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EXHIBIT 10.39
STOCK PURCHASE AGREEMENT AND TERMINATION AGREEMENT
This Stock Purchase and Termination Agreement (this "AGREEMENT") is
entered into as of the 25th day of March, 1999 by and among XXXXXXX X. XXXXXX,
in his individual capacity ("PURCHASER"), Prisym Technologies, Inc. of Georgia,
a Georgia corporation (the "COMPANY"), and TEKGRAF, INC., a Georgia corporation
("SELLER").
RECITALS
A. Purchaser owns 40 shares and Seller owns 60 shares of the
$1.00 par value common stock ("COMMON STOCK") of the Company, which shares
represent 100% of the issued and outstanding shares of the Company;
B. Purchaser, Seller and the Company are parties to that certain
Shareholders Agreement made and entered into the 30th day of November, 1994
(the "SHAREHOLDERS AGREEMENT");
C. Purchaser desires to purchase from Seller, and Seller desires
to sell to Purchaser all 60 Shares of Common Stock of the Company owned by
Seller, in accordance with the terms and conditions contained herein.
D. Pursuant to the Shareholders Agreement, Seller agreed to
provide the Company with adequate working capital financing. The Company
desires to repay Seller for the financing it provided to the Company, and
Purchaser and the Company, on the one hand, and Seller, on the other, desire to
terminate the Shareholders Agreement and release each other from any further
obligations thereunder;
AGREEMENTS
Therefore, for good and valuable consideration, the receipt and
sufficiency of which arc hereby acknowledged, the parties agree as follows:
1. Purchase and Sale of Shares. On the terms and subject to the
conditions contained in this Agreement, Purchaser hereby agrees to purchase
from Seller, and Seller hereby agrees to sell to Purchaser, 60 shares (the
"SHARES") of the Common Stock of the Company, for the purchase price set forth
in Section 2 hereof.
2. Purchase Price. At the Closing (as defined in Section 4
below), Purchaser will pay to Seller a total purchase price for the Shares in
the amount of $32,000 (the "PURCHASE PRICE") by bank or cashier's check or via
wire transfer of immediately available funds to such bank and account as have
been designated by Seller to Purchaser in writing.
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3. Transfer of Shares. Contemporaneously with the Closing (as
defined in Section 4 below), Seller shall deliver to the Purchaser the stock
certificate representing the Shares, together with a duly executed stock
transfer power therefor, free and clear of any liens, claims, equities,
security interests, preemptive rights, judgments and other encumbrances of
every kind and nature whatsoever.
4. Time and Place of Closing. The transactions contemplated by
this Agreement will be consummated (the "CLOSING") at 2:00 p.m., at the offices
of Xxxxxxxx Xxxxxxx LLP on March 25, 1999, and will be effective as of March 1,
1999 (the "Effective Date"). The date on which the Closing occurs is referred
to in this Agreement as the "CLOSING DATE".
5. Repayment. Contemporaneously with the Closing, the Company
will pay to Seller, by wire transfer of immediately available funds, the sum of
$947,239.07, which sum represents payment and satisfaction in full of all
amounts that are owed by the Company to the Seller under the Shareholders
Agreement or otherwise. Following such payment, the Seller, the Purchaser and
the Company shall have no further right or claim against one another for any
debts, claims, obligations or liabilities of any kind, all of which are hereby
forever discharged and released, other than any claims arising under this
Agreement.
6. No Further Distribution of Profits. The parties have agreed
that there shall be no further distribution of "Net Profits" (as defined in the
Shareholders Agreement) of the Company, and Seller waives all rights to any
such further distributions.
