REPURCHASE AGREEMENT
THIS REPURCHASE AGREEMENT is made and is effective as of the 10th day
of May, 2000, by and between Xxxxxxx Xxxxx (hereinafter referred to as "Xxxxx"),
and Yellowave Corporation, a New York Corporation (hereinafter referred to as
"Company").
R E C I T A L S
WHEREAS, the Company has issued and there are outstanding Two Million
Eight Hundred Twenty-Seven Thousand Four Hundred Eighty-Six (2,827,486) shares
of common stock of the Company; of which a substantial portion are unregistered;
and
WHEREAS, the Company has issued a total of One Hundred Fifty Thousand
(150,000) of such unregistered shares to Xxxxx (hereinafter referred to as the
"Shares"), as well as options to acquire an additional One Hundred Fifty
Thousand (150,000) shares of common stock of the Company (hereinafter referred
to as the "Options"); and
WHEREAS, the Company desires to purchase from Xxxxx and Xxxxx desires
to sell to the Company the Shares and the Options on the terms and conditions
set forth below;
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations, and warranties contained in this Agreement, the parties agree
as follows:
ARTICLE I.
PURCHASE AND SALE OF SHARES AND OPTIONS
Section 1.1 Sale and Transfer. Subject to the terms and conditions set
forth in this Agreement, at the Closing provided for in Article VII, Section 7.1
hereof, Xxxxx will sell, assign, transfer and convey the Shares and Options, to
the Company, and the Company will acquire all of those Shares and Options from
Xxxxx.
Section 1.2 Consideration from the Company. The total purchase price
for all of the Shares and Options shall be Two Hundred Sixty-Two Thousand Five
Hundred Dollars
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($262,500.00) (hereafter referred to as the "Purchase Price"). As full payment
for the transfer of the Shares and Options by Xxxxx to the Company, the Company
shall deliver, at the Closing, in accordance with the provisions of Article VII,
Section 7.3, the following:
Immediately available funds in the form of a Certified or bank
Cashier's check payable to the order of Xxxxx in the amount of
Two Hundred Sixty-Two Thousand Five Hundred Dollars
($262,500.00).
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF XXXXX
Xxxxx represents, warrants and covenants that as of the date of this
Agreement and of the Closing:
Section 2.1 Authority. Xxxxx has the right, power, legal capacity and
authority to enter into and perform his obligations under this Agreement; this
Agreement is binding on and enforceable against Xxxxx in accordance with its
terms.
Section 2.2 Full Disclosure. None of the representations or warranties
made by Xxxxx contains or will contain any untrue statement of a material fact,
or omits or will omit any material fact the omission of which would be
misleading.
Section 2.3 Reliance. Xxxxx has not relied on any representation,
warranty, statement or promise of the Company or any person claiming to be a
representative of Company not specifically set forth in this Agreement, and
except for the representations and warranties contained in this Agreement, Xxxxx
has relied solely on his own knowledge and investigation in determining the
purchase price for the Shares and Options as well as whether or not it is in his
interest to enter into this Agreement and comply with its terms.
ARTICLE III.
COMPANY'S REPRESENTATIONS AND WARRANTIES
The Company represents, warrants and covenants that as of the date of
this Agreement and of the Closing:
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Section 3.1 Corporate Authority. All necessary corporate action has
been taken, including the due adoption of a resolution by Company's board of
directors, sufficient to enable Company to enter into this Agreement, to be
bound thereby, and to perform fully as required hereunder; this Agreement is
binding on and enforceable against Company in accordance with its terms.
Section 3.2 Full Disclosure. None of the representations or warranties
made by the Company in this Agreement contains or will contain any untrue
statement of a material fact, or omits or will omit any material fact the
omission of which would be misleading.
Section 3.3 Reliance. The Company has not relied on any representation,
warranty, statement or promise of Xxxxx, or any person claiming to be a
representative of him, not specifically set forth in this Agreement, and except
for the representations and warranties contained in this Agreement, the Company
has relied solely on its own knowledge and investigation in determining the
purchase price for the Shares and Options as well as whether or not it is in the
Company's interest to enter into this Agreement and comply with its terms.
