EXHIBIT 10.14
HARBOR CITY CORPORATION
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (hereinafter referred to as the
"Agreement") is made and entered into this 18th day of May, 1998 by and between
Carnegie International Corporation, a Corporation of the Stale of Colorado
(hereinafter referred to as "Carnegie" or "Purchaser") Xxxxx Xxxx, Individually
(hereinafter referred to as "Xx. Xxxx"), Xxxxx X. Xxxx, Individually
(hereinafter referred to as "Xx. Xxxx) and Harbor City Corporation, t/a ACC
Telecom (hereinafter referred to as the "Company"), a Corporation of the State
of Maryland. Xx. Xxxx and Xx. Xxxx shall hereinafter collectively be referred to
as "Seller".
EXPLANATORY STATEMENT
Seller owns One Thousand (1,000) shares of Common Stock of the Company,
which represents One Hundred Percent (100%) of the issued and outstanding
Company Stock, (hereinafter referred to as the "Shares"). The Company owns One
Hundred percent (100%) of the assets used in the operation of the Company
including but not limited to equipment, furniture, fixtures, inventory, contract
rights, lease rights for the Premises of the Company located at 0000 Xxxxxx
Xxxx, Xxxx X, Xxxxxxxx, Xxxxxxxx 00000 (hereinafter referred to as the
"Premises"), and any and all other assets related to the business of the Company
(hereinafter referred to as the "Assets").
Carnegie shall purchase the Shares from Seller, together with such
relative rights, preferences and i limitations as appertain to said Shares, as
are hereinafter provided by this. Agreement. Seller shall issue, sell, transfer
and deliver said Shares to Carnegie upon the terms and conditions provided by
this Agreement.
NOW, THEREFORE, in consideration of the Explanatory Statement, which
shall constitute a substantive part of this Agreement, and the mutual covenants,
promises, agreements, representations and warranties hereinafter set forth, the
receipt and sufficiency of which are hereby acknowledged by the Parties hereto,
Purchaser, Seller and the Company do hereby covenant, promise, agree, represent
and warrant as follows:
1. Closing Purchase of Shares:
1.1. The closing (hereinafter referred to as the "Closing" of the
Shares provided by this Agreement shall take place simultaneously with the
execution of this Agreement, or on such other day as Purchaser and Seller shall
agree in writing, at the law offices of Xxxxxxxxx and Pearl, LLC through an
escrow arrangement agreeable to the parties unless the place and means of
closing is changed pursuant to a writing signed by all parties hereto
(hereinafter, such day shall be referred to as the "Closing Date", and such law
offices shall be referred to as the "Closing Place.")
1.2. On the Closing Date and at the Closing Place, Seller shall
issue, sell, transfer and deliver to Carnegie the Shares, which Shares shall in
each instance be
represented by one or more stock certificates of the Company duly endorsed to
Carnegie or accompanied by stock powers duly executed in blank for transfer on
the books of the Company, which shall convey ownership rights, title and
interest to the shares and the Assets of the Company effective as of the Cut-Off
Date, February 28, 1998, including all Assets on the List of Assets (a copy of
which is attached hereto as Exhibit A2).
1.2.1. Cut-Off Date: The Parties hereby agree that for
purposes of calculating purchase price adjustments, if any, due to changes in
the amount of assets, liabilities, including inventory, cash, accounts
receivable and accounts payable and the like from the October 31, 1997 amounts
presented to Carnegie by Seller compared to said amounts on February 28, 1998,
the effective date of all such calculations shall be 12:00 A.M., February 28,
1998 (the "Cut-Off Date"), regardless of the date of completion of this
Agreement.
1.2.2. Post Closing Adjustments: Seller and Purchaser agree
that a representative of Purchaser shall visit Seller's premises where books and
records are maintained to reconcile said books for the purpose of determining
any adjustments as of the Cut-Off Date. Said visit shall occur within fourteen
(14) days after closing or at such time as records are made available by the
Company to allow calculations of any adjustments. Adjustments shall be made to
the purchase price only if there is a decrease in the net assets
(assets-liabilities) of the Company existing as of October 31, 1997 (See
Schedule of Closing Adjustments included herein as Exhibit A-3).
1.3. Purchase Price: The Purchase Price of the Shares shall be as
follows:
1.3.1. Purchaser shall issue to Seller Two Hundred Thousand
(200,000) shares of Preferred Series A restricted stock of Carnegie
International Corporation which shall be convertible to Rule 144 Restricted
Legend Common Stock of Carnegie (hereinafter "Rule 144 Stock") twenty-four (24)
months (the "Period") from the Closing Date, as follows:
1.3.1.1. In the event the Seller elects to convert said
Preferred Shares to Rule 144 Stock prior to the expiration of the Period, Seller
shall receive Rule 144 Legend stock with a value equal to Two Million Dollars
($2,000,000.00) based on the Value, as set forth in Section 1.3.1.3. below.
Seller shall have said right of early conversion only in the event the common
stock of Carnegie closes above Two Dollars ($2.00) per share. Carnegie shall
initiate the conversion of said shares within three (3) business days after the
receipt of written notice of Seller's valid request for conversion.
1.3.1.2. In the event the Seller does not request
conversion as set forth in Section 1.3.1.1., prior to the expiration of the
Period, Seller shall receive the greater of
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(i) Rule 144 Stock with a value of Two Million
Dollars ($2,000,000.00) based upon the conversion value set forth in Section
1.3.1.3. below; or
(ii) Two Million shares of Rule 144 Stock, (which
shall be considered higher in Value than Two Million Dollars ($2,000,000) if the
Value of the Common Stock of Carnegie is above $1.00 per share as computed on
the business day immediately preceding the expiration of the Period.
1.3.1.3. The Value of each share of Rule 144 Stock for
conversion calculation purposes shall be based on the average Market closing
price of Carnegie's Common Stock on the five (5) business days immediately
preceding the conversion date. For the purposes of this section " Market" shall
include the price quoted for Carnegie's Common Stock by the NASD Over the
Counter Bulletin Board Service (OTCBB).
1.3.2. One Million Dollars ($1,000,000.00) to be paid in quarterly
installments over a period of five (5) years in the amount of Fifty Thousand
Dollars ($50,000.00) per quarter, with the first payment to be paid at closing.
