PREFERRED STOCK PURCHASE AGREEMENT
This is an Agreement dated March 19, 1997 between Xxxxx Electronics
Inc. ("XXXXX"), an Ohio corporation, as assignee of Xxxxx Inc., and Encore
Computer Corporation ("ENCORE"), a Delaware corporation, relating to the
cancellation by Xxxxx of the Exchanged Indebtedness (as that term is defined in
Paragraph 1.2) in exchange for shares of Series I Convertible Stock (as that
term is defined in Paragraph 1.1).
NOW, THEREFORE, Xxxxx and Encore agree as follows:
ARTICLE I
PURCHASE OF SHARES
1.1 ISSUANCE OF SHARES. At the Closing described in Paragraph 2.1,
Encore will issue to Xxxxx 400,000 shares of Series I Convertible Preferred
Stock of Encore with the powers, rights and preferences set forth on EXHIBIT
1.1 (the "SERIES I CONVERTIBLE STOCK").
1.2 CONSIDERATION FOR SHARES. The consideration to be paid by
Xxxxx for the shares of Series I Convertible Stock to be issued to Xxxxx
pursuant to Paragraph 1.1 will be cancellation of the Exchanged Indebtedness.
As used in this Agreement, the term "EXCHANGED INDEBTEDNESS" means $40,000,000
of revolving credit loans outstanding under the Amended and Restated Credit
Agreement between Encore and Xxxxx dated as of March 17, 1995, as amended (the
"LOAN AGREEMENT") .
ARTICLE II
THE CLOSING
2.1 TIME AND PLACE OF CLOSING. The closing (the "CLOSING") of the
issuance of the shares of Series I Convertible Stock pursuant to Paragraph 1.1
will take place at the offices of Xxxxxx & Xxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, at 3:00 p.m. New York City time, on March 19, 1997, or such other
place, time and date as Xxxxx and Encore may agree in writing (the "CLOSING
DATE").
2.2 ITEMS TO BE DELIVERED BY ENCORE TO XXXXX AT CLOSING. At the
Closing, Encore will deliver to Xxxxx the following:
(a) Certificates representing all of the shares of Series I
Convertible Stock to be issued to Xxxxx pursuant to Paragraph 1.1, registered
in the name of Xxxxx. These certificates shall be legended to the effect that
the shares represented by them were issued in a transaction which was not
registered under the Securities Act of 1933, as amended, and those shares may
only be sold or transferred in a transaction which is registered under that Act
or exempt from the registration requirements of that Act.
(b) A copy, executed by Encore and Indian Creek Capital, Ltd.
("INDIAN CREEK"), as assignee of Xxxxxxx X. Xxxxxx, of an Eighth Amended and
Restated Registration Agreement (the "REGISTRATION AGREEMENT"), substantially
in the form of EXHIBIT 2.2-B.
(c) A copy, executed by Indian Creek and Encore, of the Third
Amendment to the Second Amended and Restated Stockholders Agreement (the
"STOCKHOLDERS AGREEMENT AMENDMENT"), substantially in the form of EXHIBIT 2.2-
C.
(d) An agreement by Xxxxxxx X. Xxxxxx to vote all shares of stock
of Encore which he owns or has the power to vote in favor of amending Encore's
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certificate of incorporation to increase the number of shares of common stock
it is authorized to issue to 300,000,000 shares.
2.3 ITEMS TO BE DELIVERED BY XXXXX TO ENCORE AT CLOSING. At the
Closing, Xxxxx will deliver to Encore copies of the following documents:
(a) The Registration Agreement, executed by Xxxxx and EFI
International, Inc. ("EFI").
(b) A document (the "ACKNOWLEDGEMENT OF CANCELLATION"), executed by
Xxxxx, in which Xxxxx acknowledges cancellation of the Exchanged Indebtedness.
(c) A letter, executed by Xxxxx, in which Xxxxx acknowledges that
it will be acquiring the shares of Series I Convertible Stock to be issued to
it pursuant to Paragraph 1.1 for investment and not with a current view toward
their sale or distribution.
(d) The Stockholders Agreement Amendment, executed by Xxxxx and
EFI.
