UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 16, 1997
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Commission file number: 0-11552
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TeleVideo, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 94-2383795
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(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
2345 Harris Way, San Jose, California 95131
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(Address of principal executive offices)
Registrant's telephone number, including area code: (408) 954-8333
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On April 16, 1997, TeleVideo, Inc. (formerly, TeleVideo Systems, Inc.)
(the "Company") entered into a Common Stock Purchase Agreement with Applied
Photonics Technology, Inc., a California Corporation ("APT") whereby the Company
purchased 30% of the Common Stock of APT. In consideration for the issuance of
the APT stock, the Company agreed to pay $3,000,000 to APT: $2,000,000 payable
on the day of closing and the remaining $1,000,000 payable 90 days after
closing.
Founded in October 1996, APT is a high-tech engineering firm specializing
in the development of electronics display technology. The markets for APT's
Outdoor Media Display system include the high end of the billboard and
illuminated sign markets, sports stadiums and arenas, transportation terminals,
volume retailers and malls, and safety/public information displays.
The authorized capital of APT consists of no shares of Preferred Stock and
20,000,000 shares of Common Stock, of which 5,593,800 shares are issued and
outstanding. Except for options representing an aggregate of 1,000,000 shares
issuable in the future in consideration of contributions by key employees and
certain consultants of APT, TeleVideo received Common Stock equal to 30% of all
issued and outstanding shares as of closing date, for a total of 1,678,140
shares. The Company funded the purchase of the Common Stock through the
retirement of its Time Deposits.
ITEM 5. OTHER EVENTS
On April 22, 1997, the Company filed a Certificate of Amendment of its
Certificate of Incorporation, thereby changing its name from TeleVideo Systems,
Inc. to TeleVideo, Inc.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The following exhibits are filed as part of this Current Report on Form
8-K:
Exhibit
Number Exhibit
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3.1 Certificate of Incorporation, as amended
10.11 Common Stock Purchase Agreement between Applied Photonics
Technology, Inc. and the Company, dated April 16, 1997
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TELEVIDEO, INC.
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(Registrant)
Date: April 30, 1997 By: /s/ K. Philip Hwang
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Dr. K. Philip Hwang
Chairman of the Board and
Chief Executive Officer
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EXHIBIT 3.1
State of Delaware
Office of the Secretary of State
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT
OF "TELEVIDEO SYSTEMS, INC.", CHANGING ITS NAME FROM "TELEVIDEO SYSTEMS, INC."
TO "TELEVIDEO, INC.", FILED IN THIS OFFICE ON THE TWENTY-SECOND DAY OF APRIL,
A.D. 1997, AT 9 O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS FOR RECORDING.
/s/ Edward J. Freel
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Edward J. Freel
Secretary of State
2114777 8100 AUTHENTICATION: 8433300
971130239 DATE: 04-23-97
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CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
TeleVideo Systems, Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware:
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors on March 24, 1997,
resolutions were duly adopted setting forth a proposed amendment of the
Certificate of Incorporation of said corporation, declaring said amendment to be
advisable and declaring that the matter should be brought before the
stockholders for consideration at its next annual meeting of the stockholders.
The resolution setting forth the proposed amendment is as follows:
RESOLVED, that the Certificate of Incorporation of this corporation
be amended by changing the Article thereof numbered "1" so that, as amended,
said Article shall be and read as follows:
"The name of the Corporation is TeleVideo, Inc."
SECOND: That thereafter, pursuant to resolution of its Board of Directors,
that the corporation's Annual Meeting of Stockholders was duly called and held
upon notice in accordance with Section 222 of the General Corporation Law of the
State of Delaware, at which meeting the necessary number of shares as required
by statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, said corporation has caused this certificate to be
signed by K. Philip Hwang, its authorized officer, this 4th day of April, 1997.
/s/ K. Philip Hwang
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K. Philip Hwang
Chairman & CEO
Attest:
/s/ Kathy Cleveland
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Kathy Cleveland
Assistant Secretary
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EXHIBIT 10.11
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT AND SHAREHOLDERS' AGREEMENT (the
"Agreement,") is made as of the 16th day of April, 1997, by and among Applied
Photonics Technology. Inc., a California Corporation, ("APT"), and TeleVideo,
Inc., a Delaware Corporation ("Investor").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. PURCHASE AND SALE OF STOCK AND WARRANT.
