STOCK PURCHASE AGREEMENT
This Agreement dated as of this 29th day of October, 1996 ("Agreement"), by
and among Social Expressions Acquisition Corporation, a Delaware corporation
(hereinafter called "Purchaser"), AGP and Company, Inc., a New Jersey
corporation (hereinafter called "AGP") and Robmar Corporation, a Delaware
corporation (hereinafter called "Robmar").
W I T N E S S E T H T H A T:
WHEREAS, AGP is the owner of all of the issued and outstanding shares of
the capital stock of Robmar, which, in turn, is the owner of all of the issued
and outstanding shares of the capital stock of TMC Group, Inc. ("TMC"), a
Delaware corporation; and
WHEREAS, AGP, Purchaser and certain other persons and entities have entered
into a Settlement Agreement, dated October 1, 1996 (the "Settlement Agreement"),
which provides for the sale of TMC to Purchaser; and
WHEREAS, AGP and Robmar desire to sell all of the issued and outstanding
shares of TMC to Purchaser, and Purchaser desires to purchase such shares from
Robmar, on the terms and conditions hereinafter set forth,
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and in the Settlement Agreement, Purchaser, AGP and Robmar
hereby agree as follows:
1. Sale and Purchase of Shares: At the Closing (as hereinafter defined), in
reliance upon the representations and warranties of Purchaser and subject to the
fulfillment by Purchaser of the conditions to be fulfilled by Purchaser prior to
or at the Closing, Robmar agrees to sell, assign, transfer and deliver to
Purchaser, and AGP agrees to cause Robmar to sell, assign, transfer and deliver
to Purchaser, for the consideration described in Section 3 hereof, all of the
issued and outstanding shares of the capital stock of TMC on the date of Closing
(the "Shares"). Purchaser, in reliance upon the representations and warranties
of AGP and Robmar and subject to the fulfillment by AGP and Robmar of the
conditions to be fulfilled by them prior to or at the Closing, agrees to
purchase the Shares from Robmar for the consideration specified in such Section
3 hereof, to be paid as provided in such Section 3.
2. Purchase Price: The purchase price of the Shares ("Purchase Price")
shall be as set forth hereinafter in Section 3.
3. Payment of Purchase Price: Purchaser shall deliver to Robmar the
following in payment for the Shares:
a. Purchaser has entered into agreements to become a public company
subject to the reporting requirements of the Securities Exchange Act of 1934, as
amended (a "Public Company") on or before the Closing. Provided that Purchaser
is a Public Company on or before the date of Closing, the Purchase Price shall
consist of (i) a number of shares of Purchaser's voting common stock ("Common
Stock") having an aggregate value of $2,500,000, and (ii) a royalty in the
amount of 0.75% of TMC's annual net collected revenues (as defined below), paid
quarterly, in arrears, for a period of three (3) years commencing with the date
of Closing. The precise number of such shares to be delivered to Robmar at the
Closing shall be calculated by dividing $2,500,00 by the average of the closing
bid and asked prices of the Common Stock during the last ten trading days
immediately preceding the Closing.
b. In the event that Purchaser is not a Public Company on the date of
Closing, then the Purchase Price shall consist of (i) Purchaser's 10%
subordinated note maturing ten (10) years from the date of Closing (the "Note")
in an aggregate principal amount of $2,500,000, and (ii) a royalty payment equal
to 1.5% of TMC's annual net collected revenues (defined as gross cash revenues
from product sales less returns, discounts and allowances), paid quarterly, in
arrears, for a period of three (3) years commencing with the date of Closing,
one-half (1/2) of which shall reduce the principal amount otherwise due and
owing on the Note. The Note shall be in the form set forth in Exhibit A,
attached hereto and made a part hereof. The Purchaser shall retain the right to
redeem the Note in exchange for the issuance of shares of its Common Stock at
the time it becomes a Public Company. In the event that Purchaser does not
redeem the Note at such time, Robmar shall have the right to immediately convert
the Note in exchange for shares of Purchaser's Common Stock. Upon such
redemption or exercise by Robmar of its right described in the preceding
sentence, Purchaser shall issue a number of shares of its Common Stock having
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an aggregate value equal to the then outstanding principal amount of the Note
and any accrued interest (the "Amount"). The precise number of such shares to be
delivered to Robmar shall be calculated by dividing the Amount by the average of
the closing bid and asked prices of the Common Stock during the last ten trading
days immediately preceding the date of such redemption or conversion by Robmar.
