SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
(Rule 13d-101)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. __)
OneWave, Inc.
---------------------
(Name of Issuer)
Common Stock, par value $.001 per share
--------------------------------------------
(Title of Class of Securities)
68272R108
---------------------------
(CUSIP Number)
With copies to:
Mr. Martin Mengwall Richard R. Plumridge, Esq.
Avix Ventures, L.P. Brobeck, Phleger & Harrison LLP
160 West 66th Street 1633 Broadway, 47th Floor
Suite 47D New York, NY 10019
New York, NY 10023 (212) 581-1600
(212) 579-6965
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
April 22, 1997
---------------------------------------------
(Date of Event Which Requires Filing
of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box /_/.
Note. Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
(Continued on following pages)
Page 1 of 56 Pages
Exhibit Index Appears on Page 12
<PAGE>
CUSIP No. 68272R108 13D Page 2 of 56 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Avix Ventures, L.P.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /x/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS PF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS / /
IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
- --------------------------------------------------------------------------------
NUMBER 7 SOLE VOTING POWER 0 shares
OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER 7,748,871 shares
OWNED
BY --------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER 0 shares
REPORTING
PERSON --------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER 7,748,871 shares
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7,748,871 shares
- --------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES / /
CERTAIN SHARES
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 51.7%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON PN
- --------------------------------------------------------------------------------
<PAGE>
CUSIP No. 68272R108 13D Page 3 of 56 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Avix Associates, L.P., as general partner of Avix Ventures, L.P.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /x/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS / /
IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
- --------------------------------------------------------------------------------
NUMBER 7 SOLE VOTING POWER 0 shares
OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER 7,748,871 shares
OWNED
BY --------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER 0 shares
REPORTING
PERSON --------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER 7,748,871 shares
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7,748,871 shares
- --------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES / /
CERTAIN SHARES
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 51.7%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON PN
- --------------------------------------------------------------------------------
<PAGE>
CUSIP No. 68272R108 13D Page 4 of 56 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Kevin Azzouz, as general partner of Avix Associates, L.P.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /x/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS / /
IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION United States
- --------------------------------------------------------------------------------
NUMBER 7 SOLE VOTING POWER 0 shares
OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER 7,748,871 shares
OWNED
BY --------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER 0 shares
REPORTING
PERSON --------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER 7,748,871 shares
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7,748,871 shares
- --------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES / /
CERTAIN SHARES
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 51.7%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON IN
- --------------------------------------------------------------------------------
<PAGE>
CUSIP No. 68272R108 13D Page 5 of 56 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Lennart Mengwall, as general partner of Avix Associates, L.P.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /x/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS / /
IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION Sweden
- --------------------------------------------------------------------------------
NUMBER 7 SOLE VOTING POWER 20,000 shares
OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER 7,748,871 shares
OWNED
BY --------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER 20,000 shares
REPORTING
PERSON --------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER 7,748,871 shares
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7,768,871 shares
- --------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES / /
CERTAIN SHARES
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 51.8%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON IN
- --------------------------------------------------------------------------------
<PAGE>
Preliminary Note
This Schedule 13D is filed on behalf of a group within the meaning of
Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), consisting of Avix Ventures, L.P., Avix Associates, L.P., Kevin Azzouz
and Lennart Mengwall (together, the "Reporting Persons"). Pursuant to the Stock
Purchase Agreement (the "Stock Purchase Agreement") dated as of April 22, 1997
by and among Avix Ventures, L.P., a Delaware limited partnership ("Avix" or the
"Purchaser") and Appleby Trust, by Harrington Trust Limited, as Trustee, J&S
Limited Partnership, Legacy Investment Partnership and Sundar Subramaniam
(collectively, the "Sellers"), the Sellers have agreed to sell to Avix an
aggregate of 7,748,871 shares (the "Shares") of common stock, par value $.001
per share (the "Common Stock"), of OneWave, Inc., a Delaware corporation (the
"Issuer"). A copy of the Stock Purchase Agreement is filed as Exhibit A hereto.
The Stock Purchase Agreement contemplates that until the closing of the
sale contemplated thereby, and in the event that any matters are brought before
the stockholders of the Issuer for a vote, either at the Issuer's annual meeting
of stockholders or otherwise, the Sellers shall (i) attend or decline to attend
such meeting for purposes of determining the presence of a quorum thereat and
(ii) vote the Shares at such annual meeting or otherwise, in each case as
instructed by Avix. Therefore, as a result of the Stock Purchase Agreement and
as set forth herein, the Purchaser and the Sellers have agreed to take certain
actions which seek to direct or cause the direction of the management of the
Issuer and may vote their shares of Common Stock, in a manner consistent with
each other.
The Reporting Persons may be deemed to be acting together for the purpose
of acquiring, holding, voting or disposing of shares of Common Stock, within the
meanings of Section 13(d)(3) of the Exchange Act and Rule 13d-5 under the
Exchange Act. An Agreement to File a Joint Statement on Schedule 13D among the
Reporting Persons authorizing that this Schedule 13D be filed on behalf of each
of them is annexed as Exhibit B to this Schedule 13D.
On even date herewith, the Sellers are filing a Schedule 13D to reflect
the information contained herein and to amend statements made on a
previously-filed Schedule 13G. The Reporting Persons, on the one hand, and the
Sellers, on the other hand, may be deemed to be acting together for the purpose
of acquiring, holding, voting or disposing of shares of Common Stock, within the
meanings of Section 13(d)(3) of the Exchange Act and Rule 13d-5 under the
Exchange Act. However, the Reporting Persons disclaim that they are acting
together with the Sellers except as otherwise indicated herein.
Item 1. Security and Issuer.
This Statement on Schedule 13D relates to shares of Common Stock, $0.001
par value per share (the "Common Stock"), of OneWave, Inc., a Delaware
corporation (the "Issuer"), whose principal executive offices are located at One
Arsenal Marketplace, Watertown, MA 02172.
Page 6 of 56 Pages
<PAGE>
Item 2. Identity and Background.
(a)-(c) and (f) This Statement on Schedule 13D is filed on behalf of Avix
Ventures, L.P., Avix Associates, L.P., Kevin Azzouz and Lennart Mengwall
(collectively, the "Reporting Persons"). The following table sets forth the
name, the State or other place of organization, the principal business, the
address of such principal business and the address of the principal office of
each of Avix Ventures, L.P. and Avix Associates, L.P. Further, the following
table sets forth the names, addresses, principal occupations and citizenship of
Messrs. Azzouz and Mengwall.
Name: Avix Ventures, L.P.
State of organization: Delaware
Principal business: Venture capital investment
Address of principal business: 160 West 66th Street
Suite 47D
New York, New York 10023
Address of principal office: 160 West 66th Street
Suite 47D
New York, New York 10023
Name: Avix Associates, L.P.
State of organization: Delaware
Principal business: Venture capital investment
Address of principal business: 160 West 66th Street
Suite 47D
New York, New York 10023
Address of principal office: 160 West 66th Street
Suite 47D
New York, New York 10023
Name: Kevin Azzouz
Principal business or
residential address: 2176 Alaqua Drive
Longwood, Florida 32776
Principal occupation
or employment: Private Investor
Citizenship: United States of America
Name: Lennart Mengwall
Principal business or
residential address: 20 Shady Acres
Darien, Connecticut 06820
Principal occupation
or employment: Private Investor
Citizenship: Sweden
Page 7 of 56 Pages
<PAGE>
(d)-(e) During the five years prior to the date hereof, none of the
Reporting Persons (i) has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or (ii) has been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction, as a
result of which such person was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, Federal or state securities laws or finding any violation with
respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
On April 22, 1997, Avix Ventures, L.P. entered into an agreement (the
"Agreement") with each of Mr. Sundar Subramaniam, J&S Limited Partnership,
Harrington Trust Limited, as Trustee of The Appleby Trust, and Legacy Investment
Partnership (collectively, the "Sellers"), to purchase an aggregate of Seven
Million Seven Hundred Forty Eight Thousand Eight Hundred Seventy One (7,748,871)
shares of Common Stock of the Issuer with personal funds. The closing of the
sale and purchase of the aforementioned shares of Common Stock is contingent
upon the satisfaction or waiver of certain conditions. Pursuant to the terms of
the agreement, the Sellers have agreed to vote their shares of Common Stock in
accordance with the instructions of the Reporting Persons and to cooperate with
the Reporting Persons with respect to similar matters relating to the record
ownership of the Sellers' Common Stock. The actions described in Item 4 of this
Schedule 13D are in furtherance of such obligation.
Item 4. Purpose of Transaction.
The Reporting Persons intend to acquire the shares of Common Stock of the
Issuer as an investment in the Issuer.
On April 24, 1997, in connection with the Agreement, Legacy Investment
Partnership informed the Issuer by letter (the "Notice") of its intent to
nominate, at the next scheduled annual meeting of the stockholders of the
Issuer, for a slate of directors consisting of Mr. Kevin Azzouz and Mr. Lennart
Mengwall, general partners of Avix Associates L.P., and to adopt any amendments
to the By-Laws of the Issuer as may be necessary to accomplish such action.
In connection with the intentions set forth in the Notice, the Reporting
Persons anticipate that the Sellers may contact and confer periodically with the
Issuer or others, including other stockholders of the Issuer, as appropriate, to
discuss matters relating to the Issuer, including the matters the subject of the
Notice, or may take any other action which will maximize the value of the Common
Stock for all stockholders.
Although the Reporting Persons have not formulated any definitive plans
other than those set forth above, they may from time to time acquire, or dispose
of, Common Stock and/or other securities of the Issuer if and when they deem it
appropriate, subject to the restrictions imposed by Section 16 of the Securities
Exchange Act of 1934, as amended (the "Act"). The Reporting Persons
Page 8 of 56 Pages
<PAGE>
may formulate other purposes, plans or proposals relating to any of such
securities of the Issuer to the extent deemed advisable in light of market
conditions, investment policies and other factors.
Except as indicated in this Schedule 13D, the Reporting Persons currently
have no plans or proposals that relate to or would result in any of the other
matters described in subparagraphs (a) through (j) of Item 4 of Schedule 13D. In
the future, however, the Reporting Persons reserve the right to adopt such plans
or proposals.
Item 5. Interest in Securities of the Issuer.
(a) Mr. Lennart Mengwall beneficially owns 20,000 shares of the Common
Stock of the Issuer; the other Reporting Persons beneficially own no shares of
the Common Stock of the Issuer.
(b) The Reporting Persons have shared power to vote 7,748,871 shares of
Common Stock of the Issuer, which amount includes 2,738,437 shares of Common
Stock of the Issuer held by Mr. Sundar Subramaniam, 981,978 shares of Common
Stock of the Issuer held by J&S Limited Partnership, 2,722,123 shares of Common
Stock of the Issuer held by Harrington Trust Limited, as Trustee of The Appleby
Trust, and 1,306,333 shares of Common Stock of the Issuer held by Legacy
Investment Partnership.
(c) On April 22, 1997, Avix Ventures, L.P. entered into the Agreement with
the Sellers to purchase an aggregate of Seven Million Seven Hundred Forty Eight
Thousand Eight Hundred Seventy One (7,748,871) shares of Common Stock of the
Issuer with personal funds. The closing of the sale and purchase of the
aforementioned shares of Common Stock is contingent upon the satisfaction or
waiver of certain conditions.
