EXHIBIT 6
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STOCK PURCHASE AGREEMENT
among
XXX X. XXXXXX
an individual
XXX X. XXXXXX IRREVOCABLE CREDIT TRUST
POTTON RESOURCES LIMITED
a British Virgin Islands Company
and
ULTIMATE PIONEER LIMITED
a British Virgin Islands Company
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Dated as of
June 5, 2001
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made as of June 5,
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2001, by and among Xx. Xxx X. Xxxxxx, an individual ("Xxxxxx") and the Xxx X.
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Xxxxxx Irrevocable Credit Trust (the "Trust") (Xxxxxx and the Trust are each
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referred to as a "Seller" and are collectively referred to as the "Sellers"),
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Potton Resources Limited, a British Virgin Islands company ("PRL") and wholly
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owned subsidiary of Xxxxxx Kong (Holdings) Limited, a Hong Kong corporation, and
Ultimate Pioneer Limited, a British Virgin Islands company ("UPL") and wholly
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owned subsidiary of Xxxxxxxxx Whampoa Limited, a Hong Kong corporation (PRL and
UPL are each a "Purchaser", and collectively the "Purchasers").
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NOW, THEREFORE, the parties hereto hereby agree as follows.
ARTICLE I.
DEFINITIONS
As used in this Agreement, the following terms shall have the
following meanings:
"Affiliate" shall mean, with respect to any person, any other person
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directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person and, in the case of a person who is an
individual, shall include (i) members of such specified person's immediate
family (as defined in Instruction 2 of Item 404(a) of Regulation S-K under the
Securities Act) and (ii) trusts, the trustee and all beneficiaries of which are
such specified person or members of such person's immediate family as determined
in accordance with the foregoing clause (i). For the purposes of this
definition, "control," when used with respect to any person, means the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "affiliated," "controlling" and "controlled" have meanings
correlative to the foregoing.
"Agreement" shall have the meaning set forth in the Preamble.
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"Applicable Law" shall mean, with respect to any person, any law,
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statute, rule, regulation, order, writ, injunction, judgment or decree of any
Governmental Authority to which such person or any of its subsidiaries is bound
or to which any of their respective properties is subject.
"Business Day" shall mean any day on which commercial banks are not
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authorized or required to close in New York City and Hong Kong.
"Closing" shall have the meaning set forth in Section 2.2.
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"Common Stock" shall mean the common stock, par value $.008 per share,
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of the Company.
"Company" shall mean xxxxxxxxx.xxx Incorporated, a Delaware
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corporation.
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"Exchange Act" shall mean the Securities Exchange Act of 1934, as
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amended, and the rules and regulations promulgated thereunder.
"FEL" shall mean Forthcoming Era Limited, a British Virgin Islands
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company and a wholly owned subsidiary of Xxxxxxxxx Whampoa Limited.
"Governmental Authority" shall mean any foreign, Federal, state or
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local court or governmental or regulatory authority.
"HSR Act" shall mean Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
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1976, as amended.
"Indemnified Party" shall have the meaning set forth in Section 9.1.
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"Indemnifying Party" shall have the meaning set forth in Section 9.1.
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"Lien" shall mean any pledge, lien, claim, restriction, charge or
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encumbrance of any kind.
"NASD" shall mean the National Association of Securities Dealers, Inc.
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"Nasdaq Rules" shall mean the Marketplace Rules of the Nasdaq Stock
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Market.
"Notices" shall have the meaning set forth in Section 9.2.
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"Permitted Transferee" shall mean, as to either Purchaser, (i) the
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other Purchaser, (ii) PPG, (iii) FEL, (iv) any wholly-owned subsidiary of
Xxxxxxxxx Whampoa Limited and (v) any wholly-owned subsidiary of Xxxxxx Kong
(Holdings) Limited.
"Permitted Liens" shall mean: (i) liens for Taxes and other
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governmental charges and assessments arising in the ordinary course of business
which are not yet due and payable, (ii) liens of landlords and liens of
carriers, warehousemen, mechanics and materialmen and other like liens arising
in the ordinary course of business for sums not yet due and payable and (iii)
other liens or imperfections on property which are not material in amount, do
not interfere with, and are not violated by, the consummation of the
transactions contemplated by this Agreement, and do not impair the marketability
of, or materially detract from the value of or materially impair the existing
use of, the property affected by such lien or imperfection.
"person" shall mean any individual, partnership, corporation, limited
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liability company, joint venture, association, joint- stock company, trust,
unincorporated organization, government or agency or political subdivision
thereof, or other entity.
"Original Company Stock Purchase Agreement" shall mean the Stock
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Purchase Agreement dated as of February 15, 2001, among the Company and the
Original Purchasers.
"Original Purchasers" shall mean PPG and FEL.
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"PPG" shall mean Prime Pro Group Limited, a British Virgin Islands
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company and a wholly owned subsidiary of Xxxxxx Kong (Holdings) Limited.
