STOCK PURCHASE AND OPTION AGREEMENT
This Agreement, dated as of this 3rd day of May, 1996 is by
and among Technology Service Group, Inc., a Delaware corporation (the
"Company"), Wexford Partners Fund L.P., Acor, S.A., Firlane Business Corp. (each
a Seller and, together, the "Sellers") and A.T.T. IV, N.V., a Netherlands
Antilles corporation (the "Investor"), with an address c/o its investment
advisor, Applied Telecommunications Technologies, Inc., a Delaware corporation
(the "Advisor"), 00 Xxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000.
W I T N E S S E T H:
WHEREAS, the Company has prepared and filed with the United
States Securities and Exchange Commission (the "Commission") an Amendment No. 2
to a Registration Statement on Form S-1 (File No. 33-80695) (the "Registration
Statement"), which includes a Preliminary Prospectus, dated March 29, 1996 as a
part thereof (the "Preliminary Prospectus"); and
WHEREAS, the Registration Statement describes a proposed
public offering by Company (the "Offering") of at least 1,000,000 shares of
Common Stock, par value $.01 per share, of the Company ("Common Stock"), and
1,000,000 Redeemable Common Stock Purchase Warrants ("Warrants") to acquire an
additional 500,000 shares of Common Stock (which securities will be offered as
Units (the "Units") as described in the Preliminary Prospectus); and
WHEREAS, the Investor desires to purchase, and the Sellers are
severally, and not jointly, willing to sell to Investor, a total of 366,300
shares of Common Stock at a price of $8.14 per share, for an aggregate purchase
price of $2,981,682, prior to the commencement of the Offering on the terms and
conditions set forth herein; and
WHEREAS, Investor also desires to purchase, and the Sellers
are severally, and not jointly, willing to sell options (the "Options") to the
Investor to acquire from Sellers a total of 183,150 additional shares of Common
Stock (the "Option Shares") at a price of $.10 per Option, for an aggregate
purchase price of $18,315, at an option exercise price of $11.00 per Option
Share (the "Option Exercise Price");
WHEREAS, the Company is desirous of facilitating the sale of
Common Stock and Options contemplated hereby;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1.
PURCHASE AND SALE OF COMMON STOCK AND OPTIONS
ss.1.1 Purchase and Sale of Common Stock. (a) Subject to the
terms and conditions herein contained, the Sellers on the Closing Date will sell
to the Investor, severally and not jointly, and the Investor will purchase from
Sellers, a total of 366,300 shares of Common Stock and 183,150 Options, each
Seller to sell the number of shares (the "Shares") and Options set forth
opposite its name on the signature page hereto. At the Closing, the Sellers will
deliver certificates evidencing the Shares (together with stock powers executed
in blank and signature guaranteed if required) to the Investor and the Investor
shall pay the Sellers (x) $8.14 per share in cash (or $2,981,682 in the
aggregate) for the Shares and (y) $.10 per Option ($18,315 in the aggregate) for
the Options (subject to adjustment as provided in Section 5.1 hereof). It shall
be a condition to the obligations of the Sellers and the Investor to consummate
the sale and purchase of Shares and Options hereunder that the representations
and warranties of the other parties made herein shall be true and correct on and
as of the Closing Date, as if made on such date. The Closing hereunder is
conditioned upon the Offering being consummated upon terms and conditions
satisfactory to the Investor, it being understood that the sale by the Company
on or prior to May 22, 1996 of 1,000,000 Units (each Unit consisting of one
share of Common Stock and one Redeemable Common Stock Purchase Warrant, in each
case as defined and described in the Preliminary Prospectus) at a price of $9
per Unit shall be satisfactory terms and conditions for purposes of this
sentence. Option Shares shall be sold by Sellers to Investor upon the exercise
of Options as set forth in 1.2(b) below.