Section 3.4 Title to Shares. Xxxxx is the owner, beneficially and of
record, of all the Shares and Options being transferred. Xxxxx has full power to
transfer the Shares and Options to the Company without obtaining the consent or
approval of any other person or governmental authority.
Section 3.5 No Breach. The execution and performance of this Agreement
will not result in a breach of or constitute a default under (a) any charter,
by-law, agreement or other document to or by which Company is a party or bound;
or (b) any decree, order or rule of any court or governmental authority which is
binding on Company or any property of Company.
ARTICLE IV.
XXXXX' OBLIGATIONS BEFORE CLOSING
Xxxxx covenants that from the date of this Agreement until the Closing:
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Section 4.1 Preservation of Business and Relationships. Xxxxx will use
all reasonable efforts to preserve the Company's business organization intact,
and to preserve its present relationships with suppliers, customers, and others
having business relationships with it.
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ARTICLE V.
CONDITIONS PRECEDENT TO COMPANY'S PERFORMANCE
The obligations of the Company to purchase the Shares and Options under
this Agreement are subject to the satisfaction, at or before Closing, of all the
conditions set out below in this Article V. The Company may waive any or all of
these conditions in whole or in part without prior notice; provided, however,
that no such waiver of a condition shall constitute a waiver by the Company of
any of its other rights or remedies, at law or in equity, if Xxxxx shall be in
default of any of their representations, warranties, or covenants under this
Agreement.
Section 5.1 Accuracy of Xxxxx Representations and Warranties. All
representations and warranties by Xxxxx in this Agreement or in any written
statement that shall be delivered to the Company under this Agreement shall be
true in all material respects on and as of the Closing as though such
representations and warranties were made on and as of that date.
Section 5.2 Performance by Xxxxx. Xxxxx shall have performed,
satisfied, and complied with, in all material respects, all covenants and
agreements, and satisfied all conditions required by this Agreement to be
performed or complied with by him at or before the Closing.
Section 5.3 Approval of Documentation. The form and substance of all
documents delivered to the Company under this Agreement shall be satisfactory in
all reasonable respects to the Company and its counsel.
ARTICLE VI.
CONDITIONS PRECEDENT TO XXXXX' PERFORMANCE
The obligations of Xxxxx to sell and transfer the Shares and Options
under this Agreement are subject to the satisfaction, at or before the Closing,
of all of the conditions set forth in this Article VI. Xxxxx may waive any or
all of these conditions in whole or in part without prior notice; provided,
however, that no such waiver of a condition shall constitute a waiver by Xxxxx
of any of their other rights or remedies if the Company shall be in default of
any of its representations, warranties or covenants in this Agreement.
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Section 6.1 Accuracy of Company's Representations and Warranties. All
representations and warranties by the Company contained in this Agreement or in
any written statement delivered by the Company under this Agreement shall be
true in all material respects on and as of the Closing as though such
representations and warranties were made on and as of that date.
Section 6.2 Company's Performance. The Company shall have performed,
satisfied and complied with, in all material respects, all covenants and
agreements, and satisfied all conditions required by this Agreement to be
performed or complied with by it at or before the Closing.
Section 6.3 Approval of Documentation. The form and substance of all
documents delivered to Xxxxx under this Agreement shall be satisfactory in all
reasonable respects to Xxxxx and his counsel.
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ARTICLE VII.
THE CLOSING
Section 7.1 Time and Place. The transfer of the Shares and Options by
Xxxxx to the Company (the "Closing") shall take place at the offices of the
Company not later than five (5) days after the date hereof, or at such other
time and place as Xxxxx and the Company may agree to in writing.