"Purchaser" shall have the meaning set forth in the Preamble.
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"Shares" shall have the meaning set forth in Section 2.1 hereof.
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"Securities" shall mean the Shares and any other Common Stock of the
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Company.
"Securities Act" shall mean the Securities Act of 1933, as amended,
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and the rules and regulations thereunder.
"Stockholders' Agreement" shall mean the Stockholders' Agreement dated
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as of the date hereof, among the Company, the Original Purchasers and the
Purchasers.
"subsidiary" shall mean, with respect to any person, (a) a corporation
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a majority of whose capital stock with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly, owned
by such person, by a subsidiary of such person, or by such person and one or
more subsidiaries of such person or (b) a partnership in which such person or a
subsidiary of such person is, at the date of determination, a general partner,
or any other person (other than a corporation) in which such person, a
subsidiary of such person or such person and one or more subsidiaries of such
person, directly or indirectly, at the date of determination thereof, has (i) at
least a majority ownership interest, (ii) the power to elect or direct the
election of the directors or other governing body, or (iii) the power to direct
or cause the direction of the affairs or management. For purposes of this
definition, a person is deemed to own any capital stock or other ownership
interest if such person has the right to acquire such capital stock or other
ownership interest, whether through the exercise of any purchase option,
conversion privilege or similar right.
"Taxes" shall mean all foreign, federal, state and local taxes,
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including any interest, penalties or additions to tax that may become payable in
respect thereof, imposed by any Governmental Authority, which taxes shall
include, without limiting the generality of the foregoing, all income taxes,
payroll and employee withholding taxes, unemployment insurance, social security,
sales and use taxes, excise taxes, franchise taxes, gross receipts taxes,
occupation taxes, real and personal property taxes, stamp taxes, transfer taxes,
workmen's compensation taxes and other obligations of the same or a similar
nature, whether arising before, on or after the Closing Date.
ARTICLE II.
SALE AND PURCHASE
Section 2.1 Sale of Shares. On the Closing Date, upon the terms and
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subject to the satisfaction of all the conditions to Closing set forth in this
Agreement, each Seller shall sell to each Purchaser, severally and not jointly,
and each Purchaser shall purchase and accept from each Seller, payable in
immediately available funds, the number of shares of Common Stock set forth
opposite each Purchaser's name on Exhibit A hereto, at a purchase price of $4.37
per share (the
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aggregate number of shares of Common Stock being sold hereinafter being referred
to herein as the "Shares").
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Section 2.2 Closing.
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(a) The closing of the purchase and sale of the Shares
hereunder (the "Closing") shall take place three (3) Business Days after the
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satisfaction of all the conditions to Closing set forth in Article VII (the
"Closing Date"), at the offices of Xxxxx Xxxxxxxxxx LLP, 1301 Avenue of the
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Xxxxxxxx, Xxx Xxxx, XX 00000, or at such other time and place as the parties
hereto shall agree in writing.
(b) At the Closing (i) each Purchaser shall deposit
into one or more bank accounts designated by each Seller, by wire transfer of
immediately available funds, an amount equal to the purchase price of the Shares
being purchased by such Purchaser from such Seller pursuant to Section 2.1 and
(ii) such Seller shall deliver to each Purchaser, against payment of the
purchase price therefor, a stock certificate or stock certificates representing
the Shares being purchased from such Seller by such Purchaser pursuant to
Section 2.1. The stock certificates shall be duly endorsed or accompanied by
appropriate stock powers duly endorsed in blank and evidence of payment of any
applicable stock transfer tax which may be incurred as a result of the transfer
of the Shares.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
OF THE SELLERS
Each Seller represents and warrants, as to itself only and severally
and not jointly, to the Purchasers as follows (except that the representation in
Section 3.6 is made only by Xxxxxx):
Section 3.1 Authorization; Enforceability. Such Seller has duly
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executed and delivered this Agreement. This Agreement constitutes, assuming due
execution by the other parties hereto, the legal, valid and binding obligation
of such Seller enforceable against him or it in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
Section 3.2 No Violation; Consents.
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(a) The execution, delivery and performance by such
Seller of this Agreement and the consummation of the transactions contemplated
hereby does not and will not contravene any Applicable Law and will not (x)
violate, result in a breach of or constitute (with due notice or lapse of time
or both) a default under any contract, lease, loan agreement, mortgage, security
agreement or other agreement or instrument to which such Seller is a party or by
which either he or it or his or its properties or assets is subject or (y)
result in the creation or imposition of any Lien (other than a Permitted Lien)
upon any of such Seller's properties or assets.
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(b) Except for filings and clearance under the HSR Act
and, if required, approval of stockholders of the Company under the Nasdaq
Rules, no consent, authorization or order of, or filing or registration with,
any Governmental Authority or other person is required to be obtained or made by
such Seller for the execution, delivery and performance of this Agreement, or
the consummation by such Seller of any of the transactions contemplated hereby.