(e) Written consents executed by Xxxxx in its capacities as the
holder of 728,722 shares of Series B Convertible Preferred Stock of Encore,
123,890 shares of Series D Convertible Preferred Stock of Encore, 1,139,789
shares of Series E Convertible Preferred Stock of Encore, 533,333 shares of
Series F Convertible Preferred Stock, 572,289 shares of Series G Convertible
Preferred Stock and 350,000 shares of Series H Convertible Preferred Stock, and
a written consent executed by EFI, in its capacity as the holder of 991,184
shares of Series D Convertible Preferred Stock of Encore, each approving the
creation and designation of the Series I Convertible Stock and the issuance of
the Series I Convertible Stock pursuant to Paragraph 1.1 of this Agreement
(share amounts exclude accrued dividends with respect to each of the above) .
(f) An agreement by Xxxxx to vote all shares of Encore common stock
or Series A Convertible Participating Preferred Stock of Encore (or any shares
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of any other class or series of Encore stock which is entitled to vote) which
Xxxxx owns or has the power to vote in favor of amending Encore's certificate
of incorporation to increase the number of shares of common stock it is
authorized to issue to 300,000,000 shares.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF ENCORE. Encore represents
and warrants to Xxxxx as follows:
(a) Encore and each of its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. Encore and each of its subsidiaries is
qualified to do business as a foreign corporation in each jurisdiction in which
qualification is required, except jurisdictions in which the failure to
qualify, in the aggregate, will not have a material adverse effect upon Encore
and its subsidiaries taken as a whole.
(b) This Agreement has been duly executed by Encore and, upon
receipt of the consents referred to in Paragraph 2.3(e), is authorized by all
necessary corporate action on the part of Encore, and is a valid and binding
agreement of Encore, enforceable against Encore in accordance with its terms.
Encore has all corporate power and authority necessary to enable it to carry
out the transactions contemplated by this Agreement, upon receipt of the
consents referred to in Paragraph 2.3(e). Neither the execution or delivery by
Encore of this Agreement or any document contemplated by this Agreement nor the
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consummation by Encore of the transactions contemplated by this Agreement or
any document contemplated by this Agreement will violate, result in a breach
of, constitute a default under, or give any party other than Encore or a
subsidiary of Encore the right to terminate, or modify the rights or
obligations of Encore or any of its subsidiaries under, (i) subject to receipt
of the consents referred to in Paragraph 2.3(e), any agreement or instrument to
which Encore or any of its subsidiaries is a party or by which any of them is
bound, (ii) any statute, ordinance or other law to which Encore or any of its
subsidiaries is subject, (iii) any rule or regulation of any governmental
agency having jurisdiction over Encore or any of its subsidiaries, (iv) any
license, permit or other governmental authorization held by Encore or any of
its subsidiaries, or (v) any order or decree of any court or governmental
agency having jurisdiction over Encore or any of its subsidiaries or any of
their assets.
(c) Except as disclosed on EXHIBIT 3.1-C, no governmental filings,
authorizations, approvals or consents, or other governmental action, are
required to permit Encore to fulfill all its obligations under this Agreement
or any document contemplated by this Agreement.
(d) When executed and delivered at the Closing, the Stockholders
Agreement Amendment, the Second Amended and Restated Stockholders Agreement, as
previously amended and as amended by the Stockholders Agreement Amendment, and
the Registration Agreement (together, the "ENCORE AGREEMENTS") will each be a
valid and binding agreement of Encore and Indian Creek, enforceable against
each of them in accordance with their respective terms.
(e) The only authorized stock of Encore is 200,000,000 shares of
common stock, par value $.01 per share, and 10,000,000 shares of preferred
stock, par value $.01 per share, and the only series of preferred stock
authorized by the Board of Directors of Encore is 73,641 shares of Series A
Convertible Participating Preferred Stock, 1,000,000 shares of Series B
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Convertible Preferred Stock, 1,500,000 shares of Series D Convertible Preferred
Stock, 1,500,000 shares of Series E Preferred Convertible Stock, 1,000,000
shares of Series F Convertible Preferred Stock, 1,000,000 shares of Series G
Convertible Preferred Stock, 700,000 shares of Series H Convertible Preferred
Stock, and 800,000 shares of Series I Convertible Preferred Stock and 246,154
shares of Series J Convertible Participating Preferred Stock ("Series J
Convertible Stock"). At the date of this Agreement, the only outstanding stock
of Encore is not more than 37,300,000 shares of common stock, 73,641 shares of
Encore Series A Convertible Participating Preferred Stock, 728,722 shares of
Series B Convertible Preferred Stock, 1,115,074 shares of Series D Convertible
Preferred Stock, 1,139,782 shares of Series E Convertible Preferred Stock,
533,333 shares of Series F Convertible Preferred Stock, 572,289 shares of
Series G Convertible Preferred Stock and 350,000 shares of Series H Convertible
Preferred Stock. Except as disclosed in Encore's Annual Report on Form 10-K
for the year ended December 31, 1995 (the "1995 10-K") or its Report on Form
10-Q for the period ended September 30, 1996 (the "September 10-Q" and,
together with the 1995 10-K, the "Encore Reports") or shown on EXHIBIT 3.1-E,
Encore does not have any outstanding options, warrants or convertible or
exchangeable securities, and Encore is not a party to any other agreements
(other than this Agreement), which require, or upon the passage of time, the
payment of money or the occurrence of any other event may require Encore to
issue any of its stock.
