ASSET PURCHASE AGREEMENT
Dated as of August 31, 1996
by and between
TELEPLUS, INC.
and
AMNEX, INC.
TABLE OF CONTENTS
PAGE
SECTION 1. Certain Definitions.............................................................................4
SECTION 2. Assignment of Dealer Agreement..................................................................6
2.1 Dealer Agreement To Be Assigned........................................................6
SECTION 3. Consideration...................................................................................6
3.1 Amount of Purchase Price...............................................................6
3.2 Payment of Purchase Price..............................................................6
3.3 Due and Payable Commissions............................................................7
SECTION 4. Representations and Warranties of Seller........................................................7
4.1 Good Standing..........................................................................7
4.2 Authorization; Consents; Conflicts.....................................................7
4.3 No Additional Agreements...............................................................8
4.4 No Amounts Due and Owing...............................................................8
4.5 Legal Proceedings......................................................................8
4.6 Orders, Decrees, Etc...................................................................9
4.7 Governmental Approvals.................................................................9
4.8 No Omissions...........................................................................9
4.9 Investment Intent......................................................................9
4.10 Restricted Securities.....................................................................10
SECTION 5. Representations and Warranties of Buyer................................................................11
5.1 Good Standing.........................................................................11
5.2 Authorization.........................................................................11
5.3 No Additional Agreements..............................................................11
5.4 Orders, Decrees, Etc..................................................................12
5.5 Governmental Approvals................................................................12
5.6 No Omissions..........................................................................12
5.7 Restricted Securities.................................................................12
SECTION 6. Non-Disclosure, Non Interference.......................................................................13
6.1 Non-Disclosure........................................................................13
6.2 Non-Interference......................................................................13
SECTION 7. Non-Competition................................................................................13
7.1 Non-Competition.......................................................................13
7.2 Non-Solicitation......................................................................14
7.3 Specific Performance..................................................................15
7.4 Severability..........................................................................15
SECTION 8. Indemnification........................................................................................15
8.1 Indemnification by Seller.............................................................15
8.2 Indemnification by Buyer..............................................................16
8.3 Procedures for Indemnification........................................................16
SECTION 9. Registration Rights....................................................................................16
9.1 Required Registration.................................................................16
9.2 Procedure for Registration............................................................17
9.3 Piggyback Registration................................................................17
9.4 Indemnification by Buyer..............................................................19
9.5 Indemnification by Seller.............................................................20
9.6 Holdback Agreement....................................................................21
SECTION 10. Survival of Representations;
Effect of Certificates................................................................22
10.1 Survival..............................................................................22
SECTION 11. No Broker.............................................................................................22
SECTION 12. Notices...............................................................................................23
SECTION 13. Miscellaneous.........................................................................................24
13.1 Entire Agreement......................................................................24
13.2 Governing Law; Arbitration............................................................25
13.3 Benefit of Parties; Assignment........................................................25
13.4 Pronouns..............................................................................26
13.5 Headings..............................................................................26
13.6 Counterparts..........................................................................26
13.7 Further Assurances....................................................................26
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT dated as of August 31, 1996 (this
"Agreement") by and between TelePlus, Inc., a Texas corporation ("Seller"),
and AMNEX, Inc., a New York corporation ("Buyer").
W I T N E S S E T H:
WHEREAS, Buyer desires to purchase from Seller and Seller
desires to sell to Buyer, all of the rights of Seller resulting in the
termination of Seller's interest in and to that certain Mexico Sales
Representative Agreement (the "Dealer Agreement") dated November 3, 1993
between Seller and Capital Network System, Inc., a Texas corporation and a
wholly-owned subsidiary of Buyer ("CNSI"), upon the terms and conditions and
for the purchase price hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and for other good and valuable consideration set forth
herein, the parties hereto agree as follows:
SECTION 1. Certain Definitions. For purposes of this
Agreement, the following terms shall have the respective meanings
set forth below:
"Actions" means any claims, actions, complaints, grievances,
suits, proceedings and investigations, whether at law, in equity or in
admiralty or before any court, arbitrator, arbitration panel or Governmental
Authority.