c. In the event that Purchaser fails to make any required royalty
payment when due pursuant to this Section 3, any and all proxies previously
delivered by AGP with respect to shares of the capital stock of Purchaser shall
be null and void during the period of any such non-payment. Upon payment of the
required royalty fee, such proxies shall be immediately effective again.
Notwithstanding the above, in the event that Purchaser fails to make the first
required royalty payment when due, the proxies given by AGP will remain in
effect, as long as Purchaser has taken no action which requires a vote of its
shareholders prior to Purchaser's making the required payment in full. Purchaser
shall use its best efforts to make all royalty payments on a timely basis.
4. Closing Transfer:
a. Closing hereunder shall take place at 10:00 a.m. local time on the
first business day after receipt of approval of this Agreement by the
shareholders of AGP, but in no event later than February 1, 1997, time being of
the essence, unless all parties hereto mutually agree, in a signed writing, upon
a different time and date ("Closing Date"). Closing shall take place at the
office of Hall, Dickler, Kent, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇, unless the parties hereto mutually agree, in writing, upon a different
place of Closing.
b. At Closing, Robmar and AGP shall deliver to Purchaser the
following:
(I) The certificate or certificates representing all of the
issued and outstanding shares of TMC together with stock
powers relating thereto, duly executed in blank.
(II) The minute books, stock books and corporate seal of TMC.
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(III) A certified copy of resolutions of the Board of Directors
and shareholders of AGP, and a certified copy of resolutions
of the Board of Directors and the sole shareholder of
Robmar, approving and authorizing the execution, delivery
and performance of this Agreement by AGP and Robmar (and all
other documents to be executed and delivered by AGP and
Robmar in connection herewith) and the consummation of the
transaction contemplated hereunder.
(IV) Good standing certificates of AGP (from the Secretary of
State of New Jersey) and of Robmar and TMC (from the
Secretary of State of Delaware).
c. At Closing, Purchaser shall deliver to Robmar the following:
(I) Either the appropriate number of shares of the Common Stock
of Purchaser described in Section 3(a) or, in the
alternative, the Note, as described in Section 3(b).
(II) A certified copy of resolutions of the Board of Directors of
Purchaser approving and authorizing the execution, delivery
and performance of this Agreement by Purchaser (and all
other documents to be executed and delivered by Purchaser in
connection herewith) and the consummation of the transaction
contemplated hereunder.
5. Settlement Agreement: The parties hereto expressly acknowledge and agree
that their rights and obligations under the Settlement Agreement, attached
hereto as Exhibit B, the terms of which are hereby incorporated by reference as
if fully set forth herein, are hereby reaffirmed and that this Stock Purchase
Agreement has been prepared in full conformity with such Settlement Agreement.
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6. Representations, Warranties and Covenants of AGP and Robmar: AGP and
Robmar warrant, represent and covenant to Purchaser as follows:
a. AGP is a corporation duly organized, validly existing and in good
standing under the laws of the State of New Jersey, and Robmar and TMC are each
corporations duly organized, validly existing and in good standing under the
laws of the State of Delaware. AGP and Robmar further represent and warrant that
AGP, Robmar and TMC each, respectively, has all requisite legal and corporate
power and authority to own and utilize its respective properties and to carry on
its respective business and operations as currently conducted (and as the same
shall be conducted on the Closing Date) in all material respects.
b. The Boards of Directors of AGP and Robmar have duly and validly
authorized the execution, delivery and performance by AGP and Robmar of this
Agreement (and all such other documents to be executed, delivered and/or
performed by them in connection herewith), and this Agreement (and all such
other documents) are valid and binding upon AGP and Robmar and enforceable
against them in accordance with their respective terms.
