THE OFFER AND SALE OF THE SECURITIES REFERRED TO IN THIS AGREEMENT (THE
"OFFERING") HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS AND SUCH SHARES
ARE BEING OFFERED AND SOLD IN RELIANCE ON THE EXEMPTION FROM THE SECURITIES
REGISTRATION AND QUALIFICATION REQUIREMENTS OF THE ACT AND SUCH LAWS OFFERED
BY SECTION 4(2) OF THE ACT. ACCORDINGLY, THE SECURITIES MAY NOT BE
TRANSFERRED OR RESOLD WITHOUT REGISTRATION AND QUALIFICATION UNDER THE ACT
AND APPLICABLE STATE SECURITIES LAWS, UNLESS AN EXEMPTION FROM SUCH
REGISTRATION AND QUALIFICATION UNDER THE ACT AND SUCH LAWS IS THEN AVAILABLE.
THE OFFER AND SALE OF THE SECURITIES EFFECTED HEREBY HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE
SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE
FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THE OFFERING.
SUBSCRIPTION AGREEMENT
MICROTEL INTERNATIONAL, INC.
CONVERTIBLE PREFERRED STOCK - SERIES A
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THIS SUBSCRIPTION AGREEMENT (hereinafter the "Agreement") has been executed
by the undersigned (collectively the "Buyer") in connection with the sale of
certain Securities designated as Series A Convertible Preferred Stock
(hereinafter the "Preferred Shares"), which are convertible into shares of
common stock (hereinafter the "Conversion Shares") of MicroTel International,
Inc. (the "Company").
1. AGREEMENT TO SUBSCRIBE; PURCHASE PRICE
1.1 Each Buyer hereby subscribes for the number of Preferred Shares set
forth below on the signature page of this Agreement which Preferred Shares
shall be convertible into Conversion Shares of the Company in accordance with
the terms set forth in the Certificate of Designations, Rights and
Preferences of Preferred Stock attached as Exhibit A to this Agreement (the
"Conversion Shares"), at a purchase price of $10,000 per Preferred Share
payable in United States Dollars.
1.2 Buyer shall pay the purchase price by delivering same day funds in
United States Dollars to the Company upon delivery of the Preferred Shares by
the Company to Buyer.
2. REPRESENTATIONS AND WARRANTIES.
2.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants that as of the date of this Agreement:
(a) EXISTENCE. The Company is a corporation duly organized and in
good standing under the laws of the State of Delaware and is duly qualified
to do business and is in good standing in all states where such
qualification is necessary, except for those jurisdictions in which the
failure to qualify would not, in the aggregate, have a material adverse
effect on the Company's financial condition, results of operations or
business.
(b) AUTHORITY. The execution and delivery by the Company of this
Agreement and the Preferred Stock (i) are within the Company's corporate
powers; (ii) are duly authorized by the Company's board of directors; (iii)
are not in contravention of the terms of the Company's certificate of
incorporation or bylaws; (iv) are not in contravention of any law or laws;
(v) except for the filing of a Form D Notice with the Securities and
Exchange Commission and any exemption filing related thereto which may be
required pursuant to applicable state securities or "blue sky" laws, do not
require any governmental consent, registration or approval; (vi) do not
contravene any contractual or governmental restriction binding upon the
Company; and (vii) will not result in the imposition of any lien, charge,
security interest or encumbrance upon any property of the Company under any
existing indenture, mortgage, deed of trust, loan or credit agreement or
other material agreement or instrument to which the Company is a party or
by which the Company or any of the Company's property may be bound or
affected.
(c) BINDING EFFECT. This Agreement has been duly authorized,
executed and delivered by the Company and constitutes the valid and legally
binding obligation of the Company, enforceable in accordance with its
terms, subject to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles.