"Closing" means the closing of the transactions contemplated
hereby, which shall take place simultaneously with the execution and delivery
of this Agreement on the date first above written.
"Closing Date" means the date first above written.
"Commission" means the Securities and Exchange
Commission.
"Costs and Expenses" shall include all of the costs and
expenses relating to the Registration Statement involved, including but not
limited to registration, filing and qualification fees, blue-sky expenses,
printing expenses, reasonable fees and disbursements of counsel to Buyer,
counsel to
Seller, and accounting fees; provided, however, that underwriting discounts
and commissions and reimbursable underwriters' expenses will be borne pro rata
by the holders of the securities included in the Registration Statement.
"Damages" mean losses, liabilities, costs, damages, claims,
taxes and expenses (including attorneys fees and expenses.)
"Dealer Agreement" means that certain Mexico Sales
Representative Agreement dated November 3, 1993 between Seller and CNSI.
"Governmental Authority" means any agency, instrumentality,
department, commission, court, tribunal or board of any government, whether
foreign or domestic and whether national, federal, state, provincial or local.
"Laws" mean laws, rules, regulations, codes, orders,
ordinances, judgments, injunctions, decrees and policies.
"Lien" means any security interest, lien, mortgage, claim,
charge, pledge, restriction, equitable interest or encumbrance of any nature.
"Person" means any natural person, corporation, business
trust, joint venture, association, company, firm, partnership, or other entity
or government or Governmental Authority.
"Registration Statement" means an appropriate shelf
registration statement pursuant to Rule 415 under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended,
or any similar federal law then in effect.
SECTION 2. Assignment of Dealer Agreement.
2.1. Dealer Agreement To Be Assigned. Seller hereby sells,
conveys, transfers, assigns and delivers to Buyer, its successors and assigns,
free and clear of all Liens, all of Seller's right, title and interest in and
to the Dealer Agreement and Buyer hereby buys and accepts, the Dealer
Agreement.
SECTION 3. Consideration.
3.1. Amount of Purchase Price. The total consideration
(the "Purchase Price") to be paid by Buyer for assignment and termination of
Seller's interest in the Dealer Agreement and the covenant not to compete set
forth in Section 7 hereof (the "Covenant") shall be $5,250,000 of which
$10,000 shall be allocated to the Covenant.
3.2. Payment of Purchase Price.
(a) Concurrently with the execution hereof, Buyer
is paying to Seller $1,500,000 of the Purchase Price (the "Initial Payment"),
by the delivery by Buyer to Seller of a certified or bank cashier's check in
such amount payable to the order of Seller or by means of a wire transfer in
such amount to an account number and depository designated by Seller; and
(b) $3,750,000.00 of the Purchase Price shall be
payable as follows:
(i) on January 30, 1997 Buyer shall issue and
deliver 526,168 shares of Common Stock of Buyer, $.001 par value per share
(the "AMNEX Common Stock"), to Seller; and
(ii) on January 30, 1998 Buyer shall issue and
deliver 526,168 shares of AMNEX Common Stock to Seller. Such number of shares
of AMNEX Common Stock (collectively, the "AMNEX Shares") have been determined
by averaging the closing share price as reflected in the "Close" column in the
NASDAQ/Wall Street Journal Quotation of Buyer's Common Stock for the 30
trading days preceding August 1, 1996, as reported by the NASDAQ Stock Market.
(c) Until such time as the AMNEX Shares are
registered under the Securities Act pursuant to Section 12 hereof, the AMNEX
Shares shall be unregistered and subject to certain trading restrictions which
shall be as set forth in Rule 144 promulgated under the Securities Act.