(b) Each Seller severally represents to Investor that Seller
has sole ownership of the Shares, Options and Option Shares to be sold by it
hereunder or pursuant to the Options, and that legal title to the Shares,
Options and Option Shares sold by them hereunder shall pass to the Investor at
the Closing (and, with respect to the Option Shares, upon each exercise of an
Option) free and clear of any liens, claims or encumbrances of any person or
entity (other than any of such items created by Investor).
ss.1.2 Closing.
(a) Time and Place of Closing. The closing of the transactions
contemplated hereunder (the "Closing") shall take place concurrently with the
closing of the Offering at the offices of Xxxxxx, Xxxxxxxxxx and Xxxxxxxxx in
New York, New York, or at such other time and place as the parties hereto shall
mutually agree, but in any event not later than May 22, 1996 (the "Closing
Date").
(b) (i) Each Seller, effective on the Closing, hereby grants
to Investor an option to acquire from Seller the number of Option Shares
(subject to adjustment on the same basis, in the same manner and to the same
extent as the Warrants are adjusted pursuant to Section 8 of the Warrant
Agreement) set forth opposite Seller's name on the signature page hereto.
Options may be exercised by Investor as a whole or in part from time to time, on
the basis of one Option Share per Option, at any time commencing on or after the
Closing Date and continuing for three years from such date. To exercise an
option, the Investor shall deliver a "Notice of Option Exercise" to each
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Seller. Investor agrees that it shall exercise Options ratably with respect to
each Seller in proportion to such Seller's current percentage ownership of the
Company as set forth in the Preliminary Prospectus; provided, however, that if
any Seller or Sellers shall not honor its or their Options, the other Seller(s)
shall nonetheless be required to honor theirs and, in such event, Investor's
obligation hereunder to exercise its Options ratably shall be determined solely
with respect to those Sellers honoring their Options in full. Upon the delivery
by Investor to a Seller of (x) a duly completed "Notice of Option Exercise" and
(y) the exercise price in cash or by wire transfer, said Seller shall promptly
deliver to Investor (i) a stock certificate(s) representing that number of the
Company's duly authorized, validly issued, fully paid and nonassessable shares
of common stock for which said Option has been exercised, and (ii) unless such
certificate is registered in the Investor's name, a stock power (with all
requisite stock transfer tax stamps attached) for such certificate(s) duly
executed in blank by the Seller, with such signature appropriately guaranteed
(if required by the Company's transfer agent). The initial Option Exercise Price
shall be $11.00 per Option Share payable in cash forthwith upon exercise
thereof, which exercise price shall be adjusted on the same basis, in the same
manner and to the same extent as the Warrants are adjusted upon any
reclassification, stock split or similar transaction or event.
(ii) The Investor hereby grants to each Seller a separate
option to acquire from Investor, at any time on or after a date occurring nine
months from the Closing Date and ending three years from such Closing Date, on
45 days prior written notice, all or a portion of the Options granted by such
Seller to Investor hereunder and not theretofore exercised or redeemed at an
option exercise price of $.10 per Option; provided, however, that such option
may not be exercised by any Seller unless and until the average closing bid
price of the Common Stock equals or exceeds $13.00 per share (the "Redemption
Target") (subject to adjustments on the same basis, in the same manner and to
the same extent as the Option Exercise Price, as set forth in Section 1.2(b)(i)
hereof) for 45 consecutive "trading days" ending within 5 days prior to the
Seller's delivery of a "Notice of Seller's Option Exercise" to Investor (in the
form annexed hereto); and provided further that if Investor delivers a Notice of
Option Exercise plus the exercise price therefor to a Seller at any time prior
to the expiration of the 45-day period first above mentioned, said Seller shall
be obligated to honor such Notice of Option Exercise and any option exercised by
Seller with respect to the Option so exercised shall be deemed withdrawn and
without force or effect. For purposes hereof, "average closing bid price" is the
per share price determined in accordance with Section 9(a)(i) or Section
9(a)(ii) (as applicable) of the Warrant Agreement (as in effect on the date
hereof and, for purposes of such terms as used herein and in the Options, with
only such amendments thereto as the Investor and the relevant Seller shall have
agreed to)pursuant to which the Warrants are proposed to be issued. The term
"trading day" means any day on which the Common Stock is tradeable through one
or more of the exchanges or facilities referred to in the definition of the term
"average closing bid price." References in this Agreement to the Warrant
Agreement "as in effect on the date hereof" and like references shall be deemed
references to the 3/22/96 draft of the Warrant Agreement.
