AGREEMENT, dated as of January 13, 1997, by and among AMNEX,
INC. (the "Company"), XXXXXXX CORPORATE FINANCE AG ("Xxxxxxx XX"), XXXXXXX
CORPORATE FINANCE INC. ("Xxxxxxx Inc."), and XXXXX XXXXXXX ("Xxxxxxx" and
collectively with Xxxxxxx XX and Xxxxxxx Inc., the "Xxxxxxx Group").
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WHEREAS, Spring Technology Corp. ("Spring") is the holder of a
certain promissory note of the Company, dated March 8, 1993, in the principal
amount of four hundred fifty thousand dollars ($450,000) (the "Spring Note").
WHEREAS, Cofinvest 97 Ltd. ("Cofinvest" and collectively with
Spring, the "1993 Noteholders") is the holder of a certain promissory note of
the Company, dated July 13, 1993, in the principal amount of fifty thousand
dollars ($50,000) (the "Cofinvest Note" and collectively with the Spring Note,
the "1993 Notes").
WHEREAS, the 1993 Notes provide for the payment of interest on
the principal amount thereof at the rate of ten percent (10%) per annum, such
interest being originally payable from the following dates:
(i) with respect to the Spring Note, (a) from
February 22, 1993 with respect to the principal amount of seventy thousand
dollars ($70,000); (b) from February 23, 1993 with respect to the principal
amount of ninety-six thousand dollars ($96,000) and (c) from March 8, 1993
with respect to the principal amount of two hundred eighty-four thousand
dollars ($284,000); and
(ii) with respect to the Cofinvest Note, from
November 18, 1992.
WHEREAS, the principal amount of the 1993 Notes, together with
accrued and unpaid interest thereon, is convertible into Common Shares of the
Company at a conversion price of twenty cents ($.20) per share (the "1993 Note
Conversion Rate").
WHEREAS, Logitech Corp. ("Logitech" and collectively with the
1993 Noteholders, the "Noteholders") is the holder of a certain promissory note
of the Company, dated May 1, 1995, in the principal amount of three hundred
twenty-five thousand dollars ($325,000) (the "Logitech Note" and collectively
with the 1993 Notes, the "Notes").
WHEREAS, the Logitech Note provides for the payment of
interest on the principal amount thereof at the rate of eight percent (8%) per
annum.
WHEREAS, the principal amount of the Logitech Note, together
with accrued and unpaid interest thereon, is convertible into Common Shares of
the Company at a conversion price of two dollars eighty-one and one-quarter
cents ($2.8125) per share (the "Logitech Note Conversion Rate").
WHEREAS, subject to the terms hereof, the Xxxxxxx Group has
agreed to use its best efforts to cause the 1993 Noteholders to convert the
principal amounts of the 1993 Notes, together with accrued and unpaid interest
thereon, into Common Shares of the Company at the 1993 Note Conversion Rate.
WHEREAS, subject to the terms hereof, the Xxxxxxx Group has
agreed to use its best efforts to cause Logitech to convert seventy-five percent
(75%) of the principal amount of the Logitech Note, together with accrued and
unpaid interest thereon, into Common Shares of the Company at the Logitech Note
Conversion Rate.
WHEREAS, there are currently outstanding 72,450 Series B
Preferred Shares of the Company, 1,413,337 Series D Preferred Shares of the
Company and 1,035,000 Series E Preferred Shares of the Company.
WHEREAS, each Series B Preferred Share is convertible into ten
(10) Common Shares of the Company (the "Series B Conversion Rate").
WHEREAS, each Series D Preferred Share is convertible into
one (1) Common Share of the Company (the "Series D Conversion Rate").
WHEREAS, each Series E Preferred Share is convertible into one
(1) Common Share of the Company (the "Series E Conversion Rate").
WHEREAS, subject to the terms hereof, the Xxxxxxx Group has
agreed to use its best efforts to cause the holders of at least seventy-five
percent (75%) of each of the outstanding Series B Preferred Shares (the "Series
B Holders"), Series D Preferred Shares (the "Series D Holders") and Series E
Preferred Shares (the "Series E Holders" and collectively with the Series B
Holders, and the Series D Holders, the "Preferred Holders" and collectively
further with the Noteholders, the "Converting Holders") to convert their
respective Preferred Shares (the "Preferred Shares" and collectively with the
Notes, the "Converting Securities") into Common Shares at the Series B
Conversion Rate, Series D Conversion Rate or Series E Conversion Rate, as the
case may be.
WHEREAS, no party to this Agreement will receive, directly or
indirectly, any commission or other remuneration for soliciting the conversions
or exchanges contemplated hereby.
WHEREAS, subject to the terms hereof, the Xxxxxxx Group has
agreed to use its best efforts to cause (i) the Converting Holders to sell the
Underlying Shares (as hereinafter defined) and (ii) the holders of such number
of Common Shares of the Company (the "Common Holders" and collectively with the
Converting Holders, the "Holders") which, when added to the aggregate number of
Underlying Shares, equals nine million (9,000,000) Common Shares (the "Subject
Common Shares" and collectively with the Underlying Shares, the "Shares") to
sell such Subject Common Shares, in each case in accordance with the provisions
hereof.
WHEREAS, subject to the terms hereof, the Company and the
Xxxxxxx Group are willing to settle a dispute between them with regard to a
certain consulting fee claimed to be payable by the Company to Xxxxxxx XX.
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WHEREAS, subject to the terms hereof, the Company has agreed
to make a payment to the Preferred Holders in lieu of a cash dividend with
respect to the Series B, Series D and Series E Preferred Shares of the Company.
WHEREAS, subject to the terms hereof, the Company has agreed
to offer to exchange Series K Preferred Shares of the Company for the Company's
outstanding Series F Preferred Shares.
WHEREAS, subject to the terms hereof, the Company has agreed
to redeem certain outstanding promissory notes of the Company in the aggregate
principal amount of $1,400,000.
WHEREAS, each representation, warranty and agreement of the
Xxxxxxx Group in this Agreement shall be the joint and several representation,
warranty and agreement of Xxxxxxx XX, Xxxxxxx Inc. and Xxxxxxx and each
reference herein to the Xxxxxxx Group shall be deemed to refer to each of
Xxxxxxx XX, Xxxxxxx Inc. and Xxxxxxx.
NOW, THEREFORE, in consideration of the foregoing, the parties
hereto have agreed, and do hereby agree, as follows:
1. Recitals. Each of the parties hereto acknowledges and
agrees that each of the above recitals is true and that each has relied upon the
accuracy thereof in entering into this Agreement.
2. Conversion of 1993 Notes. Promptly following the execution
of this Agreement, the Xxxxxxx Group shall use its best efforts to cause each of
Spring and Cofinvest to execute and deliver to the Company an irrevocable
election to convert, in the form of Exhibit A attached hereto, the principal
amount of its respective 1993 Note, together with all accrued and unpaid
interest thereon through the day immediately preceding the date hereof, into two
million eight hundred twenty thousand five hundred seventy-five (2,820,575) and
three hundred fifty-three thousand eight hundred nineteen (353,819) Common
Shares of the Company, respectively (collectively, the "Underlying 1993 Note
Shares"), which election shall be subject to the terms hereof. In addition,
concurrently therewith, the Xxxxxxx Group shall use its best efforts to cause
Spring and Cofinvest to deliver to the Company their respective original 1993
Notes for cancellation, subject to the terms hereof.
