"Management Shares Amendment" shall have the meaning assigned to that
term in Section 2.04 hereof.
"Management Shares Agreement" shall have the meaning set forth in the
Recitals.
"Management Shareholders" shall have the meaning set forth in the
Recitals.
"Management Shareholder Notes" shall mean those certain Note and
Security Agreements executed by the Management Shareholders evidencing
principal indebtedness to GTI totaling $1,496,600.00 and granting GTI a
security interest in certain shares of Promptus Common Stock.
"Market Value of the VideoServer Common Stock" shall mean the price of
the VideoServer Common Stock as determined pursuant to Section 2.1(b) of the
NAC Purchase Agreement, without regard to the collar on such price described
therein.
"NAC Escrow Agreement" shall mean the Escrow Agreement dated as of the
Closing Date by and among VideoServer, Promptus and an escrow agent to be
determined as provided therein.
"NAC Purchase Agreement" shall mean the Asset Purchase Agreement of
even date herewith by and between VideoServer and Promptus.
"NAC Purchase Price" shall mean the Purchase Price paid to Promptus by
VideoServer under the NAC Purchase Agreement.
"NAC Registration Rights Agreement" shall mean the Registration Rights
and Lock-up Agreement dated as of the Closing Date by and between VideoServer
and Promptus, which shall be in the form of Exhibit D to the NAC Purchase
Agreement.
"NAC Sale" shall have the meaning set forth in the Recitals.
"NAC Technology Agreement" shall mean the Technology and Software
License Agreement dated as of the Closing Date by and between VideoServer and
Promptus, which shall be in the form attached as Exhibit F to the NAC Purchase
Agreement.
"NAC Transaction Documents" shall mean the NAC Purchase Agreement and
Schedules thereto, the NAC Escrow Agreement, the NAC Registration Rights
Agreement and the NAC Technology Agreement.
"Net Cash Proceeds" shall mean the Cash Portion (excluding any portion
thereof which is subject to the NAC Escrow Agreement whether contributed by
VideoServer or Promptus) of the NAC Purchase Price (giving effect to the
Working Capital Adjustment) paid to Promptus under the NAC Purchase Agreement
minus the Closing Date Liabilities Adjustment, determined in accordance with
the provisions of Section 2.02(a) hereof.
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"Net Stock Proceeds" shall mean the net proceeds from the sale of
VideoServer Common Stock (excluding any portion thereof which is subject to the
NAC Escrow Agreement) delivered as the Stock Portion of the NAC Purchase Price,
after deduction of all fees and expenses incurred or borne by Promptus in
connection with such sale (including legal and accounting fees and expenses in
connection with the registration of such stock under federal and state
securities laws and any selling expenses or commissions) and, in the event that
less than all of the VideoServer Common Stock is sold pursuant to an order to
sell less than all of such stock, assuming that all of the VideoServer Common
Stock had been sold at the average price per share realized on the sale of at
least 72% of the VideoServer Common Stock.
"Person" shall mean an individual, corporation, partnership,
unincorporated organization, voluntary association, joint stock company,
business trust joint venture, Governmental Authority or any other entity.
"Pledged Management Shares" shall mean those shares of Promptus common
sock which are pledged to GTI to secure obligations under the Management
Shareholder Notes.
"Preliminary Returns" shall have the meaning assigned to such term in
Section 2.02 (a)(i) hereof. "Preliminary Statement" shall have the meaning
assigned to such term in Section 2.02 (a)(i) hereof.
"Promptus Defined Contribution Plan" shall have the meaning assigned
to such term in Section 5.02(A) hereof.
"Related Documents" shall mean and include, collectively, this
Agreement, the Transfer Documents, the Management Share Amendment and all other
agreements and instruments related thereto.
"Remaining Payment" shall mean an amount equal to the difference
between (i) the Full Payment minus (ii) the Closing Date Payment.
"Reserve Amount" shall mean the greater of (i) $40,000.00 and (ii) the
amount, if any, by which the Actual Liabilities Adjustment as determined on the
Business Day immediately preceding the date of the Initial Stock Payment
exceeds the Closing Date Liabilities Adjustment.
"Taxes" shall mean all taxes, however denominated, including any
interest, penalties or additions to tax that may become payable in respect
thereof, imposed by any federal, state, local or foreign government or any
agency or political subdivision of any such government, relating to the income
of the applicable Person, whether arising before, on or after the date hereof.
"Taxes Adjustment" means an amount equal to the product of (i) the
amount of the Taxes portion of the Liabilities Adjustment (as determined under
subpart (i) of the definition of the term "Liabilities Adjustment") as of the
determination of the Actual Liabilities Adjustment multiplied by (ii) 5.00% for
the period commencing on the day after the Closing Date and continuing through
the date or dates on which such Taxes become due and payable (which dates will
be detemined at the Closing) multipled by (iii) 60% multiplied by (iv)
72.1267%.
"Tax Return" shall mean any return, report, filing, estimate,
declaration, or information statement related to, or required to be filed in
connection with, any Tax pursuant to statutes, rules and regulations of any
federal, state, local or foreign government taxing authority.
"Telemetrix Confirmation" shall have the meaning assigned to such term
in Section 6.03(d) hereof.
"Total Profit-Sharing Plan Transfer Amount" shall have the meaning
assigned to such term in Section 5.02(b) hereof.
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"Transfer Date" shall have the meaning assigned to such term in
Section 5.02(c) hereof.
"Transfer Documents" shall have the meaning set forth in Section 2.03
hereof.
"Transaction Expenses" means all fees and expenses incurred by
Promptus and GTI in connection with the preparation, execution and consummation
of the NAC Purchase Agreement and this Agreement and the transactions
contemplated thereby, including, without limitation, filing fees under the HSR
Act, License Fees, attorneys' fees and expenses (including legal fees and
expenses of the Agent for the Management Shareholders), accountants' and
outsider adviser's fees and disbursements (including the fees and expenses of
Xxxxxx Xxxxxxxx for preparation of the Preliminary Returns and Final Returns
required hereunder net of any reimbursements from VideoServer), but excluding
any fees or expenses expressly assumed by GTI hereunder, including, without
limitation, the fees and expenses of Xxxxxxxxxx Securities, Inc. and the fees
incurred in connection with obtaining the Telemetrix Confirmation.
"VideoServer" means VideoServer, Inc., a Delaware corporation.
"VideoServer Common Stock" means the common stock of VideoServer
delivered as the Stock Portion (as such term is defined NAC Purchase Agreement)
of the NAC Purchase Price.
ARTICLE II
PURCHASE OF GTI SHARES
2.01 Agreement to Sell; Agreement to Purchase. Subject to the
terms and conditions set forth in this Agreement, on the Closing Date, GTI
shall sell and transfer to Promptus the GTI Shares and Promptus will purchase
the GTI shares from GTI.
2.02 Purchase Price. As payment for the GTI Shares, Promptus
agrees to pay GTI the following:
(a) Net Cash Proceeds. Promptus shall pay to GTI
72.1267% of the Net Cash Proceeds, which amount shall be determined and
payable as follows:
(i) Attached hereto as Schedule 2.02 is a
Settlement Statement setting forth a preliminary calculation of the Liabilities
Adjustment and Net Cash Proceeds based upon the parties' good faith estimates
of the components thereof. At the Closing, Promptus shall deliver to GTI (A)
draft federal and state income Tax Returns (the "Preliminary Returns") for
Promptus prepared by Xxxxxx Xxxxxxxx LLP ("Xxxxxx Xxxxxxxx") as if the tax year
of Promptus ended on the Closing Date, which Preliminary Returns shall contain
a calculation based on Promptus' best estimate of the taxable income or loss
and other tax attributes for Promptus for the period from January 1, 1997 to
the Closing Date (the "STUB Period") after giving effect to the NAC Sale, and
(B) a revised Settlement Statement (the "Closing Date Statement") setting forth
any known adjustments to the estimate of the Liabilities Adjustment as of the
Closing Date (the "Closing Date Liabilities Adjustment") and the calculation of
the Net Cash Proceeds based upon such estimate and the Cash Portion of the NAC
Purchase Price paid to Promptus at the closing of the NAC Sale. At the
Closing, immediately following the receipt of the Cash Portion of the NAC
Purchase Price, Promptus shall deliver to GTI, by wire transfer to a bank
account designated by GTI at least two (2) Business Days prior to the Closing
Date, an amount equal to 72.1267% of the Net Cash Proceeds as reflected on the
Closing Date Statement (the "Closing Date Payment").
