SUBSCRIPTION AGREEMENT, dated as of October 2, 1998 (the "Agreement"), by and
between EXTECH CORPORATION, a Delaware corporation ("EXTECH" or the "Company"),
and EAGLE INSURANCE COMPANY, a New Jersey domiciled insurance company (the
"Subscriber").
RECITALS:
The Company is a party to an Agreement, dated as of May 8, 1998, with
Xxxxxx X. Xxxxxxxxx ("Certilman"), Xxx X. Xxxx ("Haft"), Xxxxx Xxxx ("Xxxx") and
Xxxxxxx Xxxxxxxxx ("Xxxxxxxxx") (as amended, the "DCAP Agreement"), pursuant to
which, subject to the terms and conditions thereof, the Company has agreed to
purchase from Lang and Xxxxxxxxx, and Xxxx and Xxxxxxxxx have agreed to sell to
the Company, all of the outstanding shares of capital stock of Dealers Choice
Automotive Planning Inc., ("DCAP") and certain other related entities as well as
certain of the outstanding capital stock and membership interests in certain
other related entities (collectively, the "Related DCAP Entities").
The consummation of the DCAP Agreement is subject to, among other
things, approval by the stockholders of the Company of an amendment to the
Certificate of Incorporation of the Company pursuant to which the number of
authorized shares of Common Stock, $.01 par value, of the Company ("Common
Shares") is increased from 10,000,000 to at least 20,000,000 (the "Authorized
Share Increase").
In connection with the consummation of the DCAP Agreement, the Company
desires to obtain additional financing by selling to the Subscriber 1,486,893
Common Shares (the "Shares") at a price of $0.67 per Share (the "Offering").
The Subscriber is a wholly-owned subsidiary of The Xxxxxx Plan
Corporation ("Xxxxxx Plan").
Stockholder approval of the Authorized Share Increase is necessary to
consummate this Offering, The consummation of this Offering is contemplated to
take place concurrently with the consummation of the DCAP Agreement (the "DCAP
Closing").
Capitalized terms used in this Agreement will have the meanings given
such terms in Article XIV hereof or elsewhere in the text of this Agreement, and
variants and derivatives of such terms shall have correlative meanings,
NOW, THEREFORE, in consideration of the recitals and the respective
representations, warranties and agreements herein contained and intending to be
legally bound hereby, the parties hereby agree as follows;
ARTICLE I
SUBSCRIPTION FOR SHARES
1.1 Subscription. Upon and subject to the terms and conditions of this
Agreement, the Subscriber hereby subscribes for and agrees to purchase from the
Company, and the Company hereby agrees to issue and sell to the Subscriber, the
Shares at the Closing.
ARTICLE II
PURCHASE PRICE
2.1 Purchase Price. The purchase price for the Shares (the "Purchase Price)
shall be sixty-seven cents ($0.67) per Share or an aggregate of nine hundred
ninety-six thousand two hundred eighteen dollars and thirty-one cents
($996,218.3 1).
2.2 Payment of Purchase Price. The Purchase Price shall be paid at the Closing
by the wire transfer by the Subscriber of immediately available funds to an
account designated by the Company against delivery by the Company of a
certificate representing the Shares.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
THE SUBSCRIBER
The Subscriber makes the following representations and warranties to EXTECH:
3.1 Valid Existence. The Subscriber is a corporation validly existing under and
in compliance with the laws of the State of New Jersey.
3.2 Consents. No consent of any Body or other Person is required to be received
by or on the part of the Subscriber to enable it to enter into and carry out
this Agreement and the transactions contemplated hereby.
3.3 Authority; Binding Nature of Agreement. The Subscriber has the corporate
power to enter into this Agreement and to carry out its obligations hereunder.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by the Board of
Directors of the Subscriber and no other corporate proceedings on the part of
the Subscriber are necessary to authorize the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby. This
Agreement constitutes the valid and binding obligation of the Subscriber and is
enforceable in accordance with its terms.
3.4 No Breach Neither the execution and delivery of this Agreement, nor
compliance by the Subscriber with any of the provisions hereof nor the
consummation of the transactions contemplated hereby will:
(a) violate or conflict with any provision of the Certificate of
Incorporation or By-Laws of the Subscriber;
(b) violate or, alone or with notice or the passage of time, or both,
result in the breach or termination of, or otherwise give any party the
right to terminate, or declare a default under, the terms of any Contract to
which the Subscriber is a party or by which it may be bound;
(c) violate any judgment, order, injunction, decree or award against,or
binding upon, the Subscriber or upon any of its assets; or
(d) violate any law or regulation of any jurisdiction relating to the
Subscriber.
3.5 Legal Proceedings. No event set forth in paragraph (f) of Item 401 of
Regulation S-K (Involvement in Certain Legal Proceedings), promulgated by the
SEC, or paragraph (d) of Item 401 of Regulation S-B (Involvement in Certain
Legal Proceedings), promulgated by the SEC, has occurred during the past five
years with respect to either the Subscriber, Xxxxxx Plan or Xxxxxx Xxxxxxx.
3.6 Brokers. The Subscriber has not engaged, consented to, or authorized any
broker, finder, investment banker or other third party to act on its behalf,
directly or indirectly, as a broker or finder in connection with the
transactions contemplated by this Agreement.
3.7 Proxy Statement. The information to be furnished by the Subscriber for
inclusion in the Proxy Statement, when furnished, and at all times to and
including the time of the stockholders' meeting convened for the purpose of
obtaining Stockholder Approval, will not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein contained not misleading.
3.8 SEC Reports. The Subscriber hereby represents that the Company has furnished
to it a copy of the Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1997 and Quarterly Reports on Form 10-QSB for the periods
ended March 31, 1998 and June 30, 1998 (the "SEC Reports"). The Subscriber
represents further that it has been furnished with all information regarding the
Company, including, without limitation, regarding the DCAP Agreement, which it
has requested or desired to know; that all other documents which could be
reasonably provided, including, without limitation, a copy of the DCAP
Agreement, have been made available for its inspection and review; and that it
has been afforded the opportunity to ask questions of and receive answers from
duly authorized officers and/or other representatives of the Company concerning
the terms and conditions of the Offering, and any additional information which
it has requested.
3.9 DCAP Agreement. The Subscriber hereby represents that the Company has
furnished to it a copy of the DCAP Agreement and all of the Schedules and
Exhibits thereto, which are listed in the Table of Contents to the DCAP
Agreement, and that the Subscriber has reviewed such items.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF EXTECH
Subject to Section 15.17 hereof, EXTECH makes the following
representations and warranties to the Subscriber:
4.1 Valid Existence; Qualification. (a) EXTECH is a corporation validly existing
and in good standing under the laws of the State of Delaware. EXTECH has the
power to carry on its business as now conducted and to own its assets now owned.
EXTECH is qualified to do business in the State of New York, is not required to
qualify in any other jurisdiction in order to own its assets now owned or to
carry on its business as now conducted, and there has not been any claim by any
other jurisdiction to the effect that EXTECH is required to qualify or otherwise
be authorized to do business as a foreign corporation therein.
(b) Each of EXTECH's subsidiaries is duly organized, validly
existing and in good standing in its jurisdiction of incorporation and is duly
qualified as a foreign corporation and authorized to do business in all other
jurisdictions in which the nature of its business or property requires such
qualification. Each of such subsidiaries has the power to own its properties and
to carry on its business as now conducted and as proposed to be conducted.
4.2 Capitalization. (a) The authorized capital stock of EXTECH consists solely
of ten million (10,000,000) Common Shares of which 5,591,367 shares are issued
and outstanding. Immediately following the DCAP Closing and the issuance of the
Shares, except as provided for on Schedule 4.2 hereto, the authorized capital
stock of EXTECH will consist of at least 20,000,000 Common Shares of which
approximately 11,780,260 Common Shares will be issued and outstanding.