1.1. SALE AND ISSUANCE OF COMMON STOCK AND WARRANT. Subject to the terms
and conditions of this Agreement, Investor shall purchase at Closing (as defined
below) the following securities of APT:
(a) Stock: In consideration for cash payment of Three Million
Dollars ($3,000,000) by Investor, APT shall issue to Investor thirty percent
(30%) of APT's issued and outstanding Common Stock, (the "Common Stock").
Schedule for the payment of $3,000,000 by Investor is as follows: $2,000,000 on
the day of the Closing defined herein; the remaining $1,000,000, ninty (90) days
after closing.
1.2 CLOSING. A Closing for the sale of shares of Common Stock shall
occur on or before April 16, 1997. INVESTOR WILL TENDER A CHECK FOR THE AGREED
SUM, MADE PAYABLE TO APPLIED PHOTONICS TECHNOLOGY, INC. INVESTOR UNDERSTANDS
THAT HE WILL RECEIVE THE SHARE CERTIFICATE AS SOON AS THE FUNDS HAVE CLEARED.
The Closing shall take place at Lee Technology, Inc.'s principal place of
business, 900 Hansen Way, Palo Alto, California.
2. REPRESENTATIONS AND WARRANTIES OF APT. APT hereby represents and warrant to
the Investor that:
2.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. APT is a corporation
duly organized, validly existing and in good standing under the laws of
California and has all requisite corporate power and authority to carry on its
business as now conducted and substantially as proposed to be conducted in the
Business Plan, heretofore furnished to the Investor ("Business Plan"). Investor
understands that APT is in the process of obtaining but does not yet have a
binding contract with the Pennsylvania Turnpike Authority. APT is in the process
of negotiating but has not consummated other binding investment agreements with
Lee Technology and others. APT is duly qualified to transact business and is in
good standing in each jurisdiction in which the failure to so qualify would have
a material adverse effect on its business or properties.
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2.2 CAPITALIZATION AND VOTING RIGHTS.
(a) The authorized capital of APT consists of no shares of
Preferred Stock and 20,000,000 shares of Common Stock, of which 5,593,800 shares
are issued and outstanding. The outstanding shares of Common Stock are all and
validly authorized and issued, fully paid and nonassessable, and were issued in
accordance with the registration or qualification provisions of the Securities
Act of 1933, as amended (the "Act"), and any relevant foreign and state
securities laws or pursuant to valid exemptions therefrom.
(b) Except for options representing an aggregate of 1,000,000
shares issuable in the future in consideration of contributions by key employees
and certain consultants of APT and TeleVideo to receive equal to 30% of all
issued and outstanding options as of closing date. (to be determined amongst
them selves), there are no outstanding options, warrants, rights (including
conversion or preemptive rights) understandings, set-asides, or agreements for
the purchase or acquisition from APT of any shares of capital stock. APT is not
a party nor subject to any agreement or understanding, and, to the best of APT's
knowledge, there is no agreement or understanding between any persons and/or
entities, which affects or relates to the voting or giving of written consents
with respect to any security or by a director of APT.
2.3 SUBSIDIARIES. APT does not presently own or control, directly or
indirectly, any interest in any other corporation, association, or other
business entity. APT is not a participation in any joint venture, partnership,
or similar arrangement.
2.4 AUTHORIZATION. The corporate action on the part of APT, its
officers, directors and shareholders necessary for the authorization, execution
and delivery of this Agreement, the performance of all obligations of APT
hereunder and the authorization, issuance, sale and delivery of the Common,
Stock being sold hereunder has been taken or will be taken prior to the Closing
and this Agreement constitutes the valid and legally binding obligation of APT,
enforceable in accordance with its terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors' rights generally, and (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies.
2.5 VALID ISSUANCE OF COMMON STOCK. The Common Stock that is being
purchased by Investor hereunder, when issued, sold and delivered in accordance
with the terms of this Agreement for the consideration expressed herein, will be
duly and validly issued, fully paid, and nonassessable, and will be free of
restrictions on transfer other than restrictions on transfer under this
Agreement and under applicable state and federal securities laws.
