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EXHIBIT 10.5
EXECUTION COPY
AGREEMENT TO RESTRUCTURE
BY AND AMONG
XXXXXX X. XXXXXX ("WVM"),
AND
XXXXXX XXXXXXX XXXXXX ("HGM"),
AND
SAFEGUARD SCIENTIFICS, INC
AND
BONFIELD INSURANCE, LTD.
DATED AS OF APRIL 16, 2001
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TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS; RULES OF CONSTRUCTION...................................................................3
Section 1.1 Defined Terms.................................................................................3
Section 1.2 Rules of Construction.........................................................................7
ARTICLE II. ACKNOWLEDGEMENTS....................................................................................7
Section 2.1 Confirmation of Indebtedness..................................................................7
Section 2.2 Validity and Enforceability of Letter Agreement, Security Agreement,
Mortgages.....................................................................................7
Section 2.3 Tax Returns for 2000..........................................................................8
ARTICLE III. RESTRUCTURING PLAN - PHASE I.......................................................................8
Section 3.1 Components of Phase I.........................................................................8
Section 3.2 Conditions Precedent to Effectiveness of Phase I.............................................12
Section 3.3 Phase I Effective Date.......................................................................14
ARTICLE IV. RESTRUCTURING PLAN - PHASE II......................................................................14
Section 4.1 Restructure of Xxxx Xxxxx Debt...............................................................14
Section 4.2 SFE Option...................................................................................16
Section 4.3 Release of Escrow Items......................................................................17
Section 4.4 Lake Naomi Option............................................................................17
Section 4.5 Conditions Precedent to Effectiveness of Phase II of this Agreement..........................17
Section 4.6 Phase II Effective Date......................................................................19
ARTICLE V. TERMINATION.........................................................................................19
Section 5.1 Events of Termination........................................................................19
Section 5.2 Remedies.....................................................................................19
ARTICLE VI. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.........................................................20
Section 6.1 By WVM.......................................................................................20
Section 6.2 By HGM.......................................................................................21
Section 6.3 By Safeguard.................................................................................23
ARTICLE VII. MISCELLANEOUS.....................................................................................24
Section 7.1 Cooperation; Other Documents.................................................................24
Section 7.2 Confidentiality; Announcements...............................................................24
Section 7.3 Non-Disparagement............................................................................24
Section 7.4 Indemnity....................................................................................25
Section 7.5 No Waivers...................................................................................25
Section 7.6 Modification.................................................................................25
Section 7.7 Notices......................................................................................25
Section 7.8 Binding and Governing Law....................................................................27
Section 7.9 Counterparts.................................................................................27
Section 7.10 Submission to Jurisdiction...................................................................27
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AGREEMENT TO RESTRUCTURE
This AGREEMENT TO RESTRUCTURE (the "Agreement") is made as of the 16th
day of April, 2001, by and among Xxxxxx X. Xxxxxx ("WVM"), an individual
residing at 000 Xxxxxx Xxxx, Xxxx Xxxx, XX 00000, Xxxxxx Xxxxxxx Xxxxxx ("HGM"),
an individual residing at 000 Xxxxxx Xxxx, Xxxx Xxxx, XX 00000, Safeguard
Scientifics, Inc. ("SFE"), a Pennsylvania corporation with offices at 000 Xxxxx
Xxxx Xxxxx, 000 Xxxxxxxx, Xxxxx, XX 00000, and Xxxxxxxx Insurance, Ltd.
("Xxxxxxxx," and together with SFE, "Safeguard"), a British Virgin Islands
corporation with offices c/o Safeguard Delaware, Inc., 0000 Xxxxxxxxxxx Xxxx,
Xxxxx, 000, Xxxxxxxxxx, XX 00000.
BACKGROUND
A. SFE entered into a Guaranty dated as of October 4, 2000, in favor of
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated ("Xxxx Xxxxx") (the "Xxxx Xxxxx Guaranty"),
relating to certain obligations of WVM to Xxxx Xxxxx arising under the Xxxxxx X.
Xxxxxx Foundation, Inc. Xxxx Xxxxx Account (No. [Intentionally Omitted]) and the
Xxxxxx X. Xxxxxx Xxxx Xxxxx Account (No. [Intentionally Omitted]) (collectively,
the "Xxxx Xxxxx Accounts").
B. Pursuant to a Letter Agreement dated October 4, 2000, and
amended as of November 8, 2000 (the "Letter Agreement"), WVM has agreed to
reimburse SFE for any amounts paid pursuant to the Guaranty.
C. Pursuant to a Security Agreement dated as of November 8, 2000,
by WVM in favor of SFE (the "11/2000 Security Agreement"), WVM granted to SFE a
security interest in the property described therein as "Collateral" to secure
WVM's Liabilities (as defined in the Security Agreement), including his
obligations to SFE under the Letter Agreement.
D. Pursuant to an Assumption of Guaranty of Account dated
November 13, 2000, between SFE and Xxxxxxxx, and accepted by Xxxx Xxxxx (the
"Assumption"), SFE assigned to Xxxxxxxx, and Xxxxxxxx assumed from SFE, all of
SFE's obligations and interests in connection with the Guaranty.
E. Pursuant to an Assignment dated as of November 13, 2000 (the
"Xxxxxxxx Assignment"), SFE assigned to Xxxxxxxx, and Xxxxxxxx accepted from SFE
a transfer to Xxxxxxxx of SFE's rights, title and interest in and to the 11/2000
Security Agreement and the Letter Agreement in further consideration for
Xxxxxxxx'x assumption of the Guaranty.
F. Pursuant to a Guaranty dated December 1, 2000 by WVM in favor
of SFE and its assignees (the "WVM Guaranty"), WVM guaranteed the performance of
his obligations under, inter alia, the Letter Agreement.
G. HGM has executed and delivered a document entitled "Guaranty"
dated December 1, 2000 (the "HGM Guaranty"), pursuant to which, Safeguard
contends, HGM guaranteed WVM's obligations under, inter alia, the Letter
Agreement, on a non-recourse basis, and which HGM contends, is not binding upon
or enforceable against her.
H. Pursuant to the Existing Mortgages (defined below), WVM has
secured his obligations under the Letter Agreement and the WVM Guaranty, and,
Safeguard contends although HGM disputes, HGM has secured her obligations, if
any, under the HGM Guaranty.
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I. WVM requested that Safeguard agree to: (i) make certain
advances or release certain assets to enable him to meet his obligations in
respect of certain income tax liability; (ii) restructure certain agreements
relating to the Xxxx Xxxxx Accounts and modify the collateral security thereof;
and (iii) forbear from its exercise of certain rights under the Existing
Documents (defined below); and Safeguard has agreed to the foregoing on the
terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, incorporating the foregoing background recitals by
reference, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS; RULES OF CONSTRUCTION
Section 1.1 Defined Terms. All terms used in this Agreement and
not otherwise defined herein, shall have the respective meanings ascribed to
such terms in the Existing Documents unless the context of this Agreement
otherwise requires. The following terms, as used in this Agreement and the other
Transaction Documents, shall have the following meanings:
"Affiliate" means (i) SFE, (ii) Xxxxxxxx, (iii) any person or entity
directly or indirectly owning, controlling or holding ten percent (10%) or more
of the outstanding beneficial interest in SFE or Xxxxxxxx, (iv) any person or
entity ten percent (10%) or more of the outstanding beneficial interest of which
is directly or indirectly owned, controlled or held by SFE or Xxxxxxxx, or any
subsidiary of either, (v) any person or entity directly or indirectly
controlling, controlled by, or under common control with SFE or Xxxxxxxx, (vi)
any officer, director, employee, agent, representative of the foregoing, and
(vii) any related Partner Company or Fund; provided that, for purposes of this
Agreement, the term "Affiliate" shall not include WVM, HGM, their respective
heirs, administrators, executors, successors, assigns, or any person or entity
claiming by or through them or on their or his or her behalf.
"Ancillary Assets" means all Collateral other than the SFE Options and
the Vassar Street Property.
"Amended and Restated Note" means that certain promissory note in the
form attached hereto as Exhibit A-1 to be delivered, pursuant to Section
4.5(a)(1) hereof, by WVM in favor of Xxxxxxxx in a principal amount equal to the
Outstanding Obligations on the Phase II Effective Date.
"Xxxxxxxx Account" means that certain account no. [Intentionally
Omitted] at PNC Bank, Delaware, ABA #[Intentionally Omitted].
"Xxxxxxxx Assignment" has the meaning set forth in Background paragraph
E.
"Collateral" means the assets listed on Schedule 1.1 attached hereto,
and any and all proceeds thereof, accretions thereto, permitted substitutions
therefor, and such additional assets and property as the parties may from time
to time agree, as more particularly described in the Security Agreement.
"Conditional Exercise" has the meaning set forth in Section 4.2(a)
hereof.
"DBR" means Drinker, Xxxxxx & Xxxxx LLP, counsel to WVM and the WVM
Entities.
"Exercise Shares" has the meaning set forth in Section 4.2(a) hereof.
"Existing Documents" means the Letter Agreement, the Existing Security
Agreement, the Existing Mortgages, the WVM Guaranty and the HGM Guaranty.
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"Existing Mortgages" means the mortgages listed on Schedule 1.2
attached hereto, which are to be released as of the Phase II Effective Date.
"Existing Security Agreement" means the 11/2000 Security Agreement, as
assigned to Xxxxxxxx pursuant to the Xxxxxxxx Assignment.
"FROF" means Fox, Rothschild, O'Brien & Xxxxxxx, LLP, counsel to HGM.
"FROF Escrow Agreement" means that certain escrow agreement by and
among FROF, as escrow agent, WVM, HGM, SFE and Xxxxxxxx, relating to the release
of the Existing Mortgages.