(b) Options, Etc. Except as set forth on Schedule 4.2 or in
the SEC Reports or as contemplated by the DCAP Agreement, there are no
outstanding rights (either pre-emptive or other) or options to subscribe for or
purchase from EXTECH, or any warrants or other agreements providing for or
requiring the issuance or purchase by EXTECH of, any of its capital stock or any
securities convertible into or exchangeable, for, or exercisable into, any of
its capital stock or any voting trusts, proxies or agreements relating to the
voting of the EXTECH's capital stock.
4.3 Consents. Except (a) as set forth in Schedule 4.3 hereto, (b) for the
consent of Lang and Xxxxxxxxx pursuant to the DCAP Agreement to the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby (the "DCAP Consent"), and (c) for the Stockholder Approvals,
the execution, delivery and performance by EXTECH of this Agreement, the DCAP
Agreement and of each Related Agreement, and the issuance and sale of the Shares
hereunder, do not and will not require the approval or consent of, or any filing
with, any governmental authority or agency or any other Person.
4.4 Authority; Binding Nature of Agreement. EXTECH has the corporate power to
enter into this Agreement and to carry out its obligations hereunder. The
execution, delivery and performance by EXTECH of this Agreement, the DCAP
Agreement and each agreement, instrument, or other document to be executed in
connection herewith or therewith (the "Related Agreements") and the consummation
of the transactions contemplated hereby and thereby have been duly authorized by
the Board of Directors of EXTECH and, except for Stockholder Approval, no other
corporate proceedings on the part of EXTECH are necessary to authorize the
execution, delivery and performance by EXTECH of this Agreement and the
consummation of the transactions contemplated hereby. Each of this Agreement,
the DCAP Agreement and each other Related Agreement constitutes the valid and
binding obligation of EXTECH and is enforceable against it in accordance with
its terms.
4.5 SEC Reports. EXTECH has previously delivered to the Subscriber true and
complete copies, including exhibits, of the SEC Reports. The SEC Reports do not
contain any untrue statement of material fact, or fail to state any material
fact required to be stated therein or necessary to make the statements made
therein not materially misleading.
4.6 No Breach. Neither the execution, delivery or performance by EXTECH of this
Agreement, the DCAP Agreement or any other Related Agreement, nor compliance by
EXTECH with any of the provisions hereof nor the consummation of the
transactions contemplated hereby or thereby will:
(a) violate or conflict with any provisions of the Certificate
of Incorporation or By-Laws of EXTECH;
(b) violate, or alone or with notice or the passage of time,
or both, result in the breach or termination of, or otherwise give any party the
right to terminate, or declare a default under, the terms of any Contract,
license or permit to which EXTECH is a party or by which it may be bound, the
violation, breach or termination of which, or default under which, would have a
Material Adverse Effect;
(c) violate any judgment, order, injunction, decree or award
against, or binding upon, EXTECH or upon any of its assets;
(d) subject to the accuracy of the representations made by the
Subscriber in Article V hereof and by Lang and Xxxxxxxxx in Article VI of the
DCAP Agreement, violate any law or regulation of any jurisdiction relating to
EXTECH, the violation of which would have a Material Adverse Effect; or
(e) result in the creation of any Lien upon any of the assets
of EXTECH or any of EXTECH's subsidiaries, the creation of which would have a
Material Adverse Effect.
4.7 DCAP Agreement. EXTECH has in all material respects performed all its
obligations required to be performed by it to date under the DCAP Agreement,
substantially in the manner provided in the DCAP Agreement, without any waiver
or excusal of the performance or nonperformance of any such obligation, and is
not in default under the DCAP Agreement (nor, to EXTECH's Knowledge has any
event occurred which with the passage of time or notice, or both, would
constitute such a default). To EXTECH's Knowledge, (a) each of the
representations and warranties of Lang and Xxxxxxxxx made pursuant to the DCAP
Agreement was true and correct in all material respects when made and is true
and correct in all material respects as of the date hereof, and (b) each of Lang
or Xxxxxxxxx and DCAP has performed, and complied with, in all material respects
their respective covenants and agreements to be performed, or complied with, on
or prior to the date hereof. EXTECH has received no notice of any dispute,
default or alleged default or breach of any representation or warranty under the
DCAP Agreement.
4.8 Brokers. EXTECH has not engaged, consented to, or authorized any broker,
finder, investment banker or other third party to act on its behalf, directly or
indirectly, as a broker or finder in connection with the transactions
contemplated by this Agreement.
4.9 Proxy Statement. The Proxy Statement (excluding information to be furnished
by the Subscriber for inclusion therein), when furnished to the Company's
stockholders, and at all times to and including the time of the stockholders'
meeting convened for the purpose of obtaining Stockholder Approval, will not
contain any untrue statement of a material fact with regard to the Authorized
Share Increase proposal or omit to state any material fact with respect thereto
necessary to make the statements therein contained not misleading.
4.10 Subsidiaries. Except as set forth on Schedule 4.10 hereto or in the SEC
Reports, EXTECH does not have any subsidiaries and does not own or hold of
record and/or beneficially own or hold, directly or through a subsidiary, any
shares of any class of the capital of any corporation or any legal or beneficial
ownership interest in any general or limited partnership, limited liability
company, business trust or joint venture or in any other unincorporated trade or
business enterprise. The capital stock or other equity interest for each of such
Subsidiaries is wholly owned directly or indirectly by EXTECH, free and clear of
any Lien.
4.11 Absence of Certain Developments. Except for entering into this Agreement
and the DCAP Agreement, except as disclosed on Schedule 4.11 hereof, since June
30, 1998, neither EXTECH nor any of its subsidiaries has, whether or not in the
ordinary course of business:
(a) issued any capital stock or other equity interest or any
right, options or warrants with respect thereto;
(b) declared, set aside, paid to a reserve fund or made any
payment or distribution of cash or other property to its stockholders or equity
holders with respect to any class of its capital stock or other equity interest
(other than dividends paid by EXTECH's subsidiaries to EXTECH) or purchased or
redeemed any shares of its capital stock or other equity interests;
(c) suffered any substantial loss to any of its material assets;
(d) suffered damage, destruction or other casualty loss, or
forfeiture of, any property or assets, whether or not covered by insurance,
which has had or may reasonably be expected to have a Material Adverse Effect;
(e) mortgaged or pledged all or any substantial part of its
properties or assets, tangible or intangible, or subjected them to any Lien,
except Liens for current property taxes not yet due and payable;
(vi) entered into any agreement or arrangement granting any
rights to purchase or lease all or any substantial part of its assets,
properties or rights or requiring the consent of any Person to the transfer,
assignment or lease of any such assets, properties or rights; or
(vii) entered into any agreement or understanding to do any of
the foregoing.
4.12 Liens. Neither EXTECH nor any of its subsidiaries has Liens upon any of its
properties other than the Liens which are listed on Schedule 4.12 hereto and
Liens on personal property created in connection with equipment leases,
installment purchase contracts, conditional sales contracts, purchase money
mortgages and the like to secure Indebtedness incurred to acquire property not
exceeding $50,000 in the aggregate.
4.13 Indebtedness to and from Officers, Directors and Others. Except as set
forth on Schedule 4.13 hereto, neither EXTECH nor any of its subsidiaries is
indebted to any shareholder, director, officer, partner, manager, employee or
consultant of EXTECH or any of its Subsidiaries or to any affiliate of EXTECH or
any of its subsidiaries except for amounts due as normal salaries, wages or
reimbursement of ordinary business expenses or routine employee advances for
expenses, which business expenses and employee advances do not exceed $25,000 in
the aggregate for all such shareholders, directors, officers, partners,
managers, employees and consultants and not exceeding $10,000 for any such
Person. Except as set forth on Schedule 4.13, no shareholder, director, officer,
partner, manager, employee or consultant of EXTECH or any of its subsidiaries
nor any affiliate of EXTECH or any of its subsidiaries is now indebted to EXTECH
or any subsidiary except for ordinary business expense advances.