(d) CAPITALIZATION. The authorized capital stock of the Company
consists of 25,000,000 shares of Common Stock, par value $.0033 per share,
11,927,793 shares of which are issued and outstanding and 10,000,000 shares
of Preferred Stock, par value $.01 per share, of which none are
outstanding. The shares of common stock issuable upon conversion of the
Preferred Stock (the "Conversion Shares") have been duly and validly
authorized and reserved for issuance and, when issued and delivered in
accordance with the terms of this Agreement, will be duly and validly
issued, fully paid and non-assessable.
(e) SEC DOCUMENTS. The Company has furnished each Buyer with a true
and complete copy of the Company's Report on Form 10-K for the fiscal year
ended December 31, 1997 and Form 10-Q for the quarter ended March 31, 1998
(the "Disclosure Documents"). Except as disclosed in the Disclosure
Documents, since December 31, 1997 the Company has not incurred any
material liability except in the
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ordinary course of its business consistent with past practice and there
has not been any change in the business, financial condition or results
of operations of the Company which has had a material adverse effect on the
Company. Since January 1, 1997, the Company has filed with the Securities
and Exchange Commission (the "SEC") all documents required to be filed
pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations promulgated thereunder. As
of their respective dates, the Disclosure Documents complied in all
material respects with the requirements of the Exchange Act, and the rules
and regulations of the SEC thereunder applicable to such Disclosure
Documents, and the Disclosure Documents did not contain any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
The financial statements of the Company included in the Disclosure
Documents (the "Financial Statements") comply as to form in all material
respects with applicable accounting requirements and with the published
rules and regulations of the SEC with respect thereto. The Financial
Statements are accurate, complete and have been prepared in accordance
with the books and records of the Company and in accordance with
generally accepted accounting principles applied on a consistent basis
during the periods involved (except as may be indicated in the notes
thereto and fairly present (subject, in the case of the unaudited
statements, to normal, recurring audit adjustments that are not material)
the consolidated financial position of the Company as at the dates thereof
and the consolidated results of its operations and cash flows for the
periods then ended.
(f) LITIGATION. Except as set forth in the Disclosure Documents,
there is neither pending nor, to the Company's knowledge and belief,
threatened any action, suit, proceeding or claim, or any basis therefor, to
which the Company is or may be named as a party or its property is or may
be subject or which calls into question any of the transactions
contemplated by this Agreement.
(g) SECURITIES MATTERS. Subject to the accuracy of the
representations of the Buyers set forth in Section 2.2 hereof, the offer,
sale and issuance of the Preferred Stock and the Conversion Shares as
contemplated by this Agreement are exempt from the registration
requirements of the Securities Act of 1933 as amended (the "Securities
Act"). The Company has complied and will comply with all applicable state
"blue sky" or securities laws in connection with the offer, sale and
issuance of the Preferred Stock and the Conversion Shares as contemplated
by this Agreement.
(h) CERTIFICATES. The Company will issue one or more Certificates
representing the Preferred Shares in the name of Buyer with the following
restrictive legend set forth below (the "Restrictive Legend") in such
denominations to be specified by the Buyer:
"The Securities represented by this Certificate have not
been registered under the United States Securities Act of
1933 (the "Act") and may not be sold, transferred, pledged
or otherwise
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hypothecated unless (a) they are covered by a registration
statement or a post-effective amendment thereto under the
Act, or (b) in the opinion of counsel for Buyer, which
opinion shall be reasonably acceptable to the Company,
such sale, transfer, pledge or hypothecation is otherwise
exempt from the provisions of Section 5 of the Act."
(i) CONVERSION. Within two full business days of receipt by the
Company of a properly executed request for conversion in the form annexed
as Exhibit B hereto accompanied by the Preferred Shares to be converted,
the Company will deliver to its transfer agent its directive and
authorization to execute the conversion and to issue to Buyer the common
stock shares so authorized.
