EXHIBIT 10(a)
STOCK TRANSFER AGREEMENT
THIS STOCK TRANSFER AGREEMENT is entered into as of this 13th day of
March, 2001, by and among Acorn Technology Fund, L.P., a New Jersey limited
partnership ("Acorn"), Xxxxxx Xxxxx, a resident of the State of New Jersey
("Xxxxx"), Xxxxx Xxxxxx, M.D., a resident of the State of New York ("Elbirt"),
Xxxx X. Xxxxx, a resident of the State of New York ("Xxxxx," and together with
Xxxxx and Elbirt, the "Principal Common Stockholders"), XxxxxXxx.xxx, Inc., a
Georgia corporation ("Pedianet"), and Xxxxx & Schloss LLP, a New York limited
liability partnership, as escrow agent (the "Escrow Agent").
WITNESSETH:
WHEREAS, Pedianet has entered into an Agreement and Plan of
Reorganization and Merger (the "Merger Agreement") with xxxxxxx.xxx, Inc., a
Delaware corporation ("xxxxxxx.xxx"), and Pedianet Acquisition Corp., a Delaware
corporation and wholly-owned subsidiary of Pedianet ("Acquisition Sub"),
pursuant to which Acquisition Sub will merge (the "Merger") with and into
xxxxxxx.xxx, with xxxxxxx.xxx as the surviving corporation, and stockholders of
xxxxxxx.xxx, including without limitation Acorn and the Principal Common
Stockholders, will receive shares of the common stock, $.001 par value per share
(the "Stock"), of Pedianet, all in accordance with the terms and conditions of
the Merger Agreement; and
WHEREAS, Section 3(a)(1) of the Merger Agreement provides, in part,
that Acorn shall receive no less than 2,800,000 shares of Stock and no more than
4,600,000 shares of Stock (as the holder of all outstanding shares of
xxxxxxx.xxx's preferred stock prior to the consummation of the Merger), based on
the 90-day average closing price, ending on the first anniversary of the closing
of the Merger, for shares of Stock on the primary exchange, quotation system, or
electronic bulletin board on which such shares are then trading; and
WHEREAS, as of the date hereof, the Merger is being effectuated, and
Acorn initially is being issued a Stock certificate representing 2,800,000
shares of Stock; and
WHEREAS, all shares of Stock being issued in the Merger to the
stockholders of xxxxxxx.xxx are to be deposited in escrow with the Escrow Agent
for a period of one year, subject to the terms and conditions of an escrow
agreement dated as of even date herewith (the "Escrow Agreement"), among
Pedianet, xxxxxxx.xxx (for itself and on behalf of its stockholders), and the
Escrow Agent; and
WHEREAS, the parties hereto desire to establish a mechanism to transfer
shares of Stock issued solely to Engel, Elbirt, and Xxxxx in the Merger to
Acorn, if and solely to the extent Acorn is entitled to additional shares of
Stock, if any, based upon the terms and conditions contained in Section 3(a)(1)
of the Merger Agreement;
NOW, THEREFORE, for and in consideration of the mutual promises and
covenants herein contained, and for other mutual consideration paid to each of
the parties hereto, the receipt and sufficiency of which are hereby expressly
acknowledged, the parties hereto agree as follows:
1. Initial Issuances of Stock. (a) Upon consummation of the Merger,
Acorn shall be issued one or more certificates by Pedianet representing
2,800,000 shares of Stock. Each of Engel, Elbirt, and Xxxxx shall be issued not
less than two certificates representing in the aggregate the full number of
shares of Stock to which each is entitled under Section 3(a)(4) of the Merger
Agreement, with one or more certificates for each representing the minimum
number of shares of Stock such person would be entitled to under Section 3(a)(4)
of the Merger Agreement (the "Minimum Number of Shares") after any transfers of
Stock to Acorn as contemplated by this Agreement (assuming that Acorn would be
entitled to the maximum of 4,600,000 shares of Stock under Section 3(a)(1) of
the Merger Agreement), and another one or more certificates from which Acorn
will receive additional shares of stock, if any, under such Section 3(a)(1) (the
"Transfer Shares"). All of the shares of Stock shall be deposited into escrow
with the Escrow Agent as contemplated by the Escrow Agreement, subject to the
terms thereof and the terms of this Agreement. Pedianet expressly acknowledges
and agrees that its recourse to indemnification against the Principal Common
Stockholders initially shall be against the Minimum Number of Shares, and then,
following release to Acorn of the Transfer Shares, if any, against any other
shares of Stock to which the Principal Common Stockholders are entitled.