4.14 Tax Returns. Each of EXTECH and its subsidiaries has filed all Tax returns
and reports which are required to be filed with any foreign, federal, state or
local governmental authority or agency and has paid all Taxes which have become
due, and made adequate provision for the payment of all Taxes that will become
due, under applicable foreign, federal, state or local governmental law or
regulations with respect to the periods in respect of which such returns and
reports were filed, and all assessments of Taxes. EXTECH and its management
knows of no additional assessments since the date of such returns and reports.
Each of EXTECH and its subsidiaries has made adequate provisions for all current
Taxes.
4.15 Solvency. Each of EXTECH and its subsidiaries is solvent and has tangible
and intangible assets having a fair value in excess of the amount required to
pay its probable liabilities on its existing debts as they become absolute and
matured, after giving effect to the transactions contemplated hereunder and
under the DCAP Agreement and each of the other Related Agreements.
4.16 Title to Assets. Each of EXTECH and its subsidiaries owns all of its
respective assets, and has good and marketable title with respect thereto, free
and clear of all Liens other than those disclosed on Schedule 4.16.
4.17 Material Contracts and Obligations.
(a) Attached hereto as Schedule 4.17 is a true, complete and
accurate list of all Contracts substantially restricting EXTECH or any of its
subsidiaries from engaging in the insurance business or competing in such
business with any Person or in any geographical area, or from using or
disclosing any information in its possession (other than routine supplier and
customer confidentiality agreements that have been entered into by EXTECH or its
Subsidiaries which are in writing or have been orally agreed to by EXTECH or any
such Subsidiary.)
(b) Except as set forth on Schedule 4.17(b) hereto, all
Contracts required to be disclosed to the Subscriber pursuant to this Section
4.17 are valid, binding and in full force and effect as to EXTECH or its
Subsidiaries, and neither EXTECH nor, to the Company's knowledge, any other
party thereto, is in material breach or violation of, or material default under,
nor is there any reasonable basis for a claim of such breach or violation by
EXTECH or such default by EXTECH or its Subsidiaries under, the terms of any
such Contract, and no event has occurred which constitutes or, with the lapse of
time or the giving of notice or both, would constitute, such a material breach,
violation or default by EXTECH or its Subsidiaries thereunder. EXTECH has
furnished to the Subscriber a true and complete copy of all Contracts required
to be disclosed pursuant to this Section 4.17, including all amendments thereto
listed on Schedule 4.17.
4.18 Necessary Property; Condition of Property. The properties and assets owned,
leased by or licensed to EXTECH and each of its subsidiaries, if applicable,
constitute all of the real and personal properties, tangible and intangible,
which are necessary, used or useful in the conduct of its business in the manner
and to the extent presently conducted or as presently contemplated to be
conducted. No other material real or personal properties are required for the
conduct of the business of EXTECH or any of its subsidiaries as presently or
proposed to be conducted by them.
4.19. Necessary Licenses and Permits. Except as set forth on Schedule 4.19,
EXTECH and each of its Subsidiaries, if applicable, has all licenses, permits,
consents, concessions and other authorizations of governmental, regulatory or
administrative agencies or authorities, whether foreign, federal, provincial,
state, or local (collectively "Permits"), required to own and lease its
properties and assets and to conduct its business as now or proposed to be
conducted by them except where the failure to have such Permits would not have a
Material Adverse Effect. Schedule 4.19 hereto sets forth a list of each material
license, permit, consent, concession, or other authorization so required or used
by EXTECH or any of its subsidiaries in the conduct of its business, as now or
proposed to be conducted. Except as specified in Schedule 4.19 hereto, no
registrations, filings, applications, notices, transfers, consents, approvals,
audits, qualifications, waivers or other action of any kind is required by
virtue of the execution and delivery of this Agreement, the DCAP Agreement or
any other Related Agreement, or of the consummation of the transactions
contemplated hereby, including without limitation the issuance of the Shares,
(a) to avoid the loss of any Permit listed in Schedule 4.19 or any asset,
property or right pursuant to the terms thereof, or the violation or breach of
any law applicable thereto or (b) to enable EXTECH or any of its subsidiaries to
hold and enjoy the same after the Closing Date in the conduct of its business as
now or proposed to be conducted by them.
4.20 Compliance with Law. Except as disclosed pursuant to the DCAP Agreement,
EXTECH and each of its subsidiaries is in compliance with all applicable laws,
regulations, orders, judgments, decrees, permits, licenses, franchises and
authorizations, except where the failure to so comply would not have a Material
Adverse Effect. Except as may be set forth on Schedule 4.20 hereto or disclosed
pursuant to the DCAP Agreement, neither EXTECH nor any of its subsidiaries, if
applicable, is in default under, or in violation of, or has violated (and not
cured) any law (including, without limitation, laws relating to the issuance or
sale of securities, antitrust, zoning and building codes and ordinances,
occupational safety, the protection of the environment, transportation, storage
or disposal of hazardous waste, anti-pollution and air and water quality laws),
or any licenses, franchises, permits, authorizations or concessions granted by,
or any judgment, decree, writ, injunction or order of, any governmental or
regulatory authority, applicable to its business or any of its properties or
assets, except where such defaults and violations would not, in the aggregate,
have a Material Adverse Effect. Neither EXTECH nor any of its subsidiaries has
received any notification alleging any violations of any of the foregoing within
the last five years with respect to which adequate corrective action has not
been taken.
4.21 Environmental Compliance.
(a) (i) Neither EXTECH nor any of its subsidiaries has
generated, used, transported, treated, stored, released or disposed of, and has
not suffered or permitted anyone else to generate, use, transport, treat, store,
release or dispose of any "Hazardous Substance" (as hereinafter defined) in
violation of any "Environmental Laws" (as hereinafter defined); (ii) there has
not been any generation, use, transportation, treatment, storage, release or
disposal of any Hazardous Substance resulting from the conduct of EXTECH or any
of its subsidiaries or the use of any property or facility by EXTECH or any of
its subsidiaries or, to the best of the Company's knowledge, any nearby or
adjacent properties or facilities, which has created or might reasonably be
expected to create any liability on the part of EXTECH or any of its
subsidiaries under the Environmental Laws or which would require reporting to or
notification by EXTECH or any of its subsidiaries to any governmental entity;
(iii) no asbestos which is or has some reasonable likelihood of becoming friable
or polychlorinated biphenyl or underground storage tank is contained in or
located at any facility owned, leased or used by EXTECH or any of its
subsidiaries; and (iv) any Hazardous Substance handled or dealt with in any way
in connection with the business of EXTECH or any of its subsidiaries, whether
before or during the ownership of EXTECH or any of its subsidiaries, has been
and is being handled or dealt with in all respects in compliance with the
Environmental Laws in effect at the time such activities were being conducted.
(b) For purposes of this Agreement, the term "Hazardous
Substance" shall mean (but shall not be limited to) substances that are defined
or listed in, or otherwise classified pursuant to, any applicable Environmental
Laws as "hazardous substances," "hazardous materials" "hazardous wastes" or
"toxic substances," or any other formulation intended to define, list or
classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, radioactivity, carcinogenicity, reproductive toxicity
or "EP toxicity," and petroleum and drilling fluids, produced waters and other
wastes associated with the exploration, development, or production of crude oil,
natural gas or geothermal energy, asbestos, polychlorinated biphenyls and urea
formaldehyde.
(c) For purposes of this Agreement, the term "Environmental
Laws" shall mean the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, the Resources Conservation and Recovery Act
of 1976, as amended, and distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Substances and any applicable statutes,
regulations, rules, orders in council, ordinances, codes, licenses, permits,
orders, approvals, plans, authorizations, concessions, and similar items of all
governmental authorities and all applicable judicial, administrative and
regulatory decrees, judgments and orders, any of which relate to the protection
of human health or the environment from the effects of Hazardous Substances,
including, but not limited to, those pertaining to reporting, licensing,
permitting, investigating and remediating emissions, discharges, releases or
threatened releases of Hazardous Substances into the air, surface water,
groundwater or land, or relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous
Substances.