3.3. Due and Payable Commissions. Buyer shall pay Seller
within the time specified by the Dealer Agreement all monies and commissions
due, payable and/or accrued through the Closing Date (i.e., commissions for
July and August 1996 services shall be paid in September and October 1996,
respectively).
SECTION 4. Representations and Warranties of Seller.
Seller hereby warrants and represents to and agrees with Buyer as
follows:
4.1. Good Standing. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Texas,
has full power and authority to own, lease and operate its properties and
assets and to conduct its business as now being conducted, and is duly
qualified or licensed to do business as a foreign corporation in each
jurisdiction in which the nature of its business or its ownership or leasing
of property requires such qualification, except where the failure to be so
qualified as a foreign corporation would not materially adversely affect the
business of Seller.
4.2. Authorization; Consents; Conflicts.
The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by the Board of Directors of Seller and all other corporate action of Seller
necessary to authorize the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been taken. This
Agreement constitutes the valid and binding obligation of Seller enforceable
against it in accordance with the terms hereof. No consent of any lender,
trustee, security holder of Seller, or other Person is required for Seller to
enter into and deliver this Agreement or to consummate the transactions
contemplated hereby, nor do the Articles of Incorporation or By-Laws of Seller
or any Contract, mortgage or other instrument to which Seller is a party or by
which Seller is bound or affecting any of its properties conflict with or
restrict the execution and delivery of this Agreement or the consummation of
the transactions contemplated hereby.
4.3. No Additional Agreements. The Dealer Agreement, a true
and correct copy of which is attached on Schedule 4.3, represents the only
Contract, agreement, instrument or understanding between Seller and CNSI,
other than this Agreement and no other Person other than CNSI has any rights
arising out of or related to the Dealer Agreement and is, to the best of
Seller's knowledge, in full force and effect. To the best of Seller's
knowledge, Seller is not in breach of the Dealer Agreement.
4.4. No Amounts Due and Owing. To the best of Seller's
knowledge, there are no amounts due and owing to Seller from
either Buyer or CNSI other than commissions for July and August
1996 referred in Section 3.3 hereof.
4.5. Legal Proceedings. Except for the ATI Settlement
described in Section 4.6, below, there are no Actions (whether or
not purportedly on behalf of Seller) pending or, to the knowledge
of Seller, threatened against or affecting Seller or any of its properties,
rights or business. Seller is not in default with respect to any order, writ,
injunction or decree of any Governmental Authority that may effect the Dealer
Agreement. The ATI Settlement will not have an adverse effect on the Dealer
Agreement.
4.6. Orders, Decrees, Etc. There are no orders, decrees,
injunctions, rulings, decisions, directives, consents or regulations of any
court or any Governmental Authority issued against, or binding on, Seller
which do or may affect, limit or control the Dealer Agreement, except for that
certain Agreed Order of Dismissal With Prejudice and to Dissolve Cash
Bond and Compromise Settlement Agreement and Mutual Release in the case
styled, TelePlus, Inc. and Capital Network System, Inc. vs. American
Telesource International, Inc., et al., (CA95-CI-01168) in the District
Court, Bexar County, Texas, 45th Judicial District (the "ATI Settlement").
4.7. Governmental Approvals. No governmental authori zation,
approval, order, license, permit, franchise, or consent and no registration,
declaration or filing by Seller or any shareholder or Affiliate of Seller with
any Governmental Authority is required in connection with the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby.
4.8. No Omissions. Seller does not, as of the date of this
Agreement, know of any facts or circumstances not disclosed to Buyer which
indicate that the Dealer Agreement may be adversely affected or which
otherwise reasonably should be disclosed to Buyer in order to make any of the
representations or warranties made herein on the part of the Seller not
misleading. No representation or warranty by Seller contained in this
Agreement, and no statement contained in any Schedule, Exhibit, certificate or
other instrument furnished to Buyer under or in connection with this
Agreement, contains any untrue statement of any material fact, or omits to
state any material fact necessary in order to make the statements contained
herein or therein not misleading.
