SHARE PURCHASE AGREEMENT
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THIS SHARE PURCHASE AGREEMENT ("Agreement") is made this 7th day of May,
1998, between Telos Corporation, a Maryland corporation, formerly named and
known as C3, Inc. ("Telos"), and Union Bank of Switzerland ("UBS"), and
consented and agreed to by Union de Banques Suisses (Luxembourg) S.A.
R E C I T A L S
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1. UBS is the owner and holder of all of the authorized, issued and
outstanding Class B Redeemable Preferred Stock of Telos, with a face value of
seven million, five hundred thousand dollars and 00/100 ($7,500,000.00), which
stock from July 1, 1995 through June 30, 1997 had a cumulative dividend rate per
annum equal to 11.125% which increased to 14.125% per annum thereafter, and
which stock as of the date hereof has undeclared and unpaid dividends relating
to the Class B Redeemable Preferred Stock totaling approximately four million,
nine hundred thousand dollars ($4,900,000.00) (the "Preferred Shares").
2. UBS is also the owner and holder of one million, eight hundred
thirty-seven thousand, seven hundred and seventy-three(1,837,773) shares of
Telos' Class A Common Stock, no par value, and has the ability to purchase an
additional one million, three hundred twelve thousand, six hundred and
ninety-five (1,312,695) shares of Class A Common Stock purchasable upon exercise
of a Warrant pursuant to the terms of a certain Warrant Agreement between Telos
and UBS dated January 14, 1992 (the "Common/Warrant Stock").
3. The Preferred Stock and the Common/Warrant Stock are sometimes
collectively referred to herein as the "Shares".
4. Telos and UBS have agreed that Telos will purchase the Shares from UBS
as provided in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereby agree as follows:
ARTICLE I
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RECITALS
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SECTION 1.1 The foregoing Recitals are hereby made a part of this
Agreement.
ARTICLE II
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ACQUISITION OF THE SHARES
The sale by UBS and the purchase by Telos of the Shares shall be
consummated as set forth in this Article II.
SECTION 2.1 PURCHASE OF THE SHARES
2.1.1 Purchase of the Shares by Telos. Subject to the terms
and conditions herein, UBS agrees to sell to Telos and Telos agrees to purchase
from UBS, the Shares, which are all the equity interests UBS has in Telos for a
purchase price of five million, five hundred thousand dollars and 00/100
($5,500,000.00) payable as follows:
(a) The sum of five million dollars ($5,000,000.00)
by federal wired funds at the Closing, and
(b) The sum of five hundred thousand dollars
($500,000.00), without interest, on or before November 7, 1998, secured by
a Letter of Credit from Nations Bank, N.A., in the form of the Letter of Credit
attached hereto as Exhibit A.
SECTION 2.2 CLOSING
2.2.1 Closing Date. The closing of the sale and purchase of
the Shares shall take place at the offices of Union Bank of Switzerland, New
York Branch, 000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 00000 on May 7, 1998 at 2:30 P.M.,
unless the parties hereto otherwise mutually shall agree. The time and date on
which the closing hereunder occurs is herein called the "Closing."
2.2.2 Deliveries by UBS. At Closing, UBS will deliver the
following to Telos:
Stock certificates representing the Shares
accompanied by stock powers duly executed in blank or duly executed instruments
of transfer, and any other documents that are necessary to transfer to Telos
good title to such Shares.
2.2.3 Deliveries by Telos. At Closing, Telos will deliver to
UBS the following:
(a) By same day funds to a bank account designated in
advance by UBS, an amount equal to Five Million Dollars and 00/100
($5,000,000.00).
(b) The Letter of Credit for five hundred thousand
dollars and 00/100 ($500,000.00) attached hereto as Exhibit A.
(c) The opinion of counsel referred to in Section
2.6.2(d) hereof.
SECTION 2.3 REPRESENTATIONS AND WARRANTIES OF UBS
UBS hereby represents and warrants to Telos the following:
2.3.1 No Encumbrance. UBS has good title to and has not sold,
transferred or otherwise encumbered any of the Shares. The Shares represent all
equity interests acquired by UBS in Telos, pursuant to or in connection with any
of the following agreements, including any amendments, modifications,
supplements or restructuring of any of such agreements or any debt or equity
issued pursuant to such agreements: (i) $20,000,000 principal amount of Senior
Exchange Notes due 1994 issued by C3, Inc. under an indenture dated as of
November 21, 1989 between C3, Inc. and The Connecticut National Bank, as trustee
(the "Trustee") and (ii) $45,747,000 principal amount of Senior Subordinated
Exchange Notes due 1999 issued by C3, Inc. under an indenture dated as of
November 21, 1989 between C3, Inc. and the Trustee.