3. Conversion of Logitech Note. Promptly following the
execution of this Agreement, the Xxxxxxx Group shall use its best efforts to
cause Logitech to execute and deliver to the Company an irrevocable election to
convert, in the form of Exhibit B attached hereto, seventy-five percent (75%) of
the principal amount of the Logitech Note, together with all accrued and unpaid
interest thereon through the day immediately preceding the date hereof, into
ninety-eight thousand four hundred eighty (98,480) Common Shares of the Company
(collectively, the
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"Underlying Logitech Note Shares"), which election shall be subject to the terms
hereof. In addition, concurrently therewith, the Xxxxxxx Group shall use its
best efforts to cause Logitech to deliver to the Company the original Logitech
Note for notation as to such conversion, subject to the terms hereof.
4. Conversion of Series B Preferred Shares. Promptly following
the execution of this Agreement, the Xxxxxxx Group shall use its best efforts to
cause each Series B Holder to execute and deliver to the Company an irrevocable
election to convert, in the form of Exhibit C attached hereto, each of its
respective Series B Preferred Shares that are contemplated to be converted into
Common Shares of the Company pursuant to the terms hereof (the "Converting
Series B Preferred Shares") into ten (10) Common Shares of the Company
(collectively, the "Underlying Series B Shares"), which election shall be
subject to the terms hereof. In addition, concurrently therewith, the Xxxxxxx
Group shall use its best efforts to cause each Series B Holder to deliver to the
Company its stock certificate(s) representing the Converting Series B Preferred
Shares for cancellation, subject to the terms hereof.
5. Conversion of Series D Preferred Shares.
(a) Promptly following the execution of this
Agreement, the Xxxxxxx Group shall use its best efforts to cause each Series D
Holder that is a Permitted Holder (as hereinafter defined) (a "Series D
Permitted Holder") to execute and deliver to the Company an irrevocable
election to convert, in the form of Exhibit D-1 attached hereto, each of its
respective Series D Preferred Shares that are contemplated to be converted into
Common Shares of the Company pursuant to the terms hereof (the "Converting
Series D Preferred Shares") into one (1) Common Share of the Company
(collectively, the "Underlying Series D Shares"), which election shall be
subject to the terms hereof. In addition, concurrently therewith, the Xxxxxxx
Group shall use its best efforts to cause each Series D Permitted Holder to
deliver to the Company its stock certificate(s) representing the Converting
Series D Preferred Shares for cancellation, subject to the terms hereof.
(b) Promptly following the receipt by any member
of the Xxxxxxx Group and a Series D Holder that is a Remaining Holder (as
hereinafter defined) (a "Series D Remaining Holder") of a Sell Request (as
hereinafter defined), as provided for in Section 8(c) hereof, the Xxxxxxx
Group shall use its best efforts to cause each such Series D Remaining Holder
to execute and deliver to the Company, promptly by telecopier transmission and
overnight mail or courier service, an irrevocable election to convert, in the
form of Exhibit D-2 attached hereto, each of its respective Converting Series
D Preferred Shares into Underlying Series D Shares, which election shall be
subject to, and shall be treated by the Company as subject to, the terms hereof
(notwithstanding anything expressly or implicitly to the contrary therein or the
absence therein of any express condition that such election is subject to the
terms of this Agreement). In addition, concurrently therewith, the Xxxxxxx
Group shall use its best efforts to cause each Series D Remaining Holder to
deliver to the Company, immediately by overnight mail or courier service,
its stock certificate(s) representing the Converting Series D Preferred Shares
for cancellation, subject to the terms hereof.
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6. Conversion of Series E Preferred Shares.
(a) Promptly following the execution of this Agreement, the Xxxxxxx Group
shall use its best efforts to cause each Series E Holder that is a Permitted
Holder (a "Series E Permitted Holder") to execute and deliver to the Company an
irrevocable election to convert, in the form of Exhibit E-1 attached hereto,
each of its respective Series E Preferred Shares that are contemplated to be
converted into Common Shares of the Company pursuant to the terms hereof (the
"Converting Series E Preferred Shares") into one (1) Common Share of the Company
(collectively, the "Underlying Series E Shares" and collectively further with
the Underlying Series B Shares, the Underlying Series D Shares, the Underlying
1993 Note Shares and the Underlying Logitech Note Shares, the "Underlying
Shares"), which election shall be subject to the terms hereof. In addition,
concurrently therewith, the Xxxxxxx Group shall use its best efforts to cause
each Series E Permitted Holder to deliver to the Company its stock
certificate(s) representing the Converting Series E Preferred Shares for
cancellation, subject to the terms hereof.
(b) Promptly following the receipt by any member of the Xxxxxxx Group
and a Series E Holder that is a Remaining Holder (a "Series E Remaining Holder")
of a Sell Request, as provided for in Section 8(c) hereof, the Xxxxxxx Group
shall use its best efforts to cause each such Series E Remaining Holder to
execute and deliver to the Company, promptly by telecopier transmission and
overnight mail or courier service, an irrevocable election to convert, in the
form of Exhibit E-2 attached hereto, each of its respective Converting Series E
Preferred Shares into Underlying Series E Shares, which election shall be
subject to, and shall be treated by the Company as subject to, the terms hereof
(notwithstanding anything expressly or implicitly to the contrary therein or the
absence therein of any express condition that such election is subject to the
terms of this Agreement). In addition, concurrently therewith, the Xxxxxxx Group
shall use its best efforts to cause each Series E Remaining Holder to deliver to
the Company, immediately by overnight mail or courier service, its stock
certificate(s) representing the Converting Series E Preferred Shares for
cancellation, subject to the terms hereof.
7. Effectiveness of Conversions; Delivery of Underlying Shares; Additional
Common Shares Issuable.
(a) The parties acknowledge and agree (on which agreement each Holder
shall be entitled specifically to rely and which agreement is intended
specifically for the benefit of the Holders (the specificity of the foregoing
not being intended to limit, and being without prejudice to, the Holders' rights
to rely on all other provisions of this Agreement and to receive the benefits
thereof)) that the elections to convert the Converting Securities into
Underlying Shares, as provided for in Sections 2 through 6 hereof (collectively,
the "Conversions"), with respect to any principal amount of any particular Note
or any particular number of Preferred Shares, shall only become effective
immediately prior to the settlement of, and shall only result in the holder's
entitlement to receive the Underlying Shares to the extent of, the sale of the
respective Underlying Shares pursuant to the provisions of Section 9 hereof;
provided, however, that a particular Conversion shall become effective earlier
in the event the holder of the Converting Security advises the Company in
writing
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that the Conversion is to become effective notwithstanding that the Underlying
Shares with respect thereto have not been sold (the "Conversion Notice"). In
such event, the Conversion shall become effective upon the date the Company
receives the Conversion Notice.
(b) The parties acknowledge and agree that, during the Sale Period (as
hereinafter defined), the certificates representing the Underlying Shares are to
be delivered directly to the Broker-Dealer(s) (as hereinafter defined), or its
designee, for sale and/or delivery as contemplated by Section 9 hereof.
(c) The parties acknowledge and agree further that, notwithstanding that,
in determining the number of Underlying Shares issuable upon Conversion of the
Notes, interest is calculated through the day immediately preceding the date
hereof, upon the effectiveness of any Conversion of the Notes, additional
validly issued, fully paid and nonassessable Common Shares (the "Additional
Common Shares") shall be issuable to the Holder thereof to give effect to the
Conversion of accrued interest from the date hereof through the day immediately
preceding the effective date of Conversion.
