AGREEMENT made as of June 6, 1996 by and among K. XXXXX XXXXX, residing
at 0000 Xxxxxxxxx Xxxxxxx, Xxxxxxxx, Xxxxxxxx 00000 ("Xxxxx"), BENEDEK
COMMUNICATIONS CORPORATION, a Delaware corporation having an office at 000 Xxxx
Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000 (the "Company") and A. XXXXXXX XXXXXXX,
residing at 000 Xxxxxxx Xxxx Xxxx, Xxx Xxxx, Xxx Xxxx ("Benedek").
W I T N E S S E T H:
WHEREAS, the Company has authorized common stock consisting of
25,000,000 shares of Class B Common Stock, par value $.01 per share (the "Class
B Stock"), of which 10,000 shares are issued and outstanding as of the date
hereof and owned by Benedek; and
WHEREAS, the Company has authorized common stock consisting of
25,000,000 shares of Class A Common Stock, par value $.01 per share (the "Class
A Stock"), of which no shares are issued and outstanding as of the date hereof
(the Class A Stock and the Class B Stock are collectively referred to herein as
the "Common Stock"); and
WHEREAS, Benedek Broadcasting Corporation ("BBC"), Xxxxx and Xxxxxxx are
parties to two agreements pursuant to which BBC granted to Xxxxx the option to
acquire an aggregate of 7.78 shares of common stock of BBC (the "Existing
Options"); and
WHEREAS, Benedek owns all of the outstanding common stock of BBC and
Benedek intends, contemporaneously with the execution of this Agreement, to
contribute all of such shares to the capital of the Company in exchange for the
issuance to him of 7,030,000 shares of Class B Stock;
WHEREAS, the Company desires to assume the obligations of BBC in repsect
of the Existing Options and, in connection therewith, to issue to Xxxxx options
to acquire 370,000 shares of Class B Stock on the same terms and conditions as,
and in lieu and replacement of, the Existing Options;
WHEREAS, Benedek, Xxxxx and the Company desire to set forth their
understandings and agreements concerning the ownership by of shares of Common
Stock of the Company and their respective rights and obligations with respect
thereto;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto agree as follows:
1. OPTION TO PURCHASE STOCK. Subject to the terms and conditions of this
Agreement, the Company hereby grants to Xxxxx, and Xxxxx hereby accepts,
non-transferable options (the "Options") to purchase (i) 130,784 shares of Class
B Stock (the "First Options") and
1
(ii) 239,216 shares of Class B Stock (the "Second Options") (the First Options
and the Second Options are collectively referred to herein as the "Options" and
the shares of Class B Stock issuable upon the exercise of the Options are
referred to herein as the "Option Stock"). The Options may be exercised
immediately as to all of the shares covered thereby. The First Options, to the
extent unexercised, will expire on May 31, 1998 (the "First Expiration Date")
and the Second Options, to the extent unexercised, will expire on May 1, 2004
(the "Second Expiration Date"), unless extended by the Company pursuant to
Section 5 hereof. The Existing Options are hereby terminated and shall be of no
further force or effect.
1.1. The purchase price per share (the "Purchase Price") for the
acquisition by Xxxxx of the Option Stock shall be $1.578939 with respect to the
Initial Options and $4.121797 with respect to the Second Options.
1.2. The Options shall be nontransferable otherwise than by will
or by the laws of descent and distribution and shall be exercisable during
Xxxxx'x lifetime solely by him. The Options may be exercised by Xxxxx by written
notice to the Company accompanied by a certified check in the amount of the
Purchase Price multiplied by the number of shares of Option Stock that are the
subject of the notice of exercise. Promptly after receipt of such notice and
payment, the Company shall deliver to Xxxxx certificates evidencing the
appropriate number of shares of Option Stock.
1.3. New options rights may be substituted for the Options or the
Company's duties as to the Options may be assumed, by a corporation other than
the Company, or by a parent or subsidiary of the Company or such corporation, in
connection with any merger, consolidation, acquisition, separation,
reorganization, liquidation or like occurrence in which the Company is involved.