4.22 Litigation. Except as set forth on Schedule 4.22 hereto or disclosed
pursuant to the DCAP Agreement, there is no suit, claim, action, proceeding or
investigation pending or, to the Company's knowledge, threatened against EXTECH
or any of its subsidiaries or any of their respective assets or properties,
including each Employee Benefit Plan at law or in equity or before any
governmental authority or instrumentality or before any arbitrator of any kind
nor to the Company's knowledge, has there occurred any event or does there exist
any condition on the basis of which any litigation, proceeding or investigation
might properly be instituted.
4.23 No Material Adverse Changes. Except as set forth on Schedule 4.23 hereto
and for continuing losses, since June 30, 1998, no Material Adverse Effect has
occurred, and EXTECH has no knowledge of any occurrence or development which
might reasonably be expected to result in any such Material Adverse Effect.
4.24 Corporate Documents, Books and Records. Complete and correct copies of the
certificate or articles of incorporation and by-laws, and of all amendments
thereto, of EXTECH and each of its subsidiaries have been made available for
review by the Subscriber, and no changes in said documents will be made on or
before the Closing Date other than as contemplated hereby or by the DCAP
Agreement or as disclosed to, and concurred to in writing by Subscriber. The
minute books of EXTECH and each of its subsidiaries contain accurate records of
all meetings and consents in lieu of meetings of the Board (and its committees)
and shareholders of each corporation since incorporation. Except as reflected in
such minute books or as set forth on Schedule 4.24 hereto, there are no minutes
of meetings or consents in lieu of meetings of the Board (or its committees) or
of the shareholders of EXTECH or any of its subsidiaries. The books and records
of EXTECH and each of its subsidiaries accurately reflect the transactions to
which EXTECH and each of its subsidiaries is a party or by which its properties
are subject or bound, and such books and records have been properly kept and
maintained in all material respects.
4.25 Disclosure. No representation, warranty or statement made in this
Agreement, any Related Agreement, or any agreement, certificate, statement or
document furnished by or on behalf of EXTECH or any of its subsidiaries in
connection with the issuance of the Shares contains or will contain any untrue
statement of material fact or omits to state a material fact necessary in order
to make the statements contained herein or therein, in light of the
circumstances in which they were made, not misleading.
ARTICLE V
ACQUISITION OF SHARES
5.1 Investment Intent; Qualification as Purchaser.
(a) The Subscriber represents and warrants that the Shares to
be acquired pursuant to the terms hereof are being acquired for its own account,
for investment purposes and not with a view to the distribution thereof. The
Subscriber agrees that it will not sell, assign, transfer, encumber or otherwise
dispose of any of the Shares unless (i) a registration statement under the
Securities Act with respect to the Shares is in effect and the prospectus
included therein meets the requirements of Section 10 of the Securities Act, or
(ii) pursuant to an exemption from registration under the Securities Act. In the
event, Subscriber relies on such an exemption, upon written request of EXTECH,
prior to any disposition of any Shares, Subscriber shall provide to EXTECH a
written opinion of its counsel that, after an investigation of the relevant
facts, such counsel is of the opinion that such proposed sale, assignment,
transfer, encumbrance or disposition does not require registration under the
Securities Act.
(b) The Subscriber understands and acknowledges that the
Shares are not being registered under the Securities Act and must be hold
indefinitely unless they are subsequently registered thereunder or an exemption
from such registration is available.
(c) The Subscriber represents and warrants that (i) it is an
"accredited investor," as such term is defined in Rule 501(a) promulgated by the
SEC under the Securities Act, and has such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks of
the acquisition of the Shares contemplated hereby; (ii) it is able to bear the
economic risk of an investment in the Shares, including, without limitation, the
risk of the loss of part or all of its investment and the inability to sell or
transfer the Shares for an indefinite period of time; (iii) it has adequate
means of providing for current needs and contingencies and has no need for
liquidity in its investment in the Shares; and (iv) it does not have an overall
commitment to investments which are not readily marketable that is excessive in
proportion to its net worth and an investment in the Shares will not cause such
overall commitment to become excessive. The Subscriber will execute and deliver
to EXTECH such documents as EXTECH may reasonably request in order to confirm
the accuracy of the foregoing.
5.2 Restrictive Legend. The Shares to be issued to the Subscriber may not be
sold, assigned, transferred, encumbered or disposed of unless they are
registered under the Securities Act or unless an exemption from such
registration is available. Accordingly, the following restrictive legend will be
placed on any instrument, certificate or other document evidencing the Shares:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended. These shares have been
acquired for investment and not for distribution or resale. They may
not be sold, assigned, mortgaged, pledged, hypothecated or otherwise
transferred or disposed of without an effective registration statement
for such shares under the Securities Act of 1933, as amended or an
opinion of counsel for the Company that registration is not required
under such Act."
5.3 Certain Risk Factors. The Subscriber acknowledges that there are significant
risks relating to the acquisition of the Shares including, without limitation,
as a result of the matters described in the SEC Reports and the risks relating
to the operation of DCAP and its related entities.
ARTICLE VI
PROXY STATEMENT
6.1 Subscriber Information. At the request of the Company, the Subscriber shall
furnish to the Company in a timely manner any and all information with respect
to itself, Xxxxxx Plan and Xxxxxx Xxxxxxx as shall be necessary for the
completion of the Proxy Statement in accordance with the requirements of the
proxy rules promulgated under the Exchange Act.
ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATION OF EXTECH TO CLOSE
The obligation of EXTECH to consummate the transactions contemplated
hereby is subject to the fulfillment, prior to or at the Closing, of each of the
following conditions, any one or more of which may be waived by EXTECH (except
when the fulfillment of such condition is a requirement of law):
7.1 Representations and Warranties. All representations and warranties of the
Subscriber contained in this Agreement shall be true and correct in all material
respects as at the Closing Date, as if made at the Closing and as of the Closing
Date.
7.2 Performance of Obligations. The Subscriber shall have performed or complied
with in all material respects its agreements, covenants and undertakings
hereunder and under each Related Agreement to be performed or complied with on
or prior to the Closing Date.
7.3 Certificate. EXTECH shall have received a certificate, dated the Closing
Date, signed by an executive officer of the Subscriber, as to the satisfaction
of the conditions contained in Sections 7.1, 7.2 and 7.8 hereof.
7.4 Purchase Price. The Subscriber shall have tendered to EXTECH the Purchase
Price in accordance with the provisions of Section 2.2 hereof.
7.5 Stockholder Approval. Stockholder Approval shall have occurred.
7.6 DCAP Consent. EXTECH shall have obtained the DCAP Consent.
7.7 DCAP Closing. The DCAP Closing shall have occurred concurrently with the
Closing.
7.8 No Actions. No Action shall have been instituted and be continuing before a
court or before or by a Body, or shall have been threatened and be unresolved,
to restrain or prevent, or obtain any material amount of damages in respect of,
the carrying out of the transactions contemplated hereby or which might have a
materially adverse effect thereon.
7.9. Related Agreements. This Agreement and each of the Related Agreements shall
have been executed and delivered in a form provided for herein, and each of the
Related Agreements shall be in full force and effect and no term or condition
thereof shall have been amended, modified or waived except with the prior
written consent of EXTECH.
7.10 Secretary's Certificate. EXTECH shall have received from the Subscriber
copies certified by the Secretary thereof to be true and complete as of the
Closing Date, of the records of all corporate action taken to authorize the
execution, delivery and performance of this Agreement and each of the Related
Agreements to which the Subscriber is a party.
7.11 Incumbency Certificate. EXTECH shall have received from the Subscriber an
incumbency certificate, dated the Closing Date, signed by a duly authorized
officer thereof and giving the name and bearing a specimen signature of each
individual who shall be authorized to sign, in the name and on behalf of the
Subscriber, this Agreement and each of the Related Agreements to which the
Subscriber is or is to become a party, and to give notices and to take other
action on behalf of the Subscriber under each of such documents.