8. Establishment of Brokerage Accounts; Delivery of Instruments and
Documents.
(a) Promptly following the Designation Time (as hereinafter defined), the
Xxxxxxx Group shall use its best efforts to cause all of the Noteholders, Series
B Holders and Common Holders, as well as Spring, Cofinvest, Logitech, Xxxxx Ltd.
and Eagle Growth Ltd. (collectively, the "Principal Holders") with regard to any
and all Converting Series D Preferred Shares and Converting Series E Preferred
Shares held of record by them (the Noteholders, Series B Holders, Common Holders
and Principal Holders being collectively referred to as the "Permitted
Holders"), to establish one or more brokerage accounts (the "Accounts") with one
or more broker-dealers designated by the Company (the "Permitted Holder
Broker-Dealers") (the Xxxxxxx Group acknowledging and agreeing that the number
of Shares which are held by or issuable upon Conversion to the Permitted
Holders, and which shall be subject to the provisions of this Section 8(a),
shall not be less than five million (5,000,000) Shares) and shall use its best
efforts to cause the Permitted Holders to deliver to the Permitted Holder
Broker-Dealer(s) the following (the "Required Permitted Holder Instruments"):
(i) unlegended certificates representing the Subject Common Shares held by the
Permitted Holders and (ii) duly executed stock powers, with signatures medallion
guaranteed, covering the transfer of the Shares held by or issuable upon
Conversion to the Permitted Holders (the "Permitted Shares"). The name(s) and
address(es) of the Permitted Holder Broker-Dealer(s) shall be set forth in a
writing (the "Broker-Dealer Designation") executed and delivered by the Company
by telecopier transmission to Xxxxxxx XX by 5:00 p.m., New York City time, on
the seventh day following the date hereof (the "Designation Time"). The Company
agrees to cooperate with the Xxxxxxx Group in connection with the removal of any
legends on the certificates representing the Subject Common Shares.
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(b) Concurrently, the Xxxxxxx Group shall use its best efforts to cause
the Permitted Holders to deliver to (i) the Permitted Holder Broker-Dealer(s)
such duly executed and certified corporate resolutions and other instruments and
documentation, with signatures medallion guaranteed, as are required by the
Permitted Holder Broker-Dealer(s) in connection with the establishment of the
Accounts and to permit the Permitted Holder Broker-Dealer(s) to purchase the
Permitted Shares for their account, or sell the Permitted Shares on behalf of
the Permitted Holders, during the Sale Period in accordance with the provisions
of Section 9 hereof and (ii) the Company's transfer agent, namely Jersey
Transfer & Trust Co., the address of which is 000 Xxxxxxxxxx Xxxxxx, X.X. Xxx
00, Xxxxxx, Xxx Xxxxxx 00000, Fax (000) 000-0000 (the "Transfer Agent") such
duly executed and certified corporate resolutions, with signatures medallion
guaranteed, as are required by the Transfer Agent to permit the transfer of the
Permitted Shares ((i) and (ii) being collectively referred to as the "Required
Permitted Holder Documents").
(c) Promptly following the receipt from time to time during the Sale
Period (as hereinafter defined) by any member of the Xxxxxxx Group and any
Holder other than a Permitted Holder (such Holders being referred to
collectively as the "Remaining Holders") of a request from one or more
broker-dealers designated by the Company (the "Remaining Holder Broker-Dealers"
and collectively with the Permitted Holder Broker-Dealers, the "Broker-Dealers")
that such Remaining Holder sell any or all of its Shares (the Shares of all
Remaining Holders being collectively referred to as the "Remaining Shares") in a
manner consistent with the provisions of Section 9 hereof (a "Sell Request"),
the Xxxxxxx Group shall use its best efforts to cause each such Remaining Holder
to deliver to the Remaining Holder Broker-Dealer(s), promptly by facsimile
transmission and by overnight mail or courier service, the following: (i) an
order to sell the subject Remaining Shares or other document in lieu thereof
required by the Remaining Holder Broker- Dealer to indicate the Remaining
Holder's agreement to sell the subject Remaining Shares consistent with the Sell
Request (a "Remaining Holder Sell Order"), (ii) unlegended certificates
representing any and all Subject Common Shares held by the Remaining Holders
that would be required to be delivered pursuant to the Remaining Holder Sell
Order and (iii) duly executed stock powers, with signatures medallion
guaranteed, covering the transfer of any and all Remaining Shares held by or
issuable upon Conversion to the Remaining Holder that would be required to be
delivered pursuant to the Remaining Holder Sell Order ((i), (ii) and (iii) being
referred to as the "Required Remaining Holder Instruments" and collectively with
the Required Permitted Holder Instruments, as the "Required Instruments"). The
name(s) and address(es) of the Remaining Holder Broker-Dealer(s) shall be set
forth in a writing (the "Additional Designation") executed and delivered by the
Company by telecopier transmission to Xxxxxxx XX prior to the receipt by any
member of the Xxxxxxx Group or the Remaining Holders of the initial Sell
Request.
(d) Concurrently, the Xxxxxxx Group shall use its best efforts to cause
the Remaining Holders to deliver to (i) the Remaining Holder Broker-Dealer(s),
concurrently with their placing a Remaining Holder Sell Order, by facsimile
transmission and overnight mail or courier service, such other duly executed and
certified corporate resolutions and other instruments and documentation, with
signatures medallion guaranteed, as are required by the Remaining Holder
Broker-Dealer(s) to permit them to purchase the Remaining Shares for their
account, or to permit
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a designee of the Remaining Holder Broker-Dealer(s) to purchase the Remaining
Shares, during the Sale Period in accordance with the provisions of Section 9
hereof and (ii) the Company's Transfer Agent, promptly by facsimile transmission
and overnight mail or courier, such duly executed and certified corporate
resolutions, with signatures medallion guaranteed, as are required to permit the
transfer of the Remaining Shares ((i) and (ii) being referred to as the
"Required Remaining Holder Documents" and collectively with the Required
Permitted Holder Documents, as the "Required Documents").
(e) The parties agree that the Broker-Dealer Designation shall provide
for, in addition to the name(s) and address(es) of the Permitted Holder
Broker-Dealer(s), the minimum number of separate accounts to be established by
the Permitted Holders with each Permitted Holder Broker-Dealer, and the number
of Permitted Shares to be offered for sale to or through each Permitted Holder
Broker-Dealer.
(f) The Xxxxxxx Group shall use its best efforts to cause the Holders to
advise the Broker-Dealers to deliver to the Company copies of all Required
Instruments and all Required Documents executed and/or delivered by the Holders
to the Broker-Dealers (the "Instrument/Document Delivery Instructions") (such
advice, with regard to the Remaining Holders, to be given concurrently with the
delivery of the Required Remaining Holder Instruments and Required Remaining
Holder Documents).
9. Sale of Shares; Proceeds.
(a) The Xxxxxxx Group shall use its best efforts to cause each Permitted
Holder, concurrently with its delivery of the Required Permitted Holder
Instruments and Required Permitted Holder Documents to the Permitted Holder
Broker-Dealer(s), to place an order to sell the Permitted Shares, to or through
the Permitted Holder Broker-Dealer(s) (the "Permitted Holder Sell Orders" and
collectively with the Remaining Holder Sell Orders, the "Sell Orders"), as
expeditiously as possible, subject to the order of priority set forth in Section
9(c) hereof and the other terms set forth in this Section 9. In addition, the
Xxxxxxx Group shall use its best efforts to cause each Remaining Holder, from
time to time during the Sale Period, to sell, to or through the Remaining Holder
Broker Dealer(s), the Remaining Shares in a manner consistent with the
provisions of Section 8(c) hereof.
