TLM HOLDINGS CORP.
c/o Foster Management Company
0000 Xxxx Xxxxx Xxxxxx
Xxxx xx Xxxxxxx, Xxxxxxxxxxxx 00000
January 15, 1997
Xx. Xxx X. Xxxxxxxxx
0000 Xxxxxxxxx 00 Xxx, Xxxxx Xxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Dear Xxx:
The undersigned, TLM Holdings Corp., a Delaware corporation (the
"Company"), and you (the "Purchaser"), hereby agree as follows:
1. Authorization and Sale of the Shares. The Company has authorized
the issuance to the Purchaser of and proposes to sell to the Purchaser pursuant
hereto an aggregate of 50,000 shares (collectively the "Shares" and individually
a "Share") of its common stock, $.01 par value (the "Common Stock"), at a price
of $.057 per Share.
2. Purchase of the Shares by the Purchaser. Subject to the terms and
conditions hereof, the Purchaser hereby agrees to purchase the Shares from the
Company in reliance upon its representations and warranties herein contained,
and the Company hereby agrees to sell the Shares to the Purchaser in reliance
upon his representations and warranties herein contained, at an aggregate
purchase price (the "Purchase Price") of $2,850, in cash.
3. Representations, Warranties, and Agreements of the Company. The
Company represents and warrants to, and agrees with, the Purchaser as follows:
(a) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware.
(b) The Company has duly authorized the execution and delivery of
this Agreement and the issuance and delivery of the Shares and this Agreement
constitutes a valid and
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legally binding agreement of the Company enforceable in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
or other laws affecting generally the enforceability of creditors' rights and by
limitations on the availability of equitable remedies. The Shares, when issued
and delivered in accordance with this Agreement, shall have been duly issued and
shall be validly outstanding, fully paid and nonassessable shares of the Common
Stock.
(c) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated herein shall violate any provision
of the Certificate of Incorporation or By-laws of the Company or any statute,
ordinance, regulation, order, judgment or decree of any court or governmental
agency, or conflict with or result in any breach of any of the terms of,
constitute a default under, or result in the termination of or the creation of
any lien pursuant to the terms of, any contract or agreement to which the
Company is a party or by which the Company or any of its assets is bound.
4. Representations, Warranties, and Agreements of the Purchaser. The
Purchaser hereby represents and warrants to, and agrees with, the Company as
follows:
(a) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated herein shall conflict with or
result in any breach of any of the terms of, constitute a default under, or
result in the termination of or the creation of any lien pursuant to the terms
of, any contract or agreement to which the Purchaser is a party or by which he
or any of his assets is bound.
(b) (i) The Purchaser understands that by the terms of this
Agreement he is purchasing shares of Common Stock issued and delivered by the
Company without compliance with the registration requirements of the Securities
Act of 1933, as amended (the "Securities Act") or the securities laws of any
state, under and in reliance on exemptions from the registration requirements of
the Securities Act and such laws, and without the approval, disapproval, or
passing on the merits by any regulatory authority; that for purposes of such
exemptions, the Company will rely upon the representations, warranties and
agreements of the Purchaser contained herein; and that such non-compliance with
registration requirements is not permissible unless such representations and
warranties are correct and such agreements performed.
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(ii) The Purchaser understands that the Company is under no
obligation to effect a registration under the Securities Act of the Shares to be
purchased by him hereunder. The Purchaser understands that, under existing rules
of the Securities and Exchange Commission (the "Commission"), he may be unable
to sell any of the Shares except to the extent that the Shares may be sold (A)
in a bona fide private placement to a purchaser who shall be subject to the same
restrictions on sale or (B) subject to the restrictions contained in Rule 144
under the Securities Act.
(iii) As the President of the TeleManagement Services Division of
the Company, the Purchaser is fully familiar with the business, properties and
financial condition of the Company, and acknowledges that he has been afforded
access to such additional information concerning the Company as he considers
necessary or appropriate to make an informed investment decision. The Purchaser
is an "accredited investor" as such term is defined in Rule 501 under the
Securities Act.
(iv) The Purchaser is a sophisticated investor familiar with the
type of risks inherent in the acquisition of securities such as the Common
Stock, and his financial position is such that he can afford to retain the
Shares for an indefinite period of time without realizing any direct or indirect
cash return on his investment.