c. Neither the execution nor the delivery of this Agreement by AGP or
Robmar, nor the consummation of the transaction contemplated hereunder, will
conflict with or will result in a violation or breach of any term or provision
of, or constitute an event of default or acceleration under (assuming the
passage of time and/or the giving of notice) the respective Articles of
Incorporation or By-laws of AGP, Robmar and TMC, or any law, regulation, order,
permit, license or decree or any agreement to which AGP, Robmar or TMC is a
party or subject, or will result in the imposition of any lien, encumbrance or
charge upon any of the assets or properties of AGP, Robmar or TMC or give any
third party the right to terminate, amend or renegotiate any material agreement
to which AGP, Robmar or TMC is a party. No consent of any third party is
required to authorize the execution and delivery of this Agreement or the
consummation of any of the transactions contemplated hereunder by AGP or Robmar
except for the approval of the shareholders of AGP.
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d. No representation or warranty of AGP or Robmar made herein, or in
any exhibit, document, certificate or schedule required to be furnished
hereunder, contains or will contain any untrue statement of material fact or
omits or will omit to state a material fact necessary to make any statement of
fact contained herein or therein not materially misleading.
e. Robmar is the owner of 48,850 shares of the Class A Common Stock,
par value $1.00 per share, of TMC and 93,900 shares of the Class B Common Stock,
par value $1.00 per share, of TMC, such shares constituting all of the issued
and outstanding shares of the capital stock of TMC. Robmar has good and
marketable title to such shares, and there are no liens, claims, options,
proxies, charges or encumbrances whatsoever affecting such shares or the ability
of Robmar or AGP to sell such shares to Purchaser. At the Closing, Purchaser
shall acquire good and marketable title to such shares, free and clear of all
liens, claims, options, proxies, charges and encumbrances whatsoever.
f. Illuminations, Inc. and The Wedding Company, Inc. are subsidiaries
of TMC.
g. In addition to AGP's obligations pursuant to Section 3.3(b) of the
Settlement Agreement, AGP and its directors and officers will use their best
efforts to obtain the requisite approval by the shareholders of AGP of this
Agreement.
7. Representations and Warranties of Purchaser: Purchaser warrants and
represents to AGP and Robmar as follows:
a. Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware.
b. The Board of Directors of Purchaser has duly and validly authorized
the execution, delivery and performance by Purchaser of this Agreement (and all
other documents to be executed, delivered and/or performed by Purchaser in
connection herewith), and this Agreement (and all such other documents) are
valid and binding upon Purchaser and enforceable against Purchaser in accordance
with their respective terms.
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c. Neither the execution nor the delivery of this Agreement by
Purchaser, nor the consummation of the transaction contemplated hereunder, will
conflict with or will result in a violation or breach of any terms or provisions
of, or constitute an event of default or acceleration under (assuming the
passage of time and/or the giving of notice) the Articles of Incorporation or
By-laws of Purchaser, or any law, regulation, order, permit, license or decree
or any agreement to which Purchaser is a party or subject, or will result in the
imposition of any lien, encumbrance or charge upon any of the assets or
properties of Purchaser, or give any third party the right to terminate, amend
or renegotiate any material agreement to which Purchaser is a party. No consent
of any third party is required to authorize the execution and delivery of this
Agreement or the consummation of any of the transactions contemplated hereunder
by Purchaser.
d. No representation or warranty of Purchaser made herein, or in any
exhibit, document, certificate or schedule required to be furnished hereunder,
contains or will contain any untrue statement of material fact or omits or will
omit to state a material fact necessary to make any statement of fact contained
herein or therein not materially misleading.
8. Conditions Precedent to Purchaser's Closing: The obligation of Purchaser
to close this transaction is hereby conditioned upon the fulfillment at or prior
to the Closing of the following conditions, unless waived in writing, in whole
or in part, by Purchaser:
a. All representations and warranties of AGP and Robmar made herein
shall be true and correct in all material respects as of the Closing Date as
though made on such date.
b. AGP and Robmar shall have fully complied in all material respects
with all of the terms, covenants and obligations to be performed by them at or
prior to the Closing Date pursuant to the terms of this Agreement and the
Settlement Agreement.
c. Receipt of the requisite approval from the shareholders of AGP in
accordance with applicable law and AGP's Articles of Incorporation and By-laws.