"Fund" means those private equity funds in which SFE has direct or
indirect equity ownership interests and their related management companies,
including, without limitation, those identified on Schedule 1.4 attached hereto,
and any successors thereto.
"Governmental Body" means any court, government (federal, state, local
or foreign), department, commission, board, agency, bureau, official or other
regulatory, administrative or governmental or quasi-governmental authority.
"HGM Guaranty" has the meaning set forth in Background paragraph G.
"Income Year" has the meaning set forth in Section 3.1(a)(1)(B).
"Legal Requirements" means any law, statute, rule, regulation,
franchise, governmental permit, judgment, decree, Order, ordinance, variance,
directive, code or requirement of any Governmental Body; whether now or
hereafter in effect.
"Xxxx Xxxxx" has the meaning set forth in Background paragraph A.
"Xxxx Xxxxx Accounts" has the meaning set forth in Background paragraph
A.
"Letter Agreement" has the meaning set forth in Background paragraph B.
"Xxxx Xxxxx Guaranty" has the meaning set forth in Background paragraph
A.
"Xxxxxx Asset Purchase" means that certain arrangement between WVM and
Xxx Xxxxxx, for the purchase by Xx. Xxxxxx of WVM's interest in the following
entities: UPH Lakeside, LP (Xxxxxxxxx Xxxxxx), SBN Partners, LP (Baltimore
Sheraton), Valley Forge Colonial, LP, Valley Forge Convention Center, and RIC
Partners, LP (Richmond Hilton), for an aggregate purchase price of $1,000,000,
payable in increments of $100,000 for each of the ten months following the
acquisition, commencing on February 1, 2001.
"MIT" means the Massachusetts Institute of Technology, a Massachusetts
educational corporation.
"MIT Existing Mortgage" means that certain mortgage on the Vassar
Street Property securing a loan made as of October 11, 1994 by MIT to the owners
of the Vassar Street Property in the original principal amount of $5,800,000,
which extends to MIT, inter alia, an option to purchase the Vassar Street
Property, which option is secured by a second mortgage on the Vassar Street
Property; the proceeds of which shall be Collateral hereunder.
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"MIT Financing" means that certain proposed new loan to be made by MIT
to the owner of the Vassar Street Property, in the original principal amount of
$12,500,000, which includes, inter alia, an agreement between said owner and MIT
for MIT's purchase of the Vassar Street Property on December 1, 2005.
"New Mortgages" means those certain mortgages substantially in the
forms attached hereto as Exhibits B-1 (Pennsylvania), B-2 (Pennsylvania
Condominium) and B-3 (Massachusetts) attached hereto, to be delivered by WVM or
the WVM Entity or Entities with title to same, covering the properties listed on
Schedule 1.3 hereto.
"Non-Recourse Compensation" means any retirement benefits, director or
employee compensation and benefits, consulting compensation, or other
compensation as director, officer, chairman, chairman emeritus, employee or
consultant of or for SFE or any Partner Company or Fund identified on Schedule
1.4 attached hereto or any successor thereto (collectively, the "Safeguard
Entities") which are granted to WVM or agreed by SFE or any Safeguard Entity to
be paid, provided or otherwise made available to WVM in connection with or after
the approval or execution of this Agreement or the approval or consummation of
the transactions provided for therein, if and only to the extent such benefits
or compensation are paid in cash and are not related to or based on the value of
SFE or of its securities or of any of the Safeguard Entities or of their
securities. "Non-Recourse Compensation" expressly shall not include any and all
increases in the value of, earnings on and proceeds of any and all investments
made utilizing Non-Recourse Compensation.
"Non-Transferable Asset" has the meaning set forth in Section 3.1(c)(2)
hereof.
"Notes" means, collectively, and "Note" means, individually, as the
context may require, the Amended and Restated Note, the Tax Note and the Option
Note.
"Option Loan" has the meaning set forth in Section 4.2(a) hereof.
"Option Loan Consents" has the meaning set forth in Section 4.2(a)
hereof.
"Option Note" means that certain promissory note in the form attached
hereto as Exhibit A-2, to be delivered, pursuant to Section 4.2(a) hereof, by
WVM in favor of Xxxxxxxx in a principal amount not to exceed $5,281,300.
"Option Price" has the meaning set forth in Section 4.2(a) hereof.
"Order" means any order, writ, injunction, ruling, judgment,
stipulation or decree by or with any Governmental Body.
"Outstanding Obligations" means, as of the date of determination, the
amount of the obligations of WVM to any of the following (without duplication):
(i) Xxxx Xxxxx, in connection with the Xxxx Xxxxx Accounts; (ii) Xxxxxxxx, under
the Letter Agreement; (iii) Xxxxxxxx, under the Existing Mortgages; and (iv)
Xxxxxxxx, under the Tax Note.
"Partner Company" means a company in which SFE has acquired an equity
ownership or debt interest and which SFE refers to from time to time as its
"Partner Companies" in its annual report to shareholders or its reports filed
with the Securities and Exchange Commission under Section 13 of the Securities
Exchange Act of 1934, as amended.
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"Permitted Encumbrances" shall mean (i) liens, encumbrances, mortgages,
deeds of trust and restrictions of public record in the relevant jurisdictions,
(ii) liens, encumbrances, mortgages, deeds of trust and restrictions arising
under the Existing Documents, (iii) with respect to WVM's interests in any
partnership, restrictions set forth in the Partnership Agreements relating
thereto and restrictions arising under applicable securities laws, (iv) with
respect to the Vassar Street Property, the MIT Existing Mortgage and any lien,
encumbrance, mortgage or deed of trust required in connection with the MIT
Financing, (v) with respect to WVM's interest in any equity securities,
restrictions arising under the Xxxx Xxxxx Guaranty and WVM's agreements with
Xxxx Xxxxx and applicable securities laws, (vi) with respect to any condominium
owned by WVM or the WVM Entities, liens, restrictions and encumbrances arising
under the applicable condominium agreements, if any, and the bylaws or other
governing documents of the condominium association or similar governing body,
(vii) with respect to the Lake Naomi Property (as defined in Section 4.4), the
Lake Naomi option as described in Section 4.4, (viii) with respect to the SFE
Option, restrictions arising under the applicable option agreement and related
stock option plan, to the extent not waived, and applicable securities laws and
(ix) with respect to real property, liens for taxes, assessments, governmental
charges and levies not yet due or which are being contested in good faith by
appropriate proceedings and are not material in amount or value in relation to
the associated property, and such utility or municipal easements and
restrictions, if any, as do not detract in any material respect from the value
or marketability of the property subject thereto and do not interfere with the
current use of such property in any material respect.
"Phase I Conditions" has the meaning set forth in Section 3.2 hereof.
"Phase II Conditions" has the meaning set forth in Section 4.5 hereof.
"Phase I Effective Date" has the meaning set forth in Section 3.3
hereof.
"Phase II Effective Date" has the meaning set forth in Section 4.6
hereof.
"Pre-Nuptial Agreement" means that certain Pre-Nuptial Agreement dated
November 23, 2000, by and between WVM and HGM, together with any predecessor or
successor agreements and documents, any and all amendments or modifications
thereto from time to time in effect, and instruments, or agreements required or
contemplated thereby or in connection therewith, whether or not in writing.
"Related Document" means any document, instrument, agreement or other
writing required to be executed and delivered pursuant to or in connection with
this Agreement
"Representatives" has the meaning set forth in Section 7.2(a) hereof.
"Retention Bonus" means the bonus payment of $500,000 payable by SFE to
WVM during January, 2002, pursuant to a resolution adopted at the November 28,
2000 meeting of the Compensation Committee of the Board of Directors of SFE.
"Security Agreement" means the Amended and Restated Security Agreement
required to be delivered by WVM and each WVM Entity in favor of Xxxxxxxx
pursuant to Section 3.2(a)(5) hereof.
"SFE Option" means that certain option of WVM to purchase one million
(1,000,000) shares of common stock (the "Shares") of SFE at an exercise price
per share of $5.2813 pursuant to that certain Option granted by SFE to WVM on
December 21, 2000 (the "Option"), together with all property now or hereafter
received in conjunction therewith, including, without limitation, the Shares,
dividends payable in cash or stock, and shares or other proceeds of conversion
or splits of any such securities, together with all additions thereto,
substitutions or exchanges therefor, proceeds thereof or distributions thereon.
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"Tax Loan" has the meaning set forth in Section 3.1(a) hereof.
"Tax Note" means the promissory note in the form attached hereto as
Exhibit A-3, required, pursuant to Section 3.2(a)(2) hereof, to be executed and
delivered by WVM in favor of Xxxxxxxx on or before April 16, 2001, evidencing
his obligations in connection with the Tax Loan.
"Vassar Street Property" means that certain real property and
improvements thereon located at 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx.
"WVM Entities" means those entities listed on Schedule 1.5 attached
hereto.
"WVM Guaranty" has the meaning set forth in Background paragraph F.
"11/2000 Security Agreement" has the meaning set forth in Background
paragraph C.
Section 1.2 Rules of Construction.
(a) References to Xxxxxxxx. References to Safeguard or
Xxxxxxxx shall include, as the context requires, any successors and permitted
assignees of Safeguard or Xxxxxxxx, as applicable.
ARTICLE II. ACKNOWLEDGEMENTS
Section 2.1 Confirmation of Indebtedness. WVM and HGM each
confirms and acknowledges that, as of the date hereof:
(a)(i) The principal amount of WVM's obligations to Xxxx Xxxxx
is approximately $32,100,000; and (ii) interest has been accruing thereon at a
rate of prime minus one and one quarter percent and approximately $150,000 in
interest has accrued on such principal amount as of the date hereof;
(b) The principal amount of Xxxxxxxx'x liability under the
Xxxx Xxxxx Guaranty as of the date hereof is equal to the lesser of the
principal and accrued interest set forth in Section 2.1(a) hereof, and
$35,000,000; and
(c) WVM's obligations to Safeguard under the Letter Agreement
include the amount Xxxxxxxx is required to pay to Xxxx Xxxxx under the Xxxx
Xxxxx Guaranty.