(v) The Purchaser is acquiring the Shares pursuant to this Agreement
for his own account and not with a view to or for sale in connection with the
distribution thereof within the meaning of the Securities Act. Except as
permitted hereby, the Purchaser shall not effect a distribution of any Shares
until either (A) he has received the opinion of counsel for the Company that
registration under the Securities Act is not required or (B) a registration
statement under the Securities Act covering such Shares and the disposition
thereof has become effective under the Securities Act, and the Purchaser agrees
that the certificates evidencing the Shares may bear a restrictive legend to the
foregoing effect.
5. Restrictions on Transferability of the Shares. The Purchaser
hereby agrees that the Purchaser shall not sell, assign, transfer, gift, devise,
bequeath, deliver, pledge, hypothecate or otherwise dispose of any of the
Shares, except as provided for in this Agreement. Any disposition or purported
disposition of Shares in violation of this Agreement shall be null and void and
shall not be
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recorded on the books of the Company. Notwithstanding the foregoing:
(a) Disposition of Vested Shares and Shares which are not Vested
Shares. Shares which are "vested" in accordance with the following schedule (the
"Vested Shares") may be disposed of in the manner set forth in Subsection (b) or
(d) of this Section 5.
Cumulative percentage
of Shares which are
Vested Shares
---------------------
On or before December 31, 2000.................. 0%
January 1, 2001 to
December 31, 2001............................... 50
On or after January 1, 2002..................... 100
Shares which are not Vested Shares (the "Unvested Shares") may be
disposed of only in the manner set forth in Subsection (c) or (d) of this
Section 5.
(b) Vested Shares.
(i) Vested Shares held by the Purchaser may be transferred by the
Purchaser provided that the Purchaser first complies with the right to purchase
set forth in this Subsection (b). The Company shall have a right to purchase any
Vested Shares proposed to be sold by the Purchaser on the terms set forth in
this Subsection (b).
(ii) If the Purchaser wishes to dispose of Vested Shares, the
Purchaser shall first obtain a bona fide written offer (the "Offer") for the
purchase of the Vested Shares which he wishes to dispose of. Such Offer shall be
for cash or promissory notes only. Promptly upon receipt of the Offer, the
Purchaser shall give notice to the Company (the "Offer Notice") of his intent to
dispose of Vested Shares, which Offer Notice shall specify the name of the
proposed purchaser, the number of Vested Shares (the "Offered Securities") the
Purchaser desires to dispose of and the price and terms of payment of such
proposed disposition. Upon receipt of the Offer Notice, the Company shall have
the right to purchase all (but not less than all) of the Offered Securities at
the price and on the terms of the Offer. Such right must be exercised by the
Company by giving notice to that effect to the Purchaser within a period of 20
days after the date of receipt of the Offer
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Notice (any such notice of the exercise of such right being herein referred to
as an "Acceptance Notice").
(iii) In the event of the exercise by the Company of its right to
purchase pursuant to this Subsection (b), the Acceptance Notice shall specify
the time and date for purchase of the Offered Securities (the "Share Closing")
which shall be not more than 30 days after the expiration of the 20-day period
set forth in clause (b)(ii). The Purchaser shall deliver to the Company at the
Share Closing, which shall be held at the business headquarters of the Company,
the Offered Securities in due and proper form for transfer, against payment of
the purchase price by the Company.
(iv) If the Company shall fail or decline to agree to purchase the
Offered Securities within the 20-day period provided for in clause (b)(ii), then
the Purchaser shall have the right and privilege to sell all (but not less than
all) the Offered Securities, within 60 days after the expiration of such 20-day
period, to the bona fide purchaser named in the Offer Notice, at the price and
on terms of payment specified in the Offer. If, for any reason, the Offered
Securities are not sold within such 60-day period, the Offered Securities shall
again become subject to the terms and conditions of this Agreement.
(v) If, as of the Share Closing, any amount of principal of and
interest on any indebtedness of the Purchaser to the Company shall then be
outstanding, payment of the purchase price for the Offered Securities at the
Closing shall be made, at the Company's option, by a credit against such
indebtedness to the extent of the principal thereof and interest thereon then
outstanding (whether or not such principal and interest is then due and
payable).