2.3.2 Corporate Powers' Non-Contravention of Laws. UBS has the
corporate power and authority to execute, deliver and carry out the terms and
provisions of this Agreement. UBS has taken all necessary corporate action to
authorize the execution, delivery and performance of this Agreement. This
Agreement has been duly executed and delivered by UBS and constitutes the legal,
valid and binding obligation of UBS enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization, and other
laws of general applicability relating to or affecting creditors' rights and to
general equitable principles. Neither the execution, delivery or performance by
UBS of this Agreement nor compliance with any of the terms and provisions
hereof, nor the consummation of any of the transactions contemplated hereby will
contravene any law, statute, rule or regulation of the United States, New York
or Luxembourg or any existing order, writ, injunction or decree of any
governmental authority.
2.3.3 Brokers. UBS has not incurred any liability, contingent
or otherwise, for any brokerage fee, commission or financial advisory fee in
connection with the transactions contemplated by this Agreement.
2.3.4 Offering of the Shares. Neither UBS or any person
authorized or employed by UBS as agent, broker, dealer or otherwise has offered
the Shares for sale to, or solicited any offers to buy the Shares of UBS from,
or otherwise approached or negotiated with respect thereto with, any person or
persons other than Telos, and neither UBS nor any person acting on its behalf
has taken any action (including without limitation any offer, issuance or sale
of the Shares) which might subject the offering, issuance or sale of the Shares
to the registration provisions of the Securities Act.
SECTION 2.4 REPRESENTATIONS AND WARRANTIES OF TELOS
Telos hereby represents and warrants to UBS the following:
2.4.1 Organization and Good Standing; Business. Telos (i) is a
corporation, duly organized and existing in good standing under the laws of
Maryland with all requisite corporate power and authority to own its properties
and conduct its business as now being conducted, (ii) is duly qualified to do
business as a foreign corporation in good standing in each jurisdiction where it
conducts its business or owns or leases property.
2.4.2 Authority. Telos has full power and authority to enter
into and perform this Agreement in accordance with its terms and has duly
authorized, executed and delivered this Agreement, except to the extent as may
be limited by bankruptcy, insolvency or similar laws and the exercise of
judicial discretion in applying general principles of equity.
2.4.3 No Violation. The execution, delivery and performance of
this Agreement by Telos does not and will not (i) conflict with any provision of
the Certificate of Incorporation or By-Laws of Telos or any law, regulation,
order or similar governmental act applicable to Telos, (ii) conflict with, or
result in the creation of any encumbrance, security interest, equity or right of
others upon any of the properties or assets of Telos under any of the terms,
conditions or provisions of any agreement, instrument or obligation to which
Telos may be bound or affected or (iii) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to Telos and its assets.
2.4.4 Consents. No consent, approval, permit or license from
or filing with any governmental or regulatory authority or other person is
required to be obtained or made by Telos in connection with the execution,
delivery and performance by Telos of this Agreement.
2.4.5 No Defaults. Telos is (i) not in violation of any
provision of its Certificate of Incorporation or By-Laws (or other analogous
organizational documents) or in default under or in violation of any agreement,
instrument or obligation to which it is a party or by which it is bound or to
which any of its properties are subject and (ii) in compliance with all laws,
regulations, governmental orders and other governmental action applicable to it
or its business.
2.4.6 Brokers. Telos has not incurred any liability,
contingent or otherwise, for any brokerage fee, commission or financial advisory
fee (other than in favor of UBS or an affiliate of UBS) in connection with the
transactions contemplated by this Agreement.
SECTION 2.5 CONDITIONS TO CLOSING OF SHARE ACQUISITION
2.5.1 Conditions to Obligations of Telos. The obligations of
Telos under Article II of this Agreement are subject to satisfaction or to
waiver by Telos, on or prior to Closing, of each of the following conditions
precedent:
(a) Representations and Warranties; Performance;
Certificate. The representations and warranties of UBS contained in
Article II of this Agreement or in any instrument, list, certificate or
writing delivered to Telos pursuant to Article II of this Agreement shall be
correct in all material respects on and as of Closing with the same effect as
though made on and as of such date by reference to the facts and circumstances
then existing; UBS shall have performed in all material respects each of their
obligations and agreements hereunder to be performed by it pursuant to this
Article II at or prior to Closing.