In no event shall the Holders be required to accept a price of less
than three dollars fifty cents ($3.50) per Share, net (the "Minimum Price");
however, if a price in excess of the Minimum Price is offered to the Holders by
the Broker-Dealer(s), directly or indirectly, for the purchase of their Shares,
the Xxxxxxx Group shall use its best efforts to cause the Holders to accept the
highest price so offered. The Xxxxxxx Group agrees with the Company that, in
consideration for the Company's agreement to repurchase, as provided for in
Section 10 hereof, and other good and valuable consideration, the receipt and
sufficiency of which the Xxxxxxx Group acknowledges, the Company shall be
entitled to receive and retain any and all net sales proceeds per Share in
excess of the Minimum Price. The Xxxxxxx Group shall use its best efforts to
cause the Holders to advise the
8
Broker-Dealer(s) to pay directly to the Company any and all such excess proceeds
(the "Excess Proceeds Instructions") and to deliver to the Company copies of the
Excess Proceeds Instructions and all confirmations of orders to sell, and
confirmations of sales of, the Shares (the "Proceeds/Confirmation Delivery
Instructions") (such advice, with regard to the Remaining Holders, to be given
concurrently with the delivery of the Required Remaining Holder Instruments and
Required Remaining Holder Documents).
(b) The Xxxxxxx Group shall use its best efforts to cause the Permitted
Holders to maintain the Permitted Holder Sell Orders in effect until at least
the earlier of (the "Sale Period") (i) the repurchase of the particular
Permitted Shares pursuant to the provisions of Section 10 hereof or (ii) one
hundred twenty (120) days following the later of the date (A) all Required
Permitted Holder Instruments and all Required Permitted Holder Documents are
delivered to the Permitted Holder Broker-Dealer(s), (B) all documents and
instruments required to be delivered by the Permitted Holders to the Company in
accordance with the provisions of Sections 2 through 4, 5(a) and 6(a) hereof are
so delivered, (C) all of the Permitted Holder Sell Orders are placed, (D) the
Instrument/Document Delivery Instructions are given by the Permitted Holders to
the Permitted Holder Broker-Dealer(s), (E) the letters in the forms of Exhibits
F-1, F-2 and F-3 attached hereto (the "Holder Letters") are executed and
delivered by the Holders to the Company, (F) the Excess Proceeds Instructions
are given by the Permitted Holders to the Permitted Holder Broker-Dealer(s), (G)
the Proceeds/Confirmation Delivery Instructions are given by the Permitted
Holders to the Permitted Holder Broker-Dealer(s) and (H) the Principal Holder
Releases (as hereinafter defined) are executed and delivered to the Escrow Agent
(as hereinafter defined)((A) through (H) being referred to collectively as the
"Holder Documents").
(c) The parties agree, and the Xxxxxxx Group shall so advise the Holders
prior to their delivery of any executed Holder Documents, and the Company shall
advise the Broker- Dealers, that sales of the Shares shall be made in the
following order of priority: (i) the Subject Common Shares, (ii) the Underlying
1993 Note Shares, (iii) the Underlying Logitech Note Shares, (iv) the Underlying
Series E Shares, (v) the Underlying Series B Shares and (vi) the Underlying
Series D Shares, or as otherwise agreed in writing between the Company and
Xxxxxxx. The Company agrees that it will not issue any Underlying Shares
pursuant to any Conversion made under this Agreement unless, to its knowledge,
based upon its receipt of confirmations of sales of Shares, all Shares of a
higher priority have been sold.
10. Repurchase of Securities.
(a) In the event any of the Underlying Shares are not sold within the
Sale Period, the Xxxxxxx Group shall use its best efforts to cause the
Converting Holders to sell to the Company, and, subject to the conditions set
forth below, the Company agrees to repurchase from the Converting Holders, to
the fullest extent permitted by applicable law, any and all Converting
Securities which were not converted into Underlying Shares (the "Repurchase
Securities") at a purchase price (the "Repurchase Price") equal to the number
of Underlying Shares that would have been issued upon Conversion multiplied
by three dollars fifty cents ($3.50) per Share (the "Repurchases"). The
Repurchase Price shall be payable in cash, certified check or wire transfer to
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an account designated by the particular Converting Holder at least two (2) days
in advance of the Repurchase Closing Date (as hereinafter defined). In the event
the Company is unable to repurchase all of the Repurchase Securities, subject to
the conditions hereof, it shall repurchase such of the Repurchase Securities
permitted by applicable law in the order of priority set forth in Section 9(c)
hereof.
(b) The obligation of the Company to repurchase any and all Repurchase
Securities is subject to the satisfaction of the following conditions: (i)
through and as of the Repurchase Closing Date, the Xxxxxxx Group shall have
performed all of its obligations hereunder ("Xxxxxxx Compliance"), (ii) through
and as of the Repurchase Closing Date, all of the Holders shall have done and
performed all acts with respect to which the Xxxxxxx Group has agreed to use its
best efforts to cause the Holders to do and perform hereunder through and as of
such date (including, without limitation, executing, delivering and complying
with all of the provisions of all of the Holder Documents, placing the Sell
Orders and maintaining the Permitted Holder Sell Orders in effect throughout the
Sale Period) (collectively, "Holder Compliance"), (iii) neither the Xxxxxxx
Group nor any Holder nor any Institution or Ultimate Beneficial Owner (as such
terms are hereinafter defined) nor any Affiliate of any of the foregoing shall
have commenced or maintained any action or proceeding similar in nature to the
Xxxxx Action (as hereinafter defined) nor taken any actions which the Xxxxxxx
Group has agreed not to take pursuant to Section 12 hereof ("Xxxxx Compliance"),
(iv) as of the Repurchase Closing Date, the representations and warranties of
the Xxxxxxx Group, and of each of the Holders as set forth in the Holder
Documents, shall be true and complete as if made at and as of such date, and (v)
on or after the date hereof and prior to the Repurchase Outside Date (as
hereinafter defined), the Company shall have obtained financing in an amount at
least equal to the Repurchase Price, which financing does not prohibit the use
thereof for making the Repurchases and is not obtained for a different
particular purpose ("Permitted Financing"); provided, however, that, if the
Company obtains Permitted Financing in an amount less than the Repurchase Price,
subject to the conditions hereof, it shall be obligated to repurchase the
Repurchase Securities, in the order of priority set forth in Section 9(c)
hereof, to the extent of the Permitted Financing received. The Company shall use
its best efforts to obtain such financing on terms reasonably satisfactory to
it.
(c) The closing of the Repurchases provided for hereunder (the
"Repurchase Closing") shall take place at the offices of the Company on such
date (the "Repurchase Closing Date") and at such time as shall be indicated in a
notice given not fewer than five (5) days in advance by the Company to the
Holders who own such Repurchase Securities, which Repurchase Closing Date shall
not be later than the day following the expiration of the Sale Period (the
"Repurchase Outside Date"). Upon the Repurchase of Repurchase Securities at the
Repurchase Closing, the Company shall be entitled to retain and cancel (or, in
the case of the Logitech Note, make appropriate notation upon and then shall
return) all certificates and instruments representing or constituting Repurchase
Securities (other than Unrepurchased Securities (as hereinafter defined)) that
were delivered to it pursuant to the provisions of Sections 2 through 6 hereof.
