EXHIBIT 10.44
-------------
FINANCING AGREEMENT
-------------------
THIS FINANCING AGREEMENT (the "Agreement") is entered into on August
___, 2001, by and between ARTESIAN DIRECT HOLDINGS CORPORATION, a Washington
corporation ("Artesian"), and CELERITY SYSTEMS, INC., a Delaware corporation
("Celerity").
RECITALS:
--------
WHEREAS, on July 3, 2001, the parties hereto entered into a letter of
intent (the "Letter of Intent") setting forth the principle terms of a proposed
transaction between the parties; and
WHEREAS, this Agreement is intended to be the definitive agreement
referenced in the Letter of Intent.
NOW THEREFORE, in consideration of the mutual promises, covenants and
conditions contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
AGREEMENT:
---------
1. PURCHASE COMMITMENT. From time to time during the Term (as
defined herein), Artesian shall purchase from Celerity or provide lease
financing to Celerity in an aggregate amount of $10 million (the "Purchase
Commitment") for the manufacture and installation of Celerity's products and
services, including, without limitation, the digital set top boxes, servers,
equipment, services, applications and content (collectively, the "Products").
All purchases by Artesian shall be at the then-existing prices and terms
established by Celerity for other customers purchasing similar quantities. Any
financing terms extended by Artesian hereunder shall be upon terms not to exceed
that which is available to Celerity from other sources in arms-length
transactions, which terms shall include, without limitation, the interest rate,
repayment terms, and amount financed.
2. SUPPORT AND PROMOTION. During the Term, Artesian shall use its
reasonable best efforts to support and promote Celerity's Products through its
marketing and sales departments.
3. WARRANTY. Celerity shall offer a manufacturers' warranty (the
"Warranty") on all Products delivered to or on behalf of Artesian under the
Purchase Commitment, which Warranty shall be no less favorable than Celerity's
then-existing standard warranty.
3. TERM. The Purchase Commitment shall be effective on the date
hereof and shall end on August ___, 2003 (the "Term").
4. CONSIDERATION.
(a) In consideration for the Purchase Commitment, promptly
after Celerity receives shareholder approval to increase its authorized capital
stock at its annual shareholders meeting to be held on August 23, 2001 or any
adjournment thereof, Celerity shall issue and deliver to Artesian 2.4 million
shares of Celerity common stock. Celerity agrees to include these shares in any
registration statement (the "Registration Statement") it files with the
Securities and Exchange Commission (the "SEC"). Celerity also agrees to use its
reasonable best efforts to have Registration Statement declared effective by the
SEC and to maintain such effectiveness for one year. The shares to be issued to
Artesian hereunder will, when issued, be fully paid and non-assessable.
(b) If Artesian (i) fails to provide all or any portion of
the Purchase Commitment in accordance with Section 1 hereof and (ii)
beneficially owns shares of Celerity common stock at that time, then Artesian
agrees to deliver shares of the Celerity common stock to Celerity pro rata,
based on the portion of the Purchase Commitment not provided. For example, if
Artesian only purchased $5 million of Products from Celerity (i.e., 50% of the
Purchase Commitment), then Artesian will deliver 1.2 million shares of its
Celerity common stock to Celerity (assuming Artesian still owns such shares). If
Artesian no longer owns sufficient shares of Celerity common stock to make up
the shortfall in the Purchase Commitment, Artesian will deliver to Celerity any
shares its then owns and thereafter will have no further liability to Celerity.
5. GUARANTY. The Purchase Commitment shall be partially guaranteed
by Xx. Xxxxxx Xxxxxxx on the terms set forth in a Guaranty Agreement of even
date hereof.
6. MISCELLANEOUS.
(a) NOTICES. All notices and other communications given or made
pursuant to this Agreement shall be in writing and shall be deemed to have been
duly given or made (i) the second business day after the date of mailing, if
delivered by registered or certified mail, postage prepaid, return receipt
requested, (ii) upon delivery, if sent by hand delivery, (iii) upon delivery, if
sent by prepaid overnight carrier, with a record of receipt, or (iv) the next
day after the date of dispatch, if sent by cable, telegram, facsimile or
telecopy (with a copy simultaneously sent by registered or certified mail,
postage prepaid, return receipt requested), to the parties at the following
addresses (or at such other addresses as shall be specified by the parties by
like notice):
- 2 -
(i) if to Artesian, to:
-----------------------------
-----------------------------
-----------------------------
-----------------------------
(ii) if to Celerity, to:
Celerity Systems, Inc.
000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxxx X. Van Meter, President
with a copy, to:
Xxxxxxxxxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esquire
(c) SUCCESSORS AND ASSIGNS. This Agreement and all the rights
and powers granted hereby shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns.
(d) GOVERNING LAW; JURISDICTION. This Agreement shall be
governed by and construed in accordance with the laws of the State of Tennessee
without regard to its conflict of laws doctrines. Any dispute arising hereunder
shall be brought exclusively in the state or federal courts located in Xxxx
County, Tennessee and each party hereto agrees not to object to the venue of
such courts.
(e) NO ASSIGNMENT. This Agreement and the rights, interests
and obligations hereunder may not be assigned by any party hereto.
(f) ENTIRE AGREEMENT. This Agreement sets forth all of the
promises, covenants, agreements, conditions and undertakings between the parties
hereto with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements and understandings, inducements or conditions,
express or implied, oral or written.
(g) SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other terms, conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner
- 3 -
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the extent possible.
(h) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall be deemed to be one and the same instrument.
(i) AMENDMENT AND MODIFICATION. This Agreement may be amended,
modified, or supplemented only by written agreement of the parties hereto.
(j) HEADINGS. The headings used in this Agreement are for
convenience and reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
- 4 -
IN WITNESS WHEREOF, the undersigned parties have executed this
Financing Agreement as of the date first above written.
ARTESIAN DIRECT HOLDINGS CORPORATION
By:-------------------------
Name:-----------------------
Title:----------------------
CELERITY SYSTEMS, INC.
By:-------------------------
Name:-----------------------
Title:----------------------
- 5 -