Section 7.2 Xxxxx' Obligations at Closing. At the Closing, Xxxxx shall
deliver or cause to be delivered to the Company the following instruments and
documents, in form and substance satisfactory to the Company and its counsel:
(a) A certificate or certificates representing the Shares and
Options, registered in the name of Xxxxx, duly endorsed by Xxxxx for transfer or
accompanied by an assignment of the Shares and Options duly executed by Xxxxx;
(b) Resignations from Xxxxx, resigning all Company
officerships and directorships held by him; and
(c) All other documents, assurances and other matters
provided in this Agreement to be delivered to the Company at or before the
Closing and not delivered to the Company before the Closing.
Section 7.3 Company's Obligations at Closing. At the Closing, the
Company shall deliver or cause to be delivered to Xxxxx the following
instruments and documents:
(a) A Certified or bank Cashier's check as described in
Article I, Section 1.2 hereof;
(b) All other documents, assurances and other matters provided
in this Agreement to be delivered to Xxxxx at or before the Closing and not
delivered to Xxxxx before the Closing.
Section 7.4 Further Assurances. At any time before or after the
Closing, Xxxxx and the Company shall execute, acknowledge and deliver to each
other any further documents, assurances and other matters, and will take any
other action consistent with the terms of this
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Agreement, that may reasonably be requested by any party as necessary or
desirable to carry out the purpose of this Agreement.
ARTICLE VIII.
XXXXX' OBLIGATIONS AFTER CLOSING
Section 8.1 Xxxxx' General Release. Xxxxx, for himself and his legal
successors and assigns, effective upon the Closing, hereby settles, releases,
waives and absolutely discharges the Company and its successors, assigns,
incorporators, stockholders, officers, directors, agents, employees,
accountants, attorneys, past, present and future, and any of their heirs,
executors, administrators, successors or assigns (together, for purposes of this
Section 8.1, the "Released Parties"), from all claims, damages, liabilities,
costs, expenses, obligations and causes of action, in each case of every kind
and nature, whether now known or unknown, suspected or unsuspected, which
involve or relate to Xxxxx' ownership of any of the Shares or Options, or his
employment by the Company, including, without limitation, any claim relating to
any federal or state securities law violation by or common law liability for
fraud or neglect or other misrepresentation of any of the Released Parties
arising by reason of any purported misstatement or omission of a material fact,
whether written or oral, or the management or conduct of the business and
affairs of the Company, excepting only the obligations of Company arising under
this Agreement (together, for purposes of this Section 8.1, the "Released
Matters").
Xxxxx waives and relinquishes any right or benefit which he
has or may have under Section 1542 of the Civil Code of the State of California
or any similar provision of the statutory or nonstatutory law of any other
jurisdiction to the full extent they may lawfully waive such rights and benefits
pertaining to the subject matter of this Agreement. Section 1542 of the
California Civil Code reads:
"A GENERAL RELEASE DOES NOT EXTEND TO
CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM MUST HAVE MATERIALLY
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EFFECTED HIS SETTLEMENT WITH THE DEBTOR."
In connection with such waiver and relinquishment, Xxxxx
acknowledges that he is aware that he or his attorneys or others may hereafter
discover claims or facts in addition to or different from those which Xxxxx now
knows or believes to exist with respect to the subject matter of this Agreement,
that it is Xxxxx' intention to fully, finally and forever release, waive and
discharge all of the Released Matters. The release given herein shall remain in
effect as a full and complete general release, notwithstanding the discovery or
existence of any such additional or different claims or facts.
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ARTICLE IX.