The remaining payments shall begin on September 1, 1998 and shall continue to be
paid on the first day of each calendar quarter thereafter. Carnegie shall assume
the liabilities of ACC as set forth in Exhibit B as of the closing date which
shall be substantially the same as those reflected on the estimated fiscal year
ended October 31, 1997 tax return of ACC provided to Carnegie, excluding tax
liabilities and also excluding the seventeen percent (17%) interest portion of a
December 3, 1979 Promissory Note to Xxxxx Xxxx in the amount of Fourteen
Thousand Dollars ($14,000). The interest rate on said Note shall be adjusted to
one point over the Prime Rate as published in 'the Wall Street Journal.
1.3.3. The purchase of the Shares shall vest in Carnegie on the
Cut-Off Date, subject to the provisions of this Agreement, complete possession,
ownership and control of the Shares and the management and operations of the
Company and ownership of the Assets, including but not limited to the leases,
equipment, fixtures, inventory, cash, accounts receivable, contract rights with
equipment suppliers and others, goodwill, leasehold improvements and assets
relating thereto; provided, however, that Xxxxx Xxxx shall continue to manage
the daily operations of the Company, including decisions on hiring and
terminating personnel. Seller and the Company shall cooperate in and facilitate
the immediate transfer of possession, ownership and control of the Shares and
Assets including all assets and operations relating to the Premises of the
Company.
1.3.4. Purchaser acknowledges that, prior to the execution of this
Agreement, it has conducted a due diligence investigation of the operations of
the Company and the Assets, including, without limitation, an investigation of
the financial operations.of the Premises, the books and records of Seller
relating to the same and the condition of the Premises and the Assets, and
Purchaser is satisfied with the results of the investigation, except as provided
to the contrary herein. Purchaser has had an opportunity to investigate all
matters which
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Purchaser has deemed relevant concerning the Shares and the Assets and has had
an opportunity to discuss the same with the officers of the Company.
1.3.5. Seller and the Company acknowledge that they have performed
a due diligence test of the Multi-Language Automated Voice Intelligent System
(XXXXX) owned by Purchaser through one of its subsidiaries and Seller and the
Company have determined that XXXXX will operate in a reasonable commercial
manner on PBX, Analogue and Digital Phone Systems. Xxxxx Xxxx, Xxxxx Xxxx and
the Company are satisfied as to the results of such test.
1.3.6. There shall be no debt of the Company as of and including
the CutOff Date, except for any amount substantially the same as that
represented to Purchaser as existing at October 31, 1997. Purchaser shall not be
liable for any tax liability or other liabilities of any kind whatsoever
relating to or incurred by the Company or its owners up to and including the
Cut-Off Date, and Seller shall indemnify Purchaser and hold Purchaser harmless
from any of said tax or other liabilities.
1.3.7. The Certified Financial Statements of Carnegie as of and
for the period ending December 31, 1997, fairly present the outstanding debt of
Carnegie as of such date.
2. Representations and Warranties of the Seller and the Company;
Seller and the Company represent and warrant to Purchaser as
follows:
2.1. Sellers are, and as of the Closing Time will be the valid and
legal owners of the Shares and related Assets being transferred hereby and own
the Shares free and clear of any and all liens and encumbrances (See Certificate
of No Debts - Exhibit B). The Seller through the ownership of the Shares owns
all of the Assets of and relating to the Company located at 0000 Xxxxxx Xxxx,
Xxxx X, Xxxxxxxx, Xxxxxxxx 00000 (hereinafter referred to as the "Premises"),
including but not limited to the leases, equipment, inventory, furniture,
fixtures and the like and assets relating thereto.
Sellers represent and warrant that they own the Shares that
represent one hundred percent (100%) of the stock of the Company and have fairly
and accurately in all material respects reflected and allocated all assets,
liabilities, income and expenses related to both the management and results of
operations of the Company on the books and records of the Company, which have
been presented to Carnegie for the periods ended October 31, 1997, January 31,
1998 and February 28, 1998, respectively.
2.2. Sellers have the requisite and proper authority to enter into
the within agreement and to transfer, assign and sell the Shares in accordance
with the terms hereof.
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2.3. The Company is, and at the Closing Time will be, a
corporation duly organized, validly existing and in good standing under the laws
of Maryland, the Company has, and at the Closing Date will have, the power and
authority to own, lease and operate its properties and to conduct its business
as such business is now being conducted by Company. A complete and correct copy
of the articles of incorporation, as amended, and the by-laws, as amended, of
the Company, are attached to this Agreement collectively as Exhibit C and are
incorporated by reference herein, and no changes therein will be made subsequent
to the date hereof and prior to the Closing Time.
2.4. The Company has validly authorized, issued, and has
outstanding, and on the Closing Date will have authorized, issued and
outstanding, fully paid and non-assessable, One Thousand (1,000) shares of its
common stock. Upon issuance, sale, transfer and delivery of the Shares to
Purchaser, the shares of the Company Common Stock issued and outstanding will
constitute One Hundred Percent (100%) of the issued and outstanding capital
stock of the Company. Except as hereinafter set forth in this Section 2.4, the
Company does not have outstanding, and on the Closing Date will not have
outstanding, any options to purchase, or any rights or warrants to subscribe
for, or any securities or obligations convertible into, or any contracts or
commitments to issue or to sell assets or shares of common stock or any such
options, rights, warrants, convertible securities or obligations. The Company
has not issued, and hereby warrants and represents that it shall not issue any
Stock Options (hereinafter referred to as the "Options"), which grant to the
holders thereof the right to purchase in the aggregate any shares of the Company
Common Stock.
2.5. The Shares are fully paid and non-assessable, free and clear
of all mortgages, pledges, liens, security interests, conditional sale
agreements, charges, encumbrances and restrictions of every nature, except for
those created pursuant to the terms of this Agreement.
2.6. Except as set forth on Exhibit D, Company has properly and
accurately filed all tax returns, as appropriate, country wide, state and local,
and all related information required to be filed prior to the date hereof, and
at the Closing Time shall have filed all tax returns, as appropriate, and all
related information required to be filed prior to the Closing Time. To the best
knowledge of Seller and the Company, the amounts reflected in the Balance Sheet
for taxes are sufficient for the payment of all accrued and unpaid federal,
state and local taxes of all types, including interest and penalties thereon, of
the Company for or on account of which Company is or may become liable in any
manner whatsoever for periods prior to the Closing Date.
2.7. Since November 1, 1979
2.7.1. The business of the Company has been operated, and up
to the Closing Date will be operated, only in the ordinary course.