(b) Remaining Payment. Promptus shall pay GTI the
Remaining Payment, which amount shall be determined and payable as follows:
(i) within two (2) Business Days of Promptus'
receipt of the Net Stock Proceeds from the sale of not less than 72% of the
VideoServer Common Stock, Promptus shall deliver to GTI, by wire transfer to
GTI's bank account designated in accordance with Section 2.02(a)(i) hereof, an
amount equal to the sum of (A) the Initial Stock Payment and (B) the Additional
Payment;
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(ii) within thirty (30) days of the payment of the
Initial Stock Payment, Promptus shall prepare a final Settlement Statement (the
"Final Statement") setting forth the actual Cash Portion (excluding any portion
thereof which is subject to the NAC Escrow Agreement) of the NAC Purchase Price
(after any Working Capital Adjustment), the actual Liabilities Adjustment (the
"Actual Liabilities Adjustment"), the amount of the Net Cash Proceeds, the
amount of the Net Stock Proceeds, the amount of the Taxes Adjustment, the
amount of the Additional Payment and the amount of the Collar Adjustment, which
it shall deliver to GTI, together with final draft federal and state income Tax
Returns for the STUB Period (the "Final Returns") prepared by Xxxxxx Xxxxxxxx,
which shall reflect the estimated tax liability of Promptus for the STUB Period
(including any gain or loss realized on the sale of the VideoServer Common
Stock, calculated as if such gain or loss had been realized on the Closing
Date). If GTI disputes the correctness of either the Final Returns or the
Final Statement, GTI shall notify Promptus of its objections within the (10)
Business Days after delivery of the Final Statement and shall set forth in
reasonable detail in such notice the reason for its objections. If GTI fails
to deliver such notice within such time period, GTI shall be deemed to have
accepted Promptus' calculation of the Actual Liabilities Adjustment, the Net
Cash Proceeds, the Net Stock Proceeds, the Taxes Adjustment, the Additional
Payment and the Collar Adjustment. If GTI delivers such notice, GTI and
Promptus shall endeavor in good faith to resolve their dispute over the
determination of the Actual Liabilities Adjustment, the Net Cash Proceeds, the
Net Stock Proceeds, the Taxes Adjustment, the Additional Payment and the Collar
Adjustment within 15 days after Promptus' receipt of such notice. If they are
unable to do so within such 15-day period, the dispute shall be submitted to a
tax partner with experience in the computer technology industry of the Boston
office of Xxxxxx Xxxxxxxx who shall resolve the dispute within 15 days. The
decision of Xxxxxx Xxxxxxxx as to the Actual Liabilities Adjustment, the Net
Cash Proceeds, the Net Stock Proceeds, the Taxes Adjustment, the Additional
Payment and the Collar Adjustment shall be final and binding upon the parties.
The expense of Xxxxxx Xxxxxxxx shall be treated as a Liabilities Adjustment in
calculating the amount of the Full Payment.
(iii) Within two (2) Business Days following final
determination of the Actual Liabilities Adjustment, the Net Cash Proceeds, the
Net Stock Proceeds, the Taxes Adjustment, the Additional Payment and the Collar
Adjustment, Promptus shall pay to GTI an amount equal to the Full Payment less
the sum of the Closing Date Payment and the Initial Stock Payment. Such
payment shall be made by wire transfer to GTI's bank account designated in
accordance with Section 2.02(a)(i) hereof. In the event that the sum of the
Closing Date Payment plus the Initial Stock Payment plus the Additional Payment
exceeds the amount of the Full Payment, then GTI shall pay to Promptus an
amount equal to such difference within two Business Days following final
determination of the Actual Liabilities Adjustment, the Net Cash Proceeds, the
Net Stock Proceeds, the Taxes Adjustment, the Additional Payment and the Collar
Adjustment by wire transfer to a bank account designated by Promptus.
(c) Escrow Distributions. Promptus shall pay GTI 72.1267
% of the Escrow Distributions within two (2) Business Days of Promptus' receipt
thereof, in cash by wire transfer to a bank account designated by GTI.
2.03 Assignment of Management Shareholder Notes. On the Closing
Date, GTI shall deliver to Promptus the original Management Shareholder Notes
endorsed without recourse to the order of Promptus and all certificates
evidencing Pledged Management Shares, together with blank stock powers executed
by the pledgors (the "Pledged Certificates") so as to vest in Promptus all of
GTI's right, title and interest in and to the Management Shareholder Notes and
the Pledged Management Shares.
2.04 Amendment to Management Shares Agreement. On the Closing
Date, Promptus, GTI and the Agent shall each execute and deliver the Amendment
to Management Shares Agreement (the "Management Shares Amendment") in the form
attached hereto as Exhibit A.
2.05 Release of Guarantees and Discharge of Liens. At the Closing,
GTI shall deliver to Promptus pay-off letters and lien discharges (or
agreements therefor) from any Person with an encumbrance on any assets of
Promptus or who holds a guaranty from Promptus, each of which to be in form and
substance satisfactory to Promptus.
2.06 The Closing. The purchase and sale of the GTI Shares as
contemplated by this Agreement (the "Closing") will take place concurrently
with the closing of the NAC Sale pursuant to the NAC Purchase Agreement or as
soon thereafter as all conditions to Closing set forth herein have been
satisfied or waived. The date on which the Closing is actually held hereunder
is sometimes referred to herein as the "Closing Date".
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2.07 Pledge of VideoServer Common Stock and Escrow Distributions.
As security for the payment of the Net Stock Proceeds and the Escrow
Distributions, Promptus shall pledge to GTI its interest in 72.1267% of (i)
the shares of VideoServer Common Stock held by it (excluding shares of
VideoServer Common Stock subject to the NAC Escrow Agreement) pursuant to the
terms of a stock pledge agreement in the form of Exhibit B attached hereto and
(ii) Promptus' interest in the Escrow Distributions pursuant to the terms of a
pledge agreement in the form of Exhibit C attached hereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF GTI
GTI hereby represents and warrants to Promptus as follows:
3.01 Organization, Standing, and Authority. GTI is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Delaware, and is duly qualified to do business and in good standing in
the States of the United States and foreign jurisdictions where its ownership
or leasing of property or the conduct of its business requires it to be so
qualified and in which the failure to be duly qualified would, either
individually or in the aggregate, have a material adverse effect on the
business, operations, assets, condition (financial or otherwise), or results of
operations of GTI, or GTI's ability to consummate the transactions contemplated
by this Agreement (a "GTI Material Adverse Effect"). GTI has all necessary
corporate power and authority to carry on its business as now conducted, to
own, lease, and operate its assets, properties, and business, and to execute
and deliver, and to perform its obligations under, this Agreement.
3.02. Authority.
(a) The execution and delivery of this Agreement by GTI
and the consummation by GTI of the transactions contemplated herein, have been
duly and validly authorized by the Board of Directors of GTI and by all other
necessary corporate action on the part of GTI. This Agreement represents the
valid and legally binding obligation of GTI, enforceable against GTI in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting generally the
enforcement of creditors' rights and by general principles of equity.
(b) Neither the execution and deliver of this Agreement
by GTI, nor the consummation by GTI of the transactions contemplated herein,
nor compliance by GTI with any of the provisions hereof, will (i) conflict with
or result in a breach of any provision of the Certificate of Incorporation or
By-Laws of GTI, or (ii) constitute or result in the breach of any term,
condition, or provision of, or constitute a default or give rise to any
additional liability of GTI under, or give rise to any right of termination,
cancellation, or acceleration with respect to, or result in the creation of any
lien, charge, or encumbrance upon any property or assets of GTI pursuant to,
any note, bond, mortgage, indenture, license, agreement, lease, or other
instrument or obligation to which GTI is a party or by which GTI or any of its
properties or assets may be subject, and that would, either individually or in
the aggregate, have a GTI Material Adverse Effect. The GTI Disclosure Letter
lists the approvals, authorizations, filings, registrations, notifications and
consents required in connection with the consummation of the transactions
contemplated hereby. Consummation of the transactions contemplated hereby will
not violate any order, writ, injunction, decree, statute, rule or regulation
applicable to GTI or any of its properties or assets.