(f) When issued as contemplated in this Agreement, the shares of
Series I Convertible Stock to be issued to Xxxxx pursuant to Paragraph 1.1 (i)
will all be duly authorized, validly issued, fully paid and nonassessable and
will have the powers, rights and preferences set forth on EXHIBIT 1.1 and (ii)
will be the only outstanding shares of Series I Convertible Stock. When shares
6
of common stock or of Series J Convertible Stock are issued on conversion of
such shares of Series I Convertible Stock, and when shares of common stock are
issued on conversion of Series J Convertible Stock, those shares of common
stock or Series J Convertible Stock will be duly authorized, validly issued,
fully paid and nonassessable, and the shares of Series J Convertible Stock will
have the rights and preferences set forth on EXHIBIT 3.1-F. When Xxxxx
receives the shares of Series I Convertible Stock to be issued to it pursuant
to Paragraph 1.1, it will own such shares free and clear of any liens or
encumbrances attributable to Encore, other than restrictions imposed by the
Stockholders Agreement.
(g) The subsidiaries of Encore are set forth on EXHIBIT 3.1-G.
Except as set forth on EXHIBIT 3.1-G, each of the subsidiaries is wholly owned
by Encore. Neither Encore nor any of those subsidiaries has any outstanding
options, warrants or convertible or exchangeable securities, or is a party to
any other agreements (other than the Security Documents (as that term is
defined in the Loan Agreement) and except as set forth on EXHIBIT 3.1-G), which
require, or upon the passage of time, the payment of money or the occurrence of
any other event, may require Encore or any of those subsidiaries to issue or
transfer any stock or other ownership interests in any of those subsidiaries.
(h) Each of the Encore Reports, including the documents
incorporated by reference in each of the Encore Reports, contains all the
information required to be included in it and does not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading. The financial statements included in the
1995 10-K all were, and the financial information in the September 10-Q was
derived from financial statements which were, prepared in accordance with
7
generally accepted accounting principles, consistently applied, and present
fairly the consolidated financial position, results of operations and cash
flows of Encore and its subsidiaries at the dates, and for the periods, to
which they apply. Since September 30, 1996, Encore has made all disclosures
about its activities and financial condition required by the Securities
Exchange Act of 1934, as amended, and the rules under that Act. Except as set
forth on EXHIBIT 3.1-H, since September 30, 1996 there has been no material
adverse change in (i) the consolidated financial condition of Encore and its
subsidiaries, (ii) the consolidated results of operations of Encore and its
subsidiaries compared with the consolidated results of operations of those
corporations for the same period of the prior year, or (iii) the operations or
prospects of Encore and its subsidiaries taken as a whole. For the purposes of
this Paragraph, (x) an adverse change in financial condition will be material
if it is a material reduction of working capital, tangible net worth or
shareholders' equity, and (y) an adverse change in results of operations will
be material if it is a material reduction in total revenues, net income before
income taxes or net income. As a result of the transactions contemplated by
this Agreement, following the Closing, Encore, as a separate entity, and Encore
and its subsidiaries as a consolidated group, will each be solvent.
