STOCK PURCHASE AGREEMENT
Exhibit
1
This
STOCK PURCHASE AGREEMENT dated as of March 29, 2007 (this “Agreement”),
by
and between XXXXXX
CORPORATION,
a
Delaware corporation (“Seller”),
and
IHL
INVESTMENTS, LLC,
a
Delaware limited liability company (“Buyer”).
Recitals
Seller
is
the record and beneficial owner of 40,000 shares of Series C Convertible
Preferred Stock, $.001 par value (the “Shares”),
of
Teltronics, Inc., a Delaware corporation (the “Company”).
Buyer
desires to purchase the Shares from Seller, and Seller desires to sell the
Shares to Buyer, all upon the terms and subject to the conditions set forth
in
this Agreement.
Therefore,
in reliance on the representations, warranties and agreements made herein and
in
consideration of the premises and mutual promises herein contained and for
other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree
as
follows:
Terms
1. Sale
and Purchase of Shares.
At the
Closing (defined below), Seller shall sell, assign and transfer to Buyer the
Shares and all rights that Seller shall have with respect to any and all accrued
but unpaid dividends relating to the Shares by delivering to Buyer, against
payment therefor as provided below, one or more certificates evidencing the
Shares (the “Stock
Certificates”),
in
proper form for transfer or with duly executed stock powers attached thereto.
2. Closing.
The
closing of the transactions contemplated by this Agreement (the “Closing”)
shall
take place at the offices of Seller, 0000 Xxxx XXXX Xxxxxxxxx, Xxxxxxxxx,
Xxxxxxx 00000, or at such other place or places as the parties may agree on
March 29, 2007, (the “Closing
Date”)
and
shall be effective as of that date.
3. Purchase
Price and Payment.
The
purchase price payable by Buyer for the Shares shall be ONE MILLION SEVEN
HUNDRED THOUSAND DOLLARS ($1,700,000.00) (the “Purchase
Price”).
ONE
MILLION THREE HUNDRED THOUSAND DOLLARS ($1,300,000.00) of the Purchase Price
(the “Cash
Consideration”)
shall
be payable in cash at Closing by wire transfer of immediately available funds
to
the account designated by Seller to Buyer prior to the Closing. The remaining
FOUR HUNDRED THOUSAND DOLLARS ($400,000.00) of the Purchase Price (the
“Deferred
Consideration”)
shall
be due and payable from Buyer to Seller on December 27, 2007 without interest.
The terms of payment of the Deferred Consideration are further detailed by
the
terms of a promissory note made by Buyer in favor of Seller dated of even date
herewith (the “Note”),
which
obligations under the Note shall be secured by a pledge of the Shares pursuant
to a pledge agreement by Buyer in favor of Seller dated of even date herewith
(the “Pledge
Agreement”).
4. Deliveries
of Buyer at Closing.
At the
Closing, Buyer shall deliver to Seller:
(a) payment
of the Cash Consideration in accordance with Section 3 hereof;
(b) the
Note
in the amount of the Deferred Consideration in the form of Exhibit
A
attached
hereto; and
(c) the
Pledge Agreement in the form of Exhibit
B
attached
hereto.
5. Representations
and Warranties of Seller.
Seller
represents and warrants to Buyer that: (a) Seller is the owner of the Shares,
(b) Seller has the corporate power and authority to sell the Shares to Buyer
and
(c) the Shares are free of all encumbrances, except for restrictions with
respect to transferability imposed by the provisions of the Securities Act
of
1933, as amended or applicable state securities laws. EXCEPT AS EXPRESSLY
PROVIDED IN THIS SECTION 5, THE SELLER DISCLAIMS ALL REPRESENTATIONS AND
WARRANTIES, WHETHER EXPRESSED OR IMPLIED, WRITTEN OR ORAL.
6. Representations
and Warranties of Buyer.
Buyer
represents and warrants to Seller that:
(a) Buyer
acknowledges and agrees that Seller: (i) is not a controlling person with
respect to the Company; (ii) does not have the power to nominate or appoint
any
member of the Company’s board of directors; (iii) is not otherwise involved in
the management of the Company; and (iv) has a relationship with the Company
such
that Seller is not privy to, nor does Seller have access to, information
regarding the Company that has not been publicly disclosed;
(b) Buyer
is
not relying on Seller to provide Buyer information regarding the Company or
the
Shares, and Buyer is looking solely to the Company for such
information;
(c) the
Company has provided Buyer all information relevant to Buyer’s investment
decision, including, but not limited to, the Company’s financial statements for
the most recent fiscal year and any and all of the Company’s reports and
registration statements filed with the Securities Exchange
Commission;
(d) the
Company has permitted Buyer to make such other investigations as Buyer considers
appropriate to determine or verify the condition (financial or otherwise) of
the
Company and to consummate the transactions contemplated by this
Agreement;
(e) Buyer
is
able to evaluate the merits, risks and other factors bearing on the suitability
of the Shares as an investment;
(f) Buyer
is
acquiring the Shares for its own account, for investment purposes only and
not
with a view to, or for sale in connection with, any distribution of the Shares,
or with any present intention of selling all or part of the Shares;
(g) Buyer
is
not acting as part of a group, or in concert with any other person or entity,
in
connection with its purchase of the Shares; and
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(h) Buyer
is
aware that it may be required to report the acquisition of Shares pursuant
to
Section 16 of the Securities Exchange Act and may be subject to other reporting
obligations under applicable securities laws.