3.03 Ownership of GTI Shares. GTI represents and warrants that (i)
it owns the GTI Shares free and clear of all assignments, collateral
assignments, liens, encumbrances, security interests, claims and restrictions
of any kind whatsoever, including without limitation claims of any third
parties (other than a lien created by the pledge of the GTI Shares to Union
Bank to secure obligations of GTI to Union Bank, which lien will be released
prior to or at the Closing), and GTI has the full power and authority to
transfer the GTI Shares to Promptus; (ii) Promptus will acquire title to the
GTI Shares free and clear of any restrictions, liens, encumbrances or any other
claims of third parties whatsoever; (iii) there are no rights, subscriptions,
warrants, options, conversion rights or other arrangements of any kind
outstanding to purchase or otherwise acquire all or any portion of the GTI
Shares, and (iv) GTI has not granted any option to purchase, right of first
refusal or right to restrain the GTI Shares or any portion thereof.
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3.04 Ownership of Management Shareholder Notes. GTI represents and
warrants that (i) it owns the Management Shareholder Notes, free and clear of
all assignments, collateral assignments, liens and encumbrances, security
interests, claims and restrictions of any kind whatsoever, including without
limitation claims of any third parties (other than a lien created by the pledge
of some or all of the Management Shareholder Notes to Union Bank to secure
obligations of GTI to Union Bank, which lien will be released prior to or at
the Closing), and GTI has the full power and authority to transfer the
Management Shareholder Notes to Promptus; (ii) Promptus will acquire title to
the Management Shareholder Notes free and clear of any restrictions, liens,
encumbrances or any other claims of third parties whatsoever; (iii) there are
no rights, subscriptions, warrants, options, conversion rights or other
arrangements of any kind outstanding to purchase or otherwise acquire all or
any portion of the Management Shareholder Notes; and (iv) GTI has not granted
any option to purchase, right of first refusal or right to restrain the
Management Shareholder Notes or any portion thereof.
3.05 Reports. Since January 1, 1995, GTI has filed all reports and
statements, together with any amendments required to be made with respect
thereto, that it was required to file with (a) the Securities and Exchange
Commission ("SEC") and (b) any other applicable federal or state regulatory
authorities (except state filings which are not material or filings with
regulatory authorities other than federal or state securities authorities which
are not material). As of their respective dates and without giving effect to
any amendments or modifications filed after the date of this Agreement with
respect to reports and documents filed before the date of this Agreement), each
of such reports and documents, including the financial statements, exhibits,
and schedules thereto, complied in all material respects with all of the
statutes, rules, and regulations enforced or promulgated by the authority with
which they were filed and did not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
3.06 GTI Profit Sharing Plan. The Amended and Restated Cash or
Deferred Profit Sharing Plan for Employees of GTI Corporation and its
Affiliates (the "GTI Profit-Sharing Plan") has been determined to be qualified
by the Internal Revenue Service under Section 401(k) of the Code, nothing has
occurred since the date of the last such determination which has resulted or is
likely to result in the revocation of such determination, and such GTI
Profit-Sharing Plan is and has heretofore been maintained and operated in
compliance in all material respects with the terms of such Plan and with the
requirements prescribed (whether as a matter of substantive law or as necessary
to secure favorable tax treatment) by any and all statutes, governmental or
court orders, or governmental rules or regulations in effect from time to time,
including but not limited to the Employee Retirement Income Security Act of
1974 ("ERISA") and the Code.
3.07 Broker. Neither GTI nor, to GTI's knowledge, Promptus has
retained, utilized or been represented by any broker, agent, finder or
intermediary in connection with the negotiation or consummation of the
transactions contemplated by the NAC Purchase Agreement, this Agreement, except
for Xxxxxxxxxx Securities, Inc. ("Xxxxxxxxxx"). GTI shall be solely
responsible for any payments to Xxxxxxxxxx, and shall indemnify Promptus from
and against any and all liability to or claims by Xxxxxxxxxx or any other
broker, agent, finder or intermediary claiming to act for or on behalf of GTI
or Promptus.
3.08 Disclosure. To GTI's knowledge, the NAC Transaction Documents
(including the Schedules and Exhibits thereto) contain all of the terms and
conditions of, and constitutes the entire agreement among VideoServer, Promptus
and GTI with respect to the NAC Sale.
3.09 No Consents. Except for the Telemetrix Confirmation, no
authorization, consent, approval, license, exemption of or filing or
registration with any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, (except those which
have been obtained) is or will be necessary to the valid execution, delivery to
Promptus and the Agent or performance by GTI of this Agreement.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PROMPTUS
Promptus hereby represents and warrants to GTI as follows:
4.01 Organization, Standing, and Authority. Promptus is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Rhode Island, and, with the exception of The Commonwealth
of Massachusetts, is duly qualified to do business and in good standing in the
States of the United States and foreign jurisdictions where its ownership or
leasing of property or the conduct of its business requires it to be so
qualified and in which the failure to be duly qualified would, either
individually or in the aggregate, have a material adverse effect on the
business, operations, assets, condition (financial or otherwise), or results of
operations of Promptus, or Promptus's ability to consummate the transactions
contemplated by this Agreement (a "Promptus Material Adverse Effect").
Promptus has all necessary corporate power and authority to carry on its
business as now conducted, to own, lease, and operate its assets, properties,
and business, and to execute and deliver, and to perform its obligations under,
this Agreement.
4.02. Authority.
(a) The execution and delivery of this Agreement by
Promptus and the consummation by Promptus of the transactions contemplated
herein, have been duly and validly authorized by the Board of Directors of
Promptus and by all other necessary corporate action on the part of Promptus,
other than shareholder authorization for the repurchase of the GTI Shares,
which shall have been duly and validly authorized by all necessary corporate
action on the part of Promptus shareholders prior to the Closing Date. This
Agreement represents the valid and legally binding obligation of Promptus,
enforceable against Promptus in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting generally the enforcement of creditors' rights and by general
principles of equity.
(b) Neither the execution and deliver of this Agreement
by Promptus, nor the consummation by Promptus of the transactions contemplated
herein, nor compliance by Promptus with any of the provisions hereof, will (i)
conflict with or result in a breach of any provision of the Articles of
Incorporation or By-Laws of Promptus or (ii) constitute or result in the breach
of any term, condition, or provision of, or constitute a default or give rise
to any additional liability of Promptus under, or give rise to any right of
termination, cancellation, or acceleration with respect to, or result in the
creation of any lien, charge, or encumbrance upon any property or assets of
Promptus pursuant to, any note, bond, mortgage, indenture, license, agreement,
lease, or other instrument or obligation to which Promptus is a party or by
which Promptus or any of its properties or assets may be subject, and that
would, either individually or in the aggregate, have a Promptus Material
Adverse Effect. Consummation of the transactions contemplated hereby will not
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Promptus or any of its properties or assets.
ARTICLE IVA
REPRESENTATIONS AND WARRANTIES OF THE AGENT
The Agent hereby represents and warrants to GTI as follows:
4A.01 Broker. The Agent has not retained, utilized or been
represented by any broker, agent, finder or intermediary in connection with the
negotiation or consummation of the transactions contemplated by the NAC
Purchase Agreement or this Agreement.
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4A.02 Disclosure. To the Agent's knowledge, the NAC Transaction
Documents (including the Schedules and Exhibits thereto) contain all of the
terms and conditions of, and constitutes the entire agreement among
VideoServer, Promptus and GTI with respect to the NAC Sale.
ARTICLE V
COVENANTS
5.01 Amendment to NAC Transaction Documents. Neither Promptus nor
GTI may execute or agree to any supplement, modification or amendment of any of
the NAC Transaction Documents or waive any provisions thereof without the prior
written consent of the Agent and, to the extent that such supplement,
modification or amendment may have an effect on GTI, the prior written consent
of GTI. The Agent may not execute or agree to any supplement, modification or
amendment of any of the NAC Transaction Documents or waive any provisions
thereof to the extent that such supplement, modification or amendment would
have an effect on GTI without the prior written consent of the GTI.