7. Payment of Taxes. Seller shall be responsible for the timely
filing of the appropriate federal and state tax returns of the Company and the
payment of federal and state income taxes owed by the Company for the fiscal
year ended December 31, 1998, and shall provide Purchaser with a copy of the
1998 federal and state tax returns so filed. Seller shall be entitled to
receive any refund arising out of such taxes and shall be responsible for the
payment of any deficiencies arising out of such taxes. The Company shall be
responsible for the filing of the appropriate federal and state tax returns and
the payment of all other taxes owed by the Company, including any payments for
estimated taxes during 1999.
8. Termination of Certain Agreements.
8.1. Contemporaneously with the Closing, Purchaser, Seller
and the Company hereby agree to terminate the Shareholders Agreement
effective as of the Effective Date and to release the parties thereto
from all further obligations thereunder.
8.2. Contemporaneously with the Closing, the Company and
Purchaser hereby agree to terminate that certain Employment Agreement
between the Company and Purchaser dated November 30, 1994 and to
release one another from any further obligations thereunder. Such
termination and release shall be effective as of the Effective Date.
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9. Removal of Seller's Representatives, Designees and
Appointees. Effective on or before the Closing Date, the Seller as a
shareholder of the Company hereby agrees to execute a written consent of the
shareholders of the Company adopting certain actions and resolutions in lieu of
meeting, whereby all of Seller's representatives, designees and appointees
serving as directors of the Company are removed from such positions with the
Company.
10. Representations and Warranties by Seller. Seller hereby
represents and warrants to Purchaser as follows:
10.1. Power and Authority. Seller has the corporate power
and authority to enter into this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Seller, and no other
corporate proceedings on the part of Seller are necessary to authorize
the execution, delivery and performance of this Agreement by Seller.
10.2. Binding Effect. This Agreement has been duly
executed and delivered by Seller and constitutes its legal, valid and
binding obligation, enforceable in accordance with its terms.
10.3. Title to Shares. The Shares are duly and validly
issued, fully paid and nonassessable and are owed beneficially and of
record by the Seller, free and clear of any and all liens, claims,
equities, security interests, preemptive rights, judgments and other
encumbrances of every kind and nature whatsoever.
10.4. Other Securities. Other than the Shares and the
shares of Common Stock owned by Purchaser, as of the Effective Date,
Seller has not authorized, and to Seller's best knowledge, there are
no issued and outstanding shares of any class of securities of the
Company or outstanding options, warrants, convertible securities,
subscriptions or other agreements or rights of any nature under which
the Company may be obligated to issue or transfer any shares of its
stock.
10.5. Consents and Approvals. Seller has obtained all
consents, authorizations and approvals to the transactions
contemplated by this Agreement that to its knowledge are required
pursuant to the terms of any material agreement or arrangement
relating to or binding upon the Seller or any of its affiliates or
subsidiaries.
11. Representations by Purchaser. Purchaser hereby represents and
warrants to Seller as follows:
11.1. Investment Intent. Purchaser hereby represents and
warrants to Seller that he is acquiring the Shares for his own account
for investment purposes only and not with a view to, or for resale in
connection with, any distribution of such Shares within the meaning of
the Georgia Securities Act of 1973, as amended, or the Securities Act
of 1933, as amended, and that he does not presently intend to resell,
assign or
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otherwise dispose of all or any part of the Shares and that Purchaser
will not sell, pledge, transfer or assign the Shares except in a
transaction which is exempt under the provisions of the federal
securities laws and applicable state securities laws. Purchaser
represents and warrants that he is a sophisticated investor who, as the
chief executive officer of the Company, has access to such information
as he deemed necessary or appropriate to formulate an informed purchase
decision.
11.2. Power and Authority. Purchaser has the power and
authority to enter into this Agreement, to perform his obligations
hereunder and to consummate the transactions contemplated hereby.
11.3. Consents and Approvals. The Purchaser has obtained
all consents, authorizations and approvals to the transactions
contemplated by this Agreement that are required pursuant to the terms
of any material agreement or arrangement relating to or binding upon
the Purchaser.