The Company acknowledges that a delay in issuance of its authorization
and directive for the conversion could result in economic loss to the
Buyer. Therefore, as compensation to the Buyer for such loss, in the event
that the Company fails to deliver said authorization and directive within
two full business days, the Company agrees to pay liquidated damages to the
Buyer for late issuance of said authorization and directive in the amount
of $500 per day for each day of delay after three days, up to a maximum of
$10,000 per conversion request. Nothing herein shall create a liability to
the Company for actions or delays of the transfer agent once the
authorization and directive have been delivered to it by the Company. Any
liquidated damages due Buyer will be paid within seven (7) days of issuance
of the shares resulting from the conversion.
(j) ISSUANCE OF SHARES. Upon conversion of the Preferred Shares, the
Company will issue one or more certificates representing the Conversion
Shares in the name of the Buyer without restrictive legend, except as may
otherwise be required by applicable law, rule or regulation, and in DTC
eligible form, in such denominations to be specified by the Buyer prior to
conversion provided Buyer represents to the Company that resale of the
Conversion Shares will be made only in compliance with applicable
securities laws. Company further warrants that no instructions other than
these instructions, and instructions for a "stop transfer" for any sale of
Conversion Shares in excess of those permitted to be sold under Section
2.2(c), have been given to the transfer agent and also warrants that the
Conversion Shares shall otherwise be freely transferable on the books and
records of the Company subject to compliance with Federal and State
securities laws.
2.2 REPRESENTATIONS AND WARRANTIES OF THE BUYER. Each Buyer represents
and warrants that as of the date of the execution of this Agreement:
(a) AUTHORIZATION. This Agreement constitutes a valid and legally
binding obligation of such Buyer.
(b) INVESTMENT REPRESENTATIONS (i) The Buyer has received and
reviewed the Company's Disclosure Documents and the Buyer or the Buyer's
designated
4
representatives have concluded a satisfactory due diligence investigation
of the Company and have had an opportunity to have all their questions
regarding the Company satisfactorily answered.
(ii) The Buyer acknowledges that the Preferred Stock and the
Conversion Shares are speculative and involve a high degree of risk
and the Buyer represents that it is able to sustain the loss of the
entire amount of its investment.
(iii) The Buyer (or its members and/or officers) has
previously invested in unregistered securities and has sufficient
financial and investing expertise to evaluate and understand the risks
of the Preferred Stock and the Conversion Shares.
(iv) The Buyer has received from the Company, and is relying
on, no representations (except as set forth in this Agreement) or
projections with respect to the Company's business and prospects.
(v) The Buyer is an "accredited investor" within the
meaning of Regulation D under the Securities Act.
(vi) The Buyer is acquiring the Preferred Stock and the
Conversion Shares for investment purposes only without intent to
distribute the same, and acknowledges that the Preferred Stock and the
Conversion Shares have not been registered under the Securities Act
and applicable state securities laws, and accordingly, constitute
"restricted securities" for purposes of the Securities Act and such
state securities laws.
(vii) The Buyer acknowledges that it will not be able to
transfer the Preferred Stock and the Conversion Shares except upon
compliance with the registration requirements of the Securities Act
and applicable state securities laws or exemptions therefrom.
(viii) The certificates and/or instruments evidencing the
Preferred Stock and the Conversion Shares will contain a legend to the
foregoing effect.
(c) LOCK-UP. The Buyer will not transfer any Preferred Shares or
Conversion Shares for a period of ninety (90) days after the date of the
Closing. No more than 20% of the aggregate number of Series A Preferred
Shares originally purchased and owned by the Buyer may be converted in any
thirty (30) day period, on a cumulative basis, after the ninetieth (90th)
day of issuance. Further, the Buyer will not, after conversion, sell more
than 20% of the Conversion Shares owned by it in any thirty day period, on
a cumulative basis, commencing with the ninety-first (91st) day after the
Closing.
3. CLOSING
3.1 The Buyer understands that the Company's obligation to sell the
Preferred Shares
5
is conditioned upon delivery by the Buyer to the Company of the purchase price
set forth in Section 1 herein.