(d) Each of the Sellers has the right to receive or the power to direct
the receipt of dividends from the shares of Common Stock of the Issuer
respectively held by such Sellers.
(e) Inapplicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with respect to
Securities of the Issuer.
Reference is made to the Preliminary Note set forth on page 6 of this
Schedule 13D and to the information set forth in response to Items 4 and 5 of
this Schedule 13D for information relating to the existence of certain
contracts, arrangements, understandings or relationships among the Reporting
Persons and the Sellers, which information is incorporated by reference herein.
On April 22, 1997, Avix Ventures, L.P. entered into the Agreement with the
Sellers to purchase an aggregate of Seven Million Seven Hundred Forty Eight
Thousand Eight Hundred Seventy One (7,748,871) shares of Common Stock of the
Issuer with personal funds. The closing of the sale and purchase of the
aforementioned shares of Common Stock is contingent upon the
Page 9 of 56 Pages
<PAGE>
satisfaction or waiver of certain conditions. Until the closing of such sale,
and pursuant to the terms of the agreement, the Sellers have agreed to vote
their shares of Common Stock in accordance with the instructions of the
Reporting Persons and to cooperate with the Reporting Persons with respect to
similar matters relating to the record ownership of the Sellers' Common Stock.
Item 7. Material to be Filed as Exhibits.
Exhibit 1: Stock Purchase Agreement dated as of April 22, 1997 between
Avix Ventures, L.P. and the Sellers.
Exhibit 2: Agreement to File a Joint Statement on Schedule 13D among the
Reporting Persons.
Page 10 of 56 Pages
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
Date: May 2, 1997
AVIX VENTURES, L.P.
By: AVIX ASSOCIATES, L.P., its general partner
/S/Lennart Mengwall
--------------------------------------------
By: Lennart Mengwall
Title: General Partner
AVIX ASSOCIATES, L.P.
/S/Lennart Mengwall
--------------------------------------------
By: Lennart Mengwall
Title: General Partner
/S/Kevin Azzouz
--------------------------------------------
Kevin Azzouz, as a General Partner of Avix
Associates, L.P.
/S/Lennart Mengwall
--------------------------------------------
Lennart Mengwall, as a General Partner of Avix
Associates, L.P.
Page 11 of 56 Pages
<PAGE>
EXHIBIT INDEX
Sequentially
Exhibit Numbered Page
- ------- -------------
Exhibit 1 Stock Purchase Agreement dated as of April 22,
1997 between Avix Ventures, L.P. and the Sellers. 13
Exhibit 2 Agreement to File a Joint Statement on Schedule 13D 56
among the Reporting Persons.
Page 12 of 56 Pages
<PAGE>
EXHIBIT 1
STOCK PURCHASE AGREEMENT
AMONG
AVIX VENTURES, L.P. ("PURCHASER")
AND
APPLEBY TRUST, BY
HARRINGTON TRUST LIMITED, AS TRUSTEE,
J&S LIMITED PARTNERSHIP,
LEGACY INVESTMENT PARTNERSHIP,
SUNDAR SUBRAMANIAM (THE "SELLERS")
Dated as of April 22, 1997
Page 13 of 56 Pages
<PAGE>
TABLE OF CONTENTS
Page
----
1. Sale and Purchase of Shares.......................................... 1
1.1 Sale and Purchase of Shares................................. 1
2. Purchase Price and Payment........................................... 1
2.1 Purchase Price and Payment.................................. 1
2.2 Contingent Purchase Price................................... 2
2.3 Arbitrator's Adjustment..................................... 2
3. Closing and Termination.............................................. 3
3.1 Closing Date................................................ 3
3.2 Termination of Agreement.................................... 3
3.3 Procedure Upon Termination.................................. 4
3.4 Effect of Termination....................................... 4
4. Representations and Warranties of the Sellers........................ 4
4.1 Organization and Good Standing.............................. 5
4.2 Authorization of Agreement.................................. 5
4.3 Conflicts; Consents of Third Parties........................ 5
4.4 Ownership and Transfer of Shares............................ 6
4.5 Related Party Transactions.................................. 6
4.6 No Misrepresentation........................................ 6
4.7 Litigation.................................................. 7
4.8 Financial Advisors.......................................... 7
5. Representations and Warranties of Purchaser.......................... 7
5.1 Organization and Good Standing.............................. 7
5.2 Authorization of Agreement.................................. 7
5.3 Conflicts; Consents of Third Parties........................ 8
5.4 Litigation.................................................. 8
5.5 Financial Advisors.......................................... 8
5.6 Investment Experience, Investment Intent, Etc............... 8
6. Covenants............................................................ 9
6.1 Consents.................................................... 9
6.2 Other Actions............................................... 10
6.3 No Solicitation............................................. 10
6.4 Publicity................................................... 10
6.5 Repayment of Loans.......................................... 11
6.6 Irrevocable Proxy........................................... 11
Page 14 of 56 Pages
<PAGE>
7. Conditions to Closing................................................ 11
7.1 Conditions Precedent to Obligations of
Purchaser................................................. 11
7.2 Conditions Precedent to Obligations of
the Sellers............................................... 12
8. Documents to be Delivered............................................ 13
8.1 Documents to be Delivered by the Sellers.................... 13
8.2 Documents to be Delivered by Purchaser...................... 13
9. Miscellaneous........................................................ 14
9.1 Certain Definitions......................................... 14
9.2 Payment of Sales, Use or Similar Taxes...................... 16
9.3 Survival of Representations and Warranties.................. 16
9.4 Costs and Expenses.......................................... 16
9.5 Specific Performance........................................ 16
9.6 Further Assurances.......................................... 16
9.7 Entire Agreement; Amendments and Waivers.................... 17
9.8 Governing Law............................................... 17
9.9 Table of Contents and Headings.............................. 17
9.10 Notices..................................................... 17
9.11 Severability................................................ 18
9.12 Binding Effect; Assignment.................................. 18
9.13 Sellers' Representative..................................... 19
9.14 Counterparts................................................ 19
ANNEXES
ANNEX A Schedule of Sellers and Purchase Price for Shares
EXHIBITS
EXHIBIT A Form of Non-Recourse Promissory Note
EXHIBIT B Form of Pledge Agreement
SCHEDULES
Schedule 4.4 Liens
Schedule 4.5 Related Party Transactions
Schedule 4.8 Financial Advisors
Page 15 of 56 Pages
<PAGE>
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (the "Agreement") is made as of the 22nd
day of April, 1997, by and among Avix Ventures, L.P. ("Purchaser") and Appleby
Trust, by Harrington Trust Limited, as trustee, J&S Limited Partnership, Legacy
Investment Partnership and Sundar Subramaniam (the "Sellers").
W I T N E S S E T H:
WHEREAS, the Sellers own an aggregate of 7,748,871 shares of common
stock, $.001 par value per share (the "Shares") of OneWave, Inc., a Delaware
corporation (the "Company"); and
WHEREAS, the Sellers desire to sell to Purchaser, and Purchaser
desires to purchase from the Sellers, the Shares for the purchase price and upon
the terms and conditions hereinafter set forth; and
WHEREAS, certain terms used in this Agreement are defined in Section
9.1;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter contained, the parties hereby agree as
follows:
ARTICLE I
SALE AND PURCHASE OF SHARES
1.1 Sale and Purchase of Shares. Upon the terms and subject to the
conditions contained herein, on the Closing Date, each Seller shall sell,
assign, transfer, convey and deliver to Purchaser, and Purchaser shall purchase
from each Seller, the Shares of such Seller set forth opposite such Seller's
name on Annex A hereto.
ARTICLE II
PURCHASE PRICE AND PAYMENT
2.1 Purchase Price and Payment. The purchase price for the Shares
shall be an aggregate amount equal to $8,000,000 (the "Purchase Price"), subject
to adjustment as provided in Section 2.3 below. The Purchase Price shall be paid
as follows: (i) $3,000,000 in cash to be paid at the Closing in the form of a
wire transfer, (ii) $3,000,000 to be paid in the form of a Non-Recourse
Promissory Note due six months from the Closing Date substantially in the form
of Exhibit A hereto and (iii) $2,000,000 to be paid in the form of a
Non-Recourse Promissory Note, substantially in the form of Exhibit A hereto
except that
Page 16 of 56 Pages
<PAGE>
such note shall be due 36 months from the Closing Date (subject to a reduction
in the maturity date as provided in Section 2.3 below). The Non-Recourse
Promissory Notes will be secured by a Pledge Agreement, substantially in the
form of Exhibit B hereto. The cash purchase price to be paid to each Seller
shall be equal to the total purchase price multiplied by the percentage interest
owned by each respective Seller (the "Seller's Percentage Interest"), as set
forth opposite each Seller's name on Annex A hereto; the Non-Recourse Promissory
Notes will be paid to John J. Donovan, Jr., as agent for the Sellers.
2.2 Contingent Purchase Price. In the event that Purchaser sells any
of the Shares being purchased hereunder, the Sellers shall be entitled to
receive an additional payment, to be paid within ten (10) days after such sale,
equal in the aggregate to (i) 15% of the proceeds, net of commissions and
selling costs (the "net proceeds"), received by Purchaser in such sale in excess
of $5 per share and (ii) an additional 5% of the net proceeds received by
Purchaser in such sale in excess of $10 per share. In each case, (i) the
Purchaser shall pay the additional payment to the Sellers either in cash or in
property, depending on the type of consideration received by the Purchaser at
the time such shares are sold, (ii) each individual Seller shall receive an
amount equal to the total amount of the additional payment multiplied by such
Seller's Percentage Interest, unless the Sellers and Purchaser mutually agree
otherwise and (iii) the per share prices in the preceding sentence shall be
adjusted in the event of that the Company declares and effectuates a stock
dividend, stock split, reverse stock split or recapitalization. All certificates
for Shares registered in the name of the Purchaser or its nominee shall bear an
appropriate legend making reference to the Sellers' rights under this Section
2.2.
2.3 Arbitrator's Adjustment. On the date which is 17 months after
the Closing Date, each of Purchaser and the Sellers shall submit to James G.
Nondorf or, in the event Mr. Nondorf is unable or unwilling to serve, to a
successor arbitrator designated by Mr. Nondorf if he is able to do so or jointly
by Purchaser and the Sellers if he is unable to do so (in either case, the
"Arbitrator") such information as it or they deem relevant to an evaluation of
the economic and other benefits to the Purchaser of its ownership of the Shares.
In his sole discretion, based on the information submitted to him by Purchaser
and the Sellers and on such other information, if any, as the Arbitrator deems
relevant, the Arbitrator, by written notice to Purchaser and the Sellers, may,
but is under no obligation to, (i) shorten, to a date not earlier than a date 18
months following the Closing Date, the due date of the $2,000,000 Non-Recourse
Promissory Note referred to in Section 2.1(iii) above and/or (ii) increase the
amount of contingent consideration payable pursuant to Section 2.2 above by an
amount equal to up to 10% of the net proceeds received by the Purchaser in any
sale of the Shares for a price in excess of $2.00 per share but less than or
equal to $5.50 per share, which additional contingent consideration shall be
payable when and as the contingent consideration payable pursuant to Section 2.2
shall be payable. The Arbitrator shall be free to exercise his independent
discretion in determining whether any adjustment pursuant to this Section 2.3
shall be appropriate. The determination of the Arbitrator hereunder shall be
final and non-appealable and shall be binding upon Purchaser and the Sellers.