11.4. Present Intent not to Sell Shares to Certain
Persons. As of the date hereof, Purchaser does not intend to sell the
Shares, or any other shares of capital stock of the Company, to any of
the current holders of the Class B Common Stock of Seller, a list of
whom will be provided to the Purchaser by Seller upon request of
Purchaser, and to Purchaser's knowledge, no such persons are involved
in the transactions contemplated herein except in their capacities on
behalf of Seller.
12. Representation by the Company. The Company has the corporate
power and authority to enter into this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of the Company, and no other corporate proceedings on the part of
the Company are necessary to authorize the execution, delivery and performance
of this Agreement by the Company. The Company has obtained all consents,
authorizations and approvals to the transactions contemplated by this Agreement
that are to the Company's knowledge required pursuant to the terms of any
material agreement or arrangement relating to or binding upon the Company.
13. Publicity. Neither Seller nor Purchaser nor the Company shall
issue any press release, written public statement or announcement relating to
this Agreement or the transactions contemplated hereby without the written prior
approval, which shall not be unreasonably withheld, of all parties in each
instance, except to the extent such disclosure is required by law (in which case
such parties shall use all reasonable efforts to give the other parties prior
notice thereof).
14. Confidentiality. Purchaser and Seller agree that any
information or material regarding the transactions contemplated herein that is
obtained by Purchaser from Seller, its employees, agents, or representatives,
including its attorneys, subsidiaries, or affiliates, regarding Seller, its
subsidiaries or affiliates and that is obtained by Seller from Purchaser, its
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employees, agents or representatives, including its attorneys,
regarding Purchaser, will be used solely for the purposes of
evaluating and consummating the transactions contemplated herein.
Purchaser and Seller agree that they will keep such confidential
information confidential for a period of two years, and neither will
disclose any information regarding the transactions contemplated
herein received from the other or the Company, or any of their
respective employees, agents, or representatives, including attorneys
and accountants, to any third party, except as required by applicable
law or legal process, without the prior written consent of the other;
provided, however, that any such information may be disclosed to a
person's representatives when they need to know such information for
the purposes of preparing for and evaluating the proposed transaction
or for the purpose of financing the proposed transaction. Purchaser
and Seller agree that if the proposed transaction contemplated hereby
is not closed for any reason, each shall return to the other all
materials received from the other regarding the transactions
contemplated herein.
15. Conduct of Business Pending Closing. Purchaser hereby
covenants that from the date hereof until the Closing Date the Company will
carry on its business in the usual, regular and ordinary course consistent with
past practices.
15.1. Dividends. Between March 1, 1999 and the Closing
Date, Purchaser hereby covenants that he will not cause the Company to
make any dividend or other unusual distributions of any kind to the
shareholders of the Company unless in a manner prescribed by the
Shareholder Agreement and upon prior written notice to the Chief
Financial Officer of the Seller.
15.2. Access to the Business. Prior to the Closing Date,
Purchaser shall use reasonable efforts to cause the Company to permit
Seller and its representatives, agents, counsel and accountants, to
have full access at all reasonable times to the premises, business,
properties, assets, financial statements, contracts, books, records
and working papers of, and other relevant information pertaining to
the Company and to cause the Company's officers and employees to
furnish to Seller and its representatives, agents, counsel and
accountants, such financial and operating data and other information
with respect to the Company as Seller may reasonably request. Prior to
the Closing Date, Seller shall use reasonable efforts to cause the
Company to permit Purchaser and its representatives, agents, counsel
and accountants, to have full access at all reasonable times to the
premises, business, properties, assets, financial statements,
contracts, books, records and working papers of, and other relevant
information pertaining to the Company and to use reasonable efforts to
cause the Company's officers and employees to furnish to Purchaser and
its representatives, agents, counsel and accountants, such financial
and operating data and other information with respect to the Company
as Purchasers may reasonably request.