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2.6 GOVERNMENTAL CONSENTS. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any
federal, state, foreign or local governmental authority on the part of APT is
required in connection with the consummation of the transactions contemplated by
this Agreement, except for the filing pursuant to Section 251020 of the
California Corporate Securities Law of 1968, as amended, and the rules
thereunder, which filing will be effected as required by law.
2.7 OFFERING. Subject in part to the truth and accuracy "Investor's
representations set forth in Section 3 of this Agreement, the offer, sale and
issuance of the Common Stock as contemplated by this Agreement are exempt from
the registration requirements of the Act. and neither APT nor any authorized
agent acting on its behalf will take any action hereafter that would cause the
loss of such exemption.
2.8 LITIGATION. There is no action, suit, proceeding or investigation
pending or currently threatened against APT that questions the validity of this
Agreement, or the right of APT to enter into this Agreement, or to consummate
the transactions contemplated hereby, or that might result, either individually
or in the aggregate, in any material adverse changes in the assets, condition,
affairs or prospects of APT., financially or otherwise, or any change in the
current equity ownership of APT, nor is APT aware that there is any basis for
the foregoing. The foregoing includes, without limitation, actions, suits,
proceedings or investigations pending or threatened (or any basis therefore
known to APT involving the prior employment of any of APT's employees, their use
in connection with APT's business of any information or techniques allegedly
proprietary to any of their former employers, or their obligations under any
agreements with prior employers.
2.9 PROPRIETARY INFORMATION AGREEMENTS, As and when appropriate, each
employee, officer and consultant of APT will promptly execute a Confidentiality
and Non-Disclosure Agreement in a form reasonably acceptable to APT that
requires such person to maintain the confidentiality of the proprietary
information of APT and provides that inventions developed by such person shall
be assigned to APT. APT, after reasonable investigation, is not aware that any
of its employees, officers or consultants are in violation thereof, and APT will
we its best efforts to Prevent any such violation.
2.10 PATENTS AND TRADEMARKS. APT has sufficient title and ownership of
all patents, trademarks, service marks, trade names, secrets, information,
proprietary rights and processes necessary for its business as now conducted and
proposed to be conducted as described in the Business Plan. Neither the
execution nor delivery of this Agreement, nor the carrying on of APT's business
by the employees of APT nor the conduct of APT's business as proposed, will, to
the best of APT's knowledge, conflict with or result in a breach of the terms,
conditions or provisions of, or constitute a default under, any contract,
covenant or instrument under which any of such employees is now obligated.
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2.11 COMPLIANCE WITH OTHER INSTRUMENTS.
(a) APT is not in violation or default in any material respect of
any provisions of its Articles of Incorporation or Bylaws, or of any instrument,
judgment, order, writ, decree or contract to which it is a party or by which it
is bound, or, to the best of their knowledge, any provision of any federal or
state statute, rule or regulation applicable to APT. The execution, delivery and
performance of this Agreement, and the consummation of the transactions
contemplated hereby will not result in any such violation or be in conflict with
or constitute, with or without the passage of time and giving of notice, either
a default under any such provision, instrument, judgment, order, writ, decree or
contract or an event that results in the creation of any lien, charge or
encumbrance upon any assets of APT or the suspension, revocation, impairment,
forfeiture, or non-renewal of any material permit, license, authorization, or
approval applicable to APT, its business or operations of any of its assets or
properties.
(b) APT has avoided every condition, and has not performed any
act, the occurrence of which would result in APT's loss of any right granted
under any license, distribution or other agreement.
2.12 RELATED PARTY TRANSACTIONS. No employee, officer, or director of APT
or member of his or her immediate family is indebted to APT for money borrowed,
nor is APT indebted (or committed to make loans or extend or guarantee credit)
to any of them for money borrowed, except expenses incurred but not reimbursed
as of the date hereof.
2.13 PERMITS. APT has all governmental and regulatory franchises,
permits, licenses, and any similar authority necessary for the conduct of its
business as now being conducted by it the lack of which could materially and
adversely affect the business, properties, prospects, or financial condition, of
APT, and APT believes it can obtain, without undue burden or expense, any
similar authority for the conduct of its business as planned to be conducted.
