EXHIBIT 10.12
SHARE REPURCHASE AGREEMENT
This Share Repurchase Agreement ("Agreement") is made and entered into
this 10th day of July, 2001, by and among J. XXXXXXX XXXXXX, JR. ("Packy") and
XXXXXXXX X. XXXXXX, husband and wife, as joint tenants with right of
survivorship (collectively "Seller"), the record and beneficial owners of the
one million one hundred seventy-six thousand four hundred seventy-one
(1,176,471) Common Shares, without par value (the "Shares"), of Xxxxxx Software,
Inc. that are the subject matter of this Agreement and XXXXXX SOFTWARE, INC., an
Ohio corporation (the "Company").
RECITAL:
(A) Seller desires to sell to the Company, and the Company desires
to repurchase and redeem from Seller, the Shares under and pursuant to the terms
of this Agreement.
(B) Packy is willing to agree to certain restrictions on his
business activities for the benefit of the Company.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Representations and Warranties.
(a) Seller represents and warrants to the Company that because
they are and have been shareholders of the Company, and because of their review
of various documents delivered to them by the Company from time to time, Seller
has had access to all material and relevant information concerning the Company,
its business and financial condition and its prospects, including but not
limited to any and all information that Seller has requested from the Company,
thereby enabling Seller to make informed investment decisions with respect to
the sale of the Shares.
(b) Seller represents and warrants to the Company that Seller is
the record and beneficial owner of the Shares, free and clear of any
restrictions and adverse claims of any nature whatsoever (except restrictions
under applicable federal and state securities laws and restrictions under the
Shareholders' Agreement among the Company and certain shareholders of the
Company, dated January 31, 2001 (the "Shareholders' Agreement")) and will sell
and transfer good and marketable title to the Shares to the Company free and
clear of any restrictions and adverse claims of any nature whatsoever (except as
described above).
(c) The Company represents and warrants to Seller that the Company
is solvent within the meaning of the Ohio General Corporation Act (the "Ohio
Act") and will not be rendered insolvent by its performance of this Agreement
and consummation of the transactions contemplated hereby; and that the Company
has sufficient surplus, within the meaning of the Ohlo Act, so as to permit the
Company to perform this Agreement and
consummate the transactions contemplated hereby, including but not limited to
the payment in full of the Repurchase Note (as hereinafter defined).
(d) The parties acknowledge and agree that all of the foregoing
representations and warranties shall survive the execution and delivery of this
Agreement, the closing of the transactions contemplated hereby and the sale,
repurchase and transfer of the Shares, notwithstanding any investigation that
may have been or may be conducted by any party with respect to any of such
matters at any time.
2. Sale and Purchase. Seller agrees to sell the Shares to the
Company, and the Company agrees to repurchase the Shares from Seller, for a
repurchase price of $4.25 per Share (the "Repurchase Price"). Seller shall
surrender to the Company the certificate evidencing the Shares (the "Shares
Certificate"), together with a duly endorsed blank stock power for the Shares,
in fulfillment of Sellers' obligation to tender the Shares to the Company. The
Company shall deliver to Seller, in payment of the Repurchase Price:
(a) a check payable to the order of Seller in the amount of $2
million; and
(b) a non-negotiable promissory note in principal amount equal to
the balance of the Repurchase Price ($3,000,001.75) and otherwise in the form of
the note attached hereto as Exhibit A (the "Repurchase Note").
All of the foregoing transfers and deliveries shall constitute the closing of
the transactions contemplated by this Agreement and shall occur simultaneously
with the execution and delivery of this Agreement by the parties.
3. Restrictive Covenants Of Packy.
(a) Covenant Not to Compete and Non-Solicitation. Packy recognizes
that the Company's decision to enter into this Agreement has been induced in
part because of the covenants and assurances made by Packy in this Section 3,
that Packy's covenant not to compete is necessary to ensure the continuation of
the business of the Company and the reputation of the Company, and that
irreparable harm and damage will be done to the Company if Packy competes with
the Company. Therefore, Packy agrees that for a period ending on the later of
(1) the date that is sixty (60) months from the date of this Agreement or (2)
the last day that Packy holds a position as a director, officer or employee of
the Company, Packy shall not, directly or indirectly, as an employee, employer,
contractor, consultant, agent, principal, shareholder, corporate officer,
director or in any other individual or representative capacity: (A) engage or
participate in any business anywhere in the world that develops, produces,
markets, sells or distributes enterprise software or any other computer software
combining document imaging, document management, enterprise report management
and work flow technologies, or provides services of a nature provided by the
Company with respect to any of the foregoing products; (b) solicit for
employment any person who is or was an employee of the Company at any time
during the twenty-four (24) month period immediately prior to the date of this
Agreement; or (c)
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interfere with any of the contractual relationships of the Company.
Notwithstanding anything to the contrary in this Section 3(a), Seller is not
prohibited from owning any equity interest whatsoever that is less than one
percent (1%) of the equity of any publicly-traded entity. Packy acknowledges and
agrees that the enforcement of this restriction by the Company will not create
an undue hardship upon Packy and he will be capable of still earning a
livelihood for himself and his family.