ARTICLE VIII
CONDITIONS PRECEDENT TO THE OBLIGATION OF
THE SUBSCRIBER TO CLOSE
The obligation of the Subscriber to consummate the transactions
contemplated hereby is subject to the fulfillment, prior to or at the Closing,
of each of the following conditions, any one or more of which may be waived by
the Subscriber (except when the fulfillment of such condition is a requirement
of law):
8.1 Representations and Warranties. All representations and warranties of EXTECH
contained in this Agreement shall be true and correct in all material respects
as at the Closing Date, as if made at the Closing and as of the Closing Date.
8.2 Performance of Obligations. EXTECH shall have performed or complied with in
all material respects its agreements, covenants and undertakings hereunder and
under each Related Agreement to be performed or complied with on or prior to the
Closing Date.
8.3 Certificate. The Subscriber shall have received a certificate, dated the
Closing Date, signed by the Chairman of the Board or President of EXTECH, as to
the satisfaction of the conditions contained in Sections 8.1, 8.2, 8.5, 8.6,
8.7, 8.8, 8.9 and 8.15 hereof.
8.4 Shares. EXTECH shall have tendered to the Subscriber a certificate
evidencing the Shares.
8.5 Stockholder Approval. Stockholder Approval shall have occurred.
8.6 Size of Board: Election as Director. The size of the Board of Directors of
EXTECH shall have been increased to five (5) and the nominee designated by the
Subscriber (which nominee shall be Xxxxxx Xxxxxxx) shall have been elected as a
member thereof.
8.7 DCAP Consent. EXTECH shall have obtained the DCAP Consent.
8.8 DCAP Closing. The DCAP Closing shall have occurred concurrently with the
Closing, and the issued and outstanding shares of EXTECH beneficially owned,
directly or indirectly, by Lang, Weinzimer, Xxxxxx X. Xxxxxxxxx and Xxx X. Xxxx,
after giving effect to the DCAP Closing, shall be substantially as set forth on
Schedule 8.8 attached hereto.
8.9 No Actions. No Action shall have been instituted and be continuing before a
court or before or by a Body, or shall have been threatened and be unresolved,
to restrain or prevent, or obtain any material amount of damages in respect of,
the carrying out of the transactions contemplated hereby, or which might
materially affect the right of the Subscriber to own the Shares after the
Closing Date, or which might have a materially adverse effect thereon.
8.10 Related Agreements. This Agreement, the DCAP Agreement and each of the
Related Agreements shall have been executed and delivered in a form provided for
herein, and each of the Related Agreements shall be in full force and effect and
no term or condition thereof shall have been amended, modified or waived except
with the prior written consent of Subscriber.
8.11 Charter. The Subscriber shall have received from EXTECH (a) a copy of
EXTECH's Certificate or Articles of Incorporation, certified by the Secretary of
the Company to be true and complete as of a date no more than five days prior to
the Closing Date, (b) a copy, certified by the Secretary of EXTECH to be true
and complete as of the Closing Date, of the by-laws thereof; and (c) a
certificate, dated not more than five days prior to the date hereof, of the
relevant governmental authority or other appropriate official of each
jurisdiction in which EXTECH is incorporated or qualified to do business, as to
EXTECH's corporate good standing in such jurisdiction or qualification to do
business, as the case may be.
8.12 Secretary's Certificate. The Subscriber shall have received from EXTECH
copies certified by the Secretary thereof to be true and complete as of the
Closing Date, of the records of all corporate action taken to authorize the
execution, delivery and performance of this Agreement, the DCAP Agreement and
each of the Related Agreements to which EXTECH is a party.
8.13 Incumbency Certificate. The Subscriber shall have received from EXTECH an
incumbency certificate, dated the Closing Date, signed by a duly authorized
officer thereof and giving the name and bearing a specimen signature of each
individual who shall be authorized to sign, in the name and on behalf of EXTECH,
this Agreement, the DCAP Agreement and each of the Related Agreements to which
EXTECH is or is to become a party, and to give notices and to take other action
on behalf of EXTECH under each of such documents.
8.14 Agreements. The Subscriber shall have received copies of the DCAP
Agreement, each Related Agreement, each other agreement, instrument, certificate
or other document executed in connection with the DCAP Agreement or any such
Related Agreement and all amendments, modifications or supplements thereto,
certified to the Subscriber's reasonable satisfaction to be true and accurate
copies thereof; provided that to the extent Subscriber shall have received a
certified copy of any of the foregoing prior to the Closing, EXTECH may, in lieu
of delivering an additional copy, certify in writing to the Subscriber that the
certified copy thereof previously delivered to the Subscriber represents a true
and correct copy thereof as of the Closing Date.
8.15 Amendment of DCAP Agreement, Etc. EXTECH shall not have agreed to any
amendment to or modification of, nor shall have granted any waiver or failed to
enforce any of its rights pursuant to any provision of the DCAP Agreement or the
other Related Agreements to which DCAP is a party or executed in connection with
the DCAP Agreement, which amendment, modification, waiver or failure to enforce
shall have (a) materially increased the consideration payable by EXTECH pursuant
to the DCAP Agreement, (b) materially reduced the obligations of Lang or
Xxxxxxxxx under the DCAP Agreement, (c) materially limited or restricted any
representation or warranty or eliminated any material representation and
warranty, of Lang or Xxxxxxxxx pursuant to the DCAP Agreement, (d) materially
increased the obligations of EXTECH under, or added any material obligation of
EXTECH with respect to, the DCAP Agreement, or (e) materially adversely affected
the value of the Shares.
ARTICLE IX
CLOSING
9.1 Time and Location. The closing (the "Closing") provided for herein shall
take place at the offices of Certilman Balin Xxxxx & Xxxxx, LLP, 00 Xxxxxxx
Xxxxxx, Xxxx Xxxxxx, Xxx Xxxx 00000, upon or no more than two (2) business days
following the DCAP Closing or, if, as of such date, any party shall not be
obligated to close and shall not have waived such closing condition(s), subject
to the provisions of Article XII hereof, on the business day after such later
date as such party or parties shall be obligated to close or shall have waived
such closing condition(s), or at such time and place as may be mutually agreed
to by the parties. Such date is referred to in this Agreement as the "Closing
Date."
9.2 Items to be Delivered by the Subscriber. At the Closing, the Subscriber will
deliver to EXTECH:
(a) the certificate required by Section 7.3 hereof; and
(b) the Purchase Price for the Shares.
9.3 Items to be Delivered by EXTECH. At the Closing, EXTECH will deliver to the
Subscriber:
(a) the certificate required by Section 8.3 hereof; and
(b) the certificate representing the Shares.
ARTICLE X
PRE-CLOSING COVENANTS
EXTECH covenants that, following the date hereof and through the
Closing Date, except as contemplated hereby (including, without limitation, as
set forth in the schedules hereto), EXTECH will comply, and will cause each of
its subsidiaries to comply, with the following.
10.1 Corporate Existence; Subsidiaries; Maintenance of Properties. Each of
EXTECH and its subsidiaries will preserve and keep in full force and effect its
corporate existence, rights and franchises. EXTECH and its subsidiaries will not
engage in any business other than those presently conducted or now contemplated
by such Persons and those businesses substantially similar to the business now
conducted or now contemplated. Each of EXTECH and its subsidiaries will maintain
all of its properties used or useful in the conduct of its business in good
condition, repair and working order (normal wear and tear excepted) and cause to
be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of EXTECH may be necessary so that
the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing in this
Section 10.1 shall prevent EXTECH or any of its subsidiaries from discontinuing
the operation and maintenance of any of such properties if such discontinuance
is, in the judgment of EXTECH, desirable in the conduct of such Person's
business and does not cause a Material Adverse Effect.
