EXHIBIT 10.6
STOCK PURCHASE AND ASSET SALE AGREEMENT
This Agreement is made this 1st day of July, 1999 between Inter-American
Telecommunications Corporation ("Buyer") and Cognigen Corporation ("Seller").
RECITALS
The Buyer was organized for the purpose of consolidating the operations of
certain enterprises engaged in the commerce and transmission of domestic and
international long distance telephone and related services. The Seller is
engaged in direct and multilevel electronic marketing and sale of long distance
telephone service products. The Buyer will be engaged in the direct and
multilevel agency marketing and sale of long distance service and products as
well as switching and transport of voice, fax and data telephone and Internet
traffic and related services.
In order to promote and bring about greater synergies of effort and economies of
scale, the Buyer has agreed to purchase and the Seller has agreed to sell all of
the assets described herein.
1. PARTIES:
1.1 Inter-American Telecommunications Holding Corporation, the Buyer, also
referred to as "ITHC," a Delaware corporation with 10,000 common shares of
authorized capital stock with no par value.
1.2 Cognigen Corporation, the Seller also referred to as "Cognigen," a Nevada
corporation.
1.3 ITHC and Cognigen are hereinafter collectively referred to as the
"Parties."
2. CONSIDERATION:
2.1 The Seller has agreed to sell, transfer and exchange all of the herein
described assets owned by it to the Buyer and the Buyer has agreed to
purchase those assets for and in consideration of:
a. Five Thousand Five Hundred (5,500) shares of the Buyer's common stock,
and
b. Payment of $300,000 cash, and
c. A contract of employment in favor of Xxxxx Xxxxxxxx as Managing
Director of the Cognigen E-Commerce Division of ITHC for a period of 4
years with an annual base salary of $175,000, and
d. Provision of $600,000 of working capital, over and above the current
level of operating costs to cover business expansion and staffing
requirements for the Cognigen E-Commerce Division over a 3 year
period.
e. Permission to insert banner advertising for non-telecommunications
products on the bottom margin of Buyer's Web sites for a period of 4
years at no cost.
3. ASSETS SELLER WILL DELIVER AT TME OF CLOSING:
3.1 All of its agency, reseller and other agreements and contracts Seller has
with carriers, switched resellers, unswitched resellers, consolidators or
other providers of long distance and local telephone service.
3.2 All accounts receivable, commissions receivable, future commissions that
are and may be payable from any of the carriers, switched resellers,
unswitched resellers, consolidators or other providers of long distance and
local telephone service.
3.3 All computer software, proprietary programs and applications, computers,
monitors, peripherals, printers, copiers, telephone PABX systems, office
furniture and fixtures, office leases, belonging to and used by the Seller
in the conduct of its business.
3.4 All of the Seller's customer databases, customers lists, print and
electronic records relating to customers.
3.5 Inventories and orders for prepaid telephone cards. 3.6 All new accounts
generated via Seller's Web sites or through direct sales. 3.7All Web sites,
pages, links and agreements related to the conduct of its core
telecommunications business as well as all Internet domains, and email
addresses.
3.8 All of the Seller's agreements with agents and their subagents within or
without its multilevel marketing system. 3.9 Exclusive use and control of
the name "Cognigen" and its attendant copyright, trade name, trademark and
service xxxx registrations both federal and state that may exist.
3.10 All other intellectual property of the Seller owned and used in connection
with the conduct of its core telecommunications business.
3.11 All its lines of credit with carriers, prepaid card providers, switched
resellers, switchless resellers and other providers of local and long
distance phone service.
4. SELLER'S REPRESENTATIONS AND WARRANTIES:
4.1 Seller warrants that pursuant to its articles of incorporation and by-laws
it has the legal right to enter into the present Agreement. Seller also
warrants that it has the required corporate authority to enter into and
conclude this transaction as evidenced by the attached corporate
resolution.
4.2 That the transaction provided for in this Agreement is not prohibited or
affected by indentures, mortgages, loans, credit arrangements, or other
agreements.
4.3 Seller warrants it has good title to the above listed assets.
4.4 Seller warrants that affecting it there is no litigation pending,
outstanding, or adverse actions known. 4.5 Seller warrants it holds all
permits, licenses, approvals required by law for the conduct of its
business.
5. BUYER WILL DELIVER AT TIME OF CLOSING:
5.1 The shares of stock provided for in paragraph 2.1(a),
5.2 A promissory note made by the Buyer in favor of the Seller in the amount of
$300,000 as provided for in paragraph 2.1(b), and
5.3 Delivery of an executed contract of employment provided for in paragraph
2.1(c).
6. TERMS OF DEFAULT BY BUYER OR SELLER:
6.1 Failure of any party to the Agreement insisting upon strict performance of
the provisions hereof shall not be construed as waiving their rights under
it.