3.2 The Company understands that Buyer's obligation to purchase the
Preferred Shares is conditioned upon delivery of certificate(s) representing the
Preferred Shares as described herein, and provision of an opinion of counsel as
provided in Subsection D (ii) herein below.
3.3 For this transaction to close, the Buyer must:
(i) Wire funds to the Pacific Continental Securities
Corporation, as Escrow Agent (the "Escrow Agent"), in the amount of
Five Hundred Thousand U.S. dollars ($500,000) (the "Purchase Price")
no later than 72 hours after receipt by the Company of the
Subscription Agreement executed by the Buyer and the Company. Wire
transfer instructions for the Escrow Agent are annexed as Exhibit C
hereto.
(ii) Deliver a signed Subscription Agreement.
3.4 For this transaction to close, the Company must:
(i) Deliver to the Buyer Certificate(s) for the Preferred
Shares.
(ii) Deliver to the Buyer the Company's Certificate of
Designation set forth in Exhibit A hereto.
(iii) Deliver to the Buyer an opinion letter from the
Company's counsel stating that (a) the Company is duly incorporated
and validly existing; (b) this Agreement, the issuance of the
Preferred Shares, and the issuance of the Common Stock upon conversion
of the Preferred Shares up to the number of shares of common stock
authorized in the Company's Certificate of Incorporation, have been
duly approved by all required corporate action, and that all such
securities upon due issuance, shall be validly issued and outstanding,
fully paid and nonassessable, and in each case, having the rights,
preferences and privileges set forth in the Certificate of
Incorporation; and (c) this Agreement is a valid and binding
obligation of the Company, enforceable in accordance with its terms,
except as enforceability of any indemnification provisions may be
limited by principles of public policy, and subject to laws of general
application relating to bankruptcy, insolvency and the relief of
debtors and rules of laws governing specific performance and other
equitable remedies; and
(iv) Deliver to the Buyer a signed Subscription Agreement
which shall be signed after execution of such Subscription Agreement
by Buyer; and
(v) Deliver to the Buyer executed warrants to purchase
common stock
6
of the Company in the form attached hereto as Exhibit D (the
"Warrants").
7
3.5 Upon confirmation by Buyer that it has received each of the items set
forth in 3.4(i)-(v), and by the Company that it has received a signed
Subscription Agreement, Escrow Agent shall, after deducting any amounts due to
it from the Company, release the balance of the purchase price to the Company or
as directed by the Company.
E. Pacific Continental Securities Corporation shall serve as agent (the
"Agent") in the transaction contemplated by this Agreement. Agent's fee is
solely the responsibility of the Company and Company expressly agrees to
pay Agent said fee as such is agreed upon between the Company and the
Agent. Neither the Company nor the Agent has any recourse of any kind
whatsoever against the Buyer for any monies owed the Agent by the Company
or for any monies paid by the Company to the Agent. Company expressly
indemnifies Buyer against any monies owed the Agent.
4. REGISTRATION OF CONVERSION SHARES
4.1 The Company shall prepare and file with the SEC a registration
statement as soon as practical, which registration statement shall include the
Conversion Shares and shares of Common Stock issuable pursuant to the Warrants
("Warrant Shares") and shall thereafter use its best efforts to have such
registration statement declared effective within 90 days after the Closing Date
(the "Target Date") and remain effective until the earlier of the date on which
all the Conversion Shares are sold or two years after the Closing Date (the
"Effective Period"). The Company shall prepare and file with the SEC such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective throughout the Effective Period and to comply with the
provisions of the Securities Act with respect to the sale or other disposition
of the Conversion Shares or Warrant Shares covered by such registration
statement whenever the Buyer shall desire to sell or otherwise dispose of the
same.
