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 provisions 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 issued 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 Purchasers 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(l)(1)); (iii) IDC is barred from issuing new stock (except in
connection with a dividend or similar transaction) for the two years after the
Effective Date (Underwriting Agreement at P. 3(l)(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
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indemnify the other against misrepresentations 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(l)). 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 may
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.
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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 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.
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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 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
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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 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
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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.
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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 Corporation
As Trustee for Xxxxxxxx Oakmont, Inc. By: Xxx Xxxxxxxxx
Title: President