(b) Nondisclosure. Packy covenants and agrees that he will not at
any time reveal to any individual, person, company, business organization or
entity any of the trade secrets or confidential information concerning the
organization, business, finances, operations or business associates of the
Company (including but not limited to trade secrets or confidential information
respecting inventions, products, services, designs, methods, know-how,
techniques, systems, processes, software programs, works of authorship, customer
lists, supplier lists, projects, plans and proposals) (collectively,
"Confidential Information"), and Packy will keep secret all Confidential
Information entrusted to him by the Company or its representatives and will not
use or attempt to use any such Confidential Information in any manner that may
injure or cause loss or may be calculated to injure or cause loss, whether
directly or indirectly, to the Company.
The foregoing limitations on disclosure and use of Confidential
Information will not apply to any Confidential Information that is (1) known or
available to the general public, provided it has become known or available to
the general public other than through a breach of this Agreement, (2) received
by Packy after the date of this Agreement from third parties having a bona fide
right to disclose the same to Packy and under no legal, contractual or other
duty of confidentiality to the Company, (3) required to be disclosed by Packy as
a matter of law, (4) disclosed by Packy to his tax advisors or used by Packy in
the planning and preparation or otherwise in connection with his personal tax
matters, and solely for that purpose, or (5) disclosed or used by Packy in
furtherance of any claim by Packy against the Company under this Agreement or
the Repurchase Note.
(c) Irreparable Harm. Packy acknowledges that (1) Packy's
compliance with this Section 3 is necessary to preserve and protect the
proprietary rights, Confidential Information and goodwill of the Company as a
going concern; (2) any failure by Packy to comply with the provisions of this
Section 3 will cause economic harm and loss of goodwill to the Company resulting
in immediate and irreparable and continuing injury to the Company for which
there will be no adequate remedy at law; (3) In the event that Packy should fail
to comply with the provisions of this Section 3, the Company shall be entitled,
in addition to such other relief as may be proper, to seek all types of
equitable relief (including, but not limited to, specific performance or the
issuance of any injunction or temporary restraining order) as may be necessary
to cause Packy to comply with this Section 3, to restore to the Company its
property, and to compensate the Company for such damages as it may have actually
suffered. The Company shall not be required to post any bond in connection with
the obtaining of Injunctive or any other equitable relief, and Packy hereby
waives his rights to any such requirement.
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In the event Packy should breach the provisions of Section 3(a), and so
long as the Company is not in default of any of its obligations under the
Repurchase Note, the Company also shall be entitled to set-off the amount of any
money damages that the Company suffers as a result of such breach against any
payments due from the Company to Seller under the Repurchase Note. Any such
set-off shall be effected in accordance with the following procedure. If the
Company seeks to exercise the right of set-off hereunder, the Company shall
provide written notice thereof to Seller. Thereafter, unless and until the
earliest of: (1) the date a court of competent jurisdiction issues a preliminary
or permanent injunction or other comparable equitable relief restraining Packy
from violating such Section 3(a), (2) the date Seller notifies the Company in
writing that Seller will not contest such set-off, or (3) the amount of such
set-off is finally determined based upon a final, non-appealable judicial
determination or mutual agreement of Seller and the Company as to the amount of
money damages attributable to such breach, then at the time(s) the amount(s) to
be set-off are otherwise required to be paid to Seller under the Repurchase Note
the Company shall deposit such payments into an interest bearing escrow account
at a banking institution reasonably selected by the Company, to be held by such
escrow agent pending the resolution of such dispute. Seller and the Company
agree to provide prompt written notice to the escrow agent of any final
resolution (in the manner described above) of such dispute. The escrow agent
shall be entitled to rely conclusively upon such joint written notice provided
by the parties, or upon any written court order to such effect. The escrow agent
will disburse any amounts held in such escrow account, including interest, in
furtherance of such final resolution immediately upon the escrow agent's receipt
of such joint written notice. All escrow fees and other reasonable charges of
the escrow agent shall be borne and paid by the parties in the inverse
proportions that the amounts held in such escrow account are finally distributed
to the parties.
(d) Suspension of Passage of Time During Period of Violation. It
is specifically agreed that the period during which the agreements and covenants
of Packy made in this Section 3 shall be effective shall be computed by
excluding from such computation any time during which Packy is in violation of
the agreement or covenant in question.
(e) Survival. The provisions of this Section 3 shall survive the
Closing.
(f) Ancillary Agreement. The covenants set forth in Section 3(a)
and (b) shall be construed as an agreement ancillary to the other provisions of
this Agreement, and the existence of any claim or cause of action of Seller
against the Company, whether predicated on this Agreement or otherwise, shall
not constitute a defense to the enforcement by the Company of Section 3(a) and
(b).
4. Further Assurances. Each party agrees to execute and deliver
such additional documents, and take such other actions, as the other party may
reasonably request and as may be necessary to effectuate the sale and purchase
of the Shares.
5. Governing Law. This Agreement and the interpretation thereof
are governed by the laws of the State of Ohio, without regard to the conflict of
laws provisions thereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
SELLER: COMPANY:
Xxxxxx Software, Inc.
/s/ J. Xxxxxxx Xxxxxx,
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J. Xxxxxxx Xxxxxx, Jr. By: /s/ Xxxxx Xxxxxx
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Its: CFO
/s/ Xxxxxxxx X. Xxxxxx
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Xxxxxxxx X. Xxxxxx
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