AGREEMENT
THIS AGREEMENT is made and entered into this 4th day of February, 1999, by
and between COMPU-XXXX, INC., hereinafter referred to as "Compu-Xxxx," and BOCA
RESEARCH, INC., hereinafter referred to as "BRI."
W I T N E S S E T H : WHEREAS, e-TV COMMERCE, INC. ("e-TV"), a wholly owned
subsidiary and assignee of Compu-Xxxx, has acquired the operating and other
assets of LocalNet Communications, Inc. ("LocalNet") pursuant to a peaceful
surrender Agreement in satisfaction of a portion of the principal of a senior
secured loan to LocalNet; and
WHEREAS, Compu-Xxxx and e-TV, in order to develop and operate its business
with the assets acquired from LocalNet, desires to commence and continue
commerce with BRI and to obtain exclusivity rights being the same as that which
BRI heretofore provided LocalNet, subject to Compu-Xxxx and/or e-TV maintaining
an exclusive source of supply of its set top box products from BRI.
NOW, THEREFORE, in consideration for BRI extending the exclusivity terms as
described in this Agreement, BRI's agreeing to continue to commence and engage
in commerce with Compu-Xxxx and e-TV and other good and valuable consideration,
the adequacy of which is hereby acknowledged, the parties hereby agree as
follows:
1. Compu-Xxxx shall, within five (5) days following the date of this
Agreement, issue to BRI, at no cost to BRI, fully paid-up common stock in
Compu-Xxxx in two (2) tranches, the terms relative to each being hereinafter
described:
A. 91,363 shares (the "Tranche 1 Shares")
B. 26,087 shares (the "Tranche 2 Shares") valued at $5.75 per share
(the "Tranche 2 Shares Price").
C. Compu-Xxxx shall retain a call on all shares issued pursuant to
both tranches at a price equal to $5.00 per share for the Tranche 1 Shares,
and the Tranche 2 Shares Price for the Tranche 2 Shares; provided that such
call may only be exercised in its entirety as to all shares held by BRI.
2. Tranche 1 Shares Terms and Conditions. All Tranche 1 Shares shall be
unregistered stock and may only be publicly sold pursuant to Rule 144
promulgated under the Securities Act of 1933, as amended (the "Securities Act")
or pursuant to an effective, current registration statement under the Securities
Act. BRI shall be granted piggyback registration rights with respect to the
Tranche 1 Shares as set forth in Section 9. Compu-Xxxx shall at all times retain
a call on such Tranche 1 Shares held by BRI prior to their public sale on the
open market at a price equal to $5.00 per share. Upon the expiration of one (1)
year from the date of
this Agreement, BRI shall be entitled to sell such shares as it deems
appropriate in the open market, pursuant to Rule 144.
Notwithstanding the foregoing, BRI agrees that at such time as BRI shall
have obtained net proceeds from the sale of any Tranche 1 Shares in an amount
equal to $456,814.17, BRI shall provide Compu-Xxxx written notice thereof, and
ten (10) days after providing such notice (the "Election Notice Period"), either
(I) shall endorse over and deliver to Compu-Xxxx remaining Tranche 1 Shares
which BRI shall possess, or (ii) if Compu-Xxxx elects in writing prior to the
expiration of the Election Notice Period, BRI shall continue to sell the Tranche
1 Shares publicly and deliver the net proceeds from such sale above such
$456,814.17 to Compu-Xxxx.
3. Tranche 2 Shares Terms and Conditions. All Tranche 2 Shares shall be
unregistered and may be publicly sold pursuant to Rule 144 or pursuant to an
effective, current registration statement. Compu-Xxxx shall, at all times,
provide BRI with full piggyback registration rights with respect to the Tranche
2 Shares as set forth in Section 9.
4. Exclusivity. Provided that LocalNet Communications, Inc. shall execute a
full release and consent in form as attached hereto as Exhibit "A," BRI hereby
agrees not to manufacture the set top box product (the "Product") for any
multilevel marketing company which is engaged primarily in the business of
reselling local and/or long distance telephone services or Internet access
services upon the following terms and conditions:
(a) Exclusivity shall not apply to BRI's sale of approximately 40,000
units of the Product on a one-time basis to a competitor of Compu-Xxxx set
forth on Schedule 4(a) attached hereto, provided that such Product is
without Citrix-type enhancements which make the Product network capable.
(b) The Exclusivity shall be conditioned upon Compu-Xxxx ordering and
accepting delivery from BRI of no fewer than 36,000 units of the Product
during the first twelve (12) months following the date of this Agreement,
of which at least 8,000 of said units must be ordered and delivery accepted
within the first six (6) months of this Agreement.