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2.7.2. Except as set forth in Exhibit D1, there has been, and
prior to the Closing Date there will be, no material adverse change,
individually or in the aggregate, in Company's condition (financial or
otherwise) or in Company's assets, liabilities or business. There also has been
no material adverse change, individually or in the aggregate, in the Company's
condition (financial or otherwise) or in the Company or its Assets, liabilities
or business from the status that was represented to Purchaser as existing at
October 31,.1997 compared to the status at the Closing Date.
2.7.3. There has been, and prior to the Closing Date there
will be, no damage, destruction or loss to the Company or any of its contracts,
assets, inventory, accounts, or other properties, or other events or conditions
of any character, or any pending or threatened developments, individually or in
the aggregate, which would materially and adversely affect the Company's
condition (financial or otherwise) or Company's assets, liabilities or business.
2.8. Except as set forth in Exhibit D1 attached hereto and
incorporated by reference herein, there is, and on the Closing Date there will
be, no material action, suit, proceeding or investigation pending or, to the
knowledge of Company, threatened, against or affecting the Company or any of its
assets. Company is not, and on the Closing Date will not be, in default under or
with respect to any judgment, order, writ, injunction or decree of any court or
of any federal, state, municipal or other governmental authority, department,
commission, board, agency or other instrumentality. To Seller's and Company's
knowledge, Company has, and on the Closing Date will have, complied in all
material respects with all laws, rules, regulations and orders applicable to it
and to its business; has, and on the Closing Date will have, performed in all
material respects all of its material obligations and duties to be performed by
it to the extent required in accordance with their respective terms; and is not,
and on the Closing Date will not be, in default under or in material breach of
any material contract, agreement, commitment or other instrument to which it is
subject or a party or under which it is bound.
2.9. Seller and the Company have not, and on the Closing Date will
not have, incurred any liability, obligation or duty for any finder's, agents or
brokers fee or commission in connection with this Agreement or the transactions
contemplated hereby.
2.10. The Board of Directors of the Company, pursuant to the power
and authority legally vested in it, has duly authorized the execution, sealing
and delivery of this Agreement by the Seller and the Company, Common Stock of
the Company, and the transactions hereby contemplated, and no action,
confirmation or ratification by any stockholder of the Company, Seller, or by
any other person, entity or governmental authority is required in connection
therewith. The Seller and the Company have the power and authority to execute,
seal and deliver this Agreement, to consummate the transactions hereby
contemplated and to take all other actions required to be taken by them pursuant
to the provisions hereof. The Seller and the Company have taken all actions
required by law, the Company's certificate of creation or incorporation, as
amended, its bylaws, as amended, or otherwise to authorize the execution,
sealing and delivery of this Agreement and the issuance, sale, transfer and
delivery of the Shares
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and related Assets pursuant to the provisions hereof. This Agreement is valid
and binding upon the Seller and the Company in accordance with its terms.
Neither the execution, sealing and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will constitute a violation
or breach of the Articles of Incorporation, as amended, or the by-laws, as
amended, of the Company, or any agreement, stipulation, order, writ, injunction,
decree, law, rule or regulation applicable to the Company or the Seller.
2.11. Attached hereto as Exhibit E and incorporated by reference
herein is a list of all officers and directors of the Company and all beneficial
owners of the issued and outstanding Company Common Stock, and the number of
shares of the Company Common Stock owned of record and beneficially by each such
officer, director and beneficial owner. To the best knowledge of Company, the
information set forth on Exhibit E is true and correct.
2.12. To Seller's knowledge neither this Agreement nor any written
information, statement, list or certificate furnished or to be furnished to
Purchaser pursuant to this Agreement or in connection with this Agreement or any
of the transactions contemplated by this Agreement contains or, on the Closing
Date will contain any untrue statement of a material fact or omits or, on the
Closing Date will omit to state a material fact necessary in order to make the
statements contained therein, in light of the circumstances in which they are
made, not misleading.
2.13. Seller's and the Company's Release: Seller and the Company
hereby warrant, represent and acknowledge that they shall execute at the time of
closing a release of all claims which reflects Seller and the Company's complete
release and discharge of any claims it may have against the Company, both
individually and as an officer or Director of the Company, except for those
considerations due as set forth in this Agreement. Such release shall be
attached hereto and incorporated herein by reference as Exhibit F.
2.14. [Intentionally left blank]
2.15. Seller has and will continue until the Closing Date to
accurately maintain the books of account of the Company, or any other entity
operating at the Premises or as successor to the Company. Seller shall indemnify
and hold Purchaser harmless from any and all losses due to Seller's intentional
misconduct or gross negligence during the period in which Seller is managing the
financial operations of the Company.
2.16. No Subsidiaries: The Seller and the Company hereby
acknowledge that the Company does not have any subsidiaries and does not,
directly or indirectly, own any interest in or control any corporation,
partnership, joint venture or other business entity.
2.17. Licenses; Permits; Related Approvals: The Company possesses
all licenses, permits, consents, approvals, authorizations, qualifications and
orders (hereinafter collectively referred to as the "Permits") of all
governments and governmental agencies lawfully
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required for the Company to conduct its business in all jurisdictions where
business is conducted. All of the Permits are in full force and effect and no
suspension, modification, or cancellation of any business or permits is pending
or threatened. A list of the business/permits is attached hereto as Exhibit G
and incorporated herein by reference.
2.18. No Real Property: Except as set forth on Exhibit H attached
hereto and incorporated herein by reference, the Company does not own or have
any interest in any real estate.
2.19. Condition of Personal Property: Attached hereto as Exhibit I
and incorporated by reference herein is a true, correct and complete list of all
personal property, owned by the Company or used by the Company in the conduct of
its business, including, but not limited to, all inventory, equipment, machinery
and fixtures, (collectively, the "Personal Property"), indicating whether it is
owned or the manner in which the Personal Property is otherwise utilized by the
Company. The Company has sole and exclusive, good.and merchantable title to all
of the Personal Property owned by it free and clear of all pledges, claims,
liens, restrictions, security interests, charges and other encumbrances, except
as provided to the contrary in Exhibit I.
2.20. Certain Contracts. Attached hereto as Exhibit J and
incorporated by reference herein is a true, correct and complete list and copy
of all contracts under which the Company is provided or is providing services
(collectively, the "Service Contracts"). To Seller's knowledge, each of the
Service Contracts is in full force and effect is valid and binding upon each of
the parties thereto and is fully enforceable by the Company against the other
party thereto in accordance with its terms. Neither Seller nor the Company has
any notice of, or any reason to believe that there is or has been any actual,
threatened or contemplated, termination or modification of any of the Service
Contracts. To Seller's knowledge, no party to any of the Service Contracts is in
breach of or in default thereunder, nor has any event occurred which, with the
lapse of time, notice or election, may become a breach or default by the Company
or any other party to or under any of the Service Contracts. All payments
required to be made by Seller pursuant to the Service Contracts have been paid
in full through See Exhibit J.