7. Indemnification.
Subject
to the conditions set forth below, each party hereto (the “Indemnifying
Party,”
as
applicable) agrees to indemnify and hold harmless the other party hereto and
its
respective affiliates, agents, employees, officers and directors (collectively,
the “Indemnified
Parties”)
against any and all loss, liability, claim, damage and reasonable expense
whatsoever (which shall include, for all purposes of this Section 7, but not
be
limited to, reasonable attorneys’ fees and any and all expense whatsoever
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever and any and all amounts paid
in
settlement of any claim or litigation) as and when incurred arising out of,
based upon, or in connection with (a) any breach of representation or warranty
contained in this Agreement, or (b) the Indemnifying Party’s breach of the
provisions of this Agreement.
8. Release
of Seller. Except
for Seller’s obligation to deliver the Stock Certificates to Buyer pursuant to
Section 1 hereof; deliver the Assignment pursuant to Section 9 hereof; and
Seller’s representations and warranties as set forth in Section 5 hereof: (a)
Seller and its affiliates, agents, employees, officers and directors shall
have
no liability to Buyer or its affiliates, agents, employees, officers or
directors for any losses, claims or expenses related to or arising out of this
Agreement; and (b) Buyer for itself and on behalf of its affiliates, agents,
employees, officers and directors hereby waives and releases any and all claims
Buyer currently has or may in the future have against Seller and its affiliates,
agents, employees, officers and directors arising in connection with or
otherwise related to this Agreement or the transactions contemplated
hereby.
9. Assignment
of Registration Rights Agreement.
At the
Closing, Seller shall assign to Buyer the Registration Rights Agreement dated
March 27, 2002 by and between Seller and the Company.
10. Miscellaneous
Provisions.
(a) Costs
and Expenses.
Each
party shall pay its own expenses in connection with the preparation,
negotiation, and performance of the terms of this Agreement.
(b) Survival
of Representations and Warranties.
The
representations and warranties contained herein or in any certificate,
statement, document or instrument furnished hereunder shall survive the Closing
until March 29, 2009. The covenants of Seller and Buyer shall continue in full
force and effect in accordance with their respective terms.
(c) Governing
Law.
This
Agreement shall be governed by, and construed and enforced in accordance with
the laws of the State of Delaware without giving effect to any choice or
conflicts of laws provisions or rules thereof (whether of the State of Delaware
or any other jurisdiction) that would cause the application of the laws of
any
other jurisdiction other than the State of Delaware.
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(d) Notices.
All
notices, consents, requests, instructions, approvals and other communications
which may be or are required to be given, served or sent by either party
pursuant to this Agreement, shall be in writing and shall be delivered
personally, or sent by nationally recognized overnight courier service, or
by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If
to
Buyer:
IHL
Investments, LLC
0000
Xxx Xxxxx, Xxxxx
000
Xxxxxx,
Xxxxx
00000
Attention: Manager
With
a
copy to: Xxxxxxxxx,
Xxxxx, Xxxxxx & Xxxxx, P.C.
0000
Xxx Xxxxx, Xxxxx
000
Xxxxxx,
Xxxxx
00000
Attention: Xxx
X.
Xxxxxxxxx, Esq.
If
to
Seller: Xxxxxx
Corporation
0000
Xxxx
XXXX Xxxxxxxxx
Xxxxxxxxx,
XX 00000
Attention: Xxxxx
X.
Xxxxxx
Each
party may designate by notice in writing as aforesaid a new address to which
any
notice, demand, request or communication may thereafter be so given, served
or
sent. Each notice, demand, request or communication which shall be mailed,
sent,
or delivered in the manner described above, shall be deemed sufficiently given,
served, sent or received for all purposes (i) on the day personally
delivered or faxed, (ii) on the second day after the date delivered to a
nationally recognized overnight courier, or (iii) on the fifth day following
the
date sent by certified mail.
(e) Severability.
If any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction to be illegal, invalid, void or unenforceable, then
the
remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect.
(f) Submission
to Jurisdiction;
Prevailing Party
(i) Jurisdiction.
EACH
PARTY HEREBY CONSENTS TO THE JURISDICTION OF ANY FEDERAL COURT LOCATED WITHIN
THE MIDDLE DISTRICT OF FLORIDA AND ANY STATE COURT WITHIN BREVARD COUNTY, STATE
OF FLORIDA, AND IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS RELATING
TO
THIS AGREEMENT MAY BE LITIGATED IN SUCH COURTS, AND EACH PARTY WAIVES ANY
OBJECTION WHICH IT MIGHT HAVE BASED ON IMPROPER VENUE OR FORUM NON CONVENIENS.
EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH
RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT.
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(ii) Prevailing
Party.