(i) Encore and each of its subsidiaries has filed when due (after
the taking into account of extensions) all national (including United States
federal), state and local tax returns which they have been required to file and
have paid all taxes shown on those returns to be due. Each tax return filed by
Encore or a subsidiary has been a complete and correct return and has reported
all taxable items and taxes which were required to be reported, other than
items as to which there was substantial authority to support a position that
the items need not be reported and for which there are adequate reserves on the
consolidated financial statements included in the Encore Reports. The United
States federal corporate income tax returns of Encore have been audited, or the
period of limitations has expired, with regard to all years to and including
8
the year ended December 31, 1989. Except as described on EXHIBIT 3.1-I, (i) no
tax return filed by Encore or any of its subsidiaries is the subject of a
pending audit, (ii) no deficiency has been asserted against Encore or any of
its subsidiaries with regard to any tax return filed by it, other than (x)
deficiencies which are being contested in good faith and for which there are
adequate reserves on the financial statements included in the Encore Reports,
or (y) deficiencies which have been satisfied, and (iii) except as described on
EXHIBIT 3.1-I, neither Encore nor any of its subsidiaries has granted any
extensions of the time for the assessment of any taxes.
(j) Encore and each of its subsidiaries has complied in all
material respects with the requirements of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and of the Internal Revenue Code of
1986, as amended (the "CODE"), and all other applicable laws and regulations,
with regard to each of the "employee benefit plans" within the meaning of
Section 3(3) of ERISA under which any of them is providing compensation or
benefits to any of their employees which is or was subject to ERISA, the Code
or other applicable laws or regulations. No employee benefit plan which Encore
or any of its subsidiaries maintains or sponsors has (i) incurred an
"accumulated funding deficiency," as that term is used in Section 412(a) of the
Code, whether or not waived, (ii) been the subject of a "reportable event," as
that term is used in Section 4043(b) of ERISA (except to the extent reporting
has been waived by the Pension Benefit Guaranty Corporation ("PBGC")), or (iii)
resulted, or is expected to result, in termination liability to the PBGC.
(k) Except as described in EXHIBIT 3.1-K, Encore has not received
any notice from any governmental authority, or otherwise become aware, that any
facility owned or leased by it, or any operation being conducted by it, is
violating any applicable law or regulation regarding the discharge of
9
pollutants or other hazardous substances into the atmosphere, contamination of
soil or ground water, storage of hazardous substances or other matters relating
to protection of the environment.
(l) All the documentation constituting Licensed Intellectual
Property, as that term is defined in an Intellectual Property License Agreement
between Encore and Encore Computer U.S., Inc. and Xxxxx Inc. dated as of
January 28, 1991 (the "Intellectual Property Agreement"), including but not
limited to all documentation relating to Encore Enhancements and Encore
Derivative Works, as those terms are defined in the Intellectual Property
Agreement, has been deposited with Xxxxxxx Bank (the "Escrow Agent"), as escrow
agent, or it has been deposited in On-Site Escrow Deposit under an Escrow,
Access and Training Agreement dated as of January 28, 1991 among Encore, Encore
Computer U.S., Inc. and Xxxxx Inc. (the "Escrow Agreement") (except
documentation which is currently being worked on). The most recent day on
which documentation was deposited with the Escrow Agent under the Escrow
Agreement was January 27, 1997. The Licensed Intellectual Property is all the
intellectual property used by Encore with regard to all the products which
Encore is manufacturing, or which are being developed by Encore, at the date of
this Agreement (except materials which are currently being worked on).
3.2 REPRESENTATIONS AND WARRANTIES OF XXXXX. Xxxxx represents and
warrants to Encore as follows:
(a) Xxxxx is a corporation duly organized, validly existing and in
good standing under the laws of the State of Ohio.
(b) This Agreement has been duly executed by Xxxxx and authorized
by all necessary corporate action on the part of Xxxxx and is a valid and
binding agreement of Xxxxx, enforceable against Xxxxx in accordance with its
terms. Xxxxx has all corporate power and authority necessary to enable it to
10
carry out the transactions contemplated by this Agreement. When delivered at
the Closing, the Registration Agreement, the Stockholders Agreement Amendment,
the Acknowledgment of Cancellation and the stockholder's consents of Xxxxx and
EFI referred to in Section 2.3(e) (together, the "XXXXX AGREEMENTS"), will each
be a valid and binding agreement of Xxxxx, enforceable against Xxxxx or EFI, as
the case may be, in accordance with its terms. Neither the execution or
delivery by Xxxxx of this Agreement or any document contemplated by this
Agreement nor the consummation by Xxxxx of the transactions contemplated by
this Agreement or any document contemplated by this Agreement will violate,
result in a breach of, or constitute a default under (i) except as set forth on
EXHIBIT 3.2-B, any agreement or instrument to which Xxxxx or any of its
subsidiaries is a party or by which any of them is bound, (ii) any statute,
ordinance or other law to which Xxxxx or any of its subsidiaries is subject,
(iii) any rule or regulation of any governmental agency having jurisdiction
over Xxxxx or any of its subsidiaries, (iv) any license, permit or other
governmental authorization held by Xxxxx or any of its subsidiaries, or (v) any
order or decree of any court or governmental agency having jurisdiction over
Xxxxx or any of its subsidiaries or any of their assets.