Notwithstanding the foregoing or the provisions of Section 1.4 hereof, in the
event such corporation, or parent or subsidiary of the Company or such
corporation, does not substitute new option rights for, and substantially
equivalent to, the Options or assume the Options, the Options shall terminate
and thereupon become null and void (i) upon dissolution or liquidation of the
Company, or similar occurrence, (ii) upon any merger, consolidation,
acquisition, separation, reorganization, or similar occurrence where the
Company will not be a surviving entity, or (iii) upon a transfer of
substantially all of the assets of the Company or more than 80% of the
outstanding stock; provided, however, that Xxxxx shall have the right
immediately prior to or concurrently with such dissolution, liquidation, merger,
consolidation, acquisition, separation, reorganization or similar occurrence,
to exercise any unexpired Options granted hereunder whether or not then
exercisable.
1.4. The existence of the Options shall not affect in any way the
right or power of the Company or its stockholders to make or authorize any or
all adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or consolidation of
the Company, or any issuance of Common Stock or subscription rights thereto, or
any merger or consolidation of the Company, or any issuance of bonds,
debentures, preferred or prior preference stock ahead of or affecting the Common
Stock or the rights thereof, or the dissolution or liquidation of the Company,
or any sale or
2
transfer of all or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or otherwise; provided,
however, that if the outstanding Common Stock of the Company shall at any time
be changed or exchanged by declaration of a stock dividend, stock split,
combination of shares or recapitalization, the number and kind of shares subject
to the Options and the Purchase Price, shall be appropriately and equitably
adjusted so as to maintain the proportionate number of shares of Common Stock
without changing the aggregate Purchase Price. Adjustments under this Section
shall be made by the Board of Directors of the Company, whose determination as
to what adjustment, if any, shall be made, and the extent thereof, shall be
final.
1.5. The Options shall be subject to the requirement that if at
any time the Board of Directors shall in its discretion determine that the
listing, registration or qualification of shares of Common Stock subject to such
Options upon any securities exchange or under any Federal or state law, or the
approval of consent of any governmental regulatory body, is necessary or
desirable in connection with the issuance or purchase of shares of Common Stock
thereunder, the Options may not be exercised in whole or in part unless such
listing, registration, qualification, approval or consent shall have been
effected or obtained free from any conditions not reasonably acceptable to the
Board of Directors.
1.6. Unless at the time of the exercise of the Options and the
issuance of the shares of Class B Stock thereby purchased there shall be in
effect as to such shares of Class B Stock a registration statement under the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations of
the Securities and Exchange Commission, Xxxxx shall deliver to the Company at
the time of exercise a certificate (i) acknowledging that the shares of Class B
Stock so acquired may be "restricted securities" within the meaning of Rule 144
promulgated under the Act, (ii) certifying that he is acquiring the shares of
Class B Stock issuable to him upon such exercise for the purpose of investment
and not with a view to their sale or distribution; and (iii) containing his
agreement that such shares of Class B Stock may not be sold or otherwise
disposed of except in accordance with applicable provisions of the Act. The
Company shall not be required to issue or deliver certificate for shares of
Class B Stock until there shall have been compliance with all applicable laws,
rules and regulations, including the rules and regulations of the Securities and
Exchange Commission.
1.7. Xxxxx hereby acknowledges that, under existing law, unless
at the time of the exercise of the Options a registration statement under the
Act is in effect as to such shares: (i) any shares purchased by Xxxxx upon
exercise of the Options may be required to be held indefinitely unless such
shares are subsequently registered under the Act or an exemption from such
registration is available; (ii) any sales of such shares made in reliance upon
Rule 144 promulgated under the act may be made only in accordance with the terms
and conditions of that Rule (which, under certain circumstances, restrict the
number of shares which may be sold); (iii) in the case of securities to which
Rule 144 is not applicable, compliance with Regulation A promulgated under the
Act or some other disclosure exemption will be required; (iv) certificates for
shares to be issued to Xxxxx hereunder shall bear a legend to the effect that
the shares have not been registered under the Act and that the shares may not be
sold or otherwise transferred
3
in the absence of an effective registration statement under the Act relating
thereto or an exemption from such registration; and (v) the Company will place
an appropriate "stop transfer" order with its transfer agent with respect to
such shares. In addition, Xxxxx hereby acknowledges that the Company has no
obligation to furnish information necessary to enable Xxxxx to make sales under
Rule 144.
