CONVERTIBLE DEBENTURE REDEMPTION AGREEMENT
THIS CONVERTIBLE DEBENTURE REDEMPTION AGREEMENT ("Agreement") is made as of
this 23rd day of May, 1997, by and between FAIRWAY CAPITAL LIMITED, a
corporation organized and existing under the laws of Nevis, West Indies (the
"Holder"), and INTEK DIVERSIFIED CORPORATION, a corporation organized and
existing under the laws of the State of Delaware, United States of America (the
"Company").
WHEREAS, THE Holder purchased, pursuant to that certain Convertible
Debenture Purchase Agreement made as of February 6, 1997 between the Company
and the Holder (the "Purchase Agreement"), acquired from the Company, (i) one
or more 7.5% Convertible Debentures Due 2000 issued by the Company, in the
principal aggregate amount of U.S. $1.0 million (the "Debentures"), and (ii)
one or more Offshore Warrants to purchase up to 106,250 shares of Common
Stock, par value U.S. $0.01 per share ("Common Stock"), of the Company (the
"Warrants"), in each case outside of the "United States" (as that term is
defined in Regulation S under the U.S. Securities Act of 1933, as amended);
and
WHEREAS, the Company desires to redeem and the Holder desires to permit the
Company to redeem the Debentures:
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties herein contained and of other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereby agree as follows:
ARTICLE I
REDEMPTION OF DEBENTURES
1.1 REDEMPTION. Subject to the conditions set forth in 1.2, below, at
the Closing (as hereafter defined), the Company shall redeem the Debentures
from the Holder for an aggregate of $1,121,875.00 (the "Redemption Price")
representing 110% of the principal amount of the Debentures being redeemed,
together with accrued and unpaid interest at the rate of 7.5% from the date
of issuance of the Debentures until May 23, 1997.
1.2 CLOSING. The closing of the purchase and sale of the Debentures (the
"Closing") shall take place on May 23, 1997. The date of this Agreement is
sometimes hereinafter referred to as the "Closing Date." The Closing shall take
place at the offices of Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP, 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other time and/or
place as the Holder and the Company may agree.
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1.3 DELIVERIES BY THE COMPANY AT THE CLOSING. At the Closing, the Company
shall deliver to the Holder the Redemption Price, as determined pursuant to this
Article I, in United States dollars in immediately available funds by wire
transfer to the account designated in writing by the Holder on the signature
page hereof and will cancel the Debentures.
1.4 DELIVERIES BY THE HOLDER AT THE CLOSING. At the Closing, the Holder
shall deliver to the Company the executed original Debentures.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
makes the following representations and warranties to the Purchaser as of the
Closing Date:
(a) ORGANIZATION. The Company is a corporation, duly incorporated,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation.
(b) AUTHORIZATION; ENFORCEABILITY. The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by the
Company and the consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary action on the part of the
Company. This Agreement has been duly executed and delivered by the Company and
constitutes the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the enforcement
of, creditors' rights and remedies or by other equitable principles of general
application.
(c) NO CONFLICTS. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby do not and will not (i) violate any provision of its
certificate of incorporation or bylaws or, (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Company is a party, or to the knowledge of the Company result in a violation
of any order, judgment, injunction, decree or other restriction of any U.S.
court or governmental authority to which the Company is subject or by which any
property or asset of the Company is bound or affected.
(d) LITIGATION; PROCEEDINGS. There is no action, suit, notice of
violation, proceeding or investigation pending, or, to the knowledge of the
Company, threatened against or affecting the Company or any of its Subsidiaries
or any of their respective properties before or by
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any court, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) that relates to or challenges the
legality, validity or enforceability of this Agreement.
The Holder acknowledges and agrees that the Company makes no representation
or warranty with respect to the transactions contemplated hereby other than
those specifically set forth in Article II and Article III herein.
2.2 REPRESENTATIONS AND WARRANTIES OF THE HOLDER. The Holder hereby makes
the following representations and warranties to the Company as of the Closing
Date:
(a) ORGANIZATION, AUTHORIZATION; ENFORCEABILITY. The Holder is an
entity duly organized and validly existing and in good standing under the laws
of its jurisdiction of organization. The Holder has the requisite power and
authority to enter into and to consummate the transactions contemplated hereby
and otherwise to carry out its obligations hereunder. The execution and
delivery of this Agreement by the Holder and the consummation by it of the
transactions contemplated hereby have been duly authorized by all necessary
action on the part of the Holder. This Agreement has been duly executed and
delivered by the Holder and constitutes a valid and binding obligation of the
Holder enforceable against the Holder in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application.