(c) During the second twelve (12) months following the execution of
this Agreement, such Exclusivity shall continue, provided that Compu-Xxxx
shall have ordered and accepted delivery of no fewer than 80,000 units of
Product from BRI, with such units being ordered and delivery accepted at
the rate of 20,000 units per quarter; provided, however, that in the event
Compu-Xxxx shall fail to meet such minimum 20,000 unit per quarter
commitment, Compu-Xxxx shall have the right to cure such deficiency during
the immediate next quarter.
(d) The Exclusivity shall terminate upon the earlier of (a)
Compu-Dawn's failure to meet its commitment as set forth above as well as
all of its obligations to BRI (including payments) as provided for in this
Agreement, or (b) two (2) years from the date of this Agreement.
(e) Provided that Exclusivity shall remain in effect at the expiration
of two (2) years from the date of this Agreement, the parties agree to
negotiate in good faith for the extension of the Exclusivity, subject to
the parties' mutual agreement as to acceptable minimum volume commitments
by Compu-Xxxx, considering then prevailing market conditions.
5. Legend. The Certificate(s) representing Tranche 1 Shares and Tranche 2
Shares (collectively the "Common Shares") shall bear a legend that the Common
Shares are subject to this Agreement in a form acceptable to Compu-Xxxx, in
addition to any other legends thereon.
6. Release. BRI hereby releases and forever discharges Compu-Xxxx, its
parent, subsidiaries (including, without limitation, x.XX), affiliates, related
companies, stockholders, directors, officers, employees, agents, attorneys,
successors, and assigns (collectively, the "Compu-Xxxx Releasees") from all
liabilities, actions, causes of action, suits, claims, debt damages and demands
whatsoever, whether known or unknown, at law or in equity, whether statutory or
common law, whether federal, state, local, or otherwise, which against the
Compu- Xxxx Releasees, BRI, its successors and assigns ever had, now have or
hereafter can, shall or may, have for, upon, or by reason of, or arising out of,
its relationship with LocalNet or in connection with, or related to, the
Peaceful Surrender Agreement, at any time up to and including the date hereof,
excluding, however, Compu-Dawn's obligation for the guarantee of any payments to
BRI owed by LocalNet which were expressly guaranteed by Compu-Xxxx.
7. BRI Representations and Warranties. BRI, hereby represents and warrants
to Compu-Xxxx:
(a) Status. It is a corporation duly authorized, validly existing and
in good standing under the laws of its state of incorporation and it has
qualified to do business as a foreign limited partnership in the
jurisdictions, if any, outside of such state, in which it does business and
is required to so qualify;
(b) Performance. It has full corporate power and authority to execute
and deliver this Agreement and to perform the duties and responsibilities
contemplated hereby;
(c) Authorization. The execution, delivery and performance of this
Agreement has been duly authorized by its directors and no other corporate
approvals are necessary;
(d) No Conflict of Violation. that neither the execution of this
Agreement nor performance hereunder will (i) violate, conflict with or
result in a breach of any provisions of, or constitute a default (or an
event which, with notice or lapse of time or both, would constitute a
default) under the terms, conditions or provisions of its limited
partnership agreement or any contract, agreement or other instrument or
obligation to which it is a party, or by which it may be bound, or (ii)
violate any order, judgment, writ, injunction or decree applicable to it.
(e) Investment Representations. With respect to the issuance of the
Common Shares:
i) BRI represents and warrants that the common Shares
are being acquired for its own account, for investment
purposes and not with a view to any distribution. BRI will not
sell, assign, mortgage, pledge, hypothecate, transfer or
otherwise dispose of any of the common Shares unless (A) a
registration statement under the Securities Act, with respect
thereto is in effect and the prospectus included therein meets
the requirements of Section 10 of the Securities Act, or (B)
Compu-Xxxx has received a written opinion of its counsel that,
after an investigation of the relevant facts, such counsel is
of the opinion that such proposed sale, assignment, mortgage,
pledge, hypothecation, transfer or disposition does not
require registration under the Securities Act.
(ii) BRI represents and warrants further that (A) it
is either an "accredited investor," as such term is defined in
Rule 501(a) promulgated under the Securities Act, or, either
alone or with its purchaser representative, has such knowledge
and experience in financial and business matters that it is
capable of evaluating the merits and risks of the acquisition
of the Common Shares; (B) it is able to bear the economic
risks of an investment in the Common Shares, including,
without limitation, the risk of the loss of part or all of its
investment and the inability to sell or transfer the Common
Shares for an indefinite period of time; (C) it has adequate
financial means of providing for current needs and
contingencies and has no need for liquidity in its investment
in the Common Shares; and (D) it does not have an overall
commitment to investments which are not readily marketable
that is excessive in proportion to net worth and an investment
in the Common Shares will not cause such overall commitment to
become excessive.