Section 3.3 Litigation. Except as disclosed in Schedule 3.3, the
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sale of the Shares pursuant to this Agreement has not been, and has not been
threatened to be, restrained or enjoined (either temporarily, preliminarily or
permanently), and no material adverse conditions have been imposed thereon by
any Governmental Authority or arbitrator.
Section 3.4 No Integrated Offering. Neither such Seller, nor any
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person acting on its behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security under
circumstances that would require the registration of the Shares under the
Securities Act.
Section 3.5 Ownership of Shares. All of the Shares are on the date
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hereof (except as disclosed in Schedule 3.5), and all of the Shares (without
exception) will be as of the Closing Date, duly authorized and validly issued,
fully-paid and non-assessable, with no personal liability attaching to the
ownership thereof and free and clear of any taxes, liens or other claims or
encumbrances. Assuming the truth and accuracy of each Purchaser's
representations and warranties contained in Article IV, the offers and sales of
the Shares as contemplated hereby and the deliveries to the Purchasers of the
Shares are exempt from registration under the Securities Act and under
applicable state securities and "blue sky" laws. Such Seller is the sole record
and beneficial owner of such Shares and, except for the shares of Common Stock
listed on Schedule 3.5, such Shares constitute all of the shares of the Common
Stock owned beneficially or of record by such Seller. Upon delivery by such
Seller of the certificates representing the Shares being sold by such Seller and
payment therefor by the Purchasers as provided in Section 2.2 hereof, the
Purchasers will acquire valid and marketable title to such Shares free and clear
of any claims or encumbrances, except for restrictions on transfer imposed by
the Securities Act and state securities laws and any restrictions arising as a
result of the Purchasers.
Section 3.6 Additional Representation. Xxxxxx has no actual
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knowledge, without having made any inquiry, of any facts or circumstances that
would have a material adverse effect on the Company's and its subsidiaries',
taken as a whole, financial condition or results of operations, except as
disclosed in the Company's reports and filings under the Exchange Act or the
Securities Act filed prior to the date hereof or on the disclosure schedules to
the Original Company Stock Purchase Agreement.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each of the Purchasers hereby represents and warrants, each as to
itself only and each severally and not jointly, to the Sellers as follows:
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Section 4.1 Organization and Standing; Authorization;
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Enforceability; No Violations.
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(a) Such Purchaser is duly organized, validly existing
and in good standing as a domestic corporation under the laws of the British
Virgin Islands and has all requisite corporate power and authority to own its
properties and assets and to carry on its business as it is now being conducted.
(b) Such Purchaser has the corporate power to execute,
deliver and perform its obligations under this Agreement and has taken all
necessary action to authorize the execution, delivery and performance by it of
this Agreement and to consummate the transactions contemplated hereby. No other
corporate proceedings on the part of such Purchaser are necessary therefor.
(c) Such Purchaser has duly executed and delivered this
Agreement. This Agreement constitutes the legal, valid and binding obligation of
such Purchaser, enforceable against it in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).
(d) The execution, delivery and performance by such
Purchaser of this Agreement and the consummation of the transactions
contemplated hereby does not and will not contravene any Applicable Law and will
not (x) violate, result in a breach of or constitute (with due notice or lapse
of time or both) a default under any contract, lease, loan agreement, mortgage,
security agreement or other agreement or instrument to which such Purchaser is a
party or by which either it or its properties or assets is subject or (y) result
in the creation or imposition of any Lien (other than a Permitted Lien) upon any
of such Purchaser's properties or assets.
Section 4.2 Consents. Except for filings and clearance under the
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HSR Act, or, if required under the Nasdaq Rules, stockholder approval, no
consent, authorization or order of, or filing or registration with, any
Governmental Authority or other person is required to be obtained or made by
such Purchaser for the execution, delivery and performance by such Purchaser of
this Agreement or the consummation by the Purchaser of any of the transactions
contemplated hereby.
Section 4.3 Investment Representations. Such Purchaser is capable
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of evaluating the risks and merits of its investment in the Shares and has the
capacity to protect its owns interests. Such Purchaser is acquiring the Shares
for investment for its own account and not with a view to, or for resale in
connection with, any distribution thereof, and has no present intention of
selling or distribution of the Shares. It understands that the Shares have not
been registered under the Securities Act by reason of a specific exemption from
the registration provisions of the Securities Act which depends upon, among
other things, the bona fide nature of the investment intent as expressed herein.
Such Purchaser acknowledges that because they have not been registered under the
Securities Act, the Shares it is purchasing must be held indefinitely unless
subsequently registered under the Securities Act or an exemption from such
registration is available.
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ARTICLE V.
COVENANTS OF THE SELLERS
Section 5.1 Agreement to Take Necessary and Desirable Actions. Each
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Seller shall execute and deliver such other documents, certificates, agreements
and other writings and take such other actions as may be necessary, desirable or
reasonably requested by the Purchasers in order to consummate or implement as
expeditiously as practicable the transactions contemplated hereby; provided,
however, that notwithstanding the foregoing or any of the other covenants
contained in this Article V, such Seller shall have no obligation with respect
to obtaining or assisting to obtain any approval of the Company's stockholders
that may be required under Rule 4350(i) of the Nasdaq Rules.