(iii) The form of Notice of Option Exercise is attached hereto
as Annex II.
(iv) Failure of any Seller to sell its Shares or issue its
Options shall not excuse the other Sellers; however, in the event one or more
Sellers does not sell to Purchaser all of
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its Shares and Options required to be so sold or issued hereunder, the Purchaser
(at its option and without liability to any Seller, the Company or anyone else)
may elect not to purchase any of the Shares or Options.
ARTICLE 2.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLERS
Each Seller, severally and not jointly with respect to any
representations concerning the Company, and severally and with respect to itself
only as to any representation concerning a Seller, represents and warrants to
(and severally agrees with) Investor, as follows:
ss.2.1 Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Company is entitled to own or lease its properties and to carry on
its business as and in the places where such properties are now owned, leased or
operated and such business is now conducted; the Company has substantially
complied in all material respects with all federal, state and local laws with
respect to its operations and the conduct of its business, provided any failure
to comply will not have a material adverse effect on its business, properties,
operations, prospects or condition (financial or otherwise). The Company is duly
licensed or qualified and in good standing as a foreign corporation in all
jurisdictions where necessary to be licensed or qualified. Copies of the
Certificate of Incorporation and By-Laws of the Company, and all amendments
thereto, as they presently exist, heretofore furnished to the Investor are true,
complete and correct, as of the date hereof.
ss.2.2 Capital Structure of the Company. The Company has an
authorized capital stock consisting of ten million shares of Common Stock, $0.01
par value, of which 3,500,000 shares will be outstanding on the Closing Date
(excluding any shares sold in the Offering) and 100,000 shares of Preferred
Stock, par value $100 per share, none of which will be issued and outstanding at
such date. The Company has outstanding options and warrants to acquire Common
Stock as set forth in the Preliminary Prospectus.
ss.2.3 Corporate Authority. The execution, delivery and
performance of this Agreement has been duly authorized by all necessary
corporate and other required action by Seller. The Agreement constitutes the
legal, valid and binding obligation of Seller, enforceable against it in
accordance with its terms. The Shares and the Option Shares being sold hereunder
and pursuant to the Options by Seller have been duly authorized and validly
issued, and are fully paid and non-assessable. Each Option Share, when
transferred by Seller to Investor upon exercise of an Option, shall be duly
authorized, validly issued, fully paid and nonassessable.
ss.2.4 No Defaults Resulting from Agreement. Neither the
execution nor delivery of this Agreement nor performance hereof or of the
Options by Seller will result in a breach of the terms or conditions of, or
constitute a default under, the Certificate of Incorporation or By-Laws of
Seller or the Company or any agreement, instrument, undertaking, governmental
license, order, writ, decree, injunction, judgment or regulatory or other
restriction or obligation to which the Seller or, to the best of Seller's
knowledge, the Company is a party or by which its properties or
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assets may be bound or affected, or result in the creation or imposition of a
lien, charge, security interest, claim, or other encumbrance upon the assets or
properties of Seller or, to the best of Seller's knowledge, the Company.
ss.2.5 Consents and Approvals. The execution and performance
of this Agreement and the Options by Seller and the consummation of the
transactions contemplated hereby and thereby do not require the consent,
approval or action of, or any filing with or notice to, any corporation, person,
firm or any governmental or judicial authority or other entity.
ss.2.6 Suits, Proceedings, Etc. There are no actions, suits,
claims or proceedings pending or threatened against, by or affecting Seller in
any court or before any arbitrator or governmental agency, domestic or foreign,
which would prevent or hinder its performance hereof or of any Option.
ss.2.7 Registration Statement.
