Exhibit 10.10
SALE AND ASSIGNMENT AGREEMENT
SALE AND Assignment AGREEMENT, dated as of November 19, 1997 (the
"Agreement"), by and between XXXXXX X. XXXXXX, AS TRUSTEE FOR THE LIQUIDATION OF
XXXXXXXX OAKMONT, INC. under the Securities Investor Protection Act (the
"Trustee") and INTERNATIONAL DISPENSING CORPORATION, a Delaware corporation
("IDC").
R E C I T A L S:
A. On January 29, 1997, in the SIPA liquidation proceeding of Xxxxxxxx
Oakmont, Inc. ("Xxxxxxxx Oakmont"), pending in the United States Bankruptcy
Court for the Southern District of New York (the "Bankruptcy Court") SIPA
Proceeding No. 97-8074A(TLB) (the "SIPA Proceeding"), the Trustee was appointed
pursuant to the provision of the Securities Investor Protection Act of 1970, 15
U.S.C. ss.78aaa et seq. ("SIPA"), to administer the liquidation of Xxxxxxxx
Oakmont; and
B. As trustee for Xxxxxxxx Oakmont, the Trustee is the owner of 995,705
shares of the common stock of IDC (the "shares"), subject to a pledge of the
Shares (the "Pledge") by Xxxxxxxx Oakmont in favor of Xxxxxx Xxxxxx Card
("Card") to secure certain obligations of Xxxxxxxx Oakmont to Card; and
C. The Shares are currently registered in the name of Card solely for
purposes of perfection of the Pledge; and
D. The Trustee has entered into a settlement agreement with Card (the "Card
Agreement", the form of which is annexed hereto as Exhibit "1") providing for,
inter alia, the release by Card of all right, title, and interest in the Shares,
and providing further, that in consideration for such release, the Trustee may
allow Card to retain in lieu of a cash settlement payment by the Trustee,
certain of the Shares (the "Card Shares") as are equal in value to $200,000, all
as more fully set forth in the Card Agreement; and
E. The Trustee has been advised that Xxxxxxxx Oakmont and Reseal Food
Dispensing Systems, Inc. ("RFDS") entered into an underwriting agreement
pursuant to which Xxxxxxxx Oakmont agreed to serve as underwriter for the sale
of certain common stock and common stock purchase warrants to be used by RFDS to
the public (the "Underwriting Agreement," the form of which is annexed hereto as
Exhibit "2"); and
F. The trustee has been advised that RFDS subsequently changed its name to
IDC; and
G. The Trustee desires to sell to IDC, or to no more than ten designees of
IDC, subject to the qualification of such designees as provided herein (the "IDC
Designees" and, collectively with IDC, the "IDC Purchasers"), some or all of the
Shares, and the IDC purchaser
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desire to purchase from the Trustee, such Shares free and clear of all liens,
claims, encumbrances, and interests upon the terms and conditions hereinafter
set forth; and
H. The Trustee desires to assign to IDC, and IDC desires to acquire from
the Trustee, all of Xxxxxxxx Oakmont's rights and interests in the Underwriting
Agreement (the transferred Shares and the Underwriting Agreement are hereinafter
referred to as the "Transferred Assets") free and clear of all liens, claims,
encumbrances, and interests, upon the terms and conditions hereinafter set
forth;
NOW, THEREFORE, IN CONSIDERATION OF THE PROMISES, CONDITIONS, AND COVENANTS
STATED HEREIN, THE PARTIES, INTENDING TO BE LEGALLY BOUND, HEREBY AGREE AS
FOLLOWS:
1. Transfer of Shares - Upon the terms and subject to the conditions
contained herein:
(a) On the Closing Date (as such term is hereinafter defined), the
Trustee shall convey to the IDC purchasers the first delivery (the "First
Delivery") of the Shares, which number of Shares shall be equal to or
greater than the total amount of Shares (995,705) minus: (i) the Card
Shares, and (ii) 200,000 of the Shares.
(b) On the Final Date (as such term is hereinafter defined), the
Trustee shall convey to the IDC Purchasers all of the remaining Shares then
held by the Trustee (the "Final Delivery").