Page 17 of 56 Pages
<PAGE>
ARTICLE III
CLOSING AND TERMINATION
3.1 Closing Date. Subject to the satisfaction of the conditions set
forth in Sections 7.1 and 7.2 hereof (or the waiver thereof by the party
entitled to waive that condition), the closing of the sale and purchase of the
Shares provided for in Section 1(A) hereof (the "Closing") shall take place at
the offices of Brobeck, Phleger & Harrison, New York, New York, at 10:00 a.m.,
on May 15, 1997, or at such other time and place as Purchaser and the Sellers
shall mutually agree. The date on which the Closing shall be held is referred to
in this Agreement as the "Closing Date". At the Closing, each Seller shall
deliver to Purchaser a certificate or certificates representing the Shares that
Purchaser is purchasing from such Seller, against payment of the purchase price
therefor by check, wire transfer, or such other form of payment as shall be
mutually agreed upon by Purchaser and such Seller.
3.2 Termination of Agreement. This Agreement may be terminated prior
to the Closing as follows:
(a) At the election of Purchaser on or after June 15, 1997, if the
Closing shall not have occurred by the close of business on such date, provided
that Purchaser is not in default of any of its obligations hereunder;
(b) by mutual written consent of the Sellers' Representative and
Purchaser; or
(c) by the Sellers' Representative or Purchaser if there shall be in
effect a final nonappealable Order of a Governmental Body of competent
jurisdiction restraining, enjoining or otherwise prohibiting the consummation of
the transactions contemplated hereby; it being agreed that the parties hereto
shall promptly appeal any adverse determination which is not nonappealable (and
pursue such appeal with reasonable diligence).
3.3 Procedure Upon Termination. In the event of termination and
abandonment by Purchaser or the Sellers, or both, pursuant to Section 3.2
hereof, written notice thereof shall forthwith be given to the other party or
parties, and this Agreement shall terminate, and the purchase of the Shares
hereunder shall be abandoned, without further action by Purchaser or the
Sellers. If this Agreement is terminated as provided herein each party shall
redeliver all documents, work papers and other material of any other party
relating to the transactions contemplated hereby, whether so obtained before or
after the execution hereof, to the party furnishing the same.
3.4 Effect of Termination. In the event that this Agreement is
validly terminated as provided herein, then each of the parties shall be
relieved of their duties and obligations arising under this Agreement after the
date of such termination and such termination shall be without liability to
Purchaser or any Seller; provided, however, that the obligations of the parties
set forth in Section 9.4 hereof shall survive any such termination
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and shall be enforceable hereunder; provided, further, however, that nothing in
this Section 3.4 shall relieve Purchaser or any Seller of any liability for a
breach of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers hereby, jointly and not severally, represent and warrant
to Purchaser that:
4.1 Organization and Good Standing.
If such Seller is a corporate entity, it is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. If such Seller is a partnership, it is a
partnership duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization. If such Seller is a trust, it is a
trust duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization.
4.2 Authorization of Agreement. Such Seller has all requisite power,
authority and legal capacity to execute and deliver this Agreement and each
other agreement, document, or instrument or certificate contemplated by this
Agreement or to be executed by such Seller in connection with the consummation
of the transactions contemplated by this Agreement (together with this
Agreement, the "Seller Documents"), and to consummate the transactions
contemplated hereby and thereby. This Agreement has been, and each of the Seller
Documents will be at or prior to the Closing, duly and validly executed and
delivered by such Seller and (assuming the due authorization, execution and
delivery by the other parties hereto and thereto) this Agreement constitutes,
and each of the Seller Documents when so executed and delivered will constitute,
legal, valid and binding obligations of such Seller, enforceable against such
Seller in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally, and subject, as to enforceability, to
general principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
4.3 Conflicts; Consents of Third Parties. (a) None of the execution
and delivery by such Seller of this Agreement and the Seller Documents, the
consummation of the transactions contemplated hereby or thereby, or compliance
by such Seller with any of the provisions hereof or thereof will (i) conflict
with, or result in the breach of, any provision of the certificate of
incorporation or by-laws or comparable organizational documents of such Seller;
(ii) conflict with, violate, result in the breach or termination of, or
constitute a default under any note, bond, mortgage, indenture, license,
agreement or other instrument or obligation to which such Seller is a party or
by which it or any of its properties or assets is bound; (iii) violate any
statute, rule, regulation, order or decree of any govern-
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mental body or authority by which such Seller is bound; or (iv) result in the
creation of any Lien upon the properties or assets of such Seller except, in
case of clauses (ii), (iii) and (iv), for such violations, breaches or defaults
as would not, individually or in the aggregate, have a Material Adverse Effect.
(b) No consent, waiver, approval, Order, Permit or authorization of,
or declaration or filing with, or notification to, any Person or Governmental
Body is required on the part of such Seller or the Company in connection with
the execution and delivery of this Agreement or the Seller Documents, or the
compliance by such Seller or the Company as the case may be, with any of the
provisions hereof or thereof.
4.4 Ownership and Transfer of Shares. Such Seller is the record and
beneficial owner of the Shares indicated as being owned by such Seller on Annex
A hereto, free and clear of any and all Liens, except for Liens described on
Schedule 4.4 hereof, which Liens shall be discharged prior to Closing and
evidence of such discharge shall be provided to the Purchaser. Such Seller has
the power and authority to sell, transfer, assign and deliver such Shares as
provided in this Agreement, and such delivery will convey to Purchaser good and
marketable title to such Shares, free and clear of any and all Liens.
4.5 Related Party Transactions. Except as set forth on Schedule 4.5
hereto, neither such Seller nor any of its Affiliates has borrowed any moneys
from or has outstanding any indebtedness or other similar obligations to the
Company. Except as set forth in Schedule 4.5 hereto, neither such Seller, any
Affiliate of such Seller nor any officer or employee of any of them (i) owns any
direct or indirect interest of any kind in, or controls or is a director,
officer, employee or partner of, or consultant to, or lender to or borrower from
or has the right to participate in the profits of, any Person which is (A) a
competitor, supplier, customer, landlord, tenant, creditor or debtor of the
Company, (B) engaged in a business related to the business of the Company or (C)
a participant in any transaction to which the Company is a party or (ii) is a
party to any Contract with the Company.
4.6 No Misrepresentation. No representation or warranty of such
Seller contained in this Agreement or in any schedule hereto or in any
certificate or other instrument furnished by such Seller to Purchaser pursuant
to the terms hereof, contains any untrue statement of a material fact or omits
to state a material fact necessary to make the statements contained herein or
therein not misleading.
4.7 Litigation. There are no Legal Proceedings pending or, to the
best knowledge of such Seller, threatened that are reasonably likely to prohibit
or restrain the ability of such Seller to enter into this Agreement or
consummate the transactions contemplated hereby.
4.8 Financial Advisors. Except as set forth on Schedule 4.8 hereof,
no Person has acted, directly or indirectly, as a broker, finder or financial
advisor for such Seller, or to the best of such Seller's knowledge, any of the
other Sellers, in connection with
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the transactions contemplated by this Agreement and no Person is entitled to any
fee or commission or like payment in respect thereof.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to the Sellers that:
5.1 Organization and Good Standing. Purchaser is a limited
partnership duly organized, validly existing and in good standing under the laws
of the State of Delaware.
5.2 Authorization of Agreement. Purchaser has full partnership power
and authority to execute and deliver this Agreement, the Non-Recourse Promissory
Notes, the Pledge Agreement and each other agreement, document, instrument or
certificate contemplated by this Agreement or to be executed by Purchaser in
connection with the consummation of the transactions contemplated hereby and
thereby (the "Purchaser Documents"), and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance by
Purchaser of this Agreement and each Purchaser Document have been duly
authorized by all necessary partnership action on behalf of Purchaser. This
Agreement has been, and each Purchaser Document will be at or prior to the
Closing, duly executed and delivered by Purchaser and (assuming the due
authorization, execution and delivery by the other parties hereto and thereto)
this Agreement constitutes, and each Purchaser Document when so executed and
delivered will constitute, legal, valid and binding obligations of Purchaser,
enforceable against Purchaser in accordance with their respective terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium and similar
laws affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
5.3 Conflicts; Consents of Third Parties.
(a) Neither the execution and delivery by Purchaser of this
Agreement and of the Purchaser Documents, nor the compliance by Purchaser with
any of the provisions hereof or thereof will (i) conflict with, or result in the
breach of, any provision of the partnership agreement of Purchaser, (ii)
conflict with, violate, result in the breach of, or constitute a default under
any note, bond, mortgage, indenture, license, agreement or other obligation to
which Purchaser is a party or by which Purchaser or its properties or assets are
bound or (iii) violate any statute, rule, regulation, order or decree of any
governmental body or authority by which Purchaser is bound, except, in the case
of clauses (ii) and (iii), for such violations, breaches or defaults as would
not, individually or in the aggregate, have a material adverse effect on the
business, properties, results of operations, prospects, conditions (financial or
otherwise) of Purchaser.
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(b) No consent, waiver, approval, Order, Permit or authorization of,
or declaration or filing with, or notification to, any Person or Governmental
Body is required on the part of Purchaser in connection with the execution and
delivery of this Agreement or the Purchaser Documents or the compliance by
Purchaser with any of the provisions hereof or thereof.
5.4 Litigation. There are no Legal Proceedings pending or, to the
best knowledge of Purchaser, threatened that are reasonably likely to prohibit
or restrain the ability of Purchaser to enter into this Agreement or consummate
the transactions contemplated hereby.
5.5 Financial Advisors. No Person has acted, directly or indirectly,
as a broker, finder or financial advisor for Purchaser in connection with the
transactions contemplated by this Agreement and no person is entitled to any fee
or commission or like payment in respect thereof.
5.6 Investment Experience, Investment Intent, Etc.
(a) Purchaser acknowledges that, in making the decision to purchase
the Shares, it has relied solely upon independent investigations made by it and
not upon any representations made by the Sellers with respect to the Company or
the Shares, except for the representations and warranties of the Sellers
contained in this Agreement.
(b) Purchaser understands that the Shares are being offered and sold
to it in reliance on specific exemptions from the registration requirements of
the Federal and state securities laws and that the Sellers are relying, in part,
upon the truth and accuracy of the representations, warranties, agreements,
acknowledgements and understandings of Purchaser set forth herein in order to
determine the applicability of such exemptions and the suitability of Purchaser
to acquire the Shares.
(c) Purchaser is aware that the Shares have not been registered
under the Securities Act of 1933, as amended (the "Securities Act"), and may
only be offered or sold pursuant to registration under the Securities Act or an
available exemption or exclusion therefrom.
(d) Purchaser is an "accredited investor" within the meaning of Rule
501 of Regulation D under the Securities Act.
(e) Purchaser has sufficient knowledge and experience in investing
in companies similar to the Company so as to be able to evaluate the risks and
merits of its investment in the Company and Purchaser is able to bear the
financial risks thereof.
(f) Purchaser is acquiring the Shares for its own account for the
purpose of investment and not with a view to or for sale in connection with any
distribution thereof.
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(g) The purchase of the Shares is consistent with the general
investment objectives of Purchaser.