(a) The Registration Statement contains a complete description
of the business and operations of the Company, including historical financial
statements for the periods indicated therein that have been prepared in
accordance with generally accepted accounting principles consistently applied
and the information set forth in the Registration Statement is true and correct
in all material respects, and no information is omitted therefrom necessary to
make the material information contained therein not misleading; provided,
however, that the transaction contemplated hereby has not been reflected in the
Registration Statement as of the date hereof (but will be as of the Closing
Date). The financial statements included in the Registration Statement fairly
present the results of operations and financial condition of the Company for the
periods stated. The Preliminary Prospectus does not contain, and the Prospectus
to be delivered to the Investor upon effectiveness of the Registration Statement
will not contain, any untrue statement of a material fact or omit to state a
material fact necessary to make the statements contained therein, in light of
the circumstances in which they are made, not misleading.
(b) Since March 29, 1996, the date on which the Registration
Statement was filed with the SEC, the Company has not experienced any change
with respect to its business, properties, operations, prospects or condition
(financial or otherwise), entered into any contracts or arrangements, been the
subject of, party to or threatened by any claim, action, suit or proceeding,
incurred any debt or liability or otherwise engaged in any transaction or been
the subject of any event, action, proceeding or state of facts which would have,
individually or collectively, a material adverse effect on TSG's business,
properties, operations, prospects or condition (financial or otherwise) as the
same are described in the Registration Statement ("Material Adverse Effect").
Prior to the Closing, each Seller agrees to promptly notify Investor of any
event of which it is aware which could reasonably result in a Material Adverse
Effect. If any such Material Adverse Effect has occurred, or if any of the
representations or warranties of any Seller or the Company contained herein or
in any document referred to herein is not true and correct on the Closing Date,
in each case in the opinion of the Investor, the Investor shall not be obligated
to purchase any of the Shares or Options and shall have no liability to any
Seller, the Company or any other person or entity in the event it does not do
so.
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ss.2.8 Reservation of Shares. During the period within which
any Option may be exercised, Seller will at all times own solely by itself
(subject to no lien, claim or other encumbrance or any other option or similar
right) a sufficient number of shares of the Common Stock solely to provide for
the exercise of the rights represented by Investor's unexercised Options. Seller
and Investor shall cooperate so that, to the extent feasible, no transfer or
similar taxes shall be payable in connection with the sale or other delivery of
any shares deliverable hereunder or pursuant to the Option; if there are any
such transfer or similar taxes, Seller shall pay the same.
ss.2.9 Delivery of Option Shares. If the Investor exercises
its Option, it shall be entitled to receive any dividend or similar payments
paid or issued with respect to such Option Shares from and after the date that
it has delivered to the Seller the duly executed Notice of Option Exercise and
the related exercise price, regardless of when the Shares are actually delivered
to Investor, and any such amounts or issuances otherwise received by Seller with
respect thereto shall be held by Seller in trust for Investor and promptly
delivered by it to Investor.
ARTICLE 2.A
REPRESENTATIONS AND WARRANTIES OF COMPANY
The Company hereby represents and warrants to the Investor
that the Preliminary Prospectus does not contain, and the Prospectus to be
delivered to the Investor upon effectiveness of the Registration Statement will
not contain, any untrue statement of a material fact or omit to state a material
fact necessary to make the statements contained therein, in light of the
circumstances in which they are made, not misleading.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF INVESTOR
The Investor hereby represents and warrants to each of the
Sellers as follows:
ss.3.1 Corporate Authority. The Investor is a corporation duly
organized, validly existing and in good standing under the laws of the
Netherlands Antilles. The Investor has full corporate right, power and authority
to make, execute and perform this Agreement and to purchase the Shares. The
execution, delivery and performance of this Agreement and the purchase of the
Shares have been duly authorized by all necessary corporate action by the
Investor. The Agreement constitutes the legal, valid and binding obligations of
the Investor, enforceable against it in accordance with its terms.