Section 2.2 Validity and Enforceability of Letter Agreement,
Security Agreement, Mortgages. Each of WVM and HGM, to the extent each is a
party thereto or obligated thereunder, confirms and acknowledges, except to the
extent expressly modified hereby or pursuant to any Related Document, as of the
effective date of the applicable provision hereof, or of such document, as the
case may be: (i) the continued existence, validity and enforceability of the
Existing Documents and all the terms and conditions of each of the Existing
Documents; (ii) that the collateral security granted to secure WVM's and HGM's
respective obligations under the Letter Agreement and other Existing Documents
and the terms of the Existing Documents, shall not be impaired by anything
contained herein; (iii) that such Existing Security Agreement and the Existing
Mortgages secure and shall continue to secure WVM's obligations under the Letter
Agreement and the WVM Guaranty; (iv) that WVM is liable, pursuant to the Letter
Agreement and the WVM Guaranty and the Existing Mortgages, for any and all
indebtedness, obligations and liabilities of any type or nature, to Safeguard
under the Letter Agreement including, without limitation, amounts advanced by
Xxxxxxxx under the Xxxx Xxxxx Guaranty, and any new loans, guaranties or other
extensions of credit made by Safeguard to WVM, including without
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limitation, the Tax Loan to be made pursuant to Section 3.1 hereof and (v) that
the execution of the documents and consummation of the transactions contemplated
under Article III of this Restructuring Agreement do not affect in any manner
the obligations of HGM, if any, under the HGM Guaranty and the mortgage and
security interest, if any, created by the Existing Mortgages.
Section 2.3 Tax Returns for 2000. WVM and HGM each hereby agrees
and acknowledges that, they will file their 2000 tax returns on a "married,
filing jointly" basis.
ARTICLE III. RESTRUCTURING PLAN - PHASE I
Section 3.1 Components of Phase I. Upon the satisfaction of the
Phase I Conditions, as set forth in Section 3.2 hereof, the following will
occur:
(a) Tax Loan. Xxxxxxxx will advance to WVM the principal
amount of $4,113,279.00 (the "Tax Loan"), the proceeds of which will be used to
fund the payment of estimated 2000 tax payments due April 16, 2001. The Tax Loan
shall be evidenced by the Tax Note, which shall constitute a general and direct
obligation of WVM, with full recourse to all of his personal assets.
(1) Advances.
(A) The Initial Advance. The initial advance
of the Tax Loan shall be made in the form of a check drawn for the benefit of
the Department of Treasury for federal income taxes, and the appropriate state
tax authority for state income taxes following WVM's delivery to, and review by
Xxxxxxxx and an accountant or an accounting firm reasonably acceptable to
Xxxxxxxx, of a copy of the form 4868 (and the similar state extension form), for
an extension of time within which to file federal and state income tax returns,
which WVM and HGM intend to file, jointly, with respect to the 2000 calendar
year, prepared and/or reviewed by an accountant or accounting firm reasonably
acceptable to Xxxxxxxx, showing the estimated income taxes due for 2000 calendar
year, after application of all credits and withholdings.
(i) Refunds of the Initial Advance.
WVM shall provide Xxxxxxxx with executed final copies of the 2000 form 1040 and
comparable state form (the "Final 2000 Forms") within 10 days of their filing.
If a Final 2000 Form shows an overpayment of taxes, such overpayment shall be
claimed as a refund, and not claimed as an estimated payment for the year 2001.
WVM and HGM hereby agree to deliver to Xxxxxxxx, immediately upon the receipt
thereof, such refund as a payment on the Tax Note. Failure to so return within
three (3) business days after receipt thereof shall constitute an Event of
Default under the Tax Note and an Event of Termination under this Agreement.
(B) Subsequent Advances for Tax Payments.
For calendar years 2001 and following (each an "Income Year"), so long as the
Tax Loan is outstanding, and no Event of Default under the Tax Note, or Event of
Termination hereunder (whether or not declared) has occurred, WVM may request
that Xxxxxxxx advance to him additional funds to pay federal and state income
taxes, under the terms of this Section 3.1(a)(1)(B)(i).
(i) If WVM intends to request an
advance from Xxxxxxxx under this Section 3.1(a)(1)(B), then no later than March
15 of the year after the Income Year (the "Payment Year"), WVM shall provide to
Xxxxxxxx (x) a copy of the draft form 1040 (or comparable state form), for
federal and state income taxes, that he intends to file with respect to the
Income Year, prepared by an accountant or accounting firm reasonably acceptable
to Xxxxxxxx (the "Tax Accountant"), showing the income taxes due for the Income
Year, after application of all credits and withholdings (the "Actual
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Tax") and (y) a pro forma calculation of federal and state income taxes,
prepared by the Tax Accountant, that would have been payable with respect to the
relevant Income Year, if the recognized gain or loss related to the sale or
other disposition of the Collateral (which shall not include the exercise of any
Options), were excluded (the "ProForma Tax"). Solely for the purposes of this
section 3.1(a)(1)(B)(i), for the 2001 Income Year, gain or loss related to the
sale or other disposition of the Collateral shall include the gain or loss on
the disposition of the assets listed on Schedule 3.1 attached hereto. Xxxxxxxx,
through its employees and representatives, shall be entitled to review such
returns and calculations and discuss the propriety of such calculations with the
Tax Accountant.
(ii) If WVM has requested an advance
under this section 3.1(a)(1)(B), Xxxxxxxx shall, no later than April 15 of the
Payment Year, advance to WVM the amount by which the Actual Tax exceeds the Pro
Forma Tax for the Income Year, as an advance under the Tax Note; provided,
however, that advances to WVM in any Payment Year shall not be more than the
amount by which the proceeds from the sale of Collateral received by Xxxxxxxx
during the relevant Income Year reduced the principal on the Tax Note.
(iii) Advances under this section
shall be made in the form of a check drawn for the benefit of the Department of
Treasury for federal income taxes, or the appropriate state tax authority for
state income taxes.
(iv) If the final form 1040 (or
comparable state forms) are not completed by April 15 of the relevant Payment
Year, the amount of advances under section 3.1(a)(1)(B)(ii) shall be determined
based on good faith estimates prepared by the Tax Accountant, evidenced on form
4868 (and the similar state extension form), and the calculation shall be
finalized when final tax returns for the Income Year are prepared, and if
necessary additional funds advanced to WVM under the terms of this section. Any
refunds available to WVM (or his spouse, to the extent they have filed jointly
with respect to any subsequent Income Year) because of overpayment based on the
estimates shall be promptly be returned to Xxxxxxxx. Failure to so return within
three (3) business days after receipt thereof shall constitute an Event of
Default under the Tax Note and an Event of Termination under this Agreement.
(2) Maturity Date. The Tax Note shall be payable
(subject to mandatory prepayments, as required pursuant to Section 3.1(a)(3)(B)
below), on demand, at any time after April 30, 2001 against WVM. Notwithstanding
the foregoing, on the Phase II Effective Date, obligations outstanding under the
Tax Note shall be consolidated into the Amended and Restated Note.
(3) Payments.
(A) Voluntary Payments. WVM may, at his
option, prepay the Tax Note in whole or in part, at any time, without any
premium or penalty.
(B) Mandatory Prepayments. The Tax Note
shall be mandatorily repaid from the following funding sources subject to the
provisions of the Option Note and Section 4.2(c) hereof.:
(i) SFE shall offset the amount of
$300,000 against SFE's obligation to pay the Retention Bonus, and such proceeds
shall be applied to reduce the obligations outstanding under the Tax Note and
other Outstanding Obligations;
(ii) all proceeds, as and when
received with respect to all payments made after the date hereof, in connection
with the Xxxxxx Asset Purchase; and
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(iii) all proceeds received from the
sale, financing or other disposition of any of the Collateral and the exercise
of rights and remedies under the Existing Documents.
(C) Application of Payments. Each such
prepayment, including any voluntary and mandatory prepayments, shall be applied
first to outstanding accrued interest and then to the remaining outstanding
principal balance of the Tax Note.
(4) Interest. Interest on the outstanding principal
balance of the Tax Note shall accrue at a rate of seven percent (7%) per annum
and shall accrue and be capitalized annually, on each anniversary of the date of
such Tax Note.
(b) Collateral; Credit Enhancements. The Tax Note and the
other Outstanding Obligations shall be secured by a first priority lien (with
respect to the Vassar Street Property, subject to the MIT Existing Mortgage and,
if the MIT Financing is consummated, a mortgage securing the MIT Financing) on
all of the Collateral; provided, however, that until the later of the Phase II
Effective Date or the date on which WVM's obligations to Xxxx Xxxxx have been
satisfied, Xxxxxxxx'x security interest in WVM Xxxx Xxxxx Account shall be
subordinate to the security interest in favor of Xxxx Xxxxx. The Tax Note shall
also be secured by the Existing Mortgages and, if and to the extent but only if
and to the extent secured prior to execution of this Agreement, the HGM
Guaranty, on a non-recourse basis, pursuant to the terms of such HGM Guaranty.
(c) Transfers; Asset Liquidation. In addition to, and not
in substitution for Xxxxxxxx'x rights as a secured party in accordance with
Section 3.1(b) hereof and as provided in the Security Agreement, the Control
Agreements, the New Mortgages and the Existing Documents, Xxxxxxxx may elect, on
an item by item basis, to transfer title to, or mortgage, refinance, or
otherwise monetize any or all of WVM's interests in (or those of any WVM
Entity), the Collateral and the property subject to the Existing Agreements to
Xxxxxxxx or a designee of Xxxxxxxx, in reduction of the outstanding balance
under the Tax Note, subject, in any event, to the provisions of Section 3.1(f)
hereof, and in accordance with the provisions of this Section 3.1(c).
