STOCK PURCHASE AGREEMENT dated as of January 20, 1999 (the "Agree ment") by
and between XXXX X. XXXXXX ("Seller") and TELEBYTE TECHNOLOGY, INC.
("Purchaser"). RECITALS :
Seller owns 262,635 Common Shares (the "Shares") of the Purchaser and
options (the "Options") to purchase 10,000 Common Shares of Purchaser (the
"Underlying Shares").
Upon the terms and conditions of this Agreement, (i) Seller desires to sell
to Purchaser, and Purchaser desires to purchase from Seller, the Shares and (ii)
Seller and Purchaser desire to cancel the Options.
NOW, THEREFORE, in consideration of the recitals and the respective
covenants, representations, warranties and agreements herein contained, the
parties hereto hereby agree as follows:
ARTICLE I
SALE AND PURCHASE
1.1 Sale And Purchase of Shares. At the Closing (as hereinafter defined), Seller
shall sell and deliver to the Purchaser, and the Purchaser shall purchase from
Seller, upon and subject to the terms and conditions of this Agreement, all of
Seller's right, title and interest in and to all of the Shares, free and clear
of any and all claims, liens, pledges, options, charges, restrictions, security
interests, encumbrances or other rights of third parties, whether voluntarily
incurred or arising by operation of law, and including, without limitation, any
agreement to give any of the foregoing in the future (collectively, "Liens").
1.2 Cancellation of Options. Subject to the terms and conditions of this
Agreement, at the Closing, Seller shall execute and deliver to Purchaser such
instruments, documents and agreements as contemplated by Sections 5.5 and 5.7
hereof to effect the cancellation and termination of the Options.
1.3 Purchase Price.
1.3.1 Purchase Price. Subject to the terms of this Agreement, the
purchase price for the Shares, cancellation of Options and Seller's restrictive
covenant contemplated by the Termination Agreement, as hereinafter defined shall
be an aggregate of One Million Seventy-Five Thousand One Hundred Ninety Dollars
($1,075,190) (the "Purchase Price").
1.3.2 Payment of Purchase Price. Subject to the terms and conditions of
this Agreement, at the Closing, Purchaser, as full payment of the Purchase
Price, will deliver to the Seller a bank or certified check in the amount of the
Purchase Price (the "Closing Payment").
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1.3.3 Allocation of Purchase Price. The Purchase Price shall be allocated
hereunder as follows:
Dollar Amount Allocation
$867,510 The Shares
$ 17,680 Cancellation of the Options
$190,000 The restrictive covenant
contemplated by the
Termination Agreement, as
hereinafter defined.
It is agreed that the apportionments set forth above were arrived at by arm's
length negotiation and properly reflect the respective fair market values of the
foregoing. Seller and Purchaser each hereby covenants and agrees that it will
not take a position on any income tax return, before any governmental agency
charged with the collection of any income tax, or in any judicial proceeding
that is in any way inconsistent with the terms of this Section 1.3.3.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller makes the following representations and warranties to
Purchaser:
2.1 Shares.
(a) Seller owns the Shares and Options free and clear of any and
all Liens.
(b) The Shares being sold and Options being cancelled pursuant to
this Agreement constitute all of the issued and outstanding shares and
options to purchase shares of Purchaser owned beneficially and of
record by Seller.
(c) The Seller is the sole record and beneficial owner of the
Shares and Options, the Seller has good and marketable title to the
Shares and Options and the absolute and unqualified right to sell,
transfer and deliver the Shares to the Purchaser and cancel the
Options; and the delivery of the Shares to the Purchaser pursuant to
the provisions hereof will transfer valid title thereto, free and
clear of any and all Liens.
(d) There are no subscriptions, options, warrants, rights or
calls or other commitments, understandings or agreements to which
Seller is a party or by which he is bound, or of which Seller is
aware, calling for the transfer, sale or other disposition of the
Shares or Options.
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(e) Giving effect to the transactions contemplated hereby (and
without giving such effect), to the best of Seller's knowledge,
Seller's spouse and children own in the aggregate, of record and
beneficially, no more than five (5%) percent of the Purchaser's issued
and outstanding shares of Common Stock.
(f) The Options have not been exercised, sold, transferred,
assigned or otherwise disposed of or cancelled.
(g) For purposes of this Agreement, beneficial ownership shall be
determined in accordance with Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended(the "Exchange Act").
2.2 Consents. No consents of governmental or other regulatory agencies and/or of
other parties are required to be received by or on the part of Seller to enable
Seller to enter into and carry out this Agreement and the transactions
contemplated hereby to be performed by Seller.