10
(d) The parties agree that, in the event of a default on the part of the
Company in its obligation to repurchase the Repurchase Securities, as liquidated
damages and as the sole and exclusive remedy of the Xxxxxxx Group and the
Holders for such default, the Company shall be obligated to pay to the Holders
of the Repurchase Securities that were not repurchased (the "Unrepurchased
Securities") an amount (the "Liquidated Damages Amount") equal to five and four-
sevenths percent (5-4/7%) of the Repurchase Price thereof, such amount to be
payable in equal monthly installments on the last day of each month over a three
(3) year period commencing with the month in which the default occurs. In no
event shall the Liquidated Damages Amount exceed, in the aggregate for all
Holders, the sum of one million dollars ($1,000,000) (the "Cap"). In the event
the Cap is applicable, a proportionate amount of the Cap shall be payable to the
Holders of the Unrepurchased Securities, as provided for above, based upon the
respective Repurchase Price thereof. The Company hereby acknowledges and agrees
that the Liquidated Damages Amount is reasonable in light of the anticipated and
actual harm, if any, caused by such breach or default, the difficulties of proof
of loss and damage, and the inconvenience and nonfeasibility of the other
parties hereto or the Holders otherwise obtaining an adequate remedy. The
Company hereby acknowledges and agrees that the Liquidated Damages Amount is not
unreasonably large, under the circumstances, and that such amount does not
constitute, and shall not be construed as, a penalty.
(e) The certificates and instruments representing or constituting the
Converting Securities that were not repurchased and the documents executed by
the Holders with respect to the Converting Securities that were not repurchased
shall be returned to the Holders thereof by the Company no later than the
Repurchase Outside Date. The certificates and instruments representing or
constituting the Converting Securities that are returned to the Holders shall be
identical to and shall have the same rights and preferences as the certificates
and instruments representing or constituting the Notes and/or the Preferred
Shares held by the Holders on the day before execution of this Agreement.
11. Voting Rights. The holders of the Preferred Shares will
retain all voting rights with respect thereto until the effectiveness of the
Conversion and sale, or Repurchase, thereof. The holders of the Subject Common
Shares will retain all voting rights with respect thereto until the sales of
such securities are consummated and record ownership thereof is transferred. The
provisions set forth in this Agreement or any other agreement of even date shall
not alter or otherwise affect the voting rights of the Preferred Shares or the
Subject Common Shares until the effectiveness, as the case may be, of the (i)
Conversion of the Preferred Shares, (ii) Repurchase of the Preferred Shares, or
(iii) sale of the Subject Common Shares.
12. Xxxxx Litigation. The Xxxxxxx Group agrees that, until the Repurchase
Closing Date, they will not, directly or indirectly, commence or maintain any
action or proceeding similar in nature to that certain action entitled Xxxx
Xxxxx v. Xxxxxxx X. Xxxxxx, Xxxxx X. Xxxx, Xxxxxxx X. Xxxxxxxx and Xxxxxxx X.
Xxxxxxx (the "Xxxxx Action"), which action was dismissed without prejudice, or
otherwise encourage or assist any other person or entity to commence or maintain
any such action or proceeding.
11
13. Representations and Warranties of the Xxxxxxx Group.
As a material inducement to the Company's entering into this
Agreement, the Xxxxxxx Group hereby represents, warrants, covenants and agrees
as follows:
(a) The Xxxxxxx Group has the power and authority to enter into this
Agreement and to perform its obligations hereunder. The execution and delivery
of this Agreement and the performance by the Xxxxxxx Group of its obligations
hereunder have been duly authorized by the Board of Directors or other governing
body of Xxxxxxx XX and Xxxxxxx Inc. and, if required, their respective
shareholders in conformity with applicable law. No other corporate proceeding on
the part of Xxxxxxx XX or Xxxxxxx Inc. is necessary to authorize the execution
or delivery of this Agreement or the performance by the Xxxxxxx Group of its
obligations hereunder. This Agreement is the valid and binding obligation of,
and is enforceable in accordance with its terms against, the Xxxxxxx Group.
(b) Neither the execution, delivery or performance of this Agreement by
the Xxxxxxx Group, nor the performance by the Xxxxxxx Group of its obligations
hereunder, requires the consent or approval of any third party or any foreign
governmental body or other foreign regulatory or administrative authority,
agency, bureau or commission (collectively, "Foreign Governmental Body").
(c) Neither the execution, delivery or performance of this Agreement by
the Xxxxxxx Group nor the performance by the Xxxxxxx Group of its obligations
hereunder, (i) violates, conflicts with or results in a breach of any provision
of the Certificate of Incorporation or By-Laws or other charter or
organizational document of Xxxxxxx XX or Xxxxxxx Inc.; (ii) violates, breaches
or is in conflict with, or constitutes a default (or an event which, with notice
or lapse of time or both, would constitute a default) under any agreement or
other obligation to which the Xxxxxxx Group is a party or by which it is
otherwise bound; or (iii) violates any order, writ, injunction, decree or
judgment, or any law, statute, rule or regulation of any Foreign Governmental
Body applicable to the Xxxxxxx Group.
(d) Each person executing this Agreement on behalf of Xxxxxxx XX and
Xxxxxxx Inc. has been duly authorized to execute and deliver this Agreement on
such entity's behalf.
(e) To the knowledge of the Xxxxxxx Group, each Holder is a nominee
holder of the securities of the Company that are registered in its name. To the
knowledge of the Xxxxxxx Group, such securities are held for the benefit of
certain banking institutions (the "Institutions"), which, in turn, hold such
securities for the benefit of others (the "Ultimate Beneficial Owners"). To the
knowledge of the Xxxxxxx Group, none of the Holders, Institutions or Ultimate
Beneficial Owners, directly or indirectly, is now, or has ever been, the
beneficial owner (as such term is defined in Section 13 of the Exchange Act and
the rules and regulations promulgated thereunder) of more than five percent (5%)
of the outstanding Common Shares of the Company.
12
(f) To the knowledge of the Xxxxxxx Group, each Holder, Institution and
Ultimate Beneficial Owner acts, and has always acted, independently of all other
Holders, Institutions and Ultimate Beneficial Owners, as well as independently
of all other entities that acquired securities of the Company through the
efforts of the Xxxxxxx Group (the "Xxxxxxx Clients"), and none of the Holders,
Institutions or Ultimate Beneficial Owners acts, or has ever acted, in concert
with any other Holder, Institution, Ultimate Beneficial Owner or other Xxxxxxx
Client in connection with the acquisition, disposition or voting of any
securities of the Company.
(g) To the knowledge of the Xxxxxxx Group, the respective Converting
Securities were acquired, and have been held, pursuant to Regulation S
("Regulation S"), promulgated under the Securities Act of 1933, as amended (the
"Securities Act"). To the knowledge of the Xxxxxxx Group, any and all
representations and certifications set forth in any subscription or purchase
agreement or representation letter relating to the acquisition of the Converting
Securities were accurate at the time made.
(h) To the knowledge of the Xxxxxxx Group, since the respective
Converting Holder's acquisition of the Converting Securities, it has not sold
short, or otherwise taken any short position with respect to, any Common Shares
of the Company.
(i) To the knowledge of the Xxxxxxx Group, the respective Converting
Holder's acquisition of the Converting Securities was not part of any
prearranged transaction to sell such securities or Underlying Shares to a
purchaser in the United States or to a "U.S. person" (as such term is defined in
Regulation S).