1.8. The Company may establish, from time to time, appropriate
procedures to provide for payment or withholding of such income or other taxes
as may be required by law to be paid or withheld in connection with the exercise
of the Options. Xxxxx shall pay the Company all such amounts requested by the
Company to permit the Company to take any deduction available to it resulting
from the exercise of an Option. The Company may also establish, from time to
time, appropriate procedures to ensure that the Company receives prompt advice
concerning the occurrence of any event which may create, or affect the timing or
amount of, any obligation to pay or withhold any such taxes or which may make
available to the Company any tax deduction resulting from the occurrence of such
event, and Xxxxx will comply with all such procedures so established.
1.9. The Company and Benedek represent and warrant to Xxxxx that
(i) Benedek owns 7,030,000 shares of Stock and (ii) there are no issued or
outstanding shares of Common Stock other than the shares owned by Benedek nor
are there any outstanding options, warrants, agreements, rights or commitments
relating to authorized but unissued Common Stock other than (a) warrants to
purchase 600,000 shares of Class A Stock (the "Initial Warrants") issued to the
purchasers of the Company's 15.0% Exchangeable Redeemable Preferred Stock (the
"Redeemable Preferred Stock") and (b) contingent warrants, not presently
outstanding, to purchase 880,000 shares of Class A Stock (the "Contingent
Warrants") issued to the purchasers of the Redeemable Preferred Stock. Whenever
in this Agreement reference is made to the number of outstanding shares of
Common Stock of the Company, such number of outstanding shares shall include the
number of shares of Class A Stock issuable upon exercise of the Initial Warrants
and, if and only if the Contingent Warrants are then deemed outstanding, the
number of shares of Class A Stock issuable upon exercise of the Contingent
Warrants.
2. STOCK CERTIFICATES. All stock certificates representing shares of
Option Stock hereafter acquired by Xxxxx shall be subject to this Agreement and
shall be marked prominently with the following legend:
"The shares of stock evidenced by this certificate or any
certificate issued in exchange or transfer therefor are, and
will be subject to, and may not be transferred except in
accordance with, an agreement dated as of June 6, 1996, by and
among the Company and its stockholders, which agreement
provides, among other things, for certain restrictions on the
transfer, encumbrance and disposition of the shares of stock of
the Company, a copy of which agreement is on file and may be
obtained at the principal office of the Company. The shares of
stock evidenced by this certificate have not been registered
under the Securities Act of 1933 and may not be sold or
otherwise transferred in the absence of an
4
effective registration statement under such Act relating thereto
or an exemption from such registration."
3. RESTRICTIONS ON SALES OR TRANSFERS OF SHARES OF OPTION STOCK. Xxxxx
may not sell, assign, transfer, hypothecate, mortgage, pledge, encumber or
otherwise dispose of any shares of Option Stock at any time owned by him, except
has follows:
3.1. If Xxxxx shall receive a bona fide offer (the "Bona Fide
Offer"), in writing, from a third party in respect of the sale of all of the
shares of Option Stock then owned by Xxxxx (such Option Stock being hereinafter
referred to as the "Offered Stock"), which offer Xxxxx desires to accept, the
following provisions shall be applicable:
3.1.1. Xxxxx shall first offer to sell all of the Offered
Stock to the Company upon the same terms as are contained in the Bona Fide
Offer. The offer shall be in writing and accompanied by a true copy of the Bona
Fide Offer.