2.21. Contracts, Licenses, and Other Agreements. Attached hereto
and incorporated by reference herein are the following:
2.21.1. Exhibit K, a true, correct and complete list and copy
(or where they are oral, true, correct and complete written summaries) of all
leases of the Company relating to real property.
2.21.2. Exhibit L, a true, correct and complete list and copy
(or where they are oral, true, correct and complete written summaries) of all
leases of the Company relating to personal property.
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2.21.3. Exhibit M, a true, correct and complete list and copy
(or where they are oral, true, correct and complete written summaries) of all
licenses, franchises, assignments or other agreements of the Company and/or
Seller relating to trademarks, trade names, patents, copyrights and service
marks (or applications therefor), unpatented designs or styles, know-how and
technical assistance.
2.21.4. Exhibit O, a true, correct and complete list and copy
(or where they are oral, true, correct and complete written summaries) of all
employment, compensation and consulting agreements, contracts, understandings or
arrangements of the Company with any officer, director, employee, broker, agent,
consultant salesman or other Person, including the names, starting dates of
employment term of employment, functions and aggregate compensation (including
salary, bonuses, commissions and other forms of compensation).
2.21.5. Exhibit P, a true, correct and complete list and copy
(or where they are oral, true, correct and complete written summaries) of all
agreements of the Company for the purchase, sale or lease of goods, materials,
supplies, machinery, equipment, capital assets and services having a cost in
excess of Two Thousand Five Hundred Dollars ($2,500.00) in any one instance or
in excess of Ten Thousand Dollars ($10,000.00) in the aggregate.
2.21.6. Exhibit Q, a true, correct and complete list and copy
(or where they are oral, true, correct and complete written summaries) of all
agreements and arrangements of the Company for the borrowing or lending of
money, on a secured or unsecured basis, or guaranteeing, indemnifying or
otherwise becoming liable for the obligations or liabilities of any other Person
or entity.
2.21.7. Exhibit R, a true, correct and complete fist and copy
(or where they are oral, true, correct and complete written summaries) of all
agreements and understandings of the Company other than those listed in Exhibits
O through Q which are material in nature, involve the payment or receipt, in any
twelve (12) month period, of more than Five Thousand Dollars ($5,000.00) or have
a term of more than the twelve (12) months.
To Seller's knowledge, each of the agreements, arrangements
and understandings listed in Exhibits K through R (hereinafter collectively
referred to as the "Commitments") is in full force and effect, is valid and
binding upon each of the parties thereto and is fully enforceable by the Company
against the other party thereto in accordance with its terms. Neither Seller nor
the Company has any notice of, or any reason to believe, that there is or has
been any actual, threatened or contemplated termination or modification of any
of the Commitments. To Seller's knowledge, no party to any of the Commitments is
in breach of or in default thereunder, nor has any event occurred which, with
the lapse of time, notice or election, may become a breach or default by the
Company or any other party to or under any of the Commitments. The Company has
the right to quiet enjoyment of all real properties leased
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to it for the full term of the lease thereof. All payments required to be made
by the Company pursuant to any of the Commitments have been paid in full through
See Exhibits K-R.
2.22. Insurance: Attached hereto as Exhibit S and incorporated by
reference herein is a list of all insurance policies of the Company, setting
forth with respect to each policy the name of the insurer, a description of the
policy, the dollar amount of coverages, the amount of the premium, the date
through which all premiums have been paid, and the expiration date. Each
insurance policy relating to the insurance referred to in Exhibit S is in full
force and effect, is valid and enforceable, and the Company is not in breach of
or in default under any such policy. Neither Seller nor the Company have any
notice of or any reason to believe that there is or has been any actual,
threatened, or contemplated termination or cancellation of any insurance policy
relating to the insurance referred to in Exhibit S.
2.23. Pension Plans: Seller and the Company hereby acknowledge
that the Company does not maintain any pension, profit sharing, ESOP, stock
option, incentive bonus, hospitalization, major medical, dental, optical,
prescription, drug, health insurance, life insurance, or other benefit plan for
the benefit of any employee as the term "Employee Benefit Plan" is defined in
ERISA, Section 3, except as set forth on Exhibit T.
2.24. Employee Relations and Employment Agreements:
2.24.1. None of the Company's employees is represented by a
labor organization, and no petition for representation has ever been filed with
the National Labor Relations Board. Seller and the Company are not aware of any
union organizational activity with respect to the Company, and have no reason to
believe that any such activity is being contemplated.
2.24.2. To Seller's knowledge, the Company is not in
violation in any material respect of any applicable equal employment opportunity
laws, wage and hour laws, occupational safety and health laws, federal labor
laws or any other laws of any government or governmental agency relating to
employment.
2.24.3. The Company has not entered into written employment
agreements and all employees can be terminated at will. The Company has no
contractual obligation or special termination or severance arrangements with
respect to any employee. The Company and Seller further represent and warrant
that there have been and will be no changes in employment or corporation salary
agreements between the Company and its employees, officers, directors or
contractors from January 1, 1998 up till and including the date of Closing.
2.24.4. The Company has paid all wages due including all
required taxes, insurance and withholding thereon, and will continue to do so
through the Closing Date.
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2.24.5. Attached hereto as Exhibit U and incorporated herein
by reference, is a list of all accrued vacation, sick leave, and accrued
bonuses, if any, as of the Cut-Off Date.
2.24.6. Seller and the Company shall supply to Purchaser a
list of all employees of the Company, including the date of hire of each,
position, present salary, amount of. bonus paid in the last year, and announced
termination date, if any, as Exhibit V.
2.24.7. Patents; Trademarks; Service Marks; Related
Contracts. Attached hereto as Exhibit W and incorporated by reference herein, is
a true, correct and complete list of all patents, trademarks, trade names, or
trademark or trade name registrations, service marks, and copyrights or
copyright registrations (the "Proprietary Rights") related to the Company. To
Seller's knowledge, all of the Proprietary Rights are valid, enforceable, in
full force and effect and free and clear of any and all security interests,
liens, pledges and encumbrances of any nature or kind. Neither Seller or the
Company has licensed, leased or otherwise assigned, transferred or granted any
right to use any of its Proprietary Rights to any other Person or entity, and to
Seller's knowledge, no Person or entity is infringing upon the Proprietary
Rights. The Company has not infringed and are not infringing upon any patent,
trademark, trade name, or trademark or trade name registration, service xxxx,
copyright, or copyright registration of any other Person or entity. Seller and
the Company have filed all necessary and appropriate documents and paid all
necessary fees to maintain the integrity of the Proprietary Rights until the
year See Exhibit W.