(j) To the knowledge of the Xxxxxxx Group, none of the Holders is now,
nor has any of them ever been, an Affiliate (as such term is defined in Rule 405
promulgated under the Securities Act) of the Company.
(k) To the knowledge of the Xxxxxxx Group, each of the Converting Holders
was at the time of its acquisition of its respective Converting Securities, and
each of them is, an "accredited investor" (as such term is defined in Rule 501
promulgated under the Securities Act).
(l) To the knowledge of the Xxxxxxx Group, each of the Converting Holders
has significant prior investment experience, including investment in non-listed
and non-registered securities, and each is able to bear the economic risk of a
conversion of the Converting Securities into the Underlying Shares.
(m) In connection with (i) the conversion of the Converting Securities
into Underlying Shares or Additional Common Shares and (ii) any exchange of the
Series F Preferred Shares of the Company for Series K Preferred Shares of the
Company, as contemplated by Section 18 hereof, no commission or other
remuneration was or will be paid or given, directly or indirectly, by the
Holders or the holders of the Series F Preferred Shares, or any Affiliate
thereof, to, or demanded or received, directly or indirectly, by, the Xxxxxxx
Group for soliciting such conversion or exchange.
13
(n) To the knowledge of the Xxxxxxx Group, the Holders own the
Converting Securities and the Subject Common Shares, and, upon Conversion of the
Converting Securities, will own the Underlying Shares, free and clear of any and
all liens, pledges, security interests, claims, rights and other encumbrances
other than as contemplated by this Agreement.
(o) Upon the effectiveness of the Conversions, or Repurchases, of the
Converting Securities pursuant to Section 7 or 10 hereof, the Converting Holders
shall have no further rights with regard to the Converting Securities.
(p) As of the date hereof, there is no litigation or governmental
proceeding pending, or, to the knowledge of the Xxxxxxx Group, threatened to
restrain, invalidate, prevent, or otherwise impede any transaction contemplated
hereby, the defense of which would, in the judgment of the Company, made in good
faith and based upon the advice of counsel, involve material expense or lapse
of time that would be adverse to the interests of the Company.
(q) The representations and warranties of the Xxxxxxx Group set forth
herein are true and complete in all respects as of the date hereof and the
Xxxxxxx Group will neither take any action, nor cause or encourage the Holders
to take any action, directly or indirectly, that would cause any of such
representations and warranties to not be true and complete in all respects at
any time until the expiration of the Sale Period or the Outside Repurchase Date,
as the case may be. The Xxxxxxx Group shall use its best efforts to cause the
Holders to execute and deliver the Holder Letters to the Company.
14. Representations and Warranties of the Company. As a material inducement
to the Xxxxxxx Group's entering into this Agreement, the Company hereby
represents, warrants, covenants and agrees as follows:
(a) The Company is a corporation validly existing and in good standing
under the laws of the State of New York, and has the power and authority to
enter into this Agreement and to perform its obligations hereunder. The
execution and delivery of this Agreement and the performance of its obligations
hereunder have been duly authorized by the Board of Directors of the Company in
conformity with applicable law. No other corporate proceeding on the part of the
Company, including, without limitation, shareholder approval, is necessary to
authorize the execution or delivery of this Agreement or the performance of its
obligations hereunder. This Agreement is a valid and binding obligation of, and
is enforceable in accordance with its terms against, the Company.
(b) Neither the execution, delivery or performance of this Agreement by
the Company nor the performance of its obligations hereunder, requires the
consent or approval of any third party or any United States governmental body or
other United States regulatory or administrative authority, agency, bureau or
commission ("Domestic Governmental Body"), except that the foregoing
representation and warranty with regard to the requirement of any consent or
14
approval of the Securities and Exchange Commission (the "SEC") is subject to the
accuracy of the Xxxxxxx Group's representations and warranties in paragraphs (e)
through (m) of Section 13 hereof and those set forth in paragraphs (i) through
(ix) of the Holder Letters (with respect to Exhibits F-1 and F-2) and paragraphs
(i) and (ii) of the Holder Letters (with respect to Exhibit F-3).
(c) Neither the execution, delivery or performance of this Agreement by
the Company nor the performance of its obligations hereunder (i) violates,
conflicts with or results in a breach of any provision of the Certificate of
Incorporation or By-Laws of the Company; (ii) violates, breaches or is in
conflict with, or constitutes a default (or an event which, with notice of lapse
of time or both, would constitute a default) under any agreement or other
obligation to which the Company is a party or by which the Company is otherwise
bound; or (iii) violates any order, writ, injunction, decree or judgment, or any
law, statute, rule or regulation of any Domestic Governmental Body applicable to
the Company, except that the foregoing representation and warranty with regard
to any law, statute, rule or regulation, as it applies to the SEC or any
securities laws or statutes, is subject to the accuracy of the Xxxxxxx Group's
representations in paragraphs (e) through (m) of Section 13 hereof and those set
forth in paragraphs (i) through (ix) of the Holder Letters (with respect to
Exhibits F-1 and F-2) and paragraphs (i) and (ii) of the Holder Letters (with
respect to Exhibit F-3).
(d) The person executing this Agreement on behalf of the Company has
been duly authorized to execute and deliver this Agreement on its behalf.
(e) As of the date hereof, there is no litigation or governmental
proceeding pending or, to the knowledge of the Company, threatened to restrain,
invalidate, prevent, or otherwise impede any transaction contemplated hereby,
the defense of which would, in the judgment of the Xxxxxxx Group, made in good
faith and based upon the advice of counsel, involve material expense or lapse of
time that would be adverse to the interests of the Xxxxxxx Group.
(f) The Company has not filed a petition in bankruptcy or, to its
knowledge, had an involuntary petition in bankruptcy filed against it.
(g) The Company has reserved a number of authorized and unissued
Common Shares that is not less than the total number of Common Shares issuable
upon all of the Conversions, and insofar as one or more Conversions might not
become effective immediately prior to the settlement of the sale of the
respective Underlying Shares as contemplated by this Agreement (as a result of
the provisions of the Restated Certificate of Incorporation of the Company or
otherwise) and the Board is authorized and empowered (pursuant to the provisions
of such Restated Certificate of Incorporation or otherwise) to hasten the
effectiveness of such Conversions, the Board by duly adopted resolution (the
"Conversion Board Resolution") (a certified copy of which shall be delivered to
the Xxxxxxx Group upon written request) shall act to render all Conversions
effective immediately prior to the settlement of the sale of the respective
Underlying Shares as contemplated by this Agreement.
15
(h) The representations and warranties of the Company set forth herein
are true and complete in all respects as of the date hereof and the Company will
not take any action that would cause any such representations or warranties to
not be true and complete in all respects at any time until the expiration of the
Sale Period or the Outside Repurchase Date, as the case may be.