4.2 If a registration statement covering all Shares is not effective by
the Target Date, the Company shall pay to the Buyers as liquidated damages an
aggregate amount equal to one percent ( 1%) of the total purchase price of the
Preferred Stock for each thirty (30) day period following the Target Date until
such time as the registration statement is declared effective. The payment set
forth above shall be pro-rated daily as to any period of less than thirty (30)
days. Such payment shall be made to each Buyer by cashier's check or wire
transfer in immediately available funds to such account as shall be designated
in writing by the Buyer and shall be paid irrespective of the amount of
Preferred Stock, Conversion Shares and Warrant Shares held by Buyer on the
Target Date and thereafter.
4.3 Any amount payable pursuant to the foregoing provisions shall be
delivered on or before the fifth (5th) day following the end of the calendar
month in which such payment or delivery obligation arose.
4.4 The Company shall file a request for acceleration of effectiveness of
the registration statement within five days after it has received a no review/no
further comment determination from the SEC.
8
4.5 It shall be a condition precedent to the obligation of the Company to
register any Conversion Shares and Warrant Shares pursuant to this Section 4
that Buyer shall furnish to the Company such information regarding the
Conversion Shares and Warrant Shares held and the intended method of disposition
thereof and other information concerning the Buyer as the Company shall
reasonably request and as shall be required in connection with the registration
statement to be filed by the Company. If after a registration statement becomes
effective the Company advises the Buyer that the Company considers it
appropriate to amend or supplement the applicable registration statement, the
Buyer shall suspend further sales of the Conversion Shares and Warrant Shares
until the Company advises the Buyer that such registration statement has been
amended or supplemented.
4.6 Whenever the Company is required by the provisions of this Section 4
to effect the registration of the Conversion Shares and Warrant Shares under the
Securities Act, the Company shall:
(i) Prepare and file with the SEC a registration statement
with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective;
(ii) Prepare and file with the SEC such amendments to such
registration statement and supplements to the prospectus contained
therein as may be necessary to keep such registration statement
effective;
(iii) Furnish to the Buyer and to the underwriters (if any)
of the securities being registered such reasonable number of copies of
the registration statement, preliminary prospectus, final prospectus
and such other documents as the Buyer may reasonably request in order
to facilitate the public offering of such securities;
(iv) Use its best efforts to register or qualify the
securities covered by such registration statement under such state
securities or Blue Sky Laws of such jurisdictions as the Buyer may
reasonably request within twenty (20) days following the original
filing of such registration statement, except that the Company shall
not for any purpose be required to execute a general consent to
service of process or to qualify to do business as a foreign
corporation in any jurisdiction wherein it is not so qualified;
(v) Notify the Buyer, promptly after it shall receive
notice thereof, of the time when such registration statement has
become effective or a supplement to any prospectus forming a part of
such registration statement has been filed;
(vi) Notify the Buyer promptly of any request by the SEC for
the amending or supplementing of such registration statement or
prospectus or for additional information; and
9
(vii) Prepare and promptly file with the SEC and promptly
notify the Buyer of the filing of such amendment or supplement to such
registration statement or prospectus as may be necessary to correct
any statements or omissions if, at the time when a prospectus relating
to such securities is required to be delivered under the Securities
Act, any event shall have occurred as the result of which any such
prospectus or any other prospectus as then in effect would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading.
4.7 With respect to the inclusion of the Conversion Shares and Warrant
Shares in a registration statement pursuant to this Section 4, all registration
expenses, fees, costs and expenses of and incidental to such registration,
inclusion and public offering in connection therewith shall be borne by the
Company; provided, however, that the Buyer shall bear its own professional fees
and pro rata share of the underwriting discount and commissions, if any. The
fees, costs and expenses of registration to be borne by the Company shall
include, without limitation, all registration, filing, printing expenses, fees
and disbursements of counsel and accountants for the Company, fees and
disbursements of counsel for the underwriter or underwriters of such securities
(if any and if the Company and/or selling security holders are required to bear
such fees and disbursements), and all legal fees and disbursements and other
expenses of complying with state securities or Blue Sky Laws of any jurisdiction
in which the securities to be offered are to be registered or qualified.