2.25. Seller agrees that after Closing Seller shall execute any
and all documents which may be reasonably necessary to carry out the terms,
conditions and intention Of this agreement and to facilitate the transfer of the
property, to ratify unto Purchaser such Shares and/or property and to facilitate
the operations of the Company by Purchaser.
2.26. Seller and the Company shall transfer to Purchaser or
Purchaser's designee all title, rights and interests in any deposits (as
reflected on Exhibit X) owned by Seller or the Company related to the Premises
and/or the Company's business.
2.27. There are no bulk transfer laws in Maryland applicable to
this transaction (See Opinion Letter of Counsel, Exhibit B1).
2.28. To the best knowledge of such Seller and the Company, the
issuance, sale, transfer and delivery of the Shares and related Assets pursuant
to the provisions of this Agreement will not constitute a violation or breach of
any agreement, stipulation, order, writ, injunction or decree applicable to the
Seller or the Company.
3. Representations, Warranties and Covenants of Purchaser.
Purchaser represents, warrants and covenants to Seller as follows:
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3.1. Purchaser is, and on the Closing Date will be, a corporation
duly organized, validly existing and in good standing under the laws of the
State of Colorado.
3.2. The Board of Directors of Purchaser, pursuant to the power
and authority legally vested in it, has duly authorized the execution, sealing
and delivery of this Agreement by Purchaser and the transactions hereby
contemplated, and no action, confirmation or ratification by the stockholders of
Purchaser or by any other person, entity or governmental authority is required
in connection therewith. Purchaser has the power and authority to execute, seal
and deliver this Agreement, to consummate the transactions hereby contemplated
and to take all other actions required to be taken by it pursuant to the
provision, hereof. Purchaser has taken all actions required by law, its articles
of incorporation, its by-laws or otherwise to authorize the execution, sealing
and delivery of this Agreement. This Agreement is valid and binding upon
Purchaser in accordance with its terms. Neither the execution, sealing and
delivery of this Agreement nor the consummation of said transactions will
constitute any violation or breach of the articles of incorporation or the
by-laws of Purchaser, or any agreement, order, writ, injunction, decree, law,
rule or regulation applicable to Purchaser.
3.3. Purchaser covenants that for the twenty-four (24) month
period commencing on the Closing Date, Purchaser will maintain the Company as a
wholly owned subsidiary of Purchaser, and will not sell transfer or encumber the
Shares, the Premises or the Property, merge the Company into another entity or
otherwise transfer the Shares, without the prior written consent of Xxxxx Xxxx.
4. Further Agreements:
4.1. Seller's Agreement Not to Compete: The Parties hereby
acknowledge that Seller shall not establish a business telephone sales,
installation and/or services business in the same market as the Company operates
at the time of acquisition of the shares, directly or indirectly, for a period
of two (2) years from the date of this Agreement.
4.2. Marketing of Software: The Company shall serve as the
exclusive marketing agent in North America of the Multi-Language Automated Voice
Intelligent System (XXXXX) software owned by Carnegie. The Company shall be
reimbursed by Carnegie for the reasonable expenses of marketing XXXXX approved
by Xxxxxx Xxxxxx or E. Xxxxx Xxxxx until such time as XXXXX sales permit
absorption of such expenses by the Company. If Seller or Purchaser exercise
their respective rights to Buy-Back or Sell-Back the Shares of the Company, the
Company shall no longer serve as the exclusive marketing agent of XXXXX in North
America. A separate Licensing Agreement relative to XXXXX shall be negotiated in
good faith between the Parties hereto should a Buy-Back or Sell-Back be
exercised by either Seller or Purchaser.
The Seller shall have a first right of refusal to be the
exclusive marketing agent in North America of all future telecommunications
software products developed
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by Carnegie's subsidiary, Profit Thru Telecommunications Limited CPM or a
subsidiary of PTT, for a period of thirty (30) days after receipt of notice of
said products from Carnegie.
5. Conditions Precedent to Obligation and Duty of Purchaser to Acquire
the Property:
5.1. The obligation and duty of Purchaser to purchase the Property
from Seller as contemplated by this Agreement are subject to the fulfillment and
satisfaction on the Closing Date of each of the following conditions precedent,
any or all of which may be waived in whole or in part at or prior to the Closing
Date by Purchaser:
5.1.1. All representations and warranties of the Seller and
the Company contained in this Agreement and expressly made at the Closing Date
shall be true and correct at the Closing Date, in all material respects, and all
of the other representations and warranties of Seller and the Company contained
in this Agreement shall be true and correct at the Closing Date as though each
of such representations and warranties was made at such time.
5.1.2. Seller and the Company shall have performed and
complied in all material respects with all covenants and agreements on their
part required by this Agreement in material respects to be performed or complied
with prior to or at the Closing Date.
5.1.3. Purchaser shall have received certificates of the
officers and directors of Company, whose signatures, such as President, shall be
attested by the Secretary of Company or an independent third party if Signatory
and Secretary are the same person, dated as of the Closing Date, in form
reasonably satisfactory to Purchaser, certifying to the fulfillment and
satisfaction of each of the conditions precedent specified in Sections 5.1.1.
and 5.1.2. of this Agreement.
5.1.4. Purchaser shall receive the written opinions of the
legal counsel (See Exhibit B1) for Seller and the Company, dated the Closing
Date, stating that:
(a) The Company is a corporation duly organized, validly
existing and in good standing. The Company has the power and authority to own,
lease and operate its properties and to conduct its business as such business is
now being conducted by them.
(b) The Company is authorized to issue Five Thousand
(5,000) shares of Company Common Stock.
(c) Except as set forth on Exhibit D1 to this Agreement,
such counsel does not know of any material action, suit, proceeding or
investigation pending or threatened against the Company or affecting the Company
or any of its assets.
