1
CUSIP No. 4569108
Exhibit 1
NOTE AND STOCK PURCHASE AGREEMENT
---------------------------------
This Agreement made this 23rd day of February, 1998 by and among Xxxxx X.
Xxxxxx, Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx, individually and
Carle C. and Xxx Xxxxxx as Co-Trustees of the Xxxxx and Xxx Xxxxxx Family Trust
and Xxxxxx X. Xxxxxx, as Trustee of the Xxxxxx Family Trust, hereinafter
referred to collectively as "Sellers" and Northeast Hampton Holdings, LLC,
hereinafter referred to as "Buyer".
Whereas the Sellers are the owners of certain common stock ("Stock"), and Xxxxx
X. Xxxxxx, individually, is the owner of certain notes ("Notes"), convertible
upon certain terms and conditions into Stock and certain vested options
("Options") to purchase Stock of Infinite Machines, Corp. ("Company") and the
Sellers desire to sell said Stock, exercise said Options and sell the common
stock thereby acquired, and sell said Notes upon the terms and conditions
hereinafter set forth and Buyer desires to purchase said Stock and Notes, also
upon the terms and conditions hereinafter set forth and the parties having
reached an agreement in principal regarding the transaction. It Is Now Therefore
Agreed As Follows:
(1) SALE OF STOCK OF XXXXXX X. XXXXXX, XXXXXXX X. XXXXXX AND XXXXXX FAMILY
TRUST
(a) Seller, Xxxxxx X. Xxxxxx, shall sell to the Buyer and the Buyer shall
purchase from him 104,258 shares of Stock of the Company for a total
purchase price of Two Hundred Eight Thousand Five Hundred Sixteen and
no/100 Dollars ($208,516.00), pursuant to the terms set forth in paragraph
5 (a), below.
(b) Seller, Xxxxxxx X. Xxxxxx, shall sell to the Buyer and the Buyer shall
purchase from her 104,258 shares of stock of the Company for a total
purchase price of Two Hundred Eight Thousand Five Hundred Sixteen and
no/100 Dollars ($208,516.00), pursuant to the terms set forth in paragraph
5 (b), below.
(c) Seller, Xxxxxx Family Trust, shall sell to Buyer and the Buyer shall
purchase from it 66,489 shares of stock of the Company for a total purchase
price of One Hundred Thirty-Two Thousand Nine Hundred Seventy-Eight and
no/100 Dollars ($132,978.00) pursuant to the terms set forth in paragraph 5
(c) below.
(2) SALE OF STOCK ISSUED AND HELD BY XXXXX X. XXXXXX AND THE XXXXX AND XXX
XXXXXX FAMILY TRUST
Sellers, Xxxxx X. Xxxxxx and the Xxxxx and Xxx Xxxxxx Family Trust, shall
sell to the Buyer and the Buyer shall purchase from them 1,526,022 shares
of Stock of the Company now owned by them for a total purchase price of
Three Million Fifty-Two Thousand Forty-Four and no/100 Dollars
($3,052,044.00) upon the terms and conditions set forth in paragraph 5 (d),
below.
(3) SALE OF SHARES OF COMMON STOCK TO BE ACQUIRED BY EXERCISE OF CERTAIN
OPTIONS Seller, Xxxxx X. Xxxxxx, is the holder of certain Options issued by
the Company. He hereby agrees to exercise his rights as contained therein,
and agrees to sell to the Buyer
2
CUSIP No. 4569108
any and all shares of Stock acquired by such exercise at a purchase price
equal to his cost of exercise as set forth below:
Shares to be Acquired Option Price Total Cost
by Exercise
_____________________ ____________ ___________
177,905 $0.60 $106,743.00
The Buyer shall pay the Seller One Hundred Six Thousand Seven Hundred Forty
Three and 00/100 Dollars ($106,743.00) in immediately available funds on
date of closing. The purchase by the Buyer is specifically made subject to
the Seller obtaining from the Company its written permission to exercise
the Option and immediately transfer to the Buyer the shares thereby
acquired.