2. Assignment of Rights - Upon the terms and subject to the conditions
contained herein, on the Closing Date (as such term is hereinafter defined) the
Trustee shall assign to IDC all of Xxxxxxxx Oakmont's right, title, and interest
in its agreement with IDC evidenced by the Underwriting Agreement, including,
without limitation, provisions that (i) Xxxxxxxx Oakmont has an option to
acquire certain securities of IDC (the Underwriter's Purchase Option as defined
in the prospectus annexed hereto as Exhibit "2"); (ii) shareholders of IDC are
barred from selling or otherwise trading in their stock in IDC without the prior
written consent of IDC for the two years after the Effective Date as such term
is defined in the Underwriting Agreement (Underwriting Agreement at P. 3(1)(1));
(iii) IDC is barred from issuing new stock (except in connection with a divided
or similar transaction) for the two years after the Effective Date (Underwriting
Agreement at P. 3(1)(2)); (iv) Xxxxxxxx Oakmont has the right to appoint an
observer to attend meetings of IDC's board of directors for the three years
after the Effective Date (Underwriting Agreement at P. 3(t)); (v) a finder's fee
of 5% for the first $3 million, 4% for the next $3 million, 3% for the next $2
million, 2% for the next $2 million and 1% of the excess, if any, over $10
million will be paid to Xxxxxxxx Oakmont by IDC if Xxxxxxxx Oakmont introduces a
merger partner (or partner to a similar transaction) to IDC for the five years
after the Effective Date (Underwriting Agreement at P. 3(u)); (vi) IDC must pay
Xxxxxxxx Oakmont a warrant solicitation fee of 4% of the exercise price of IDC's
warrants exercised at least one year after the Effective Date, subject to
certain conditions and restrictions (Underwriting Agreement at P. 3(v)); (vii)
Xxxxxxxx Oakmont and IDC each indemnify the other against misrepresentations
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made in connection with the registration or the prospectus (Underwriting
Agreement at P. 6); and (viii) for a period of 24 months from the date the
offering under the prospectus was complete neither IDC nor shareholders of IDC
may offer or dispose of shares of IDC common stock without the prior written
consent of Xxxxxxxx Oakmont (Underwriting Agreement P. 3(1)). Such sale and
transfer of the Transferred Assets shall be free and clear of all liens, claims,
encumbrances, and interests.
3. Payments for Transferred Assets - In consideration for the agreements
contained herein, the IDC Purchasers shall pay the Trustee sixty cents ($0.60)
(the "Purchase Price") for each Share tendered by the Trustee pursuant to the
terms of this Agreement. In the event of the failure of an IDC Designee to
tender the Purchase Price, IDC shall be obligated to tender such price
immediately.
4. Qualification of IDC Designees - In order to qualify as an IDC Designee
entitled to act as an IDC Purchaser hereunder, each IDC Designee shall enter
into an agreement with the Trustee pursuant to which such IDC Designee shall
represent, acknowledge and agree as follows: (a) such IDC Designee is acquiring
the Shares for its own account, for investment purposes only and not with a view
to the distribution (as such term is used in Section 2(11) of the Securities Act
of 1933, as amended (the "Securities Act")) thereof; (b) such IDC Designee
understands that such Shares have not been registered under the Securities Act
and cannot be sold unless subsequently registered under the Securities Act and
any applicable state securities laws, or an exemption from such registration is
available; (c) such IDC Designee is an "accredited investor" within the meaning
of subparagraph (a) of Rule 501 under the Securities Act; (d) such IDC Designee
is aware that it may be required to bear the economic risk of an investment in
such Shares for an indefinite period of time, and it is able to bear such risk
for an indefinite period; (e) such IDC Designee has received adequate
information, and has had an opportunity to ask questions of IDC, concerning the
legal, business, and financial condition of IDC in order to make an informed
decision regarding an investment in the Shares; and (f) such IDC Designee will
provide such other information as is requested by the Trustee to enable the
Trustee to conclude that the sale of Shares by the Trustee to such person or
entity will be exempt from the registration provisions of the Securities Act and
any applicable state securities laws. The IDC Designees xxx appoint one entity
to act as their nominee for the purpose of receiving the Shares purchased by the
IDC Designees hereunder and making payment therefor, and the IDC Designees shall
provide the Trustee with a written representation as to such appointment with an
acknowledgment by such nominee.