(iii) BRI has obtained and reviewed Compu-Dawn's
reports filed under the Securities Exchange Act of 1934, as
amended, (the "Exchange Act") including, without limitation,
Compu-Dawn's Annual Report on Form 10-KSB for the year ended
December 31, 1997, Quarterly Reports, on Form 10-QSB for the
periods ended March 31, June 30, and September 30, 1998 and
Current Reports on Form 8-K for events dated April 22, April
23, June 8, September 1, September 25, and November 18, 1998
and has been afforded the opportunity to obtain such
information with regard to the Compu-Xxxx it has requested to
evaluate the merits and risks of BRI's investment in the
Common Shares.
(f) BRI acknowledges that a restrictive legend will be placed on any
instrument, certificate or other document evidencing the Common Shares in,
or substantially in, the following form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933 and may not be
sold, transferred, pledged, hypothecated or otherwise disposed
of in the absence of (i) an effective registration statement
for such securities under said act or (ii) an opinion of
Company counsel that such registration is not required."
(g) BRI acknowledges that Compu-Xxxx will be relying upon the
foregoing with regard to the issuance of the Common Shares to BRI and any
subsequent transfer of the Common Shares by BRI and agrees to advise
Compu-Xxxx in writing in the event of any change in any of the foregoing.
8. Compu-Xxxx Representations and Warranties. Compu-Xxxx hereby represents
and warrants to BRI:
(a) Status. It is a corporation duly organized validly existing and in
good standing under the laws of the state of its incorporation and it has
qualified to do business as a foreign corporation in the jurisdictions, if
any, outside of such state, in which it does business and is required to so
qualify;
(b) Performance. It has full corporate power and authority to execute
and deliver this Agreement and to perform the duties and responsibilities
contemplated hereby;
(c) Authority. The execution, delivery and performance of this
Agreement has been duly authorized by its Board of Directors and no other
corporate approvals are necessary;
(d) No Conflict Violation. That neither the execution of this
Agreement nor performance hereunder will (i) violate, conflict with or
result in a breach of any provisions of, or constitute a default (or an
event which, with notice or lapse of time or both, would constitute a
default) under the terms, conditions or provisions of its Certificate of
Incorporation or By-Laws or any contract, agreement or other instrument or
obligation to which it is a party, or by which it may be bound, or (ii)
violate any order, judgment, writ, injunction or decree applicable to it.
(e) Issuance of Common Shares. Upon issuance of the Common Shares as
provided herein, such Common Shares shall be duly authorized, validly
issued, fully paid and non-assessable Common Shares of Compu-Xxxx.
9. Piggy-back Registration Rights
(a) Compu-Xxxx Obligations.
(i) Registration. If at any time after the date hereof
Compu-Xxxx shall file with the Securities and Exchange
Commission (the "SEC")
a registration statement (a "Registration Statement") under
the Securities Act relating to an offering for its own account
or the account of others under the Securities Act of any of
its equity securities (other than on Form S-4 or Form S-8 or
their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity
or business or equity securities issuable in connection with
stock option or other employee benefit plans), Compu-Xxxx
shall send to BRI written notice of such determination and, if
within fifteen (15) days after the date of such notice, BRI
shall so request in writing, Compu-Xxxx shall include in such
Registration Statement all or any part of the Common Shares
BRI requests to be registered, except that if, in connection
with any underwritten public offering, the managing
underwriter(s) thereof shall impose a limitation on the number
of of Common Shares which may be included in the Registration
Statement because, in such underwriter(s)' judgment, marketing
or other factors dictate such limitation is necessary to
facilitate public distribution, then Compu-Xxxx shall be
obligated to include in such Registration Statement only such
limited portion of the as the underwriter shall permit
(limited to zero if necessary). If an offering in connection
with which is entitled to registration under this Section
9(a)(i) is an underwritten offering, then BRI shall, unless
otherwise agreed by Compu-Xxxx, offer and sell such Common
Shares in an underwritten offering using the same underwriter
or underwriters and, subject to the provisions of this
Agreement, on the same terms and conditions as other Common
Shares included in such underwritten offering.
(ii) Amendments and Supplements; Maintain
Effectiveness. Compu-Xxxx shall prepare and file with the SEC
such amendments (including post-effective amendments) and
supplements to the Registration Statement and the prospectus
used in connection with the Registration Statement as may be
necessary to keep the Registration Statement effective at all
times for a period of six (6) months following the effective
date thereof (the ARegistration Period@), except during any
Disclosure Delay Period (as defined in Section 9(a)(iii)),
and, during such period, comply with the provisions of the
Securities Act with respect to the disposition of all Common
Shares covered by the Registration Statement until such time
as all of such Common Shares have been disposed of in
accordance with the intended methods of disposition by BRI
thereof as set forth in the Registration Statement.