3.1.2. The Company shall have the right, but not the
obligation, to accept such offer by written notice of acceptance to Xxxxx within
30 days after receipt of such offer. In the event that the Company does not
accept the offer, then Xxxxx shall be free to accept the Bona Fide Offer
originally made by the third party with respect to all, but not less than all,
of the Offered Stock and all of the restrictions imposed by this Agreement upon
the Offered Stock shall forthwith terminate; provided, however, if all of the
Offered Stock is not disposed of to the third party making such offer upon the
terms set forth therein within a period of 60 days after the expiration of the
offer made by Xxxxx to the Company pursuant to Section 3.1.1 above, then all of
such Offered Stock shall again be subject to all of the restrictions set forth
in this Agreement.
3.1.3. Payment of the purchase price for any Offered Stock
purchased by the Company in accordance with the provisions of this Paragraph
3.1 shall be made at a closing to be held at the offices of the attorneys for
the Company on a date selected by the Company which shall be not later than 45
days after the acceptance by the Company of any offer made pursuant to Section
3.1 above. At the closing, (i) the Company shall pay the purchase price for
the Offered Stock in full in cash or by bank cashier's check and (ii) Xxxxx
shall deliver all certificates representing the Offered Stock to the Company,
free and clear of all liens, claims and encumbrances, duly endorsed in blank
for transfer or with duly executed stock powers attached, with all necessary
transfer tax stamps affixed thereto to the purchaser.
3.2. Xxxxx may, and at the request of the Company if Benedek
shall have entered into a similar arrangement with respect to the shares of
Common Stock owned by him Xxxxx shall, pledge any and all shares of Option Stock
from time to time owned by him as collateral security for the obligations of the
Company or any of its subsidiaries to institutional lenders providing secured
financing for the Company. In such event, Xxxxx shall execute such pledge
agreement and related documents as may be reasonably requested by such lenders.
5
4. TAKE-ALONG AND COME-ALONG RIGHTS.
4.1. Prior to the sale by the Company of shares of Common Stock
to the public in a public offering registered with the Securities and Exchange
Commission pursuant to a registration statement on Forms X-0, X-0, X-0 or S-4 or
any successor from thereto (a "Registration Statement"), whenever Benedek shall
receive a bona fide offer from a third party to purchase shares of Stock
beneficially owned by Benedek constituting more than 50% of the outstanding
shares of Common Stock of the Company and which offer he wishes to accept,
Benedek shall give written notice to Xxxxx to such effect, enclosing a copy of
such offer and specifying the number of shares of Common Stock to which such
offer relates, the name of the person or persons to whom such sale is to be made
and the dollar value of the consideration which has been offered in connection
therewith.
4.2. Upon receipt of such notice, Xxxxx shall have the right,
exercisable by written notice to Benedek within 15 days after the receipt of
notice from Benedek, to require that Benedek arrange for the sale of a
proportionate portion of Xxxxx'x holdings of shares of Common Stock to the
prospective purchaser on the terms and conditions set out in the offer received
by Benedek.
4.3. Benedek shall have the right, exercisable at any time during
the term of this Agreement, to require that Xxxxx sell all of the shares of
Common Stock then owned by him to any bona fide purchaser to whom Benedek
intends to sell shares of Common Stock constituting at least 50% of the
outstanding Common Stock of the Company, such sale by Xxxxx to be on the same
terms and conditions as the sale by Benedek. Benedek may exercise the right
described herein by giving 15 days' written notice to Xxxxx.
5. PUT OPTION. Subject to the rights of the Company under this Section
5, the Company hereby grants to Xxxxx the option, right and privilege (the
"Right to Put"), exercisable by written notice, in the case of the First
Options, during the one-year period prior to the First Expiration Date, and in
the case of the Second Options, during the one-year period prior to the Second
Expiration Date, to require the Company to purchase from Xxxxx the then
unexercised First Options or Second Options, as the case may be (the Options
in respect of which such notice is given is referred to in this Section 5 as the
"Subject Options"), for a purchase price equal to the Formula Price (as
hereinafter defined), provided (i) Xxxxx is then employed by the Company or
his employment by the Company was terminated prior thereto by reason of his
death or disability while employed by the Company and (ii) the Common Stock
of the Company is not then registered pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended.