4.9. Investment Intent. Seller is acquiring the AMNEX
Shares for its own account and not with a present view to, or for
sale in connection with, any distribution thereof in violation of
the Securities Act of 1933, as amended (the "Securities Act").
Seller consents to the placement of the following legend on each
certificate representing the AMNEX Shares:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE
TRANSFERRED OR SOLD UNLESS (i) A REGISTRATION STATEMENT UNDER
SUCH ACT IS THEN IN EFFECT WITH RESPECT THERETO, (ii) A
WRITTEN OPINION FROM COUNSEL FOR THE ISSUER OR OTHER COUNSEL
FOR THE HOLDER REASONABLY ACCEPTABLE TO THE ISSUER HAS BEEN
DELIVERED TO THE ISSUER TO THE EFFECT THAT NO SUCH
REGISTRATION IS REQUIRED OR (iii) A 'NO ACTION' LETTER OR ITS
THEN EQUIVALENT HAS BEEN ISSUED BY THE STAFF OF THE SECURITIES
AND EXCHANGE COMMISSION WITH RESPECT TO SUCH TRANSFER OR
SALE."
4.10. Restricted Securities. Seller understands that the AMNEX
Shares will not be registered when issued and delivered to Seller under the
Securities Act for the reason that the sale provided for in this Agreement is
exempt pursuant to Section 4 of the Securities Act and that the reliance of
Buyer on such exemption is predicated in part on Seller's representations set
forth herein. Seller represents that it is experienced in evaluating companies
such as Buyer, is able to fend for itself, has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits
and risks of its investment, and has the ability to suffer the total loss of
its investment. Seller further represents that Buyer has furnished it with
Buyer's Annual Report on Form 10-K for the year ended December 31, 1995 and
subsequent reports on Form 00-X xxx 0-X (xxx "XXXXX Xxxxxx Documents) and that
Seller has reviewed the same and has been afforded the opportunity to obtain
such other information as it has deemed necessary to evaluate its investment
in AMNEX Common Stock, ask questions of and receive answers from the Company
and to obtain additional information (to the extent the Company possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify the accuracy of any information furnished to it or to
which it had access.
Seller understands that the AMNEX Shares may not be sold,
transferred or otherwise disposed of without registration under the Securities
Act or an exemption therefrom and that in the absence of an effective
registration statement covering the Shares or an available exemption from
registration under the Securities Act, the AMNEX Shares must be held
indefinitely.
SECTION 5. Representations and Warranties of Buyer.
Buyer warrants and represents to and agrees with Seller as
follows:
5.1. Good Standing. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of New York,
has full power and authority to own, lease and operate its properties and
assets and to conduct its business as now being conducted, and is duly
qualified or licensed to do business as a foreign corporation in each
jurisdiction in which the nature of its business or its ownership or leasing
of property requires such qualification, except where the failure to be so
qualified as a foreign corporation would not materially adversely affect the
business of Buyer.
5.2. Authorization. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by the Board of Directors of Buyer and all other
corporate action of Buyer, including all shareholder approvals, authorizations
and ratifications, necessary to authorize the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have
been taken. This Agreement constitutes a binding obligation of Buyer
enforceable against Buyer in accordance with its terms. No consent of any
lender, trustee, security holder of Buyer, or other Person is required for
Buyer to enter into and deliver this Agreement or to consummate the
transactions contemplated hereby, nor do the Certificate of Incorporation or
By-Laws of Buyer or any Contract, mortgage or other instrument to which Buyer
is a party or by which Buyer is bound or affecting any of its properties
conflict with or restrict the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
5.3. No Additional Agreements. Buyer is not in default
with respect to any order, writ, injunction or decree of any
Governmental Authority that may effect the Dealer Agreement.