9. Conditions Precedent to AGP's and Robmar's Closing: The obligation of
AGP and Robmar to close this transaction is hereby conditioned upon the
fulfillment at or prior to
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the Closing of the following conditions, unless waived in writing, in whole or
in part, by AGP and Robmar:
a. All representations and warranties of Purchaser made herein shall
be true and correct in all material respects as of the Closing Date as though
made on such date.
b. Purchaser shall have fully complied in all material respects with
all of the terms, covenants and obligations to be performed by it at or prior to
the Closing Date pursuant to the terms of this Agreement and the Settlement
Agreement.
c. Receipt of a fairness opinion from Nutmeg Securities, which shall
state that the consideration to be received by Robmar for the Shares pursuant to
this Agreement is fair from a financial point of view and which shall be
received no later than the date on which AGP is first able to mail to its
shareholders the proxy materials to be used in connection with seeking approval
by AGP's shareholders of this Agreement.
d. Receipt of the requisite approval from the shareholders of AGP in
accordance with applicable law and AGP's Articles of Incorporation and By-laws.
10. Survival of Representations and Warranties:
All of the respective representations and warranties made by AGP,
Robmar and Purchaser herein shall survive the Closing for a period of two (2)
years thereafter.
11. Registration Rights and Lock-Up Agreement.
a. Definitions. For purposes of this Section 11, the following terms
shall have the following meanings:
(i) "Holder" shall mean Robmar and its Permitted Assignee.
(ii) "Mandatory Registration Rights Period" shall mean the period
commencing 12 months and 1 day after the Closing Date and ending on a date
which is 24 months after the Closing Date.
(iii) "Permitted Assignee" shall mean AGP.
(iv) "Piggyback Registration Rights Period" shall mean the period
commencing on the Closing Date and ending on a date which is 12 months
after the Closing Date.
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(v) "Registerable Securities" and "Registerable Shares" shall mean all
shares of Common Stock which are (i) issued to Robmar and (ii) continue to
be held by Robmar or its Permitted Assignee.
(vi) "SEC" shall mean the Securities and Exchange Commission.
(vii) "1933 Act" shall mean the Securities Act of 1933, as amended.
b. Piggyback Registration Rights.
(i) If, during the Piggyback Registration Rights Period, Purchaser
files a registration statement on any SEC Form other than Form S-4 or Form
S-8 (or their respective successors) under the 1933 Act in which any shares
of Common Stock other than Registerable Shares are to be sold, Purchaser
will, prior to such filing, give written notice to the Holder (at its last
known business address) of its intention to do so and, upon the written
request of the Holder given within 10 business days after Purchaser
provides such notice, Purchaser shall use its best efforts to cause all
Registerable Securities which Purchaser has been requested to register by
the Holder to be included in such registration statement; provided,
however, that if such registration statement pertains to an underwritten
offering, then Purchaser shall have the right to postpone or withdraw any
registration effected pursuant to this Section 11(b) without obligation to
the Holder upon the advice of the managing underwriter that such
postponement or withdrawal is in the best interests of Purchaser.
(ii) In connection with any offering under this Section 11(b)
involving an underwriting, Purchaser shall not be required to include any
Registerable Shares in such underwriting unless the Holder accepts the
terms of the underwriting as agreed upon by Purchaser and the underwriter
or underwriters selected by Purchaser (including, without limitation, terms
regarding indemnification by selling shareholders and representations of
selling shareholders). If in the opinion of the managing underwriter the
registration of all or part of the Registerable Shares which the Holder has
requested to be included could adversely affect such public offering, then
Purchaser shall be required to include in the
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underwriting and in such registration statement only that number of
Registerable Shares, if any, which the managing underwriter believes may be
sold without causing such adverse effect. It is understood that no such
reduction shall be made with respect to any securities offered by Purchaser
for its own account.