COMPANY'S OBLIGATIONS AFTER CLOSING
Section 9.1 Company's Indemnity. The Company shall indemnify, defend
(with counsel acceptable to Xxxxx) and hold harmless Xxxxx and his successors,
heirs and assigns against and in respect of any and all claims, demands, losses,
costs, expenses, obligations, liabilities, damages, causes of action, recoveries
and deficiencies, including interest, penalties and reasonable attorneys' fees
that Xxxxx shall incur or suffer, which directly or indirectly arise, result
from or relate to (a) any actual or alleged breach of or failure by the Company
to perform any of its representations, warranties, covenants or agreements in
this Agreement or in any schedule, certificate, exhibit or other instrument
furnished or to be furnished by the Company under this Agreement; and (b) any
claim against Xxxxx asserting or alleging liability for any act or failure to
act, or breach of any duty as an officer, director, shareholder, employee,
agent, fiduciary or other representative of Company, including but not limited
to any claim in the nature of a shareholder or other derivative claim, whether
or not any such claim is determined to be meritorious; and (c) any claim against
Xxxxx asserting or alleging liability for entering into or performing under this
Agreement, whether or not such claim is determined to be meritorious. Xxxxx
shall have the right but not the obligation to join, participate in and control,
if he so elects, any legal proceeding or action for which Xxxxx is entitled to
indemnification under this Section. All costs and expenses incurred by Xxxxx for
which Company is responsible under this Section or for which Xxxxx is entitled
to indemnification shall be reimbursed to Xxxxx on demand. The provisions of
this Section 9.1 shall be in addition to and not in limitation of the rights to
indemnification and insurance provided under Article IX of Company's bylaws, all
of which rights hereby are confirmed to Xxxxx.
Section 9.2 Company's General Release. The Company, for itself and its
legal successors and assigns, effective upon the Closing, hereby settles,
releases, waives and absolutely discharges Xxxxx and his successors, assigns,
agents, employees, accountants, attorneys, past, present and future, and any of
their heirs, executors, administrators, successors or assigns
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(together, for purposes of this Section 9.2, the "Released Parties"), from all
claims, damages, liabilities, costs, expenses, obligations and causes of action,
in each case of every kind and nature, whether now known or unknown, suspected
or unsuspected which involve or relate to Xxxxx' ownership of any of the Shares
or Options or any other interest in the Company or his employment by the
Company, including, without limitation, any claim relating to any federal or
state securities law violation by or common law liability for fraud or neglect
or other misrepresentation of any of the Released Parties arising by reason of
any purported misstatement or omission of a material fact, whether written or
oral, or the management or conduct of the business and affairs of the Company,
excepting only the obligations of Xxxxx arising under this Agreement (together,
for purposes of this Section 9.2, the "Released Matters").
The Company waives and relinquishes any right or benefit which it has
or may have under Section 1542 of the Civil Code of the State of California or
any similar provision of the statutory or non-statutory law of any other
jurisdiction to the full extent it may lawfully waive such rights and benefits
pertaining to the subject matter of this Agreement. Section 1542 of the
California Civil Code reads:
"A GENERAL RELEASE DOES NOT EXTEND TO
CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM MUST HAVE MATERIALLY
EFFECTED HIS SETTLEMENT WITH THE
DEBTOR."
In connection with such waiver and relinquishment, the Company
acknowledges that it is aware that it or its attorneys or others may hereafter
discover claims or facts in addition to or different from those which the
Company now knows or believes to exist with respect to the subject matter of
this Agreement, that it is the Company's intention to fully, finally and forever
release, waive and discharge all of the Released Matters. The release given
herein shall remain in effect as a full and complete general release,
notwithstanding the discovery or existence or any such additional or different
claims or fact.
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9.3 Xxxxx' Personal Property. For the period commencing with the date
of this Agreement and terminating twenty-one (21) days after the Closing, Xxxxx
shall have unrestricted access to Company's offices for the purpose of packing
and removing Xxxxx' furniture, furnishings and other personal property located
therein.
9.4 Insurance. The Company shall, for a period of not less than three
(3) years from the Closing, maintain Directors and Officers Liability insurance
with coverages and in amounts not less than those maintained by Company on the
date of this Agreement, explicitly naming Xxxxx an insured thereunder.
ARTICLE X.
COSTS
Section 10.1 Expenses. Each of the parties shall pay all costs and
expenses incurred or to be incurred by it in negotiating and preparing this
Agreement.
ARTICLE XI.
FORM OF AGREEMENT
Section 11.1 Effect of Headings. The subject headings of the Articles
and Sections of this Agreement are included for purposes of convenience only,
and shall not affect the construction or interpretation of any of its
provisions.