5. Releases - Effective upon the transfer of the First Delivery of Shares,
the payment of the Purchase Price therefor by the IDC Purchasers, and the
assignment of the Underwriting Agreement (a) the Trustee hereby waives,
releases, and relinquishes any and all claims, rights or causes of action that
the Trustee or Xxxxxxxx Oakmont may have against IDC, its agents, principals,
and affiliates, whether known or unknown, arising after January 29, 1997 through
and including the date hereof, except claims arising under this Agreement; and
(b) IDC hereby waives, releases, relinquishes any and all claims, rights, or
causes of action that IDC may have against the Trustee or Xxxxxxxx Oakmont, or
their respective agents, principals, and
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affiliates, whether known or unknown, arising after January 29, 1997 through and
including the date hereof, except claims arising under this Agreement.
Notwithstanding anything in the preceding sentence to the contrary, the Trustee
waives, releases, and relinquishes all claims, rights, or causes of action
arising under the Underwriting Agreement and/or the remaining Transferred Assets
from the date of such agreement through and including the date hereof.
6. Conditions Precedent - This Agreement is subject to approval by the
Bankruptcy Court, and shall be of no force or effect unless and until such
condition is satisfied. The Trustee shall apply to the Bankruptcy Court for
approval of this Agreement as soon as is practicable following execution by both
parties. In the event that the Bankruptcy Court does not approve this Agreement,
this Agreement (except for this paragraph) shall be null and void and shall not
be binding upon the parties hereto, and the parties reserve their rights,
claims, and defenses without prejudice by reason of this Agreement or any
statement made, or action or position taken, document prepared or executed in
connection herewith or at the hearing, if any, before the Bankruptcy Court to
consider authorization of this Agreement (none of which, in such event, be
referred to, or relied upon, by any party for any purpose except as shall be
specifically agreed to in writing by the parties).
7. Closing Date - Upon the satisfaction of the conditions herein and the
receipt by the Trustee of the qualification documentation set forth in section 4
herein, the Trustee shall, on a business day (the "Closing Date") as soon as
practicable following the entry by the Bankruptcy Court of an order approving
this Agreement, tender the First Delivery of Shares and execute documentation
evidencing the assignment of the Underwriting Agreement as provided for herein,
and the IDC Purchasers shall tender the Purchase Price provided herein. The
payment of the Purchase Price shall be made by wire transfer of funds to the
Trustee's account.
8. Outside Date and Final Date - On, or at any time prior to, the first
business day (the "Outside Date") that is 180 days after the Closing Date, the
Trustee may tender the Final Delivery of Shares and the IDC Purchasers shall
tender the Purchase Price provided herein, provided, however, that if the
Trustee proposes to tender the Final Delivery on a date prior to the Outside
Date, he shall give the IDC Purchasers notice of such proposed tender no fewer
than twenty days prior to such tender. Notwithstanding the foregoing, the
Trustee shall tender the Final Delivery on the Outside Date if not tendered
prior to such date. The payment of the Purchase Price shall be made by wire
transfer of funds to the Trustee's account. The date of the Final Tender shall
be the "Final Date" hereunder.
9. Representations - General - Each party to this Agreement hereby
represents and warrants to the other parties to this Agreement that (a) such
party has all power and authority necessary to enter into this Agreement, to
bind all parties, persons, or entities for whom such party acts, and to carry
out and perform this Agreement according to its terms; (b) this Agreement is
binding and enforceable upon such party; (c) no consent, approval,
authorization, or order of, and no notice to, or filing with, any court,
governmental authority, person, or entity is required for the execution,
delivery, and performance by such party of this Agreement that has not been
obtained; (d) the execution, delivery, and performance of this
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Agreement will not conflict or contravene any contract obligations that such
party has; (e) such party is not relying on, and expressly disclaims the
existence of or any reliance upon any oral or written representation, promise,
statement, opinion, or other act or omission made to such party other than those
expressly set forth in writing in this Agreement, such party has received all
information that is material to such party related to this Agreement, and such
party has had the benefit of counsel of such party's own choice and has been
afforded the opportunity to independently review and understand this Agreement,
with such party's chosen counsel; (f) the parties have entered into this
Agreement freely and without duress after having independently consulted with
their own counsel; and (g) this Agreement has been actually negotiated by and
between the parties, is jointly drafted by their respective counsel, and shall
not be construed against any party hereto.
