STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), entered into this 27th day
of December, 1999, by and between Greystone Funding Corporation, a Virginia
corporation (the "Buyer") and Xxxxxx Technologies, Inc., a Delaware corporation
(the "Stockholder" or "Xxxxxx").
W I T N E S S E T H:
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WHEREAS, the Stockholder is the record and beneficial owner of 468,000
shares, no par value per share of the outstanding capital stock (the "Stock"),
of Photobit Corporation (the "Company"); and
WHEREAS, the Buyer desires to purchase from the Stockholder and the
Stockholder desires to sell to the Buyer, all upon the terms and subject to the
conditions set forth in this Agreement, all (and not less than all) of the
Stock;
WHEREAS, in order to induce the Buyer to purchase the Stock, the
Stockholder has agreed to issue to the Buyer warrants to purchase 2,000,000
shares of common stock of Xxxxxx Technologies, Inc. ("Xxxxxx Common Stock") at
an exercise price of $0.75 per share;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereby agree as follows:
1. PURCHASE AND SALE OF THE STOCK.
1.1 Stock Purchase. Subject to the terms and conditions of this
Agreement, on December 27, 1999 (the "Closing Date"), the Buyer shall
purchase and acquire from the Stockholder, and the Stockholder shall sell
and transfer to the Buyer, all (and not less than all) of the Stock, for
the Purchase Price provided for in Section 1.2 below. In furtherance
thereof, the Stockholder shall, on the Closing Date, deliver to the Buyer
the certificate(s) representing all of the Stock, duly endorsed for
transfer or accompanied by stock powers executed in blank for transfer.
1.2 Purchase Price. (a) The purchase price (the "Purchase Price") for
the Stock is $4.00 per share which equals One Million Eight Hundred
Seventy-two Thousand Dollars ($1,872,000), payable as follows: (a)
immediate payment of the aggregate sum of One Million ($1,000,000) Dollars
(the "Cash Portion") and (b) immediate delivery of the Buyer's
fully-executed promissory note in the aggregate principal amount of Eight
Hundred Seventy-two Thousand ($872,000) Dollars (the "Note"). On the
Closing date, the Buyer shall pay such Cash Portion (minus $60,000 of
expenses) by wire transfer of immediately available funds to the
Stockholder's designated account and shall deliver the duly executed Note
to the Stockholder.
1.3 Warrants. (a) Xxxxxx shall issue warrants to purchase Two Million
(2,000,000) shares of
Xxxxxx Common Stock at an exercise price of $0.75 per share (subject to
adjustment to protect the holder against dilution as provided in the
Warrants) to the Buyer or its permitted designee. The Stockholder shall, on
the Closing Date, deliver such duly executed warrants to the Buyer.
(b) the Buyer shall return the Warrants to Xxxxxx if the DVI Consent
shall have not been received by February 15, 2000.
2. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER.
In connection with the sale of the Stock to the Buyer, the Stockholder
hereby represents and warrants to the Buyer as follows:
2.1 Title to the Stock. The Stockholder is the valid and lawful record
and beneficial owner of all of the Stock, all of which Stock has been duly
authorized and validly issued and is fully paid and non-assessable, and is
free and clear of all pledges, liens, claims, charges, options, calls,
encumbrances, restrictions and assessments whatsoever (except any
restrictions which may be created by operation of state or federal
securities laws). On the Closing Date, the Buyer shall receive from the
Stockholder good, valid and marketable title to all of the Stock, free and
clear of all pledges, liens, claims, charges, options, calls, encumbrances,
restrictions and assessments whatsoever.
2.2 Valid and Binding Agreement; No Breach.
Subject to the Shareholders Agreement,
(a) The Stockholder has full legal right, power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. This Agreement, when executed and delivered by
the Stockholder, constitutes and will constitute the legal, valid and
binding obligation of the Stockholder, enforceable against the
Stockholder in accordance with its terms, except to the extent that
such enforceability may be limited by bankruptcy, insolvency,
reorganization and other laws affecting creditors' rights generally,
and except that the remedy of specific performance or similar
equitable relief is available only at the discretion of the court
before which enforcement is sought.
(b) Neither the execution and delivery of this Agreement or the
by the Stockholder, nor compliance with the terms and provisions of
this Agreement on the part of the Stockholder, will: (i) violate any
statute or regulation of any governmental authority, domestic or
foreign, affecting either Company or the Stockholder; (ii) require the
issuance of any authorization, license, consent or approval of any
federal or state governmental agency, or any other person; or (iii)
conflict with or result in a breach of any of the terms, conditions or
provisions of any judgment, order, injunction, decree, agreement or
other agreement or instrument to which either Company or the
Stockholder is a party, or by which either Company or the Stockholder
is bound, or constitute a default thereunder.
(c) Consents. All necessary disclosures to and agreements and
consents of (a) any parties to any material contracts and/or any
licensing authorities which are
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material to either Company's business, and (b) any governmental
authorities or agencies to the extent required in connection with the
transactions contemplated by this Agreement, shall have been obtained
and true and complete copies thereof delivered to the Buyer.