(4) SALE OF CONVERTIBLE NOTES HELD BY XXXXX X. XXXXXX
The Seller, Xxxxx X. Xxxxxx, shall sell and the Buyer shall purchase 25
Notes of various dates and principal amounts from the Company now held by
the Seller (A complete list of said Notes is attached as Schedule I and
made a part hereof.), which Notes are convertible into Stock of the Company
on certain terms and conditions, for the purchase price of $900,605 on the
terms and conditions hereinafter set forth in paragraph 5 hereof and
further shall pay to seller accumulated interest on said Notes at the rate
of $247 per day from October 1, 1997 to day of closing, in immediately
available funds. The terms and conditions of the convertibility of said
Notes are set forth on Schedule II attached hereto and made a part hereof.
(5) PAYMENT BY BUYER
At closing the Buyer shall execute Four (4) Term Notes ("Term Notes"),
payable to the respective Sellers as follows:
(a) To Xxxxxx X. Xxxxxx in the amount of $208,516.00 with interest
initially at 7% per annum payable quarterly, in arrears and principal,
payable in two equal annual installments of $104,258.00 each on the second
days of January 1999 and 2000, all due and payable January 2, 2000, all
such payments shall be made to the Escrow Agent as more fully set forth in
Exhibit AI attached hereto and made a part hereof.
(b) To Xxxxxxx X. Xxxxxx in the amount of $208,516.00 with interest
initially at 7% per annum payable quarterly, in arrears and principal,
payable in two equal annual installments of $104,258.00 each on the second
days of January 1999 and 2000, all due and payable January 2, 2000, all
such payments shall be made to the Escrow Agent as more fully set forth in
Exhibit AII attached hereto and made a part hereof.
(c) To the Xxxxxx Family Trust in the amount of $132,978.00 with interest
at 7% per annum payable quarterly, in arrears, and principal payable in two
equal annual installments of $66,489.00 each on the second days of January
1999 and 2000, all such payments shall be made to the Escrow Agent as more
fully set forth in Exhibit A III attached hereto and made a part hereof.
(d) To the Xxxxx and Xxx Xxxxxx Family Trust in the total amount of
$3,952,649.00 with interest at 7% per annum payable quarterly, in arrears
and principal payable in seven annual installments, first six of which
shall be in the amount of $560,000 each on the second days of January 2000,
2001, 2002, 2003, 2004, and 2005, and the
3
CUSIP No. 4569108
seventh payment of $592,649.00 on June 30, 2006, all due and payable June
30, 2006, all such principal payments shall be made to the Escrow Agent and
shall be applied or allocated first to the payments due for the purchase of
the Notes, and second to the purchase of the Stock now standing in the name
of Xxxxx X. Xxxxxx and the Xxxxx and Xxx Xxxxxx Family Trust, as more fully
set forth in Exhibit AIV attached hereto and made a part hereof.
(6) SECURITY
(a) PLEDGE AND SECURITY AGREEMENT; ESCROW AGREEMENT
The Buyer and the Sellers shall also execute a Pledge and Security
Agreement, in substantially the form set forth on Exhibit C attached hereto
and an Escrow Agreement, in substantially the form set forth on Exhibit D
attached hereto whereby INTER ALIA the Notes and Stock purchased by the
Buyer shall be placed in the control of an Escrow Agent and the Buyer shall
have the right to exercise all the rights and powers which enure to the
benefit of such Stock and Notes so long as the Buyer is not in default on
any terms or conditions of the Term Notes, the Security Agreement and
Pledge, the Personal Guarantee and if a default occurs then the Escrow
Agent shall convey the Stock and Notes to the Sellers and the Sellers shall
thereafter exercise such rights and powers.
In no event shall Sellers be entitled to receive any amount over and above
the amount necessary to pay the entire principal and any unpaid interest
owed pursuant to the Notes plus any expenses, commissions, legal fees or
other costs associated or related to the liquidation of such security, and
any amount over and above that necessary to so pay the amount of principal
and interest due on the Notes plus such expenses will be paid and/or
returned to the Buyer. Buyer shall have the option to be paid any such
amount over and above the amount due plus such expenses in cash or in kind.
Further, said Security and Pledge Agreement and Escrow Agreement shall
contain provisions INTER ALIA as follows:
1. That the Buyer shall have the right, so long as no default has occurred
or has occurred and been cured, to sell some or all of the Stock so long as
he places in escrow, subject to the agreement tangible or intangible assets
the value of which, as determined in the sole discretion of the Sellers, is
equal to or greater than 120% of the selling price or fair market value,
whichever is greater, of the Stock.