15. Release; Escrow Agreement. Simultaneously herewith,
pursuant to the terms of an Escrow Agreement of even date (the "Escrow
Agreement") among the Company, the Xxxxxxx Group and Certilman Balin Xxxxx &
Xxxxx, LLP, as escrow agent (the "Escrow Agent"), the Company is executing and
delivering to the Escrow Agent, among other things, a general release of, and
covenant with respect to, among others, the Xxxxxxx Group, the Holders, the
Institutions and the Ultimate Beneficial Owners (the "Company Release"), and the
Xxxxxxx Group is executing and delivering to the Escrow Agent a general release
of, and covenant with respect to, among others, the Company and all Affiliates
of the Company (the "Xxxxxxx Group Release" and collectively with the Company
Release, the "Releases"), in the forms attached hereto as Exhibits G-1 and G-2,
respectively, which Releases and other deliveries shall be held and delivered in
accordance with the terms of the Escrow Agreement. The Xxxxxxx Group agrees to
use its best efforts to cause each of the Principal Holders to execute, and
deliver to the Escrow Agent, a general release and covenant in the form of the
Xxxxxxx Group Release (the "Principal Holder Releases"), which Principal Holder
Releases shall be held in accordance with the terms of the Escrow Agreement,
including, without limitation, the conditions for delivery to the Company
therein.
16. Payment in Lieu of Dividends. The Company agrees to pay to
the Series B Holders, Series D Holders and Series E Holders an amount (the "In
Lieu Amount") in cash that would have been payable to such Preferred Holders had
the Company declared a cash dividend or dividends covering the period(s) through
the date of Conversion of such shares or the Repurchase Closing Date, as the
case may be, in the respective amounts of the dividend preferences set forth in
the Company's Certificate of Incorporation, with regard to the Series B
Preferred Shares, the Series D Preferred Shares and the Series E Preferred
Shares. The In Lieu Amount shall be payable on the first anniversary of the
sixtieth (60th) day of the Sale Period, except that, in the event that there are
no Repurchase Securities, the In Lieu Amount shall be payable on the earlier of
(a) the expiration of the Sale Period or (b) the sale of all of the Shares
pursuant to Section 9 hereof. Notwithstanding the foregoing, the Company's
payment obligation hereunder shall be subject to and conditional upon Xxxxxxx
Compliance, Holder Compliance and Xxxxx Compliance as of and through the date of
Conversion of such shares or the Repurchase Closing Date, as the case may be.
17. Consulting Fees. In full and complete satisfaction and settlement of
any and all claims of any nature whatsoever, whether at law, in equity or
otherwise, which the Xxxxxxx Group may have against the Company and any and all
Affiliates thereof for consulting, advisory, investment banking or similar or
related fees, or for costs and expenses incurred in connection therewith, the
Company agrees to pay to Xxxxxxx XX, and the Xxxxxxx Group hereby agrees that
Xxxxxxx XX shall accept from the Company, the aggregate sum of three hundred
seventy-five thousand dollars ($375,000) (the "Xxxxxxx Settlement Amount").
The Xxxxxxx Settlement Amount shall be
16
delivered by the Company to the Escrow Agent within five (5) business days after
the Holders shall have executed and delivered all Holder Documents, including,
without limitation, the Permitted Holder Sell Orders, and shall be held in
accordance with the terms of the Escrow Agreement, including, without
limitation, the conditions for delivery to Xxxxxxx XX therein. In the event the
Xxxxxxx Settlement Amount is redelivered to the Company pursuant to the terms of
the Escrow Agreement, the Xxxxxxx Group and the Company shall have any and all
rights, powers, remedies and defenses now or hereafter existing at law or in
equity, by statute or otherwise, with respect to any and all claims of any
nature whatsoever that either may have against the other.
18. Preferred Share Exchange; Redemption of Notes.
(a) The Company agrees to irrevocably offer to the holders of the Series
F Preferred Shares of the Company, for a period of sixty (60) days commencing on
the expiration of the Sale Period (the "Exchange Period"), the right to exchange
such shares, on a one-to-one basis, for duly authorized, validly issued, fully
paid and nonassessable Series K Preferred Shares of the Company, such Series K
Preferred Shares to have the same relative rights, powers, preferences,
qualifications and limitations as the Series F Preferred Shares, except that the
term "Conversion Price", as used with respect to the Series K Preferred Shares,
shall mean three dollars fifty cents ($3.50). Notwithstanding the foregoing, the
Company's obligation to make such offer shall be subject to and conditional upon
Xxxxxxx Compliance, Holder Compliance and Xxxxx Compliance. The Xxxxxxx Group
shall use its best efforts to cause each of the holders of the Series F
Preferred Shares to execute and deliver to the Company, in connection with the
exchange, the document attached hereto as Exhibit H, and the consummation of
such exchange, with respect to any particular holder of Series F Preferred
Shares, shall be subject to the Company's receipt of such executed document
prior to the expiration of the Exchange Period.
(b) The Company agrees to advise the registered holders of those certain
promissory notes of the Company, dated as of October 4, 1995, in the aggregate
principal amount of one million four hundred thousand dollars ($1,400,000) that
were issued in connection with the acquisition of the outstanding stock of
Crescent Communications, Inc. (the "Crescent Notes"), on or before December 31,
1997, in writing (with a copy to the Xxxxxxx Group) that it will redeem and
prepay the Crescent Notes upon its receipt of the original Crescent Notes for
cancellation, and the Company thereupon shall so redeem and prepay the Crescent
Notes. Notwithstanding the foregoing, the Company's obligation to redeem and
prepay the Crescent Notes shall be subject to and conditional upon Xxxxxxx
Compliance, Holder Compliance and Xxxxx Compliance as of and through the
expiration date of the Sale Period.
19. Termination.
(a) The Company shall have the right to terminate all of its obligations
under this Agreement, by written notice to such effect to the Xxxxxxx Group, and
to require that the Escrow Agent redeliver the Company Release and other Company
deliveries to the Company, and the Xxxxxxx Group Release and any Principal
Holder Releases to the Xxxxxxx Group, in the event any Holder Document has not
been executed and delivered to the Permitted Holder Broker-Dealer(s),
17
the Escrow Agent or the Company, as the case may be, within thirty (30) days of
the date of delivery to the Xxxxxxx Group of the Broker-Dealer Designation and
such undelivered Holder Document(s) are not so executed and delivered within
five (5) days of receipt by Xxxxxxx XX of written notice to such effect from the
Company.
(b) The Xxxxxxx Group shall have the right to terminate all of its
obligations under this Agreement, by written notice to such effect to the
Company, and to require that the Escrow Agent make the redeliveries provided
for in Section 19(a) hereof in the event any of the following shall occur and
shall not have been cured within five (5) days of receipt by the Company of
written notice to such effect from Xxxxxxx XX: (i) the Company shall not
have delivered the Broker-Dealer Designation by the Designation Time as
provided for in Section 8(a) hereof, (ii) the Company shall not have delivered
a certified copy of the Conversion Board Resolution following the request made
by the Xxxxxxx Group, as provided for in Section 14(g) hereof or (iii) the
Company shall not have delivered the Xxxxxxx Settlement Amount to the Escrow
Agent within the period provided for in Section 17 hereof.
(c) In the event of a termination of this Agreement pursuant to the
foregoing provisions of Section 19, no party shall have any liability or
obligation under this Agreement except for any breach of this Agreement that has
occurred prior to the giving of the notice of termination.
20. Notices. Except as otherwise expressly provided for
hereunder, any communication or notice given hereunder shall be, and shall be
deemed to be given when, delivered by hand, or sent by certified or registered
mail, return receipt requested and postage being prepaid, overnight mail or
courier, or telecopier as follows:
If to the Company:
000 Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: President
Telecopier Number: (000) 000-0000
With a copy to:
Certilman Balin Xxxxx & Xxxxx, LLP
00 Xxxxxxx Xxxxxx
Xxxx Xxxxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxx, Esq.