16. Nonsolicitation of Customers. The Company and Purchaser agree
that, during the six (6) month period commencing as of the Closing Date,
neither they nor any entity with which they are affiliated or which they
control will, without the prior written consent of Seller in each instance,
either directly or indirectly, alone or in conjunction with any other person or
entity, for or on behalf of the Company solicit, entice or induce any customer
of Seller or any
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of its subsidiaries or affiliates with whom or with which the Company had
direct contact. Seller agrees that, during the six (6) month period commencing
as of the Closing Date, neither it nor any entity with which it is affiliated
or which it controls will, without the prior written consent of the Company and
the Purchaser in each instance, either directly or indirectly, alone or in
conjunction with any other person or entity, for or on behalf of Seller or any
of its subsidiaries or affiliates solicit, entice or induce any customer of the
Company or any of its affiliates with whom or with which Seller had direct
contact.
17. Nonsolicitation or Personnel. The Company and Purchaser agree
that, during the six (6) month period commencing as of the Closing Date,
neither they nor any entity with which they are affiliated or which they
control will, without the prior written consent of Seller in each instance,
either directly or indirectly, alone or in conjunction with any other person or
other personnel, solicit any personnel of Seller or any of its subsidiaries or
affiliates to terminate, alter or lessen that party's affiliation as a
consultant, contractor or employee of Seller or any of its subsidiaries or
affiliates. Seller agrees that, during the six (6) month period commencing as
of the Closing Date, neither they nor any entity with which they are affiliated
or which they control will, without the prior written consent of the Company in
each instance, either directly or indirectly, alone or in conjunction with any
other person or other personnel of the Company, solicit any personnel to
terminate, alter or lessen that party's affiliation as a consultant, contractor
or employee of the Company.
18. Conditions to Obligations of Purchaser and the Company. All
of the obligations of Purchaser and the Company under this Agreement are
subject to the fulfillment prior to or at the Closing of each of the following
conditions, any of which may be waived by Seller in its sole discretion:
18.1. Representations and Warranties. All representations
and warranties of Seller contained in this Agreement shall be true and
correct in all material respects as of the date hereof, and such
representations and warranties shall be true and correct in all
material respects as of the Closing (as if made at and as of such
time).
18.2. Performance of Agreements. Seller shall have
performed and complied in all material respects with all agreements
and conditions required by this Agreement to be performed or complied
with by it prior to or at the Closing.
18.3. Approvals. Any and all governmental authorities,
bodies or agencies having jurisdiction over the transactions
contemplated by this Agreement shall have granted such consents,
authorizations and approvals as are necessary for the consummation
thereof, and all applicable waiting or similar periods required by law
shall have expired.
18.4. No Injunctions. No preliminary or permanent
injunction or other order by any federal, state or local court which
prevents the consummation of the transactions contemplated by this
Agreement shall have been issued and remain in effect, and no action
to obtain any such injunction or order shall have been filed and
remain pending.
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18.5. Financing. Purchaser shall have obtained the
financing necessary to consummate the transactions contemplated
hereby.
18.6. Material Adverse Change. There shall have been no
material adverse change in the business, operations, equity, earnings,
prospects or financial condition of the Company from October 31, 1998
until the Closing Date.
19. Conditions to Obligations of Seller. All of the obligations
of Seller under this Agreement are subject to the fulfillment prior to or at
the Closing of each of the following conditions, any of which may be waived by
Purchaser and the Company:
19.1. Representations and Warranties. All representations
and warranties of Purchaser and the Company contained in this
Agreement shall be true and correct in all material respects as of the
date hereof, and such representations and warranties shall be true and
correct in all material respects as of the Closing (as if made at and
as of such time).
19.2. Performance of Agreements. Purchaser and the Company
shall have fully performed and complied in all material respects with
all agreements and conditions required by this Agreement to be
performed or complied with by him prior to or at the Closing.
