THIS DOCUMENT IS A COPY OF THE EXHIBIT FILED ON OCTOBER 24, 1996
PURSUANT TO A RULE 201 TEMPORARY HARDSHIP EXEMPTION.
ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT is made the ____ day of _____________, 199_ by
\and\ among XXXXXX X. XXXXXXX XX ("Xxxxxxx"), NATIONAL CANADA FINANCE CORP.
("NCFC") and DELTA COMPUTEC INC. ("Delta"), a New York corporation.
RECITALS
A. Delta has granted Xxxxxxx options to purchase 11,440,475 of its
authorized but unissued shares of common stock (the "Option Shares"),
which options are evidenced by Amended and Restated Option Agreements
between Delta and Xxxxxxx of even date herewith (individually an
"Option Agreement" and collectively the "Option Agreements").
B. On the date hereof Delta, Xxxxxxx and NCFC have entered into an
agreement pursuant to which Xxxxxxx has purchased a portion of the
indebtedness due from Delta to NCFC, and $750,000 of indebtedness to
NCFC from Delta remains due and payable to NCFC, which $750,000 debt
is evidenced by an Amended and Restated Promissory Note dated October
10, 1996 (the "NCFC Note").
C. In connection with this transaction Xxxxxxx has agreed to assign a
portion of his rights under the Option Agreements to NCFC.
NOW THEREFORE, the parties agree as follows:
1. Xxxxxxx hereby assigns and transfers the entire right, title and
interest in the Option Agreement attached hereto as Exhibit A benefically held
by Xxxxxxx to NCFC (such right, title and interest hereinafter referred to as
the "Assigned Option"). The exercise of the Assigned Option shall become
effective only if the NCFC Loan is not repaid in full prior to the earlier to
occur of: (i) the occurrence of an Event of Default (which is not cured upon the
expiration of any applicable cure period) under the NCFC Note; or (ii) the first
day of the thirty-seventh month after the date hereof. NCFC agrees that it will
not exercise the Assigned Option until the earlier to occur of: (i) the
occurrence of an Event of Default (which is not cured upon the expiration of any
applicable cure period) under the NCFC Note; or (ii) the first day of the
thirty-seventh month after the date hereof (the "Exercise Date").
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2. It is understood that the Assigned Option represents the right to
purchase 17.5% of Delta's common shares on a fully diluted basis. The term
"fully diluted basis" as used in this Agreement means, during the earlier to
occur of the period of time that the Assigned Option remains unexercised, or the
date that the NCFC Loan is paid in full, that NCFC shall be entitled to receive
17.5% of all issued and outstanding common shares for shares reserved for
issuance pursuant to any existing option or warrant of the currently authorized
20,000,000 common shares of Delta.
3. Delta approves of and consents to the assignment of the Assigned Option
\pursuant to this Agreement\, but does not consent to any other assignment or
transfer of the Assigned Option. In addition to the Assigned Option, Delta
covenants and agrees with NCFC that, in the event the Delta Certificate of
Incorporation is ever amended or restated by a vote of the Delta shareholders to
increase the authorized common shares over the existing 20,000,000 common shares
and, as a result of such amendment or restatement, the Board of Directors of
Delta issues common shares, options or warrants for action taken after the date
of this Agreement, then: (i) if any such issuance is to Xxxxxxx, JML Optical
Industries ("JML"), or affiliates thereof, Delta agrees to issue to NCFC,
without any cost to NCFC, common shares, warrants or options equal to 17.5% of
the amount of common shares, options or warrants issued to Xxxxxxx, JML or
affiliates thereof or (ii) if any such issuance is to persons ("Independent
Third Parties") other than Xxxxxxx, JML or affiliates thereof, Delta agrees to
permit NCFC to purchase any such common shares, options or warrants at the same
time and for the same consideration as are paid to Delta for the issuance of any
such common shares, options or warranties to any Independent Third Parties.
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4. All rights of NCFC to receive any common shares, warrants or options
pursuant to this Agreement, including but not limited to the Assigned Option,
are referred to as the "NCFC Equity Acquisition Rights."
5. NCFC acknowledges and agrees that the acquisition of NCFC Equity
Acquisition Rights is subject to reduction upon prepayments on the NCFC Note as
provided in Section 8.
6. In addition to those NCFC Equity Acquisition Rights set forth above, in
the event that Delta raises capital in any offering of additional equity, Delta
shall immediately apply fifty percent (50%) of the proceeds of such additional
equity to the NCFC Note.
7. If the NCFC Note remains unpaid as of the Exercise Date, then at any
time after the Exercise Date, NCFC may exercise the Assigned Option without
restriction and the call feature of the Warrant set forth in Section 8 will be
cancelled.
8. If a portion of the NCFC Note, but not the entire NCFC Note, is paid as
of the date any Quarterly Premium Payment (as defined in <________)> \the NCFC
Note)\ accrues (the "QPP Reduction Ratio Date"), or on the Exercise Date (the
"Option Reduction Ratio Date"), then:
a. in the case of Quarterly Premium Payments, the Quarterly Premium
Payment accruing as of any QPP Reduction Ratio Date will be reduced by
the proportion that all prepayments made to the NCFC Note as of that
QPP Reduction Ratio Date (the "QPP Prepayment Total") bears to the
original $750,000 principal amount of the NCFC Note. The ratio of the
QPP Prepayment Total to the original $750,000 principal amount of the
NCFC Loan shall be referred to as the "QPP Reduction Ratio"; < and >
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b. in the case of the exercise of the Assigned Option, the amount of
common shares to be issued under the Assigned Option will be reduced
by multiplying: (i) the number of common shares equal to seventeen and
one-half percent (17.5%) of the common shares of Delta on a fully
diluted basis as of any NCFC Warrant Exercise Date; by (ii) the QPP
Reduction Ratio\; and\<.>
c. in the event that any NCFC Equity Acquisition Right ever occurs in
addition to the Assigned Option, the parties acknowledge and agree
that the formula providing for the reduction of the amount of common
shares to which the Assigned Option shall be applicable pursuant to
a. and b. above, shall be equally applicable, at the same
times, to all such other types of NCFC Equity Acquisition Rights as
may ever be issued to NCFC by Xxxxxxx, by JML or by Delta.
9. In consideration of its unconditional right to exercise the Warrant on
or after the first day of the thirty seventh month, NCFC shall be deemed to have
waived its right to collect any accrued Quarterly Premium Payments as of the
first day of the thirty seventh month.
10. This Agreement shall be in interpreted and enforced in accordance with
the laws of New York.
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11. This Agreement is binding on, and shall inure to the benefit of the
parties and each of their successors and assigns. This Agreement shall not
terminate in the event of the death or disability of Xxxxxxx or as a result of
his ceasing to be an officer or director of Delta. This Agreement supersedes any
and all prior discussions and negotiations with regard to the subject matter
hereof and may only be amended by a writing executed by all parties.
IN WITNESS WHEREOF, the parties hereof executed this Agreement on the date
first above written.
_________________________________________
XXXXXX X. XXXXXXX XX
NATIONAL CANADA FINANCE CORP.
By ______________________________________
Name:
Title:
Page 128 of 207 Pages
DELTA COMPUTEC INC.
By ______________________________________
Name:
Title:
Page 129 of 207 Pages