4.8 Subject to the conditions set forth below, in connection with any
registration of the Shares pursuant to this Section 4, the Company agrees to
indemnify and hold harmless the Buyer, any underwriter for the Company or acting
on behalf of the Buyer and each person, if any, who controls the Buyer, within
the meaning of Section 15 of the Securities Act, as follows:
(i) Against any and all loss, claim, damage and expense
whatsoever arising out of or based upon (including, but not limited
to, any and all expense whatsoever reasonably incurred in
investigating, preparing or defending any litigation, commenced or
threatened, or any claim whatsoever based upon) any untrue or alleged
untrue statement of a material fact contained in any preliminary
prospectus (if used prior to the effective date of the registration
statement), the registration statement or the prospectus (as from time
to time amended and supplemented), or in any application or other
document executed by the Company or based upon written information
furnished by the Company filed in any jurisdiction in order to qualify
the Company's securities under the securities laws thereof, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading, or any other violation of applicable federal or state
statutory or regulatory requirements or limitations relating to action
or inaction by the Company in the course of preparing, filing, or
implementing such registered offering; provided, however, that the
indemnity agreement contained in this section shall not apply to
10
any loss, claim, damage, liability or action arising out of or based
upon any untrue or alleged untrue statement or omission made in
reliance upon and in conformity with any information furnished in
writing to the Company by or on behalf of the Buyer expressly for use
in connection therewith or arising out of any action or inaction of
the Buyer;
(ii) Subject to the proviso contained in Subsection (i)
above, against any and all loss, liability, claim, damage and expense
whatsoever to the extent of the aggregate amount paid in settlement of
any litigation, commenced or threatened, or of any claim whatsoever
based upon any untrue statement or omission (including, but not
limited to, any and all expense whatsoever reasonably incurred in
investigating, preparing or defending against any such litigation or
claim) if such settlement is effected with the written consent of the
Company; and
(iii) In no case shall the Company be liable under this
indemnity agreement with respect to any claim made against such
Company, underwriter or any such controlling person unless the Company
shall be notified, by letter or by facsimile confirmed by letter, of
any action commenced against such persons, promptly after such person
shall have been served with the summons or other legal process giving
information as to the nature and basis of the claim. The failure to
so notify the Company, if prejudicial in any material respect to the
Company's ability to defend such claim, shall relieve the Company from
its liability to the indemnified person under this Section 4, but only
to the extent that the Company was prejudiced. The failure to so
notify the Company shall not relieve the Company from any liability
which it may have otherwise than on account of this indemnity
agreement. The Company shall be entitled to participate at its own
expense in the defense of any suit brought to enforce any such claim,
but if the Company elects to assume the defense, such defense shall be
conducted by counsel chosen by it, provided such counsel is reasonably
satisfactory to the Company or controlling persons, defendants in any
suit so brought. In the event the Company elects to assume the
defense of any such suit and retain such counsel, the Company,
underwriter or controlling persons, defendants in the suit, shall,
after the date they are notified of such election, bear the fees and
expenses of any counsel thereafter retained by them, as well as any
other expenses thereafter incurred by them in connection with the
defense thereof; provided, however, that if the Company, underwriter
or controlling persons reasonably believe that there may be available
to them any defense or counterclaim different than those available to
the Company or that representation of such Company, underwriters or
controlling persons by counsel for the Company presents a conflict of
interest for such counsel, then such Company, underwriter and
controlling person shall be entitled to defend such suit with counsel
of their own choosing and the Company shall bear the fees, expenses
and other costs of such separate counsel.