(1) Xxxxxxxx or a designee, may, at any time prior to
repayment in full of all of the obligations under the Tax Note, and from time to
time, purchase from WVM or the applicable WVM Entity, free and clear of all
liens, claims and encumbrances of any nature other than Permitted Encumbrances,
one or more of the assets included in the Collateral. The purchase price for
each such asset shall be the value ascribed thereto on Exhibit 1.1 and shall be
payable by crediting the amount thereof against the Tax Note or other
Outstanding Obligations, in such order and amounts as Safeguard shall determine,
in its sole discretion. With respect to all Collateral other than real property
(for which the applicable notice period shall be thirty (30) days), Xxxxxxxx
shall provide WVM or the applicable WVM Entity with ten (10) days' prior written
notice of its intent to effect a conveyance of the asset, including in such
notice a description of the asset, the purchase price, the intended date of
conveyance and the identity of the party acquiring title, if not Xxxxxxxx. WVM
or the applicable WVM Entity shall forward to Xxxxxxxx, not less than three (3)
days prior to the intended date of conveyance, such documents and evidence of
the conveyance as Xxxxxxxx shall reasonably request, based on the nature of the
asset to be conveyed. Upon Xxxxxxxx'x or the applicable designee's receipt of
all required documents and instruments, including, without limitation, title
documents, consents, confirmation of required notices, certificates or other
similar documents, it shall credit the purchase price as provided hereinabove.
(2) To the extent that any asset which would
otherwise be conveyed to Xxxxxxxx or a designee is not capable of being sold,
assigned, transferred, conveyed or delivered because a necessary consent or
release can not be obtained by the intended transfer date (a "Non-Transferable
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Asset"), WVM and each WVM Entity shall use its respective reasonable best
efforts to obtain such consent or release.
(3) Notwithstanding anything to the contrary herein,
Xxxxxxxx shall not be obligated to purchase any Non-Transferable Asset without
WVM or the applicable WVM Entity first having obtained all necessary consents,
removed or eliminated any such potential defaults under any agreements affecting
any such asset without adversely modifying, amending or burdening such
Non-Transferable Asset; provided however, that WVM's or the applicable WVM
Entity's failure to effect the conveyance within the period set forth in the
initial notice required pursuant to Section 3.1(c)(1) hereof, shall, at
Xxxxxxxx'x election, constitute an Event of Default under the Tax Note, an Event
of Termination under this Agreement.
(d) Application of Proceeds. The proceeds of any exercise
by Xxxxxxxx of its remedies with respect to the Collateral, whether as a secured
party, pursuant to Section 3.1(b) hereof, or as a purchaser, pursuant to Section
3.1(c) hereof, will be applied as a mandatory prepayment of the Tax Note.
Xxxxxxxx may exercise such remedies before, on or after January 1, 2003, whether
or not demand has been made in respect of the Tax Note or any other Outstanding
Obligation.
(e) Excess Proceeds From Collateral. In the event Phase
II is not consummated, and in the event Safeguard realizes proceeds (net of any
and all taxes, tax advances and expenses of sales payable in connection
therewith and reasonable counsel fees incurred in connection therewith) from the
Collateral in excess of the amounts owing under the Notes and any other
Outstanding Obligations, such excess shall be returned to WVM (or, if WVM is
then not living, to HGM) upon the expiration of all periods during which any
such proceeds could be subject to avoidance under any applicable preference or
fraudulent conveyance laws or Legal Requirements of similar import then in
effect.
(f) Forbearance. Safeguard will forbear from (i)
demanding immediate payment of all amounts due under the Letter Agreement or the
Tax Note, including without limitation, interest, fees, costs, charges,
expenses, indemnities or other sums chargeable to WVM under the Existing
Documents; (ii) exercising any of its rights and remedies under the Existing
Documents as a result of WVM's failure to comply with the terms of the Letter
Agreement and the Existing Security Agreement prior to the date hereof; and
(iii) exercising its rights and remedies with respect to the collateral security
granted pursuant to Section 3.1(b) hereof; provided, however, that such
forbearance shall continue only until the earliest of (i) the Phase II Effective
Date, (ii) April 30, 2001 or (iii) the declaration of an Event of Termination
(as defined in Article V of this Agreement). The declaration of an Event of
Termination shall immediately operate to terminate Safeguard's agreement to
forbear hereunder. Upon such termination, Safeguard shall have no further
obligations to forbear hereunder.
(g) Agreement as to Treatment of Existing Mortgages. Safeguard
shall deposit into escrow, pursuant to the FROF Escrow Agreement, releases with
respect to the Existing Mortgages, with such release to be effective as of the
Phase II Effective Date.
(h) HGM Actions. HGM shall resign, effective immediately
upon receipt of $50,000 in prepaid fees payable under a Letter dated the date
hereof to MegaSystems, Inc. relating to the provision by HGM of consulting
services, as director and officer of MegaSystems, Inc., and from any and all
positions she holds with MegaSystems, Inc. and in connection therewith shall
cause her office to be relocated to a premises other than 000 Xxxxx Xxxx Xxxxx,
Xxxxx, Xxxxxxxxxxxx, on or before April 25, 2001.
(i) Consent of Third Parties. WVM will seek and obtain
the consent of each third party necessary to effect or complete the transactions
contemplated by Phase I and Phase II of this
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Agreement, including, without limitation, the persons and entities identified in
Sections 3.2(a)(9) and(10) hereof.
Section 3.2 Conditions Precedent to Effectiveness of Phase I. The
parties to this Agreement hereby agree that the following are the "Phase I
Conditions":
(a) Documents to be Delivered. The respective parties
shall have delivered or caused to have been delivered to each other, on or
before the Phase I Effective Date, the following documents or agreements, each
duly executed by the respective parties thereto and each to be effective as of
the Phase I Effective Date, except as specifically provided herein:
(1) Restructuring Agreement. This Agreement.
(2) Tax Note. The Tax Note, in the form attached
hereto as Exhibit A-3.
(3) Control Agreement. A Control Agreement by and
among WVM, Xxxxxxxx and Xxxx Xxxxx and, if requested by Safeguard, H. D. Xxxxx
and Associates, with respect to the WVM Xxxx Xxxxx Account and, if requested by
Safeguard, WVM's account at H.D. Xxxxx and Associates, in the form attached
hereto as Exhibit C.
(4) Stock Certificates; Related Documents. Stock
Certificates representing the certificated securities listed on Schedule 3.2;
together with Stock Powers executed in blank for each of the Securities listed
on Schedule 3.2; together with Forms 144, if required by Safeguard.
(5) Security Agreement. The Amended and Restated
Security Agreement, in the form attached hereto as Exhibit D, together with such
UCC-1 and UCC-3 Financing Statements as may be requested by Safeguard.
(6) SFE Option Documents. A Notice to Issuer pursuant
to Uniform Commercial Code ("UCC") Section 8106 with respect to the SFE Option,
together with the delivery to Xxxxxxxx of the Option and such UCC-1 financing
statements as may be requested by Safeguard.
(7) New Mortgages. The New Mortgages in form and
substance satisfactory to Safeguard, and substantially in the forms attached
hereto as Exhibits B-1 and B-2, respectively, for each of the properties listed
on Schedule 1.3, other than the Vassar Street Property.
(8) Releases. A Release by:
(A) HGM, in the form attached hereto as
Exhibit E-1;
(B) HGM, in the form attached hereto as
Exhibit E-2, to be delivered into escrow pursuant to the FROF Escrow Agreement,
and to be effective as of the Phase II Effective Date;
(C) WVM, in the form attached hereto as
Exhibit E-3;
(D) Each WVM Entity, in the form attached
hereto as Exhibit E-4; and
(E) SFE and Xxxxxxxx, in the form attached
hereto as Exhibit E-5.
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(F) A release of claims by HGM, in the form
of Exhibit G attached hereto, to be delivered into escrow pursuant to the FROF
Escrow Agreement, and to be effective as of the Phase II Effective Date.
(9) Third Party Consents. Consents to the
transactions contemplated hereby, in form and substance satisfactory to
Safeguard, by each of:
(A) Xxx Xxxxxx, with respect to the
assignment of the proceeds of the Xxxxxx Asset Purchase; and
(B) [Reserved];
(10) Investment Property and Acknowledgments. A
Notice and Acknowledgment from each of the following entities (or the
appropriate general partner, representative or agent thereof) with respect to
the pledge and assignment by WVM to Xxxxxxxx of all of his right, title and
interest in and to such entity: (i) Xxxxxxxx Partners, II, LP; (ii) RRE GIGA
Investors, LP; (iii) Technology Leaders, LP; (iv) Technology Leaders, II
Management, LP; (v) Eastern Technology Fund, LP; (vi) Plum Holdings, LP; and
(vii) NEPA Venture Fund II, LP.
(11) Resignation of HGM; Consulting Agreement. The
resignation by HGM required pursuant to Section 3.1(h) hereof, in the form
attached hereto as Exhibit F-1; and the delivery of a duly executed Letter by
HGM to MegaSystems, Inc., in the form attached hereto as Exhibit F-2, relating
to the provision by HGM of consulting services to MegaSystems, Inc..
(12) Additional Documentation Relating to Owned
Assets. Documentation Evidencing WVM's interest in each of the following:
(A) MDK Real Estate Corporation;
(B) WDK Associates I, L.P.;
(C) WDK Associates II, L.P.;
(D) Xxxxxxxx Partners II, L.P.;
(E) RRE GIGA Investors, L.P.;
(F) Technology Leaders, L.P.;
(G) Technology Leaders II, L.P.;
(H) Eastern Technology Fund, LP;
(I) Plum Holdings, L.P.;
(J) NEPA Venture Fund II, L.P.; and
(K) The Emerald HomeState PA Growth Fund- A
of The Emerald Funds held in account number [Intentionally Omitted].