19.3. Approvals. Any and all governmental authorities,
bodies or agencies having jurisdiction over the transactions
contemplated by this Agreement shall have granted such consents,
authorizations and approvals as are necessary for the consummation
thereof, and all applicable waiting or similar periods required by law
shall have expired.
19.4. No Injunctions. No preliminary or permanent
injunction or other order by any federal, state or local court which
prevents the consummation of the transactions contemplated by this
Agreement shall have been issued and remain in effect, and no action
to obtain any such injunction or order shall have been filed and
remain pending.
19.5. Ordinary Course of Business. Purchaser shall have
operated the Company in the ordinary course consistent with past
practices since March 1, 1999.
19.6. Material Adverse Change. There shall have been no
material adverse change in the business, operations, equity, earnings,
prospects or financial condition of the Company from October 31, 1998
until the Closing Date.
20. Closing Deliveries.
20.1. Closing Deliveries by Purchaser and the Company.
Purchaser and the Company shall deliver or cause to be delivered at
the Closing all of the following:
(a) The Purchaser shall pay the Purchase Price
set forth in Section 2;
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(b) The Company shall satisfy its obligations
under Section 5 hereof, to repay amounts outstanding that are
owed to Seller.
(c) The Company shall satisfy its obligations
under Section 6 hereof to distribute to Purchaser and Seller
their respective interests in the Undistributed Profits of
the Company.
20.2. Closing Deliveries by the Seller. The Seller shall
deliver or cause to be delivered at Closing all of the following:
(a) The original stock certificate representing
all the Shares of Common Stock of the Company owed by the
Seller, duly endorsed by the Seller or with duly executed
stock powers attached.
(b) A duly certified copy of the written
consent of the board of directors of Seller evidencing the
approval of Seller's board of directors of this Agreement and
the sale contemplated hereby.
(c) All promissory notes or other evidences of
indebtedness of the Company to the Seller marked "satisfied"
or other evidence satisfactory to the Purchaser that all
debts owed to Seller by the Company have been satisfied.
21. Indemnification.
21.1. Definition of Damages. As used in this Agreement,
"Damages" shall mean all assessments, levies, losses, fines, penalties,
liabilities, damages, costs and expenses, including reasonable
attorneys' fees and expenses.
21.2. Purchaser's Indemnification Obligations. Purchaser
shall indemnify, save and keep harmless Seller, its subsidiaries and
affiliates against and from all Damages sustained or incurred by them
as a result of or arising out of or by virtue of:
(a) any inaccuracy in or breach of any
representation and warranty made by the Purchaser to Seller
herein or in any closing document delivered to Seller in
connection herewith; or
(b) the breach by Purchaser of or the failure of
the Purchaser to comply with, any of the covenants or
obligations to be performed by the Purchaser under this
Agreement.
21.3. Seller's Indemnification. Obligations. Seller shall
indemnify, save and keep harmless Purchaser and its successors and
permitted assigns (each a "PURCHASER INDEMNITEE"), against and from all
Damages sustained or incurred by any Purchaser Indemnitee as a result
of or arising out of or by virtue of:
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(a) any inaccuracy in or breach of any
representation and warranty made by Seller to the Purchaser
herein or in any closing document delivered to the Purchaser
in connection herewith; or
(b) any breach by Seller of, or failure by
Seller to comply with, any of the covenants or obligations
under this Agreement to be performed by Seller under this
Agreement.
21.4. Time Limitation On Certain Indemnification
Obligations. Claims for indemnification made under paragraphs 21.2 and
21.3 of this Agreement may be made during the period from the Closing
Date until the second anniversary of the Closing Date. Notwithstanding
the foregoing, any claim for indemnification shall survive such
termination date, if the party seeking indemnification, prior to such
termination date shall have advised the party from whom it seeks
indemnification in writing of the claim.
22. Commissions. Each party shall be responsible for any
commissions or finders' or originator's or transaction fees payable to any
person retained by it in connection with the proposed transaction, and the
parties will indemnify each other with respect thereto.