(d) Settlement of Accounts. All debts, liabilities and other
monetary obligations owed to the Company by the Stockholder and/or any
of its Affiliates shall have been fully paid to the subject Company,
such that no such debts, liabilities or obligations shall be
outstanding on the Closing Date other than those incurred in the
regular course of business.
2.3 Capital Structure; Equity Ownership.
(a) Subject to the Shareholder Agreement, there are no
outstanding subscriptions, options, rights, warrants, convertible
securities or other agreements or calls, demands or commitments
obligating the Stockholder to transfer any shares of the Stock.
(b) The Stock represents all of the issued and outstanding shares
of the Company that are owned by the Stockholder.
(c) There are no actions, suits or proceedings pending or
threatened against or affecting the Stockholder that involve or relate
to the Stock.
2.4 Stockholder Board of Director Approval. This Agreement and the
sale of the Stock by the Stockholder has been approved by the Stockholder's
Board of Directors and duly executed resolutions of the Stockholder's Board
of Directors have been delivered to the Buyer.
2.5 Waiver of Right of First Refusal. (a) The Buyer shall have
attempted to obtain notice of the waiver of the Right of First Refusal
pursuant to the Shareholders Agreement, dated August 1, 1997, by and among
Photobit Corporation, its founders and certain of its shareholders (the
"Shareholder Agreement") from:
(i) the Company pursuant to Section 3.2 of the Shareholder
Agreement; and
(ii) from all of the founders pursuant to Section 3.3 of the
Shareholder Agreement.
(b) Notwithstanding the foregoing, however, in the event that the
Company or any of the founders exercise the Right of First Refusal
under the Shareholder Agreement, the Stock subject to such exercise
shall be sold by the Buyer to the exercising parties at a price of $4
per share.
3. REPRESENTATIONS AND WARRANTIES OF THE BUYER.
In connection with the Buyer's purchase of the Stock from the Stockholder,
the Buyer hereby represents and warrants to the Stockholder as follows:
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3.1 Organization, Good Standing and Qualification. The Buyer is a
corporation duly organized, validly existing and in good standing under the
laws of the Commonwealth of Virginia, with all necessary power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby.
3.2 Valid and Binding Agreement. Subject to the Shareholder Agreement,
this Agreement constitutes and will constitute the legal, valid and binding
obligations of the Buyer, enforceable against the Buyer in accordance with
their respective terms, except to the extent that such enforceability may
be limited by bankruptcy, insolvency, reorganization and other laws
affecting creditors' rights generally, and except that the remedy of
specific performance or similar equitable relief is available only at the
discretion of the court before which enforcement is sought.
3.3 No Breach of Statute or Contract. Neither the execution and
delivery of this Agreement by the Buyer, nor compliance with the terms and
provisions of this Agreement on the part of the Buyer, will: (a) violate
any statute or regulation of any governmental authority, domestic or
foreign, affecting the Buyer; or (b) require the issuance of any
authorization, license, consent or approval of any federal or state
governmental agency.
3.4 Investment. The Buyer is purchasing the Stock for its own account
for investment, and not with a view to the resale or distribution thereof
in violation of any applicable securities laws.
4. INDEMNIFICATION.
4.1 Survival. This Agreement and all covenants, agreements,
representations and warranties made herein and in the certificates
delivered pursuant hereto, shall survive the execution and delivery to the
Buyer of this Agreement, and shall continue in full force and effect for so
long as the Stock is owned by the Buyer. Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to
include the successors and permitted assigns of such party; and all
covenants, promises and agreements in this Agreement contained, by or on
behalf of the Stockholder, shall inure to the benefit of the successors and
assigns of the Buyer.
4.2 General.
(a) The Stockholder shall defend, indemnify and hold harmless the
Buyer from, against and in respect of any and all claims, losses,
costs, expenses, obligations, liabilities, damages, recoveries and
deficiencies, including interest, penalties and reasonable attorneys'
fees, that the Buyer may incur, sustain or suffer ("Losses") as a
result of (i) any misrepresentation or breach of warranty by the
Stockholder under this Agreement, and/or (ii) any failure by the
Stockholder to perform any of the covenants or agreements of the
Stockholder contained in this Agreement.
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(b) The Buyer shall defend, indemnify and hold harmless the
Stockholder from, against and in respect of any and all claims,
losses, costs, expenses, obligations, liabilities, damages, recoveries
and deficiencies, including interest, penalties and reasonable
attorneys' fees, that the Stockholder may incur, sustain or suffer as
a result of any breach of, or failure by the Buyer to perform, any of
the representations, warranties, covenants or agreements of the Buyer
contained in this Agreement.
5. POST-CLOSING EVENTS.
5.1 Further Assurances. From time to time from and after the Closing
Date, the parties will execute and deliver to each other any and all
further agreements, instruments, certificates and other documents as may
reasonably be requested by the other party in order more fully to
consummate the transactions contemplated hereby, and to effect an orderly
transition of the business being acquired by the Buyer hereunder.
6. COSTS.
6.1 Finder's or Broker's Fees. Each of the Buyer and the Stockholder
represents and warrants that neither they nor any of their respective
Affiliates have dealt with any broker or finder in connection with the
transaction contemplated by this Agreement, and no broker or other person
is entitled to any commission or finder's fee in connection with this
transaction.