5.1. The Company shall elect, by written notice to Xxxxx within
90 days after receipt of notice from Xxxxx of his exercise of the Right to Put,
to (i) purchase the Subject Options for the Formula Price, (ii) lend to Xxxxx
the Purchase Price for the Option Stock issuable pursuant to the Subject Options
plus the amount necessary to pay any Federal and state income tax due upon and
by reason of the exercise by Xxxxx of the Subject Options (in which event Xxxxx
shall be deemed to have exercised the Subject Options), or (iii) extend the
6
Expiration Date of the Subject Options. If the Company does not make such
election within such 90-day period, the Company shall be deemed to have elected
to extend the Expiration Date of the Subject Options for a period of five years.
5.2. In the event that the Company elects to purchase the Subject
Options, payment of the Formula Price shall be made at a closing to be held at
the offices of attorneys for the Company on a date selected by the Company
within 30 days after the expiration of the 90-day period described in Section
5.1. At the closing, the purchase price for the Subject Options shall be paid in
full in cash or by bank cashier's check. At the closing, Xxxxx shall execute and
deliver an instrument satisfactory to the Company cancelling and terminating the
Subject Options. Certain capitalized terms used in this Section 5 have the
meanings ascribed thereto in those certain Warrant Agreements dated as of
December 18, 1986, as subsequently amended (the "Warrant Agreement"), between
BBC and the then holders of its Series A Capital Notes, which Capital Notes and
related warrants were redeemed by BBC.
5.2.1. The term "Formula Price" means the (i) Value of the
Company multiplied by the Applicable Ratio, minus the (ii) Purchase Price
multiplied by the number of shares of Option Stock which are the subject of the
Subject Options to be purchased by the Company.
5.2.2. For purposes of Section 5.2.1, the following terms
shall have the meanings set forth below:
5.2.2.1. The term "Applicable Ratio" means (i) the
number of shares of Option Stock which are the subject of the Subject Options to
be purchased by the Company, divided by (ii) the sum of the number of
outstanding shares of Common Stock and the number of shares of Common Stock that
would be outstanding if all of the then unexercised Options were exercised.
5.2.2.2. The term "Consolidated Current Assets" is
defined in the Warrant Agreements.
5.2.2.3. The term "Consolidated Liabilities" is
defined in the Warrant Agreements.
5.2.2.4. The term "Consolidated Operating Profit"
is defined in the Warrant Agreements.
5.2.2.5. The term "Investments" is defined in the
Warrant Agreements.
5.2.2.6. The term "Operating Asset Value" means the
Consolidated Operating Profit of the Company for the four fiscal quarters most
recently ended prior to the time of determination of such Operating Asset Value.
7
5.2.2.7. The term "Value" means (i) the Operating
Asset Value of the Company at such time, plus (ii) the aggregate amount of
Consolidated Current Assets and Investments as of the last day of the then most
recently ended fiscal quarter of the Company, minus (iii) the Consolidated
Liabilities as of the end of such quarter.
5.3. In the event that the Company elects to lend Xxxxx the
amount necessary to pay any Federal and state income taxes due upon the exercise
of the Subject Options, the Company shall lend such amount to Xxxxx upon 30
days' written notice from Xxxxx, such notice by Xxxxx to be given after the
exercise of the Subject Options and no earlier than 45 days prior to the date
such taxes are due and payable. The notice by Xxxxx pursuant to this Section 5.3
shall be accompanied by a (i) promissory note in form and substance satisfactory
to the Company duly executed by Xxxxx, in the principal amount of the loan to be
made by the Company and providing for repayment of the principal amount thereof
in quarterly installments over a period of three years with interest, payable
quarterly, at fluctuating rate per annum equal to the prime rate as published
from time to time in The Wall Street Journal, and (ii) a pledge agreement in
form and substance satisfactory to the Company duly executed by Xxxxx pursuant
to which Xxxxx shall grant the Company a security interest in the Option Stock
issuable pursuant to the Subject Options as security for the amounts due under
the promissory note.