23. Cost and Expense. Each party will bear its own costs and
expenses in connection with the proposed transaction and the transactions
contemplated herein.
24. Miscellaneous.
24.1. Survival. All covenants, agreements, representations
and warranties made herein or pursuant to any certificate or
instrument delivered pursuant to this Agreement shall survive the
Closing.
24.2. Amendment. This Agreement may not be amended except
by an instrument in writing signed by Seller and Purchaser.
24.3. Notices. All notices required or permitted to be
given hereunder shall be in writing and may be delivered by hand, by
facsimile, by nationally recognized private courier, or by United
States mail. Notices delivered by mail shall be deemed given three (3)
business days after being deposited in the United States mail, postage
prepaid, registered or certified mail, return receipt requested.
Notices delivered by hand, by facsimile, or by nationally recognized
private courier shall be deemed given on the day of receipt (if such
day is a business day or, if such day is not a business day, the next
succeeding business day); provided, however, that a notice delivered
by facsimile shall only be effective if confirmation is received of
receipt of the facsimile at the number provided in this Section 24.3
or if such notice is also delivered by hand, or deposited in the
United States mail, postage prepaid, registered or certified mail
(return receipt requested), on or before two (2) business days
following transmission by facsimile. All notices shall be addressed as
follows:
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If to Seller:
Tekgraf, Inc.
0000 Xxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn.: W. Xxxxxxx Xxxx
Facsimile: 000-000-0000
If to Purchaser:
Xxxxxxx X. Xxxxxx
Prisym Technologies, Inc. of Georgia
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Facsimile: 000-000-0000
and/or to such other respective addresses and/or addressees as may be
designated by notice given in accordance with the provisions of this
Section 24.3.
24.4. Entire Agreement; Binding Effect. This Agreement and
the instruments to be delivered by the parties pursuant to the
provisions hereof constitute the entire agreement between the parties
and shall be binding upon and inure to the benefit of the parties
hereto and their respective legal representatives, successors and
permitted assigns.
24.5. Non-Waiver. The failure in any one or more instances
of a party to insist upon performance of any of the terms, covenants
or conditions of this Agreement, to exercise any right or privilege in
this Agreement conferred, or the waiver by such party of any breach of
any of the terms, covenants or conditions of this Agreement, shall not
be construed as a subsequent waiver of any such terms, covenants,
conditions, rights or privileges, but the same shall continue and
remain in full force and effect as if no such forbearance or waiver
had occurred. No waiver shall be effective unless it is in writing and
signed by an authorized representative of the waiving party.
24.6. Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be deemed to be an
original, and all such counterparts shall constitute but one
instrument.
24.7. Severability. The invalidity of any provision of
this Agreement or portion of a provision shall not affect the validity
of any other provision of this Agreement or the remaining portion of
the applicable provision.
24.8. Applicable Law. This Agreement shall be governed and
controlled as to validity, enforcement, interpretation, construction,
effect and in all other respects by the internal laws of the State of
Georgia applicable to contracts made in that State.
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24.9. Benefits. Except as expressly provided herein,
nothing in this Agreement, express or implied, shall confer on any
Person other than the parties hereto, and their respective successors
and permitted assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, including third
party beneficiary rights.
24.10. Assignability. This Agreement shall not be
assignable by Seller, Purchaser or the Company without the prior
written consent of the other parties. Purchaser may assign his right
to purchase the Shares to any person or entity prior to Closing,
except for any of the persons listed in Section 11.4 hereof.
24.11. Headings. The headings contained in this Agreement
are for convenience of reference only and shall not affect the meaning
or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
"SELLER"
TEKGRAF, INC.
By: /s/ Xxxx Xxxx
--------------------------------
Title: CFO
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"PURCHASER"
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
"COMPANY"
PRISYM TECHNOLOGIES, INC. OF GEORGIA
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Title: President
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