(iii) Disclosure Delay Period. If, at any time prior
to the expiration of the Registration Period, in the good
faith reasonable judgment of Compu-Dawn's Board of Directors,
the disposition of Common Shares would require the premature
disclosure of material non-public information which may
reasonably be expected to have an adverse effect on
Compu-Xxxx, then Compu-Xxxx shall not be required to
maintain the effectiveness of or amend or supplement the
Registration Statement for a period (a "Disclosure Delay
Period") expiring upon the earlier to occur of (A) the date on
which such material information is disclosed to the public or
ceases to be material or (B) subject to Section 9(a)(iv)
hereof, up to ninety (90) calendar days after the date on
which Compu-Xxxx provides a notice to BRI under Section
9(a)(iv) hereof stating that the failure to disclose such
non-public information causes the prospectus included in the
Registration Statement, as then in effect, to include an
untrue statement of a material fact or to omit to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading.
(iv) Notice of Disclosure Delay Period. Compu-Xxxx
will give prompt written notice, to BRI of each Disclosure
Delay Period. BRI agrees that, upon receipt of such notice
prior to BRI's disposition of all such Common Shares will
forthwith discontinue disposition of such Common Shares
pursuant to the Registration Statement, and will not deliver
any prospectus forming a part thereof in connection with any
sale of such Common Shares until the expiration of such
Disclosure Delay Period. Notwithstanding anything in this
Section 9 to the contrary, there shall not be more than an
aggregate of One Hundred Eighty (180) calendar days in any
twelve (12) month period during which Compu-Xxxx is in a
Disclosure Delay Period.
(v) Copies of Filings and Correspondence. Compu-Xxxx
shall furnish to BRI if its Common Shares are included for
resale in the Registration Statement (A) promptly after the
same is prepared and publicly distributed, filed with the SEC,
or received by Compu-Xxxx, one copy of the Registration
Statement and any amendment thereto, each preliminary
prospectus and prospectus and each amendment or supplement
thereto, and each item of correspondence from the SEC or the
staff of the SEC which comments upon or requests information
relating to BRI and/or the Common Shares (including, without
limitation, the resale and plan of distribution hereof), in
each case relating to such Registration Statement (other than
any portion, if any, thereof which contains information for
which Compu-Xxxx has sought confidential treatment), (B) on
the date of effectiveness of the Registration Statement or any
amendment thereto, a notice stating that the Registration
Statement or amendment has been declared effective, and (C)
such number of copies of a prospectus, including a preliminary
prospectus, and all amendments and supplements thereto and
such other documents as such BRI may reasonably request in
order to facilitate the disposition of the Common Shares by
BRI.
(vi) Blue Sky. Compu-Xxxx shall use its best efforts
to (A) register and qualify the Common Shares covered by the
Registration Statement under such other securities or "blue
sky" laws of such jurisdictions in the United States as BRI
reasonably requests, (B) prepare and file in those
jurisdictions such amendments (including post-effective
amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (C) take
such other actions as may be necessary to maintain such
registrations and qualifications in effect at all times during
the Registration Period, and (D) take all other actions
reasonably necessary or advisable to qualify the Common Shares
for sale in such jurisdictions; provided, however, that
Compu-Xxxx shall not be required in connection therewith or as
a condition thereto to (A) qualify to do business in any
jurisdiction where it would not otherwise be required to
qualify but for this Section 9(a)(vi), (B) subject itself to
general taxation in any such jurisdiction, (C) file a general
consent to service of process in any such jurisdiction, (D)
provide any undertakings that cause Compu- Xxxx undue expense
or burden, or (E) make any change in its charter or bylaws,
which in each case the Board of Directors of Compu-Xxxx
determines to be contrary to the best interests of Compu-Xxxx
and its stockholders.
(vii) Events Affecting Prospectus. As promptly as
practicable after becoming aware of such event, Compu-Xxxx
shall notify BRI of the happening of any event, of which
Compu-Xxxx has knowledge, as a result of which the prospectus
included in the Registration Statement, as then in effect,
includes an untrue statement of a material fact or omission to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and
if such Registration Statement is supplemented or amended to
correct such untrue statement or omission, to deliver such
number as BRI may reasonably request.
(viii) Notification of Amendment or Supplement.
Compu-Xxxx shall, as promptly as practical after becoming
aware of such event described in Section 9(vii), notify BRI of
the issuance of such order and the resolution thereof (and if
such Registration Statement is supplemented or amended,
deliver such number of copies of such supplement or amendment
to BRI as BRI may reasonably request).
(ix) Review by BRI's Counsel. Compu-Xxxx shall permit
a single firm of counsel designated by BRI to review the
Registration Statement and all amendments and supplements
thereto a reasonable period of time prior to their filing with
the SEC.