5.02 Transfer of 401(k) Plan Assets.
(a) Promptus agrees to establish a defined contribution
employee pension benefit plan that is qualified under Section 401(a) of the
Code (the "Promptus Defined Contribution Plan"), effective no later than the
Transfer Date. In accordance with the provisions of this Section 5.02, GTI
agrees to cause the trustee of the GTI Profit-Sharing Plan to transfer the
Total Profit-Sharing Plan Transfer Amount to the trustee of the Promptus
Defined Contribution Plan.
(b) The "Total Profit-Sharing Plan Transfer Amount" shall
be the amount equal to the account balances in the GTI Profit- Sharing Plan
attributable to the participants and beneficiaries in such plan who are
Promptus employees as shown on the valuation report for the monthly valuation
date occurring on, or immediately before, the Closing Date (including any
amounts accrued as of such date but not yet contributed to the GTI
Profit-Sharing Plan or not yet allocated to the account of a Promptus employee
under the GTI Profit-Sharing Plan). The Total Profit-Sharing Plan Transfer
Amount shall take into account any distributions, in-service withdrawals or
participant loans received by Promptus employees from the GTI Profit-Sharing
Plan, including any such distributions, withdrawals or loans received after the
Closing Date. The Total Profit-Sharing Plan Transfer Amount shall be
transferred to the Promptus Trustee entirely in (i) cash or other assets
acceptable to the Promptus Trustee, and (ii) notes which represent the
participant loans of Promptus employees.
(c) GTI shall cause the GTI Trustee to make a transfer to
the Promptus Defined Contribution Plan in an amount equal to the Total
Profit-Sharing Plan Transfer Amount as soon as practicable after the creation
of the Promptus Defined Contribution Plan, but in no event later than 60 days
after the establishment thereof (the "Transfer Date"). The obligations of GTI
to cause the trustee of the GTI Profit- Sharing Plan to so transfer the Total
Profit-Sharing Plan Transfer Amount by the Transfer Date is conditioned upon
Promptus' having first established the Promptus Defined Contribution Plan and
having provided GTI with a determination letter to that effect.
(d) GTI agrees to prepare and provide to Promptus, as
soon as practicable following the Closing Date, a list of the Promptus
employees who were participants in or otherwise entitled to benefits under the
GTI Profit-Sharing Plan, as of the Closing Date, together with a listing of
each such Promptus employee's term of service for eligibility and vesting
purposes under the GTI Profit-Sharing Plan and a listing of each such Promptus
employee's account balance thereunder, and Promptus and GTI agree to provide
one another with such additional information in the possession of one company
and not already in the possession of the other as may be reasonably requested
by either of them and necessary in order for Promptus to establish and
administer the transferred account balances of Promptus employees. In
addition, with respect to any amounts payable prior to the Transfer Date by
Promptus employees on participant loans received from the GTI Profit-Sharing
Plan, Promptus shall take whatever actions and make whatever arrangements may
be necessary to permit the periodic repayment of such amounts through payroll
deduction and the remittance of the payments to the GTI Profit-Sharing Plan.
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(e) Before the expiration of the remedial amendment
period that applies under Code Section 401(b) to the Promptus Defined
Contribution Plan for determination of its initial qualification under Code
Section 401(a), Promptus shall apply for a determination by the Internal
Revenue Service to the effect that the Promptus Defined Contribution Plan
satisfies the requirements for qualification under Section 401(a) of the Code,
and Promptus shall take all reasonable actions to ensure continued
qualification of the Defined Contribution Plan under Section 401(a) of the
Code.
5.03 Non-Competition; Non-Disclosure.
(a) GTI agrees with each of Promptus and the Agent that GTI
will not at any time within the three (3) year period immediately following the
Closing, directly or indirectly, divulge, communicate, use to the detriment of
Promptus and the Management Shareholders or for the benefit of any other
Person, or misuse in any way, any confidential information or trade secrets of
Promptus, including personnel information, secret processes, know-how, customer
lists, formulas, or other technical data except as may be required to be
disclosed by GTI pursuant to a requirement of law; provided, however, that GTI
provides Promptus with prior written notice of such disclosure and takes
reasonable and lawful actions to avoid and/or minimize the extent of such
disclosure. GTI acknowledges that any information or data GTI has acquired on
any of these matters or items was received in confidence and as a fiduciary of
Promptus.
(b) GTI acknowledges that the injury that would be
suffered by Promptus and the Management Shareholders as a result of the breach
of this section will be irreparable and that an award of monetary damages will
be an adequate remedy. Consequently, Promptus and the Agent and either of
them, will have the right to obtain injunctive relief against any breach or
threatened breach of this section and to specifically enforce its provisions.
Neither Promptus nor the Agent will be obligated to post bond or other security
in seeking such relief. GTI will pay the reasonable costs and expenses
incurred by Promptus or the Agent in enforcing this section if Promptus or the
Agent is the prevailing party.
5.04 Cooperation in Administrative Matters. Promptus and GTI will
cooperate fully with each other in connection with the preparation of all Tax
Returns and all audit examinations of, or claims or assertions against,
Promptus, or with respect to the NAC Sale or the purchase of GTI Shares, by any
governmental taxing authority with respect to any taxable period ending on or
before the Closing Date to the extent that the audit, claim or assertion
relates to property, income or operations of Promptus, in each case including
but not limited to the furnishing or making available of records, books of
account or other materials and appropriate personnel necessary or helpful for
the defense against the assertions of any taxing authority. Promptus and GTI
will further cooperate fully with each other in connection with the preparation
of other mutual administrative matters such as the preparation of financial
statements for both Promptus and GTI.
5.05 Repayment of GTI Loan. Promptus shall use a portion of the
cash portion of the Purchase Price paid under the NAC Purchase Agreement to
repay the GTI Loan by wire transfer on the Closing Date or, if the cash portion
of the Purchase Price is received by Promptus too late in the day on the
Closing Date to effect a wire transfer, then on the Business Day immediately
following the Closing Date.
5.06 Sale of VideoServer Common Stock. Promptus agrees to exercise
its right to sell not less than 72.1267% of the VideoServer Common Stock held
by it as soon as it is so permitted pursuant to the terms and conditions of NAC
Registration Rights Agreement and, in connection therewith, to cooperate fully
with VideoServer in the preparation of the registration statement covering the
resale of such securities. Promptus hereby agrees that Xxxxxxxxxx shall serve
as its agent for such sale so long as the fees charged to Promptus by
Xxxxxxxxxx in connection therewith are commercially competitive.
5.07 VideoServer Disbursements and Adjustments. Promptus agrees
not to consent to any disbursements from the NAC Escrow Agreement or to any
settlements related thereto, or to any adjustments to Working Capital (as such
term is defined in the NAC Purchase Agreement) without the prior consent of
GTI, which consent shall not be unreasonably withheld.
5.08 Telemetrix Confirmation. GTI agrees to use its best efforts
to obtain the Telemetrix Confirmation.
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ARTICLE VI
CONDITIONS TO AND DELIVERIES AT CLOSING
6.01 Mutual Conditions. The obligations of GTI, Promptus and the
Agent to consummate this Agreement and the transactions contemplated hereby are
subject to the fulfillment, at the Closing (or prior to the Closing, if
specified), of the following conditions precedent (subject to the rights of the
parties to waive any such condition in writing):
(a) No Legal Bar. No Governmental Authority shall have
instituted or notified any of the parties of its intention to institute any
suit or proceeding to restrain or enjoin the consummation of this Agreement or
the transactions contemplated hereby or to nullify or render ineffective this
Agreement or such transactions if consummated, and no order or decree so
restraining or enjoining such consummation shall be in effect.
(b) Consents and Approvals. Any and all material
consents, orders, permits, licenses, qualifications, authorizations or
approvals from Governmental Authorities required for the consummation of the
transactions contemplated by the NAC Purchase Agreement and this Agreement
shall have been obtained, and all applicable waiting periods shall have
expired.
(c) Absence of Litigation. No order or decree will have
been issued against GTI, Promptus or the Agent restraining or enjoining the
consummation of the transactions contemplated by the NAC Purchase Agreement or
this Agreement.
(d) NAC Sale. The NAC Sale shall have been consummated.