Section 11.2 Entire Agreement; Modification; Waiver. This Agreement
constitutes the entire agreement between the parties pertaining to the subject
matter contained in it and supersedes all prior and contemporaneous agreements,
representations, and understandings of the parties. No supplement, modification,
or amendment of this Agreement shall be binding unless executed in writing by
all the parties. Any party may waive any term, provision or condition included
for the benefit of such party. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provision,
whether or not similar, nor shall any
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waiver constitute a continuing waiver. No waiver shall be binding unless
executed in writing by the party making the waiver.
Section 11.3 Counterparts. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
Section 11.4 Severability. If any provision of this Agreement, as
applied to any party or to any circumstance, shall be found by a court to be
valid, illegal or unenforceable, the same shall not effect any other provision
of this Agreement, the application of any such provision in any other
circumstance, or the validity or enforceability of this Agreement.
Section 11.5 Construction. In all matters of interpretation, whenever
necessary to give effect to any provision of this Agreement, each gender shall
include the others, the singular shall include the plural and the plural shall
include the singular. All remedies, rights, undertakings, obligations and
agreements contained in this Agreement shall be cumulative and none of them
shall be in limitation of any other remedy, right, undertaking, obligation or
agreement of any party. Each party and its counsel have reviewed and revised
this Agreement. As a result, the normal rule of construction to the effect that
any ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Agreement or any amendment, exhibit or
documentation subsidiary to it.
Section 11.6 Recitals. The recitals set forth above preceding
Section 1 of this Agreement are true and accurate and are incorporated herein
at length.
ARTICLE XII.
PARTIES
Section 12.1 Parties-in-Interest. Except as hereafter provided, nothing
in this Agreement, whether express or implied, is intended to confer any rights
or remedies under or by reason of this Agreement on any persons other than the
parties to it and their respective successors and assigns, nor is anything in
this Agreement intended to relieve or discharge the obligation or
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liability of any third persons to any party to this Agreement, nor shall any
provision give any third persons any right of subrogation or action against any
party to this Agreement. The parties to this Agreement do understand, expect and
intend that Third Party Investors in the Company will rely upon the warranties,
representations and covenants of the parties contained in this Agreement in
determining whether or not to invest in the Company, and such Third Party
Investors are intended beneficiaries under this Agreement.
Section 12.2 Binding Effect. This Agreement shall be binding on, and
shall inure to the benefit of, the parties to it and their respective heirs,
legal representatives, successors, and assigns.
ARTICLE XIII.
REMEDIES
Section 13.1 Specific Performance and Waiver of Rescission Rights.
Xxxxx' and the Company's obligations under this Agreement are unique. If Xxxxx
or the Company should default in their or its obligations under this Agreement
prior to the Closing, the parties each acknowledge that it would be extremely
impracticable to measure the resulting damages; accordingly, in addition to any
other available rights or remedies, Xxxxx and the Company may xxx in equity for
specific performance, and Xxxxx and the Company expressly waive the defense that
a remedy in damages will be adequate. Notwithstanding any breach or default by
any of the parties of any of their respective representations, warranties,
covenants or agreements under this Agreement, if the purchase and sale
contemplated by it shall be consummated at the Closing, each of the parties
waives any rights that it or they may have to rescind this Agreement or the
transaction consummated by it; provided, however, this waiver shall not affect
any other rights or remedies available to the parties under this Agreement or
under law.
Section 13.2 Recovery of Litigation Costs; Place of Litigation or
Arbitration. If any legal action or any arbitration or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged
dispute, breach, default, or misrepresentation in connection
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with any of the provisions of this Agreement, the successful or prevailing party
or parties shall be entitled to recover reasonable attorneys' fees and other
costs incurred in that action or proceedings, in addition to any other relief to
which it or they may be entitled. Any litigation or arbitration shall occur
exclusively in Los Angeles County, California.
