XXXXXXX XXXXXXXX
00 Xxxxxxxxx Xxxxxx
Xxxxxx Xxxxxx, XX 00000
(000) 000-0000
November 30, 1995
Xxxxxx X. Hafesh
000 Xxxxxxx Xx. Xxx. 0000
Xxxxxxxxx Xxxx, XX 00000
Dear Mr. Hafesh:
This letter agreement (the "Agreement") will serve to confirm our recent
conversations and negotiations concerning the parameters attendant upon the
receipt by the undersigned (the "Donee") of securities constituting a
controlling equity interest in Techscience Industries, Inc., a publicly owned
Delaware corporation ("TSCI") with a class of securities registered pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 (the"34 Act"). This
Agreement is and is intended to be confidential and no public or other
announcement is or will be made by TSCI or Donee until and unless the same is
mandated by the federal securities laws or counsel to either party.
1. GIFT. Simultaneously with the execution of this Agreement at a
mutually agreeable time and place (the"Hafesh Closing"), the Donee will be the
recipient from Xxxxxx X. Hafesh ("Hafesh") of a gift of an aggregate of
1,889,000 issued and outstanding shares of TSCI's Common Stock, $.01 par value
per share owned beneficially and of record by Hafesh since 1978 (the "Gift
Shares"). The Gift Shares, which represent approximately 38% of TSCI's total
issued and outstanding Common Stock capitalization as of the date hereof, are
being delivered to the Donee without consideration.
2. BUSINESS PURPOSE. Hafesh, an executive officer and director of TSCI
who resigned these positions on August 25, 1993, hereby declares his express
written intent in executing and performing this Agreement is to free himself
from any and all potential obligations under Section 16 of the Securities
Exchange Act of 1934, by divesting himself of securities that have had little or
no value since 1991.
3. OUTSTANDING CAPITALIZATION. At the Hafesh Closing, TSCI's issued and
outstanding capitalization shall consist of 5,017,750 shares of common stock,
its only class of equity or debt securities.
4. INVESTMENT INTENT. The Donee hereby represents, warrants covenants
and agrees that he has been advised, and by the execution of this Agreement,
hereby agrees, accepts and acknowledges as follows with respect to the Gift
Shares:
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(a) That none of the Gift Shares to be delivered hereunder
shall have been registered under the Securities Act of 1933, as amended (the
"Securities Act") or under any state securities law, and that Hafesh will be
relying upon an exemption from registration based upon the investment
representations of the Donee;
(b) The Donee will be acquiring the Gift Shares for investment
purposes and without any view to the transfer or resale thereof and that such
shares shall not be sold, transferred, assigned, pledged or hypothecated in
violation of the Security Act, or the applicable securities laws of any state;
and
(c) The certificates representing all of the Gift Shares to be
delivered pursuant to this Agreement, shall bear a restrictive legend in
substantially the following form and shall be subject to the imposition of a
standard stop transfer order on the books and records of TSCI:
"The Shares represented by this certificate have not been
registered under the Securities Act of 1933 as amended. They
may not be sold, assigned or transferred in the absence of an
effective registration statement for the Shares under the said
Securities Act; receipt of a 'no action' letter from the
Securities and Exchange Commission or an opinion of counsel
satisfactory to the Issuer that registration is no required
under said Securities Act."
5. EXPENSES. The Donee and Hafesh shall bear his and its own expenses
in connection with the preparation for and consummation of the transaction
contemplated by this Agreement.
6. ACCESS AND INFORMATION. Hafesh shall afford to the Donee and his
accountants, counsel and other duly authorized representatives access, during
normal business hours and on reasonable advance notice, during the period after
execution of this Agreement and prior to the Hafesh Closing, the right to make
copies of all properties, books, contracts, commitments and records (including
but not limited to tax returns) concerning TSCI that Hafesh happens to have
stored for TSCI. In the event the Hafesh Closing does not take place as
hereinabove provided, and except for publicly available information or material,
the Donee shall return to Hafesh all documents, work papers and other material
obtained by or on his behalf as a result of this Agreement or in connection
herewith whether obtained before or after the execution hereof, and the Donee
shall hold such information in confidence until such time as such information is
otherwise publicly available.
7. NO BREACH. The execution and delivery of this Agreement does not,
and the consummation by the Donee and Hafesh of the transactions contemplated
hereby will not, violate any provision of, or result in a default or
acceleration of any obligation under, or result in any change in the rights or
obligations of the Donee, Hafesh or TSCI under any lien, agreement, contract,
instrument, order, arbitration award, judgment, or decree to which the Donee,
Hafesh or TSCI, is a party or by which the Donee, Hafesh or TSCI is bound, or to
which any property of the Donee, Hafesh or TSCI is subject. No default or breach
will occur in any material respect by virtue of the consummation of the
transactions contemplated herein under any material contract, agreement,
indenture or other instrument entered into by the Donee, Hafesh or TSCI;
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8. CONFIDENTIALITY AND PUBLICITY. Due to the nature of the discussion
being conducted hereunder, the parties hereby covenant and agree, one to the
other, to keep all joint discussions, this Agreement and all other documents
related hereto, or which may be reviewed by the parties hereto, their agents or
affiliates, as part of the due diligence process described above, in strict
confidence. Neither party shall make any public announcement of the transactions
contemplated hereby without the prior consent of the other party hereto, except
that any party may make such disclosures as are, in the opinion of its counsel,
required by any applicable law, rules or regulations, in which event the party
making such disclosure shall give the other party notice of and a copy of the
text or proposed text of such disclosure, and shall use its best efforts to
provide such notice and copy to the other party prior to making the required
disclosure.
9. MISCELLANEOUS. (a) This Agreement may be executed in counterparts
each of which so executed shall be deemed an original and constitute one and the
same agreement. (b) Each party shall at all times keep the other informed of its
principal place of business if different from that stated herein, and shall
promptly notify the other of any change, giving the address of the new principal
place of business or residence. (c) All notices that are required to be or may
be sent pursuant to the provision of this Agreement shall be sent by certified
mail, return receipt requested, or by overnight package delivery service, to
each of the parties at the address appearing herein, and shall count from the
date of mailing or the validated airbill. (d) A modification or waiver of any of
the provisions of this Agreement or any amendment to this Agreement shall be
effective only if made in writing and executed with the same formality as this
Agreement. (e) The failure of any party to insist upon strict performance of any
of the provisions of this Agreement shall not be construed as a waiver of any
subsequent default of the same or similar nature or of any other nature or kind.
(f) Each party is, shall be, and be deemed to be, an independent contractor in
the performance of its duties hereunder, any law of any jurisdiction to the
contrary notwithstanding. (g) This Agreement is binding upon and shall inure to
the benefit of and shall be enforceable against the parties hereto and their
respective successors and assigns. (h) This Agreement shall not be assigned or
amended without the prior written consent of the other party. (i) This Agreement
represents the entire agreement and understanding of the parties with respect to
the subject matter hereof. There are no representations, warranties and/or
covenants not set forth herein.
If the foregoing correctly sets forth our understanding and agreement, please
confirm the accuracy and completeness of this Agreement by signing the enclosed
copy in the indicated space and returning the executed document to the
undersigned as soon as practicable.
Very truly yours,
/s/ XXXXXXX XXXXXXXX
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Xxxxxxx Xxxxxxxx
AGREED TO AND ACCEPTED:
/s/ XXXXXX X. HAFESH
---------------------------
Xxxxxx X. Hafesh
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