(iii) In the case of any registration effected pursuant to this
Section 11(b), the Holder shall bear (a) its pro rata portion of any
underwriting discounts and commissions, (b) the fees and costs of its own
counsel if such counsel is other than Purchaser's counsel, (c) all blue sky
filing fees and related expenses incurred in connection with the Holder's
desire to sell the Registerable Shares in any state where Purchaser does
not intend to sell pursuant to such registration statement and (d) Holder's
pro rata portion of any other offering expenses if required by the
securities laws of any state in which the Holder desires to sell the
Registerable Shares.
(iv) It is understood that Purchaser shall not be required to file
more than one registration statement pursuant to this Section 11(b).
c. Mandatory Registration.
(i) If, at any one time and only one time during the Mandatory
Registration Rights Period, the Holder shall give notice to the Purchaser
requesting that Purchaser file with the SEC under the 1933 Act a
registration statement relating to fifty percent (50%) or more of the
Registerable Shares issued to Robmar pursuant to this Agreement, Purchaser
shall as expeditiously as possible file (subject to Section 11(c)(iv)) and
use its best efforts to cause to become effective under the 1933 Act a
registration statement covering such number of Registerable Shares as the
Purchaser has been requested to register for disposition by the Holder or
to the extent required to permit the public sale or other public
disposition thereof for a period of up to nine months by the Holder.
(ii) Purchaser shall pay all costs, expenses, disbursements and fees,
including fees and expenses of Purchaser's counsel and of printing and
furnishing copies of the prospectuses, in connection with the one
registration statement initiated pursuant to the
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provisions of this Section 11(c), and also including all costs, expenses,
disbursements and fees required to keep such registration statement current
for a period of up to nine months, but excluding those costs described in
Section 11(b)(iii) above. Notwithstanding the foregoing, Purchaser shall
not be required to pay for any expenses of any registration proceeding
begun pursuant to this Section 11(c) if the registration request is
subsequently withdrawn by the Holder unless such withdrawal results from a
material decline in the market price of the Common Stock for reasons that
were not foreseen by Purchaser and disclosed to the Holder within 10 days
after the request for such registration is made to Purchaser. If the
Holder's request under this Section 11(c) is made at a time when the
Purchaser's nine month financial statements are no longer usable in a
registration statement pursuant to applicable SEC regulations, but the
Purchaser's year-end financial statements are not yet completed and are not
required to be completed pursuant to applicable SEC regulations, the Holder
shall bear the additional costs and fees of the Purchaser's auditors which
may result from the Purchaser's inability to use year-end financial
statements in the registration statement initially filed pursuant to the
Holder's request, unless the Purchaser would ordinarily be required to
incur such costs to comply with the reporting requirements of the
Securities Exchange Act of 1934, as amended.
(iii) It is understood that Purchaser shall not be required to file
more than one registration statement pursuant to this Section 11(c).
(iv) It is also understood that if the registration statement pertains
to an underwritten offering, Purchaser shall have the right to postpone or
withdraw any registration effected pursuant to this Section 11(c) without
obligation to the Holder upon the advice of the managing underwriter that
such postponement or withdrawal is in the best interests of Purchaser.
d. Indemnification and Contribution.
(1) In connection with any registration statement filed pursuant
to this Section 11, the Purchaser shall indemnify and hold harmless
each of the Holder, its
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officers and directors and each person who controls the Holder within
the meaning of the 1933 Act against any and all losses, claims,
damages or liabilities and expenses whatsoever as incurred, insofar as
such losses, claims, damages, liabilities and expenses arise out of or
are based upon any untrue or alleged untrue statement of material fact
contained in the registration statement, or any prospectus or
preliminary prospectus or any amendment thereof or supplement thereto
or arise out of or are based upon any omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to
reimburse each such indemnified person, as incurred, for any legal or
other expense reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that (i) the Purchaser will not be liable
in any case to the extent that any loss, claim, damage, liability or
expenses arises out of or is based upon any such untrue or alleged
untrue statement or any such omission or alleged omission made therein
in reliance upon and in conformity with written information furnished
to the Purchaser by or on behalf of the Holder specifically for
inclusion therein and (ii) the foregoing indemnity with respect to any
untrue statement or alleged untrue statement or any omission or
alleged omission made in any preliminary prospectus relating to the
registration statement shall not inure to the benefit of the Holder
(or any person controlling it) from whom the person asserting any such
loss, claim, damage or liability purchases any of the Registerable
Securities that are the subject thereof if such person did not receive
a copy of the final prospectus (or the final prospectus as
supplemented) at or prior to the written confirmation of the sale of
such Registerable Securities to such person and the untrue statement
or omission contained in the preliminary prospectus was corrected in
the final prospectus (or the final prospectus as supplemented).