Section 13.3 Defaults Permitting Termination. If prior to the Closing
Xxxxx or the Company materially default in the due and timely performance of any
of its or his warranties, covenants, or agreements under this Agreement, a
nondefaulting party may give notice of termination of this Agreement, in the
manner provided in Section 15.1. This notice shall specify with particularity
the default or defaults on which the notice is based. The termination shall be
effective on the later of five (5) days after the giving of such notice or the
Closing, unless the specified default or defaults have been cured on or before
the effective date for termination.
Section 13.4 Arbitration. In order to obtain prompt and expeditious
resolution of any disputes under this Agreement, the parties hereby agree that
each claim, dispute or controversy, of whatever nature, arising out of, in
connection with, or in relation to the interpretation, performance or breach of
this Agreement (or any other agreement contemplated by or related to this
Agreement) including without limitation any claim based on contract, tort or
statute, or the arbitrability of any claim hereunder (an "Arbitrable Claim"),
shall be settled by final and binding arbitration conducted in Los Angeles
County, California under the auspices of and in accordance with the Commercial
Arbitration Rules then in effect of the American Arbitration Association. Each
party hereto expressly consents to, and waives any future objection to, such
forum and arbitration rules. Judgment upon any award may be entered by any state
or federal court having jurisdiction thereof.
Adherence to this dispute resolution process shall not limit the right
of either party to obtain any provisional remedy, including without limitation,
injunctive or similar relief, from any court of competent jurisdiction as may be
necessary to protect their respective rights and interests
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pending arbitration. Notwithstanding the foregoing sentence, this dispute
resolution procedure is intended to be the exclusive method of resolving any
Arbitrable Claim.
The Arbitrator(s) shall determine the prevailing party and shall
include in their award that party's reasonable attorneys' fees and costs.
ARTICLE XIV.
NATURE AND SURVIVAL OF REPRESENTATIONS
AND OBLIGATIONS
Section 14.1 All representations, warranties, covenants and agreements
of the parties contained in this Agreement, or in any instrument, certificate,
opinion or other writing provided for in it, shall survive the Closing.
ARTICLE XV.
NOTICES
Section 15.1 All notices or demands shall be in writing and shall be
served personally, or by overnight courier, such as Federal Express or
comparable service, or by U.S. certified mail. Service shall be deemed
conclusively made at the time of service if personally served, forty-eight (48)
hours after deposit thereof with such overnight courier, properly addressed and
postage prepaid, return receipt requested, and five (5) days after deposit
thereof in the United States mail, properly addressed and postage prepaid,
return receipt requested, if served by certified mail.
Any notice or demand to the Company shall be given to:
Yellowave Corporation
00000 Xxx Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxxx, CEO
Any notice or demand to Xxxxx shall be given to:
Xxxxxxx Xxxxx
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----------------------
----------------------
, California
---------------------- ----
Any party may, by virtue of written notice in compliance with this paragraph,
alter or change the address or the identity of the person to whom any notice, or
copy thereof, is to be sent.
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ARTICLE XVI.
GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of California applicable to contracts made and fully to be
performed in that State, without regard to principles of conflicts of laws.
ARTICLE XVII.
CONFIDENTIALITY
This Agreement, its content, and the parties' discussions pertaining to
it, as well as the underlying facts relating to it, are confidential, and no
party shall communicate or allow communication in any manner (written or oral)
with respect to this Agreement, its content, the discussions pertaining to it,
or the facts underlying it, except to a party's attorneys and accountants, and
to governmental taxing authorities or otherwise to the extent disclosure is
required by applicable law. No communication of any type shall be made relating
to Xxxxx' resignation as the Company's President and as a member of its Board of
Directors, or otherwise relating to his employment by the Company, except to
state that he has resigned to pursue other interests and that the Company
regrets his resignation.
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IN WITNESS WHEREOF, the parties to this Agreement have duly executed it
as of the day and year first above written.
"XXXXX":
/s/ Xxxxxxx Xxxxx
---------------------------
XXXXXXX XXXXX
"COMPANY":
Yellowave Corporation
A New York Corporation
By: /s/ Xxxxx Xxxxxxxxx
------------------------
XXXXX XXXXXXXXX
Chief Executive Officer
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