(h) Purchaser acknowledges that certain of the foregoing
representations and warranties can, and will, be relied upon by the Company and
any transfer agent of the Company in connection with the transfer of the Shares
from the Sellers to Purchaser.
ARTICLE VI
COVENANTS
6.1 Consents. The Sellers shall use their best efforts, and
Purchaser shall cooperate with the Sellers to obtain at the earliest practicable
date any and all consents and approvals required to consummate the transactions
contemplated by this Agreement; provided, however, that neither the Sellers nor
Purchaser shall be obligated to pay any consideration therefor to any third
party from whom consent or approval is requested.
6.2 Other Actions. Each of the Sellers and Purchaser shall use its
best efforts to (i) take all actions necessary or appropriate to consummate the
transactions contemplated by this Agreement and (ii) cause the fulfillment at
the earliest practicable date of all of the conditions to their respective
obligations to consummate the transactions contemplated by this Agreement.
6.3 No Solicitation. Until the Closing Date, the Sellers will not,
and will use its best efforts to prevent the Company or any of the Company's
directors, officers, employees, representatives or agents (collectively, the
"Representatives") from, directly or indirectly, (i) discussing, negotiating,
undertaking, authorizing, recommending, proposing or entering into, either as
the proposed surviving, merged, acquiring or acquired corporation, any
transaction involving a merger, consolidation, business combination, purchase or
disposition of any amount of the assets or capital stock or other equity
interest in the Company other than the transactions contemplated by this
Agreement (an "Acquisition Transaction"), (ii) facilitating, encouraging,
soliciting or initiating discussions, negotiations or submissions of proposals
or offers in respect of an Acquisition Transaction, (iii) furnishing or causing
to be furnished, to any Person, any information concerning the business,
operations, properties or assets of the Company in connection with an
Acquisition Transaction, or (iv) otherwise cooperating in any way with, or
assisting or participating in, facilitating or encouraging, any effort or
attempt by any other Person to do or seek any of the foregoing. The Sellers will
inform Purchaser in writing immediately following the receipt by any Seller, the
Company or any Representative of any proposal or inquiry in respect of any
Acquisition Transaction.
6.4 Publicity. None of the Sellers nor Purchaser shall issue any
press release or public announcement concerning this Agreement or the
transactions contemplated hereby without obtaining the prior written approval of
the other party hereto, which approval will
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not be unreasonably withheld or delayed, unless, in the sole judgment of
Purchaser, disclosure is otherwise required by applicable Law or by the
applicable rules of any stock exchange, provided that, to the extent required by
applicable law, the party intending to make such release shall use its best
efforts consistent with such applicable law to consult with the other party with
respect to the text thereof.
6.5 Repayment of Loans. On or prior to the Closing Date, any and all
loans or other advances to the Sellers or any of their Affiliates, including any
accrued and unpaid interest thereon, shall be repaid in full to the Company.
6.6 Irrevocable Proxy. In the event that, at any time after this
Agreement has been executed and the Sellers are still the owners of record of
the Shares, any matters are brought before the stockholders of the Company for a
vote, either at the Company's Annual Meeting of Stockholders or otherwise, the
Sellers hereby irrevocably agree to (i) attend or decline to attend such meeting
for purposes of determining the presence of a quorum thereat and (ii) vote the
Shares at such Annual Meeting or otherwise, in each case as instructed by
Purchaser. In connection therewith, the Sellers shall consult with Purchaser to
receive voting instructions for each and every matter brought before the
stockholders for a vote during such period, and will not under any circumstances
attend such a meeting or vote the Shares other than in accordance with such
instructions. The Sellers also hereby agree to cooperate with Purchaser in a
similar fashion relating to any other similar matters relating to the record
ownership of the Shares.
ARTICLE VII
CONDITIONS TO CLOSING
7.1 Conditions Precedent to Obligations of Purchaser. The obligation
of Purchaser to consummate the transactions contemplated by this Agreement is
subject to the fulfillment, on or prior to the Closing Date, of each of the
following conditions (any or all of which may be waived by Purchaser in whole or
in part to the extent permitted by applicable law):
(a) all representations and warranties of the Sellers contained
herein shall be true and correct as of the date hereof;
(b) all representations and warranties of the Sellers contained
herein shall be true and correct, at and as of the Closing Date with the same
effect as though those representations and warranties had been made again at and
as of that time;
(c) the Sellers shall have performed and complied in all material
respects with all obligations and covenants required by this Agreement to be
performed or complied with by them on or prior to the Closing Date;
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(d) Purchaser shall have been furnished with certificates (dated the
Closing Date and in form and substance reasonably satisfactory to Purchaser)
executed by each Seller certifying as to the fulfillment of the conditions
specified in Sections 7.1(a), 7.1(b) and 7.1(c) hereof;
(e) Certificates representing all of the Shares shall have been, or
shall at the Closing be, validly delivered and transferred to Purchaser, free
and clear of any and all Liens, accompanied by stock powers duly endorsed in
form sufficient to permit immediate transfer of the Shares to Purchaser;
(f) Purchaser shall have obtained all consents and waivers referred
to in Section 5.3 hereof with respect to the transactions contemplated by this
Agreement and the Purchaser Documents;
(g) the Sellers shall have obtained all consents and waivers
referred to in Section 4.5 hereof, in a form reasonably satisfactory to
Purchaser, with respect to the transactions contemplated by this Agreement and
the Seller Documents;
(h) no Legal Proceedings shall have been instituted or threatened or
claim or demand made against the Sellers, the Company, or Purchaser seeking to
restrain or prohibit or to obtain substantial damages with respect to the
consummation of the transactions contemplated hereby, and there shall not be in
effect any Order by a Governmental Body of competent jurisdiction restraining,
enjoining or otherwise prohibiting the consummation of the transactions
contemplated hereby; and
(i) all Affiliate Loans shall have been repaid to the Company prior
to the Closing Date.
7.2 Conditions Precedent to Obligations of the Sellers. The
obligations of the Sellers to consummate the transactions contemplated by this
Agreement are subject to the fulfillment, prior to or on the Closing Date, of
each of the following conditions (any or all of which may be waived by the
Sellers in whole or in part to the extent permitted by applicable law):
(a) all representations and warranties of Purchaser contained herein
shall be true and correct as of the date hereof;
(b) all representations and warranties of Purchaser contained herein
shall be true and correct in all material respects, at and as of the Closing
Date, with the same effect as though those representations and warranties had
been made again at and as of that date;
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(c) Purchaser shall have performed and complied in all material
respects with all obligations and covenants required by this Agreement to be
performed or complied with by Purchaser on or prior to the Closing Date;
(d) the Sellers shall have been furnished with certificates (dated
the Closing Date and in form and substance reasonably satisfactory to the
Sellers) executed by Purchaser certifying as to the fulfillment of the
conditions specified in Sections 7.2(a), 7.2(b) and 7.2(c) hereof;
(e) there shall not be in effect any Order by a Governmental Body of
competent jurisdiction restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated hereby.
ARTICLE VIII
DOCUMENTS TO BE DELIVERED
8.1 Documents to be Delivered by the Sellers. At the Closing, the
Sellers shall deliver, or cause to be delivered, to Purchaser the following:
(a) stock certificates representing the Shares, duly endorsed in
blank or accompanied by stock transfer powers and with all requisite stock
transfer tax stamps attached;
(b) copies of all consents and waivers referred to in Section 7.1(f)
hereof;
(c) written evidence of the repayment to the Company of all
Affiliate Loans; and
(d) such other documents as Purchaser shall reasonably request.
8.2 Documents to be Delivered by Purchaser. At the Closing,
Purchaser shall deliver to the Sellers the following:
(a) evidence of the wire transfers referred to in Section 2 hereof;
(b) the Non-Recourse Promissory Notes;
(c) the Pledge Agreement, with stock powers sufficient to permit
transfer of the Shares pursuant to the provisions of such Pledge Agreement; and
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(d) such other documents as the Sellers shall reasonably request.
ARTICLE IX
MISCELLANEOUS
9.1 Certain Definitions.
For purposes of this Agreement, the following terms shall have the
meanings specified in this Section 9.1:
"Affiliate" means, with respect to any Person, any other Person
controlling, controlled by or under common control with such Person.
"Closing" shall have the meaning ascribed to such term in Section
3.1 hereof.
"Closing Date" shall have the meaning ascribed to such term in
Section 3.1 hereof.
"Contract" means any Contract, agreement, indenture, note, bond,
loan, instrument, lease, commitment or other arrangement or agreement.
"Governmental Body" means any government or governmental or
regulatory body thereof, or political subdivision thereof, whether federal,
state, local or foreign, or any agency, instrumentality or authority thereof, or
any court or arbitrator (public or private).
"Law" means any federal, state, local or foreign law (including
common law), statute, code, ordinance, rule, regulation or other requirement.
"Legal Proceeding" means any judicial, administrative or arbitral
actions, suits, proceedings (public or private), claims or governmental
proceedings.
"Lien" means any lien, pledge, mortgage, deed of trust, security
interest, claim, lease, charge, option, right of first refusal, easement,
servitude, transfer restriction under any shareholder or similar agreement,
encumbrance or any other restriction or limitation whatsoever.
"Material Adverse Change" means any material adverse change in the
business, properties, results of operations, prospects, condition (financial or
otherwise) of the Company.
"Material Adverse Effect" means any effect which has resulted in, or
is reasonably likely to result in, a Material Adverse Change.
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"Order" means any order, injunction, judgment, decree, ruling, writ,
assessment or arbitration award.
"Permits" means any approvals, authorizations, consents, licenses,
permits or certificates.
"Person" means any individual, corporation, partnership, firm, joint
venture, association, joint-stock company, trust, unincorporated organization,
Governmental Body or other entity.
"Purchaser Documents" shall have the meaning ascribed to such term
in Section 5.2 hereof.
"Purchase Price" shall have the meaning ascribed to such term in
Section 2.1 hereof.
"Seller Documents" shall have the meaning ascribed to such term in
Section 4.2 hereof.
"Sellers' Representative" shall have the meaning ascribed to such
term in Section 9.13 hereof.
"Shares" shall have the meaning ascribed to such term in the first
recital of this Agreement.
"Taxes" means (i) all federal, state, local or foreign taxes,
charges, fees, imposts, levies or other assessments, including, without
limitation, all net income, gross receipts, capital, sales, use, ad valorem,
value added, transfer, franchise, profits, inventory, capital stock, license,
withholding, payroll, employment, social security, unemployment, excise,
severance, stamp, occupation, property and estimated taxes, customs duties,
fees, assessments and charges of any kind whatsoever, (ii) all interest,
penalties, fines, additions to tax or additional amounts imposed by any taxing
authority in connection with any item described in clause (i) and (iii) any
transferee liability in respect of any items described in clauses (i) and/or
(ii).
9.2 Payment of Sales, Use or Similar Taxes. All sales, use,
transfer, intangible, recordation, documentary stamp or similar Taxes or
charges, of any nature whatsoever, applicable to, or resulting from, the
transactions contemplated by this Agreement shall be borne by the Sellers.
9.3 Survival of Representations and Warranties. The parties hereto
hereby agree that the representations and warranties contained in this Agreement
or in any certificate, document or instrument delivered in connection herewith,
shall survive the execution and delivery of this Agreement, and the Closing
hereunder, regardless of any investigation made by the parties hereto; provided,
however, that any claims or actions with
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respect thereto shall terminate unless within thirty-six (36) months after the
Closing Date written notice of such claims is given to the Sellers or such
actions are commenced.