5.4. Orders, Decrees, Etc. There are no orders,
decrees, injunctions, rulings, decisions, directives, consents or
regulations of any court or any Governmental Authority issued
against, or binding on, Buyer which do or may affect, limit or
control the Dealer Agreement, except for that certain Agreed Order
of Dismissal With Prejudice and to Dissolve Cash Bond and
Compromise Settlement Agreement and Mutual Release in the case
styled TelePlus, Inc. and Capital Network System, Inc. vs.
American Telesource International, Inc., et al., (CA95-CI-01168)
in the District Court, Bexar County, Texas, 45th Judicial
District.
5.5. Governmental Approvals. No governmental authoriza tion,
approval, order, license, permit, franchise, or consent and no registration,
declaration or filing by Buyer or any shareholder or Affiliate of Buyer with
any Governmental Authority is required in connection with the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby.
5.6. No Omissions. No representation or warranty by Buyer
contained in this Agreement, and no statement contained in any Schedule,
Exhibit, certificate or other instrument furnished to Buyer under or in
connection with this Agreement, and no AMNEX Public Document contains any
untrue statement of any material fact, or omits to state any material fact
necessary in order to make the statements contained herein or therein not
misleading.
5.7. Restricted Securities. As and when required by this
Agreement, the Buyer shall issue, deliver to Seller and register the AMNEX
Shares, and when issued, the AMNEX Shares will be duly authorized, validly
issued, fully paid and non-assessable, and listed for trading on, the Nasdaq
Stock Market or such national securities exchange on which the AMNEX Shares
are then listed, if any.
SECTION 6. Non-Disclosure, Non Interference.
6.1. Non-Disclosure. The Seller recognizes the interest
of Buyer in maintaining the confidential nature of the proprietary
and other business and commercial information of Buyer and CNSI.
a. In consideration thereof, Seller shall not,
except to the extent necessary to fulfill this Agreement, or, except as
authorized in writing by Buyer, directly or indirectly, publish, disclose or
use, or authorize anyone else to publish, disclose or use, any secret or
confidential matter, or proprietary or other confidential business information
not in the public domain and acquired by Seller, relating to any aspect of the
operations, customers, marketing, contracts, activities, research,
investigations or obligations of any of Buyer or CNSI now known to the Seller
as a result of the Dealer Agreement, (the "Confidential Information").
b. In the event that Seller becomes legally
required to disclose any Confidential Information, Seller shall provide Buyer
with prompt notice so that it may seek a protective order or other appropriate
remedy and/or waive compliance with the provisions of this Section 6.1. In the
event that such protective order or other remedy is not obtained, or that
Buyer waives compliance with the provisions of this Section 6.1, Seller shall
furnish only that portion of the Confidential Information which is legally
required to be furnished, in the opinion of counsel to Seller.
6.2. Non-Interference. Seller shall not (a) infringe or
interfere with any of Buyer's or CNSI's copyright, trademark or
trade name rights, or any profits therefrom, or (b) use or
disclose, for itself or for the benefit of another, any
Confidential Information.
SECTION 7. Non-Competition
7.1. Non-Competition. For a period of three years from and
after the date hereof, Seller shall not (a) sell, directly or indirectly,
either for itself or as an agent for another, any telecommunications product
or service to any person or entity for which Seller was paid by CNSI or any of
its affiliates any type of compensation, commission or fee, including without
limitation, the 2% Fee (as such term is defined in the Dealer Agreement) (such
person or entity being referred to herein as a "Current CNSI Customer"),
unless CNSI's contract with a Current CNSI Customer has been terminated or
expired and a period of sixty (60) days has elapsed since the date of such
termination or expiration, (b) compete, directly or indirectly, by providing
or offering to provide, directly or indirectly, either for itself or as an
agent for another, operator services to any person or entity that is not a
Current CNSI Customer but subsequent to the date of this Agreement, enters
into and is under a contract with Buyer or CNSI for the provision of operator
services in Mexico (a "Future CNSI Customer"), (c) request, induce or attempt
to influence any Current CNSI Customer or Future CNSI Customer to limit,
curtail or cancel its business with Buyer or CNSI, (d) engage in any activity
that would tend to disparage or diminish Buyer's or CNSI's reputation, or (e)
request, induce or attempt to influence any current or future officer,
director, employee, consultant, agent or representative of Buyer or CNSI to
commit any act that, if committed by Seller, would constitute a breach of any
provision of this Section 7. Buyer and Seller expressly acknowledge and agree
that the terms and conditions of this Agreement shall not limit Seller from
selling, directly or indirectly, either for itself or as an agent for another,
any telecommunications product or service to any person or entity which is
not, at the time of such sale(s), and has not been for a period of sixty (60)
days preceding such sale(s), a Current CNSI Customer or which is not, at the
time of such sale(s), a Future CNSI Customer, or from selling any
telecommunication product or service other than operator services to any
Future CNSI Customer.