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(d) The Board of Directors of Company, pursuant to the
powers and authority legally vested in it, has duly authorized the execution,
sealing and delivery of this Agreement by Company, the transactions hereby
contemplated, and no action, confirmation or ratification by the stockholders or
Personal Representatives or Executors of any deceased stockholders of Company or
by any other person, entity or governmental authority is required in connection
therewith which has not been obtained. Seller and the Company have the power and
authority to execute, seal and deliver this Agreement, to consummate the
transactions hereby contemplated and to take all other actions required to be
taken by or pursuant to the provisions hereof Company has taken all actions
required by law, its certificate of incorporation, as amended, its by-laws, as
amended, or otherwise to authorize the execution, sealing and delivery of this
Agreement and the issuance, sale, transfer and delivery of the Shares pursuant
to the provisions hereof. This Agreement is valid and binding upon Seller and
the Company.
(e) There are no Bulk Sales laws in Maryland applicable
to this transaction.
5.2. The obligation and duty of Seller to sell the Shares and
related Assets to Purchaser as contemplated by this Agreement are subject to
fulfillment and satisfaction on the Closing Date of each of the following
conditions precedent, any or all of which may be waived in whole or in part
prior to the Closing Date by Seller:
5.2.1. All representations and warranties of the Purchaser
contained in this Agreement shall be true and correct in all material respects
at the Closing Date as though each of such representations and warranties was
made at such time.
5.2.2. Purchaser shall have performed and complied in all
material respects with all covenants and agreements on their part required by
this Agreement to be performed or complied with prior to or at the Closing Date.
5.2.3. Seller shall have received certificates of the
officers and directors of Purchaser, whose signatures, such as President shall
be attested by the Secretary of Purchaser or an independent third party if
Signatory and Secretary are the same person, dated as of the Closing Date, in
form reasonably satisfactory to Seller, certifying to the fulfillment and
satisfaction of each of the conditions precedent specified in Section 5.2.1. and
5.2.2. of this Agreement.
5.2.4. Seller shall have received the written opinion of
legal counsel for Purchaser, dated the Closing Date, containing the opinions
with respect to Purchaser which Seller's counsel is required to provide with
respect to the Companies under Section 5.1.4(a) and (d) and that Purchaser has
reserved for issuance the common stock reasonably for the transaction
contemplated herein.
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6. Indemnification:
6.1. Sellers individually and collectively and the Company shall
each indemnify and hold harmless Purchaser from and against any and all actions,
suits, proceedings, demands, causes of action, damages, liabilities, claims,
losses, costs and expenses (including reasonable attorneys' and experts' fees)
paid or incurred by Purchaser by reason of or arising out of or in connection
with:
6.1.1. The breach by Sellers (individually and jointly) or
the Company of any representation or warranty contained in this Agreement or in
any certificate delivered to Purchaser pursuant to the provisions of this
Agreement.
6.1.2. The failure of Sellers individually or collectively
and or the Company to perform or comply with any covenant or agreement required
by this Agreement to be performed or complied with by each such person or
entity.
6.1.3. Debts and or liabilities incurred, accruing or arising
up to and including the Cut-Off Date attributable to Seller or the Company
including, but not limited to, contract liabilities, tort liability and tax
liability, other than those assumed by Purchaser pursuant to the terms of this
Agreement. Purchaser shall have the right to setoff against any and all amounts
owed by Purchaser to Seller for any amounts owed or incurred by Purchaser in
connection with any and all liability imposed by this Section 6. Notwithstanding
anything to the contrary contained in this agreement, this provision 6.1.3 shall
be fully enforceable with no time limitation.
6.2. Carnegie shall indemnify and hold Seller and the Company
harmless from and against any and all actions, suits, proceedings, demands,
causes of actions, damages, liabilities, claims, losses, costs and expenses
(including reasonable attorneys' and experts' fees) paid or incurred by any of
them by reason of or arising out of in connection with:
6.2.1. The breach by Purchaser of any of the representations
or warranties contained in this Agreement or in any certificate delivered to
Seller pursuant to provisions of this Agreement;
6.2.2. The failure by Purchaser to perform or comply with any
covenant or agreement required by this Agreement to be performed or complied by
Purchaser.
6.2.3. Debts and liabilities incurred or arising after the
Cut-Off Date attributable to Purchaser or the Company, except Seller shall be
responsible for such debts and liabilities incurred or arising after the Cut-Off
Date due to the negligence of Seller and or the Company up to and including the
Cut-Off Date.
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6.3. With respect to any claim, action, suit, liability, loss,
damage or expense asserted, threatened, instituted, paid or incurred or
discovered by or against an indemnified party, within the applicable
Indemnification Period, if any, the obligation to indemnify shall continue
through the final disposition or settlement of any such matter and the full
satisfaction of the indemnification obligation.
6.4. [Intentionally Left Blank]
6.5. If a party (an "Indemnified Party"), receives notice or has
knowledge of any matter which it believes the other party hereto (the
"Indemnitor") is obligated to provide indemnification pursuant to this Section 6
(a "Claim"), the Indemnified Party will within a reasonable period of time (A)
after receipt of such notice or otherwise first becoming knowledgeable of a
Claim, give the Indemnitor written notice of the assertion of such Claim; and
(B) furnish the Indemnitor with all relevant information and copies of all
pertinent documents relating to the Claim in the Indemnified Party's possession
or control or within a reasonable period of time after the Indemnified Party's
receipt thereof, as the case may be.
6.6. The failure of the Indemnified Party to give notice of the
Claim promptly will not affect the Indemnified Party's rights to indemnification
hereunder, except if, and only to the extent that, the Indemnitor's defense of
such Claim is actually prejudiced by reason of such failure to give timely
notice.
6.7. The Indemnitor will undertake and continuously defend such
Claim with counsel of reputable standing, and the Indemnified Party may
participate in such defense by counsel of its own choosing at its own expense.
6.8. If the Indemnified Party is required to pay any amount with
respect to said Claim, such amount shall be promptly paid by the Indemnitor to
the Indemnified Party upon the Indemnified Party giving the Indemnitor a written
request therefor.
6.9. If the Indemnitor does not timely undertake or continuously
defend any such Claim, then the Indemnified Party will have the right to employ
separate counsel in any such action and to participate in the defense thereof,
and the reasonable fees and expenses of such counsel will be the Indemnitor's
obligation and direct responsibility. Furthermore, the Indemnified Party will
then have the right to defend or dispose of the Claim in such manner as it deems
advisable for Indemnities account and risk and for the purpose hereof as if such
defense or disposition had been made or undertaken by the Indemnitor.