5.4. In the event that the Company elects to extend the
Expiration Date of the First Options or Second Options, the Company shall
include in its notice to Xxxxx pursuant to Section 5.2 a new expiration date for
such Options which new expiration date shall be at least five years after the
Expiration Date for such Options. The provisions of this Section 5 shall apply
during the last year of exerciseability of the Options as extended or as deemed
to be extended by the Company and Xxxxx may exercise the Right to Put during
such year, in which the event the Company may make any election permitted under
Section 5.2.
6. REGISTRATION RIGHTS. Xxxxx shall have the registration rights set
forth in this Section with respect to shares of Class B Stock of the Company
acquired upon exercise of the Options.
6.1. For purposes of this section "Restricted Stock" shall mean
shares of Common Stock issued upon exercise of the Options that have not
theretofore been registered under the Act, or theretofore remained unsold while
registered under said Act.
6.2. If at any time or times, the Company proposes to file one or
more Registration Statements for the registration under the Act of shares of
Common Stock owned by Benedek, whether or not underwritten, the Company shall
give a Notice of Registration (as defined in Section 6.2.4 hereof) to Xxxxx, and
shall include in each Registration Statement referred to in such notice all
Restricted Stock with respect to which Xxxxx shall have delivered to the Company
a Notice of Intent to Sell (as defined in Section 6.2.3 hereof) within 30 days
after the Company has given its Notice of Registration. Such Notice of
Registration shall be given not later than 45 days prior to the filing of any
such Registration Statement. All expenses incurred by the Company and Xxxxx in
complying with all registration requirements, including
8
without limitation filing fees, fees and disbursements of counsel for the
Company and printing and other expenses (but excluding any underwriting
discounts or commissions) in connection with each such registration shall be
borne by the Company. The Company shall have no obligation to register the
Restricted Stock under this Section 6, however, unless Xxxxx agrees to join in
underwriting arrangements which are, except as otherwise herein provided, on the
same terms as other participants in the distribution, including, if the
underwriters or their representative or representatives shall determine,
reasonably and in good faith that the number of shares of Common Stock to be
included on any such Registration Statement exceeds the number of shares which
can be offered and sold on reasonable terms and price under prevailing market
conditions, a reduction in the number of shares of Restricted Stock to be
included in such Registration Statement to allow the orderly offering and sale
under prevailing market conditions by the Company of all shares of Common Stock
it is requesting to be registered, provided, however, that if shares of Stock
held by persons other than Benedek and Xxxxx are included in the shares covered
by such Registration Statement, such reduction shall be proportionate to the
reduction in the number of shares of Common Stock of the Company which such
other persons are required to make by said underwriters.
6.2.1. The Company shall not be required to maintain the
effectiveness of any Registration Statement filed in connection with the
registration which is the subject of this Section 6 or to amend such
Registration Statement or to supplement the prospectus relating thereto after
the expiration of nine months from the effective date of such Registration
Statement.
6.2.2. The Company need not include any Restricted Stock
owned by Xxxxx in any Registration Statement provided for under this Section 6
if, in the opinion of counsel for the Company, registration of such shares under
the Act is not necessary to dispose of such shares in a public offering and
distribution in the open market in compliance with the Act; provided in such
case, the opinion of such counsel shall be in writing addressed to Xxxxx and
shall be rendered within 20 days after the Notice of Intent to Sell is received
by the Company, and provided further that if the Company declines to register
any Restricted Stock pursuant to this Section 6.2.2, the Company shall
indemnify against any and all losses, damages, liabilities and expenses,
including counsel fees and liability under the Act, that may incur as a result
of any sale made in reliance upon the aforementioned opinion.
6.2.3. "Notice of Intent to Sell" shall mean a written
notice signed by Xxxxx (i) setting forth the number of shares of Restricted
Stock, if any, which Xxxxx desires to have registered for sale which number of
shares may not exceed that proportion of the shares of Restricted Stock as
equals the proportion of shares of Common Stock owned by Benedek to be included
in the applicable Registration Statement, (ii) representing that Xxxxx has a
present intention to sell the same, and (iii) agreeing to execute all consents,
Registration Statements and other documents reasonably required in order to
permit the applicable Registration Statement to be made effective and to carry
out the distribution.