ss.3.2 No Defaults Resulting from Agreement. Neither the
execution nor delivery of this Agreement nor performance hereof by the Investor
nor the purchase of the Shares will result in a breach of the terms or
conditions of, or constitute a default under, the Certificate of Incorporation
or By-Laws (or comparable documents) of the Investor or any agreement,
instrument, undertaking, governmental licenses, order, writ, decree, injunction,
judgment or
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regulatory or other restriction or obligation to which the Investor is a party
or by which its properties or assets may be bound or affected.
ss.3.3 Consents and Approvals. The execution and performance
of this Agreement by the Investor and the consummation of the transactions
contemplated hereby do not require the consent, approval or action of, or any
filing with or notice to, any corporation, person, firm or any governmental or
judicial authority, except such as have been obtained or will be obtained prior
to Closing.
ss.3.4 Due Execution of Agreement. This Agreement constitutes
its valid and legally binding obligation enforceable in accordance with its
terms, except insofar as enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting the rights of creditors
generally.
ss.3.5 Investment Intent of Investor. (a) The Shares, the
Options and the Option Shares which the Investor will acquire hereunder will be
acquired for investment and not with a view to, for resale in connection with,
or with an intent of participating directly or indirectly in any distribution of
such securities within the meaning of the Securities Act of 1933, as amended,
except in a transaction which is exempt from registration under the applicable
federal securities laws, or pursuant to an effective registration statement
thereunder. The certificates evidencing the Shares and the Option Shares which
will be delivered to the Investor by the Sellers shall bear substantially the
following legend:
"The Shares evidenced by this certificate have not been
registered under the Securities Act of 1933, as amended. Such Shares
may not be sold, except in a transaction which in the opinion of
securities counsel reasonably satisfactory to the Company (including
counsel to the Company) is exempt from registration under applicable
federal securities laws, or pursuant to an effective registration
statement thereunder."
(b) The Investor acknowledges and agrees that the Underwriter
for the Offering will require that the Shares, Options and Option Shares not be
sold to the public, directly or indirectly, for a period of twelve months
following the Offering without the prior consent of the Underwriter, and
Investor hereby agrees to such restriction and acknowledges that a legend to
that effect will also be noted on the certificates evidencing the Shares,
Options and Option Shares. Any transferee of Investor shall become a party to
the Amended Stockholders' Agreement as a condition to such transfer.
(c) The Investor acknowledges that it has been advised that
the Shares, Options and Option Shares to be delivered hereunder have not and are
not being registered under the Securities Act of 1933, as amended (the
"Securities Act"), or under the "Blue Sky" laws of any jurisdiction, and that
the Sellers in selling such securities will be relying upon, among other things,
the representations and warranties of the Investor contained in Section 3.5 of
this Agreement in concluding that such issuance is a "private resale" and does
not require compliance with the registration provisions of the Securities Act.
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(d) Investor hereby agrees and understands that, although the
Company currently intends to consummate the Offering, there is no assurance that
such Offering will be successfully completed, and that consummation of such
Offering is a condition to the obligations of the Company, the Sellers and
Investor hereunder.
ss.3.6 Receipt of Documents; Access. The Investor hereby
acknowledges receipt of the Registration Statement and the exhibits thereto and
further affirms that it is relying thereon in connection with its purchase of
the Shares and the Options. The Investor represents that by virtue of its
investment acumen, knowledge and business experience and independent advice, it
is capable of understanding and evaluating the risks, hazards and merits of
participating in the acquisition of the Shares, Options and Option Shares and
the Investor is a party of substantial financial means who is able to bear the
economic risk of participating in the purchase of the Shares, the Options and
the Option Shares. The Investor acknowledges having been afforded full access to
all information, filings and other documents related to the Company deemed
necessary by it, and it has had full access to personnel of the Company and has
had, and has exercised, the opportunity to ask questions of, and receive answers
from, officers of the Company concerning all matters the Investor considered
relevant to its acquisition of the Shares, the Options and the Option Shares.