Section 5.2 Other Consents and Approvals. Each Seller shall (a) use
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commercially reasonable efforts to obtain all necessary consents, waivers,
authorizations and approvals of all Governmental Authorities and other persons
required in connection with the execution, delivery and performance by such
Seller of this Agreement, any other document or any of the transactions
contemplated hereby or thereby, and (b) assist and cooperate with the Purchasers
and the Company in preparing and filing all documents required to be submitted
by the Purchasers or the Company to any Governmental Authority in connection
with such transactions and in obtaining any governmental consents, waivers,
authorizations or approvals which may be required to be obtained by the
Purchasers or the Company in connection with such transactions (which assistance
and cooperation shall include, without limitation, timely furnishing to the
Purchasers and the Company all information concerning such Seller that counsel
to the Purchasers or the Company reasonably determines is required to be
included in such documents or would be helpful in obtaining any such required
consent, waiver, authorization or approval).
Section 5.3 Compliance with Conditions; Commercially Reasonable
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Efforts. Each Seller shall use commercially reasonable efforts to cause all of
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the obligations imposed upon it in this Agreement to be duly complied with and
to cause all conditions precedent to the obligations of such Seller to be
satisfied. Upon the terms and subject to the conditions of this Agreement, each
Seller shall use its best efforts to take, or cause to be taken, all action, and
to do, or cause to be done, all things necessary, proper or advisable consistent
with Applicable Law, including under the HSR Act, to consummate and make
effective in the most expeditious manner practicable the transactions
contemplated hereby.
Section 5.4 Sale of Additional Shares of Common Stock. In the event
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that any of the shares of Common Stock that are subject to Liens set forth in
the Consulting/Option Agreements identified in items 4(d)-(g) on Schedule 3.5
shall cease to be subject to such Liens, Xxxxxx shall not sell, short sell,
pledge, assign or otherwise convey or transfer, directly or indirectly or by
means of any derivatives transaction, any record or beneficial interest in such
shares for a period of one year commencing on the Closing Date.
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ARTICLE VI.
COVENANTS OF THE PURCHASERS
Section 6.1 Agreement to Take Necessary and Desirable Actions. Each
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Purchaser shall execute and deliver such other documents, certificates,
agreements and other writings and take such other actions as may be necessary,
desirable or reasonably requested by the Sellers in order to consummate or
implement as expeditiously as practicable the transactions contemplated hereby.
Section 6.2 Other Consents and Approvals. Each Purchaser shall (a)
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use commercially reasonable efforts to obtain all necessary consents, waivers,
authorizations and approvals of all Governmental Authorities and other persons
required in connection with the execution, delivery and performance by such
Purchaser of this Agreement, any other document or any of the transactions
contemplated hereby or thereby, and (b) assist and cooperate with the Sellers
and the Company in preparing and filing all documents required to be submitted
by the Sellers or the Company to any Governmental Authority in connection with
such transactions and in obtaining any governmental consents, waivers,
authorizations or approvals which may be required to be obtained by the Sellers
or the Company in connection with such transactions (which assistance and
cooperation shall include, without limitation, timely furnishing to the Sellers
and the Company all information concerning such Purchaser that counsel to the
Sellers or the Company reasonably determines is required to be included in such
documents or would be helpful in obtaining any such required consent, waiver,
authorization or approval).
Section 6.3 Compliance with Conditions; Commercially Reasonable
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Efforts. Each Purchaser shall use its commercially reasonable efforts to cause
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all of the obligations imposed upon it in this Agreement to be duly complied
with and to cause all conditions precedent to the obligations of such Purchaser
and the Company to be satisfied. Upon the terms and subject to the conditions of
this Agreement, each Purchaser shall use its best efforts to take, or cause to
be taken, all action, and to do, or cause to be done, all things necessary,
proper or advisable consistent with Applicable Law, including under the HSR Act,
to consummate and make effective in the most expeditious manner practicable the
transactions contemplated hereby, including requesting in its filing under the
HSR Act early termination of the waiting period thereunder.
ARTICLE VII.
CONDITIONS TO CLOSING
Section 7.1 Conditions to Each Party's Obligations. The obligations
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of each party hereunder required to be performed at the Closing shall be subject
to the fulfillment at or prior to the Closing Date of the following conditions
(any of which maybe waived, to the extent permitted by law, by all of the
parties):
(a) To the extent required, the approval by the stockholders of the
Company under Rule 4350(i) of the Nasdaq Rules (it being understood that this
paragraph (a) shall not affect any party's right to terminate this Agreement in
accordance with Section 8.1 prior to obtaining such approval).
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(b) Any waiting period under the HSR Act applicable to the
consummation of the purchase and sale of Shares hereunder shall have expired or
been terminated early.