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The Purchaser also agrees to indemnify or contribute to losses
of, as provided in paragraph 4 below, any underwriters of Registerable
Securities registered under the registration statement, their officers
and directors and each person, if any, who controls any such
underwriter (within the meaning of the ▇▇▇▇ ▇▇▇) on substantially the
same basis as that of the indemnification of the Holder provided in
this paragraph and shall, if requested by the Holder, enter into an
underwriting agreement reflecting such agreement.
(2) The Holder shall indemnify and hold harmless the Purchaser,
its directors and officers and each person, if any, who controls the
Purchaser (within the meaning of the ▇▇▇▇ ▇▇▇) against any and all
losses, claims, damages, liabilities and expenses described in the
indemnity contained in paragraph 1 above, as incurred, resulting from
any untrue or alleged untrue statement of material fact contained in
the registration statement or any amendment thereof or supplement
thereto or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading to the extent, but only to the
extent, that such loss, claim, damage, liability or expense relates to
or arises from information relating to the Holder furnished in writing
by the Holder specifically for use in the registration statement;
provided, however, that the obligation to indemnify will be individual
to the Holder and will be limited to the amount of net proceeds
received by the Holder from the sale of Registerable Securities
pursuant to the registration statement.
(3) Any person entitled to indemnification hereunder shall give
notice as promptly as reasonably practicable to each indemnifying
party of any claim or action commenced against it in respect of which
indemnity may be sought hereunder; provided, however, that failure to
so notify an indemnifying party shall not relieve such indemnifying
party from any obligation that it may have pursuant to this Section
except to the extent that it has been materially prejudiced (through
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the forfeiture of substantive rights or defenses) by such failure;
provided further, however, that the failure to notify the indemnifying
party shall not relieve it from any liability that it may have to an
indemnified party otherwise than on account of this indemnity
agreement. If any such claim or action shall be brought against an
indemnified party, the indemnified party shall notify the indemnifying
party thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under
this Section 11 for any legal or other expenses subsequently incurred
by the indemnified party in connection with the defense thereof;
provided, however, that an indemnified party will have the right to
employ its own counsel in any such action, but the fees, expenses and
other charges of such counsel will be at the expense of such
indemnified party unless (1) the employment of counsel by the
indemnified party has been authorized in writing by the indemnifying
party, (2) the indemnified party has reasonably concluded (based on
advice of counsel) that there may be legal defenses available to it or
other indemnified parties that are different from or in addition to
those available to the indemnifying party, (3) a conflict or potential
conflict exists (based on advice of counsel to the indemnified party)
between the indemnified party and indemnifying party (in which case
the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the
indemnifying party has not in fact employed counsel to assume the
defense of such action within a reasonable time after receiving notice
of the commencement of the action, in each of which cases the
reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. It is
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understood that the indemnifying party or parties shall not, in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm of attorneys (in addition
to any local counsel) at any one time for all such indemnified party
or parties. Each indemnified party, as a condition to the indemnity
agreements contained in paragraphs 1 and 2 above, shall use all
reasonable efforts to cooperate with the indemnifying party in the
defense of any such action or claim. No indemnifying party shall be
liable for any settlement or any such action effected without its
written consent, but if settled with its written consent or if there
be a final judgment of the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of
such settlement or judgment. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement
of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such
proceeding.
(4) If a claim by an indemnified party for indemnification under
this Section 11 is found unenforceable in a final judgment by a court
of competent jurisdiction (not subject to further appeal or review)
even though the express provisions hereof provide for indemnification
in such case, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses
in such proportion as is appropriate to reflect the relative fault of
the indemnifying party and indemnified party in connection with the
actions, statements or omissions that resulted in such losses as well
as any other relevant equitable considerations.