ARTICLE 4.
COVENANTS AND AGREEMENTS
ss.4.1 Absence of Brokers. Each Seller and the Investor
represents and warrants to the other that no broker or finder has acted on its
behalf (except, as to the Investor, the Advisor) in connection with this
Agreement or the transactions contemplated hereby. Each Seller and the Investor
agrees to indemnify the other and hold and save it harmless from any claim or
demand for commission or other compensation by any broker, finder or similar
agent claiming to have been employed by or on behalf of such party.
ARTICLE 5.
PRICE PROTECTION; REGISTRATION RIGHTS
ss.5.1 Price Protection. In the event that the Units in the
Offering are sold to the Underwriters at a price to public, less underwriting
discounts and commissions per Unit (the "Net Price"), of less than $8.19 per
share, then the Sellers shall sell to Investor ratably, without payment by the
Investor of any kind, within thirty (30) days of the completion of the Offering,
(x) the number of additional shares of its Common Stock ("Additional Shares"),
equal to the difference between (i) A divided by B, multiplied by C, and (ii) C,
where A equals $8.19, B equals the Net Price per Unit in the Offering and C
equals 366,300 and (y) the number of additional Options equal to the difference
between (i) A divided by B, multiplied by C, multiplied by D, and (ii) E, where
A B C have the values noted above and where D equals .5 and E equals 183,150.
Appropriate adjustment shall also be made to the Option Exercise Price and the
Redemption Target in the event
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that the initial exercise price of Warrants in the Offering is less than $11.00
per share of Common Stock.
ss.5.2 Amended Stockholder's Agreement. Reference is made to a
proposed amendment and restatement of the Stockholders Agreement, dated as of
October 31, 1994 among the Company and the Sellers (the "Amended Stockholder's
Agreement"), which is attached as Annex I-A. Immediately upon, and as a further
condition to, the occurrence of the Closing, (x) Investor shall become a party
to the Amended Stockholder's Agreement and, thereby, a "Minority Stockholder"
for purposes of such agreement, entitled to all of the rights, and subject to
all of the obligations attendant thereto, without any further action required on
its part other than its signature to the Amended Stockholders Agreement and (y)
Sellers and the Company and Investor shall execute and deliver the Amended
Stockholder's Agreement. The Shares shall bear the appropriate legend to reflect
the restrictions of the Amended Stockholder's Agreement and this Agreement.
ss.5.3 Board Representation. The Sellers agree to cause one
designee of Investor, who shall be satisfactory to the Company in its reasonable
opinion, to be elected to a vacancy in the Board of Directors of the Company
within 90 days after the Closing. If there is no vacancy, the Company shall
cause one to occur either by increasing the number of directors by one or
obtaining the resignation of an existing director.
ARTICLE 6.
MISCELLANEOUS PROVISIONS
ss.6.1 Survival of Representations. All statements contained
herein or in any certificate or other instrument delivered by or on behalf of
the Investor, the Sellers or the Company pursuant hereto or in connection with
the transactions contemplated hereby shall be deemed representations,
warranties, covenants and agreements made by the respective parties to this
Agreement or pursuant hereto and shall survive the consummation of the
transactions contemplated herein.
ss.6.2 Notices. All notices, requests, demands, tenders and
other communications required or permitted hereunder shall be in writing and
shall be deemed to have been duly given if delivered or mailed, first class,
postage prepaid:
(a) To the Company:
Technology Service Group, Inc.
00 Xxxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: President
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With a copy to:
Xxxxx X. Xxxxxx, Esq.
00 Xxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxx, XX 00000
(b) To the Sellers:
Wexford Partners Fund L.P.
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Acor, S.A.