2.3 Authority; Binding Nature of Agreement. Seller has the power to enter into
this Agreement and to carry out his obligations hereunder. This Agreement
constitutes the valid and binding obligation of Seller and is enforceable in
accordance with its terms.
2.4 No Breach. Neither the execution and delivery of this Agreement nor
compliance by Seller with any of the provisions hereof nor the consummation of
the transactions contemplated hereby will:
(a) violate or result in the material breach or termination of,
or otherwise give any contracting party the right to terminate, or
declare a default under, the terms of any material contract to which
Seller is a party or by which he is bound;
(b) result in the creation of any Lien upon the Shares, Options
or Underlying Shares;
(c) violate any judgment, order, injunction, decree or award
against, or binding upon, Seller or upon the Shares, Options or
Underlying Shares; or
(d) violate any law or regulation of any jurisdiction relating to
Seller.
2.5 No Commitments or Liabilities. During the twelve month period ending on the
date hereof (and if the Closing occurs, on the Closing Date), Seller has not
entered into any transaction outside the ordinary course of business, consistent
with past practice , which is not reflected in the books and records of
Purchaser and which involves in excess of Twenty-Five Thousand ($25,000)
Dollars.
2.6 Litigation; Compliance with Law. There are no actions, suits,
proceedings or governmental investigations relating to Seller or any of Seller's
assets pending or, to the knowledge
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of Seller, threatened, or any order, injunction, award or decree outstanding,
against Seller or against or relating to any of Seller's assets; and there
exists no basis for any such action, suit, proceeding, governmental
investigation, order, injunction, award or decree which would have a material
adverse effect on Seller or Seller's ownership of the Shares, Options or
Underlying Shares.
2.7 Transactions With Affiliates. Except as set forth in Schedule 2.7 attached
hereto and made a part hereof, there is no loan, lease, contract, agreement,
commitment, understanding, obligation, payment or other transaction, verbal or
written, fulfilled or unfulfilled (collectively, "Agreements") between or among
Seller and/or Seller's spouse and/or any affiliate, as such term is defined
under the Securities Act of 1933, as amended (the "Securities Act") (together
with a Seller's spouse, in each case, an "Affiliate") on the one hand, and
Purchaser, on the other. Except for ownership of up to two (2%) percent of the
total outstanding capital stock of any entity the securities of which are listed
on a national securities exchange or quoted on the Nasdaq system, Seller does
not own, directly or indirectly, any interest in, or serve as an officer or
director of, or in any similar capacity for, any competitor, customer, provider
or supplier of or to the Purchaser or any organization which has an Agreement
with Purchaser.
2.8 Purchaser's Property. Schedule 2.8(a) attached hereto and made a part hereof
contains a true, accurate and complete description of all tangible and
intangible personal property owned, leased, licensed or loaned by, to or from
Purchaser (including, without limitation, keys, documents, Purchaser credit and
telephone calling cards, building or Purchaser identification cards, cellular
telephones, car service authorization and identification cards, computers and
related equipment, software, automobiles, stationary, business cards and all
other Information as defined in Section 12.3 hereof) and in the possession of
Seller or any Affiliate (collectively, "Purchaser's Property"). Schedule 2.8(b)
hereto lists certain property which the parties acknowledge does not belong to
Purchaser.
2.9 Brokers. Seller has not engaged, consented to, or authorized any broker,
finder, investment banker or other third party to act on its behalf, directly or
indirectly, as a broker or finder in connection with the transactions
contemplated by this Agreement.
2.10 Untrue or Omitted Facts. No representation, warranty or statement by Seller
in this Agreement contains any untrue statement of a material fact, or omits to
state a fact necessary in order to make such representations, warranties or
statements not materially misleading. Without limiting the generality of the
foregoing, there is no fact known to Seller that has had, or which may be
reasonably expected to have, a materially adverse effect on Seller and/or
Seller's ownership and/or transfer hereunder of the Shares and/or cancellation
of the Options that has not been disclosed in this Agreement.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser makes the following representations and warranties
to Seller:
3.1 Consents. No consents of governmental and other regulatory agencies and of
other third parties are required to be received by or on the part of Purchaser
to enable it to enter into and carry out this Agreement and the transactions
contemplated hereby.
3.2 Authority; Binding Nature of Agreement. Purchaser has the power to enter
into this Agreement and to carry out its obligations hereunder. This Agreement
constitutes the valid and binding obligation of Purchaser, has been duly
authorized by the Purchaser's Board of Directors (or a special committee thereof
empowered to act on behalf of the Board of Directors) and is enforceable in
accordance with its terms.