6.10. The Indemnitor agrees, unless it timely assumes the defense
of any Claim hereunder, to pay the Indemnified Party's costs of defending any
Claim, including, without limitation, reasonable attorneys and paralegal fees,
accountants' fees, witness fees and court costs, promptly after written demand
therefor is given by the Indemnified Party to the Indemnitor.
- 16 -
6.11. If the Indemnitor timely undertakes the defense of any
Claim, then so long as the Indemnitor, in good faith, is continuously contesting
or defending the Claim: (A) the Indemnified Party shall not admit any liability
with respect thereto, or settle, compromise, pay or discharge the same without
the prior written consent of the Indemnitor; (B) the Indemnified Party shall
cooperate with the Indemnitor in the contest or defense of the Claim; (C) the
Indemnified Party shall accept any settlement of the Claim, provided such
settlement is effected by monetary payment only and adequate arrangements for
such payment, to the Indemnified Party's reasonable satisfaction, are made by
the Indemnitor and the Indemnified Party is provided with a full release of all
Claims made; and (D) the Indemnitor will provide the Indemnified Party with all
information regarding the contest or defense of the Claim and allow counsel for
the Indemnified Party to monitor, at the Indemnified Party's sole expense, all
proceedings in connection with the Claim.
6.12. Neither the Indemnitor nor the Indemnified Party may admit
any liability with respect to any Claim or settle, compromise, pay or discharge
the same without the prior written consent of the other party if such
settlement, compromise, payment or discharge could in any way expose such other
party to the payment of funds which are not subject to a claim of reimbursement
or indemnification from the settling, compromising or paying party.
6.13. The Indemnified Party shall use reasonable efforts to
preserve the status quo, not incur any penalties and not prejudice the
Indemnitor's defense of any Claim prior to the Indemnitor undertaking the
defense of such Claim.
6.14. Anything in this Section 6 to the contrary notwithstanding,
if there is a reasonable probability that an indemnifiable Claim may materially
and adversely affect the Indemnified Party other than as a result of money
damages or other money payments, the Indemnified Party, upon giving the
Indemnitor reasonably prompt written notice thereof, shall have the right to
defend, compromise or settle such indemnifiable Claim; provided, however, that
no compromises or settlement which would result in the payment of money shall be
made, executed or delivered without the prior written consent of the Indemnitor,
which consent shall not be unreasonably withheld.
6.15. Any payment required by an Indemnitor pursuant to this
Section 6 shall be reduced by any insurance proceeds actually recovered
(excluding any deductible or self-insured retention) by the Indemnified Party as
a result thereof from a policy of insurance owned by any person. Any tax benefit
received by the Indemnified Party by reason of any action of the Indemnitor
shall reduce any payment required to be made by the Indemnitor to the
Indemnified Party arising therefrom.
7. Miscellaneous:
7.1. All of the covenants, promises, agreements, representations
and warranties set forth in this Agreement shall survive all closings under this
Agreement for the
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periods herein provided, and shall be binding and enforceable notwithstanding
any knowledge (other than as specifically herein disclosed) on the part of a
party hereto with respect to the matter involved.
7.2. At any reasonable time upon prior reasonable notice by
Purchaser (whether at or after the Closing Date), Seller and the Company shall
execute, acknowledge, seal and deliver such further instruments and documents
and take such other actions as Purchaser may reasonably request more effectively
to vest in Purchaser full right, title and interest in and to the Shares and
related Assets as shall be issued, sold, transferred and delivered under this
Agreement, and to secure for Purchaser the full benefits intended to be secured
by this Agreement.
7.3. All writings, notices and other communications under this
Agreement shall be in writing and addressed as follows:
If to Purchaser, to: Xxxxxx Xxxxxx, President
Carnegie International Corporation
Executive Xxxxx 0
Xxxxx 0000
00000 XxXxxxxxx Xxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
With a copy to: Xxxxx X. Xxxxxxx, Esquire
Xxxxxxxxx and Pearl, LLP
00000 Xxxxxxxxx Xxxxx, Xxxxx 0
Xxxxxx, Xxxxxxxx 00000
If to Seller, to: Xx. Xxxxx Xxxx
000 Xxx-xx Xxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
with a copy to: Xxx Xxxxxxxx, Esquire
Xxxxx & Xxxxxxx, L.L.P.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Any such writing, notice or communication by telegram shall be deemed given when
received at the address specified above. Any such writing, notice or
communication other than by telegram shall be deemed given when deposited in the
appropriate international or United States mails, postage prepaid, first class,
registered or certified mail, return receipt requested, and addressed as
hereinabove provided. Any such address may be changed by notice to the other
parties to this Agreement as provided in this Section 7.3.
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7.4. This Agreement shall be governed by and construed and
enforced in all respects in accordance with the laws of the State of Maryland,
United States of America.
7.5. This Agreement contains the fall, complete and exhaustive
agreement between the parties hereto. This Agreement may be amended only by an
instrument in writing executed, sealed and delivered by Seller, the Company and
Purchaser.
7.6. Nothing expressed or implied in this Agreement is intended or
shall be construed to confer or give any person or entity other than the parties
hereto any rights or remedies under or by reason of this Agreement.
7.7. This Agreement may be executed simultaneously or in
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same* instrument.
7.8. Unless the context otherwise requires, the words such as
"herein", "hereinafter", "hereby", "hereto", "hereof and "hereunder" refer to
this Agreement as a whole and not merely to a Section in which such words
appear. As used herein and unless the context otherwise requires, the singular
shall include the plural and vice-versa, and the masculine gender shall include
the feminine and neuter, and vice-versa.
7.9. This Agreement shall be binding upon and inure to the benefit
of the parties and their respective heirs, legal representatives, successors and
permitted assigns.
7.10. The headings for this Agreement are intended for convenience
of reference only and shall be given no effect in the construction or
interpretation of this Agreement.
7.11. Carnegie shall have the tight to assign its rights, title
and interests under this Agreement and to the Property to any of its wholly
owned subsidiaries, except as provided to the contrary herein. This shall not
impair any of Carnegie's obligations under this Agreement.
8. Buy-Back/Sell-Back:
Seller and Purchaser shall enter into a mutually agreeable
Buy-Back/Sell-Back Agreement, that facilitates Seller regaining ownership of the
Company if the Multi-Language Automated Voice Intelligence System ("XXXXX') owed
by Purchaser's subsidiary is not reasonably marketable or if the profitability
of ACC does not meet Purchaser's expectations. At a minimum, the
Buy-Back/Sell-Back Agreement shall include the following:
(1) Canceling of the preferred stock paid to Seller for the
Shares and canceling of Rule 144 Legend common stock
converted from said preferred stock.