9.4 Costs and Expenses. Except as otherwise provided in this
Agreement, the Sellers and Purchaser shall each bear its own expenses incurred
in connection with the negotiation and execution of this Agreement and each
other agreement, document and instrument contemplated by this Agreement and the
consummation of the transactions contemplated hereby and thereby, it being
understood that in no event shall the Company bear any of such costs and
expenses.
9.5 Specific Performance. The Sellers acknowledge and agree that the
breach of this Agreement would cause irreparable damage to Purchaser and that
Purchaser will not have an adequate remedy at law. Therefore, the obligations of
the Sellers under this Agreement, including, without limitation, the Sellers'
obligation to sell the Shares to Purchaser, shall be enforceable by a decree of
specific performance issued by any court of competent jurisdiction, and
appropriate injunctive relief may be applied for and granted in connection
therewith. Such remedies shall, however, be cumulative and not exclusive and
shall be in addition to any other remedies which any party may have under this
Agreement or otherwise.
9.6 Further Assurances. The Sellers and Purchaser each agrees to
execute and deliver such other documents or agreements and to take such other
action as may be reasonably necessary or desirable for the implementation of
this Agreement and the consummation of the transactions contemplated hereby.
9.7 Entire Agreement; Amendments and Waivers. This Agreement
(including the schedules and exhibits hereto) represents the entire
understanding and agreement between the parties hereto with respect to the
subject matter hereof and can be amended, supplemented or changed, and any
provision hereof can be waived, only by written instrument making specific
reference to this Agreement signed by the party against whom enforcement of any
such amendment, supplement, modification or waiver is sought. No action taken
pursuant to this Agreement, including without limitation, any investigation by
or on behalf of any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representation, warranty, covenant or
agreement contained herein. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a further or
continuing waiver of such breach or as a waiver of any other or subsequent
breach. No failure on the part of any party to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of such right, power or remedy
by such party preclude any other or further exercise thereof or the exercise of
any other right, power or remedy. All remedies hereunder are cumulative and are
not exclusive of any other remedies provided by law.
9.8 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware.
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9.9 Table of Contents and Headings. The table of contents and
section headings of this Agreement are for reference purposes only and are to be
given no effect in the construction or interpretation of this Agreement.
9.10 Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed given when delivered
personally or mailed by certified mail, return receipt requested, to the parties
(and shall also be transmitted by facsimile to the Persons receiving copies
thereof) at the following addresses (or to such other address as a party may
have specified by notice given to the other party pursuant to this provision):
If to any Seller, to:
John J. Donovan, Jr.
219 Vassar Street
Cambridge, MA 02139
Fax: 617-441-8188
With a copy to:
Peabody & Arnold
50 Rowes Wharf
Boston, MA 02110
Attn: William E. Kelly, Esq.
Fax: 617-921-2125
If to Purchaser, to:
Avix Ventures, L.P.
20 Shady Acres
Darien, CT 06820
Attn: Lennart Mengwall
Fax: 203-655-6915
With a copy to:
Brobeck, Phleger & Harrison LLP
1633 Broadway, 47th Floor
New York, New York 10019
Attn: Richard R. Plumridge, Esq.
Fax: 212-586-7878
9.11 Severability. If any provision of this Agreement is invalid or
unenforceable, the balance of this Agreement shall remain in effect.
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9.12 Binding Effect; Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors and
permitted assigns. Nothing in this Agreement shall create or be deemed to create
any third party beneficiary rights in any person or entity not a party to this
Agreement except as provided below. No assignment of this Agreement or of any
rights or obligations hereunder may be made by either the Sellers or Purchaser
(by operation of law or otherwise) without the prior written consent of the
other parties hereto and any attempted assignment without the required consents
shall be void; provided, however, that Purchaser may assign this Agreement and
any or all rights or obligations hereunder (including, without limitation,
Purchaser's rights to purchase the Shares and Purchaser's rights to seek
indemnification hereunder) to any Affiliate of the Purchaser. Upon any such
permitted assignment, the references in this Agreement to Purchaser shall also
apply to any such assignee unless the context otherwise requires.
9.13 Sellers' Representative. John J. Donovan, Jr. and Sundar
Subramaniam, acting jointly, or such other persons as shall succeed them
pursuant to this Section 9.13, are hereby designated as the representatives (the
"Sellers' Representative") to act for and represent the Sellers with respect to
all matters arising out of Section 3.2 hereof and in those other matters with
respect to which this Agreement specifies that the Sellers' Representative shall
so act, as well as matters which require notice to be given to the Sellers under
this Agreement. In the event of the death or incapacity of Mr. Donovan or Mr.
Subramaniam, as the case may be, the surviving person, or such other person or
persons as may be designated by a majority of the Sellers, shall succeed such
person as the Sellers' Representative.
9.14 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
taken together shall be deemed to be one and the same instrument.
Page 31 of 56 Pages
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first written above.
AVIX VENTURES, L.P.
By: /s/ Lennart Mengwall
-----------------------------------
Name: Lennart Mengwall
Title: General Partner
/s/ Sundar Subramaniam
--------------------------------------
Sundar Subramaniam
J&S LIMITED PARTNERSHIP
By: Controller Corp., Inc.,
its General Partner
By: /s/ John J. Donovan, Sr.
-----------------------------------
Name: John J. Donovan, Sr.
Title: President
HARRINGTON TRUST LIMITED,
as Trustee of The Appleby Trust
By: /s/ Martin J. Phillipps
-----------------------------------
Name: Martin J. Phillipps
Title: Managing Director
LEGACY INVESTMENT PARTNERSHIP
By: /s/ John J. Donovan, Jr.
-----------------------------------
Name: John J. Donovan, Jr.
Title: Managing Partner
Page 32 of 56 Pages
<PAGE>
ANNEX A
Seller's
Number of Percentage
Name of Seller Shares Owned Interest
- -------------- ------------ --------
Appleby Trust 2,722,123 35.13%
J&S Limited Partnership 981,978 12.67%
Legacy Investment 1,306,333 16.86%
Partnership
Sundar Subramaniam 2,738,437 35.34%
--------- ------
TOTALS 7,748,871 100.00%
Page 33 of 56 Pages
<PAGE>
EXHIBIT A
Form of Non-Recourse Promissory Note
THE PROMISSORY NOTE REPRESENTED HEREBY WAS ORIGINALLY ISSUED ON APRIL , 1997,
AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE RESOLD OR OTHERWISE TRANSFERRED WITHOUT COMPLIANCE THEREWITH OR
PURSUANT TO AN EXEMPTION THEREFROM.
NON-RECOURSE PROMISSORY NOTE
U.S. $3,000,000 Boston, Massachusetts
April ___, 1997
FOR VALUE RECEIVED, the undersigned, AVIX VENTURES, L.P., a Delaware
limited partnership (the "Partnership"), hereby promises to pay to the order of
John J. Donovan, Jr., as agent for each of the Sellers, as defined and as
enumerated on Schedule A hereto, or to any other holder of this Non-Recourse
Promissory Note (the Sellers or such other holder being the "Payee"), an
aggregate principal amount of THREE MILLION UNITED STATES DOLLARS (U.S.
$3,000,000) on October , 1997 (the "Maturity Date"). Such principal is payable
in lawful money of the United States of America to the Payee at its principal
place of business at the addresses set forth on Schedule A hereto, or at such
other place as the Payee may designate from time to time in writing (such
principal place of business or other place being the "Payment Place"), in cash
or other immediately available funds.
SECTION 1. Payment of Principal. (a) Scheduled Payment. On the
Maturity Date, the Partnership shall pay to the Payee, in cash or other
immediately available funds, the entire unpaid principal amount of this Note.
(b) Optional Prepayment. The Partnership may, at any time and from
time to time, without premium or penalty, prepay all or a portion of the unpaid
principal amount of this Note, payable in cash or other immediately available
funds. The Partnership shall give written notice of prepayment of this Note or
any portion hereof not less than 10 but not more than 30 days prior to the date
chosen for prepayment, which notice shall specify the amount thereof to be
prepaid and the date fixed for prepayment. In the event that the Partnership
shall prepay less than all of the outstanding principal amount of this Note, the
Partnership shall deliver to the Payee upon such prepayment a replacement Note
representing the remaining outstanding principal amount of this Note.
Page 34 of 56 Pages
<PAGE>
SECTION 2. Security. For as long as any principal remains unpaid
under this Note, the Partnership hereby agrees to pledge _______ shares of the
Common Stock, par value $.001 per share, of OneWave, Inc., a Delaware
corporation [representing 50% of all Shares being purchased] as security for the
repayment of principal hereunder. If this Note is not paid in full at the
Maturity Date, the Payee shall have the right to cause the Depository to
liquidate such pledged shares or to transfer such pledged shares into the name
of its nominee or nominees, in each case pursuant to the terms and conditions of
a Pledge Agreement being executed on even date herewith. The Payee shall have no
other recourse against the Partnership other than the pledged securities
referred to in this Section 2.
SECTION 3. Affirmative Covenants. For as long as any principal
remains unpaid under this Note, the Partnership shall give prompt written notice
to the Payee of the occurrence of any Event of Default hereunder; provided,
however, that if any such Event of Default has been promptly remedied or the
Partnership is diligently attempting to remedy such Event of Default (including
the securing of waivers thereof), then the failure to give notice hereunder
shall not in and of itself constitute an Event of Default hereunder.
SECTION 4. Events of Default. (a) For purposes of this Note, an
"Event of Default" shall be deemed to have occurred upon:
(i) any failure by the Partnership, after notice, to pay all
or any portion of principal under this Note, when the same shall be due
and payable in accordance with the terms hereof, whether on the Maturity
Date, by acceleration or otherwise; or
(ii) any default by the Partnership in the due and punctual
performance or observance of the covenant of the Partnership contained in
(A) Section 3 of this Note, (B) the Pledge Agreement or (C) the Stock
Purchase Agreement dated as of April , 1997 among the Partnership and the
Sellers, which failure continues unremedied for a period of 20 days after
written notice of such default is given by the Payee to the Partnership;
or
(iii) (A) the filing by the Partnership of a voluntary
petition seeking liquidation, reorganization, arrangement or readjustment,
in any form, of its debts under Title 11 of the United States Code (or
corresponding provisions of future laws) or any other applicable
bankruptcy, insolvency or similar law, or the filing by the Partnership of
an answer consenting to or acquiescing in any such petition, (B) the
making by the Partnership of any assignment for the benefit of its
creditors, or the admission by the Partnership in writing of its inability
to pay its debts as they become due, (C) the filing of (x) an involuntary
petition against the Partnership under Title 11 of the United States Code,
or any other applicable bankruptcy, insolvency or similar law (or
corresponding provisions of future laws), (y) an application for the
appointment of a custodian, receiver, trustee or other similar official
for the Partnership for all or a substantial part of the assets of the
Partnership or (z) an
Page 35 of 56 Pages
<PAGE>
involuntary petition against the Partnership seeking liquidation, winding
up, reorganization, arrangement, adjustment, protection, relief or
composition of the Partnership or any of the Partnership's debts under any
other federal or state insolvency law, provided that any such filing shall
not have been vacated, set aside or stayed within a 90 day period from the
date thereof, or (D) the entry against the Partnership of a final and
nonappealable order for relief under any bankruptcy, insolvency or similar
law now or hereafter in effect.