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(13) Authorizing Resolutions. Authorizing resolutions
from each of the following entities or other evidence of their authority to
pledge assets, assign cash flow, or grant mortgages with respect thereto: (a)
000 Xxxxxx Xxxxxx, XX; and (b) 000 Xxxxxx Xxxxxx, Inc.
(14) Existing Mortgage Releases. Releases with
respect to the Existing Mortgages, to be delivered into escrow pursuant to the
FROF Escrow Agreement, and to be effective as of the Phase II Effective Date.
(15) Escrow Agreement. The FROF Escrow Agreement.
(16) Opinions of Counsel. All legal opinions
reasonably requested by Safeguard in connection with this Agreement, including
without limitation the opinions of DBR, counsel for WVM and the WVM Entities and
FROF, counsel for HGM, each in form and substance satisfactory to Safeguard and
its counsel.
(b) Representations and Warranties. Each of the
representations and warranties made by each party hereto shall be true and
correct as of the Phase I Effective Date.
(c) Additional Escrowed Delivery. Xxxxxxxx shall deliver
to FROF the HGM Guaranty, to be held in escrow pursuant to the FROF Escrow
Agreement.
Section 3.3 Phase I Effective Date. This Agreement and the
obligations of the Parties hereto to perform hereunder shall become effective
only upon the occurrence of all of the Phase I Conditions, or upon the waiver,
in writing, by (a) either SFE or Xxxxxxxx, of any unfulfilled Phase I Condition
specified in Sections 3.2(a)(2) - (7), 8(A)-(D) and (F), 9(A) and (B), (10)-(16)
and 3.2(b), to the extent that WVM's, HGM's or any WVM Entity's actions gave
rise to such event; or (b) WVM and HGM, jointly, of any unfulfilled Phase I
Conditions specified in Sections 3.2(a)(8)(E), (14) and (15), and 3.2(b) and
(c), to the extent that Safeguard's actions gave rise to such event (the "Phase
I Effective Date").
ARTICLE IV. RESTRUCTURING PLAN - PHASE II
Upon the satisfaction of the Phase II Conditions as set forth in
Section 4.5 hereof, the following will occur:
Section 4.1 Restructure of Xxxx Xxxxx Debt. As of the Phase II
Effective Date, Safeguard will restructure the Outstanding Obligations, to be
evidenced by a new Amended and Restated Note which shall amend, restate and
consolidate (i) the Tax Note; and (ii) the Outstanding Obligations arising under
the Xxxx Xxxxx Guaranty and the Letter Agreement.
(a) Advances.
(1) The Initial Advance. The initial advance of the
Amended and Restated Loan shall be made in the form of payment by Xxxxxxxx, via
wire or electronic transfer, to Xxxx Xxxxx of funds sufficient to satisfy WVM's
then remaining obligations to Xxxx Xxxxx in connection with the Xxxx Xxxxx
Accounts.
(2) Subsequent Advances for Tax Payments. For
calendar years 2001 and following (each an "Income Year"), so long as the
Amended and Restated Loan is outstanding, and no Event of Default under the
Amended and Restated Note, or Event of Termination hereunder (whether or not
declared) has occurred, WVM may request that Xxxxxxxx advance to him additional
funds to pay
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federal and state income taxes, under the Amended and Restated Note. The terms
and conditions of such additional advances shall be as set forth in Section
3.1(a)(1)(B) hereof; provided that all references therein to the "Tax Note"
shall be deemed to be references to the "Amended and Restated Note" for purposes
of this Section.
(3) Advances for Transaction fees. Contemporaneously
with the initial advance under the Amended and Restated Loan, Xxxxxxxx shall
make an additional advance, in an aggregate amount not to exceed $250,000, for
the reasonable legal and accounting fees incurred in connection with this
Agreement and the transactions contemplated hereby.
(b) Maturity Date. The Amended and Restated Note shall be
payable (subject to mandatory prepayments, as required pursuant to Section
4.1(c)(2) below), on demand, commencing on January 1, 2003. Until April 30,
2006, recourse under the Amended and Restated Note shall be limited to the
Collateral securing WVM's obligations thereunder. From and after April 30, 2006,
the Amended and Restated Note shall constitute a general and direct obligation
of WVM, with full recourse to all of his personal assets, except to the extent
of the Non-Recourse Compensation.
(c) Payments.
(1) Voluntary Payments. WVM may, at his option,
prepay the Amended and Restated Note in whole or in part, at any time, without
any premium or penalty.
(2) Mandatory Prepayments. The Amended and Restated
Note shall be mandatorily repaid from the following funding sources:
(A) To the extent the same had not been used
to reduce obligations outstanding under the Tax Note, SFE shall offset the
amount of $300,000 against SFE's obligations to pay the Retention Bonus and such
proceeds shall be applied to reduce the obligations outstanding under the
Amended and Restated Note and any other Notes then outstanding;
(B) all proceeds, as and when received with
respect to all payments made after the date hereof, in connection with the
Xxxxxx Asset Purchase; and
(C) all proceeds received from the sale,
financing or other disposition of any of the Collateral and the exercise of
rights and remedies under any then surviving Existing Documents.
(3) Application of Payments. Each such prepayment,
including any voluntary and mandatory prepayments, shall be applied first to
outstanding accrued interest and then to the remaining outstanding principal
balance of the Amended and Restated Note.
(4) Interest. Interest on the outstanding principal
balance of the Amended and Restated Note shall accrue at a rate of seven percent
(7%) per annum and shall accrue and be capitalized annually, on each anniversary
of the date of such Amended and Restated Note.
(d) Collateral. The Amended and Restated Note shall be
secured by a first priority lien (with respect to the Vassar Street Property,
subject to the MIT Existing Mortgage and, if the MIT Financing is consummated, a
mortgage securing same the MIT Financing) on all of the Collateral.
(e) Transfers; Asset Liquidation. In addition to, and not
in substitution for Xxxxxxxx'x rights as a secured party in accordance with
Section 4.1(d) hereof and as provided in the
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Security Agreement, the Control Agreement, the New Mortgages and such of the
Existing Documents as will continue, but only to the extent they continue, in
effect following the Phase II Effective Date, Xxxxxxxx may elect, on an item by
item basis, to cause WVM to transfer title to, any or all of his interests (or
those of any WVM Entity) in the Collateral and the property subject to the
Existing Agreements to Xxxxxxxx, or a designee of Xxxxxxxx, in reduction of the
outstanding balance under the Notes. Any such conveyances shall be made in
accordance with the provisions of Section 3.1(c) hereof.
(f) Excess Proceeds from Collateral. In the event
Safeguard realizes proceeds (net of any and all taxes, tax advances and expenses
of sales payable in connection therewith and reasonable counsel fees incurred in
connection therewith) from the Collateral in excess of the amounts owing under
the Notes, such excess shall be returned to WVM (or, if WVM is then not living,
to HGM) upon the expiration of all periods during which any such proceeds could
be subject to avoidance under any applicable preference or fraudulent conveyance
laws or Legal Requirements of similar import then in effect.
Section 4.2 SFE Option.
(a) At any time at which the Market Price (as defined
below) of a share of SFE Common Stock is equal to or greater than the per share
exercise price under the SFE Option and WVM is not in default hereunder or under
any of the Related Documents, WVM shall have the right to give notice to SFE of
his intent, subject to Xxxxxxxx'x making the loan described below, to exercise
all but not less than all of the SFE Option (a "Conditional Exercise," and the
shares issuable on exercise being called the "Exercise Shares"), which notice
shall specify the amount not to exceed the aggregate exercise price of the
Exercise Shares (the "Option Price"), which WVM wishes to borrow from Xxxxxxxx
pursuant to the Option Note to pay such Option Price for such Conditional
Exercise. On receipt of a notice of Conditional Exercise, Safeguard shall use
its commercially reasonable efforts to obtain all consents and waivers, if any,
which are required under any loan agreements, other financing arrangements,
contracts or otherwise to permit Xxxxxxxx to make loans under the Option Note
without committing a default or event which, with the passage of time or giving
of notice or both would constitute a default under any such agreement,
arrangement, contract or otherwise (collectively, the "Option Loan Consents").
Subject to and upon receipt of the Option Loan Consents, Xxxxxxxx shall loan to
WVM an amount equal to the Option Price (the "Option Loan"), pursuant to, and to
be evidenced by, the Option Note, which Note shall be in the maximum aggregate
principal amount of the Option Price, shall be secured by all of the Collateral,
and shall be in the form of Exhibit A-2 hereto. In the event the Option Loan
Consents cannot be obtained within thirty (30) days of SFE's receipt of the
Notice of Conditional Exercise, the Conditional Notice shall be deemed null and
void and neither SFE nor Xxxxxxxx shall have further obligation in respect of
such Conditional Exercise. The Option Loan shall be paid by Xxxxxxxx directly to
SFE (with WVM paying simultaneously in cash any portion of the Exercise Price he
elects to pay in cash) in consideration of the payment of the Option Price for
the Exercise Shares under the applicable Conditional Exercise and the
certificates respecting the Exercise Shares, shall be issued in the name of WVM,
and shall be delivered directly to Xxxxxxxx to be held pursuant to the Amended
and Restated Security Agreement. WVM hereby expressly authorizes such payment
and delivery. WVM further expressly acknowledges and agrees that SFE shall not
have any liability to him or anyone claiming on behalf or through him (i) for
any delay in obtaining or inability or failure to obtain the Option Loan
Consents or (ii) for any delay in making or inability or failure to make the
Option Loan except Xxxxxxxx'x willful refusal to fund after receipt of the
Option Loan Consents and fulfillment of all other notices, procedures,
conditions and requirements set forth in this Section 4.2, including, without
limitation, in either event any additional tax payable or decline in market
value occasioned by any changes in the Market Price. In the event at any time
between SFE's receipt of notice of a Conditional Exercise and the making of the
Option Loan, the Market Price shall be less than the Option Price, such
Conditional Exercise shall be deemed withdrawn and null and void without further
action by either WVM or SFE. For purposes of this Section, the term
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"Market Price" shall mean, on any day, the closing price of SFE Common Stock for
the preceding day as reported on the New York Stock Exchange.