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(2) Canceling the Employment Agreement between Seller and
Purchaser.
(3) Canceling of any unpaid portion of the Purchase price due
Seller for the purchase of the Shares.
(4) A License Agreement for XXXXX that allows the Company to
market the XXXXX product after Seller regains ownership of
the Shares.
(5) Carnegie shall have a right to sell the Shares back to Seller
if the Company is not profitable (i.e., ACC or its successors
is unable to meet its obligations as they become due or does
not have sufficient cash flow to pay expenses for more than
two (2) consecutive months).
(6) Seller and/or Purchaser shall have the option to
Buy-Back/Sell-Back the Shares if XXXXX is not reasonably
marketable. Seller and Buyer shall exercise said option to
Buy-Back/Sell-Back the Shares within twenty-four (24) months
from closing hereon.
9. Employment of Seller:
Seller and Purchaser shall enter into mutually agreeable
Employment Agreements simultaneously herewith that provide for salaries to Xxxxx
Xxxx and Xxxxx Xxxx, if any, totaling Two Hundred Thousand Dollars
($200,000.00).
IN WITNESS WHEREOF, the parties have executed, sealed and delivered
this Agreement the day and year first herein above set forth.
PURCHASER:
ATTEST: CARNEGIE INTERNATIONAL CORPORATION
/s/ By: /s/ Xxxxxx Xxxxxx (SEAL)
Xxxxxx Xxxxxx, President
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THE COMPANY:
ATTEST: HARBOR CITY CORPORATION
/s/ By: /s/ Xxxxx X. Xxxx (SEAL)
XXXXX X. XXXX, President
WITNESS: SELLERS:
/s/ /s/ Xxxxx X. Xxxx
XXXXX X. XXXX, Individually
WITNESS: SELLERS:
/s/ /s/ Xxxxx X. Xxxx
XXXXX X. XXXX, Individually
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HARBOR CITY CORPORATION
STOCK PURCHASE AGREEMENT
LIST OF EXHIBITS
Section
Nos.
A1. Stock Certificate of Harbor City Corporation in the name of Carnegie 1.2.
International Corporation
A2. List of Tangible Assets of Harbor City Corporation excluding the 1.2.
Fixtures and Leasehold Improvements
A3. Schedule of Closing Adjustments 1.2.2.
B. Certificate of No Debts 2.1.
B1. Opinion Letter of Counsel Relating to Seller and the Company's 5.1.4.
Authority to Sell the Shares, Enter Into this Agreement and Other Issues
Related to this Transaction
C. Certificate of Incorporation and By-Laws of the Company 2.3.
D. Listing of Exemptions to Filing of Tax Returns 2.6.
D1. Listing of Material Adverse Changes, Suits and Claims 2.7.2.
2.8
E. List of Officers, Directors and Shareholders of the Company 2.11.
F. Release of the Company by Seller 2.13.
G. List of Permits and Licenses and Related Approvals 2.17.
H. List of Real Property 2.18.
I. List of Personal Property 2.19.
J. List of Service Contracts performed by the Companies 2.20.
K. List of Leases for Real Property 2.21.1.
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L. List of Leases for Personal Property 2.21.2.
M. List and copy of Licenses, Franchises, Assignments or Agreements 2.21.3.
relating to Trademarks, Trade names, Copyrights, Patents, Service
Marks, etc.
0. List and copy of Employment and Consulting Agreements 2.21.4.
P. List of Agreements for Purchase of Goods, Materials and Services 2.21.5.
Q. List and copy of Notes, Guarantees 2.21.6.
R. Material Contracts in excess of $5,000.00 2.21.7.
S. List of Insurance 2.22.
T. List of Employee Benefits 2.23.
U. List of Accrued Vacation, Sick Leave, and Bonus 2.24.5.
V. List of Employees 2.24.6.
W. List of Patents and Trademarks 2.24.7.
X. List of Deposits 2.26.
Y. Tax Treatment
Z. Colorado Counsel Opinion
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AMENDED STOCK PURCHASE AGREEMENT
FOR HARBOR CITY CORPORATION
THIS AGREEMENT made this 18th day of May, 1998, by and between Carnegie
International Corporation, a Colorado Corporation (hereinafter referred to as
"Carnegie") and Harbor City Corporation, t/a ACC Telecom, a Maryland Corporation
(hereinafter referred to as "ACC") and Xxxxx X. Xxxx, an individual, and Xxxxx
X. Xxxx, an individual (hereinafter Xxxxx X. Xxxx and Xxxxx X. Xxxx shall
collectively referred to as the "Hunts").
RECITALS
WHEREAS, Carnegie, ACC and Hunts entered into a Stock Purchase
Agreement dated May 18, 1998 for the purchase of Harbor City Corporation (the
"Agreement") from the Hunts effective as of February 28, 1998; and
WHEREAS, the parties wish to amend the Agreement to reflect the actual
date on which management and control was vested with Carnegie; and
WHEREAS, the Parties hereto agree that except as provided herein to the
contrary, the terms and conditions contained in the Agreement, which is
incorporated herein by reference and made a part hereof, shall remain unchanged;
and
NOW THEREFORE, in consideration of the mutual covenants and conditions
contained herein, the receipt and sufficiency of which are hereby acknowledged
by the Parties hereto the Parties hereby agree as follows:
1. Recitals. The above recitals constitute a substantive and binding
component of this Agreement.
2. Effective Date for Transfer of Management and Control. The Parties
hereto agree that the effective date for transfer of management and control of
ACC shall be as of February 1, 1998, the date that Carnegie began managing and
operating ACC.
IN WITNESS WHEREOF, the Parties have executed this Agreement on the
date first above written.
ATTEST: CARNEGIE INTERNATIONAL CORPORATION
/s/ /s/ Xxxxxx Xxxxxx (SEAL)
Xxxxxx Xxxxxx, President
ATTEST: HARBOR CITY CORPORATION, t/a ACC
TELECOM
/s/ /s/ Xxxxx X. Xxxx (SEAL)
Xxxxx X. Xxxx, President
WITNESS:
/s/ /s/ Xxxxx X. Xxxx (SEAL)
Xxxxx X. Xxxx, Individually
/s/ /s/ Xxxxx X. Xxxx (SEAL)
Xxxxx X. Xxxx, Individually
- 2 -