(b) CONSENTS AND AUTHORIZATIONS. The Holder is not required to
obtain any consent, waiver, authorization or order of, or make any filing notice
or registration with, any court or governmental authority or other person in
connection with the execution, delivery and performance by the Holder of this
Agreement.
(c) ACCESS TO INFORMATION; RELIANCE. The Purchaser and its
representatives have been afforded the opportunity to review all reports filed
by the Company under the U.S. Securities Exchange Act of 1934, as amended, other
publicly available information regarding the Company, and to ask such questions
and receive such answers, as the Holder deemed necessary to make an informed
decision. Notwithstanding anything herein to the contrary, the Holder
acknowledges that it is relying solely on the representations and warranties of
the Company set forth in Article II and its own investigation in evaluating the
transactions contemplated by this Agreement.
(d) LITIGATION; PROCEEDINGS. There is no action, suit, notice of
violation, proceeding or investigation pending, or, to the knowledge of the
Holder, threatened against or affecting the Holder or any of its affiliates or
any of their respective properties before or by any court, governmental or
administrative agency or regulatory authority (federal, state, county, local or
foreign) that relates to or challenges the legality, validity or enforceability
of this Agreement.
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(e) CERTAIN WARRANTIES. The representations and warranties of the
Holder set forth in paragraphs 2.2(c) and (g) of the Purchase Agreement were
true at the time of the closing therein and those set forth in paragraph 2.2 (f)
of the Purchase Agreement are true as if set forth in full herein.
The Company acknowledges and agrees that the Holder makes no representation
or warranty with respect to the transactions contemplated hereby other than
those specifically set forth in Article II and Article III herein.
ARTICLE III
OTHER AGREEMENTS OF THE PARTIES
3.1 RELEASE BY HOLDER. The Holder, in consideration of the sum of ten
dollars ($10.00) and other good and valuable consideration, receipt and
sufficiency of which are hereby acknowledged; hereby releases and discharges the
Company, its successors, subsidiaries, affiliates, employees, owners, officers,
directors, governors, partners, predecessors, assigns, agents, representatives
and attorneys, from any and all causes of action, actions, judgments, liens,
damages, losses, claims, liabilities, and demands whatsoever, whether known or
unknown, which each other had, now has, or hereafter can, shall or may have,
however arising, including by reason of any duty, breach, act, omission,
condition or occurrence through and including the date of this Agreement and/or
by reason of any fact, act, matter, cause or thing of any kind whatsoever,
including without limitation any alleged claim arising out of the Purchase
Agreement and the Xxxxx Xxxxxxx Agreement, except (i) any claim arising out of a
breach of this Agreement; and (ii) any claim arising out of the Warrant.
3.2 RELEASE BY COMPANY. In consideration of the sum of ten dollars
($10.00) and other good and valuable consideration, receipt and sufficiency of
which are hereby acknowledged; hereby releases and discharges the Holder, its
successors, subsidiaries, affiliates, employees, owners, officers, directors,
governors, partners, predecessors, assigns, agents, representatives and
attorneys, from any and all causes of action, actions, judgments, liens,
damages, losses, claims, liabilities, and demands whatsoever, whether known or
unknown, which each other had, now has, or hereafter can, shall or may have,
however arising, including by reason of any duty, breach, act, omission,
condition or occurrence through and including the date of this Agreement and/or
by reason of any fact, act, matter, cause or thing of any kind whatsoever,
including without limitation any alleged claim arising out of the Purchase
Agreement, except (i) any claim arising out of a breach of this Agreement; and
(ii) any claim arising out of the Warrant.
3.3 TERMINATION OF INVESTIGATION. The Company has instructed Parker,
Chapin, Xxxxxxx & Klimpl, LLP to terminate its investigation of the purchase and
sale of the Debentures.
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ARTICLE IV
MISCELLANEOUS
4.1 EXPENSES. Each party shall pay the fees and expenses of its advisers,
counsel, accountants and other experts, if any, and all other expenses incurred
by such party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement. The Holder shall be responsible for the Holder's
own tax liability that may arise as a result of the investment in the Debentures
and Warrants and the transactions contemplated by this Agreement.