2. That in the event, after January 2, 1999, the fair market value of the
Stock and Notes, as determined in the sole discretion of the Sellers, or
other assets held by the Escrow Agent falls below 120% of the amount due on
the Term Note the Buyer shall forthwith convey other assets to the Escrow
Agent subject to the Guarantee, Pledge and Security Agreement to bring the
fair market value to 120% of the amount due.
(7) LIMITED WARRANTIES AND REPRESENTATIONS BY SELLERS
(A) The sole member of the Buyer has for several years last past acted as
the chief executive officer for the investment banking firm and financial
advisor of the Company, X.X. Xxxxxx & Co., Inc. As such he is thoroughly
familiar with the financial and other affairs and conditions of the Company
and has not and will not rely in any manner whatsoever on any statements or
representations, oral or otherwise, of the
4
CUSIP No. 4569108
Sellers or any of them or any of their agents, employees or attorneys in
regard to the condition, financial or otherwise, of the Company.
(B) Each Seller, individually, represents and warrants to the Buyer that:
1. Such Seller has good and marketable title to the Shares as represented
herein and to be transferred to the Buyer and that upon the consummation of
the purchase contemplated herein, subject to the security interests of the
Sellers, the Buyer will acquire good and marketable title to the Shares,
free and clear of all liens and encumbrances excepting such restrictions as
may be placed thereon by state or federal laws regarding securities
regulations and the said security interests of the Sellers.
2. Such Seller has the full right, power and authority to enter into,
execute and deliver this agreement and to transfer, convey and sell to the
Buyer at the Closing the Shares subject hereto.
3. Each Seller has taken all necessary actions to authorize and permit him,
her or it to enter into and perform this Agreement. This Agreement is and
it and each of the other agreements required hereby will be as of the
Closing Date legal, valid and binding obligations of each Seller,
enforceable in accordance with their respective terms.
4. None of the Sellers is a party to any litigation, subject to or bound by
any Law, Order, Rule, Regulation or other promulgation which would restrict
his or her ability to execute or deliver this Agreement or the performance
of any of his or her obligations hereunder.
5. None of the Sellers is subject to any agreement restricting the sale of
any of the Shares except as disclosed in the option agreements heretofore
made available to the Buyer and except a certain Escrow Agreement covering
certain Shares owned by Xxxxx X. Xxxxxx and/or the Xxxxx and Xxx Xxxxxx
Family Trust of which X.X. Xxxxxx & Co., Inc. is the Escrow Agent.
6. None of the Sellers is a party to any pending or threatened litigation
which would restrict or encumber his or her ability to execute or deliver
this Agreement or perform any of his or her obligations hereunder.
7. None of the Sellers has engaged the services of any Broker and is not
obligated to the payment of any commission on this transaction.
(8) CLOSING DATE
This transaction shall close and the Stock and Notes shall be transferred
to the Buyer, subject to the Escrow and Pledge Agreement, on the 23rd day
of February, 1998 at the offices of Xxxxxx, Xxxxxxx and Xxxxx, 000 Xxxxxxx
Xxxxx, Xxxxxxxxx, Xxx Xxxx or at such other date and place as shall be
agreed upon among the parties.
(A) Transfer of Stock
1. Xxxxx X. Xxxxxx and the Xxxxx and Xxx Xxxxxx Family Trust shall deliver
or cause to be delivered to the Buyer certificates for 1,526,022 shares of
Stock, duly endorsed for transfer, subject to the Obligations of the Buyer
to deposit the shares with the Escrow Agent in accord with the terms of the
Escrow Agreement and the Security and Pledge Agreement. In the event X.X.
Xxxxxx & Co., Inc. has not delivered to Xxxxx X. Xxxxxx and/or the Xxxxx
and Xxx Xxxxxx Family Trust certificates which it holds in escrow, and
Xxxxx X. Xxxxxx has not received certificates now owned by him but held in
street name, Xxxxx X. Xxxxxx and/or the Xxxxx and Xxx Xxxxxx Family
5
CUSIP No. 4569108
Trust shall be given sufficient time to receive, endorse and deliver those
certificates to the Buyer but in no event shall such time exceed ten (10)
days from the date of the receipt by them of such certificates. Under no
circumstances shall the Sellers sell, give, transfer or otherwise dispose
of such shares except pursuant hereto.