10.2 Taxes. Each of EXTECH and its subsidiaries will pay and discharge, or cause
to be paid and discharged, before the same shall become overdue, all Taxes,
assessments and other governmental charges imposed upon EXTECH and its
subsidiaries and their respective real properties, sales and activities, or any
part thereof, or upon the income or profits therefrom, as well as all claims for
labor, materials, or supplies, which if unpaid might by law become a Lien or
charge upon any of their properties; provided, however, that any such Tax,
assessment, charge, levy or claim need not be paid if the validity or amount
thereof shall currently be contested in good faith by appropriate proceedings
and if EXTECH or any of its subsidiaries shall have set aside on its books
adequate reserves with respect thereto; and provided, further, that EXTECH and
its subsidiaries will pay or cause to be paid all such taxes, assessments,
charges, levies or claims forthwith upon the commencement of foreclosure on any
lien which may have attached as security therefor.
10.3 Compliance with Laws, Contracts, Licenses and Permits. Each of EXTECH and
its subsidiaries will (a) comply in all material respects with all applicable
laws and regulations wherever its business is conducted, (b) comply with the
provisions of its certificate or articles of incorporation and by-laws, (c)
comply in all material respects with all agreements and instruments by which it
or any of its properties may be bound (including, without limitation, the DCAP
Agreement and the other Related Agreements), (d) comply with all applicable
decrees, orders, and judgments and (e) comply in all material respects with all
required approvals, permits and licenses.
10.4 Distributions. Neither EXTECH nor any of its subsidiaries shall make any
Distribution.
10.5 Transactions with Affiliates. Except as set forth on Schedule 10.5, neither
EXTECH nor any of its Subsidiaries will engage in any transaction with any
affiliate, except on terms which, in the aggregate, are not less favorable to
EXTECH than could be obtained by EXTECH from a third party in an arms-length
transaction, and the terms of any such transaction shall be disclosed to the
Subscriber.
10.6 Joint Ventures. Neither EXTECH nor any or its subsidiaries will enter into
any joint venture or partnership.
10.7 Loans and Advances. Neither EXTECH nor any of its subsidiaries shall make
loans or cash advances to any director, officer, partner, employee or affiliate
other than cash advances for meals, lodging and other expenses in connection
with business-related travel which exceed $25,000 in the aggregate outstanding
at any one time for all loans and advances or exceed $10,000 to any one Person,
except that EXTECH may make loans to purchase the Xxxxxxxx Xxxxxx Shares (as
such term is defined in the DCAP Agreement).
10.8 Restrictions on Indebtedness. Neither EXTECH nor any of its subsidiaries
will create, incur, assume, guarantee or be or remain liable, contingently or
otherwise, with respect to any Indebtedness other than the following ("Permitted
Indebtedness"):
(a) Indebtedness reflected in the SEC Reports;
(b) Indebtedness of DCAP and/or any Related DCAP Entity; and
(c) any other Indebtedness of EXTECH which does not at any
time exceed $100,000 in the aggregate.
10.9 Additional SEC Reports. Promptly upon their filing with the SEC or mailing
to stockholders, EXTECH shall deliver to the Subscriber copies of all filings,
forms, material correspondence, registration statements, proxies, prospectuses
and all amendments, modifications or supplements thereto filed with the SEC or
delivered to EXTECH's stockholders, including without limitation drafts,
supplements, amendments and the final form of the Proxy Statement.
10.10 Issuance of Equity. EXTECH shall not, and shall not permit any of its
subsidiaries to, issue any shares of its capital stock or any options, warrants
or other rights exercisable or exchangeable for, convertible into or which
otherwise entitle the holder thereof to acquire, capital stock of EXTECH.
10.11 Sale of Assets. EXTECH shall not agree or permit any of its Subsidiaries
to sell any of its assets or properties, except in the ordinary course of
business.
10.12 Merger or Consolidation. EXTECH shall not authorize or effect, or permit
any of its subsidiaries to authorize or effect, the merger, combination,
consolidation or similar transaction among EXTECH and/or any such subsidiary, on
the one hand, and any other Person, on the other hand.
10.13 Liquidation. EXTECH shall not authorize or effect, or permit any of its
subsidiaries to authorize or effect, the liquidation (whether complete or
partial), dissolution or winding up of EXTECH or any such subsidiary.
ARTICLE XI
POST-CLOSING MATTERS
11.1 Further Assurances. On and after the Closing Date, the parties shall take
all such further actions and execute and deliver all such further instruments
and documents as may be necessary or appropriate to carry out the transactions
contemplated by this Agreement.
11.2 Nominee to Board of Directors. During the five (5) year period following
the Closing, provided that the Subscriber remains the beneficial owner of at
least one million (1,000,000) Common Shares (subject to adjustment for stock
dividends, stock splits, reverse stock splits, recapitalizations,
reclassifications and similar events affecting the number of issued and
outstanding Common Shares of the Company which occurs or are effective after the
Closing), the Company shall nominate as a director thereof one (1) person
designated by the Subscriber (which designee shall be Xxxxxx Xxxxxxx).
ARTICLE XII
SURVIVAL OF REPRESENTATIONS
12.1 Survival. The parties agree that their respective representations and
warranties contained in this Agreement shall survive the Closing for a period of
one (1) year.
ARTICLE XIII
TERMINATION AND WAIVER
13.1 Termination. Anything herein or elsewhere to the contrary notwithstanding,
this Agreement may be terminated and the transactions provided for herein
abandoned at any time prior to the Closing:
(a) By mutual consent of EXTECH and the Subscriber;
(b) By EXTECH if any of the conditions set forth in Article
VII hereof shall not have been fulfilled on or prior to December 31, 1998, or
shall have become incapable of fulfillment and shall not have been waived; or
(c) By the Subscriber if any of the conditions set forth in
Article VIII hereof shall not have been fulfilled on or prior to December 31,
1998, or shall have become incapable of fulfillment, and shall not have been
waived.
If this Agreement is terminated as described above, this Agreement
shall be of no further force and effect, without any liability or obligation on
the part of any of the parties except for any liability which may arise pursuant
to Section 15.2 hereof or as a result of a party's willful failure to consummate
the transactions contemplated hereby or for any breach of any representation,
warranty or covenant.
13.2 Waiver. Any condition to the performance of the parties which legally may
be waived on or prior to the Closing Date may be waived at any time by the xxxxx
entitled to the benefit thereof by action taken or authorized by an instrument
in writing executed by the relevant party or parties. The failure of any party
at any time or times to require performance of any provision hereof shall in no
manner affect the right of such party at a later time to enforce the same. No
waiver by any party of the breach of any term, representation or warranty
contained in this Agreement as a condition to such party's obligations hereunder
shall release or affect any liability resulting from such breach, and no waiver
of any nature, whether by conduct or otherwise, in any one or more instances,
shall be deemed to be or construed as a further or continuing waiver of any such
condition or of any breach of any other term, representation or warranty of this
Agreement.
ARTICLE XIV
DEFINED TERMS
14.1 Defined Terms. As used herein, the terms below shall have the following
meanings. Any of such terms, unless the context otherwise requires, may be used
in the singular or plural, depending upon the reference.
"Action" shall mean any action, claim, suit, demand,
litigation, governmental or other proceeding, arbitral action, or governmental
inquiry or investigation hereof.
"Authorized Share Increase" shall have the meaning ascribed to
it in the Recitals.
"Body" shall mean a federal, state, local, and foreign
governmental or other regulatory body, including, without limitation, one that
has jurisdiction over insurance matters.
"Closing" shall have the meaning ascribed to it in Section 9.1
hereof.
"Closing Date" shall have the meaning ascribed to it in Section
9.1 hereof.
"Common Shares" shall have the meaning ascribed to it in the
Recitals hereof.
"Company" shall have the meaning ascribed to it in the Recitals
hereof.
"Contract" shall mean any agreement, contract, instrument,
obligation, commitment, understanding or arrangement, whether written or oral,
to which a particular Person is a party or is otherwise bound.