9
6.2.4. "Notice of Registration" shall mean a written
notice signed by an officer of the Company, setting forth the approximate date
on which it intends to file a Registration Statement for the registration of
Common Stock pursuant to the Act, and the approximate date on which it
contemplates such Registration Statement will become effective.
6.2.5. The obligation of the Company to register
Restricted Stock for Xxxxx pursuant to Section 6 hereof shall be subject to the
receipt by the Company of an agreement from Xxxxx, and the underwriter of any
Restricted Stock to be registered for Xxxxx, in form and substance satisfactory
to the Company, indemnifying the Company against liability arising out of or
based upon any untrue statement or alleged untrue statement of material fact in
the Registration Statement, or the omission or alleged omission to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, if (with respect to the agreement of Xxxxx)
such statement or omission was made by the Company in reliance upon and in
conformity with written information furnished to the Company specifically for
use in such Registration Statement by or on behalf of Xxxxx, or (with respect to
the agreement of any underwriter of any Restricted Stock to be registered for
Xxxxx) by or on behalf of the underwriter. In connection with the registration
under the Act of the Restricted Stock owned by Xxxxx, the Company hereby agrees
to indemnify Xxxxx and each underwriter thereof against liability arising out of
or based upon an untrue statement or alleged untrue statement of a material fact
in a Registration Statement or the omission of any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, other than any such statement included in, or omitted from, such
Registration Statement by the Company in reliance upon and in conformity with
written information unfurnished to the company, specified for use therein, by or
on behalf of Xxxxx (with respect to Xxxxx), or by or on behalf of any
underwriter of the securities included therein (with respect to such
underwriter). The Company and Xxxxx agree to join in an underwriting agreement
having usual and customary terms, including customary representations,
warranties and other agreements (other than agreements with respect to
indemnification which shall be similar to those provided in this Section 6.2.5);
provided that no such agreement shall require Xxxxx to make any representation
or warranty concerning the Company unless the same be based upon the actual
knowledge of Xxxxx. Reasonably promptly (but not more than 30 days) after
receipt from a party claiming indemnification under this Section 6.2.5 of notice
of commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying party under this Section
6.2.5, notify in writing the indemnifying party of the commencement thereof; and
the omission to notify the indemnifying party will relieve it from any liability
under this Section 6.2.5 as to the particular item for which indemnification
is then being sought, but not from any other liability which it may have to
any indemnified party. In case any such action is brought against any
indemnified party, and the indemnified party notifies an indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate therein and to the extent that it may wish, to assume the defense
thereof, with counsel who shall be to the reasonable satisfaction of such
indemnified party, and after receipt of actual notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified party
under this Section 6.2.5 for any legal or other expenses subsequently incurred
by such indemnified party in connection with
10
the defense thereof; provided, however, that the indemnified party shall have
the right to employ separate counsel to represent it in connection with any
claim in respect of which indemnity may be sought hereunder if, in the
reasonable judgment of counsel for the indemnified party, a conflict of interest
exists making it advisable for him to be represented by separate counsel, in
which event the fees and expenses of such separate counsel shall be borne by the
indemnifying party. An indemnifying party shall not be liable to any indemnified
party on account of any settlement of any claim or action effected without the
consent of such indemnifying party.
6.2.6. In the event the Company shall at any time fail to
perform fully and completely its obligations under this Section 6, then Xxxxx
shall, in addition to all other rights or remedies hereunder, at all or in
equity, have the right to petition any court with jurisdiction in the premises
for an order compelling the Company specifically to perform said obligations, it
being recognized that monetary damages are not adequate compensation for any
such failure.