(b) Upon the occurrence and during the continuance of any Event of
Default described in Section 6(a) other than in clause (iv) thereof, the Payee
may, by written notice to the Partnership, declare all or any portion of the
unpaid principal amount of this Note to be immediately due and payable. Upon the
occurrence of any Event of Default described in clause (iv) of Section 6(a), the
unpaid principal amount of this Note shall automatically become due and payable,
without any action or notice by the Payee. Demand, presentment, protest and
notice of non-payment are hereby waived by the Partnership.
SECTION 5. Waiver or Alteration. None of the provisions hereof may
be waived, altered or amended, except by a written instrument signed by the
Payee and the Partnership. In the case of any waiver, the Partnership and the
Payee shall be restored to their former respective positions and rights
hereunder, and any Event of Default waived shall be deemed to be cured and not
continuing, but no such waiver shall extend to any subsequent or other Event of
Default or impair any right consequent thereon except to the extent expressly
provided in such waiver.
SECTION 6. Remedies Cumulative. No failure to exercise or delay in
exercising any right, remedy, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
SECTION 7. Notices. Any notices or other communications required or
permitted hereunder shall be given in writing and personally delivered with
receipt acknowledged or mailed, postage prepaid, via registered mail, return
receipt requested, if to the Payee, at its address set forth on Schedule A
hereto or any other address notified in writing by the Payee to the Partnership,
and if to the Partnership, at its address at 20 Shady Acres, Darien, CT 06820,
Attention: Lennart Mengwall, or any other address notified in writing by the
Partnership to the Payee. Any notice given in conformity with the foregoing
shall be deemed given when personally delivered or upon the date of delivery
specified in the registered mail receipt.
Page 36 of 56 Pages
<PAGE>
SECTION 8. Governing Law. This Note shall be governed by, and
construed and enforced in accordance with the laws of the Commonwealth of
Massachusetts as in effect from time to time, without giving effect to any
choice of laws or conflict of laws principles thereof.
SECTION 9. Severability. If any provision of this Note is invalid or
unenforceable in any jurisdiction, the other provisions hereof shall remain in
full force and effect in such jurisdiction and the remaining provisions hereof
shall be liberally construed in favor of the holder hereof in order to
effectuate the provisions hereof and the invalidity of any provision hereof in
any jurisdiction shall not affect the validity or enforceability of any other
provision in any other jurisdiction, including the State of Delaware.
SECTION 10. Costs of Collection. If the Payee is required to
commence suit to recover any amount due under this Note following an Event of
Default, the Payee shall be entitled to collect from the Partnership
reimbursement of such reasonable attorneys' fees and expenses as may be actually
incurred by the Payee at normal hourly rates of counsel selected by the Payee in
collecting or attempting to collect any amount due hereunder.
SECTION 11. Successors and Assigns; Transferability. This Note shall
be binding upon and inure to the benefit of the Payee and the Partnership and
their respective transferees, successors and assigns; provided, however, that
the Partnership may not transfer or assign any of its rights or obligations
hereunder without the prior written consent of the Payee. Within five Business
Days after receipt of notice of any assignment by the Payee to any person or
entity (an "Assignee") of all or any part of this Note, the Partnership shall
execute and deliver to such Assignee, in exchange for the surrendered Note or
Notes, a new Note to the order of such Assignee in an amount equal to the amount
of this Note assigned to it, and if the Payee has retained any amount owing to
it hereunder, a new Note to the order of the Payee in an amount equal to the
amount retained by it hereunder, which new Note or Notes shall be dated the same
date as the surrendered Note or Notes and be in substantially the form of this
Note, and such Assignee will be deemed the Payee under the Note issued to it.
SECTION 12. Replacement of Note. Upon receipt of evidence reasonably
satisfactory to the Partnership of the loss, theft, destruction or mutilation of
this Note, and the Partnership's receipt of an indemnity agreement of the Payee
reasonably satisfactory to the Partnership, the Partnership will, at the expense
of the Payee, execute and deliver, in lieu thereof, a new Note of like terms.
SECTION 13. No Set-Off. The obligations of the Partnership under
this Note are absolute and not subject to any right of set-off, counterclaim,
recoupment or defenses against the Payee of any kind whatsoever.
SECTION 14. Descriptive Headings. The descriptive headings of this
Note are inserted for convenience only and do not constitute a part of this
Note.
Page 37 of 56 Pages
<PAGE>
IN WITNESS WHEREOF, each of the Partnership and the Sellers have
caused this Note to be executed as of the day and year first written above.
AVIX VENTURES, L.P.
By:
-----------------------------
Name: Lennart Mengwall
Title: General Partner
--------------------------------
Sundar Subramaniam
J&S LIMITED PARTNERSHIP
By: Controller Corp., Inc.,
its General Partner
By:
-----------------------------
Name: John J. Donovan, Sr.
Title: President
HARRINGTON TRUST LIMITED,
as Trustee of The Appleby Trust
By:
-----------------------------
Name: Martin J. Phillipps
Title: Managing Director
LEGACY INVESTMENT PARTNERSHIP
By:
-----------------------------
Name: John J. Donovan, Jr.
Title: Managing Partner
Page 38 of 56 Pages
<PAGE>
SCHEDULE A
NAMES AND ADDRESSES OF SELLERS
Harrington Trust Limited,
Trustee of The Appleby Trust
Cedar House
41 Cedar Avenue
Hamilton HM12, Bermuda
Sundar Subramaniam
219 Vassar Street
Cambridge, MA 02139
J&S Limited Partnership
219 Vassar Street
Cambridge, MA 02139
Legacy Investment Partnership
219 Vassar Street
Cambridge, MA 02139
Page 39 of 56 Pages
<PAGE>
EXHIBIT B
Form of Pledge Agreement
THIS PLEDGE AGREEMENT (the "Pledge Agreement"), dated as of April
__, 1997, is made among AVIX VENTURES, L.P., a Delaware limited partnership (the
"Pledgor"), the Sellers listed on Schedule A of each of the two Non-Recourse
Promissory Notes, of even date herewith (the "Notes"), among the Pledgor and
each of the Sellers enumerated on Schedule A thereto (the "Pledgees") and The
State Street Bank & Trust Company, as depositary bank (in such capacity, the
"Depositary"). All terms used but not defined herein shall have the meanings
ascribed to such terms in that certain Stock Purchase Agreement, made as of the
__ day of April, 1997, by and among Avix Ventures, L.P. and Appleby Trust, by
Harrington Trust Limited, as trustee, J&S Limited Partnership, Legacy Investment
Partnership and Sundar Subramaniam.
It is a condition of the Notes that the Pledgor enter into this
Agreement and pledge to the Pledgees 4,843,044 shares, representing 62.5% of the
Shares (the "Pledged Securities") of the Common Stock, par value $.001 per
share, of OneWave, Inc., a Delaware corporation, to secure the obligations of
the Pledgor described below.
Accordingly, the parties hereto agree as follows:
SECTION 1 Definitions.
(a) Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"Deposit Account" means the special purpose restricted deposit
account of the Pledgor with the Depositary established pursuant to Section 3.
"Financing Statements" has the meaning set forth in Section 2(c).
"Pledged Collateral" has the meaning set forth in Section 2.
"UCC" means the Uniform Commercial Code as the same may, from time
to time, be in effect in the Commonwealth of Massachusetts; provided, however,
in the event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of the security interest in any Pledged
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the Commonwealth of Massachusetts, the term "UCC" shall
mean the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such attachment, perfection or
priority and for purposes of definitions related to such provisions.
Page 40 of 56 Pages
<PAGE>
(b) Terms Defined in UCC. Where applicable and except as otherwise
defined herein, terms used in this Agreement shall have the meanings assigned to
them in the UCC.
SECTION 2 Security Interest.
(a) Grant of Security Interest. As security for the performance of
its obligations under the Notes, the Pledgor hereby pledges, assigns, transfers,
hypothecates and sets over to the Pledgees, and hereby grants to the Pledgees a
security interest in, all of the Pledgor's right, title and interest in, to and
under (i) the Deposit Account, all Pledged Securities held therein, and any cash
interest or dividends paid thereon, (ii) all rights, interests and claims with
respect to the Deposit Account, including all such rights, interest and claims
under all related agreements, instruments and other documents, and in respect of
all guaranties, security, letters of credit, insurance, warranties and other
undertakings, (iii) all books, records and other documentation of the Pledgor
related to the Deposit Account, and (iv) all proceeds of any and all of the
foregoing, in each case whether presently existing or owned or hereafter arising
or acquired and wherever located (collectively, the "Pledged Collateral").
Notwithstanding any other provision herein, the Pledgor shall retain its right
to vote in all stockholder votes held at all times unless and until the Pledgees
have directed the Depositary to transfer or deliver any of the Pledged
Collateral to the Pledgees upon the occurrence of an Event of Default (as
hereinafter defined).
(b) Notice of Security Interest. In accordance with Section 8-313 of
the Massachusetts UCC, written notice of the security interest of the Pledgees
in the Deposit Account is hereby given to the Depositary.
(c) Financing Statements, Etc. The Pledgor shall execute and deliver
to the Pledgees at any time and from time to time, all financing statements,
continuation financing statements, termination statements, notices, and all
other documents and instruments (the "Financing Statements") which the Pledgees
may request, in form satisfactory to the Pledgees, to perfect and continue
perfected, maintain the priority of or provide notice of the pledge of and
security interest in the Pledged Collateral and to accomplish the purposes of
this Agreement.
(d) Continuing Security Interest. The Pledgor agrees that this
Agreement shall create a continuing security interest in and pledge of the
Pledged Collateral which shall remain in effect until terminated in accordance
with Section 16.
SECTION 3 The Deposit Account; Administration of the Pledged
Collateral.
(a) Establishment of Deposit Account. For purposes of this
Agreement, the Depositary has established for the Pledgor a special purpose
deposit account more fully described in Schedule 1 (the "Deposit Account") over
which the Pledgees shall have exclusive control and the sole right of
withdrawal. The Pledgor agrees that except as
Page 41 of 56 Pages
<PAGE>
otherwise expressly provided in this Agreement, upon the irrevocable deposit of
the Pledged Securities into the Deposit Account, the Pledgor shall not have any
right of withdrawal with respect to such securities, or any cash interest or
dividends which may accrue with respect to such securities and/or funds in the
Deposit Account for so long as the obligations of the Pledgor under either or
both of the Non-Recourse Promissory Notes (the "Secured Obligation") has not
been performed in full. The Pledgor irrevocably waives until the termination of
this Agreement in accordance with Section 16 (i) the right to make withdrawals
from the Deposit Account; and (ii) the right to instruct the Depositary to honor
drafts drawn against the Deposit Account.
(b) Appointment of Depositary; Pledged Collateral. The Pledgees
hereby appoints The State Street Bank & Trust Company as Depositary hereunder.
The State Street Bank & Trust Company hereby agrees to act as Depositary
hereunder and to accept and hold in accordance with the terms and conditions of
this Agreement the Pledged Securities deposited into the Deposit Account
hereunder and other Pledged Collateral transferred or delivered to it hereunder
and to release such funds and other Pledged Collateral to the Pledgees pursuant
to the terms and conditions hereof. The Depositary agrees to maintain the
Deposit Account separately and wholly segregated from all other securities,
investments, instruments and funds on deposit with or held by the Depositary.