2. Xxxxxx X. Xxxxxx shall deliver to the Buyer certificates for 104,258
shares of Stock, duly endorsed for transfer, subject to the obligations of
the Buyer to deposit the Shares with the Escrow Agent in accord with the
terms of the Escrow Agreement and the Security and Pledge Agreement.
3. Xxxxxxx X. Xxxxxx shall deliver to the Buyer certificates for 104,250
shares of Stock duly endorsed for transfer, subject to the obligations of
the Buyer to deposit the Shares with the Escrow Agent in accord with the
terms of the Escrow Agreement and the Security and Pledge Agreement.
4. The Xxxxxx Family Trust shall deliver to the Buyer certificates for
66,489 shares of stock, duly endorsed for transfer, subject to the
obligation of the Buyer to deposit the Shares with the Escrow Agent in
accord with the terms of the Escrow Agreement and the Security and Pledge
Agreement.
5. Xxxxx X. Xxxxxx shall, within ten (10) days of closing, exercise the
options as set forth in paragraph 3 and assign all right, title and
interest in the Stock to be derived from such exercise to the Buyer, the
certificates therefor to be delivered to the Escrow Agent within sixty (60)
days of closing.
6. Xxxxx X. Xxxxxx shall assign all his right, title and interest in and to
the twenty-five (25) Notes to the Buyer.
(B) Payment by Buyer
The Buyer shall deliver or cause to be transferred to:
1. Xxxxx X. Xxxxxx, within ten (10) days of closing, the amount of $106,743
and at closing an amount equal to the interest accumulated on the Notes at
the rate of $247 per day from October 1, 1997 to date of closing.
2. The executed Promissory Notes as set forth in paragraph 5 and Exhibits
AI, AII, AIII and AIV.
(C) Security Instruments from the Buyer
1. The Buyer shall execute and deliver to the Sellers the Pledge and
Security Agreement as set forth in Paragraph 6 and Exhibit C. 2. The Buyer
and the Sellers shall execute the Escrow Agreement as set forth in
paragraph 6 and Exhibit D and deliver to the Escrow Agent a certificate or
certificates for 1,978,933 shares of Stock registered in Buyer's name and
the 25 Notes as set forth in paragraph 4 and Schedule X. Xxxxx X. Xxxxxx
shall in writing instruct the Company to issue the Stock acquired by him by
the exercise of the Options to the Buyer and deliver them to the Escrow
Agent. All the Stock and Notes together with a Stock Power executed by the
Buyer in proper form to transfer such Stock on the books of the Company and
the Notes, together with an assignment of said Notes by the Buyer to the
Sellers shall be held as Collateral by the Escrow Agent.
(D) Release of Escrow by X.X. Xxxxxx & Co., Inc.
6
CUSIP No. 4569108
The Buyer shall cause X.X. Xxxxxx & Co., Inc. to release all stock held by
it to the Sellers, Xxxxx X. Xxxxxx and the Xxxxx and Xxx Xxxxxx Family
Trust and/or provide documentary evidence of such release.
12. MISCELLANEOUS
(a) This Agreement shall be constructed in accord with the Laws of the
State of New York as a contract made and to be executed therein.
(b) This Agreement is personal to the Buyer and may not be assigned by him
and any attempted assignment shall be void and of no force or effect. This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective heirs, successors and the assigns of the Sellers.
(c) In the event of any dispute between the parties arising out of this
Agreement, the prevailing party shall be entitled to recover as part of the
award and/or judgment, reasonable attorney fees plus the costs and
disbursements of the suit including but not limited to travel and lodging
expenses of the Sellers, if any. In Witness Whereof the parties have
executed this Agreement the date first above set forth.
7
Sellers
/s/ Xxxx X. Xxxxxx
----------------------------
Xxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxx
----------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxxx
----------------------------
Xxxxxxx X. Xxxxxx
Xxxxx and Xxx Xxxxxx Family Trust
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Xxxxx X. Xxxxxx, Trustee
Xxxxxx Family Trust
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Xxxxxx X. Xxxxxx, Trustee
Buyer: Northeast Hampton
Holdings, LLC
By: /s/ Xxxxx X. Xxxxx
-------------------------
Xxxxx X. Xxxxx, Sole Member