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The relative fault of such indemnifying party and indemnified party
shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission of a material fact,
has been taken or made by, or relates to information supplied by, such
indemnifying party or indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such action, statement or omission. The amount paid or payable
by a party as a result of any losses shall be deemed to include,
subject to the limitations set forth in paragraph 3 above, any legal
or other fees or expenses reasonably incurred by such party in
connection with any investigation or proceedings.
The parties hereto agree that it would not be just and equitable
if contribution pursuant to this paragraph 4 were determined by pro
rata allocation or by any other method of allocation that does not
take into account the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of
this Section, an indemnifying party that is the Holder shall not be
required to contribute any amount in excess of the amount by which the
total price at which the Registerable Securities sold by the Holder
and distributed to the public were offered to the public exceeds the
amount of any damages that the Holder has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be
entitled to any contribution from any person who was not guilty of
such fraudulent misrepresentation.
e. Obligations. Whenever required under either Section 11(b) or
Section 11(c) to use its best efforts to effect the registration of any
Registerable Securities, the Purchaser shall, as expeditiously as reasonably
possible:
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(i) Prepare and file with the SEC a registration statement with
respect to such Registerable Securities and use its best efforts to cause
such registration statement to become and remain effective for a period of
up to nine months in the event of a registration statement filed pursuant
to Section 11(c) hereof and 15 months in the event of a registration
statement filed pursuant to Section 11(b) hereof.
(ii) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of
the 1933 Act with respect to the disposition of all securities covered by
such registration statement.
(iii) Furnish to the Holder such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of
the 1933 Act, and such other documents as the Holder may reasonably request
in order to facilitate the disposition of Registerable Securities owned by
it.
(iv) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or blue
sky laws of such jurisdictions as shall be reasonably appropriate for the
distribution of the securities covered by the registration statement;
provided, that the Purchaser shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general
consent to service of process in any such states or jurisdiction.
f. Assignment. The registration rights granted pursuant to this
Section 11 are not assignable other than to the Permitted Assignee.
g. Information. It shall be a condition precedent to the obligations
of the Purchaser under this Section 11 that the Holder shall furnish to
Purchaser such information regarding it, the Registerable Shares and the
intended method of disposition of such securities as the Purchaser or any
underwriter shall reasonably request and as shall be required in connection with
the action to be taken by the Purchaser.
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h. Limitation. Notwithstanding any provision herein to the contrary,
the Holder shall not have the right to cause any Registerable Shares to be
registered pursuant to this Section 11 if the Purchaser shall have received a
written statement from the SEC to the effect that the staff of the SEC will take
no action if such Registerable Shares are sold without registration under the
1933 Act or if, in the written opinion of counsel to Purchaser, the Registerable
Shares desired to be sold by the Holder may, at the time a registration request
is made by the Holder, be sold in accordance with Rule 144 of the SEC within any
ninety day period or may otherwise be sold without registration under the 1933
Act.
i. Lock-Up. Notwithstanding the registration rights granted above, the
Holder agrees that in the event of a registration effected pursuant to paragraph
(b) above, it will not sell any Registerable Shares pursuant to the registration
statement for a period of 90 days after the effectiveness of such registration
statement, after which the Holder shall be permitted to sell an additional 25%
of its Registerable Shares during each subsequent 90 day period. In the event of
a registration effected pursuant to paragraph (c) above, the Holder will not be
subject to any lock-up restriction on its ability to sell the Registerable
Securities.
12. Entire Agreement: This Agreement together with the related exhibits,
schedules and other documents referred to herein (including without limitation
the Settlement Agreement), constitutes the entire understanding between the
parties hereto with respect to the sale of the Shares. This Agreement may not be
amended except by an instrument in writing, duly executed by all the parties
hereto. All representations, warranties, covenants, terms, conditions and
provisions of this Agreement shall be binding upon and inure to the benefit of
the respective representatives, successors and assigns of the parties hereto.