(x) BRI's Due Diligence; Confidentiality of
Compu-Xxxx Information. Compu-Xxxx shall make available for
inspection by (A) BRI, (B) one firm of attorneys and one firm
of accountants or other agents retained by BRI (collectively,
the "Inspectors") all pertinent financial and other records,
and pertinent corporate documents and properties of Compu-Xxxx
(collectively, the "Records"), as shall be reasonably deemed
necessary by each Inspector to enable each Inspector to
exercise its due diligence responsibility, and cause
Compu-Dawn's officers, directors and employees to supply all
information which BRI may reasonably request for purposes of
such due diligence; provided, however, that each Inspector
shall hold in confidence and shall not make any disclosure
(except to BRI) of any Record or other information which
Compu-Xxxx determines in good faith to be confidential, and of
which determination the Inspector so notified, unless (A) the
disclosure of such Records is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (B)
the release of such Records is ordered pursuant to a subpoena
or other order from a court or government body of competent
jurisdiction, or (C) the information in such Records has been
made generally available to the public other than by
disclosure in violation of this or any other agreement.
Compu-Xxxx shall not be required to disclose any confidential
information in such Records to any Inspector until and unless
such Inspector shall have entered into a confidentiality
agreements with Compu-Xxxx with respect thereto, substantially
in the form of this Section9(a)(x). BRI agrees that it shall,
upon learning that disclosure of such Records is sought in or
by a court or governmental body of competent jurisdiction or
through other means, give prompt notice to Compu-Xxxx and
allow Compu-Xxxx, at its expense, to undertake appropriate
action to prevent disclosure of, or to obtain a protective
order for, the Records deemed confidential. Nothing herein
shall be deemed to limit BRI's ability to sell Common Shares
in a manner which is otherwise consistent with applicable laws
and regulations.
(xi) Confidentiality of BRI Information. Compu-Xxxx
shall hold in confidence and not make any disclosure of
information concerning BRI provided to Compu-Xxxx unless (A)
disclosure of such information is necessary to comply with
federal or state securities laws, (B) the disclosure of such
information is necessary to avoid or correct a misstatement or
omission in any Registration Statement, (C) the release of
such information is ordered pursuant to a subpoena or other
order from a court or governmental body of competent
jurisdiction, (D) such information has been made generally
available to the public other than by disclosure in violation
of this or any other agreement, or (E) BRI consents to the
form and content of any such disclosure. Compu-Xxxx agrees
that it shall, upon learning that disclosure of such
information concerning BRI is sought in or by a court or
governmental body of competent jurisdiction
or through other means, give prompt notice to BRI prior to
making such disclosure, and allow BRI, at its expense, to
undertake appropriate action to prevent disclosure of, or to
obtain a protective order for, such information.
(xii) Compliance with Laws. Compu-Xxxx shall comply
with all applicable laws related to a Registration Statement
and offering and sale of securities and all applicable rules
and regulations of governmental authorities in connection
therewith (including, without limitation, the Securities Act
and the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated by the SEC.)
(b) Obligations of BRI. In connection with a registration of the
Common Shares BRI shall have the following obligations:
(i) BRI Information. It shall be a condition
precedent to the obligations of Compu-Xxxx to complete the
registration pursuant to Section 9 that BRI shall furnish to
Compu-Xxxx such information regarding itself, the Common
Shares and the intended method of disposition of the as shall
be required to effect the registration of such Registrable
Securities and shall execute such documents in connection with
such registration as Compu-Xxxx may reasonably request. At
least five (5) business days prior to the first anticipated
filing date of the Registration Statement, Compu-Xxxx shall
notify BRI of the information Compu-Xxxx requires from BRI.
(ii) Cooperation. BRI, agrees to cooperate with
Compu-Xxxx as requested by Compu-Xxxx in connection with the
preparation and filing of the Registration Statement
hereunder, unless BRI does not include any of the Common
Shares in the Registration Statement.
(iii) Underwritten Offering. In the event BRI
determines to engage the services of an underwriter, BRI
agrees to enter into and perform its obligations under an
underwriting agreement, in usual and customary form,
including, without limitation, customary indemnification and
contribution obligations, with the managing underwriter of
such offering and take such other actions as are reasonably
required in order to expedite or facilitate the disposition of
the Common Shares.
(iv) No Disposition of Common Shares. BRI agrees
that, upon receipt of any notice from Compu-Xxxx of the
happening of any event of the kind described in Sections
9(a)(vii) or 9(a)(viii), BRI will immediately discontinue
disposition of Common Shares pursuant to the Registration
Statement covering the resale of such Registrable Securities
until BRI's receipt of the copies of the supplemented or
amended prospectus
contemplated by Sections 9(a)(vii) or 9(a)(viii) and, if so
directed by Compu-Xxxx, BRI shall deliver to Compu-Xxxx or
destroy (and deliver to Compu-Xxxx a certificate of
destruction) all copies in BRI's possession, of the prospectus
covering such Common Shares current at the time of receipt of
such notice.