7.2. Non-Solicitation. Neither Seller nor any Affiliate of
Seller, and neither Buyer or CNSI nor any of their respective Affiliates, for
a period of three years from and after the date hereof, shall, directly or
indirectly, hire, offer to hire, entice away, retain, employ or solicit or
attempt to solicit (either for itself or as agent for another) for employment
or induce, persuade or encourage any person to leave the other party's employ
who, prior to the date hereof was, or during such period will be, employed or
retained by the other party as a consultant, agent, employee or otherwise. For
purposes of this Section 7.2, a person shall be deemed to be in the "employ"
of CNSI or Buyer if such person is employed by an affiliate of Buyer or by an
unaffiliated entity conducting business as an employment agency, including
without limitation, Manpower, Inc, and Seller after due inquiry is aware of
such relationship.
7.3. Specific Performance. Seller acknowledges and agrees that
any breach of Section 6 above or this Section 7 is likely to result in
irreparable injury to Buyer, that monetary damages will be an inadequate
remedy of such breach and that, accordingly, in addition to any other remedy
that Buyer may have, Buyer shall be entitled to enforce the specific
performance of such Section 6 and this Section 7 and to seek both permanent
and temporary relief in the event of any breach hereof.
7.4. Severability. The parties acknowledge that the time,
scope, geographic area and other provisions of this Section 7 have been
specifically negotiated by sophisticated commercial parties and agree that all
such provisions are reasonable under the circumstances of the transactions
contemplated by this Agreement. If any portion of this Section 7 shall be
determined to be invalid and unenforceable as written, each such portion shall
be enforced to the extent reasonable under the circumstances and such
determination shall not affect the validity or enforceability of the balance
hereof, and such balance shall remain in full force and effect. It is
understood that Seller is entering into this non-competition agreement in
order to induce Buyer to enter into this Agreement.
SECTION 8. Indemnification.
8.1. Indemnification by Seller. Seller agrees to indemnify and
hold Buyer harmless from and against any and all Damages which Buyer may
sustain at any time by reason of the breach or inaccuracy of or failure to
comply with any warranties, representations, conditions, covenants or
agreements of Seller contained in this Agreement, or in any agreement or
document
delivered pursuant hereto or in connection with this Agreement or arising out
of the consummation of the transactions contemplated hereby.
8.2. Indemnification by Buyer. Buyer agrees to indemnify and
hold Seller harmless from and against any and all Damages which Seller may
sustain at any time by reason of the breach or inaccuracy of or failure to
comply with any warranties, representations, conditions, covenants or
agreements of Buyer contained in this Agreement, or in any agreement or
document delivered pursuant hereto or in connection with this Agreement or
arising out of the consummation of the transactions contemplated hereby.