3.3 No Breach. Neither the execution and delivery of this Agreement nor
compliance by Purchaser with any of the provisions hereof nor the consummation
of the transactions contemplated hereby will:
(a) violate or result in the material breach or termination of, or
otherwise give any contracting party the right to terminate, or declare a
default under, the terms of any material contract to which Purchaser is a
party or by which it is bound;
(b) violate any judgment, order, injunction, decree or award against,
or binding upon, Purchaser; or
(c) violate any law or regulation of any jurisdiction relating to
Purchaser.
3.4 Brokers. Purchaser has not engaged, consented to, or authorized any broker,
finder, investment banker or other third party to act on its behalf, directly or
indirectly, as a broker or finder in connection with the transactions
contemplated by this Agreement.
3.5 Untrue or Omitted Facts. No representation, warranty or statement by
Purchaser in this Agreement contains any untrue statement of a material fact, or
omits to state a fact necessary in order to make such representations,
warranties or statements not materially misleading. Without limiting the
generality of the foregoing, there is no fact known to Purchaser that has had,
or which may be reasonably expected to have, a materially adverse effect on
Purchaser and/or Purchaser's purchase hereunder of the Shares that has not been
disclosed in this Agreement.
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ARTICLE IV
PRE-CLOSING COVENANTS
4.1 Seller Covenants. Seller hereby covenants that from and after the date
hereof and until the Closing or earlier termination of this Agreement:
(a) The Shares. Seller will not, without the prior written consent of
Purchaser: sell, deliver, exercise, cancel or otherwise transfer or agree
or commit to sell or deliver, exercise, cancel or otherwise transfer
(whether through the granting of options, warrants, commitments,
subscriptions, rights to purchase or otherwise) the Shares, Options and/or
Underlying Shares, as the case may be, or agree to do any of the foregoing.
(b) No Breach.
(i) Seller will (A) use his best efforts to assure that all of
his representations and warranties contained herein are true as of the
Closing as if repeated at and as of such time, that no breach or
default shall occur with respect to any of his covenants,
representations or warranties contained herein that has not been cured
by the Closing and that all conditions to Purchaser's obligation to
enter into and complete the Closing which are required or contemplated
to be satisfied by Seller are satisfied in a timely manner; (B) not
voluntarily take any action or do anything which will cause a breach
of or default respecting such covenants, representations or warranties
or would impede the satisfaction of such conditions; and (C) promptly
notify Purchaser of any event or fact which represents or is likely to
cause such a breach or default or result in such an impediment.
(ii) Without limiting the generality of the foregoing, Seller
agrees to use his best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things reasonably
necessary, proper or advisable under applicable laws and regulations
to consummate and make effective the transactions contemplated by this
Agreement.
(c) Actions by Seller. Except for Agreements where the total aggregate
value of goods and services and/or payments to be made to or by Purchaser
are less than Twenty-Five Thousand ($25,000) Dollars (with respect to each
such agreement or series of related agreements) and which are in the
ordinary course of business consistent with past practice, Seller will not
without the prior written consent of Purchaser, enter into any Agreement
by, or on behalf of, Purchaser. In any event, Seller shall conduct himself
only in the ordinary course of business as President of Purchaser,
consistent with past practice.
(d) No Negotiations. Seller shall not, directly or indirectly, enter
into or conduct negotiations, or enter into any contract, commitment or
other agreement, for the sale or possible sale of any of the Shares or
Options or Underlying Shares.
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ARTICLE V
CONDITIONS PRECEDENT TO THE
OBLIGATION OF PURCHASER TO CLOSE
The obligation of Purchaser to consummate the transactions contemplated
hereby is subject to the fulfillment, prior to or at the Closing (except with
regard to the condition set forth in Section 5.8 hereof, which must be satisfied
within the time indicated therein), of each of the following conditions, any one
or more of which may be waived by Purchaser (except when the fulfillment of such
condition is a requirement of law):
5.1 Representations and Warranties. All representations and warranties of Seller
contained in this Agreement and in any written statement (including financial
statements), exhibit, certificate, schedule or other document delivered pursuant
hereto or in connection with the transactions contemplated hereby shall be true
and correct in all material respects as at the Closing Date, as if made at the
Closing and as of the Closing Date.
5.2 Covenants. Seller shall have performed and complied with all covenants and
agreements required by this Agreement to be performed or complied with by him
prior to or at the Closing.
5.3 Certificate. Purchaser shall have received a certificate, dated the Closing
Date, signed by the Seller, as to the satisfaction of the conditions contained
in Sections 5.1 and 5.2 hereof.