(c) No action or proceeding shall be pending before a court or other
Governmental Authority to restrain or prohibit any of the transactions
contemplated hereby.
Section 7.2 Conditions to Purchasers' Obligations. The obligations
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of each Purchaser required to be performed at the Closing shall be subject to
the additional conditions (any of which may be waived, to the extent permitted
by law, by the Purchasers):
(a) The representations and warranties of the Sellers contained in
this Agreement, or in any Schedule attached hereto, shall be true and correct in
all material respects on and as of the Closing Date with the same effect as
though such representations and warranties have been made on and as of such
date, and the Sellers shall have delivered to the Purchasers a certificate,
dated as of the Closing Date, to such effect.
(b) Either (i) the Company shall have delivered to the Purchasers,
(A) a legal opinion satisfactory to the Purchasers, (B) written confirmation
from the NASD (unless such confirmation is subject to further conditions or
actions that may be imposed by the NASD on the Company, the Purchasers or the
Original Purchasers) or (C) other confirmation satisfactory to the Purchasers in
their sole discretion, that the Closing of the purchase of the Shares will not
require approval of stockholders of the Company in order to avoid violation of
Rule 4350(i) of the Nasdaq Rules or (ii) if such stockholders' approval or any
other condition or action is required by the NASD, such approval, condition or
action shall have been obtained, satisfied or taken (it being understood that
this subparagraph (ii) shall not affect any party's right to terminate this
Agreement in accordance with Section 8.1 prior to obtaining, satisfying or
taking any such approval, condition or action).
Section 7.3 Conditions to Sellers' Obligations. The obligations of
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each Seller required to be performed at the Closing shall be subject to the
additional condition (which may be waived, to the extent permitted by law, by
the Sellers) that the representations and warranties of the Purchasers contained
in this Agreement or in any Schedule attached hereto shall be true and correct
in all material respects on and as of the Closing Date with the same effect as
though such representations and warranties have been made on and as of such
date, and the Purchasers shall have delivered to the Sellers a certificate,
dated as of the Closing Date, to such effect.
Section 7.4 Parties' Election. If the conditions set forth in
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Section 7.1(c) or 7.2(a) (other than with respect to the representation and
warranty in Section 3.6) cannot be satisfied with respect to a portion of the
Shares, the Purchasers shall each have the right to elect, in their sole
discretion, to proceed with the purchase of the remainder of the Shares which
are not subject to such failure of a condition, otherwise on the terms and
subject to the conditions of this Agreement.
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ARTICLE VIII.
TERMINATION
Section 8.1. Termination. This Agreement may be terminated and the
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transactions herein contemplated may be abandoned at any time prior to or at the
Closing: (a) by mutual consent of the Sellers and the Purchasers; (b) by the
Sellers, if there has been a material misrepresentation or a material breach by
a Purchaser of a warranty or covenant herein and the material breach is not
cured by the breaching party within 20 days of receiving notice thereof from the
Sellers; (c) by the Purchasers, if there has been a material misrepresentation
or a material breach by a Seller of a warranty or covenant herein and the
material breach is not cured by the breaching party within 20 days of receiving
notice thereof from the Purchasers; (d) by any party if any applicable HSR Act
waiting period referred to in Section 7.1(b) shall not have expired or been
terminated on or prior to July 24, 2001; (e) by any party if the condition
referred to in Section 7.2(b)(i) shall not have been satisfied by the close of
business Eastern Time on July 10, 2001, or, if earlier, upon issuance by the
NASD of a written determination, reasonably determined by the Company, the
Purchasers and the Sellers to be final, that stockholders' approval will be
required under Rule 4350(i) of the Nasdaq Rules for the purchase of the Shares;
or (f) by any party if the Closing has not occurred on or prior to July 27,
2001.
Section 8.2 Effect of Termination. If this Agreement is terminated
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pursuant to Section 8.1, all further obligations of the Sellers and the
Purchasers under this Agreement shall terminate without further liability of the
Sellers or the Purchasers, provided, that in no event shall termination of this
Agreement limit or restrict the rights and remedies of any party against any
other party which has breached the provisions of this Agreement prior to
termination hereof.
ARTICLE IX.
MISCELLANEOUS
Section 9.1 Survival of Representations and Warranties.
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(a) All representations, warranties, and agreements
(except agreements which are expressly required to be performed and are
performed in full on or before the Closing) contained in this Agreement shall
survive the Closing for a period of 12 months from the Closing Date, except
that, with respect to claims asserted pursuant to this Section 9.1 before the
expiration of the applicable representation, warranty and agreements such claims
shall survive until the date they are finally liquidated or otherwise resolved.