(b) Absence of Orders. No order shall have been
issued by any court or other governmental body and not have expired or been
lifted or dissolved, and no statute, rule or regulation shall be enacted or
issued, that would have as an effect to restrain or prohibit consummation of the
transactions contemplated by this Agreement.
(c) Approvals. UBS shall have obtained all required
consents and approvals to the consummation of the transaction contemplated by
this Agreement. UBS does not require the consent or approval of any third
party in order to enter into and perform this Agreement.
2.6.2 Conditions to Obligations of UBS. The obligations of UBS
under Article II of this Agreement are subject to satisfaction or to waiver by
UBS, on or prior to Closing, of each of the following conditions precedent:
(a) Representations and Warranties; Performance;
Certificate. The representations and warranties of Telos contained in
Article II of this Agreement or in any instrument, list, certificate or
writing delivered to UBS pursuant to Article II of this Agreement shall be
correct in all material respects on and as of Closing with the same effect as
though made on and as of such date by reference to the facts and circumstances
then existing; Telos shall have performed in all material respects each
of its obligations and agreements hereunder to be performed by it pursuant
to this Article II at or prior to Closing.
(b) Absence of Orders. No order shall have been
issued by any court or other governmental body and not have expired or been
lifted or dissolved, and no statute, rule or regulation shall be enacted or
issued, that would have as an effect to restrain or prohibit consummation of
the transactions contemplated by this Agreement.
(c) Approvals. Telos shall have obtained all required
consents and approvals to the consummation of the transaction contemplated
by this Agreement. Executed counterpart copies of all consents referred to in
the preceding sentence will be delivered to UBS at Closing.
(d) Opinion of Counsel for Telos. UBS shall have
received an opinion of Telos' counsel, dated the date of the Closing, in form
and substance satisfactory to UBS' counsel, to the effect that:
(i) Telos is a corporation duly organized,
validly existing and in good standing under the laws of Maryland with the
corporate power and authority to carry on its business;
(ii) all corporate and other proceedings
required by law, by the Certificate of Incorporation or By-Laws (or other
analogous organizational documents) of Telos, or by the provisions of this
Agreement to be taken by Telos in connection with the execution and delivery of
this Agreement and/or the due consummation of the transactions contemplated
by Article II hereby have been duly and validly taken;
(iii) neither the execution or delivery of this
Agreement by UBS nor the consummation of the transactions contemplated by
Article II hereby (A) violates any statute or law or any rule, regulation,
order, judgment or decree of any court or governmental authority normally
applicable to transactions of the type contemplated by this Agreement based on
such counsel's experience, (B) violates or conflicts with or constitutes
a default under the Certificate of Incorporation or By-Laws (or other
analogous organizational documents) of Telos, or any contract, commitment,
agreement, understanding, arrangement or restriction of any kind to which
Telos is a party, or (C) will cause, or give any person valid grounds to
cause, the maturity of any liability or obligation of UBS to be accelerated or
will increase any such liability or obligation; and
(iv) this Agreement has been duly executed and
delivered by, and is a valid and binding obligation of Telos, enforceable
against Telos in accordance with its respective terms, except that (a) such
enforcement may be subject to applicable bankruptcy, reorganization, insolvency
or other laws, now or hereafter in effect, affecting creditors' rights
generally, and (b) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
(v) the repurchase by Telos of the Shares is
lawful under applicable Maryland law.
ARTICLE III
MISCELLANEOUS
SECTION 3.1 NOTICES
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Any notice, request, instruction or other document to be given
under this Agreement after the date hereof by any party hereto to any other
party shall be in writing and shall be delivered personally or sent by
registered or certified mail, postage prepaid, to the following persons and
addresses, or to such other addresses or persons as any party may designate by
written notice to the other parties:
(a) UBS:
Union Bank of Switzerland
x/x Xxxxx Xxxx Xxxxxxxxxxx
Xxx Xxxx Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: L. Xxxxxx Xxxxxx
Phone: (000) 000-0000
Facsimile: (000) 000-0000
(b) Union de Banques Suisses (Luxembourg) S.A.