(v) Method of Underwritten Distribution. BRI may not
participate in any underwritten distribution of the Common
Shares unless BRI (A) agrees to sell the Common Shares on the
basis provided in any underwriting arrangements in usual and
customary form entered into by Compu-Xxxx, (B) completes, in a
manner reasonably acceptable to Compu-Xxxx, and executes all
questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the
terms of such underwriting arrangements, and (C) agrees to pay
its pro rata share of all underwriting discounts and
commissions and any expenses in excess of those payable by
Compu- Xxxx pursuant to Section 9(c) below.
(c) Expenses of Registration. All reasonable expenses, other than
underwriting discounts and commissions, incurred in connection with
registrations, filings or qualifications, relating to one (1)
Registration Statement pursuant to Section 9, except that if a portion
of BRI Shares are not permitted to be included in one (1) Registration
Statement by an underwriter as provided in Section 9(a)(i), then
relating to the least number of Registration Statements which will
cover the resale of all the Common Shares, including all registration,
listing and qualifications fees, printers and accounting fees, the
fees and disbursements of counsel for Compu-Xxxx hereof, shall be
borne by Compu-Xxxx.
(d) Indemnification. In the event any Common Shares are included
for resale in a Registration Statement under this Agreement:
(i) Compu-Xxxx Indemnification. To the extent
permitted by law, Compu-Xxxx will indemnify, hold harmless and
defend (A) BRI and (B) the directors, officers, partners,
members, employees, agents and each person who controls BRI
within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, if any, (each, an "Indemnified
Person"), against any joint or several losses, claims,
damages, liabilities or expenses (collectively, together with
actions, proceedings or inquiries by any regulatory or
self-regulatory organization, whether commenced or threatened,
in respect thereof, "Claims") to which any of them may become
subject insofar as such Claims arise out of or are based upon:
(A) any untrue statement or alleged untrue statement of a
material fact in a Registration Statement or the omission or
alleged omission to state therein a material fact required to
be stated or necessary to make the statements therein not
misleading, (B) any untrue statement
or alleged untrue statement of a material fact contained in
any preliminary prospectus if used prior to the effective date
of such Registration Statement, or contained in the final
prospectus (as amended or supplemented, if Compu-Xxxx files
any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material
fact necessary to make the statements made therein, in light
of the circumstances under which the statements therein were
made, not misleading, or (C) any violation or alleged
violation by Compu-Xxxx of the Securities Act, the Exchange
Act, any other applicable securities law, including, without
limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the
Common Shares (the matters in the foregoing clauses (A)
through (C) being, collectively, "Violations"). Subject to the
restrictions set forth in Section 9(d)(iii) with respect to
the number of legal counsel, Compu-Xxxx shall reimburse BRI
and each other Indemnified Person, promptly as such expenses
are incurred and are due and payable, for any reasonable legal
fees or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 9(d)(i):
(A) shall not apply to a Claim arising out of or based upon a
Violation which occurs in reliance upon and in conformity with
information furnished in writing to Compu-Xxxx by such
Indemnified Person expressly for use in the Registration
Statement or any such amendment thereof or supplement thereto;
(B) shall not apply to amounts paid in settlement of any Claim
if such settlement is effected without the prior written
consent of Compu-Xxxx; and (C) with respect to any preliminary
prospectus, shall not inure to the benefit of any Indemnified
Person if the untrue statement or omission of material fact
contained in the preliminary prospectus was corrected on a
timely basis in the prospectus, as then amended or
supplemented, if such corrected prospectus was timely made
available by Compu-Xxxx pursuant to Section 9(a)(v) hereof,
and the Indemnified Person was promptly advised in writing not
to use the incorrect prospectus prior to the use giving rise
to a Violation and such Indemnified Person, notwithstanding
such advice, used it. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on
behalf of the Indemnified Person and shall survive the
transfer of the Common Shares by BRI. Notwithstanding anything
to the contrary contained herein, the indemnification
agreement contained in this Section 9(d)(i) with respect to
any preliminary prospectus shall not inure to the benefit of
any Indemnified Party if the untrue statement or omission of
material fact contained in the preliminary prospectus was
corrected on a timely basis in the prospectus, as then amended
or supplemented, and the Indemnified Party failed to utilize
such corrected prospectus.