10. Representations - Other (a) The Trustee represents that, as of the date
of the execution of this Agreement, he is unaware of any claims or causes of
action held by Xxxxxxxx Oakmont against IDC, its predecessors and successors, or
its officers, representatives, and agents that arose on or before January 29,
1997. (b) IDC represents that, as of the date of the execution of this
Agreement, (i) no amounts are currently due, owing, or payable to Xxxxxxxx
Oakmont under the Underwriting Agreement in respect of finders' fees,
solicitation fees, or otherwise, and (ii) IDC has no plans or intention as of
the date of the execution of this Agreement to undertake a merger or similar
transaction with a person or entity introduced by Xxxxxxxx Oakmont as would have
given rise to a finders' fee payable to Xxxxxxxx Oakmont under the Underwriting
Agreement.
11. Rule 144(c) Reporting - From the date this Agreement is approved by the
Bankruptcy Court through the Final Date, IDC agrees to use its best efforts to
make and keep adequate public information regarding IDC available (as those
terms are used in Rule 144(c) under the Securities Act) and file with the
Securities and Exchange Commission in a timely manner all reports and other
documents required of IDC under the Securities Act and the Securities Exchange
Act of 1934, as amended.
12. Governing Law - This Agreement is made and performable in New York
County, New York. This Agreement will be governed and construed in accordance
with the laws of the State of New York, without giving effect to the conflict of
laws rules of New York.
13. Venue and Jurisdiction - All actions against any party to this
Agreement arising under or relating in any way to this Agreement shall be
brought exclusively in the United States Bankruptcy Court for the Southern
District of New York. Each of the parties agrees to submit to the personal
jurisdiction of, and to waive any objection to venue in, such court.
14. Waiver of Jury Trial - TO THE FULL EXTENT PERMITTED BY LAW, EACH OF THE
PARTIES KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS AGREEMENT, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF
CONDUCT, COURSE
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OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY
PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES' ENTRY
INTO THIS AGREEMENT.
15. Successors and Assigns - This Agreement shall continue perpetually and
shall be binding upon the parties hereto and their respective heirs, personal
representatives, administrators, successors and assigns (collectively,
"Successors") and shall inure to the benefit of the Parties' respective
Successors.
16. Good Faith Cooperation - The parties to this Agreement agree to
cooperate in good faith to take all necessary steps to effectuate all terms and
conditions of this Agreement.
17. Counterparts - This Agreement may be executed by the parties hereto in
separate counterparts, each of which, when so executed and delivered by one or
more parties shall be deemed an original, and all of which counterparts shall
together constitute one and the same instrument.
18. Entire Agreement - This Agreement represents the entire agreement of
the parties hereto and the terms are contractual and not mere recitals. This
Agreement may not be amended, altered, or modified or changed in any way except
in a writing signed by each of the parties to this Agreement. The parties hereto
further agree that in the event of any subsequent litigation, controversy, or
dispute concerning any of the terms, conditions, or provisions of this
Agreement, neither party shall be permitted to offer or introduce any oral
evidence concerning other oral promises or oral agreements between the parties
relating to the subject matter of this Agreement not included or referred to
herein and not reflected by a writing signed by each of the parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first written above.
/s/ Xxxxxx X. Xxxxxx /s/ Xxx Xxxxxxxxx
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Xxxxxx X. Xxxxxx, International Dispensing Corp.
As Trustee for Xxxxxxxx Oakmont, Inc. By: Xxx Xxxxxxxxx
Title: President
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