(b) SFE acknowledges that the first two sentences of
Paragraph 9 of the Stock Option Grant Certificate evidencing the SFE Option will
not apply to the transactions contemplated by this Agreement. Each of WVM and
HGM agrees with this acknowledgement and agrees that SFE may amend or otherwise
modify the SFE Option in any respect, without his or her consent, to the extent
necessary to perfect or improve Xxxxxxxx'x security interest in the SFE Option,
the shares underlying the SFE Option or any proceeds from the sale of those
shares.
(c) The Option Note shall be a partial-recourse obligation of
WVM, in accordance with its terms until April 30, 2006, after which it shall
constitute a general and direct obligation of WVM, with full recourse to all of
his personal assets, except to the extent of the Non-Recourse Compensation. So
long as any portion of the Option Note the comprises a recourse obligation of
WVM shall remain outstanding, Xxxxxxxx acknowledges that all payments or offsets
made pursuant to or in accordance with the terms of this Agreement shall be
applied or allocated to reduce interest on and the principal balance of such
recourse obligations under the Option Note before same shall be applied or
allocated to any other obligations.
Section 4.3 Release of Escrow Items. Upon the satisfaction or waiver of
each of the Phase II Conditions, each of Xxxxxxxx, through its counsel, WVM and
HGM shall notify FROF, in accordance with the terms of the FROF Escrow
Agreement, that the Phase II Effective Date has occurred. Upon receipt of all
such required notices, FROF shall release the documents held in escrow strictly
in accordance with the terms of the FROF Escrow Agreement.
Section 4.4 Lake Naomi Option. HGM shall have an option to purchase the
real property and improvements thereon located at 000 Xxxxxxxx Xxxxxx, Xxxxxx
Xxxxx (Lake Naomi), Pennsylvania (the "Lake Naomi Property") for a purchase
price of the lower of (a) $500,000 or (b) the fair market value of the property,
as determined by an appraiser satisfactory to Safeguard (the "Option Price")
which option shall be exercised and the purchase price paid to Xxxxxxxx on or
before the Phase II Effective Date and, if not so exercised, the option shall be
deemed cancelled and shall thereafter be null and void.
Section 4.5 Conditions Precedent to Effectiveness of Phase II of this
Agreement. The parties to this Agreement hereby agree that the following are the
"Phase II Conditions":
(a) Documents to be Delivered. The respective parties shall
have delivered or caused to be delivered to each other, on or before the Phase
II Effective Date, the following agreements, instruments and other documents,
each duly executed by the respective parties thereto and each to be effective as
of the Phase II Effective Date:
(1) Amended and Restated Note. The Amended and
Restated Note, in the form attached hereto as Exhibit A-1.
(2) New Mortgage. The New Mortgage with respect to
the Vassar Street Property, in form and substance satisfactory to Safeguard.
(3) Vassar Street Lock Box. A Lock Box Agreement in
form and substance satisfactory to Safeguard regarding the rents and other
amounts payable with respect to the Vassar Street Property.
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(4) Third Party Consents. Consents to the
transactions contemplated hereby, in form and substance satisfactory to
Safeguard, by each of:
(A) MIT and, if required, Cambridge
Technology Partners (Massachusetts), Inc. with respect to the New Mortgage in
favor of Xxxxxxxx on the Vassar Street Property.
(B) [Reserved]
(5) [Reserved]
(6) Phase I Documents. Any document required to have
been delivered pursuant to Article III hereof, the delivery of which was waived
as of the Phase I Effective Date by the requisite party or parties.
(7) Additional Safeguard Release. A Release by SFE
and Xxxxxxxx, in the form attached hereto as Exhibit E-6.
(8) Opinions of Counsel. The additional legal
opinions reasonably requested by Safeguard in connection with this Agreement,
including without limitation the opinions of DBR, counsel for WVM and the WVM
Entities and FROF, each in form and substance satisfactory to Safeguard and its
counsel.
(9) Xxxx Xxxxx Documents. If Safeguard elects to pay
off in full WVM's Outstanding Obligations to Xxxx Xxxxx, the Xxxx Xxxxx
Guaranty, marked "cancelled," and any remaining cash collateral held by Xxxx
Xxxxx shall have been returned to Safeguard.
(b) Representations and Warranties. Each of the
representations and warranties made by each party hereto shall be true and
correct as of the Phase II Effective Date in all material respects.
(c) Non-Revocation of Release. At least seven (7) days have
passed since the Phase I Effective Date and WVM has not revoked the WVM Release
pursuant to the provisions of Section 10 thereof.
(d) Termination of Xxxxx Account. Evidence satisfactory
to Safeguard that WVM's trading account with H.D. Xxxxx and Associates has
either been terminated, or a control agreement with respect thereto has been
delivered to Xxxxxxxx.
Section 4.6 Phase II Effective Date. The obligations of the parties
hereto to perform under this Article IV shall become effective only upon the
occurrence of all of the Phase II Conditions, or upon the waiver, in writing, by
(a) either SFE or Xxxxxxxx, of any unfulfilled Phase II condition specified in
Section 4.5(a)(1)-(6), (8) and (9), or 4.5(b), (c) or (d), to the extent that
WVM's, HGM's or any WVM Entity's actions gave rise to such event, or (b) WVM and
HGM, of any unfulfilled Phase II Condition, specified in Section 4.5(a)(7) or
4.5(b), to the extent Safeguard's actions gave rise to such event (the "Phase II
Effective Date").
ARTICLE V. TERMINATION
Section 5.1 Events of Termination. Each of the following events, at the
election of, and upon notification by, Safeguard to the other parties hereto, to
the extent any such other party's actions gave rise
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to such event, and each of the events set forth in Sections 5.1(e), (f) or (g)
hereof, to the extent Safeguard's actions give rise to such event, at the
election of, and upon notification by WVM and HGM, jointly, to Safeguard, shall
be an Event of Termination hereunder:
(a) The Phase I Effective Date shall not have occurred on
or before April 16, 2001;
(b) The Phase II Effective Date shall not have occurred
on or before April 30, 2001;
(c) Any payments are made or Collateral or other property
subject to the Existing Documents or Related Documents, are sold, mortgaged or
otherwise transferred and/or accepted in violation of the existing obligations
of WVM, HGM or the WVM Entities, whether under the Existing Documents or the
Related Documents;
(d) Subject to Section 3.1(f) herein, any default or event of
default, or event which, with the passage of time, the giving of notice or both,
would be a default or event of default (whether or not such term is used with
initial capital letters), shall have occurred under any of the Existing
Documents, so long as same is in effect;
(e) Any representation or warranty, made herein or in any
document, agreement, or instrument required to be delivered hereunder shall be
false or misleading in any material respect when made;
(f) At any time after the Phase I Effective Date, any party
shall seek to rescind, terminate or contest or otherwise declare ineffective any
document executed and delivered in connection with the transactions contemplated
in Article III hereof,
(g) Any party hereto shall fail to perform any of its
obligations hereunder or, except as provided herein, shall default in the
performance of any obligation or covenant contained in any document, agreement
or instrument referenced herein.
Section 5.2 Remedies. Upon the declaration by the applicable party of
an Event of Termination hereunder:
(a) if the Phase II Effective Date has not yet occurred, the
obligations of each of the parties hereto to complete the transactions
contemplated pursuant to Article IV shall terminate and become null and void;
(b) if the Phase II Effective Date has already occurred,
Xxxxxxxx shall have no further obligation to make any loans or advances, whether
under the Amended and Restated Note, the Option Note, or otherwise; and
(c) each party shall have all of those rights, powers,
privileges and remedies available to each such party under this Agreement, each
Related Document then in effect, and each Existing Document then remaining in
effect, and for this purpose, each party hereto hereby reserves all of such
party's respective rights, powers, privileges and remedies.
ARTICLE VI. REPRESENTATIONS, WARRANTIES AND AGREEMENTS
Section 6.1 By WVM. WVM and each WVM Entity, as applicable, hereby
represents, warrants and agrees that, as of the date hereof and as of each of
the Phase I Effective Date and the Phase
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II Effective Date and, with respect to all agreements and understanding herein
and in any Related Document, from and at all times after the date hereof:
(a) Corporate Organization, etc. Each WVM Entity is a
corporation or limited partnership duly organized, validly existing and in good
standing under the laws of the state of its organization, and has full power and
authority to own or lease and operate and use its properties and assets and to
carry on its business as now conducted. WVM is a resident of the Commonwealth of
Pennsylvania, is sui juris, and of full legal capacity.
(b) Authority; No Violation.
(1) The execution and delivery of this Agreement and
all Related Documents required hereunder to be executed and delivered by WVM or
any WVM Entity, respectively, and the performance hereof and thereof, including
the consummation of the transactions contemplated hereby and thereby, have been
duly and validly authorized by the Board of Directors or other governing body,
of each such entity and no other corporate proceedings on the part of such
entity are necessary to authorize such execution, delivery and performance. WVM
has the capacity, and each of WVM and each WVM Entity has full right, power and
authority to execute, deliver and perform this Agreement and the Related
Documents to which it is a party. This Agreement has been duly executed and
delivered by WVM and constitutes his legal, valid and binding obligation,
enforceable against him in accordance with its terms. Each Related Document to
which WVM or any WVM Entity, respectively, is a party, when executed and
delivered, will be the valid and binding agreement of such entity party thereto,
enforceable against such entity party thereto in accordance with its terms.