8.3. Procedures for Indemnification. In the event that any
claim is asserted against any party hereto, or any party hereto is made a
party defendant in any action or proceeding, and such claim, action or
proceeding involves a matter which is the subject of this indemnification,
then such party (an "Indemnified Party") shall give written notice to the
other party hereto (the "Indemnifying Party") of such claim, action or
proceeding, and such Indemnifying Party shall have the right to join in the
defense of said claim, action or proceeding at such Indemnifying Party's own
cost and expense and, if the Indemnifying Party agrees in writing to be bound
by and to promptly pay the full amount of any final judgment from which no
further appeal may be taken and if the Indemnified Party is reasonably assured
of the Indemnifying Party's ability to satisfy such agreement, then at the
option of the Indemnifying Party, such Indemnifying Party may take over the
defense of such claim, action or proceeding, except that, in such case, the
Indemnified Party shall have the right to join in the defense of said claim,
action or proceeding at its own cost and expense.
SECTION 9. Registration Rights.
9.1. Required Registration. For purposes of this Section 9
only, the term "Registrable Securities" shall mean the AMNEX Shares acquired
pursuant to this Agreement, provided, however, that if such shares of AMNEX
Shares owned by Seller may be sold, pursuant to an exemption from the
registration requirements of the Securities Act, including, without
limitation, pursuant to Rule 144 under the Securities Act, such shares shall
not be deemed to be Registrable Securities. Buyer shall in good faith use its
reasonable its best efforts to cause a Registration Statement covering
one-half of the Registrable Shares to become effective with the Commission on
or prior to August 31, 1997 and
to remain effective until the completion of the distribution of the
Registrable Shares to be offered or sold, but in any case not longer than such
period as is required for the intended method of distribution, or such shorter
period which will terminate when all Registrable Shares covered by such
Registration Statement have been sold or withdrawn. Buyer shall in good faith
use its reasonable best efforts to cause a Registration Statement covering the
remaining of the Registrable Shares to become effective with the Commission on
or prior to August 31, 1998 and to remain effective until the completion of
the distribution of the Registrable Shares to be offered or sold, but in any
case not longer than such period as is required for the intended method of
distribution, or such shorter period which will terminate when all AMNEX
Shares covered by such Registration Statement have been sold or withdrawn.
Buyer shall bear all of the Costs and Expenses of such Registration
Statements.
9.2. Procedure for Registration. In connection with the filing
of a Registration Statement pursuant to Section 9.1 hereof, Buyer shall in
good faith use its reasonable its best efforts to qualify, the Registrable
Shares being registered for sale under the securities or blue-sky laws of such
states and jurisdictions within the United States as shall be reasonably
requested by Seller; provided, however, that Buyer shall not be required in
connection therewith or as a condition thereto to qualify to do business, to
become subject to taxation or to file a consent to service of process
generally in any of the aforesaid states or jurisdictions;
9.3. Piggyback Registration. Subject to the requirements of
Section 9.1 above, if at any time Buyer shall propose the filing of a
registration statement on an appropriate form under the Securities Act of any
securities of Buyer, otherwise than pursuant to Section 9.1 hereof and other
than a registration statement on Forms S-8 or S-4 or any equivalent form then
in effect, then Buyer shall give Seller notice of such proposed registration
and shall include in any registration statement relating to such securities
all or a portion of the Registrable Shares then owned by Seller, which Seller
shall request, by notice given by such Seller to Buyer within 15 days after
the giving of such notice by Buyer, to be so included; provided, however, the
number of Registrable shares owned by Seller to be included shall not exceed
that percentage of the Registrable Shares as would equal the percentage
obtained by dividing the number of Registrable Shares actually issued to
Seller by the number of shares of AMNEX Common Stock then outstanding,
calculated on a fully diluted basis to be registered
as part of such offering. For example, if Buyer has 30,000,000 shares of AMNEX
Common Stock outstanding, calculated on a fully diluted basis, and Seller has
3,000,000 Registrable Shares (10%) and Buyer intends to register 3,000,000
shares of AMNEX Common Stock (10%), then Seller shall have the right to
piggyback 300,000 Registrable Shares (10% of the newly registered shares of