6.02 Conditions to the Obligations of Promptus and the Agent. The
obligations of Promptus and the Agent to consummate this Agreement and the
transactions contemplated hereby are subject to the fulfillment, prior to or at
the Closing, of the following conditions precedent (subject to the right of
Promptus and the Agent to waive any such condition in writing):
(a) Accuracy of Representations and Warranties. The
representations and warranties of GTI herein contained shall have been true
when made and, in addition, shall be true in all material respects on and as of
the Closing Date with the same force and effect as though made on and as of the
Closing Date, except: (i) as affected by transactions contemplated hereby; and
(ii) to the extent that any such representations and warranties are made as of
a specified date, in which case such representations and warranties shall have
been true as of the specified date.
(b) Compliance with Covenants and Agreements. The
covenants and agreements required by this Agreement to be performed or complied
with by GTI in all material respects prior to or at the Closing shall have been
performed and complied with by GTI.
(c) Shareholder Authorization. The execution of this
Agreement and the consummation of the transactions contemplated hereby,
including the repurchase of the GTI Shares, shall have been duly authorized by
holders of a majority of the outstanding shares of Promptus Common Stock at a
meeting called for such purpose.
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(d) Management Shareholder Approval. The execution of
the Management Shares Amendment in the form attached hereto as Exhibit A shall
have been approved by (i) holders of a majority of the outstanding Management
Shares, and (ii) holders of a majority of the outstanding Management Shares,
excluding for purposes of such vote, Management Shares owned by Xxxxxxx Xxxxx
or Xxxxxxxx Xxxxx.
(e) Termination of Promptus' Guaranties. The termination
of any and all guaranties entered into by Promptus guarantying any obligations
of GTI.
6.03 Conditions to the Obligations of GTI. The obligation of GTI
to consummate this Agreement and the transactions contemplated hereby are
subject to the fulfillment, prior to or at the Closing, of the following
conditions precedent (subject to the right of GTI to waive any such condition
in writing):
(a) Accuracy of Representations and Warranties. The
representations and warranties of Promptus herein contained shall have been
true when made and, in addition, shall be true in all material respects on and
as of the Closing Date with the same force and effect as though made on and as
of the Closing Date, except: (i) as affected by transactions contemplated
hereby; and (ii) to the extent that any such representations and warranties are
made as of a specified date, in which case such representations and warranties
shall have been true as of the specified date.
(b) Compliance with Covenants and Agreements. The
covenants and agreements required by this Agreement to be performed or complied
with by Promptus and the Agent in all material respects prior to or at the
Closing shall have been performed and complied with by Promptus and the Agent.
(c) Termination of GTI's Guaranties. The termination of
any and all guaranties entered into by GTI guarantying any obligations of
Promptus.
(d) Stock Exchange Confirmation. GTI's parent
corporation, Telemetrix plc, shall have received the written confirmation
contemplated by Section 11.8(b) of the Listing Rules of the London Stock
Exchange with respect to the transactions contemplated hereby (the "Telemetrix
Confirmation"). It is hereby understood by the parties that any and all costs
and expenses incurred in connection with obtaining the Telemetrix Confirmation
shall be borne solely by GTI.
6.04 Deliveries by GTI to Promptus. At the Closing, GTI will
deliver to Promptus the following, all documents to be in form and substance
satisfactory to Promptus, the Agent and their counsel:
(a) CEO Certificate. GTI shall deliver to Promptus a
certificate (dated the Closing Date) executed by GTI's chief executive officer
to the effect that (i) he is familiar with the provisions of this Agreement and
(ii) the conditions specified in subsections (a) and (b) of Section 6.02 have
been satisfied.
(b) Stock Certificates. GTI shall deliver a certificate
or certificates representing the GTI Shares, registered in the name of GTI,
duly endorsed for transfer to Promptus or accompanied by an assignment of the
GTI Shares to Promptus duly executed by GTI consistent with the representations
and warranties made by GTI herein.
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(c) Transfer Documents. GTI shall deliver the Management
Shareholder Notes, Pledged Certificates and the Transfer Documents duly
executed by GTI, assigning and transferring to Promptus, GTI's right, title,
and interest in and to the Management Shareholder Notes and the Pledged
Management Shares consistent with the representations and warranties made by
GTI herein.
(d) Director and Officer Resignations . GTI shall
deliver to Promptus the written resignations of all directors of Promptus
(other than Xxxxxxx Xxxxx) and of Xxxx X'Xxxxxx.
(e) Management Shares Amendment . GTI shall deliver to
Promptus the Management Shares Amendment executed by GTI.
(f) All Proceedings to be Satisfactory. Promptus shall
have received certified or other copies of all resolutions, incumbency
certificates and other documents relating to GTI and the GTI Shares and the
Management Shareholder Notes incident to the transactions contemplated hereby
as Promptus may reasonably request and such documents shall be reasonably
satisfactory in form and substance to Promptus.
6.05 Deliveries by Promptus and the Agent to GTI. At the Closing,
Promptus will deliver to GTI the following:
(a) CEO Certificate. Promptus shall deliver to GTI a
certificate (dated the Closing Date) executed by the Chief Executive Officer of
Promptus to the effect that (i) he is familiar with the provisions of this
Agreement and (ii) the conditions specified in subsections (a) and (b) of
Section 6.03 have been satisfied.
(b) Management Shares Amendment. Promptus shall deliver
to GTI the Management Shares Amendment executed by Promptus and the Agent.
(c) Closing Date Payment. Promptus shall deliver to GTI
the Closing Date Payment in accordance with the provisions of Section 2.02(a)
hereof.
(d) All Proceedings to be Satisfactory. GTI shall have
received certified or other copies of all resolutions, incumbency certificates
and other documents relating to Promptus incident to the transactions
contemplated hereby as GTI may reasonably request and such documents shall be
reasonably satisfactory in form and substance to GTI.
ARTICLE VII
INDEMNIFICATION
7.01 Indemnity Obligations.
(a) From GTI. GTI agrees to defend, indemnify and hold
Promptus and the Agent harmless from any and all liabilities, obligations,
losses, damages, claims, costs and expenses whatsoever, including but not
limited to reasonable attorneys' fees and accounting fees and disbursements
("Damages"), incurred in connection with:
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(i) any breach of the representations and
warranties made by GTI herein or in any Related Document or otherwise
made to Promptus or the Agent in connection with the transactions
contemplated hereby;
(ii) the failure of GTI to perform any of the
covenants or obligations to be performed by it hereunder or under any
Related Document;
(iii) any liability of GTI or any member (other
than Promptus) of any Consolidated Group of which GTI has ever been a
member for the payment of all taxes, however denominated, including
any interest, penalties or additions to tax that may become payable in
respect thereof, imposed by any federal, state, local or foreign
government or any agency or political subdivision of any such
government, which taxes shall include, without limited the generality
of the foregoing, all income taxes, estimated taxes, payroll and
employee withholding taxes, backup withholding taxes, unemployment
insurance taxes, social security taxes, sale and use taxes, excise
taxes franchise taxes, gross receipts taxes, occupation taxes, capital
stock taxes, taxes on services, and other obligations of the same or
of a similar nature, whether arising before, on or after the date
hereof;
(iv) any operational defects in the administration
the GTI Profit-Sharing Plan;
(v) any liability arising under any guaranty or
security agreement entered into by Promptus guarantying or securing
any obligations of GTI; and
(vi) any fraudulent behavior by GTI of any kind or
nature in connection with the transactions under or pursuant to this
Agreement, the NAC Transaction Documents or any of the provisions of
this Section 7.01(a).
(b) From Promptus to GTI. Promptus agrees to defend,
indemnify and hold GTI harmless from any and all Damages incurred in connection
with (i) any breach of the representations and warranties made by Promptus
herein or in any Related Document, (ii) the failure of Promptus to perform any
of the covenants or obligations to be performed by it hereunder or under any
Related Document or (iii) any fraudulent behavior by Promptus of any kind or
nature in connection with the transactions under or pursuant to this Agreement,
the NAC Transaction Documents or any of the provisions of this Section 7.01(b).
(c) From Promptus to Agent. Promptus agrees to defend,
indemnify and hold the Agent harmless from any and all Damages incurred in
connection with any claim challenging the Agent's authority to enter into this
Agreement or the Management Shares Amendment.