7. FORM OF AGREEMENT.
7.1 Effect of Headings. The Section headings used in this Agreement
are included for purposes of convenience only, and shall not affect the
construction or interpretation of any of the provisions hereof.
7.2 Entire Agreement; Waivers. This Agreement and the other agreements
and instruments referred to herein constitute the entire agreement between
the parties pertaining to the subject matter hereof, and supersede all
prior agreements or understandings as to such subject matter. No party
hereto has made any representation or warranty or given any covenant to the
other except as set forth in this Agreement, and the other agreements and
instruments referred to herein. No waiver of any of the provisions of this
Agreement shall be deemed, or shall constitute, a waiver of any other
provisions, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver shall be binding unless executed in writing by
the party making the waiver.
7.3 Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
8. PARTIES.
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8.1 Parties in Interest. Nothing in this Agreement, whether expressed
or implied, is intended to confer any rights or remedies under or by reason
of this Agreement on any persons other than the parties to it and their
respective heirs, executors, administrators, personal representatives,
successors and permitted assigns, nor is anything in this Agreement
intended to relieve or discharge the obligations or liability of any third
persons to any party to this Agreement, nor shall any provision give any
third persons any right of subrogation or action over or against any party
to this Agreement.
8.2 Notices. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been
duly given on the date of service if served personally on the party to whom
notice is to be given, on the day after the delivery thereof to a
recognized overnight courier service for next-day delivery with all charges
prepaid or billed to the account of the sender, or on the third day after
mailing if mailed to the party to whom notice is to be given, by first
class mail, registered or certified, postage prepaid, and properly
addressed as follows:
(a) If to the Stockholder:
Xxxxxx Technologies, Inc.
00-00 00xx Xxxxxx
Xxxx Xxxxxx Xxxx, XX 00000
Attn: Xxxxx Xxxxxx
Telecopier # 000-000-0000
(b) If to the Buyer:
Greystone Funding Corporation
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxxxx
Telecopier # 000-000-0000
or to such other address as either party shall have specified by notice in
writing given to the other party.
9. MISCELLANEOUS.
9.1 Amendments and Modifications. No amendment or modification of this
Agreement shall be valid unless made in writing and signed by or on behalf
of the party to be charged therewith.
9.2 Non-Assignability; Binding Effect. Neither this Agreement, nor any
of the rights or obligations of the parties hereunder, shall be assignable
by any party hereto without the prior written consent of all other parties
hereto, except that the Buyer may, without the consent of the Stockholder,
at any time and from time to time upon or after the Closing, assign as
collateral to the Buyer's lenders or other financing institutions any or
all of the Buyer's rights
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to indemnification under this Agreement. Otherwise, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, personal representatives,
successors and permitted assigns.
9.3 Governing Law; Jurisdiction. The parties hereto hereby consent to
the jurisdiction of all courts of the State of New York and the United
States District Court for the Southern District of New York, as well as to
the jurisdiction of all courts from which an appeal may be properly taken
from such courts, for the purpose of any suit, action or other proceeding
arising out of or with respect to this Agreement, the Note, the Warrants,
any other agreements, instruments, certificates or other documents executed
in connection herewith or therewith, or any of the transactions
contemplated hereby or thereby, or any of the parties' obligations
hereunder or thereunder. The parties hereto hereby expressly waive any and
all objections which they may have as to venue in any of such courts, and
also waive trial by jury in any such suit, action or proceeding. The Buyer
or Stockholder may file a copy of this Agreement as evidence of the
foregoing waiver of right to jury trial.
9.4 Xxxxxx and the Buyer hereby confirm their intent and agree that,
by the sale of the Stock hereunder, Xxxxxx is selling, assigning,
transferring and contributing the Stock absolutely and irrevocably and not
as collateral or security. If, notwithstanding the parties' intent to
effect an absolute sale, assignment, transfer and contribution, the
transactions contemplated hereby are characterized as a financing, Xxxxxx
hereby grants the Buyer a security interest in the Stock and this Agreement
shall be deemed a security agreement, within the meaning of the Uniform
Commercial Code, which (or a copy hereof) the Buyer may file in an
applicable filing office. Each of Xxxxxx and the Buyer hereby agrees to
treat the sale of the stock as a sale and contribution for tax, reporting
and accounting purposes (except to the extent that such assignment is not
recognized due to the reporting of taxes on a consolidated basis where
applicable and the application of consolidated financial reporting
principles under GAAP). Xxxxxx agrees to respond to any inquiries with
respect to the sale of the Stock hereunder by confirming the sale,
assignment, transfer and contribution of the stock to the Buyer, and to
note on its financial statements that the Stock has been sold to the Buyer.
IN WITNESS WHEREOF, the parties have executed this Agreement on and as
of the date first set forth above.
Buyer:
GREYSTONE FUNDING CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
Stockholder:
XXXXXX TECHNOLOGIES, INC.
By: _____________________
Name: Xxxxx Xxxxxx
Title: CEO
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