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13. Press Release: AGP, upon execution of this Agreement, shall immediately
publish a press release announcing the transaction contemplated by this
Agreement, which press release shall be reviewed in advance by Purchaser. Upon
the execution of this Agreement and the occurrence of the Closing, AGP shall
make all required regulatory filings, including without limitation any filings
with the Securities and Exchange Commission.
14. The Law of the Contract: This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New Jersey.
15. Notices: All notices, requests, waivers, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if sent by United States certified or registered mail, postage
prepaid, return receipt requested:
AGP: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: President
Robmar: c/o AGP and Company, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: President
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Hall, Dickler, Kent, ▇▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Purchaser: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: President
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇▇, Sandler, Kohl, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
or such other addresses as shall be specified from time to time (in compliance
with the requirements of this Section 15 for the giving of notice) by the
parties entitled to receive such notices.
16. Counterparts: This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one instrument.
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17. Pronouns: Pronouns used herein shall be deemed to include the
masculine, feminine or neuter, singular or plural, as their contexts may
require.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written and intending to be fully bound, hereby
accept and agree to all of the foregoing terms.
SOCIAL EXPRESSIONS
ACQUISITION CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
▇▇▇▇ ▇▇▇▇▇▇, President
AGP AND COMPANY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Pres.
ROBMAR CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
▇▇▇▇ ▇▇▇▇▇▇, President
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Dated:____________________
SUBORDINATED PROMISSORY NOTE
$2,500,000 New York, New York
For value received, Social Expressions Corporation, a Delaware Corporation
with offices at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the
"Obligor"), hereby executes this Subordinated Promissory Note (the "Note"), and
promises to pay to the order of Robmar Corporation (the "Holder"), c/o AGP and
Company, Inc. at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, in lawful
money of the United States of America, in immediately available funds, the
principal sum of TWO MILLION FIVE HUNDRED THOUSAND dollars ($2,500,000) (the
"Principal Amount"), plus interest at the rate of ten percent (10%) per annum as
follows:
(a) No payments will be due under this Note from the date hereof until
___________, 1997, and there shall be no accrual of interest during such period;
(b) Beginning on ___________, 1997 and ending on ___________, 1998,
Obligor will make 12 monthly payments of interest only on the Principal Amount
at the interest rate set forth above; and
(c) Beginning on ___________, 1998 and continuing monthly thereafter
through and including ___________, 2006 (the "Maturity Date"), the Principal
Amount, together with all interest accruing thereon, shall be paid on a
self-amortizing basis by paying 96 level payments of $____. The unpaid balance,
if any, of the Principal Amount, together with all accrued but unpaid interest
on the Principal Amount, shall be due and payable on the Maturity Date.
1. The obligation of Obligor evidenced by this Note, and all payments due
hereunder, are subordinate to all existing secured institutional indebtedness of
the Obligor, as of the date of issuance hereof and to all secured institutional
indebtedness which Obligor may incur hereafter.
2. As used herein, secured institutional indebtedness means any borrowing,
credit facility or obligation otherwise owed to a bank, savings bank, trust
company, insurance company, investment firm or other entities in the business of
making commercial loans, which borrowing, credit facility or obligation is
secured by collateral. The Obligor shall have the right to renew or extend its
present credit facilities, to refinance them and to incur new secured
institutional indebtedness, all of which obligations shall be senior to this
Note, without the consent of the Holder. The Obligor's right to incur unsecured
indebtedness shall remain unaffected by this Note.
3. The Holder shall have no claims against individuals for liability
imposed, by statute or otherwise, upon present or future stockholders, directors
or officers of the Obligor.
4. There are no conditions of default which shall have the effect of giving
the Holder the right to accelerate the Maturity Date hereof or any of the
payments described under this Note other than Obligor's failure to make any
required payment when due under this Note, provided that such failure to pay has
not been cured within 30 days after the applicable due date.
5. The Obligor reserves the right to pay all or any portion of the
Principal Amount of this Note at any time, and to redeem said Note in accordance
with the Stock Purchase Agreement, dated October __, 1996, among the Obligor,
the Holder and AGP and Company, Inc.
6. This Note shall be binding on the Obligor and its successors and
assigns.
SOCIAL EXPRESSIONS
ACQUISITION CORPORATION
By:_________________________
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