5.4 The Shares. Purchaser shall have received (i) a stock certificate or
certificates representing the Shares, duly endorsed in blank, or accompanied by
a stock power duly executed in blank, in either case with signatures medallion
guaranteed and all necessary transfer tax stamps affixed and cancelled and (ii)
such other documentation as may be required by the transfer agent of Purchaser
to give effect to the transfer (collectively, the "Certificate"). Seller agrees
to cure any deficiencies with respect to the endorsement of the certificates
representing the Shares and/or the execution of the stock powers and other
documents delivered in connection with the transfer.
5.5 Options. Purchaser shall have received the documents constituting the
Options marked "cancelled" by Seller.
5.6 Consulting Agreement. Seller shall have executed and tendered to Purchaser a
Consulting Agreement in, or substantially in, the form attached hereto as
Exhibit A (the "Consulting Agreement").
5.7 Termination Agreement. Seller shall have executed and tendered to Purchaser
a Termination Agreement (the "Termination Agreement") in, or substantially in,
the form attached hereto as Exhibit B.
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5.8 Release. Seller shall have executed and delivered, at least seven (7) days
prior to the Closing, an Agreement and Release in, or substantially in, the form
attached hereto as Exhibit C (which Seller hereby acknowledges, he had at least
twenty-one (21) days prior to the date hereof) and such release shall not have
been revoked by Seller and Purchaser shall have received documentation
satisfactory to it, in its sole and absolute discretion, which shall be final,
conclusive and binding, that such Agreement and Release has not been revoked
(collectively, the "Release Documents")
5.9 Fairness Opinion. Purchaser shall have received an opinion from a firm
satisfactory to it to the effect that the transactions contemplated hereby are
fair, from a financial viewpoint, to the shareholders of Purchaser.
5.10 Financing Contingency. Purchaser shall have obtained financing so that the
total aggregate amount of funds immediately available from Purchaser's lending
institution shall be not less than One Million Seven Hundred Fifty Thousand
($1,750,000) Dollars (of which One Million ($1,000,000) Dollars shall have been
funded on the Closing Date on account of the Purchase Price) upon terms
satisfactory to Purchaser, in Purchaser's sole and absolute discretion, which
shall be final, conclusive and binding.
5.11 Purchaser's Property. Seller and all Affiliates shall have returned to
Purchaser all Purchaser's Property. Seller shall have delivered a certificate
certifying same (the "Property Certificate").
5.12 Resignation of Xxxxxx Xxxxxx. Purchaser shall have received the resignation
of Xxxxxx Xxxxxx from all capacities with Purchaser, including without
limitation, as a Director of Purchaser, effective as of the Closing Date.
5.13 Form 4. Purchaser shall have received from Seller a duly executed Form 4
reflecting, among other things, the transactions contemplated hereby ("Seller's
Form 4").
5.14 No Actions. No action, suit, proceeding or investigation shall have been
instituted, and be continuing before a court or before or by a governmental or
other regulatory body or agency, or shall have been threatened and be
unresolved, to restrain or to prevent or to obtain any material amount of
damages in respect of, the carrying out of the transactions contemplated hereby.
5.15 Consents; Licenses and Permits. Seller and Purchaser, respectively, shall
have obtained all consents, licenses and permits of third parties, including,
without limitation, regulatory authorities, necessary for the performance by
each of them of all of their respective obligations under this Agreement,
including, without limitation, the transfer of the Shares as contemplated
hereby, and such other consents, if any, to prevent (i) the occurrence of a
breach under any agreement of Seller and Purchaser, respectively, with any
person, the termination of which would have a material adverse effect on
Purchaser's business or (ii) any liability or obligation of Purchaser becoming
due
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or being subject to becoming due with the passage of time or on notice as a
result of the performance of this Agreement, any other provision of this
Agreement to the contrary notwithstanding.
5.16 Nevada Statutes. This Agreement and acquisition of the Shares contemplated
hereby shall be in compliance with Chapter 78 of the Nevada Revised Statutes.
5.17 Actions. All actions necessary to authorize the execution, delivery and
performance of this Agreement by Seller and the consummation of the transactions
contemplated hereby shall have been duly and validly taken and Seller shall have
full power and right to consummate the transactions contemplated by this
Agreement.
ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATION OF
SELLER TO CLOSE
The obligation of Seller to consummate the transactions contemplated
hereby is subject to the fulfillment, prior to or at the Closing, of each of the
following conditions, any one or more of which may be waived by Seller (except
when the fulfillment of such condition is a requirement of law):
6.1 Representations and Warranties. All representations and warranties of
Purchaser contained in this Agreement, exhibit, certificate, schedule or other
document delivered pursuant hereto or in connection with the transactions
contemplated hereby shall be true and correct as at the Closing Date, as if made
at the Closing and as of the Closing Date.
6.2 Covenants. Purchaser shall have performed and complied with all covenants
and agreements required by this Agreement to be performed or complied with by it
prior to or at the Closing.
6.3 Certificate. Seller shall have received a certificate, dated the Closing
Date, signed by the Chief Financial Officer of Purchaser, as to the satisfaction
of the conditions contained in Sections 6.1 and 6.2 hereof.
6.4 Closing Payment. Purchaser shall have tendered the Closing Payment to
Seller.
6.5 Consulting Agreement. Purchaser shall have executed and tendered to Seller,
the Consulting Agreement.
6.6 Termination Agreement. Purchaser shall have executed and tendered to Seller
the Termination Agreement.
6.7 No Actions. No action, suit, proceeding, or investigation shall have been
instituted, and be continuing, before a court or by a governmental or other
regulatory body or agency, or have been
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threatened, and be unresolved, to restrain or prevent, or obtain any material
amount of damages in respect of, the carrying out of the transactions
contemplated hereby.
6.8 Consents; Licenses and Permits. Purchaser shall have obtained all consents,
licenses and permits of third parties, including, without limitation, regulatory
authorities, necessary for the performance by it of all of its obligations under
this Agreement.
6.9 Corporate Actions. All actions necessary to authorize the execution,
delivery and performance of this Agreement by Purchaser and the consummation of
the transactions contemplated hereby shall have been duly and validly taken and
Purchaser shall have full power and right to consummate the transactions
contemplated by this Agreement.
ARTICLE VII
CLOSING
7.1 Location. The closing (the "Closing") provided for herein shall take place
at the offices of Certilman Balin Xxxxx & Xxxxx, LLP, 00 Xxxxxxx Xxxxxx, Xxxx
Xxxxxx, Xxx Xxxx 00000 at 10:00 A.M. three (3) days following the satisfaction
of the conditions set forth in Articles V and VI hereof but not latter than
January 20, 1999, or on such date and at such place as may be mutually agreed to
by the parties. Such date is referred to in this Agreement as the "Closing
Date."
7.2 Items to be Delivered to Purchaser. At or prior to the Closing, Seller will
deliver or cause to be delivered to Purchaser:
(a) the certificate required by Section 5.3 hereof;
(b) the Certificate required by Section 5.4 hereof;
(c) the Options required by Section 5.5 hereof;
(d) the Consulting Agreement required by Section 5.6
hereof;
(e) the Termination Agreement required by Section 5.7
hereof;
(f) the Release Documents required by Section 5.8 hereof;
(g) Purchaser's Property and the Property Certificate
required by Section 5.11 hereof;
(h) Seller's Form 4 required by Section 5.13 hereof; and
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(i) such other certified resolutions, documents and
certificates as are required to be delivered to
Purchaser by or on behalf of Seller pursuant to the
provisions of this Agreement or which otherwise
confirm that all of the conditions precedent to the
obligation of Purchaser to close have been satisfied.
7.3 Items to be Delivered to Seller. At the Closing, Purchaser will deliver or
cause to be delivered to Seller:
(a) the certificate required by Section 6.3;
(b) the Closing Payment required by Section 6.4 hereof;
(c) the Consulting Agreement required by Section 6.5 hereof;
(d) the Termination Agreement required by Section 6.6 hereof;
(e) certified copies of all corporate action required by Section
6.9 hereof; and
(f) such other certified resolutions, documents and certificates
as are required to be delivered by Purchaser pursuant to the
provisions of this Agreement or otherwise confirm that all of the
conditions precedent to the obligation of Seller to close have
been satisfied.
ARTICLE VIII
RESTRICTIONS ON CERTAIN ACTIONS
BY SELLER
8.1 Restrictions on Purchases, Sales and Other Actions by Seller. Seller agrees
that he will not, and will not cause or permit any of his Affiliates directly or
indirectly, through one or more entities, without the prior written consent of
Purchaser, to:
(a) Acquisition and Voting Restrictions. Acquire, directly or
indirectly, by purchase or otherwise, the beneficial ownership of any voting
securities of Purchaser, or any options, rights or warrants to acquire any
voting securities of Purchaser or proxies to vote any voting securities of
Purchaser. Any voting securities of Purchaser owned by the Seller and his
Affiliates shall be voted as follows: any voting securities of Purchaser owned
by Seller and his Affiliates shall be voted in accordance with the
recommendation of the Board of Directors of Purchaser on all matters presented
to shareholders of Purchaser, and voting securities of Purchaser owned by Seller
and his Affiliates shall always be voted as present for purposes of obtaining a
quorum at any meeting of shareholders.