APT is not in default in any material respect under any of such franchises,
permits, licenses, or other similar authority.
2.14 DISCLOSURE. APT has fully provided the investor with all the
information that the Investor has requested for deciding whether to purchase the
Common Stock and all information about APT that APT believes it reasonably
necessary to enable such Investor to make such decision. Neither this Agreement
nor any other statements or certificates made or delivered in connection
herewith contains any untrue statement of a material fact or omits to state a
material fact necessary to make that statements herein or therein not
misleading.
2.15 BUSINESS PLAN. The Business Plan previously delivered to the
Investor has been prepared in good faith by APT and does not contain any untrue
statement of a material fact nor, to the best of APT's knowledge, does it omit
to state a material fact necessary to make the statements made therein not
misleading, except that with respect to projections contained in the Business
Plan, APT represents only that such projections were prepared in good faith and
that APT reasonably believes there it a reasonable basis for such projections.
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2.16 TITLE TO PROPERTY AND ASSETS. APT owns its property and assets free
and clear of all, mortgages, liens, loans and encumbrances, except such
encumbrances and liens that arise in the ordinary course of business and do not
materially impair APT's ownership or use of such property or assets. With
respect to the property and assets it leases, APT is in compliance with such
leases and to the best of its knowledge, holds a valid leasehold interest free
of any liens, claims or encumbrances.
2.17 FINANCIAL STATEMENTS. The financial statements separately provided
to Investor dated February 28, 1997 (the "Financial Statements") have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods indicated and with each other, except
that the Financial Statements do not contain all footnotes required by generally
accepted accounting principles. The Financial Statements fairly present the
financial condition and operating results of APT as of the dates, and for the
periods, indicated therein. APT will maintain a standard system of accounting
established and administered in accordance with generally accepted accounting
principles.
2.18 TAX RETURNS, PAYMENTS AND ELECTIONS. APT has filed all tax returns
and reports as required by law. These returns and reports are true and correct
in all material respects. APT has paid all taxes and other assessments due,
except those contested by it in good faith.
3. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS. The Investor hereby
represents and warrants that:
3.1 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made with the
Investor in reliance upon the Investor's representation to APT, which by the
Investor' s execution of this agreement the Investor hereby confirms, that the
Common Stock to be received by the Investor will be acquired for investment for
the Investor's own account not as a nominee or agent, and not with a view to the
resale or distribution or any part thereof, and that the Investor has no present
intention of selling, granting any participation in, or otherwise distributing
the same. By executing this Agreement, the Investor further represents that the
Investor does not have any contract, undertaking, agreement or arrangement with
any person to sell, transfer or grant participations to such person or to any
third person, with respect to any shares of the Common Stock to be sold to the
investor hereunder.
3.2 DISCLOSURE OF INFORMATION. The Investor believes it has reviewed all
the information it considers necessary or appropriate for deciding whether to
purchase Common Stock. The Investor further represents that it has had an
opportunity ask questions and receive answers from APT regarding the terms and
conditions of the offering of the Common Stock and the business, properties,
prospects and financial condition of APT. The Investor acknowledges that APT has
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limited financial or operating history and that the Common Stock represents a
speculative investment which involves a high degree of risk of loss by the
Investor of its entire investment in APT. The foregoing, however, does not limit
or modify the representations and warranties of APT in Section 2 of this
Agreement or the right of the Investor to rely thereon.
3.3 INVESTMENT EXPERIENCE. The Investor is an investor in securities of
companies in the development stage and acknowledges that it is able to fend for
itself, can bear the economic risk of its investment, and has such knowledge and
experience in financial or business matters that it is capable of evaluating the
merits and risks of the investment in the Common Stock.
3.4 RESTRICTED SECURITIES. The Investor understands that the Common
Stock it is purchasing is characterized as "restricted securities" under the
federal securities laws inasmuch as they are being acquired from APT in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Act, only in certain limited circumstances. In this connection, the Investor
represents that it is familiar with SEC Rule 144, as presently in effect, and
understands the resale limitations imposed hereby and by the Act.