00, Xxx xx Xxxxxxx
Xxxxx, Xxxxxx 00000
Attention: Xxxxxxx Xxxxxxx
Firlane Business Corp.
Xxx 000
0000 Xxxxxx 00 Xxxxxxxxxxx
Attention: Xxxx-Xxxxx Xxxxxx
With a copy to:
Berlack, Israels & Xxxxxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx XxXxxx, Esq.
(c) To the Investor:
c/o Applied Telecommunications Technologies, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
With a copy to:
Xxxxxxxx & Worcester LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
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or, in each case, to such other address for such party as such party notifies
the others in accordance with the terms hereof.
ss.6.3 Entire Agreement. This Agreement supersedes all prior
discussions and agreements between and among the Company and Investor with
respect to the Shares and the other matters contained herein.
ss.6.4 Waiver. Any term or condition of this Agreement may be
waived at any time by the party hereto which is entitled to the benefit thereof,
but such waiver shall only be effective if evidenced by a writing signed by such
party. A waiver on one occasion shall not be deemed to be a waiver of the same
or of any other breach on a future occasion.
ss.6.5 Amendments. Except as otherwise specifically set forth
in this Agreement, this Agreement may be amended or modified only by a writing
signed by the party adversely affected thereby.
ss.6.6 Successors and Assigns. This Agreement (including,
without limitation, the options provided for herein) shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns. The parties hereto agree that any transferee of any Shares or
Option Shares owned by them shall become a party to this Agreement as a
condition to any such transfer.
ss.6.7 GOVERNING LAW. THE VALIDITY AND EFFECT OF THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CHOICE OF LAW OR
CONFLICTS OF LAWS PRINCIPLES THEREOF.
ss.6.8 Headings. The headings set out in this Agreement are
for convenience of reference and shall not be deemed a part of this Agreement.
ss.6.9 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be deemed
prohibited or invalid under such applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, and such
prohibition or invalidity shall not invalidate the remainder of such provision
or the other provisions of this Agreement.
ss.6.10 Counterparts. This Agreement may be signed in one or
more counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement. Telecopied signatures
hereto shall be of the same force and effect as an original of a manually signed
copy.
ss.6.11 Waiver of Jury Trial. EACH PARTY HERETO HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT, THE
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SHARES BEING SOLD HEREUNDER, THE OPTIONS, THE OPTION SHARES OR THE AMENDED
STOCKHOLDERS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN), OR ACTIONS OF ANY PARTY HERETO.
ss.6.12 No Third Party Beneficiaries. This Agreement is solely
for the benefit of the Sellers and the Investor and their respective successors
and permitted assigns. Nothing contained herein shall be deemed to confer upon
anyone other than such persons and entities any right to insist on or to enforce
the performance or observance of any of the obligations contained herein, and no
other person or entity (including without limitation the Company) shall under
any circumstances be deemed to be a beneficiary of the provisions hereof.
ss.6.13 Expenses. Each party hereto shall pay its own
expenses.
ARTICLE 7.
ss.7.1 Conditions Precedent. In addition to the conditions
precedent set forth elsewhere in this Agreement, Investor's obligations to
purchase the Shares and the Options hereunder shall be subject to the
fulfillment to the Investor's satisfaction of the following:
(a) Those provisions of the Warrants and the Warrant Agreement
which are incorporated by reference into, or otherwise applicable to, the
Options and this Agreement shall be satisfactory to the Investor in form and
substance.
(b) Legal Opinions. The Investor shall have received legal
opinions, in form and substance satisfactory to it, addressed to it and dated
the Closing Date, of counsel to Wexford Partners Fund L.P. and the Company,
covering the matters set forth in Sections 2.1, 2.3, 2.4 and 2.5 hereof. In
addition, the Investor shall have received copies of all opinions delivered or
required to be delivered by counsel for the Company to the Underwriters or any
of them on the Closing Date, together with letters from such counsel stating
that the Investor may rely thereon as fully as if such opinions were addressed
directly to it.