"DCAP" shall have the meaning ascribed to it in the Recitals
hereof.
"DCAP Agreement" shall have the meaning ascribed to it in the
Recitals hereof.
"DCAP Closing" shall have the meaning ascribed to it in the
Recitals hereof.
"DCAP Consent" shall have the meaning ascribed to it in Section
4.3.
"Distribution" means (a) the declaration or payment of any
dividend of cash or property in respect of any shares of any class of EXTECH's
or any of its Subsidiaries' Capital Stock or other equity securities; (b) the
purchase, redemption or other retirement of any shares of any class of EXTECH's
or any of its Subsidiaries' Capital Stock or other equity securities, directly
or indirectly or otherwise; or (c) any other distribution on or in respect of
any shares of any class of EXTECH's or any of its Subsidiaries' Capital Stock or
other equity securities.
"Employee Benefit Plan" means any employee benefit plan within
the meaning of ss.3(3) of ERISA maintained or contributed to by EXTECH or any
ERISA Affiliate, other than a Multiemployer Plan.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"EXTECH's Knowledge" means the actual and not imputed or
inferred knowledge of the Company based solely upon (a) the representations and
warranties of Lang and Xxxxxxxxx pursuant to Article III of the DCAP Agreement
as to facts, matters, circumstances and conditions arising on or prior to the
DCAP Closing, and (b) facts, matters, circumstances and conditions of which
Company shall have received written notice or which are actually known or have
been specifically brought to the attention of Certilman or Haft (the "Subject
Officers"); provided that, notwithstanding anything to the contrary contained
herein or in any agreement, certificate, instrument or other document executed
or delivered in connection with this Agreement, except as set forth in this
definition, (x) no knowledge of DCAP or its officers, agents, employees,
directors or representatives or any person other than the Subject Officers shall
be imputed to or deemed to be known by the Company as to facts, matters and
circumstances and conditions described in subsection (a) of this definition, and
(y) the Company shall not be deemed to have knowledge of any fact, matter,
circumstance or condition existing or arising prior to the DCAP Closing, whether
or not continuing after the DCAP Closing, except to the extent set forth in
subsection (b) of this definition.
"Indebtedness" means all obligations, contingent and
otherwise, which in accordance with GAAP should be classified on the obligor's
balance sheet as liabilities, or to which reference should be made by footnotes
thereto, including without limitation, in any event and whether or not so
classified: (i) all debt and similar monetary obligations, whether direct or
indirect; (ii) all liabilities secured by any mortgage, pledge, security
interest, lien, charge or other encumbrance existing on property owned or
acquired subject thereto, whether or not the liability secured thereby shall
have been assumed; (iii) all guaranties, endorsements and other contingent
obligations whether direct or indirect in respect of Indebtedness or performance
of others, including any obligation to supply funds to or in any manner to
invest in, directly or indirectly, the debtor, to purchase Indebtedness, or to
assure the owner of Indebtedness against loss, through an agreement to purchase
goods, supplies or services for the purpose of enabling the debtor to make
payment of the Indebtedness held by such owner or otherwise, and (iv)
obligations to reimburse issuers of any letters of credit.
"Information" shall have the meaning ascribed to it in Section
15.2 hereof.
"Lien" means (a) any encumbrance, mortgage, pledge, lien,
charge or other security interest of any kind upon any property or assets of any
character, or upon the income or profits therefrom; (b) any acquisition of or
agreement to have an option to acquire any property or assets upon conditional
sale or other title retention agreement, device or arrangement (including a
capitalized lease); or (c) any sale, assignment, pledge or other transfer for
security of any accounts, general intangibles or chattel paper, with or without
recourse.
"Material Adverse Effect" shall mean any material adverse
effect on the business, operations or financial condition of EXTECH and its
subsidiaries taken as a whole.
"Offering" shall have the meaning ascribed to it in the
Recitals hereof.
"Person" shall mean and include an individual, a partnership,
a joint venture, a corporation, a limited liability company, a limited liability
partnership, a trust, an unincorporated organization and a government or other
department or agency thereof.
"Proxy Statement" shall mean the proxy statement prepared by
EXTECH in connection with its seeking to obtain Stockholder Approval.
"Purchase Price" shall have the meaning ascribed to it in
Section 2.1 hereof.
"Related Agreements" shall have the meaning ascribed to it in
Section 4.4.
"SEC" shall mean the United States Securities and Exchange
Commission.
"SEC Reports" shall have the meaning ascribed to it in Section
3.8 hereof.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Shares" shall have the meaning ascribed to it in the Recitals
hereof.
"Stockholder Approvals" shall mean each of (a) the approval by
the stockholders of EXTECH of the Authorized Share Increase, and (b) the
"Stockholder Approval" as defined in the DCAP Agreement.
"Subscriber" shall have the meaning ascribed to it in the
Recitals hereof.
"Subsidiary" or "subsidiary" shall mean, with respect to any
Person, any Person controlled by the former Person, whether as a result of the
ownership of a majority of the latter Person's voting equity interests or
otherwise as the result of the power or right to direct the management of such
latter Person or to elect the Board of Directors or managers of such latter
Person.
"Taxes" means (A) all net income, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, occupation, premium,
property or windfall profits taxes, or other taxes of any kind whatsoever,
together with any interest and any penalties, additions to tax or additional
amounts imposed by any taxing authority (domestic or foreign) upon EXTECH with
respect to all periods or portions thereof ending on or before the date hereof
and/or (B) any liability of EXTECH for the payment of any amounts of the type
described in the immediately preceding clause (A) as a result of being a member
of an affiliated or combined group.
ARTICLE XV
MISCELLANEOUS PROVISIONS
15.1 Expenses. Each of the parties shall bear its or his own expenses in
connection herewith.
15.2 Confidential Information. All information that a disclosing party furnishes
in connection with the transactions contemplated hereby (the "Information") will
be kept confidential, will be used solely in connection with the contemplated
transactions and will not, without prior written consent of the disclosing
party, be used or disclosed, directly or indirectly, in any manner whatsoever,
in whole or in part.
Notwithstanding anything herein above to the contrary, the obligations
imposed upon the parties herein shall not apply to Information:
(a) which is publicly available prior to the date hereof; or
(b) which hereafter becomes available to the public through no
wrongful act of the receiving party; or
(c) which was in the possession of the receiving party prior
to the commencement of negotiations between the parties with regard to the
transactions contemplated hereby and not subject to an existing agreement of
confidence between the parties; or
(d) which is received from a third party without restriction,
not in violation of an agreement of confidence and without breach of this
Agreement;
(e) which is independently developed by the receiving party; or
(f) which is disclosed pursuant to a requirement or request of
a government agency, arbitrator or court.
Upon the request of a disclosing party, which may be made at any time
following any termination of this Agreement in accordance with the terms hereof,
the receiving party will redeliver to the disclosing party any and all written
Information furnished to the receiving party and will not retain any copies
thereof.
15.3 Equitable Relief. The parties agree that the remedy at law for any breach
or threatened breach of the provisions of Section 15.2 will be inadequate and
the aggrieved party shall be entitled to injunctive relief to compel the
breaching party to perform or refrain from action required or prohibited
thereunder.
15.4 Publicity. Neither EXTECH nor the Subscriber will issue any report,
statement, release or other public announcement pertaining to the matters
contemplated by this Agreement, or otherwise disclose this Agreement or the
terms hereof, without the prior written consent of the other. Notwithstanding
the foregoing, either party is permitted to make any disclosures or public
announcements of the transactions contemplated hereby and/or the terms hereof
without the prior written consent and approval of the other if it shall
determine that such disclosure is required in order to comply with applicable
securities or insurance laws and regulations. In such event, the disclosing
party shall furnish to the other party a copy of the disclosure document
promptly following the filing or other disclosure thereof.
15.5 Entire Agreement. This Agreement, including the schedules attached hereto,
which are a part hereof, constitutes the entire agreement of the parties with
respect to the subject matter hereof. No change, modification, amendment,
addition or termination of this Agreement or any part thereof shall be valid
unless in writing and signed by or on behalf of the party to be charged
therewith.