(vi) The Company's right to purchase set forth in this Subsection
(b) shall terminate upon the occurrence of the closing of the initial sale by
the Company to the public of shares of the Common Stock pursuant to a
registration statement filed under the Securities Act, other than a registration
statement covering securities of the Company to be issued pursuant to an
employee benefit plan (such occurrence, the "Termination Event").
(c) Termination of the Purchaser's Employment. (i) If the Purchaser
shall cease to be employed by the Company by reason of (x) the Purchaser's
voluntary resignation from his employment with the Company or (y) the
termination by the Company of his employment for due cause pursuant to his
employment agreement dated the date hereof
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by and between the Company and the Purchaser, the Company shall have the right
(but not the obligation) to purchase from the Purchaser all or any portion of
the Unvested Shares owned by the Purchaser at the time the Purchaser ceases to
be employed by the Company in accordance with clause (c)(i)(x) or (c)(i)(y) of
this Section 5. Such right to purchase shall be exercisable by written notice to
that effect given by the Company to the Purchaser within 60 days after the
Purchaser has ceased to be employed in accordance with clause (c)(i)(x) or
(c)(i)(y) of this Section 5 by the Company, as aforesaid. Upon the giving of
such written notice, the Purchaser shall for all purposes cease to be a
stockholder of the Company as to the Unvested Shares covered by such notice and
shall have no rights against the Company or any other person in respect of such
Unvested Shares except the right to receive payment for such Unvested Shares in
accordance herewith. Notwithstanding the provisions of Subsection (a) of this
Section 5, Unvested Shares not so purchased by the Company shall upon the
expiration of such 60-day period become Vested Shares.
(ii) At the time and date specified in the notice given by the
Company referred to in clause (c)(i), which date shall in no event be more than
15 days after the expiration of the 60-day period for the exercise of the right
to purchase set forth therein, the Purchaser shall deliver to the Company, at
the business headquarters of the Company, the Unvested Shares to be sold by the
Purchaser in due and proper form for transfer, against payment by the Company of
the purchase price therefor, as determined in accordance with clause (c)(iv).
(iii) If at the time of payment of the purchase price referred to in
clause (c)(ii), any amount of principal of or interest on any indebtedness of
the Purchaser to the Company shall be outstanding, payment of the purchase price
for the Unvested Shares shall be made, at the Company's option, as a credit
against such indebtedness to the extent of the principal thereof and interest
thereon then outstanding (whether or not such principal and interest is then due
and payable).
(iv) The per Share purchase price for the Unvested Shares payable by
the Company pursuant to clause (c)(ii) shall be $0.057. The number of Unvested
Shares to be purchased and the per Share purchase price pursuant to this clause
(c)(iv) shall be appropriately adjusted by the Board of Directors of the Company
to reflect any subdivision or combination of the Common Stock of the Company or
any stock dividend or like event.
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(d) Disposition to Family Members. Shares held by the Purchaser may
be transferred by the Purchaser to or for the benefit of the Purchaser or a
member of his immediate family. For the purpose of this Agreement, the term
"immediate family" of the Purchaser shall mean his spouse and children (and the
direct lineal descendants of his children). It shall be a condition to the
validity of any transfer of Shares permitted by the provisions of this
Subsection (d) that the transferee shall execute a copy of this Agreement, shall
hold such Shares subject to the provisions of this Agreement, and shall make no
further transfer of such Shares, except in compliance with the terms and
conditions of this Agreement.
6. Voting Agreement. (a) Except as hereinafter set forth, the
Purchaser agrees that, subject to the laws of the State of Delaware and the
terms of this Agreement, from the date of this Agreement until January 15, 2002
the Purchaser will vote all shares of Common Stock owned by the Purchaser in
favor of a Board of Directors which shall include Xxxx X. Xxxxxx and such other
persons designated by Xxxx X. Xxxxxx as shall together with Xxxx X. Xxxxxx
constitute a majority of such members.
(b) Notwithstanding any of the other terms or conditions set forth
in this Agreement, the parties hereto agree that in the event that the voting
agreement set forth in this Section 6 shall terminate upon the occurrence of the
Termination Event.