3.5 FURTHER LIMITATIONS ON DISPOSITION. Without in any way limiting the
representations set forth above, the Investor further agrees not to make any
disposition of all or any portion of the Common Stock unless and until the
transferee has agreed to be bound by this Section 3, provided and to the extent
this section and such agreement are then applicable, and:
(a) There is then in effect a Registration Statement under the Act
covering such proposed disposition and such disposition is made in accordance
with such Registration Statement; or
(b) (i) The investor shall have notified APT that issued such
shares of Common Stock shares of Common Stock of the proposed disposition and
shall have furnished APT with a detailed statement of the circumstances
surrounding the proposed disposition, and (ii) if reasonably requested by APT,
the Investor shall have furnished APT with an opinion of counsel, reasonably
satisfactory to APT that such disposition will not require registration of such
shares under the Act. It is agreed that APT will not require opinions of counsel
for transactions made pursuant to Rule 144 except in unusual circumstances.
(c) Notwithstanding the provisions of paragraphs (a) and (b)
above, no such registration statement or opinion of counsel shall be necessary
for a transfer by the Investor to a partner of such partnership or a retired
partner of such partnership who retires after the date hereof, or to the estate
of any such partner or retired partner or the transfer by gift, will or
intestate succession of any partner to his or her spouse or to tire siblings,
lineal descendants or ancestors of such partner or his or her spouse, if the
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transferee agrees in writing to be subject to the terms hereof to the same
extent as if he or she were the original Investor hereunder.
3.6 LEGENDS. It is understood that the certificates evidencing the
Common Stock may bear one or all of the following legends:
(a) "These securities have not been registered under the
Securities Act of 1933, as amended. They may not be sold, offered for sale,
pledged or hypothecated in the absence of a registration statement in effect
with respect to the securities under such Act or an opinion of counsel
satisfactory to the Company that such registration is not required or unless
sold pursuant to Rule 144 of such Act."
(b) Any legend required by the laws of the State of California,
including any legend required by the California Department of Corporations and
Sections 417 and 418 of the California Corporations Code.
4. CALIFORNIA COMMISSIONER OF CORPORATIONS.
4.1 CORPORATE SECURITIES LAW. THE SALE OF THE SECURITIES THAT ARE THE
SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR
THE PAYMENT OR RECEIPT: OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES
PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT
FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO
EXEMPT.
5. CONDITIONS OF INVESTOR'S OBLIGATIONS AT CLOSING. The obligations of the
Investor under subsection 1.1 of this Agreement are subject to the fulfillment
on or before the Closing of each of the following conditions.
5.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of APT contained in Section 2 shall be true on and as of the Closing with the
same effect as though such representations and warranties had been made on and
as of the date of such Closing.
5.2 PERFORMANCE. APT shall have performed and complied with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing.
5.3 QUALIFICATIONS. All authorizations, approvals, or permits, if any,
of any governmental authority or regulatory body of the United States or of any
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state or foreign jurisdiction that are required in connection with the lawful
issuance and sale of the Common Stock pursuant to this Agreement shall be duly
obtained and effective as of the Closing.
5.5 BYLAWS. The bylaws of APT shall be amended forthwith to provide that
its Board of Directors shall consist of five persons:
4 Seats: Current Board
1 Seat: Dr. K. Philip Hwang
6. CONDITIONS OF APT'S OBLIGATIONS AT CLOSING. The obligations of APT to the
Investor under this Agreement are subject to the fulfillment on or before the
Closing of each of the following conditions by the Investor:
6.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Investor contained in Section 3 shall be true on and as of the Closing
with the same effect as though such representations and warranties had been made
on and as of the Closing.
6.2 PAYMENT OF PURCHASE PRICE. The Investor shall have delivered the
Purchase Price in accordance with Section 1.2.
6.3 QUALIFICATIONS. All authorizations, approvals, or permits, if any,
of any governmental authority or regulatory body of the United States or of any
state or foreign jurisdiction that are required in connection with the lawful
issuance and sale of the Common Stock pursuant to this Agreement shall be duly
obtained and effective as of the Closing.