7. TERMINATION.
7.1. This Agreement shall commence upon the date hereof and shall
terminate upon the occurrence of any of the following events:
7.1.1. The written agreement of the Company, Xxxxx and
Xxxxxxx;
7.1.2. The sale of all or substantially all of the assets
of the Company; or
7.1.3. The acquisition by the Company of all of the Option
Stock or all of the Options from Xxxxx in accordance with the terms of this
Agreement or the sale of all of the Option Stock to a third party in accordance
with this Agreement.
7.2. No termination of this Agreement shall affect any provision
hereof which by its terms is to be performed or observed after its termination,
and each such provision hereof shall remain in full force and effect until such
time as such provision has been performed in full or has terminated by its own
terms.
8. CONFIDENTIAL INFORMATION. Xxxxx shall hold in a fiduciary capacity
for the benefit of the Company all information, knowledge and data relating to
or concerned with its operations, sales, business and affairs, and he shall not,
at any time hereafter, use, disclose or divulge any such information, knowledge
or data to any person, firm or corporation other than to the Company or its
designees or except as may otherwise be required in connection with the business
and affairs of the Company.
9. NOTICES. All notices, including notices of offer, acceptance and
rejection which any party hereto is required or desires to send to another
party, shall be delivered in person, or mailed by prepaid certified or
registered mail, or sent by express mail service for next day delivery or other
responsible overnight delivery service to the party at its address set forth
below or at such address as may be designated by notice in accordance with this
Section 9.
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If to Xxxxx:
0000 Xxxxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
If to the Company or Benedek:
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 611
with copies to:
Shack & Xxxxxx, P.C.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Any such notice shall be deemed to have been given and received on the day it is
personally delivered or, if mailed, on the third day after it is mailed, or, if
sent by express mail or overnight delivery service, on the next business day
after the date of the delivery of the notice to such service.
10. BENEFITS. This Agreement shall inure to the benefit of and shall be
binding upon the respective heirs, personal representatives, successors and
assigns of the parties hereto.
11. INJUNCTIVE RELIEF. In the event of a breach or threatened breach by
any party bound by this Agreement of any of such party's obligations hereunder,
the parties hereto acknowledge that all other parties bound by this Agreement
will have no adequate remedy at law and shall be entitled to such equitable and
injunctive relief as may be available to restrain a violation or threatened
violation of the provisions of this Agreement or to enforce the provisions
hereof. Nothing herein shall be deemed to preclude any party from pursuing any
other remedies, legal or equitable, available to such party for such breach or
threatened breach, including the recovery of damages.
12. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings among the parties or any of them. There are
no representations, warranties, agreements or understandings other than
expressly contained herein. No termination, alteration, modification, variation
or waiver of this agreement or any of the provisions hereof shall be effective
unless in writing. Nothing contained in this Agreement shall be construed as an
employment contract or an agreement by the Company to employ Xxxxx for any
period of time.
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13. SEVERABILITY. Should any clause, paragraph or part of this Agreement
be held or declared to be void or illegal for any reason, all other clauses,
paragraphs or parts of this agreement which can be effected without such illegal
clause, paragraph or part shall nevertheless remain in full force and effect.
If, in the opinion of any court, any clause, paragraph or part of this Agreement
is unreasonable or unenforceable, such court shall have the right, power and
authority to excise or modify such provisions, or portions thereof, of this
Agreement as to the court shall not be reasonable or enforceable and to enforce
the remainder of such clause, paragraph or part as so excised or modified.
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements
executed and to be performed entirely therein and each party hereto, by their
execution of this Agreement, hereby consents to the personal jurisdiction of the
courts of the State of New York and the Federal courts located within such State
in connection with any dispute arising under or related to this Agreement and
further agrees that service of process in any such action may be made by
certified mail to the address set forth herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
s/K. Xxxxx Xxxxx
__________________________________________
K. XXXXX XXXXX
s/ A. Xxxxxxx Xxxxxxx
__________________________________________
A. XXXXXXX XXXXXX
XXXXXXX COMMUNICATIONS CORPORATION
By: s/ A. Xxxxxxx Xxxxxxx
________________________________________
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