All covenants shall survive in accordance with their own terms. All statements
as to factual matters contained in any certificate executed and delivered by the
parties pursuant hereto shall be deemed to be representations, warranties and
covenants by such party hereunder. No claim may be commenced under this Section
9.1 (or otherwise) following expiration of the applicable period of survival,
and upon such expiration the Indemnifying Party shall be released from all
liability with respect to claims under each such section not theretofore made by
the Indemnifying Party. No right of indemnity against any claim of a third party
shall arise from any representation, warranty or covenant of an Indemnifying
Party herein contained, unless such third party claim is filed or lodged against
the Indemnified Party on or prior
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to the expiration of the applicable period of survival provided above, and all
other conditions hereunder are satisfied. A claim shall be made or commenced
hereunder by the Indemnified Party delivering to the Indemnifying Party a
written notice specifying in reasonable detail the nature of the claim, the
amount claimed (if known or reasonably estimable), and the factual basis for the
claim.
(b) (i) Each Seller, separately and not jointly,
agrees to indemnify and hold harmless, on an after-Tax basis, each of the
Purchasers and its partners, Affiliates, officers, directors, employees and duly
authorized agents and each of their affiliates and each other person controlling
such Purchaser or any of its Affiliates within the meaning of either section 15
of the Securities Act or section 20 of the Exchange Act and any partner of any
of them from and against all losses, claims, damages or liabilities resulting
from any claim, lawsuit or other proceeding by any person to which any party
indemnified under this clause may become subject which is related to or arises
out of any breach of the representations and warranties set forth in Sections
3.1, 3.2, 3.3, 3.4 and 3.5 of this Agreement by such Seller and will reimburse
each of the Purchasers and any other party indemnified under this clause for all
reasonable out-of-pocket expenses (including reasonable counsel fees and
disbursements) incurred by each Purchaser or any such other party indemnified
under this clause and further agrees that the indemnification and reimbursements
commitments herein shall apply whether or not such Purchaser or any such other
party indemnified under this clause is a formal party to any such lawsuits,
claims or other proceedings. The foregoing provisions are expressly intended to
cover reimbursement of legal and other expenses incurred in a deposition or
other discovery proceeding.
(ii) Notwithstanding the foregoing clause (i),
such Seller shall not be liable to any party otherwise entitled to
indemnification pursuant thereto: (A) in respect of any loss, claim, damage,
liability or expense to the extent the same is determined, in final judgment by
a court having jurisdiction, to have resulted from the gross negligence or
willful misconduct of such party or (B) for any settlement effected by such
party without the written consent of such Seller, which consent shall not be
unreasonably withheld or delayed.
(c) If a person entitled to indemnity hereunder (an
"Indemnified Party") asserts that any party hereto (the "Indemnifying Party")
----------------- ------------------
has become obligated to the Indemnified Party pursuant to Section 9.1(b), or if
any suit, action, investigation, claim or proceeding is begun, made or
instituted as a result of which the Indemnifying Party may become obligated to
the Indemnified Party hereunder, the Indemnified Party agrees to notify the
Indemnifying Party promptly and to cooperate with the Indemnifying Party, at the
Indemnifying Party's expense, to the extent reasonably necessary for the
resolution of such claim or in the defense of such suit, action or proceeding,
including making available any information, documents and things in the
possession of the Indemnified Party which are reasonably necessary therefor.
Notwithstanding the foregoing notice requirement, the right
to indemnification hereunder shall not be affected by any failure to give, or
delay in giving, notice unless, and only to the extent that, the rights and
remedies of the Indemnifying Party shall have been materially prejudiced as a
result of such failure or delay.
11
(d) In fulfilling its obligations under this Section
9.1, after providing each Indemnified Party with a written acknowledgment of any
liability under this Section 9.1 as between such Indemnified Party and the
Indemnifying Party, the Indemnifying Party shall have the right to investigate,
defend, settle or otherwise handle, with the aforesaid cooperation, any claim,
suit, action or proceeding brought by a third party in such manner as the
Indemnifying Party may in its sole discretion deem appropriate; provided,
however, that (i) counsel retained by the Indemnifying Party is reasonably
satisfactory to the Indemnified Party and (ii) the Indemnifying Party will not
consent to any settlement imposing any obligations on any other party hereto,
unless such party has consented in writing to such settlement. Notwithstanding
anything to the contrary contained herein, the Indemnifying Party may retain one
firm of counsel to represent all Indemnified Parties in such claim, action or
proceeding; provided, however, that in the event that the defendants in, or
targets of, any such claim, action or proceeding include more than one
Indemnified Party, and any Indemnified Party shall have reasonably concluded,
based on the opinion of its own counsel, that there may be one or more legal
defenses available to it which are in conflict with those available to any other
Indemnified Party, then such Indemnified Party may employ separate counsel to
represent or defend it or any other person entitled to indemnification and
reimbursement hereunder with respect to any such claim, action or proceeding in
which it or such other person may become involved or is named as defendant and
the Indemnifying Party shall pay the reasonable fees and disbursement of such
counsel. Notwithstanding the Indemnifying Party's election to assume the defense
or investigation of such claim, action or proceeding, the Indemnified Party
shall have the right to employ separate counsel at the expense of the
Indemnifying Party and to direct the defense or investigation of such claim,
action or proceeding if (A) in the written opinion of counsel to the Indemnified
Party, use of counsel of the Indemnifying Party's choice could reasonably be
expected to give rise to a conflict of interest, or (B) the Indemnifying Party
shall not have employed counsel reasonably satisfactory to the Indemnified Party
to represent the Indemnified Party within a reasonable time (as determined in
the light of the facts and circumstances surrounding such event), but in no
event shall such time exceed twenty (20) Business Days, after notice of the
assertion of any such claim or institution of any such action or proceeding. In
all other situations, the Indemnified Party shall have the right to participate
in the defense or investigation of such claim, action or proceeding if the
Indemnifying Party shall authorize the Indemnified Party to employ separate
counsel at the Indemnifying Party's expense or if the fees and expenses of
counsel for the Indemnified Party shall be borne by the Indemnified Party.