(2) Neither the execution, delivery and performance
of this Agreement and the Related Documents to which WVM or any WVM Entity,
respectively is a party, nor the consummation of the transactions provided for
hereby and thereby, and compliance with or fulfillment of the terms, conditions
and provisions hereof or thereof, (i) will violate or conflict with any
provision of the Certificate of Incorporation or By-Laws, or other applicable
charter or organizational documents, of any WVM Entity, respectively, (ii)
conflict with or violate any Legal Requirement to which WVM or any WVM Entity,
respectively, is, or his or its assets are, subject or bound, (iii) will result
in any violation or breach of or default under (or an event that with notice or
the passage of time or both would constitute a default), will create any rights
of acceleration, termination or cancellation or cause any loss of rights under,
or will result in the creation or imposition of any encumbrance on any of the
properties or assets of WVM or any WVM Entity under, (A) any agreement,
franchise, permit, or other authorization, right, restriction or obligation of
any kind to which either WVM or any WVM Entity is a party, beneficiary or
designee or by which either WVM or any WVM Entity is bound or to which any of
his or its properties or assets are subject, including, without limitation, the
Pre-Nuptial Agreement; or (B) any Legal Requirement affecting WVM or any WVM
Entity, or any of his or its respective properties or assets, or (iv) requires
WVM or any WVM Entity to obtain any consent, permit, license, authorization or
approval from, or make any registration or filing with, any person or entity,
except as contemplated by Sections 3.2 and 4.5 of this Agreement. In the event
and to the extent that the transactions contemplated hereby, including, without
limitation, the grant of security interests in, and assignments and asset
transfers of the Collateral to or for the benefit of Safeguard, conflict with
the terms, provisions or requirements of any agreement, including, without
limitation, the Pre-Nuptial Agreement, or right, restriction, Legal Requirement
or other right or privilege, whether contractual, legal or equitable in nature,
each of WVM and each WVM Entity hereby waives, to the extent same may be waived,
or otherwise hereby agrees to subordinate such provision, right or privilege to
the terms, provisions and conditions of this Agreement and WVM expressly
consents to any and all action by Xxxxxxxx with respect to the Collateral,
including without limitation, the sale, lease, mortgage, refinancing or other
similar actions regarding all or any portion of the Collateral or any interest
therein, all without further notice to or consent by WVM with
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respect thereto, all of which are expressly waived. WVM hereby waives any rights
he has at equity or in law to require Xxxxxxxx to apply any rights of
marshalling or other equitable doctrines in the circumstances.
(c) Litigation. There is no action, suit, proceeding or
investigation pending, or to the best of WVM's knowledge threatened, against WVM
or any WVM Entity, which questions the legality or propriety of the transactions
contemplated by this Agreement or which seeks to prevent or delay the
transactions contemplated by this Agreement.
(d) Title to Collateral. WVM, or the applicable WVM Entity, as
the case may be, is the legal and beneficial owner of all of the Collateral,
free and clear of any lien, security interest, pledge, restriction, option, or
other charge or encumbrance, except for the Permitted Encumbrances. All of the
Collateral, consisting of shares of stock, has been duly and validly issued, is
fully paid and nonassessable, and there are no pending or contingent
restrictions on transferability. All of the Collateral, consisting of
certificated shares, is listed on Schedule 3.2. To the best of WVM's knowledge,
all of the Collateral, consisting of debt obligations, has been duly and validly
authorized, authenticated, issued and delivered, is the legal, valid and binding
obligation of the issuer thereof and is not in default. Schedule 3.2 includes a
true and complete list of all other investment property owned by WVM and his
percentage ownership therein.
(e) Xxxxxx Asset Purchase Payments. The amount of all cash
payments required to be paid prior to the date hereof in connection with the
Xxxxxx Asset Purchase is $300,000 and there remains as of the date hereof
$700,000 to be paid in connection therewith.
Section 6.2 By HGM. HGM hereby represents, warrants and agrees that, as
of the date hereof and as of each of the Phase I Effective Date and the Phase II
Effective Date and with respect to all agreements and undertakings herein and in
any Related Document, from and at all times after the date hereof:
(a) Capacity, etc. HGM is a resident of the Commonwealth of
Pennsylvania, is sui juris, and of full legal capacity.
(b) Authority; No Violation.
(1) HGM has the capacity and full right, power and
authority to execute, deliver and perform this Agreement and the Related
Documents to which she it is a party. This Agreement has been duly executed and
delivered by HGM and constitutes her legal, valid and binding obligation,
enforceable against him in accordance with its terms. Each Related Document to
which HGM is a party, when executed and delivered, will be the valid and binding
agreement of such entity party thereto, enforceable against HGM in accordance
with its terms.
(2) Neither the execution, delivery and performance
of this Agreement and the Related Documents to which HGM is a party, nor the
consummation of the transactions provided for hereby and thereby, and compliance
with or fulfillment of the terms, conditions and provisions hereof or thereof,
(i) conflict with or violate any Legal Requirement to which HGM is, or her
assets are, subject or bound, (ii) will result in any violation or breach of or
default by HGM under (or an event that with notice or the passage of time or
both would constitute a default), will create any rights of acceleration,
termination or cancellation or cause any loss of rights under, or will result in
the creation or imposition of any encumbrance on any of the properties or assets
of HGM under, (A) any agreement, franchise, permit, or other authorization,
right, restriction or obligation of any kind to which HGM is a party,
beneficiary or designee or by which HGM is bound or to which any of her
properties or assets are subject, including,
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without limitation, the Pre-Nuptial Agreement, or (B) any Legal Requirement
affecting HGM, or any of her respective properties or assets, or (iii) requires
HGM to obtain any consent, permit, license, authorization or approval from, or
make any registration or filing with, any person or entity. In the event and to
the extent that the transactions contemplated hereby, including, without
limitation, the grant of security interests in, and assignments and asset
transfers of the Collateral to or for the benefit of Safeguard, conflict with
the terms, provisions or requirements or any agreement, including, without
limitation, the Pre-Nuptial Agreement, or any right, restriction, Legal
Requirement or other right or privilege, whether contractual, legal or equitable
in nature, HGM hereby waives, to the extent the same may be waived, or otherwise
hereby agrees to subordinate such provision, right or privilege to the terms,
provisions and conditions of this Agreement. In addition to and not in
limitation of the foregoing, HGM hereby expressly subordinates any and all
rights, title and interest she has or may have in and to the Collateral and the
proceeds thereof, however arising, whether contractual, legal or equitable in
nature, and including, without limitation, all marital rights under any Legal
Requirement or under applicable law, to the fullest extent permitted by law, to
the interests of Safeguard in the Collateral provided to Safeguard in and
pursuant to this Agreement and to the repayment in full of the Notes and any
other Outstanding Obligations and HGM expressly consents to any and all action
by Xxxxxxxx with respect to the Collateral, including without limitation, the
sale, lease, mortgage, refinancing or other similar actions regarding all or any
portion of the Collateral or any interest therein all without further notice to
or consent by HGM with respect thereto, all of which are expressly waived. HGM
hereby waives any rights, whether contractual, legal or equitable in nature, she
has, or may have, to require Xxxxxxxx to apply any rights of marshalling or
other equitable doctrines in the circumstances. The agreements of HGM in this
Section 6.2(b)(2) shall expressly survive the death of WVM.
(c) Litigation. There is no action, suit, proceeding or
investigation pending, or to the best of HGM's knowledge threatened, against HGM
or by HGM, which questions the legality or propriety of the transactions
contemplated by this Agreement or which seeks to prevent or delay the
transactions contemplated by this Agreement.
(d) Rights In Collateral. Each agreement, whether written
or oral, pursuant to which HGM has, may have or may claim any rights in the
Collateral is identified on Schedule 6.2 hereto.
Section 6.3 By Safeguard. Each of SFE and Xxxxxxxx, as applicable,
hereby represent and warrants that, as of the date hereof and as of each of
the Phase I Effective Date and the Phase II Effective Date and with respect to
all agreements and undertakings herein and in any Related Document, from and
at all times after the date hereof:
(a) Corporate Organization. Each of SFE and Xxxxxxxx is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation, and has full corporate power and authority to
own or lease and operate and use its properties and assets and to carry on its
business as now conducted.
(b) Authority; No Violation.
(1) The execution and delivery of this Agreement and
all Related Documents required hereunder to be executed and delivered by the SFE
or Xxxxxxxx, respectively, and the performance hereof and thereof, including the
consummation of the transactions contemplated hereby and thereby, have been duly
and validly authorized by the Board of Directors of each such entity and no
other corporate proceedings on the part of such entity are necessary to
authorize such execution, delivery and performance. Each of SFE and Xxxxxxxx has
full right, power and authority to execute, deliver and perform this Agreement
and the Related Documents to which it is a party. This Agreement has been duly
executed and delivered by each of SFE and Xxxxxxxx and constitutes its legal,
valid and binding
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obligation, enforceable against such entity in accordance with its terms. Each
Related Document to which SFE or Xxxxxxxx, respectively, is a party, when
executed and delivered, will be the valid and binding agreement of such entity
party thereto, enforceable against such entity party thereto in accordance with
its terms.
(2) Neither the execution, delivery and performance
of this Agreement and the Related Documents to which SFE or Xxxxxxxx,
respectively is a party, nor the consummation of the transactions provided for
hereby and thereby, and compliance with or fulfillment of the terms, conditions
and provisions hereof or thereof, (i) will violate or conflict with any
provision of the Certificate of Incorporation or By-Laws, or other applicable
charter or organizational documents, of SFE or Xxxxxxxx, respectively, (ii)
conflict with or violate any Legal Requirement to which SFE or Xxxxxxxx,
respectively, is, or its assets are, subject or bound, (iii) will result in any
violation or breach of or default under (or an event that with notice or the
passage of time or both would constitute a default), will create any rights of
acceleration, termination or cancellation or cause any loss of rights under, or
will result in the creation or imposition of any encumbrance on any of the
properties or assets of SFE or Xxxxxxxx under, (A) any agreement, franchise,
permit, or other authorization, right, restriction or obligation of any kind to
which either SFE or Xxxxxxxx is a party, beneficiary or designee or by which
either SFE or Xxxxxxxx is bound or to which any of its properties or assets are
subject or (B) any Legal Requirement affecting SFE or Xxxxxxxx or any of its
properties or assets, or (iv) requires SFE or Xxxxxxxx to obtain any consent,
permit, license, authorization or approval from, or make any registration or
filing with, any person or entity.