4.2 SURVIVAL. The agreements and covenants contained in Article III and
this Article IV shall survive the termination of this Agreement and the
Closing. The representations and warranties of the Company and the Holder
contained in Article II shall survive for a period of one year after the Closing
Date.
4.3 NOTICES. All notices or other communications hereunder shall be in
writing and given, and shall be deemed duly given and received if given, by
facsimile, by nationally recognized overnight courier service or by mail,
postage prepaid, to the applicable person as set forth below. Any such notice
shall be deemed given and effective upon the earliest to occur of (i) the date
of transmission of such facsimile at the facsimile telephone number specified in
this Section, (ii) on the second Business Day following the date of mailing if
sent by nationally recognized overnight courier service, (iii) five Business
Days after deposit in the United States mails or (iv) upon actual receipt by the
party to whom such notice is required to be given. The addresses and facsimile
numbers for such communications shall be:
If to the Company: INTEK Diversified Corporation
c/o Securicor Telesciences Inc.
000 Xxx Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Xxxxxx Xxxxxx of America
Facsimile No.: (000) 000-0000
Attention: Xxx X. Xxxxxxxxxx, CFO
With a required copy to: Xxxxxxx Xxxxxxx & Xxxxxx P.L.L.
Xxx Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxx 00000
Xxxxxx Xxxxxx of America
Facsimile No.: (000) 000-0000
Attention: Xxxxxx Xxxxxxxxx, Esq.
-and-
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Xxxxxx & Xxxxxxxxx LLP
000 Xxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
United States of America
Attention: Xxxxxxx X. Xxxxxx, Esq.
If to the Holder: Fairway Capital Limited
c/o Trident Trust Company (Cayman) Limited
0 Xxxxxxx Xxxxx
X.X. Xxx 000
Grand Cayman, Cayman Island, B.V.I.
Facsimile No.: (000) 000-0000
Attention: X. XxXxxxxxxx
With a copy to: HW Finance, L.L.C.
4000 Thanksgiving Tower
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
Xxxxxx Xxxxxx of America
Facsimile No.: (000)000-0000
Attention: Xxxxxx Xxxxxxxxx, Esq.
-and-
Xxxxx Xxxxxxx, LLC
Carnegie Hall Tower
152 West 57th Street, 40th Floor
New York, New York 10019
United States of America
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx Xxxxx
-and-
Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP
1290 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx xx Xxxxxxx
Facsimile No.: (000) 000-0000
Attention: Xxxx X. Xxxxx, Esq.
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4.4 AMENDMENTS; WAIVERS. No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
the Company and the Holder, or, in the case of a waiver, by the party against
whom enforcement of any such wavier is sought. No waiver of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing wavier in the future or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
either party to exercise any right hereunder in any manner impair the exercise
of any such right accruing to it thereafter.
4.5 HEADINGS. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
4.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns.
Neither the Company nor the Holder may assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other, which
consent shall not be unreasonably withheld or delayed. The assignment by a
party of this Agreement or any rights hereunder shall not affect the obligations
of such party under this Agreement.
4.7 NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
4.8 GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of Delaware without
regard to the principles of conflicts of law thereof.
4.9 SEVERABILITY. In case any one or more of the provisions of this
Agreement shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be affecting or impaired thereby and the parties will attempt in good
faith to agree upon a valid and enforceable provision which shall be a
commercially reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Agreement.
4.10 ENTIRE AGREEMENT. This Agreement contains the entire understanding of
the parties with respect to the subject matter hereof and thereof and supersede
all prior agreements and understandings, oral or written, with respect to such
matters.
4.11 COUNTERPART SIGNATURES. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, the party using such means of delivery
shall cause the originally executed signature page to be delivered to the other
party within two Business Days of the execution and delivery hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the date first
indicated above.
"COMPANY"
INTEK DIVERSIFIED CORPORATION
By: /s/ Xxx Xxxxxxxxxx
---------------------------------
Name: Xxx Xxxxxxxxxx
Title: Chief Financial Officer
"HOLDER"
Wire Instructions: FAIRWAY CAPITAL LIMITED
By: /s/ Xxxxx X. Xxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
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