(e) If for any reason (other than the gross negligence
or willful misconduct referred to in subclause (b)(ii) above) the foregoing
indemnification by a Seller is unavailable to any Indemnified Party or is
insufficient to hold it harmless as and to the extent contemplated by subclauses
(b), (c) and (d) above, then such Seller shall contribute to the amount paid or
payable by such Indemnified Party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect the relative benefits
received by such Seller, on the one hand, and the Purchasers and any other
applicable Indemnified Party, as the case may be, on the other hand, as well as
any other relevant equitable considerations.
Section 9.2 Notices. All notices, demands, requests, consents,
-------
approvals or other communications (collectively, "Notices") required or
permitted to be given hereunder or which are given with respect to this
Agreement shall be in writing and shall be personally served, delivered by
12
a reputable air courier service with tracking capability, with charges prepaid,
or transmitted by hand delivery or facsimile, addressed as set forth below, or
to such other address as such party shall have specified most recently by
written notice. Notice shall be deemed given on the date of service or
transmission if personally served or transmitted by facsimile, provided the
sender receives evidence of complete transmission without error. Notice
otherwise sent as provided herein shall be deemed given on the next business day
following delivery of such notice to a reputable air courier service.
If to the Sellers, as follows:
Mr. Xxx Xxxxxx
Xxxxxx Digital, L.L.C.
Five Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxx Xxxxxx
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
If to the Purchasers, as follows:
Ultimate Pioneer Limited
Offshore Incorporations Limited
P.O. Box 957
Offshore Incorporations Centre
Road Town, Tortola
British Virgin Islands
with a copy to:
Xxxxxxxxx Whampoa Limited
00/X Xxxxxxxxx Xxxxx
00 Xxxxxxxx Xxxx Xxxxxxx
Xxxx Xxxx
Attention: Company Secretary
Facsimile: (000) 0000 0000
and:
13
Potton Resources Limited
x/x 0/X, Xxxxxx Xxxx Xxxxxx
0 Xxxxx'x Xxxx Xxxxxxx
Xxxx Xxxx
Attention: Xx. Xxxxxx Ip
Facsimile: (000) 0000 0000
Section 9.3 Governing Law. This Agreement and the rights and
-------------
obligations of the parties hereunder shall be governed by, and construed in
accordance with, the laws of the State of New York, and each party hereto
submits to the non-exclusive jurisdiction of the state and federal courts within
the County of New York in the State of New York.
Section 9.4 Entire Agreement. This Agreement (including all
----------------
agreements entered into pursuant hereto and all certificates and instruments
delivered pursuant hereto and thereto) constitutes the entire agreement of the
parties hereto with respect to the subject matter hereof and supersedes all
prior and contemporaneous agreements, representations, understandings,
negotiations and discussions between the parties or their Affiliates, whether
oral or written, with respect to the subject matter hereof.
Section 9.5 Modifications and Amendments. No amendment,
----------------------------
modification or termination of this Agreement shall be binding upon any other
party unless executed in writing by the parties hereto intending to be bound
thereby.
Section 9.6 Waivers and Extensions. Any party to this
----------------------
Agreement may waive any right, breach or default which such party has the right
to waive, provided that such waiver will not be effective against the waiving
party unless it is in writing, is signed by such party, and specifically refers
to this Agreement. Waivers may be made in advance or after the right waived has
arisen or the breach or default waived has occurred. Any waiver may be
conditional. No waiver of any breach of any agreement or provision herein
contained shall be deemed a waiver of any preceding or succeeding breach thereof
nor of any other agreement or provision herein contained. No waiver or extension
of time for performance of any obligations or acts shall be deemed a waiver or
extension of the time for performance of any other obligations or acts.
Section 9.7 Titles and Headings. Titles and headings of
-------------------
sections of this Agreement are for convenience only and shall not affect the
construction of any provision of this Agreement.
Section 9.8 Exhibits and Schedules. Each of the annexes,
----------------------
exhibits and schedules referred to herein and attached hereto is an integral
part of this Agreement and is incorporated herein by reference.