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(d) Set-Off. If, at the time that any payment becomes
due from Promptus to GTI hereunder, Promptus has in good faith asserted a
Claim, then Promptus may withhold from such payment the amount of such Claim
pending resolution thereof, so long as Promptus segregates the amount of such
Claim from its general assets. Should the resolution of said Claim include a
determination that the Damages suffered by Promptus in respect thereof were
less than the amount of the withheld payment, then, within 15 Business Days
after the making of such determination, Promptus shall pay to GTI the amount by
which such withheld payment exceeded the Damages determined to have been
suffered by Purchaser in respect of such Claim, together with interest on said
amount at the per annum rate of Fleet National Bank's prime rate in effect
during the relevant time, from and including the date such payment was withheld
to but not including the date of payment of such amount; and, additionally, if
GTI shall obtain a final unappealable judicial order to the effect that
Promptus did not have a good faith basis to assert said Claim, then Promptus
shall also pay to GTI the reasonable out-of-pocket expenses, including
attorneys' fees, costs and expenses, of GTI in defending such Claim and seeking
such order. With respect to a Direct Claim, GTI may seek to recover such
withheld amounts in accordance with the arbitration provisions of Section
7.01(e) hereof. Third Party Claims shall not be subject to any arbitration
procedure but shall be subject to the procedures set forth in Section 7.03(a)
and (b) hereof.
(e) Arbitration of Direct Claims. If, in any case in which Promptus
intends to assert its set-off rights in connection with a Direct Claim,
Promptus shall furnish notice to GTI of such assertion (which notice shall
include the nature of the Direct Claim and the amount which Promptus proposes
to set-off), GTI shall have the right to contest either Promptus' right to
assert such set-off rights or the amount which Promptus proposes to set off by
furnishing notice thereof (the "Dispute Notice") to Promptus within 15 days of
its receipt of such notice from Promptus of its assertion of the set-off
rights, and the dispute shall be resolved as follows. Such dispute shall be
submitted to arbitration pursuant and subject to the provisions of the
Arbitration Act, R.I.G.L. Section 10-3-1 et seq. (the "Act"), in Providence,
Rhode Island. The disputants shall promptly endeavor by mutual agreement to
designate one person to serve as the arbitrator within 10 days after Promptus'
receipt of the Dispute Notice. If they are unable to agree within that period
upon such person, then the arbitrator shall be promptly selected through the
facilities of the Boston Regional Office of the American Arbitration
Association and in accordance with the rules thereof. The award of the
arbitrator shall be final and binding upon the disputants, subject only to such
rights of appeal as are provided by the Act; provided however, that any such
award shall be accompanied by a written opinion of the arbitrator giving the
reasons for the award. The costs of the arbitration proceeding, including the
fees of the arbitrator, shall be borne pro rata by the disputants based upon
the award of the arbitrator (i.e., if the party making the claim is awarded
100% of its claim, then the other party shall bear 100% of the cost of the
arbitration). If any disputant appeals the award of an arbitrator and such
award is not changed, vacated, modified or corrected by the court to which such
appeal is taken, the appellant shall pay all costs and attorneys' fees of all
parties incurred in connection with such appeal and all proceedings (other than
the arbitration) related thereto. This provision for arbitration shall be
specifically enforceable.
7.02 Limitations.
(a) As to GTI. The liability of GTI for its
indemnification obligations hereunder shall be limited as follows:
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(i) No claim for indemnity under this Agreement
may be asserted by Promptus after the first anniversary of the Closing
Date (the "First Anniversary Date") except for (i) claims for breach
of Seller's representation and warranty set forth in Section 3.06,
claims for breach of the obligations under Section 5.02 and indemnity
claims under Sections 7.01(a)(iii) and 7.01(a)(iv), which claims may
be asserted, if at all, until the expiration of the statutory period
of limitations for assessments of tax deficiencies and/or the
disqualification of tax-qualified employee pension benefit plans, as
applicable, including any extensions thereof, for the applicable
taxable period, (ii) claims for breach of GTI's obligations under
Section 5.03 which claims may be asserted, if at all, until the
expiration of the third anniversary of the Closing Date, (iii)
indemnity claims under Sections 7.01(a)(v) and 7.01(a)(vi), which
claims may be asserted, if at all, until the expiration of the
statutory period of limitations for such claims.
(ii) except for claims for breach of GTI's
representation and warranty set forth in Section 3.06 and claims for
breach of the obligations under Sections 5.02 and 5.03 and indemnity
claims under Sections 7.01(a)(iii), 7.01(a)(iv), 7.01(a)(v) and
7.01(a)(vi) (for which there will be no "cap"), GTI shall have no
liability to pay in respect of the indemnification obligations
pursuant to this Agreement more than the aggregate amount actually
paid by Promptus under this Agreement, provided, however, that if a
Claim that is subject to indemnification hereunder arises prior to the
First Anniversary Date, then if GTI is otherwise entitled to receive
additional cash and/or shares of VideoServer Common Stock pursuant to
Section 2.02 hereof or otherwise, the amount of such prior claims
shall be subject to indemnification under this Section 7.02(a) to the
extent of such cash and shares of VideoServer Common Stock.
(b) As to Promptus. The liability of Promptus for its
indemnification obligation hereunder shall be limited as follows:
(i) No claim for indemnity under this Agreement
may be asserted by GTI after the First Anniversary Date, except for
indemnity claims under Sections 7.01(b)(iii), which claims may be
asserted, if at all, until the expiration of the statutory period of
limitations for such claims;
(ii) Except for indemnity claims under Sections
7.01(b)(iii) (for which there will be no "cap"), Promptus shall have
no liability to pay in respect of the indemnification obligations
pursuant to this Agreement more than the aggregate amount actually
paid by Promptus to GTI under this Agreement.
7.03 Procedure for Indemnification.
(a) If a party to this Agreement entitled to assert a
claim under this Agreement (a "Claim") shall receive notice of the assertion by
a Person who is not a party to this Agreement (or an Affiliate of a Party to
this Agreement) of any claim or of the commencement by any such Person of any
action or proceeding (a "Third Party Claim") with respect to which GTI or
Promptus is obligated to provide indemnification, the indemnified party (the
"Indemnitee") shall give the indemnifying party (the "Indemnitor") prompt
notice thereof. Such notice shall describe the Third Party Claim in reasonable
detail.
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(b) The Indemnitor may elect to compromise or defend, at
such Indemnitor's own expense and by such Indemnitor's own counsel, any Third
Party Claim. If an Indemnitor elects to defend a Third Party Claim it shall,
within 30 days of receipt of the notice referred to in Section 7.03(a) above
(or sooner, if the nature of such Third Party Claim so requires), notify the
Indemnitee of its intent to do so, and such Indemnitee shall reasonably
cooperate in the compromise of, or defense against, such Third Party Claim.
Such Indemnitor shall pay such Indemnitee actual out-of-pocket expenses
incurred in connection with such cooperation. After notice from an Indemnitor
to an Indemnitee of its election to assume the defense of a Third Party Claim,
such Indemnitor shall not be liable to such Indemnitee under this Article VIII
for any legal expenses subsequently incurred by such Indemnitee in connection
with the defense thereof; provided that such Indemnitee shall have the right to
employ one counsel for each Third Party Claim to represent such Indemnitee if
the Indemnitee is advised by its counsel that (i) a conflict of interest
between such Indemnitee and such Indemnitor exists in respect of such Third
Party Claim or (ii) where the Indemnitor is also a party to such Third Party
Claim, different or conflicting claims or defenses may reasonably exist, in
which events such portion of the fees and expenses of such separate counsel
that are reasonably related to matters covered by the indemnity provided in
this Article VIII shall be paid by such Indemnitor. If an Indemnitor elects
not to defend against a Third Party Claim, or fails to notify an Indemnitee of
its election as provided in Section 7.03(a) above, such Indemnitee may without
advance written notice to the Indemnitor, pay, compromise or defend such Third
Party Claim reasonably and in good faith on behalf of and for the account and
risk of the Indemnitor to the extent that the Indemnitee is entitled to receive
indemnification from the Indemnitor hereunder. No Indemnitor shall consent to
entry of any judgment or entry into any settlement against or with respect to
any Indemnitee without the written consent of such Indemnitee (not to be
unreasonably withheld), unless such judgment or settlement (A) provides solely
for money damages or other payments for which such Indemnitee is entitled to
indemnification hereunder and (B) includes as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnitee of a release for all
liability in respect of such Third Party Claim.