(c) Except as disclosed on EXHIBIT 3.2-C, no governmental filings,
authorizations, approvals or consents, or other governmental action, are
required to permit Xxxxx to fulfill all its obligations under this Agreement or
any document contemplated by this Agreement.
(d) Xxxxx is the owner of all right, title and interest in all of
the Exchanged Indebtedness and has the right to surrender the Exchanged
Indebtedness as contemplated by this Agreement as consideration for the Series
I Convertible Stock to be issued to it pursuant to Paragraph 1.1 and such
Exchanged Indebtedness is not subject to any lien.
11
3.3 INDEMNIFICATION. If any representation or warranty contained
in Paragraph 3.1 or 3.2 or in any certificate delivered at or prior to the
Closing is not correct in any respect, the party which gave that representation
or warranty will indemnify the other party against, and will hold the other
party harmless from, all liabilities, costs and expenses, including legal and
accounting fees and disbursements and costs of settlements or judgments, which
that other party suffers because the facts were not as represented or
warranted, so that, after taking account of any applicable tax benefits
resulting from the facts which were not as represented or warranted, and any
applicable taxes resulting from the indemnification payments, the indemnified
party will be in the same position in which it would have been if the facts had
been as represented or warranted.
ARTICLE IV
ACTIONS PRIOR TO THE CLOSING
4.1 LIMITATIONS ON ACTS OF ENCORE. Encore agrees that from the
date this Agreement is signed to the date of the Closing it and its
subsidiaries will, except with the written consent of Xxxxx:
(a) Operate its business and the business of each of its
subsidiaries in a manner consistent with the manner in which it was being
operated at the date of this Agreement.
(b) Comply in all material respects with all applicable laws and
regulations of governmental agencies, other than laws and regulations the
applicability of which Encore or a subsidiary of Encore is contesting in good
faith.
(c) Not issue or agree to issue any stock, or any options, rights
or convertible or exchangeable securities, or enter into any other agreements
12
(except as set forth on EXHIBIT 4.1-C) by which Encore or any of its
subsidiaries is, or upon the passage of time, the payment of money, or the
occurrence of any other event may be, required to issue any stock, except as
contemplated by this Agreement.
4.2 EFFORTS TO FULFILL CONDITIONS. Xxxxx will use its best efforts
to cause all the conditions set forth in Paragraph 5.1 to be fulfilled prior to
or at the Closing, and Encore will use its best efforts to cause all the
conditions contained in Paragraph 5.2 to be fulfilled prior to or at the
Closing.
ARTICLE V
CONDITIONS PRECEDENT TO CLOSING
5.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF ENCORE. The obligations
of Encore at the Closing are subject to satisfaction of the following
conditions (any or all of which may be waived by Encore):
(a) The representations and warranties of Xxxxx contained in this
Agreement will be true and correct in all material respects at the date of the
Closing with the same effect as though made on that date, and Xxxxx will have
delivered to Encore a certificate dated that date and signed by the President
or a Vice President of Xxxxx to that effect.
(b) Xxxxx will have fulfilled in all material respects all its
obligations under this Agreement required to have been fulfilled at or prior to
the Closing.
(c) All government filings, authorizations, approvals and consents
listed on EXHIBIT 3.2-C shall have been completed or received, as appropriate.
(d) No order will have been entered by any court or governmental
authority and be in force which invalidates this Agreement or restrains Encore
from completing the transactions which are the subject of this Agreement.