Section 9.9 Expenses; Brokers. Each party shall pay its own
-----------------
costs and expenses in connection with the negotiation and execution of this
Agreement and the transactions contemplated hereby, including without
limitation, fees and disbursements of counsel, financial advisors and
accountants. The Sellers shall pay any and all stamp, transfer and other similar
Taxes
14
payable or determined to be payable in connection with the execution and
delivery of this Agreement or the transfer of the Shares, and shall save and
hold each of the Purchasers harmless from and against any and all liabilities
with respect to or resulting from any delay in paying, or omission to pay, such
Taxes. Each of the parties represents to the others that neither it nor any of
its Affiliates has used a broker or other intermediary, in connection with the
transactions contemplated by this Agreement for whose fees or expenses any other
party will be liable and respectively agrees to indemnify and hold the others
harmless from and against any and all claims, liabilities or obligations with
respect to any such fees or expenses asserted by any person on the basis of any
act or statement alleged to have been made by such party or any of its
Affiliates.
Section 9.10 Press Releases and Public Announcements. All press
---------------------------------------
releases and similar public announcements relating to the transactions
contemplated by this Agreement and the Stockholders' Agreement shall be made
after mutual consultation among the Sellers and the Purchasers, except to the
extent that such disclosure is required by law or by stock exchange regulation;
provided that any such required disclosure shall only be made to the extent
required by such law or regulation.
Section 9.11 Assignment; No Third Party Beneficiaries. This
----------------------------------------
Agreement and the rights, duties and obligations hereunder may not be assigned
or delegated by either the Sellers or the Purchasers without the prior written
consent of the other parties hereto; provided that each Purchaser may assign or
delegate its rights, duties and obligations hereunder to a Permitted Transferee
or to such other person as may be reasonably satisfactory to the Sellers. Except
as provided in the preceding sentence, any assignment or delegation of rights,
duties or obligations hereunder made without the prior written consent of the
other parties hereto shall be void and of no effect. This Agreement and the
provisions hereof shall be binding upon and shall inure to the benefit of each
of the parties and their respective successors and permitted assigns. This
Agreement is not intended to confer any rights or benefits on any persons that
are not party hereto other than as expressly set forth in Sections 9.1 and 9.11.
Section 9.12 Severability. This Agreement shall be deemed
------------
severable, and the invalidity or unenforceability of any term or provision
hereof shall not affect the validity or enforceability of this Agreement or of
any other term or provision hereof. Furthermore, in lieu of any such invalid or
unenforceable term or provision, the parties hereto intend that there shall be
added as a part of this Agreement a provision as similar in terms to such
invalid or unenforceable provision as may be possible and be valid and
enforceable.
Section 9.13 Counterparts; Facsimile. This Agreement may be
-----------------------
executed in multiple counterparts, each of which shall be deemed an original,
and all of which taken together shall constitute one and the same instrument.
All documents and closing deliveries for the transactions contemplated by this
Agreement may be delivered by a party at the Closing via facsimile; provided,
that, the originally executed signature pages and original documents are
delivered to the appropriate parties within five (5) Business Days following the
Closing.
Section 9.14 Further Assurances. Each party hereto, upon the
------------------
request of any other party hereto, shall do all such further acts and execute,
acknowledge and deliver all such further
15
instruments and documents as may be necessary or desirable to carry out the
transactions contemplated by this Agreement, including, in the case of the
Sellers, such acts, instruments and documents as may be necessary or desirable
to convey and transfer to each Purchaser the Shares to be purchased by it
hereunder.
Section 9.15 Remedies Cumulative; No Consequential Damages. The
---------------------------------------------
remedies provided herein shall be cumulative and shall not preclude the
assertion by any party hereto of any other rights or the seeking of any remedies
against the other party hereto. In no event shall any party be liable to another
party or to any indemnitee hereunder for any special or consequential damages
arising in connection with this Agreement or the purchase and sale of the Shares
pursuant hereto.
* * *
16
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
___________________________
Xxx X. Xxxxxx
XXX X. XXXXXX IRREVOCABLE
CREDIT TRUST
By:________________________
Name:
Title:
POTTON RESOURCES LIMITED
By:________________________
Name:
Title:
ULTIMATE PIONEER LIMITED
By:________________________
Name:
Title:
EXHIBIT A
---------
Shares to be Purchased
----------------------
Aggregate
Purchaser Sellers No. of Shares Purchase Price
--------- ------- ------------- --------------
Potton Resources Limited Xxx X. Xxxxxx 9,110,843 $ 39,814,383.91
Potton Resources Limited Xxx X. Xxxxxx 3,403,169 $ 14,871,848.53
Irrevocable Credit Trust
Ultimate Pioneer Limited Xxx X. Xxxxxx 9,110,843 $ 39,814,383.91
Ultimate Pioneer Limited Xxx X. Xxxxxx 3,403,168 $ 14,871,844.16
Irrevocable Credit Trust
=============================
Total 25,028,023 $109,372,460.51