(c) Interest on the Deposit Account. Interest on the cash funds on
deposit with the Depositary in the Deposit Account shall accrue at a rate per
annum equal at all times to the rate specified by the Depositary as its money
market rate and shall be paid into the Deposit Account on the fifth business day
after the end of each month, including the month in which the Deposit Account is
terminated. No interest shall accrue on any amount deposited into the Deposit
Account if such amount is withdrawn on the date of deposit. All computations of
interest in respect of the Deposit Account shall be made on the basis of a year
of 365 days for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest is payable. Each
determination by the Depositary hereunder of a rate of interest and of any
change therein and the calculation of interest payable in the absence of
manifest error shall be conclusive and binding on the parties.
(d) Statements. The Depositary shall provide to the Pledgees and the
Pledgor a quarterly statement listing the balance of the Deposit Account and the
other Pledged Collateral, if any, then held by the Depositary.
(e) Pledgees's General Authority.
(i) The Pledgees shall have the right upon the occurrence of an
Event of Default, following prior written notice to the Pledgor, directly or
through the Depositary, to vote and to give consents, ratifications and waivers
with respect to the Pledged Collateral and exercise all rights of conversion,
exchange, subscription or any other rights, privileges or options pertaining to
the Pledged Collateral, as if the Pledgees were the absolute owner
Page 42 of 56 Pages
<PAGE>
thereof; provided that the Pledgees shall have no duty to exercise any of the
foregoing rights afforded to it and shall not be responsible to the Pledgor or
any other Person for any failure to do so or delay in doing so.
(ii) The Pledgees shall have the right, for and in the name, place
and stead of the Pledgor, to execute endorsements, assignments or other
instruments of conveyance or transfer with respect to all or any of the Pledged
Collateral, to endorse any checks, drafts, money orders and other instruments
relating thereto; upon and after the occurrence of any Event of Default, to sue
for, collect, receive and give acquittance for all moneys due or to become due
in connection with the Pledged Collateral and otherwise to file any claims, take
any action or institute, defend, settle or adjust any actions, suits or
proceedings with respect to the Pledged Collateral; and to execute any and all
such other documents and instruments, and do any and all such acts and things,
as the Pledgees may deem necessary or desirable to protect, collect, realize
upon and preserve the Pledged Collateral, to enforce the Pledgees's rights with
respect to the Pledged Collateral and to accomplish the purposes of this
Agreement.
(iii) At any time and from time to time, the Pledgees may cause any
of the Pledged Collateral to be held in, or transferred into, its name or into
the name of its nominee or nominees. The Pledgees shall at all times have the
right to exchange uncertificated Pledged Collateral for certificated Pledged
Collateral, and to exchange certificated Pledged Collateral for certificates of
larger or smaller denominations, for any purpose consistent with this Agreement.
(iv) Beyond the exercise of reasonable care by the Depositary to
assure the safe custody of Pledged Collateral while held hereunder and the
accounting for moneys actually received by the Pledgees or the Depositary with
respect thereto, neither the Pledgees nor the Depositary shall have any duty or
liability to exercise or preserve any rights, privileges or powers pertaining to
the Pledged Collateral.
(f) Appointment of Pledgees as Attorney-in-Fact. For the purpose of
enabling the Pledgees to exercise its rights under this Section 3 or otherwise
in connection with this Agreement, the Pledgor hereby constitutes and appoints
the Pledgees (and any of the Pledgees's officers, employees or agents designated
by the Pledgees) its true and lawful attorney-in-fact, with full power and
authority to (i) sign any Financing Statements which must be executed or filed
to perfect or continue perfected, maintain the priority of or provide notice of
the pledge of and security interest in the Pledged Collateral, (ii) make any
deposit or withdrawal or order any transfer of funds to or from the Deposit
Account, and (iii) collect any Pledged Collateral, execute any notice,
assignment, endorsement or other instrument or document, and do any and all acts
and things for and on behalf of the Pledgor, which the Pledgees may deem
necessary or desirable to protect, collect, realize upon and preserve the
Pledged Collateral, to enforce the Pledgees's rights with respect to the Pledged
Collateral and to accomplish the purposes hereof. Such appointment is coupled
with an interest and irrevocable so long as the Secured Obligation has not been
performed in full. The Pledgor
Page 43 of 56 Pages
<PAGE>
hereby ratifies, to the extent permitted by law, all that the Pledgees shall
lawfully and in good faith do or cause to be done by virtue of and in compliance
with this Section 3(f).
(g) Depositary Acts as Agent of Pledgees. The Pledgor understands
and agrees that the Depositary is acting hereunder, and holding all Pledged
Collateral hereunder, solely as the agent and for the benefit of, the Pledgees.
(h) Depositary Waiver. The Depositary shall hold the Pledged
Collateral free of, and hereby waives, any Liens, charges, demands, or other
claims which it may have upon or with respect to the Pledged Collateral.
(i) Concerning the Depositary. The Depositary is authorized to take
such action and exercise such powers under this Agreement as are delegated to
the Depositary by the terms hereof, together with such powers as are reasonably
incidental thereto. The duties and obligations of the Depositary are strictly
limited to those expressly provided for herein, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or otherwise exist against the Depositary. As to any matters
not expressly provided for by this Agreement (including the timing and methods
of realization upon the Pledged Collateral), the Depositary shall act or refrain
from acting (and shall be fully protected in so acting or refraining from
acting) upon the instructions of the Pledgees, except that in the absence of
such instructions the Depositary may, but shall not be required to, exercise its
discretion to act or refrain from acting. The Depositary shall not be required
to take any action hereunder which exposes the Depositary to liability or which
is contrary to this Agreement or applicable law. Nothing in this Agreement
shall, or shall be construed to, constitute the Depositary a trustee or
fiduciary for the Pledgees. In performing its functions and duties hereunder,
the Depositary does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for the Pledgor.
Neither the Depositary nor any affiliate thereof nor any of their respective
directors, officers, employees or agents shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement,
except for its or their own gross negligence or willful misconduct.
(j) Resignation or Removal of Depositary.
(i) Subject to the further provisions of this subsection (i), the
Depositary may resign at any time as Depositary hereunder by its delivery to the
Pledgor and the Pledgees of written notice of resignation. The Depositary may be
removed by the Pledgees at any time, with or without cause, by written notice of
removal delivered to the Depositary. Upon any such resignation or removal the
Pledgees may, without other formality than appointment and designation in
writing, appoint a successor Depositary.
Page 44 of 56 Pages
<PAGE>
(ii) Upon acceptance by a qualified successor Depositary of its
appointment hereunder, and upon payment of the retiring Depositary's accrued
charges and fees hereunder, the retiring Depositary shall transmit to such
successor for deposit in the Deposit Account established by such successor, all
funds, if any, then on deposit in the Deposit Account, and shall deliver to such
successor all other Pledged Collateral then held by it hereunder, against
receipt by such successor.
(iii) Anything herein to the contrary notwithstanding, the
Depositary shall not be discharged from its duties or obligations hereunder
following its resignation or removal until: (A) a successor Depositary has been
appointed by the Pledgees and has accepted its appointment hereunder; (B) a new
Deposit Account has been established by such successor for purposes of this
Agreement; (C) all Pledged Collateral then held by the retiring Depositary
hereunder have been delivered to such successor; (D) all funds maintained by the
retiring Depositary in the Deposit Account, have been remitted to such successor
for deposit in such new Deposit Account; (E) all notices to third parties
required to be given have been given by the Pledgor; (F) all action required by
the Pledgees has been taken to continue the Pledgees's perfected first priority
security interest in the Pledged Collateral; and (G) such successor has executed
and delivered such agreements and instruments as the Pledgor or the Pledgees may
have requested in connection with such successor's appointment as Depositary.
(iv) Any successor Depositary hereunder shall provide the Pledgor
and the Pledgees with its address, telephone, and facsimile numbers, to be used
for purposes of Section 7.
(v) Any successor Depositary hereunder shall be a bank or trust
company having an office in New York, New York, be a member of the Federal
Reserve System and be authorized to accept deposits and offer checking account
facilities.
SECTION 4 Covenants. So long as the Secured Obligation remains
unsatisfied, the Pledgor agrees that:
(a) Preservation of Collateral. The Pledgor will do and perform all
reasonable acts that may be necessary and appropriate to maintain, preserve and
protect the Pledged Collateral.
(b) Compliance with Laws, Etc. The Pledgor will comply with all
laws, regulations and ordinances relating in a material way to the possession,
maintenance and control of the Pledged Collateral.
(c) Disposition of Pledged Collateral. The Pledgor will not
surrender or lose possession of (other than to the Pledgees or the Depositary
or, with the prior consent of the Pledgees, to any other depositary or financial
intermediary), exchange, sell, convey, assign or otherwise dispose of or
transfer the Pledged Collateral or any right, title or interest therein.
Page 45 of 56 Pages
<PAGE>
(d) Liens. The Pledgor will not create, incur or permit to exist any
Liens upon or with respect to the Pledged Collateral, other than the security
interest of and pledge to the Pledgees created by this Agreement.
(e) Further Assurances. The Pledgor will promptly, upon the written
request from time to time of the Pledgees or the Depositary, execute,
acknowledge and deliver, and file and record, all such financing statements and
other documents and instruments, and take all such action, as shall be
reasonably necessary to carry out the purposes of this Agreement.
SECTION 5 Remedies.
(a) Remedies. If an event of default occurs pursuant to the terms of
the Notes (an "Event of Default"), then the Pledgees shall have, in addition to
all other rights and remedies granted to it in this Agreement, all rights and
remedies of a secured party under the UCC and other applicable laws.
(b) Release of Deposit Account and Pledged Collateral to Pledgees.
Upon the occurrence of the Event of Default and subject to the last sentence of
this Section 5(b), the Pledgees may deliver to the Depositary a notice directing
the Depositary to release all or any part of the balance of the Deposit Account
to the Pledgees and transfer or deliver to the Pledgees, or dispose of, any
Pledged Collateral. Upon receipt of such notice and in accordance with the
Pledgees's written direction, the Depositary shall forthwith (i) pay to the
Pledgees all or any portion of the cash in the Deposit Account and (ii) as to
any Pledged Collateral, either (A) transfer and deliver such Pledged Collateral
to the Pledgees (along with appropriate endorsements, assignments or other
similar documentation) for sale or other disposition by the Pledgees or (B) sell
or otherwise dispose of such Pledged Collateral and remit to the Pledgees
forthwith the proceeds of such sale or disposition. The Pledgor acknowledges and
agrees that any such release of funds in the Deposit Account, or any sale or
other disposition of Pledged Collateral by the Depositary or the Pledgees, may
result in the liquidation of time deposits constituting all or a portion of the
Pledged Collateral, whether or not such time deposits have matured and
notwithstanding the fact that such liquidation may give rise to penalties or
other breakage costs as a result of an early withdrawal of funds.
Notwithstanding the foregoing, should the Pledgees elect to exercise its rights
pursuant to this Section 5(b), such election shall be deemed to reduce any
obligation of the Pledgor to pay any amounts to the Pledgees in connection with
such sale of the Pledged Collateral.