(c) Litigation. There is no action, suit, proceeding or
investigation pending, or to the best of SFE's or Xxxxxxxx'x knowledge
threatened, against SFE or Xxxxxxxx, which questions the legality or propriety
of the transactions contemplated by this Agreement or which seeks to prevent or
delay the transactions contemplated by this Agreement
ARTICLE VII. MISCELLANEOUS
Section 7.1 Cooperation; Other Documents. At all times following
the execution of this Agreement, the parties hereto shall execute and deliver to
the respective affected parties or shall cause to be executed and delivered to
the respective affected parties, all such other documents, instruments or
agreements or other writings, and shall do or cause to be done, all such other
acts and things as may reasonably be necessary or desirable to ensure the
parties hereto the benefit of this Agreement and the transactions contemplated
hereby. Each party hereto shall use his, her or its reasonable best efforts to
cause each of the conditions precedent to the Phase I Effective Date and the
Phase II Effective Date to be satisfied on or before the dates contemplated in
this Agreement. HGM agrees to use her best efforts to cause her father to
support any and all efforts by Xxxxxxxx to sell, mortgage or otherwise refinance
the Vassar Street Property on terms no less favorable as those previously
contemplated under the MIT Financing.
Section 7.2 Confidentiality; Announcements. Except for disclosure
required by Safeguard either pursuant to applicable securities laws or
agreements to which it is a party:
(a) each of Safeguard, WVM and HGM shall, and shall use
their best efforts to cause their respective affiliates and its and their
respective partners, officers, directors, shareholders, employees, family
members, agents, consultants, advisors, legal counsel, accountants, financing
sources and other representatives (collectively, as to a party, its
"Representatives") to: (i) not disclose any information, including without
limitation, through press releases or other public announcements, relating to
this Agreement, the transactions contemplated hereby, the parties hereto and the
activities undertaken in connection herewith, directly or indirectly, without
the consent of the other parties hereto; and (ii) keep confidential all such
information and not disclose or release to any person or entity the existence or
nature
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of the transactions, discussions, or negotiations, other than to those
Representatives of such party working on or otherwise having a need to know
about any of the foregoing in connection with consummating the transactions
contemplated hereby;
(b) if any party hereto is legally compelled by any
court, governmental agency or otherwise to disclose any of the foregoing
information, such person or entity shall give the other parties hereto prompt
notice thereof to permit such other party reasonable opportunity to seek a
protective order or to take other appropriate action; and
(c) if any such party is, in the reasonable opinion of its
counsel, compelled to disclose such information pursuant to such request, it may
disclose that portion of the information which such counsel has advised that it
is compelled to disclose.
Section 7.3 Non-Disparagement.
(a) Neither WVM nor HGM shall either during the term of
this Agreement or at any time thereafter, make any public statement reflecting
adversely on Safeguard's or its Affiliates' business, operations, prospects, or
other activities, except for such statements which WVM or HGM may legally be
required to make, whether during the term of this Agreement or at any time
thereafter.
(b) Neither SFE nor Xxxxxxxx shall either during the term
of this Agreement or at any time thereafter, make any public statement
reflecting adversely on WVM's or HGM's businesses, operations, prospects,
character or other activities, except for such statements which SFE or Xxxxxxxx
may legally be required to make, whether during the term of this Agreement or at
any time thereafter.
Section 7.4 Indemnity of WVM. Until the six year anniversary of the
later of the termination of WVM's service as a director and officer of SFE or
any entity affiliated or formerly affiliated with SFE, including any Affiliate,
Partner Company or Fund (the "Effective Date"), SFE shall indemnify, defend and
hold harmless WVM against all claims, losses, damages, expenses or liabilities
arising out of actions or omissions or alleged actions or omissions occurring
during WVM's service at SFE or any such corporation or other entity affiliated
or formerly affiliated with SFE as a promoter, officer, shareholder or director
or in a similar capacity with respect to a limited liability company,
partnership or other entity, including as a promoter, member, manager or partner
of a limited liability company or partnership or other entity, to the same
extent and on the same terms and conditions (including with respect to
advancement of expenses) provided for in Article VIII of SFE's bylaws as in
effect on the date of this Agreement. If and to the extent SFE shall obtain and
maintain in effect a directors' and officers' liability insurance policy(ies),
SFE will cause said policy(ies) to provide coverage for WVM to the same extent
as it covers then current directors and officers of SFE for a period of six
years after the Effective Date. Nothing in this Agreement or any Related
Document shall affect or modify (i) WVM's rights under any officers' and
directors' liability insurance policies purchased by any other corporation or
other entity referred to in the first sentence of this paragraph and in effect
during WVM's service with such corporation or other entity, (ii) WVM's rights to
indemnification under the articles of incorporation, bylaws, partnership
agreement or other similar governing instrument or agreement of any corporation
or other entity referred to in the first sentence of this paragraph, or (iii)
WVM's rights under any indemnification agreement or arrangement.
Section 7.5 No Waivers. Except as otherwise provided in this
Agreement, including pursuant to Section 3.1(f) hereof, nothing herein shall
constitute a waiver or impairment of either Safeguard's rights to declare any
Events of Default under the Existing Documents and to exercise any and all
rights, powers and privileges accorded to it, and until the Phase II Effective
Date, of Safeguard
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expressly reserve and preserve all rights, powers, privileges and remedies
available to each, respectively, under the Existing Documents, and otherwise,
whether at law or in equity.
Section 7.6 Modification. Except as otherwise provided herein, no
modification or amendment hereof shall be effective unless set forth in writing,
signed by duly authorized representatives of the parties hereto.
Section 7.7 Notices. Any request, consent, notice or other
communication required hereunder or in connection herewith shall be given to
each party hereto and shall be deemed satisfactorily given if in writing and
delivered personally or by registered or certified mail, postage pre-paid, by
reliable overnight courier or by telecopier to the parties at their respective
addresses set forth below, or if not listed below, listed at the beginning of
this Agreement, or at such other address as may be given by any party to the
others in writing, in accordance with this Section 7.7:
If to WVM:
000 Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Telecopier No.: ______________
with a copy to:
Xxxxxx X. Xxxxxx
Drinker Xxxxxx & Xxxxx LLP
One Xxxxx Square
00xx & Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Telecopier No.: 215.988.2757
If to HGM:
000 Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Telecopier No.: _______________
with a copy to:
Xxxxx X. Xxxxxxx, Esquire
Fox, Rothschild, O'Brien & Xxxxxxx LLP
0000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxxxx, XX 00000-0000
Telecopier No.: 215.299.2150
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If to SFE:
000 Xxxxx Xxxx Xxxxx
000 Xxxxxxxx
Xxxxx, XX 00000
Attention: N. Xxxxxxx Xxxxxxx, Esquire
Telecopier No.: 610.254.4301
with a copy to:
Xxxxx X. Xxxxxxx, Esquire
Xxxxxx Xxxxxxxx LLP
3000 Two Xxxxx Square
00xx & Xxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Telecopier No.: 215.981.4750
If to Xxxxxxxx:
c/o Safeguard Delaware, Inc.
0000 Xxxxxxxxxxx Xxxx,
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: N. Xxxxxxx Xxxxxxx, Esquire
Telecopier No.: 610.254.4301
with a copy to
Xxxxx X. Xxxxxxx, Esquire
Xxxxxx Xxxxxxxx LLP
3000 Two Xxxxx Square
00xx & Xxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Telecopier No.: 215.981.4750
Section 7.8 Binding and Governing Law. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns and, as to any natural person, his
or her respective heirs, executors and administrators, and shall be governed by
and construed in accordance with the laws of the Commonwealth of Pennsylvania.
The rights and obligations of the parties hereto cannot be assigned, delegated
or otherwise transferred without the prior written consent of the other parties
hereto, except either or both of Safeguard and Xxxxxxxx may assign or delegate
their rights hereunder to one another and/or another Safeguard Affiliate.
Section 7.9 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument.
Section 7.10 Submission to Jurisdiction. Each of the parties
hereto hereby consents to the jurisdiction state or federal court located within
the Commonwealth of Pennsylvania, and irrevocably agrees that all actions or
proceedings relating to this Agreement, the Existing Agreements or any Related
Document or the transactions contemplated hereunder shall be litigated in such
courts, and each such party hereby waives any objection which he, she or it may
have based on lack of personal jurisdiction,
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improper venue or forum non conveniens to the conduct of any proceeding, in any
such court and waive personal service of any and all process upon them, and
consent that all such service of process be made by mail or messenger directed
to them at the address set forth in Section 7.7 hereof.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the
parties hereto, by their respective duly authorized representatives, have
executed this Agreement the day and year first above written.
SAFEGUARD SCIENTIFICS, INC.
By: /S/ XXXXXX XXXXXXXXX
Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President
and Chief Financial Officer
XXXXXXXX INSURANCE, LTD.
By: /S/ XXXXXX XXXXXXXXX
Name: Xxxxxx Xxxxxxxxx
Title: President and Treasurer
Witness:
By:_____________________ /S/ XXXXXX X. XXXXXX
Xxxxxx X. Xxxxxx
Witness:
By:_____________________ /S/ XXXXXX XXXXXXX XXXXXX
Xxxxxx Xxxxxxx Xxxxxx
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