15.6 Notices. Any and all notices or other communications or deliveries required
or permitted to be given or made pursuant to any of the provisions of this
Agreement shall be deemed to have been duly given or made for all purposes when
in writing and hand delivered or sent by certified or registered mail, return
receipt requested and postage prepaid, overnight mail, nationally recognized
overnight courier or telecopier as follows:
if to EXTECH:
00 Xxxxxxx Xxxxxx
Xxxx Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, President
Telecopier Number: (000) 000-0000
With a copy to:
Certilman Balin Xxxxx & Xxxxx, LLP
00 Xxxxxxx Xxxxxx
Xxxx Xxxxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx, Esq.
Telecopier Number: ( 000) 000-0000
If to the Subscriber:
c/o The Xxxxxx Plan Corporation
000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Telecopier Number: (000) 000-0000
With a copy to:
Xxxxxxx & Xxxxxx, LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxx Xxxxxxxxxxx III, Esq.
Telecopier Number: 000-000-0000
or at such other address as any party may specify by notice given to the other
party in accordance with this Section 15.6.
15.7 Choice of Law; Severability. This Agreement shall be governed by, and
interpreted and construed in accordance with, the laws of the State of New York,
excluding choice of law principles thereof. In the event any clause, section or
part of this Agreement shall be held or declared to be void, illegal or invalid
for any reason, all other clauses, sections or parts of this Agreement which can
be effected without such void, illegal or invalid clause, section or part shall
nevertheless continue in full force and effect.
15.8 Successors and Assigns; No Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
assigns; provided, however, that neither the Subscriber nor EXTECH may assign
any of its rights or delegate any of its duties under this Agreement without the
prior written consent of the other.
15.9 Counterparts. This Agreement maybe executed in one or more counterparts,
each of which shall be deemed an original, and all of which taken together shall
constitute one and the same instrument.
15.10 Facsimile Signatures. Signatures hereon which are transmitted via
facsimile shall be deemed original signatures.
15.11 Headings; Gender. The headings, captions and/or use of a particular gender
under sections of this Agreement are for convenience of reference only and do
not in any way modify, interpret or construe the intent of the parties or affect
any of the provisions of this Agreement.
15.12 Consent to Jurisdiction. EXTECH and the Subscriber hereby agree to submit
to the exclusive jurisdiction of the courts of the State of New York and to the
courts to which an appeal of the decisions of such courts may be taken, and
consents that service of process with respect to all courts in and of the State
of New York may be made by registered mail to it at the address set forth in
Section 15.6 above.
15.13 Remedies. (a) The rights and remedies provided by this Agreement are
cumulative and the use of any one right or remedy by any party shall not
preclude or waive its right to use any or all other remedies. Said rights and
remedies are given in addition to any other rights the parties may have at law
or in equity.
(b) Without limitation of the foregoing, the parties hereto
agree that irreparable harm would occur in the event that any of the agreements
and provisions this Agreement were not performed fully by the parties hereto in
accordance with their specific terms or were otherwise breached, and that money
damages are an inadequate remedy for breach of the Agreement because of the
difficulty of ascertaining and quantifying the amount of damage that will be
suffered by the parties hereto in the event that this Agreement is not performed
in accordance with its terms or is otherwise breached. It is accordingly hereby
agreed that the parties hereto shall be entitled to an injunction or injunctions
to restrain, enjoin and prevent breaches of this Agreement by the other parties
and to enforce specifically such terms and provisions of this Agreement, such
remedy being in addition to and not in lieu of, any other rights and remedies to
which the other parties are entitled to at law or in equity.
(c) Except where a time period is otherwise specified, no
delay on the part of any party in the exercise of any right, power, privilege or
remedy hereunder shall operate as a waiver thereof, nor shall any exercise or
partial exercise of any such right, power, privilege or remedy preclude any
further exercise thereof or the exercise of any right, power, privilege or
remedy.
15.14 Arbitration. Any controversy, dispute or claim arising out of or in
connection with or relating to this Agreement, or the breach, termination or
validity hereof or any transaction contemplated hereby (any such controversy,
dispute or claim being referred to as a "Dispute") shall be finally settled by
arbitration conducted expeditiously in accordance with the Commercial
Arbitration Rules then in force (the "AAA Rules") of the American Arbitration
Association (the "AAA"). There shall be a panel of three arbitrators who shall
be appointed pursuant to AAA procedure, in each case, within fifteen (15)
business days of receipt of the demand for arbitration by the respondent(s) in
any such proceeding. Each of the arbitrators shall be an attorney with no less
than fifteen (15) years' experience in the practice of business law (preferably
with experience in the acquisition and financing of businesses such as those
engaged in by EXTECH and the Subsidiaries at the time such Dispute arises) who
shall not have performed any legal services for any of the parties or person
controlled by any of the parties for a period of 5 years prior to the date the
demand for arbitration is received by the respondent(s). The sites for an
arbitration pursuant to this Section shall be Nassau County, New York. A final
award shall be rendered as soon as reasonably possible and, in any event, within
ninety (90) days of the appointment of the panel of arbitrators; provided,
however, that if the arbitrators determine by majority vote that fairness so
requires, such ninety (90) day period may be extended by no more than sixty (60)
additional days. The parties agree that the arbitrators shall have the right and
power to shorten the length of any notice periods or other time periods provided
in the AAA Rules and to implement Expedited Procedures under the AAA Rules in
order to ensure that the arbitration process is completed within the time frames
provided herein. The arbitration decision or award shall be reasoned and in
writing. Judgment on the decision or award rendered by the arbitrators may be
entered and specifically enforced in any court having jurisdiction thereof.
Notwithstanding the provisions of Section 15.7, any arbitration held pursuant to
the provisions of this Section shall be governed by the Federal Arbitration Act.
All arbitrations commenced pursuant to this Agreement, or any other agreements
and transactions incident hereto while any other arbitration hereunder shall be
in progress, shall be consolidated and heard by the initially constituted panel
of arbitrators.
15.15 Waiver of Jury Trial.
WITHOUT LIMITATION OF THE PROVISIONS OF SECTION 15.14, EACH OF THE PARTIES
HERETO HEREBY VOLUNTARILY AND IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY JURY
IN ANY ACTION OR OTHER PROCEEDING BROUGHT IN CONNECTION WITH OR ANY MATTER
ARISING UNDER, OUT OF OR RELATING TO, THIS AGREEMENT (AS THIS AGREEMENT MAY
HEREAFTER BE AMENDED) OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
15.16 No Third Party Beneficiary. There are no third party beneficiaries of this
Agreement, including without limitation Lang, Wenzimer and DCAP and no Person
other than EXTECH, the Subscriber, and their respective permitted successors and
assigns shall be entitled to rely upon the provisions hereof.
15.17 EXTECH's Knowledge. Notwithstanding anything to the contrary contained in
Article IV hereof, the Company's representations and warranties set forth in
Article IV with respect to DCAP, the DCAP Agreement, Lang, Xxxxxxxxx or the
business, financial condition or operations of DCAP shall be limited to EXTECH's
Knowledge and the Company shall not be liable for any inaccuracy in or
incompleteness of any such representation and warranty if based on EXTECH's
Knowledge as of the date when such representation and warranty was made such
representation and warranty was true and correct in all material respects.
WITNESS the execution of this Agreement as of the date first above
written.
EXTECH CORPORATION
By:
------------------------------
Xxxxxx X. Xxxxxxxxx, President
EAGLE INSURANCE COMPANY
By:
-------------------------------
Name:
--------------------------
Title:
--------------------------
SCHEDULE 8.8
Stockholder # of Shares
Xxxxx Xxxx 2,575,000
Xxxxxxx Xxxxxxxxx 2,575,000
Xxxxxx X. Xxxxxxxxx 1,486,893
Xxx X. Xxxx 1,580,393