(ii) BRI Indemnification. In connection with any
Registration Statement in which BRI is participating, BRI
agrees to indemnify, hold harmless and defend, to the same
extent and in the same manner set forth in Section 9(d)(i),
Compu-Xxxx, each of its directors, each of its officers who
signs the Registration Statement, its employees, agents and
each person, if any, who controls Compu-Xxxx within the
meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, and any other stockholder selling securities
pursuant to the Registration Statement or any of its directors
or officers or any person who controls such stockholder within
the meaning of the Securities Act or the Exchange Act
(collectively and together with an Indemnified Person, an
"Indemnified Party"), against any Claim to which any of them
may become subject, under the Securities Act, the Exchange Act
or otherwise, insofar as such Claim arises out of or is based
upon any Violation, in each case to the extent (and only to
the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished to Compu-Xxxx by
BRI expressly for use in connection with such Registration
Statement, and subject to Section 9(d)(iii), BRI will
reimburse any legal or other expenses (promptly as such
expenses are incurred and are due and payable) reasonably
incurred by them in connection with investigating or defending
any such Claim; provided, however, that the indemnity
agreement contained in this Section 9(d)(ii) shall not apply
to amounts paid in settlement of any Claim if such settlement
is effected without the prior written consent of BRI, which
consent shall not be unreasonably withheld. Such indemnity
shall remain in full force and effect regardless of any
investigation made by or on behalf of such Indemnified Party
and shall survive the transfer of the Common Shares by BRI.
(iii) Promptly after receipt by an Indemnified Person
or Indemnified Party under this Section 9(d) of notice of the
commencement of any action (including any governmental
action), such Indemnified Person or Indemnified Party shall,
if a Claim in respect thereof is to made against any
indemnifying party under this Section 9(d), deliver to the
indemnifying party a written notice of the commencement
thereof, and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so
desires, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the
Indemnified Person or the Indemnified Party, as the case may
be; provided, however, that such indemnifying party shall not
be entitled to assume such defense and an Indemnified Person
or Indemnified Party shall have the right to retain its own
counsel with the reasonable fees and expenses to be paid by
the indemnifying party, if, in the reasonable opinion of
counsel retained by the indemnifying party, the representation
by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to
actual or potential
conflicts of interest between such Indemnified Person or
Indemnified Party and any other party represented by such
counsel in such proceeding or the actual or potential
defendants in, or targets of, any such action include both the
Indemnified Person or the Indemnified Party and the
indemnifying party and any such Indemnified Person or
Indemnified Party reasonably determines that there may be
legal defenses available to such Indemnified Person or
Indemnified Party which are different from or in addition to
those available to such indemnifying party. The indemnifying
party shall pay for only one separate legal counsel for the
Indemnified Persons or the Indemnified Parties, as applicable,
and such legal counsel shall be selected by BRI, if BRI or any
Indemnified Person is entitled to indemnification hereunder,
or by Compu-Xxxx, if Compu-Xxxx or an Indemnified Party is
entitled to indemnification hereunder, as applicable. The
failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under
this Section 9(d), except to the extent that the indemnifying
party is actually prejudiced in its ability to defend such
action. The indemnification required by this Section 9(d)
shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as such
expense, loss, damage or liability is incurred and is due and
payable.
(e) Contribution. To the extent any indemnification by an
indemnifying party is prohibited or limited by law, the indemnifying
party agrees to make the maximum contribution with respect to any
amounts for which it would otherwise be liable under Section 9(d) to
the fullest extent permitted by law; provided, however, that no
contribution shall be made under circumstances where the indemnifying
party would not have been liable for indemnification under the fault
standards set forth in Section 9(d).
(f) Exemption from Registration. The provisions of Section 9(a)
through (e) notwithstanding, Compu-Xxxx shall have no obligation to
register the resale of the Common Shares to the extent the Common
Shares may be resold without registration without violating Section 5
of the Securities Act pursuant to Rule 144 promulgated thereunder or
any other exemption or exception from registration under the
Securities Act.
10. Third Party Beneficiary. It is agreed that x.XX is a third party
beneficiary of this Agreement and may enforce any of Compu-Dawn's rights
hereunder.
11. Successors and Assigns. All terms and provisions of this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto
and their respective legal representatives, successors and assigns,
provided however, BRI may not assign this Agreement without the prior
written consent of Compu-Xxxx.
12. Notices. Any notice, delivery or other communication required or
permitted hereunder shall be deemed to have been duly made or given for all
purposes when in writing and delivered by hand or sent by certified mail,
return receipt requested, postage prepaid, telecopier, overnight mail, or
nationally recognized overnight courier, addressed as follows:
If to Compu-Xxxx:
00 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxxx, Chief Executive Officer
Telecopier Number: (000) 000-0000
with a copy to:
Certilman Balin Xxxxx & Xxxxx, LLP
00 Xxxxxxx Xxxxxx
Xxxx Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
Telecopier Number: (000) 000-0000
If to BRI:
Boca Research, Inc.