13
(e) Encore will have received an opinion of Xxxxxx & Xxxxx, counsel
to Xxxxx, to the effect that (i) Xxxxx is a corporation duly organized, validly
existing and in good standing under the laws of the State of Ohio; (ii) Xxxxx
has all corporate power and authority necessary to enable it to enter into this
Agreement and each of the Xxxxx Agreements and to carry out the transactions
contemplated by this Agreement and each of the Xxxxx Agreements; (iii) this
Agreement and each of the Xxxxx Agreements have been duly executed and
delivered by Xxxxx and each of them is a valid and binding obligation of Xxxxx,
enforceable against Xxxxx in accordance with its terms, except to the extent
enforceability may be affected by bankruptcy, reorganization or other laws
affecting the rights of creditors generally or equitable principles of general
application; (iv) the consummation of the transactions contemplated by this
Agreement and the Xxxxx Agreements will not violate, result in a breach of, or
constitute a default under, (A) any agreement or instrument of which that
counsel is aware, after a reasonable investigation, to which Xxxxx or any of
its subsidiaries is a party or by which any of them is bound, (B) any statute,
ordinance or other law to which Xxxxx or any of its subsidiaries is subject,
(C) any rule or regulation of any governmental agency having jurisdiction over
Xxxxx or any of its subsidiaries, (D) any license, permit or other governmental
authorization held by Xxxxx or any of its subsidiaries of which that counsel is
aware, after reasonable investigation, or (E) any order or decree of which that
counsel is aware, after a reasonable investigation, of any court or
governmental agency having jurisdiction over Xxxxx or any of its subsidiaries
or any of their assets; and (v) no governmental filings, authorizations,
approvals or consents or other governmental action are required to permit Xxxxx
to fulfill all its obligations under this Agreement and each of the Xxxxx
Agreements.
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5.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF XXXXX. The obligations
of Xxxxx at the Closing are subject to the following conditions (any or all of
which may be waived by Xxxxx):
(a) The representations and warranties of Encore contained in this
Agreement will be true and correct in all material respects at the date of the
Closing with the same effect as though made at that date, and Encore will have
delivered to Xxxxx a certificate dated that date and signed by the Chairman of
the Board, the President or a Vice President of Encore to that effect.
(b) Encore will have fulfilled in all material respects all its
obligations under this Agreement required to have been fulfilled at or prior to
the Closing.
(c) No order will have been entered by any court or governmental
authority and be in force which invalidates this Agreement or restrains Encore
from completing the transactions which are the subject of this Agreement.
(d) Xxxxx will have received an opinion of Xxxxxx, Hall & Xxxxxxx,
counsel to Encore, substantially in the form of EXHIBIT 5.2-D.
(e) Xxxxx will have received an opinion of Xxxx X. Xxxxxxxx, Esq.,
General Counsel of Encore, substantially in the form of EXHIBIT 5.2-E.
(f) The consents of third parties listed on EXHIBIT 3.2-B shall
have been obtained and shall be in form and substance satisfactory to Xxxxx.
(g) Xxxxx will have received a certificate dated the Closing Date
and signed by the Chairman of the Board of Encore setting forth the most recent
date on which documentation was deposited with the Escrow Agent under the
Escrow Agreement.
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ARTICLE VI
STOCKHOLDERS MEETING
6.1 HOLDING OF MEETING. Not later than June 30, 1997, Encore will
hold a meeting of the holders of its common stock at which they will be asked
to approve an amendment to Encore's Certificate of Incorporation which will
authorize Encore to issue at least 300,000,000 shares of common stock.
6.2 EFFORTS TO OBTAIN STOCKHOLDER APPROVAL. Not later than April
30, 1997, Encore will file with the Securities and Exchange Commission proxy
materials relating to the stockholders meeting described in Paragraph 6.1.
Those proxy materials will include a recommendation by Encore's Board of
Directors that Encore's stockholders approve the amendment to Encore's
Certificate of Incorporation described in Paragraph 6.1. Encore will use its
best efforts, including complying with any comments received from the staff of
the Securities and Exchange Commission, to be able to mail the proxy materials
to its stockholders not later than May 31, 1997. Encore will also take all
reasonable steps to cause its stockholders to approve the amendment to Encore's
Certificate of Incorporation described in Paragraph 6.1.
ARTICLE VII
ABSENCE OF BROKERS
7.1 REPRESENTATIONS REGARDING BROKERS. Each party to this
Agreement represents and warrants to each other party that nobody acted as a
broker, a finder or in any similar capacity in connection with the transactions
which are the subject of this Agreement. Each party to this Agreement
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indemnifies each other party against, and agrees to hold each such other party
harmless from, all liabilities and expenses (including reasonable attorneys'
fees) in connection with any claim by anyone for compensation as a broker, a
finder or in any similar capacity by reason of services allegedly rendered to
the indemnifying party in connection with the transactions which are the
subject of this Agreement.