7. Come Along/Take Along.
(a) (i) In the event that Abbingdon Venture Partners Limited
Partnership-II, a Delaware limited partnership ("Abbingdon-II") and Abbingdon
Venture Partners Limited Partnership-III, a Delaware limited partnership
("Abbingdon-III" and together with Abbingdon-II, the "Partnerships"), propose to
transfer substantially all of the shares of the Common Stock held by them (a
"Sale of Securities") other than to the public for cash pursuant to a
registration statement filed under the Securities Act, then the following
provisions of this Section 7 shall apply.
(ii) The Partnerships shall permit the Purchaser, or cause the
Purchaser to be permitted, to sell the same proportionate number of shares of
the Common Stock held by the Purchaser as the Partnerships shall sell of the
shares of the Common Stock held by the Partnerships, for the same consideration
and otherwise on the same terms and conditions to be received by the
Partnerships in the Sale of Securities.
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(iii) The Partnerships shall have the right to request the Purchaser
to sell or cause to be sold the number of shares of the Common Stock held by the
Purchaser which bears the same proportion to the number of shares of the Common
Stock then held by the Purchaser as the number of shares of the Common Stock
being sold by the Partnerships bears to the total number of shares of the Common
Stock owned by the Partnerships (a "Purchaser Request").
(iv) Upon receipt by the Purchaser of a Purchaser Request, the
Purchaser will sell or will cause to be sold the appropriate number of shares of
the Common Stock held by the Purchaser for the consideration and otherwise on
the same terms and conditions received by the Partnerships.
(b) The obligations of the Partnerships under Section 7(a) hereof to
afford the Purchaser, or cause the Purchaser to be afforded, the rights referred
to therein will be discharged if the Purchaser is given written notice which
allows the Purchaser ten business days to exercise such rights (by written reply
addressed to such person as may be designated in the notice, and if requested in
such notice, sent by certified mail, return receipt requested), and within such
ten business day period the Purchaser has not given notice of exercise of such
rights.
(c) All rights and obligations created by this Section 7 shall
terminate upon the earlier to occur of (i) the written agreement of the parties
hereto, or (ii) the Termination Event.
8. Purchaser Ratio. On the date hereof, the Purchaser is the owner
of 50,000 shares of Common Stock. Such shares represent 1/70 (the "ratio") of
the number of shares of Common Stock owned by the Partnerships (3,500,000
shares) on the date hereof. It is the intention of the parties hereto that the
Purchaser shall be given the opportunity to maintain the ratio with respect to
his shares of Common Stock in relation to the number of shares of Common Stock
owned by the Partnerships. Therefore, the parties agree that at any time that
the Partnerships acquire additional shares of Common Stock from the Company, the
Purchaser shall be offered the opportunity to acquire, for the same
consideration and otherwise on the same terms and conditions to be received by
the Partnerships, that number of shares of Common Stock necessary to maintain
the ratio. In the event that the Purchaser declines the opportunity to acquire
shares of Common Stock when offered by the Company, the Company shall
recalculate the ratio based on the number of shares owned by the Purchaser and
the number of shares of Common Stock owned by the Partnerships after the
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Partnerships' acquisition of such additional shares. For purposes of calculating
the ratio, the number of Purchaser's shares of Common Stock shall not include
(a) any shares acquired by the Purchaser as part of any contingent payments
pursuant to an Agreement of Purchase and Sale dated the date hereof by and among
the Company, the Purchaser and Telemanagement Services, Inc. and (b) any other
shares acquired by the Purchaser not pursuant to this Section 8. The provisions
of this Section 8 shall terminate upon the occurrence of the Termination Event.
9. The Closing. As soon as practicable after the execution and
delivery of this Agreement, the Purchaser shall cause to be delivered to the
Company a check or checks payable to the order of the Company in the amount of
$2,850, in payment of the Purchase Price. Promptly upon receipt of such check or
checks, the Company shall deliver to the Purchaser a stock certificate
registered in the name of the Purchaser and representing the Shares.
10. Conditions to the Obligations of the Purchaser. The obligations
of the Purchaser to purchase the Shares pursuant hereto are subject, at his
option, to the accuracy of the representations and warranties of the Company
contained in Section 3.