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(b) Option and Sales Restrictions. Grant any option or other
right to any Person, as such term is defined in Section 2(2) of the Securities
Act.
(c) Restrictions Upon Certain Actions.
(i) Solicit or encourage any Person, as such term is
defined in Section 2(2) of the Securities Act, to solicit
any proxies with respect to any voting securities of
Purchaser under any circumstances, or become a "participant"
in any "election contest" relating to the election of
Directors of Purchaser (as such terms are used in Rule
14a-11 of Regulation 14A under the Exchange Act), or seek to
advise or influence any person with respect to the voting of
any voting securities of Purchaser;
(ii) Act together with any other Person for the purpose
of acquiring, holding, voting or disposing of any voting
securities of Purchaser or any options or other rights to
acquire any such securities;
(iii) Solicit any person for the approval of, initiate
or propose one or more shareholder proposals with respect to
Purchaser, as described in Rule 14a-8 under the Exchange
Act;
(iv) Advise, encourage or assist any Person in the
acquisition of any voting securities of Purchaser or options
or rights to acquire any such securities; or
(v) Act alone or together with any Person to acquire,
or propose a business combination with, Purchaser, or to
control or influence the management, Board of Directors or
policies of Purchaser.
8.2 Termination of Restrictions. The restrictions set forth in Section 8.1 shall
terminate five (5) years from the Closing Date.
ARTICLE IX
POST-CLOSING MATTERS
9.1 Further Assurances. On and after the Closing Date, upon the request of
Purchaser, Seller shall take all such further actions and execute, acknowledge
and deliver all such further instruments and documents as may be necessary or
desirable to convey and transfer to, and vest in, Purchaser, and to protect
Purchaser's right, title and interest in and to, and enjoyment of, the Shares
intended to be assigned, transferred, conveyed and delivered pursuant to this
Agreement.
9.2 Section 16 Obligations. Seller shall file Seller's Form 4 on a timely basis
in accordance with applicable rules and regulations of the Securities and
Exchange Commission. Unless Seller notifies Purchaser otherwise in writing at
least ten (10) days prior to the date any filing other than
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Seller's Form 4 may be due, Seller hereby authorizes Purchaser to assume that no
filings are required to be made by Seller under Section 16 of the Exchange Act.
ARTICLE X
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
10.1 Survival. The parties agree that their respective representations and
warranties contained in this Agreement shall survive the Closing.
10.2 Indemnification.
10.2.1 General Indemnification Obligation of Seller. From and after the
Closing, Seller will reimburse, indemnify and hold harmless Purchaser and its
respective successors and assigns (an "Indemnified Purchaser Party") against and
in respect of:
(a) any and all damages, losses, deficiencies, liabilities,
costs and expenses incurred or suffered by any Indemnified Purchaser Party that
result from, relate to or arise out of any misrepresentation, breach of warranty
or nonfulfillment of any agreement or covenant on the part of Seller under this
Agreement, or from any misrepresentation in or omission from any certificate,
schedule, statement, document or instrument furnished to Purchaser pursuant
hereto; and
(b) any and all actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines, judgments, costs and other
expenses (including, without limitation, reasonable legal fees) incident to any
of the foregoing or to the enforcement of this Section 10.2.1.
10.2.2 General Indemnification Obligation of Purchaser. From and after
the Closing, Purchaser will reimburse, indemnify and hold harmless Seller and
its respective successors and assigns (an "Indemnified Seller Party") against
and in respect of:
(a) any and all damages, losses, deficiencies, liabilities,
costs and expenses incurred or suffered by any Indemnified Seller Party that
result from, relate to or arise out of any misrepresentation, breach of warranty
or nonfulfillment of any agreement or covenant on the part of Purchaser under
this Agreement, or from any misrepresentation in or omission from any
certificate, schedule, statement, document or instrument furnished to Seller
pursuant hereto; and
(b) any and all actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines, judgments, costs and other
expenses (including, without limitation, reasonable legal fees) incident to any
of the foregoing or to the enforcement of this Section 10.2.2.
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10.2.3 Method of Asserting Claims, Etc.