7. COVENANTS OF APT.
7.1 DELIVERY OF FINANCIAL STATEMENTS. APT shall deliver to the
investor, as soon as practicable, but in any event concurrently with providing
such information to the Board of Directors of APT, all information relating to
the financial condition, business, properties and corporate affairs of APT,
including, without limitation, far each period prepared, an income statement,
balance sheet and statement of shareholders' equity of APT and each schedule as
to the sources and applications of funds of APT.
7.2 INSPECTION. APT: shall permit the investor, at the Investor's
expense, to visit and inspect APT's properties, to examine its books of account
and records and to discuss APT's affairs, finances and accounts with its
officers, all at such reasonable times as may be requested by the Investor;
provided, however, that APT shall not be obligated pursuant to this Section 7.2
to provide information which it deems in good faith to be a trade secret or
similar confidential information.
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7.3 NEGATIVE COVENANTS. APT shall not, without the prior written consent
of a majority of the Board of Directors:
(a) Make, or permit any subsidiary to make, any loan or advance
to, or own any stock or other securities of any subsidiary or other corporation,
partnership, or other entity unless it is wholly owned by APT;
(b) Make, or permit any subsidiary to make, any loan or advance to
any person, including, without limitation, any employee or director of APT or
any subsidiary, except advances and similar expenditures in the ordinary course
of business;
(c) Guarantee, directly or indirectly, or permit any subsidiary to
guarantee, directly or indirectly, any indebtedness except for trade accounts of
APT or any subsidiary arising in the ordinary course of business;
(d) Merge with or into or consolidate with any other corporation,
or sell, lease, or otherwise dispose of all or substantially all of its
properties or assets;
(e) Incur any indebtedness in excess of $500,000, other than
normal financing of accounts receivable;
(f) Authorize or issue, or obligate itself to authorize or issue
any equity security, including any security convertible into or exercisable for
any equity security, except (i) options and reservations referred to in Section
2 hereof.
(g) redeem, repurchase or otherwise acquire: any shares of its
Common Stock; or
(h) enter into or obligate itself to enter into any agreement or
arrangement between APT and any corporation or other entity in which one or more
of its officers or directors has a material financial interest.
7.4 CASH BONUSES. Except as set forth in this Section 7.6, APT shall pay
to any employee, consultant or other person or entity providing services to APT
any compensation whatsoever, other than salaries and customary and reasonable
bonuses payable in accordance with normal and customary policies and procedures
of APT.
7.5 REINCORPORATION. At any time deemed advisable by APT's Board of
Directors, the undersigned will support the reincorporation of APT in either
Nevada or Delaware.
7.6 BOARD OF DIRECTORS. Upon Closing, the Board of Directors shall
consist of five members.
7.7 OFFICERS. The officers of APT shall, until further determination of
the Board of Directors of APT, be:
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President: Charles Antony
Vice President/Engineering: Robert Young
Chief Financial Officer: Michael Blas
7.8 REGISTRATION RIGHTS. All of the undersigned shall possess equal
rights with respect to future registration of APT's securities, if any.
7.9 RELATED PARTY TRANSACTIONS. The undersigned acknowledge that there
will be various conflicts of interest arising from previous agreements and
existing relationships between or among 1)T & M Investors, 2) Donald S.
Williams, its Managing Partner, and 3) Charles Antony, a founding shareholder.
In addition, Donald S. Williams and Charles Antony own licenses which may be
utilized by APT in their various products. Due to these relationships, any
transactions entered into among these parties may be utilized by APT in their
various products. Due to these relationships, any transactions entered into
among these parties may be entered into without the benefit of arms'-length
bargaining and could involve potential conflicts of interest.
8. NO AGREEMENT TO RETAIN STATUS
Nothing in this Agreement shall be construed to constitute or be evidence of any
agreement or understanding, express or implied, on the part of APT to retain the
undersigned in his or her status as an employee, officer or director of or
consultant to APT for any specific period of time.
9. MARKET STANDOFF AGREEMENT
The undersigned agree in connection with any registration of APT's securities
that, upon the request of APT or the underwriters managing any public offering
of APT's securities, no securities of APT of any type, kind or category affected
by this Agreement may be sold or otherwise transferred without the prior written
consent of APT or such underwriters, as the case may be, for a period of time
(not to exceed 180 days) from the effective date of such registration as APT or
the underwriters may specify.