6.2 Default by either party in their performance of the provisions of the
Agreement constitutes legal basis for the rescission or termination by the
other party.
6.3 Either party shall have 30 days from date of notification of such default
to cure or remedy the default.
7. SELLERS DECLARATION RELATIVE TO FINANCIAL STATEMENTS:
7.1 Seller declares that to the best of its information and knowledge the
financial statements, analyses and reports submitted to the Buyer for the
years reported and any interim periods are unaudited, complete, correct and
prepared by Seller's management in accordance with generally accepted
accounting principles consistently applied for the periods covered.
7.2 Seller further declares that such statements, analyses and reports fairly
present the financial condition of the company and the results of
operations for the covered periods.
8. BUYER'S REPRESENTATIONS AND WARRANTIES:
8.1 The execution, delivery, and performance of this Agreement has been
authorized properly and is a valid and legally binding obligation of the
Buyer.
8.2 There are no actions, suits or proceedings that have been instituted or
threatened by a court or government agency or body that casts doubt on the
Buyer's ability to conclude this Agreement, or its legality or validity.
9. OBLIGATIONS OF THE SELLER AND THE BUYER:
9.1 Both Seller and Buyer declare that all applicable laws and regulations that
may affect the execution and fulfillment of this Agreement have been
complied with.
9.2 Seller shall be responsible for the full and orderly transfer and delivery
to the Buyer of the assets listed in paragraphs 3.1 to 3.11 and as more
fully detailed in Annex A, attached hereto and made a part hereof.
9.3 Seller shall be responsible to assure that the conduct of business prior to
closing will be in the ordinary course of events, consistent with prior
practice. The business will be kept intact with employees, suppliers,
landlords, and customers. Seller will assist Buyer in obtaining employment
agreements or other agreements, if needed, with certain or all officers and
employees.
9.4 Seller will provide best efforts to make available to Buyer full access to
its books, records and latest financial statements.
9.5 Seller will assist and provide the required signatures to transfer to
Buyer's control all required bank accounts, or to open new accounts and to
transfer funds as may be appropriate.
9.6 Buyer shall carry out the completion of this Agreement in all respects.
10. INDEMNIFICATION:
10.1 Seller shall indemnify Buyer against losses or costs arising out of (1)
liabilities that were not contemplated or disclosed, but that should have
been, (2) misrepresentations, or (3) breaches of warranties.
10.2 No adjustments or indemnification to purchase price shall, however, be made
that will affect the integrity of the number of Buyer's shares issued and
transferred to Seller.
11. CLOSING:
11.1 Closing of this transaction shall take place concurrent with execution of
this Agreement by the Parties.
12. MISCELLANEOUS:
12.1 This Agreement shall be binding upon the legal successors and assignees of
the parties.
12.2 Notices to the parties shall be communicated as follows: Seller Xxxxxx
Xxxxxxxx, CCC 000 Xxxxx Xxxx Xxxxxx Xxxxx, Xxxxx 000 Xxxxxxx, XX 00000
Buyer: Xxxxx Xxxxxx, ITHC 0000 Xxxxxx Xxxxxx, Xxxxx 000 Xxxxxxx, XX 00000
12.3 This Agreement and attached exhibits are complete and represent the entire
agreement between the parties, and supersede other prior agreements and
understandings.
12.4 This Agreement is subject to the laws and jurisdiction of the courts of the
State of Delaware.
13. EXHIBITS:
13.1 Seller's Corporate Resolution
13.2 Buyer's Promissory Note
13.3 Xxxxx Xxxxxxxx Employment Contract
13.4 Buyer's Corporate Resolution
13.5 Annex A, List of Assets
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the day and year set forth above.
Inter-American Telecommunications Holding Corporation
By:/s/Xxxxx Xxxxxx
--------------------------------
Xxxxx Xxxxxx, Authorized Officer
Cognigen Corporation
By:/s/Xxxxxx Xxxxxxxx
-----------------------------------
Xxxxxx Xxxxxxxx, Authorized Officer
PROMISSORY NOTE
July 1, 1999 $300,000
On or before ninety days from the date hereof, without grace, we
promise to pay to the order of Cognigen Corporation (NV), at its
offices in Seattle, Washington, the sum of THREE HUNDRED THOUSAND
DOLLARS ($300,000) together with interest at the rate of 8% per annum
until paid. We waive demand and presentment. In case suit is instituted
to effect collection we agree to pay reasonable attorneys fees, which
shall not in any circumstance exceed 15% of the face value hereof.
Inter-American Telecommunications Holding Corporation (DE)
By:
--------------------------------
Xxxxx Xxxxxx, Authorized Officer