(c) On the Closing Date, and after giving effect to the
Offering, the Shares sold to the Investor by the Sellers hereunder shall
represent no less than 6% of the Company's issued and outstanding shares on such
date.
(d) Each Seller shall have delivered to the Investor a
certificate of one of Seller's authorized officers certifying, as of the Closing
Date, compliance with the conditions of Article 7 hereof and as to the accuracy
on the Closing Date of all of the representations of such Seller contained
herein.
(e) The Company shall have delivered to the Investor a
certificate of one of its authorized officers certifying, as of the Closing
Date, compliance with the conditions of Article 7 hereof and as to the accuracy
on the Closing Date of all of the representations of the Company contained
herein.
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(f) Approvals and Consents All orders, permissions, consents,
approvals, licenses, authorizations and validations of, and filings, recordings
and registrations with, and exemptions by, any government or government
authority or agency, or any other person or entity, required to authorize or
required in connection with the execution, delivery and performance of this
Agreement and the transactions contemplated hereby by any party shall have been
obtained.
(g) No amendments shall have been made to the Company's
certificate of incorporation or by-laws which have not been consented to by the
Investor.
All documents, certificates, financial statements, opinions and papers required
by this Section 7.1 shall be in form and substance satisfactory to the Investor.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their duly authorized officers all as of the day and year first
above written.
TECHNOLOGY SERVICE GROUP, INC.
Shares/Options and Option By:______________________________________
Shares to be sold: Authorized Signatory
285,714/142,857 WEXFORD PARTNERS FUND L.P.
By: Wexford Capital L.P.
By: Wexford Capital Corporation
By:_______________________
Authorized Signatory
Name:
Title:
Address:
53,114/26,557 ACOR, S.A.
By:______________________________________
Authorized Signatory
27,472/13,736 FIRLANE BUSINESS CORP.
By:______________________________________
Authorized Signatory
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A.T.T. IV, N.V.
By: Applied Telecommunications
Technologies, Inc., Attorney-in-Fact
By:__________________________________
Authorized Signatory
Address: 00 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
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Annex II
NOTICE OF OPTION EXERCISE FOR INVESTOR OPTIONS
[Name and address of Seller
The undersigned hereby irrevocably elects to exercise the right to purchase
________ Option Shares (as such term is defined in (but subject to adjustment as
provided in) the Stock Purchase and Option Agreement, dated April ___, 1996,
among Technology Service Group, Inc., Wexford Partners Fund L.P., Acor, S.A.,
Firlane Business Corp. and A.T.T. IV, N.V. (the "Agreement"), at a price per
share equal to $_____ per share. The undersigned acknowledges that the
obligation of the Sellers to issue the Option Shares is conditioned upon the
payment to Seller of the applicable Option Exercise Price. The undersigned
represents to Seller that a Notice of Option Exercise is concurrently being
delivered to the other Sellers in accordance with the Agreement.
Dated:____________________
A.T.T. IV, N.V.
By:___________________________________
Authorized Officer
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Annex III
NOTICE OF OPTION EXERCISE FOR SELLERS
A.T.T. IV, N.V. Optionor
c/o Applied Telecommunications Technologies, Inc.,
[address]
The undersigned hereby irrevocably elects to exercise the right to purchase from
optionor ________ Options (as such term is defined in the Stock Purchase and
Option Agreement, dated ____________, 1996, among Technology Service Group,
Inc., Wexford Partners Fund L.P., Acor, S.A., Firlane Business Corp. and A.T.T.
IV, N.V. (the "Agreement"), at a price of $___ per Option. The undersigned
acknowledges that the obligation of the Optionor to sell the Options to the
undersigned is conditioned upon certain events described in the Agreement and
the payment to Optionor of the option exercise price therefor.
Dated:____________________
[Name of Optionee]
By:___________________________________
Authorized Officer
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