ARTICLE VIII
MISCELLANEOUS
8.1 DEFINITION OF SUBSIDIARY. As used in this Agreement with
respect to any specified entity, the term "subsidiary" means any other entity
of which the specified entity, directly or indirectly, beneficially owns fifty
percent or more in value of the equity or holds the voting control of fifty
percent or more of the voting equity.
8.2 REIMBURSEMENT FOR EXPENSES OF TRANSACTION. Encore will
reimburse Xxxxx for all out-of-pocket expenses of Xxxxx in connection with the
transactions which are the subject of this Agreement and in connection with the
preparation, negotiation, execution and delivery of this Agreement and the
documents, instruments and agreements referred to in this Agreement. Encore
will bear its own expenses in connection with the transactions which are the
subject of this Agreement and in connection with the preparation, negotiation,
execution and delivery of this Agreement and the documents, instruments and
agreements referred to in this Agreement.
8.3 ENTIRE AGREEMENT. This document, together with the documents
and agreements to be delivered as provided in this Agreement, contain the
entire agreement between Encore and Xxxxx regarding the subject matter of this
Agreement and those other documents. All prior negotiations, understandings
and agreements between Encore and Xxxxx are superseded by this Agreement and
such other documents, and there are no representations, warranties,
17
understandings or agreements concerning the transactions which are the subject
of this Agreement and those other documents, other than those expressly set
forth in this Agreement and those other documents.
8.4 EFFECT OF HEADINGS. The article and paragraph headings are for
reference only, and do not affect the meaning or interpretation of this
Agreement.
8.5 PROHIBITION AGAINST ASSIGNMENT. Neither this Agreement nor any
right of any party under it may be assigned by any party hereto without the
consent of the other party and any purported assignment in violation hereof
shall be null and void.
8.6 NOTICES. Any notice or other communication required or
permitted to be given under this Agreement must be in writing and will be
deemed effective when delivered in person or sent by facsimile, if promptly
confirmed in writing, or on the third day after the day on which mailed by
first class mail from within the United States of America, to the following
addresses:
If to Encore:
Encore Computer Corporation
0000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxx, Hall & Xxxxxxx
Exchange Place
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Cameron Read, Esq.
Facsimile No.: (000) 000-0000
If to Xxxxx:
Xxxxx Electronics Inc.
00000 Xxxxxx Xxxxxxxxx
00
Xxxxxxxx, Xxxx 00000
Attention: General Counsel
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
8.7 GOVERNING LAW. This Agreement will be governed by, and
construed under, the substantive laws of the State of New York.
8.8 AMENDMENTS. This Agreement may be amended only by a document in
writing signed by Xxxxx and Encore.
8.9 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same agreement.
This Agreement has been executed on the day set forth on the first
page and constitutes a binding agreement between the parties to it.
ENCORE COMPUTER CORPORATION XXXXX ELECTRONICS INC.
[CAPTION]
By:________________________ By:_____________________________________
Name: Name:
Title: Title:
19
EXHIBITS
Exhibit 1.1 Certificate of Designations of Series I
Convertible Stock
Exhibit 2.2-B Registration Agreement
Exhibit 2.2-C Stockholders Agreement Amendment
Exhibit 3.1-C Governmental Filings, Authorizations,
Approvals or Consents of Encore
Exhibit 3.1-E Issued Options, Warrants or Convertible
Securities and Agreements
Exhibit 3.1-F Certificate of Designations of Series J
Convertible Stock
Exhibit 3.1-G Subsidiaries
Exhibit 3.1-H Material Adverse Changes
Exhibit 3.1-I Tax Return Information
Exhibit 3.1-K Environmental Violations
Exhibit 3.2-B Conflicts
Exhibit 3.2-C Governmental Filings, Authorizations,
Approvals or Consents of Xxxxx
Exhibit 4.1-C Issuance of Stock
Exhibit 5.2-D Form of opinion of Xxxxxx, Hall & Xxxxxxx
Exhibit 5.2-E Form of opinion of In-House Counsel to Encore
PREFERRED STOCK PURCHASE AGREEMENT
DATED
March 19, 1997
BETWEEN