SECTION 6 Certain Waivers. The Pledgor waives, to the fullest extent
permitted by law, (i) any right to require the Pledgees (A) to proceed against
any Person, (B) to exhaust any other collateral or security for the Secured
Obligation, (C) to pursue any remedy in the Pledgees's power, or (D) to make or
give any presentments, demands for performance, notices of nonperformance,
protests, notices of protests or notices of dishonor in connection with any of
the Pledged Collateral; and (ii) all claims, damages, and demands
Page 46 of 56 Pages
<PAGE>
against the Pledgees arising out of the repossession, retention, sale or
application of the proceeds of any sale of the Pledged Collateral.
SECTION 7 Notices. All notices and other communications provided for
hereunder shall, unless otherwise stated herein, be in writing (including by
facsimile transmission) and shall be mailed, sent or delivered at or to the
address or facsimile number of the respective party or parties set forth on the
signature pages hereof, or at or to such other address or facsimile number as
such party or parties shall have designated in a written notice to the other
party or parties. All such notices and communications shall be effective (i) if
delivered by hand, when delivered; (ii) if sent by mail, upon the earlier of the
date of receipt or five (5) Business Days after deposit in the mail, first class
(or air mail, with respect to communications to be sent to or from the United
States), postage prepaid; and (iii) if sent by facsimile transmission, when
sent; except that notices from the Pledgor under Section 3 shall not be
effective until actually received. Instructions for the disbursement of funds,
or any other assets in the Deposit Account, shall be made only upon Depositary's
receipt of written instructions, which may include instructions sent by
facsimile transmission. The Depositary shall be entitled to rely upon any
notices, communications or instructions that the Depositary deems to be
reasonable.
SECTION 8 No Waiver; Cumulative Remedies. No failure on the part of
the Depositary or the Pledgees to exercise, and no delay in exercising, any
right, remedy, power or privilege hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right, remedy, power or
privilege preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights and remedies under this
Agreement are cumulative and not exclusive of any rights, remedies, powers and
privileges that may otherwise be available to the Depositary or the Pledgees.
SECTION 9 Costs and Expenses; Other Charges.
(a) Costs and Expenses. The Pledgor agrees to pay on demand:
(i) the reasonable out-of-pocket costs and expenses of the
Depositary and any of its affiliates, and the reasonable fees and disbursements
of counsel to the Depositary, in connection with the negotiation, preparation,
execution, delivery and administration of this Agreement, and any amendments,
modifications or waivers of the terms thereof, and the custody of the Pledged
Collateral;
(ii) all title, appraisal (including the allocated cost of internal
appraisal services), survey, audit, consulting, search, recording, filing and
similar costs, fees and expenses incurred or sustained by the Pledgees, the
Depositary or any of their respective Affiliates in connection with this
Agreement or the Pledged Collateral; and
(iii) all costs and expenses of the Pledgees, the Depositary and
their respective Affiliates, and the fees and disbursements of counsel
(including the allocated costs
Page 47 of 56 Pages
<PAGE>
of internal counsel), in connection with the enforcement or attempted
enforcement of, and preservation of any rights or interest under, this
Agreement, any out-of-court workout or other refinancing or restructuring or in
any bankruptcy case, and the protection, sale or collection of, or other
realization upon, any of the Pledged Collateral, including any and all losses,
costs and expenses sustained by the Pledgees or the Depositary as a result of
any failure by the Pledgor to perform or observe its obligations contained
herein.
(b) Interest. Any cash amounts payable to the Pledgees or the
Depositary under this Section 9 or otherwise under this Agreement if not paid
upon demand shall bear interest from the date of such demand until paid in full,
at the prime rate of interest then being charged by the Depositary.
SECTION 10 Binding Effect. This Agreement shall be binding upon,
inure to the benefit of and be enforceable by the Pledgor, the Depositary and
the Pledgees and their respective successors and assigns.
SECTION 11 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE COMMONWEALTH OF MASSACHUSETTS,
EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND TO THE EXTENT THE VALIDITY
OR PERFECTION OF THE SECURITY INTERESTS HEREUNDER, OR THE REMEDIES HEREUNDER, IN
RESPECT OF ANY PLEDGED COLLATERAL ARE GOVERNED BY THE LAW OF A JURISDICTION
OTHER THAN THE COMMONWEALTH OF MASSACHUSETTS.
SECTION 12 Entire Agreement; Amendment.
(a) Entire Agreement. This Agreement constitutes the entire
agreement of the Pledgor, the Pledgees and the Depositary with respect to the
matters set forth herein and supersedes any prior agreements, commitments,
discussions and understandings, oral or written, with respect thereto.
(b) Amendments and Waivers. This Agreement may not be amended except
by a writing signed by the Pledgor, the Depositary and the Pledgees. No waiver
of any rights of the Pledgees under any provision of this Agreement or consent
to any departure by the Pledgor or the Depositary therefrom shall be effective
unless in writing and signed by the Depositary and the Pledgees. Any such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
SECTION 13 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
all applicable laws and regulations. If, however, any provision of this
Agreement shall be prohibited by or invalid under any such law or regulation in
any jurisdiction, it shall, as to such jurisdiction, be deemed modified to
conform to the minimum requirements of such law
Page 48 of 56 Pages
<PAGE>
or regulation, or, if for any reason it is not deemed so modified, it shall be
ineffective and invalid only to the extent of such prohibition or invalidity
without affecting the remaining provisions of this Agreement, or the validity or
effectiveness of such provision in any other jurisdiction.
SECTION 14 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute but one and the same agreement.
SECTION 15 No Inconsistent Requirements. The Pledgor acknowledges
that this Agreement may contain covenants and other terms and provisions
variously stated regarding the same or similar matters, and agrees that all such
covenants, terms and provisions are cumulative and all shall be performed and
satisfied in accordance with their respective terms.
SECTION 16 Termination.
(a) Upon the performance in full of the Pledgor's obligations under
the Non-Recourse Promissory Note in the aggregate principal amount of
$3,000,000, this Agreement shall terminate with respect to 2,905,827 of the
shares of Common Stock of the Company and the Pledgees shall promptly instruct
the Depositary in writing, which may include instructions sent by facsimile
transmission, to give the Pledgor full access to and control over such shares of
Common Stock, and each of the Pledgees and the Depositary shall execute and
deliver to the Pledgor such documents and instruments reasonably requested by
the Pledgor as shall be necessary to evidence termination of the security
interests given by the Pledgor to the Pledgees hereunder relating to such
shares. Upon such an occurrence, the defined term Pledged Securities shall be
re-defined to mean 1,937,217 shares of Common Stock of the Company.
(b) Upon the performance in full of the Pledgor's obligations under
both the Non-Recourse Promissory Note in the aggregate principal amount of
$3,000,000 and the Non-Recourse Note in the aggregate principal amount of
$2,000,000, this Agreement shall terminate and the Pledgees shall promptly
instruct the Depositary in writing, which may include instructions sent by
facsimile transmission, to give the Pledgor full access to and control over the
Deposit Account and to transfer or deliver, or cause to be transferred or
delivered, to the Pledgor any Pledged Collateral held by or for the Depositary,
and each of the Pledgees and the Depositary shall execute and deliver to the
Pledgor such documents and instruments reasonably requested by the Pledgor as
shall be necessary to evidence termination of all security interests given by
the Pledgor to the Pledgees hereunder.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, as of the date first above written.
THE PLEDGOR
AVIX VENTURES, L.P.
By:
-----------------------------
Name: Lennart Mengwall
Title: General Partner
THE DEPOSITARY
THE STATE STREET BANK & TRUST COMPANY
By:
-----------------------------
Name:
Title:
Page 50 of 56 Pages
<PAGE>
THE PLEDGEES
----------------------------------
Sundar Subramaniam
J&S LIMITED PARTNERSHIP
By: Controller Corp., Inc.,
its General Partner
By:
-----------------------------
Name: John J. Donovan, Sr.
Title: President
HARRINGTON TRUST LIMITED,
as Trustee of The Appleby Trust
By:
-----------------------------
Name: Martin J. Phillipps
Title: Managing Director
LEGACY INVESTMENT PARTNERSHIP
By:
-----------------------------
Name: John J. Donovan, Jr.
Title: Managing Partner
Page 51 of 56 Pages
<PAGE>
SCHEDULE 1
to the Pledge Agreement
DEPOSIT ACCOUNT
Page 52 of 56 Pages
<PAGE>
Schedule 4.4
Liens
The Shares owned by J&S Limited Partnership are pledged to The State Street Bank
& Trust Company, Boston, Massachusetts.
120,000 of the Shares owned by Appleby Trust are pledged to Permal Private
Equity Partners and Private Equity Partners.
Page 53 of 56 Pages
<PAGE>
Schedule 4.5
Related Party Transactions
1. The Company has sold software licenses and was engaged to develop
applications as subcontractor for Hewlett-Packard Company in connection with the
development of vertical applications for Internet Business Systems Incorporated
("IBS"). Mr. Subramaniam and John J. Donovan, Sr. are directors of IBS, and 50%
of the outstanding voting stock of IBS is owned by a limited liability company
of which trusts for the benefit of Mr. Subramaniam and members of the Donovan
family are members and Controller Corp., Inc. (the general partner of J&S
Limited Partnership) is the manager. The parties contemplated that substantially
all of the funding for such licenses and services would be provided by IBS and
other entities affiliated with the Sellers. The licensed software has not been
delivered to IBS and, to the Sellers' knowledge, the development of the
applications has not been satisfactorily completed. IBS and J&S Limited
Partnership are engaged in discussions with Hewlett-Packard Company and the
Company regarding this project.
2. International Integration Incorporated, of which Mr. Subramaniam and a
partnership between Mr. Subramaniam and The Appleby Trust are stockholders, has
acted as a reseller of the Company's products.
3. Several entities affiliated with the Sellers held licenses for use and/or
resale of the Company's products. The Company has demanded that all affiliates
of the Sellers terminate their use of the Company's products.
Page 54 of 56 Pages
<PAGE>
Schedule 4.8
Financial Advisors
None
Page 55 of 56 Pages
<PAGE>
EXHIBIT 2
AGREEMENT TO FILE A JOINT STATEMENT ON SCHEDULE 13D
In accordance with Rule 13-1(f) under the Securities Exchange Act of 1934,
as amended, the undersigned agree to the joint filing on behalf of each of them
of a statement on Schedule 13D (including amendments thereto) with respect to
the common stock, par value $.001 per share, of OneWave, Inc., a Delaware
corporation, and further agrees that this Agreement to File a Joint Statement on
Schedule 13D be included as an Exhibit to such joint filings. In evidence
thereof, the undersigned, being duly authorized, have executed this Agreement to
File a Joint Statement on Schedule 13D this 2nd day of May, 1997.
AVIX VENTURES, L.P.
By: AVIX ASSOCIATES, L.P., its general partner
/S/Lennart Mengwall
--------------------------------------------
By: Lennart Mengwall
Title: General Partner
AVIX ASSOCIATES, L.P.
/S/Lennart Mengwall
--------------------------------------------
By: Lennart Mengwall
Title: General Partner
/S/Kevin Azzouz
--------------------------------------------
Kevin Azzouz, as a General Partner of Avix
Associates, L.P.
/S/Lennart Mengwall
--------------------------------------------
Lennart Mengwall, as a General Partner of Avix
Associates, L.P.
Page 56 of 56 Pages