11. Conditions to the Obligations of the Company. The obligations of
the Company to sell the Shares pursuant hereto are subject, at its option, to
the accuracy of the representations and warranties of the Purchaser contained in
Section 4.
12. Expenses. Each of the parties hereto shall pay its own expenses
in connection with the preparation, execution and delivery of this Agreement.
13. Notice. Any notice under this Agreement shall be in writing and
delivered personally or sent by certified mail, return receipt requested,
addressed, as the case may be, (i) to the Company at its address set forth at
the head of this Agreement or such other address as may hereafter be designated
by the Company by notice to the Purchaser in the manner provided herein; and
(ii) to the Purchaser at his address set forth at the head of this Agreement or
such other address as may hereafter be designated by the Purchaser by notice to
the Company in the manner provided herein. All notices personally delivered
shall be deemed to have been given when delivered and all notices sent by mail
shall be deemed to have been given three business days after mailing.
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14. Successors. The terms, covenants and conditions of this
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, legal representatives, successors, permitted
transferees and assigns.
15. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania
applicable to agreements made and to be performed entirely within such
Commonwealth.
16. Entire Agreement. This Agreement sets forth the entire
understanding of the parties hereto, and no modifications of or amendments to
this Agreement shall be binding on the parties hereto unless in writing and
signed by them.
17. Integration. This Agreement supersedes all prior understandings,
negotiations, and agreements relating to the subject matter hereof.
18. Severability. If any provision herein contained shall be held to
be illegal or unenforceable, such holding shall not affect the validity or
enforceability of the other provisions of this Agreement.
19. Reorganization, Etc. The provisions of this Agreement shall
apply mutatis mutandis to any shares or other securities resulting from any
stock split or reverse split, stock dividend, reclassification, subdivision,
consolidation or reorganization of any shares or other securities of the
Company, to any shares or other securities resulting from any recapitalization,
consolidation, merger or reorganization of the Company and to any shares or
other securities of the Company or any successor company or of any parent of
such successor company which may be received by the Purchaser by virtue of his
ownership of any shares of Common Stock of the Company.
20. Captions. The captions appearing herein are for the convenience
of the parties only and shall not be construed to affect the meaning of the
provisions of this Agreement.
21. Legends on Certificates. During the term of this Agreement, each
of the certificates representing Shares shall contain upon its face or upon the
reverse side thereof legends to the following effect:
"This Certificate represents securities which are restricted and
which are
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subject to the terms and conditions of a Stock Purchase Agreement
dated as of January 15, 1997 by and between Xxx Xxxxxxxxx and the
Company (a copy of which is on file at the principal office of the
Company) and the rights, privileges and options therein contained.
No sale, transfer, assignment, pledge, hypothecation or other
disposition of this Certificate or any of the securities represented
hereby shall be made except in compliance with the terms and
conditions of said Stock Purchase Agreement.
The Shares represented by this Certificate have not been registered
under the Securities Act of 1933, as amended (the "Act"), and may
not be transferred in violation of such Act."
* * *
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If you are in agreement with the foregoing, please execute and
deliver to the undersigned the enclosed counterpart of this Agreement, whereupon
this Agreement shall become a binding agreement between us.
Very truly yours,
TLM HOLDINGS CORP.
By /s/ Xxxx Xxxxxxx
---------------------------
Xxxx Xxxxxxx
Accepted and agreed to as
aforesaid:
/s/ Xxx X. Xxxxxxxxx
----------------------------------
Xxx X. Xxxxxxxxx
The undersigned are executing
this Agreement to indicate
their agreement to Section 7
hereof:
ABBINGDON VENTURE PARTNERS
LIMITED PARTNERSHIP-II
By: Abbingdon-II Partners, general
partner
By /s/ Xxxxxxx X. Xxxx
----------------------------------
Xxxxxxx X. Xxxx
ABBINGDON VENTURE PARTNERS
LIMITED PARTNERSHIP-III
By: Abbingdon-II Partners, general
partner
By /s/ Xxxxxxx X. Xxxx
----------------------------------
Xxxxxxx X. Xxxx