In the
event of a dispute hereunder, the prevailing party in such dispute shall be
entitled to recover from the non-prevailing party, all costs and expenses
incurred in connection with such dispute, including reasonable attorneys’ fees
and costs incurred before and at trial or any other proceedings.
(g) Specific
Performance.
The
parties acknowledge and agree that the other would be irreparably damaged if
any
of the provisions of this Agreement are not performed in accordance with their
specific terms or are otherwise breached and that any breach of this Agreement
could not be adequately compensated in all cases by monetary damages alone.
Accordingly, in addition to any other right or remedy to which a party may
be
entitled, at law or in equity, it shall be entitled to enforce any provision
of
this Agreement by specific performance and to temporary, preliminary, and
permanent injunctive relief to prevent breaches or threatened breaches of any
of
the provisions of this Agreement.
(h) No
Third Party Beneficiary.
This
Agreement is entered into solely for the benefit of the parties hereto, and
the
provisions of this Agreement shall be for the sole and exclusive benefit of
such
parties and their respective successors and permitted assigns. No person not
a
party hereto or their successors and permitted assigns (including the Company)
shall be entitled to enforce any provisions hereof or exercise any right
hereunder.
(i) Waiver;
Amendment.
(i) Neither
the waiver by either of the parties hereto of a breach of or a default under
any
one or more of the provisions of this Agreement, nor the failure of either
of
the parties, on one or more occasions, to enforce any of the provisions of
this
Agreement or to exercise any right or privilege hereunder shall thereafter
be
construed as a waiver of any subsequent breach or default of a similar nature,
or as a waiver of any such provisions, rights or privileges hereunder. No waiver
shall be binding unless executed by the party making the waiver.
(ii) No
provisions of this Agreement may be amended, modified, discharged or terminated
except by written agreement duly executed by each of the parties.
(j) Assignment.
Neither
Seller nor Buyer shall assign any of their rights or obligations under this
Agreement without the prior written consent of the other. This Agreement shall
be binding upon and shall inure to the benefit of the parties and their
respective successors and permitted assigns.
(k) Entire
Agreement.
This
Agreement, the Note and the Pledge Agreement embody and constitute the entire
agreement and understanding between the parties with respect to the subject
matter hereof and supersede and cancel any prior and contemporaneous oral or
written agreement, letter of intent, proposal executed or delivered by or on
behalf of any of the parties, representations or understanding related to the
subject matter hereof, written or oral.
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(l) Counterparts.
This
Agreement may be executed in one or more counterparts (including by means of
facsimile or other non-alterable electronic transmission), and it shall not
be
necessary that the signature of, or on behalf of, each party, or that the
signatures of all persons required to bind any party, appear on each
counterpart, but it shall be sufficient that the signature of, or on behalf
of,
each party, or that the signatures of the persons required to bind any party,
appear on one or more such counterparts. All counterparts shall constitute
one
and the same instrument. It shall not be necessary in making proof of this
Agreement or any counterpart hereof to produce or account for any of the other
counterparts.
(m) No
Set-Off.
Neither
party hereto shall have any right to set-off any amounts due under this
Agreement against any claims or amounts due to the other parties under any
other
arrangement between or among the parties.
(n) Counsel.
Each
party hereto acknowledges each of them have been represented by legal counsel
with respect to all matters contemplated herein, from the commencement of
negotiations and at all times through the execution hereof, and each party
represents and warrants that it has reviewed, knows and understands, and agrees
with the terms and conditions of this Agreement.
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SIGNATURE
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IN
WITNESS WHEREOF, the parties have executed this Stock Purchase Agreement as
of
the date set forth above.
SELLER:
XXXXXX
CORPORATION
By:
/s/ Xxxxxxx X. Xxxxxx
Name:
Xxxxxxx X.
Xxxxxx
Title:
V.P.-Tax &
Treasurer
BUYER:
By:
/s/ L. Bailikowsky
Name: L.
Bailikowsky
Its:
Manager
SELLER:
*
* * *
*
State
of
FLORIDA
County
of
Brevard
On
March
29, 2007
before
me appeared Xxxxxxx
X. Xxxxxx
who is
personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to within the instrument and acknowledged to
me
that he executed the same in his authorized capacity, and that by his signature
on the instrument the person, or the entity upon behalf of which the person
acted, executed the instrument.
|
Notary
Public,
Commission
No. DD263331
Expires
2/24/08
(SEAL)
|
/s/
Xxxxx
X. Xxxxxxxxx
Notary
|
BUYER:
*
* * *
*
State
of
TEXAS
County
of
Dallas
On
March
29, 2007
before
me appeared L.
Bailikowsky
who is
personally
known to me (or proved to me on the basis of satisfactory evidence) to be
the
person whose name is subscribed to within the instrument and acknowledged
to me
that he executed the same in his authorized capacity, and that by his signature
on the instrument the person, or the entity upon behalf of which the person
acted, executed the instrument.
|
Notary
Public,
Commission
No.
Expires
July 25, 2009
(SEAL)
|
/s/
Xxxxxxxx
Xxxxxxx
Notary
|
[Signature
page to Stock Purchase Agreement]
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