Notwithstanding the foregoing, each holder of Stock deposited in escrow shall
have the full rights and privileges pertaining thereto, including without
limitation voting, liquidation, and dividend rights.
(b) The Escrow Agent shall receive, subject to the terms of this
Agreement, any dividends or distributions declared and paid on the shares
deposited under the Escrow Agreement and this Agreement. Notwithstanding the
foregoing, the Escrow Agent shall receive and hold, subject to the terms of the
Escrow Agreement and this Agreement, any cash and/or such shares of Stock or
other capital stock of Pedianet and any securities convertible or exchangeable
for shares of Stock or such other capital stock or warrants to purchase Stock or
such other capital stock, issued in respect of shares of Pedianet's stock or
such other capital stock held by it relating to any dividend or distribution,
including upon any merger or liquidation of Pedianet, to be distributed in
accordance with Section 3(a) of the Merger Agreement.
2. Transfer of Stock. (a) The calculation (the "Calculation") for
determining the number of shares of Stock as to which Acorn shall be entitled in
the Merger as of the first anniversary of the Closing Date (as such term is
defined in the Merger Agreement) shall be prepared by Pedianet within three
business days of such anniversary, determined solely as provided in Section
3(a)(1) of the Merger Agreement. Pedianet shall provide notice of the
Calculation (the "Calculation Notice") by facsimile transmission, as provided
herein, to each of Acorn, the Principal Common Stockholders, and the Escrow
Agent by the close of business on such third business day (the
"Calculation Notice Date"). Each of Acorn and the Principal Common Stockholders
shall have two business days from the Calculation Notice Date to object to the
Calculation, specifying the basis upon which such objection is being made, and
the resulting calculation based on its methodology. Notice of any such objection
(an "Objection Notice") shall be delivered by facsimile transmission to all of
the other parties hereto by the close of business on the second business day
following the Calculation Notice Date. If no Objection Notice is received by the
Escrow Agent by the close of business on the second business day following the
Calculation Notice Date, or thereafter Acorn and the Principal Common
Stockholders shall mutually agree in writing to such Calculation, the Escrow
Agent and Pedianet may conclusively rely upon such Calculation for purposes of
transferring the agreed upon number of Transfer Shares registered in the names
of the Principal Common Stockholders (pro rata based upon ownership of Transfer
Shares by each held by the Escrow Agent) to Acorn. If no such agreement is
obtained following delivery of an Objection Notice in the time specified above,
Pedianet shall review the objections and calculations contained in any such
Objection Notice(s), and shall thereafter determine, within two business days of
receipt thereof, the final Calculation of the number of shares as to which Acorn
shall be entitled in the Merger in accordance with Section 3(a)(1) of the Merger
Agreement.
(b) Upon the execution of this Agreement, each of the Principal Common
Stockholders shall execute a Stock power, executed in blank, to be held by the
Escrow Agent in trust for use solely in effectuating any transfers under Section
3(a) of the Merger Agreement and as specified in this Agreement. The Escrow
Agent is hereby granted a power of attorney by each of the Principal Common
Stockholders for purposes of completing each such Stock power solely in
accordance with Section 3(a) of the Merger Agreement and Section 2(a) of this
Agreement. Certificates representing the Minimum Number of Shares shall be
delivered to the Principal Common Stockholders pursuant to the Escrow Agreement,
without further reference to this Agreement. Upon the determination of the final
Calculation of the shares of Stock to be transferred to Acorn by the Principal
Common Stockholders as specified in Section 2(a) of this Agreement, the Escrow
Agent shall complete the Stock powers deposited with it by the Principal Common
Stockholders for the transfer of shares of Stock held for each as determined in
accordance with such Section 2(a), and shall deliver, within two business days
of the determination of the final Calculation under Section 2(a) of this
Agreement, certificates representing not less than the aggregate number of
shares of Stock to be transferred to Acorn, together with such executed and
completed Stock powers, to the transfer agent of Pedianet's Common Stock (as
specified from time to time by Pedianet). Pedianet shall provide irrevocable
instructions to its transfer agent to accept such delivery from the Escrow
Agent, to issue a new certificate to Acorn in the number of shares of Stock
specified by the Escrow Agent, and to issue certificates of Stock representing
the number of shares of Stock of each Principal Common Stockholder, if any, not
being transferred to Acorn to the Principal Common Stockholders, as their
respective interests may appear. Within two business days of receipt of such
certificates by the Escrow Agent from the transfer agent of Pedianet's Common
Stock, the Escrow Agent shall deliver to Acorn and each of the Principal Common
Stockholders all certificates representing shares of Stock to which each is
entitled under Section 3(a) of the Merger Agreement and under this
Agreement.