(a) In the event that any claim or demand for which Seller
would be liable to an Indemnified Purchaser Party hereunder is asserted against
or sought to be collected from an Indemnified Purchaser Party by a third party,
the Indemnified Purchaser Party shall notify Seller of such claim or demand,
specifying the nature of such claim or demand and the amount or the estimated
amount thereof to the extent then feasible (which estimate shall not be
conclusive of the final amount of such claim and demand) (the "Claim Notice").
Seller shall thereupon, at his sole cost and expense, defend the Indemnified
Purchaser Party against such claim or demand with counsel reasonably
satisfactory to Purchaser.
(b) Seller shall not, without the prior written consent of the
Indemnified Purchaser Party, consent to the entry of any judgment against the
Indemnified Purchaser Party or enter into any settlement or compromise which
does not include, as an unconditional term thereof (i.e., there being no
requirement that the Indemnified Purchaser Party pay any amount of money or give
any other consideration), the giving by the claimant or plaintiff to the
Indemnified Purchaser Party of a release, in form and substance reasonably
satisfactory to the Indemnified Purchaser Party, as the case may be, from all
liability in respect of such claim or litigation. If any Indemnified Purchaser
Party desires to participate in, but not control, any such defense or
settlement, it may do so at its sole cost and expense.
(c) In the event an Indemnified Purchaser Party should have a
claim against Seller hereunder that does not involve a claim or demand being
asserted against or sought to be collected from it by a third party, the
Indemnified Purchaser Party shall send a Claim Notice with respect to such claim
to Seller.
(d) All claims for indemnification by an Indemnified Seller
Party under this Agreement shall be asserted and resolved under the procedures
set forth hereinabove by substituting in the appropriate place "Indemnified
Seller Party" for "Indemnified Purchaser Party" and variations thereof and
"Purchaser" for "Seller".
10.3 Payment. Upon the determination of the liability under Section 10.2 hereof,
the Seller shall pay to Purchaser, within ten (10) days after such
determination, the amount of any claim for indemnification made hereunder.
10.4 Other Rights and Remedies Not Affected. The indemnification rights of the
parties under this Article X are independent of and in addition to such rights
and remedies as the parties may have at law or in equity or otherwise for any
misrepresentation, breach of warranty or failure to fulfill any agreement or
covenant hereunder on the part of any party hereto, including without limitation
the right to seek specific performance, rescission or restitution, none of which
rights or remedies shall be affected or diminished hereby.
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ARTICLE XI
TERMINATION AND WAIVER
11.1 Termination. Anything herein or elsewhere to the contrary notwithstanding,
this Agreement may be terminated and the transactions provided for herein
abandoned at any time prior to the Closing:
(a) By mutual consent of the Special Committee of the Board of
Directors of Purchaser, currently consisting of Xxxxx Xxxxxx and Xxxxxxx
Xxxxxxxxx, and Seller;
(b) By Purchaser if any of the conditions set forth in Article V
hereof shall not have been fulfilled on or prior to January 20, 1999 or
shall become incapable of fulfillment, in each case except as such shall
have been the result, directly or indirectly, of any action or inaction by
Purchaser or its officers and Directors (other than Xxxx Xxxxxx and/or
Xxxxxx Xxxxxx), and shall not have been waived; or
(c) By Seller, if any of the conditions set forth in Article VI hereof
shall not have been fulfilled on or prior to January 20, 1999 or shall have
become incapable of fulfillment, in each case except as such shall have
been the result, directly or indirectly, of any action or inaction by
Seller and shall not have been waived.
If this Agreement is terminated as described above, this Agreement
shall be of no further force and effect, without any liability or obligation on
the part of any of the parties except for any liability which may arise pursuant
to Sections 12.3 hereof or as a result of a party's willful failure to
consummate the transactions contemplated hereby.
11.2 Waiver. Any condition to the performance of the parties which legally may
be waived on or prior to the Closing Date may be waived at any time by the party
entitled to the benefit thereof by action taken or authorized by an instrument
in writing executed by the relevant party or parties. The failure of any party
at any time or times to require performance of any provision hereof shall in no
manner affect the right of such party at a later time to enforce the same. No
waiver by any party of the breach of any term, covenant, representation or
warranty contained in this Agreement as a condition to such party's obligations
hereunder shall release or affect any liability resulting from such breach, and
no waiver of any nature, whether by conduct or otherwise, in any one or more
instances, shall be deemed to be or construed as a further or continuing waiver
of any such condition or of any breach of any other term, covenant,
representation or warranty of this Agreement.
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ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Sales, Transfer and Documentary Taxes. Seller shall pay all federal, state
and local sales, documentary and other transfer taxes, if any, due as a result
of the purchase and sale of the Shares in accordance herewith.