c/o Union Bank Switzerland
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: L. Xxxxxx Xxxxxx
Phone: (000) 000-0000
Facsimile: (000) 000-0000
(b) TELOS:
Xxxxxxx X.X. Xxxxxxxx, V.P. and
General Counsel
Telos Corporation
00000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Facsimile: (000) 000-0000
SECTION 3.2 SURVIVAL OF RIGHTS
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Except as herein otherwise provided to the contrary, this
Agreement shall be binding upon and inure to the benefit of the parties hereto,
their successors and assigns. Notwithstanding any other provision of this
Agreement, the parties hereto acknowledge that (i) the rights and obligations of
UBS hereunder are those of UBS and its legal successors, and accordingly that
this Agreement will survive the merger of UBS and Swiss Bank Corporation ("SBC")
and (ii) UBS and its affiliates may provide to SBC and its affiliates
information related to the transactions contemplated hereby or other parties to
said transactions for reasons related to such merger.
SECTION 3.3 INTERPRETATION AND GOVERNING LAW
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When the context in which words are used in this Agreement
indicates that such is the intent, words in the singular number shall include
the plural and vice versa. The Article headings or titles and the tables of
contents shall not define, limit, extend or interpret the scope of this
Agreement or any particular Article. This Agreement shall be governed and
construed in accordance with the laws of the State of Maryland without giving
effect to the conflicts of law provisions thereof.
SECTION 3.4 SEVERABILITY
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If any provision, sentence, phrase or word of this Agreement
or the application thereof to any person or circumstances shall be held invalid,
the remainder of this Agreement, or the application of such provision, sentence,
phrase, or word to persons or circumstances, other than those as to which it is
held invalid, shall not be affected thereby.
SECTION 3.5 AGREEMENT IN COUNTERPARTS
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This Agreement may be executed in several counterparts, each
of which shall be deemed an original, but all of which shall constitute one and
the same instrument. In addition, this Agreement may contain more than one
counterpart of the signature page and this Agreement may be executed by the
affixing of the signatures of each of the parties to one of such counterpart
signature pages; all of such signature pages shall be read as though one, and
they shall have the same force and effect as though all of the signers had
signed a single signature page.
SECTION 3.6 THIRD PARTIES
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The agreements, covenants and representations contained herein
are for the benefit of the parties hereto inter se and are not for the benefit
of any third parties.
SECTION 3.7 ENTIRE AGREEMENT
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This Agreement and the documents referred to herein set forth
all the covenants, promises, agreements, conditions and understandings among the
parties herein, and there are no other covenants, promises, agreements,
conditions or understandings, whether oral or written, among the parties hereto.
SECTION 3.8 ATTORNEYS' FEES
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In the event attorneys' fees or other costs are incurred to
secure performance of any of the obligations herein provided for, or to
establish damages for the breach thereof, or to obtain any other appropriate
relief, whether by way of prosecution or defense, the prevailing party shall be
entitled to recover reasonable attorneys' fees and costs necessarily incurred
therein.
SECTION 3.9 ADDITIONAL DOCUMENTS
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Each party hereto agrees to execute any and all documents, and
to perform such other acts that may be necessary or expedient to further the
purposes of this Agreement.
SECTION 3.10 EXHIBITS
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All exhibits referred to in this Agreement are incorporated
into and made a part of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year above written.
ATTEST OR WITNESS: TELOS CORPORATION, a Maryland
corporation, formerly named
and known as C3, Inc.
_________________________ By: /s/ Xxxxxxx X.X. Xxxxxxxx
Name: Xxxxxxx X.X. Xxxxxxxx
Title: V.P. General Counsel
UNION BANK OF SWITZERLAND
_________________________ By:/s/ Xxxxx X. Xxxxxxxxxx
Name:Xxxxx X. Xxxxxxxxxx
Title: Attorney-In-Fact
_________________________ By:/s/ M. Xxxxx Xxxxxx
Name: M. Xxxxx Xxxxxx
Title: Attorney-In-Fact
AGREED AND CONSENTED TO BY:
Union de Banques Suisses
(Luxembourg) S.A.
By:/s/ Xxxxx X. Xxxxxxxxxx
Name: Xxxxx X. Xxxxxxxxxx
Title: Attorney-In-Fact
By: /s/ N, Xxxxx Xxxxxx
Name: M. Xxxxx Xxxxxx
Title: Attorney-In-Fact