(c) With respect to any Claim hereunder which does not
result from a Third Party Claim (a "Direct Claim"), the Indemnitor shall have a
period of 30 days from receipt of notice from the Indemnitee within which to
respond thereto. If such Indemnitor does not respond within such 30-day period
or rejects such Direct Claim in whole or in part, such Indemnitee shall be free
to pursue such remedies as may be available to such Indemnitee under applicable
law.
(d) This Article VIII shall not impair the ability of any
party to exercise any of its other rights and remedies under applicable law.
ARTICLE VIII
TERMINATION
8.01 Termination. Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing:
(a) by mutual written consent of GTI, Promptus and the
Agent;
(b) by any of GTI, Promptus or the Agent, if the NAC
Purchase Agreement is terminated;
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(c) by any of GTI, Promptus or the Agent on ten (10)
days' written notice in the event any of the conditions set forth in Sections
6.01, 6.02 or 6.03 are not satisfied by June 30, 1997 (other than as a result
of a breach of this Agreement by the party seeking termination); provided that,
the parties obligations under this Agreement shall continue during such ten-day
period, and this Agreement shall not terminate if all such conditions are
satisfied within such ten-day period;
(d) by a party not in breach in the event of a material
breach by another party which is not cured within thirty (30) days after
written notice thereof;
(e) by Promptus or the Agent in the event that the
Telemetrix Confirmation has not been received by the Closing Date and GTI
elects not to proceed with the Closing without the Telemetrix Confirmation.
8.02 Effect of Termination. If this Agreement is terminated and
the transactions contemplated hereby are not consummated as provided above,
this Agreement shall become void and of no further force and effect, except for
(i) any liability for any breach causing or permitting such termination, (ii)
the provisions of Article VIII relating to indemnification, (iii) the
provisions of Article IX relating to the Management Shares Agreement and (iv)
the provisions of this Section 8.02. GTI agrees that, if this Agreement is
terminated for the reason set forth in Section 8.01(e) above and the
transactions contemplated hereby are not consummated as provided above, it will
not cause any portion of the GTI Loan to be repaid by Promptus (other than from
operating revenues of Promptus in the ordinary course of business consistent
with past practices), nor will it cause any dividends or distributions to be
made in connection with the capital stock of Promptus, until the closing of the
sale of Management Shares subject to the purchase rights and obligations of the
Management Shareholders and GTI during the First Exercise Period (as such terms
are defined in the Management Shares Agreement). GTI further agrees that, in
the event that the NAC Sale is consummated but this Agreement is terminated and
the transactions contemplated hereby are not consummated as provided above,
Promptus will make the Additional SERP Contribution promptly after the closing
of the NAC Sale, and in no event later than two (2) Business Days thereafter.
ARTICLE IX
AGREEMENTS RELATED TO MANAGEMENT SHARES AGREEMENT
9.01 The parties agree that, if the Closing does not occur within
60 days of the date hereof, the period during which GTI and the Agent shall
attempt to agree on a forecast of the financial results to be generated by
Promptus as required under Section 3(a) of the Management Shares Agreement (the
"Forecast") for the First Exercise Period (as such term is defined in the
Management Shares Agreement) shall commence on the earlier to occur of (i) the
termination of the NAC Purchase Agreement or (ii) sixty days from the date
hereof (the "Start Date").
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9.02 The parties further agree that, in the event that GTI and the
Agent fail to reach an agreement as to the Forecast within 15 days after the
Start Date, then the matter shall immediately be presented to an arbitrator as
set forth in Section 3 of the Management Shares Agreement.
9.03 The parties also agree that, in the event that this Agreement
is terminated pursuant to the provisions of Section 8.01(e) hereof, each
Forecast to be determined by GTI and the Agent pursuant to Section 3(a) of the
Management Shares Agreement shall, for all purposes, be made as if the NAC Sale
had neither been contemplated nor had occurred and the Forecast of the NAC
Business (as such term is defined in the NAC Purchase Agreement) as determined
(by agreement of GTI and the Agent or by arbitration) for the First Exercise
Period shall be fixed for purposes of establishing the NAC Business component
of the Forecast for all subsequent Exercise Periods under the Management Shares
Agreement, and shall be deemed to be the actual results of the NAC Business
component of Promptus' business for subsequent Exercise Periods and that
appropriate adjustments shall be made to account for the receipt by Promptus of
the NAC Purchase Price and the use by Promptus thereof.
ARTICLE X
MISCELLANEOUS
10.01 Survival of Representations and Warranties. The
representations and warranties of each party hereto which are contained herein
or in any certificate or other document delivered pursuant hereto shall survive
the date hereof, but, except for the representation and warranty set forth in
Section 3.06 herein, the representations and warranties shall expire on the
First Anniversary Date, and no claim for breach thereof may be made by any
party after such date. Claims for breach of the representation and warranty set
forth in Section 3.06 herein may be asserted, if at all, until the expiration
of the statutory period of limitations for assessments of tax deficiencies,
including any extensions thereof, for the applicable taxable period.
10.02 Notices. All notices, demands and other communications which
may or are required to be given hereunder or with respect hereto shall be in
writing (including telexed and telecopied communication), shall be sent by
first-class mail, or by courier, or by telex or telecopier, or by personal
delivery and shall be deemed to have been given or made when personally
delivered and otherwise when received, addressed to the respective parties as
follows:
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(a) If to GTI:
GTI Corporation
0000 Xxxxxxxx Xxxx Xxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: President
with a copy to:
Xxxxxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx Xxxxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxx, Esq.
(b) If to Promptus or the Agent:
Promptus Communications, Inc.
000 Xxxx Xxxxx Xxx.
Xxxxxxxxxx, XX
Attention: Xxxxxxx Xxxxx
in each case with a copy to:
Xxxxxxxx, Xxxxx & Xxxxxx
0000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
or to such other address as any party may from time to time designate by notice
to each other party with respect to future notices, demands and other
communications to such party.
10.03 Postponement and Waiver. Any postponement or waiver pursuant
to this Agreement shall be in writing and shall be effective only in the
specific instance and for the purpose for which given. No failure or delay on
the part of any party in exercising any right, power or privilege under this
Agreement shall operate as a waiver thereof nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies expressly specified in this Agreement are
cumulative and are not exclusive of any rights or remedies which any party
would otherwise have.
10.04 Assignment. Neither party may assign its rights or delegate
its duties hereunder or under any of the Related Documents to any Person
without the prior written consent of the other parties. The rights and
obligations of the parties hereto shall be binding on and inure to the benefit
of their respective successors and permitted assigns.
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10.05 Entire Agreement. This Agreement, together with the exhibits
and schedules hereto and the Related Documents, constitutes the entire
agreement among the parties pertaining to the subject matter hereof, and
supersedes any and all prior agreements among the parties pertaining to the
subject matter.
10.06 Invalidity. In the event that any one or more of the
provisions contained in this Agreement, the Related Documents or in any other
instrument referred to herein, shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement, any
Related Document or any such other instrument.
10.07 Captions. The captions of Articles and Sections in this
Agreement are for convenience of reference only and shall not alter, control or
affect the meaning or construction of any provision hereof.
10.08 Counterparts. This Agreement may be executed in as many
counterparts as may be deemed necessary and convenient, and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed an original, but all such counterparts shall constitute but one and
the same instrument.
10.09 Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Rhode
Island.
10.10 Amendment. This Agreement may not be amended without the
written consent of all parties.
10.11 No Third Party Beneficiary Rights. This Agreement is made
solely and specifically between and for the benefit of the parties hereto and
the Management Shareholders, and their respective successors and assigns,
subject to the express provisions hereof relating to successors and assigns,
and no other Person (other than the Management Shareholders) shall have any
rights, interests or claims hereunder or be entitled to any benefits under or
on account of this Agreement as a third party beneficiary or otherwise.
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WITNESS the due execution of this Stock Purchase Agreement as of the
day and year first above written.