Attention: Xxxxxxx X. Xxxxxxxx
0000 Xxxxx Xxxxx Xxxx
Xxxx Xxxxx, XX 00000
Telecopier Number: (000) 000-0000, ext. 216
With a copy to:
Spinner, Dittman, Xxxxxxxxxx & Xxxxxxx
Attn: Xxxxxx X. Xxxxxxxxxx, Esq.
000 X. Xxxxxxxx Xxxxxx
Xxxxxx Xxxxx, XX 00000
Telecopier Number: (000)000-0000
or such other address as shall be furnished in writing by any such party in the
manner provided hereby, and any notice or communication given pursuant to the
provisions hereof shall be deemed to have been given as of the date delivered or
so mailed or transmitted.
13. Governing Law, Jurisdiction. The interpretation and construction of
this Escrow Agreement and all matters relating hereto shall be governed by the
laws of the State of New York, excluding choice of law rules thereof. Any
federal court in and
for the Eastern District of New York and the Supreme Court of the State of New
York in, and for Nassau County shall have jurisdiction over any action relating
to this Agreement.
14. Severability. If any provision of this Agreement shall be held to be
invalid or unenforceable, such invalidity or unenforceability shall attach only
to such provision and only to the extent such provision shall be held to be
invalid or unenforceable and shall not in any way affect the validity or
enforceability of the other provisions hereof, all of which provisions are
hereby declared severable, and this Agreement shall be carried out as if such
invalid or unenforceable provision or portion thereof was not embodied herein.
15. Entire Agreement. This Agreement sets forth the entire agreement and
understanding of the parties in respect of the subject matter hereof and
supersedes all prior and contemporaneous agreements, arrangements and
understandings relating to the subject matter hereof.
16. Modification. This Agreement may be amended only by a written
instrument executed by the party sought to be charged.
17. Waivers. No waiver by any party of any provision of this Agreement,
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 provision or
any other provision hereof.
18. Counterparts. This Agreement may be executed in counterparts, all of
which taken together shall constitute one agreement.
19. Captions. The section captions used herein are for reference purposes
only, and shall not in any way affect the meaning or interpretation of this
Agreement.
20. Facsimile Signatures. Signatures hereon which are transmitted by
facsimile shall be deemed original signatures.
21. Waiver of Jury Trial. COMPU-XXXX AND BRI ACKNOWLEDGE THAT THE RIGHT TO
A TRIAL BY JURY IS A CONSTITUTIONAL RIGHT, BUT THAT THE RIGHT MAY BE WAIVED.
COMPU-XXXX AND BRI EACH KNOWINGLY, VOLUNTARILY, IRREVOCABLY AND WITHOUT
COERCION, WAIVE ALL RIGHTS TO TRIAL BY JURY OF ALL DISPUTES BETWEEN THEM.
NEITHER COMPU-XXXX NOR BRI SHALL BE DEEMED TO HAVE GIVEN UP THIS WAIVER OF JURY
TRIAL UNLESS THE PARTY CLAIMING THAT THIS WAIVER HAS BEEN RELINQUISHED HAS A
WRITTEN INSTRUMENT SIGNED BY THE OTHER PARTY STATING THAT THIS WAIVER HAS BEEN
GIVEN UP. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO TRIAL BY THE COURT.
22. Public Announcement. Compu-Xxxx and BRI shall cooperate with each other
on a mutual best efforts basis to draft a public announcement relating to the
transaction contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day
and year first above written.
Witnesses: COMPU-XXXX, INC.
/s/ Xxxx Xxxxxxxxxxx
--------------------------------- By: /s/ Xxxx Xxxxxxxxxx
-----------------------------
BOCA RESEARCH, INC.
/s/ Xxxxx Xxxxxxxxx
--------------------------------- By:/s/ Xxxxxxx Xxxxxxxx
------------------------------
/s/ Xxxxxxx X. Bynag
---------------------------------
EXHIBIT A
CONSENT
LocalNet Communications, Inc. hereby acknowledges and agrees that all
obligations of Boca Research, Inc. to refrain from manufacturing the products
which were the subject of that certain Exclusive Manufacturing and Marketing
Agreement dated March 18, 1998, between the parties as provided for in Section
1.3 therein and as further modified under the Tripartite Agreement between the
parties dated October 28, 1998, are hereby terminated, and LocalNet hereby
consents to the entry by Boca Research, Inc. into the attached Agreement with
Compu-Xxxx, Inc., granting such rights of exclusivity as provided for therein.
LOCALNET COMMUNICATIONS, INC.
By: /s/ Xxxxx Xxxxxxxxx
-----------------------
SCHEDULE 4(a)
Big Planet