10. TAX ELECTIONS
All signatories hereto acknowledge that they have considered the advisability of
all tax elections in connection with the purchase of the shares hereunder and
the execution and delivery of this Agreement including the making of an election
under section 83(b) of the Internal Revenue Code of 1986, as amended, and any
similar elections under California or applicable state law, and that APT has no
responsibility for the making of any such election.
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11. MISCELLANEOUS
11.1 NOTICES. Any notice required or permitted to be given to a party
pursuant to the provisions of this Agreement shall be in writing and shall be
effective upon personal delivery or upon deposit in the U.S. mail, postage
prepaid and properly addressed to the party to be notified as set forth below
such party's signature or at such other address as such party may designate by
ten (10) days' advance written notice to the other parties hereto.
11.2 SUCCESSORS AND ASSIGNS. This Agreement and the rights and
obligations of the parties hereunder shall inure to the benefit of, and be
binding upon, their respective successors, assigns and legal representatives.
11.3 SEVERABILITY. In the event one or more of the provisions of this
Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement and this Agreement shall
be construed as if such invalid, illegal or unenforceable provision had never
been contained herein.
11.4 AMENDMENTS AND WAIVERS. Any amendment or modification of this
Agreement shall be effective only if evidenced by a written instrument executed
by duly authorized representatives of a majority of the 'Board of Directors. Any
party may waive its individual rights hereunder, which shall be effective only
if evidenced by a written instrument executed by a duly authorized
representative of such party. In no event shall such waiver of any rights
hereunder constitute the waiver of such rights in any future instance unless the
waiver so specifics in writing.
11.5 GOVERNING LAW. This Agreement is being executed and delivered and is
intended to be performed in, and shall be governed by and construed in
accordance with, the laws of the State of California.
11.6 BEST EFFORTS. APT agrees to use its best efforts to enforce the
terms of this Agreement, to inform shareholders of any known breach hereof and
to assist all shareholders in the exercise of their rights and performance of
their obligations hereof.
11.7 DISPUTE RESOLUTION AND ATTORNEYS' FEES. With the exception of those
matters described in Sections 9 and 10, all disputes arising out of or related
to the subject matter hereof shall be submitted to mediation or, failing in
resolution thereby, to final and binding arbitration before, Judicial
Arbitration and Mediation Services ("JAMS"). San Francisco. If a hearing officer
acceptable to all parties is not selected within seven (7) days of submission of
the matter, the Executive Director of JAMS shall make the selection. The
arbitration award shall include an allocation of filing charges, hearing officer
charges, transcripts, expert witness fees, and other costs of suit. If any party
shall bring an action of any type, in law or equity, whether in court or before
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JAMS, against another to enforce or interpret any of the terms, covenants and
provisions of this Agreement, the prevailing party in such action shall be
entitled to an award of reasonable attorneys" fees.
11.8 ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement
between the parties pertaining to its subject matter and supersedes all prior or
contemporaneous written or oral agreements and understandings of the parries,
either express or implied.
11.9 SURVIVAL OF WARRANTIES. All warranties expressed herein shall
survive the execution and performance of this Agreement.
11.10 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be an original but all of which together shall constitute one
instrument.
12. EXCLUSIVE RIGHT TO INVESTOR
It is further agreed that Investor shall have the exclusive right to sell and
market the finished electronic billboard product throughout Asia.
13. UNLESS THE PARTIES HERETO AGREE TO IN WRITING, Investor shall hold, so long
as Investor remains as a shareholder of APT and until completion of first beta
site, at least thirty percent (30%) of the voting common shares of APT.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year indicated above:
"APT" "INVESTOR"
Applied Photonics Technology, Inc. Televideo, Inc.
a California corporation a Delaware corporation
By: /s/ Charles F. Antony By: /s/ K. Philip Hwang
-------------------------------- ------------------------------
Charles F. Antony K. Philip Hwang
President / CEO Chairman & CEO
Address: 900 Hansen Way Address: 2345 Harris Way
Palo Alto, CA San Jose, CA 95131
Date: April 16, 1997 Date: April 16, 1997
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