Telecopier Number: (000) 000-0000
18
If to Xxxxxxx XX:
Xxxxxxxxxxxxxx 0, 0000
Xxxxxx, Xxxxxxxxxxx
Attn: Xxxxxxx Xxxxxx
Telecopier Number: 011 411 201 7819
With a copy to:
Morris, James, Hitchens & Xxxxxxxx
X.X. Xxx 0000
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
Telecopier Number: (000) 000-0000
If to Xxxxxxx Inc.:
Xxxxxxxxxxxxxx 0, 0000
Xxxxxx, Xxxxxxxxxxx
Attn: Xxxxx Xxxxxxx
Telecopier Number: 011 411 201 7819
With a copy to:
Morris, James, Hitchens & Xxxxxxxx
X.X. Xxx 0000
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
Telecopier Number: (000) 000-0000
If to Xxxxxxx:
Xxxxxxxxxxxxxx 0, 0000
Xxxxxx, Xxxxxxxxxxx
Telecopier Number: 011 411 201 7819
19
With a copy to:
Morris, James, Hitchens & Xxxxxxxx
X.X. Xxx 0000
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
Telecopier Number: (000) 000-0000
or at such other address as any party may specify by notice given to the other
parties hereto in accordance with the provisions hereof.
21. Further Assurances. Each of the parties hereto will execute and deliver
any and all further documents as are reasonably necessary to carry out the
provisions hereof.
22. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, applicable to agreements
performed wholly within such state.
23. Entire Agreement. This Agreement sets forth the entire understanding
of the parties hereto with regard to the subject matter hereof and
there are no representations, warranties or commitments except as set forth
herein. This Agreement supersedes all prior agreements, understandings,
negotiations and discussions, whether written or oral, relating to the subject
matter hereof. This Agreement may be modified only by a written agreement
between the Company and the Xxxxxxx Group.
24. Waiver of Breach; Partial Invalidity. The waiver by any
party of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach. If any provision, or part
thereof, of this Agreement shall be held to be invalid or unen forceable, such
invalidity or unenforceability shall attach only to such provision and not in
any way affect or render invalid or unenforceable any other provisions of this
Agreement, and this Agreement shall be carried out as if such invalid or
unenforceable provision, or part thereof, had been reformed, and any court of
competent jurisdiction is authorized to so reform such invalid or unenforceable
provision, or part thereof, so that it would be valid, legal and enforceable to
the fullest extent permitted by applicable law.
25. Binding Nature. This Agreement shall be binding upon the successors,
assigns and legal representatives of the parties hereto.
26. Headings. The paragraph headings of this Agreement are for convenience
and 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.
20
27. Counterparts; Effectiveness. This Agreement may be executed in
counterparts, each of which shall be an original, but all of which taken
together shall constitute one agreement. Unless otherwise agreed in writing by
the Company, this Agreement shall be effective only if executed and delivered by
each of the parties hereto.
28. Facsimile Signatures. Signatures transmitted by facsimile transmission
shall be deemed original signatures.
29. Third Party Beneficiary. This Agreement is for the sole
benefit of the parties hereto, the Holders and all Affiliates of the Company. No
third party (other than the Holders and Affiliates of the Company) shall have
any beneficial interest herein, directly or indirectly, nor may any third party
(other than the Holders and Affiliates of the Company) rely on the terms,
provisions, or conditions of this Agreement.
30. Materiality. All promises, covenants, agreements, understandings,
acknowledgments, representations, and warranties made in this Agreement shall be
deemed material and relied on by each party to this Agreement.
31. Remedies Cumulative. Each right, power, and remedy
provided for herein or now or hereafter existing at law or in equity, by statute
or otherwise, shall be cumulative and concurrent and shall be in addition to
every other right, power, and remedy provided for herein or now or hereafter
existing at law or in equity, by statute or otherwise, and the exercise or the
beginning of the exercise by any party of any one or more of such rights,
powers, or remedies shall not preclude the simultaneous or later exercise by
such party of any or all of such other rights, powers and remedies.
32. Specific Performance; Jurisdiction.
(a) The parties hereby acknowledge and agree that the failure of any
party to this Agreement to perform the provisions hereof in accordance with
their specific terms or other breach of such provisions will cause irreparable
injury to the other parties to this Agreement for which damages, even if
available, will not be an adequate remedy. Accordingly, the parties hereby
consent to the issuance of injunctive relief by any court of competent
jurisdiction to compel performance of any party's obligations, including an
injunction to prevent breaches, and to the granting by any such court of the
remedy of specific performance of the terms and conditions hereof.
(b) Each party hereby irrevocably and unconditionally consents to submit
to the exclusive jurisdiction of the courts of the State of New York and of the
United States of America located in the State of New York for any actions, suits
or proceedings arising out of or relating to this Agreement, the matters
referred to herein or the transactions contemplated hereby. Each party also
hereby irrevocably and unconditionally waives any objection to the laying of
venue of any action, suit or proceeding arising out of this Agreement, the
matters referred to herein or the transactions contemplated hereby in the courts
of the State of New York or of the United States of
21
America located in the State of New York, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.
33. Confidentiality.
(a) Except as otherwise required by applicable law based upon a written
opinion of counsel to the disclosing party reasonably satisfactory to the other
parties, each party shall use Confidential Information (as hereinafter defined)
only in connection with the performance of its obligations under this Agreement,
shall not otherwise use Confidential Information to its own advantage, shall not
use Confidential Information in competition with or to the detriment of any
other party, shall hold and treat all Confidential Information in confidence and
shall not disclose or offer to disclose any Confidential Information to any
person or entity not a party to this Agreement, except to an Affiliate thereof
or a Holder, an Institution or an Ultimate Beneficial Owner, which, prior to
such disclosure, shall have executed and delivered to the other parties hereto a
writing in which it agrees to be bound by the provisions hereof. The term
"Confidential Information", as used in this section, means all confidential or
proprietary information and trade secrets of or relating to any other party, an
Affiliate thereof or a Holder, an Institution or an Ultimate Beneficial Owner.
Confidential Information shall not include information generally known or
readily ascertainable by proper means. To the extent that Confidential
Information, through no act or omission of a party, a Holder, an Institution or
an Ultimate Beneficial Owner, or any of its Affiliates, employees or agents,
becomes generally known or readily ascertainable by proper means, such
information shall no longer be considered Confidential Information for purposes
of this Agreement.
(b) Nothing herein shall restrict the Company from disclosing publicly
this Agreement and/or the terms and conditions hereof; provided, however, that,
prior to such public disclosure, the Company shall afford Xxxxxxx an opportunity
to review and comment thereon; provided further, however, that the Company's
only obligation with respect thereto shall be to reasonably consider in good
faith any comments made.
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K:\WPDOC\CORP\AMNEX\XXXXXXX\AGREEMEN\MAIN.FIN
22
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
hereof.
AMNEX, INC.
By:/s/
Signature of Authorized Officer
Name of Authorized Officer
Title of Authorized Officer
XXXXXXX CORPORATE FINANCE AG
By:/s/
Signature of Authorized Officer
Name of Authorized Officer
Title of Authorized Officer
XXXXXXX CORPORATE FINANCE INC.
By:/s/
Signature of Authorized Officer
Name of Authorized Officer
Title of Authorized Officer
XXXXX XXXXXXX
/s/
Xxxxx Xxxxxxx, individually
K:\WPDOC\CORP\AMNEX\XXXXXXX\AGREEMEN\MAIN.FIN