3. Binding Effect; Successors. This Agreement shall be binding upon and
inure to the benefit of and shall be enforceable by the parties hereto and their
respective legal representatives, heirs, legatees, successors, and assigns.
4. Amendment and Waiver. This Agreement may be amended, modified, or
supplemented or any term or condition waived only by a written instrument
executed by all of the parties hereto.
5. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of New Jersey,
without regard to principles of conflicts of laws. Service of process on any of
the parties hereto in any action arising out of or relating to this Agreement
shall be effective if served upon such party in accordance with Section 8
hereof.
6. Unenforceability. If any provision of this Agreement is held or
deemed to be invalid or unenforceable to any extent when applied to any person
or circumstance, the remaining provisions of this Agreement and the enforcement
of such provisions to other persons or circumstances shall not be affected, and
each provision of this Agreement shall be enforced to the fullest extent allowed
by law.
7. Headings. The headings of articles and sections contained in this
Agreement are solely for convenience of reference, are not part of the agreement
of the parties, and shall not affect the meaning or interpretation of this
Agreement.
8. Notices. All notices, requests, demands, and other communications
permitted or required hereunder shall be in writing, and, unless otherwise
expressly provided herein, either (1) delivered in person; (2) sent by express
mail or other overnight delivery service providing receipt of delivery; (3)
mailed by certified mail, postage prepaid, return receipt requested; or (4) sent
by telecopy or other facsimile transmission, with proof of transmission thereof
retained by the transmitter, as follows:
If to Pedianet:
XxxxxXxx.xxx, Inc.
00 Xxxx Xxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx, President
Fax: (000) 000-0000
With a copy to:
Xxxxx & Schloss LLP
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
If to any of the Principal Common Stockholders:
c/o Xxxxxx Xxxxx
xxxxxxx.xxx, Inc.
00 Xxxx Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Fax: (000) 000-0000
With a copy to:
Moses & Singer LLP
0000 Xxxxxx xx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
If to Acorn:
Acorn Technology Fund, L.P.
0 Xxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxx Xxxxxxxxx
Fax: (000) 000-0000
With a copy to:
Xxxxx Xxxxxxxx Xxxx Xxxxx & Xxxxxxx
000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
If to the Escrow Agent:
Xxxxx Xxxxxxx LLP, Escrow Agent
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
or to such other address as any party hereto may designate by notice. Any such
notice or communication, if given or made by prepaid, certified mail or by
recorded express
delivery, shall be deemed to have been made when actually received, but not
later than three (3) business days after the same was posted or given to such
express delivery service and if made properly by telecopy or other facsimile
transmission such notice or communication shall be deemed to have been made at
the time of dispatch.
9. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
be deemed to constitute one and the same agreement.
IN WITNESS WHEREOF, the respective parties have caused this Agreement
to be executed as of the date first above written.
ACORN TECHNOLOGY FUND, L.P.
By: Acorn Technology Partners, L.L.C.,
Its General Partner
By: /s/Xxxx Xxxxxxxxx
------------------------
Name: Xxxx Xxxxxxxxx
Title: Manager
/s/Xxxxxx Xxxxx
----------------------------
Xxxxxx Xxxxx
/s/Xxxxx Xxxxxx, M.D.
----------------------------
Xxxxx Xxxxxx, M. D.
/s/Xxxx X. Xxxxx
----------------------------
Xxxx X. Xxxxx
XXXXXXXX.XXX, INC.
By: /s/Xxxxxx Xxxxxxx
-------------------------
Name: Xxxxxx Xxxxxxx
Title: President
XXXXX & XXXXXXX LLP
By: /s/Xxxxxx Xxxxx
-------------------------
Name: Xxxxxx Xxxxx
Title: Partner