12.2 Expenses. Each of the parties shall bear its or his own expenses in
connection herewith.
12.3 Confidential Information. Seller hereby agrees that he and his Affiliates
and representatives at all times hereafter will hold in a fiduciary capacity and
in strict confidence all information, data and documents received from Purchaser
(collectively, "Information") and will not, without the consent of Purchaser,
use or disclose, directly or indirectly, the Information in any manner
whatsoever, in whole or in part. Notwithstanding the foregoing, the obligations
under this Section 12.3 to maintain such confidentiality shall not apply to any
Information (a) that is in the public domain at the time furnished by the
disclosing party, (b) that becomes in the public domain thereafter through any
means other than as a result of any act of the receiving party or of its agents,
officers, directors or shareholders which constitutes a breach of this
Agreement, or (c) that is required by applicable law to be disclosed.
12.4 Equitable Relief. The parties agree that the remedy at law in any breach or
threatened breach of the provisions of Article IV or Section 12.3 will be
inadequate and the aggrieved party shall be entitled to injunctive relief to
compel the breaching party to perform or refrain from action required or
prohibited thereunder.
12.5 Publicity. Seller hereby agrees that no publicity, release or other public
announcement concerning the transactions contemplated by this Agreement shall be
issued by him without the advance approval of both the form and substance of the
same by the Purchaser and its counsel, which shall be final, conclusive and
binding. Seller further agrees that the terms of this Agreement shall not be
divulged by Seller, unless such terms have been publicly released in accordance
with the provisions hereof. Purchaser shall provide Seller with any release or
filing disclosing this transaction and Seller shall have a reasonable
opportunity to comment thereon prior to dissemination.
12.6 Entire Agreement. This Agreement, including the schedules and exhibits
attached hereto, which are a part hereof, constitutes the entire agreement of
the parties with respect to the subject matter hereof. The representations,
warranties, covenants and agreements set forth in this Agreement and in the
schedules or exhibits delivered pursuant hereto constitute all the
representations, warranties, covenants and agreements of the parties and upon
which the parties have relied, shall not be deemed waived or otherwise affected
by any investigation made by any party hereto and, except as may be specifically
provided herein, no change, modification, amendment, addition or termination of
this Agreement or any part thereof shall be valid unless in writing and signed
by or on behalf of the party to be charged therewith.
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12.7 Notices. Any and all notices or other communications or deliveries required
or permitted to be given or made pursuant to any of the provisions of this
Agreement shall be deemed to have been duly given or made for all purposes when
hand delivered or sent by certified or registered mail, return receipt requested
and postage prepaid, overnight mail, nationally recognized overnight courier, or
telecopier as follows:
If to Purchaser at:
Telebyte Technology, Inc.
000 Xxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
Telecopier Number: (000) 000-0000
With a copy to:
Certilman Balin Xxxxx & Xxxxx, LLP
00 Xxxxxxx Xxxxxx
Xxxx Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxxx, Esq.
Telecopier Number: (000) 000-0000
If to Seller, at:
Xxxx X. Xxxxxx
0 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Telecopier Number: (000) 000-0000
With a copy to:
Xxxxxx Xxxxxx & Xxxxxx
EAB Plaza
Uniondale, New York 11556-0111
Attention: Xxxxx X. Xxxxxxx, Esq.
Telecopier Number: (000) 000-0000
or at such other address as any party may specify by notice given to the other
party in accordance with this Section 12.7. No amendment, modification, consent,
notice, waiver or other communication required or permitted to be given by
Purchaser hereunder shall be effective or binding upon Purchaser if executed on
behalf of Purchaser only by Seller and/or Xxxxxx Xxxxxx.
12.8 Choice of Law; Severability. This Agreement shall be governed by, and
interpreted and construed in accordance with, the laws of the State of New York,
excluding choice of law principles thereof. In the event any clause, section or
part of this Agreement shall be held or declared to be void, illegal or invalid
for any reason, all other clauses, sections or parts of this Agreement which
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can be effected without such void, illegal or invalid clause, section or part
shall nevertheless continue in full force and effect.
12.9 Successors and Assigns; No Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
assigns; provided, however, that neither party may assign any of its rights or
delegate any of its duties under this Agreement without the prior written
consent of the other.
12.10 Headings. The headings or captions under sections 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.
WITNESS the execution of this Agreement as of the date first
above written.
/s/ Xxxx X. Xxxxxx
----------------------------
Xxxx X. Xxxxxx, Individually
TELEBYTE TECHNOLOGY, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
(Please Print)
Title: Senior Vice President
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