GTI CORPORATION
By:
-----------------------------------------
Title:
--------------------------------------
PROMPTUS COMMUNICATIONS, INC.
By:
-----------------------------------------
Title:
--------------------------------------
__________________________________
Xxxxxxx Xxxxx, as Agent for the
Management Shareholders
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EXHIBIT A
Form of Amendment to Management Shares Agreement
AMENDMENT TO MANAGEMENT SHARES AGREEMENT
Made this ____ day of March, 1997 among GTI Corporation, a Delaware
corporation ("GTI"), Promptus Communications, Inc., a Rhode Island corporation
("Promptus") and Xxxxxxx Xxxxx, an individual resident of Rhode Island, as
agent for the Shareholders (the "Agent").
WHEREAS, GTI, Promptus, the Agent and others are parties to that
certain Management Shares Agreement dated as of January 6, 1995 (the
"Agreement") pursuant to which the shareholders of Promptus other than GTI
(collectively, the "Shareholders") agreed to sell their remaining shares in
Promptus to GTI, and GTI agreed to purchase such shares, all on the terms and
conditions set forth therein; and
WHEREAS, on December 30, 1996 GTI and the Agent entered into an
agreement entitled "Summary of Extension Terms" pursuant to which certain time
periods set forth in the Agreement were extended; and
WHEREAS, GTI, Promptus and the Agent have entered into a Stock
Purchase Agreement dated March ___, 1997 (the "Redemption Agreement") pursuant
to which Promptus agreed to redeem all of the shares in Promptus held by GTI
and the parties agreed to take certain related actions; and
WHEREAS, one of the conditions to the transactions contemplated by the
Redemption Agreement is the execution of this Agreement.
NOW, THEREFORE, BE IT AGREED, as follows:
1. Definitions. Capitalized terms used herein and not otherwise
defined are defined in the Agreement.
2. Amendment to Agreement.
(a) The preamble to the Agreement is hereby revised to delete
the first two Whereas clauses.
(b) Section 1(a) of the Agreement is hereby revised to delete
the phrase "or with the prior written consent of GTI".
(c) Section 1(b) of the Agreement is hereby revised to delete
the phrase "GTI and".
(d) Sections 2, 3, 4, 5, 6, 7 and 8 of the Agreement are
hereby deleted.
(e) Section 9(a) of the Agreement is hereby revised to
eliminate all references to GTI, which shall have no further rights thereunder.
(f) Section 9(d) of the Agreement is hereby revised to
indicate that GTI's address is now 0000 Xxxxxxxx Xxxx Xxxxxx, Xxx Xxxxx, XX
00000.
3. Miscellaneous. The provisions of Subsections (b), (c), (d) (as
amended), (e), (f) and (g) of Section 9 of the Agreement are hereby
incorporated hereby reference.
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Executed as of the date first set forth above.
GTI Corporation
By:
--------------------------
Title: President
Promptus Communications, Inc.
By:
--------------------------
Title: Chairman
Shareholders' Agent
-----------------------------
Xxxxxxx Xxxxx
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EXHIBIT B
Form of Stock Pledge Agreement
STOCK PLEDGE AGREEMENT
To secure the payment of all obligations of Promptus Communications,
Inc., a Rhode Island corporation with a principal place of business at 000 Xxxx
Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxx (the "Debtor") to GTI Corporation, a
Delaware corporation with a principal place of business at 0000 Xxxxxxxx Xxxx
Xxxxxx, Xxx Xxxxx, Xxxxxxxxxx (the "Secured Party") arising in connection with
that certain Stock Purchase Agreement of even date herewith between, inter
alia, the Debtor and the Secured Party (the "Obligations"), and in
consideration thereof, the Debtor does hereby grant a security interest in, and
pledge, assign, transfer and deliver to the Secured Party, and to its
successors and assigns, as general collateral security for the payment and
performance of the Obligations, the shares of capital stock of VideoServer,
Inc. ("VideoServer") which are represented by the stock certificates attached
hereto as Exhibit A and incorporated herein by reference, which Exhibit A has
attached to it a stock power for each such stock certificate, duly signed by
the Debtor as transferor (all of the aforesaid stock certificates and powers
being hereinafter collectively referred to as the "Collateral").
To effectuate the provisions hereof, the Debtor hereby irrevocably
appoints and constitutes the Secured Party as its true and lawful attorney with
full power of substitution to complete and fill in any blank endorsements, to
file the same and to take such further action as the Secured Party may deem
necessary to exercise, as a stockholder, all of its right, title and position
in VideoServer. The aforesaid power of attorney shall be deemed irrevocable
and coupled with an interest. The Debtor further agrees that any transfer of
the Collateral under the provisions of this paragraph shall not be deemed a
sale or disposition under the provisions of Article 9 of the Rhode Island
Uniform Commercial Code, nor an acceptance of such Collateral in satisfaction
of the Obligations or any portion thereof.
Upon any such default, the Secured Party shall further have all the
rights and remedies of a secured party afforded by the Uniform Commercial Code
as from time to time in effect in the State of Rhode Island or afforded by
other applicable law. Requirement of reasonable notice with respect to any
sale or disposition shall be met if such notice is mailed, postage prepaid, to
the Debtor at the address set forth above at least five (5) days before the
time of the sale or other disposition. Expenses of retaking, holding,
preparing for sale, selling, or the like shall include the Secured Party's
reasonable attorneys' fees and other costs and legal expenses.
Until such time as the Obligations have been paid or performed in
full, the Debtor shall not encumber the Collateral, or any part thereof, with
any lien, security interest, or encumbrance junior to the interest granted to
the Secured Party hereby other than such liens, security interests or other
encumbrances which may exist as of the date hereof.
In no event shall the Secured Party be liable with respect to the
Collateral, except for the safekeeping thereof.
All of the agreements, obligations, undertakings, representations and
warranties herein made by the Debtor shall inure to the benefit of the Secured
Party, its successors and assigns. The Debtor further agrees to execute such
other instruments as the Secured Party may deem necessary or desirable to
effectuate the purposes of this Agreement.
This Agreement has been executed and delivered as a Rhode Island
agreement and shall be governed by and construed in accordance with the laws of
the State of Rhode Island.
Each party irrevocably
(i) agrees that any suit, action, or other legal proceeding arising
out of this Agreement may be brought in the courts of record of the State of
Rhode Island or the courts of the United States located in the State of Rhode
Island;
(ii) consents to the jurisdiction of such court in any such suit,
action or proceeding; and
(iii) waives any objection which it may have to the laying of venue
of such suit, action or proceeding in any of such courts and waives any right
to a trial by jury in any of such courts.
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In case any one or more of the provisions contained herein should be
invalid, illegal or unenforceable in any respect, the validity, legality or
enforceability of the remaining provisions contained herein shall not in any
way be affected or impaired thereby.
Executed as a sealed instrument as of the 24th day of March, 1997.
WITNESS: PROMPTUS COMMUNICATIONS, INC.
---------------------------------- By: \s\ Xxxxxxx Xxxxx
-----------------------------------
Name: Xxxxxxx Xxxxx
---------------------------------
Title: President and CEO
--------------------------------
WITNESS: GTI CORPORATION
---------------------------------- By: \s\ Xxxxxx X. Xxxx-Xxxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxx-Xxxxxxxx
---------------------------------
Title: President and CEO
--------------------------------
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Exhibit A
List of Pledged Stock
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EXHIBIT C
Form of Pledge of Escrow Distributions
[TO BE PREPARED BY XXXXXXXXXXX & XXXXXXXX]
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SCHEDULE I
Management Shareholders
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SCHEDULE 2.02
Settlement Statement
1. Calculation of Net Cash Proceeds:
2. Calculation of Liabilities Adjustment:
a. Taxes $2,800,000.00*
b. The amount of the GTI Loan $7,686,593.87
c. The Additional SERP Contribution $ 550,200.00
d. The Severance Obligations plus
the Lease Obligations $ 300,000.00
e. All Transaction Expenses $ [252,500.00]
f. Appraisal Claims plus Indemnity
Claims $____________
TOTAL $____________
* This figure is based upon an aggregate Purchase Price (as such term is
defined in the NAC Purchase Agreement) of $22,000,000.00 The amount will be
adjusted based upon the actual Purchase Price.
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