11
4.9 Each Buyer agrees to indemnify and hold harmless the Company, each
underwriter for the offering, (if any), and each of their officers and directors
and agents and each other person, if any, who controls the Company and
underwriter within the meaning of Section 15 of the Securities Act against any
and all such losses, liabilities, claims, damages and expenses as are
indemnified against by the Company under Section 4.6 above; provided, however,
that such indemnification by Buyer hereunder shall be limited to any losses,
liabilities, claims, damages, or expenses to the extent caused by any untrue
statement of a material fact or omission of a material fact (required to be
stated therein or necessary to make statements therein not misleading), if any
made (or in settlement of any litigation effected with the written consent of
such Company, alleged to have been made) in any preliminary prospectus, the
registration statement or prospectus or any amendment or supplement thereof or
in any application or other document in reliance upon, and in conformity with,
written information furnished in respect of such Company by or on behalf of such
Company expressly for use in any preliminary prospectus, the registration
statement or prospectus or any amendment or supplement thereof or in any such
application or other document or arising out of any action or inaction of such
Company in implementing such registered offering. Notwithstanding the
foregoing, the indemnification obligation of each Buyer shall not exceed the
purchase price of the Notes paid by such Buyer. In case any action shall be
brought against the Company, or any other person so indemnified, in respect of
which indemnity may be sought against any Company, such Company shall have the
rights and duties given to the Company, and each other person so indemnified
shall have the rights and duties given to the Buyer, by the provisions of
Section 4.6. The person indemnified agrees to notify the Company promptly after
the assertion of any claim against the person indemnified in connection with the
sale of securities.
4.10 If the indemnification provided for in Sections 4.8 and 4.9 above are
unavailable or insufficient to hold harmless an indemnified party in respect of
any losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative fault of the indemnified party, on one hand,
and such indemnifying party, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages, or
liabilities (or actions in respect thereof). The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the indemnified party, on one
hand, or such indemnifying party, on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. No person who has committed fraudulent
misrepresentation (within the meaning of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof referred to above in this Section shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim.
5. CLOSING DATE
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The Preferred Share certificate shall be delivered to Buyer and the funds
therefore shall be delivered to Company on or before May 22, 1998 (the "Closing
Date") or at such other time mutually agreed to by the parties.
6. GOVERNING LAW; INTERPRETATION
This Agreement shall be governed by and interpreted in accordance with the
laws of the State of Delaware. Facsimile signatures of this Agreement shall be
binding on all parties hereto.
7. ENTIRE AGREEMENT; AMENDMENT
This Agreement and the other documents delivered pursuant hereto constitute
the full and entire understanding and agreement between the parties with regard
to the subjects hereof and thereof, and no party shall be liable or bound to any
other party in any manner by any warranties, representations or covenants except
as specifically set forth herein or therein. Except as expressly provided
herein, neither this Agreement nor any term hereof may be amended, waived,
discharged or terminated other than by a written instrument signed by the party
against whom enforcement of any such amendment, waiver, discharge or termination
is sought.
8. NOTICES; ETC.
Any notice, demand or request required or permitted to be given by either
the Company or the Buyer pursuant to the terms of this Agreement shall be in
writing and shall be deemed given when delivered personally or by facsimile,
with a hard copy to follow by two day courier addressed to the parties at the
addresses of the parties set forth at the end of this Agreement or such other
address as a party may request by notifying the other in writing.
9. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
10. SEVERABILITY
In the event that any provision of this Agreement becomes or is declared by
a court of competent jurisdiction to be illegal, enforceable or void, this
Agreement shall continue in full force and effect without said provision,
provided that no such severability shall be effective if it materially changes
the economic benefit of this Agreement to any party.
11. TITLES AND SUBTITLES
The titles and subtitles used in this Agreement are used for convenience
only and are not to be considered in construing or interpreting this Agreement.
13
IN WITNESS WHEREOF, this Agreement was duly executed on the date first
written above, as confirmed by signatory below. Facsimile signatures of this
agreement shall be binding on all parties hereto.
Official Signatory of Company:
MICROTEL INTERNATIONAL, INC.
0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
By:________________________________
Xxxxxxx X. Xxxxx
President and Chief Executive Officer
RANA GENERAL HOLDING, LTD.
By:________________________________
Number of Shares of
Series A Preferred: 50