common stock). In the event of the inclusion of Registrable Shares pursuant to
this Section 9.3, Buyer shall bear all of the Costs and Expenses of such
registration. In the event the distribution of securities of Buyer covered by
a Registration Statement referred to in this Section 9.3 is to be
underwritten, then Buyer's obligation to include Registrable Shares in such
Registration Statement shall be subject, at the option of Buyer, to the
following further conditions, unless Seller refuses to be bound by such
conditions in which event the terms of Paragraph 9.1, hereof, shall control:
(a) The distribution for the account of Seller
shall be underwritten by the same underwriters who are underwriting the
distribution of the securities for the account of Buyer and/or any other
persons whose securities are covered by such Registration Statement, and
Seller will enter into an agreement with such underwriters containing
customary provisions;
(b) If the underwriting agreement entered into
with the aforesaid underwriters contains restrictions upon the sale of
securities of Buyer, other than the securities which are to be included in the
proposed distribution, for a period not exceeding 180 days from the effective
date of the Registration Statement, then such restrictions will be binding
upon Seller and, if requested by Buyer, Seller will enter into a written
agreement to that effect; and
(c) If the underwriters advise Buyer that they are
unwilling to include any or all of Seller's securities in the proposed
underwriting because such inclusion will interfere with the orderly sale and
distribution of the securities being offered by Buyer, then the number of
Seller's securities to be included will be reduced pro rata on the basis of
the number of shares owned by Seller, or there will be no inclusion of
Seller's securities in the registration statement and proposed distribution,
in accordance with such statement by the underwriters.
9.4. Indemnification by Buyer. Buyer will indemnify
and hold harmless Seller, any underwriter (as defined in the
Securities Act) each partner, officer and shareholder, director of
Seller, and each person, if any, who controls Seller or such underwriter
within the meaning of the Securities Act (but, in the case of an underwriter
or a controlling person, only if such underwriter or controlling person
indemnifies the persons mentioned in subdivision (b) of Section 9.5 hereof in
the manner set forth therein), against any losses, claims, damages or
liabilities, joint or several, to which Seller or any such underwriter,
partner, officer, shareholder, director or controlling person becomes subject,
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) are caused by any untrue
statement or alleged untrue statement of any material fact contained in any
preliminary prospectus (if used prior to the effective date of the
Registration Statement), or contained, on the effective date thereof, in any
Registration Statement under which AMNEX Shares were registered under the
Securities Act, the prospectus contained therein, or any amendment or
supplement thereto, or arising out of or based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; and Buyer will
reimburse Seller and any such underwriter, partner, officer, shareholder,
director or controlling person for any legal or other expenses reasonably
incurred by Seller, or any such partner, officer, director, underwriter or
controlling person in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that Buyer will
not be liable to any such persons in any such case to the extent that any such
loss, claim, damage, liability or action arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with information furnished to Buyer in
writing by such person expressly for inclusion in any of the foregoing
documents; provided, further, however, that the foregoing indemnity agreement
is subject to the condition that, insofar as it relates to any untrue
statement, alleged untrue statement, omission or alleged omission made in any
preliminary prospectus but eliminated or remedied in the final prospectus
(filed pursuant to Rule 424 of the Securities Act), such indemnity agreement
shall not inure to the benefit of Seller and its partners, officers,
shareholder, and directors, underwriter, broker or other person acting on
behalf of Seller and each other person, if any, who controls any of the
foregoing persons within the meaning of the Securities Act from whom the
person asserting any loss, claim, damage, liability or expense purchased the
AMNEX Shares which are the subject thereof, if a copy of such final prospectus
had been made available to such person and Seller, underwriter, broker or
other person acting on behalf of Seller and such final prospectus was not
delivered to
such person with or prior to the written confirmation of the sale of such
AMNEX Shares.
9.5. Indemnification by Seller. Seller shall:
(a) Furnish in writing all information to Buyer
concerning itself and its holdings of securities of Buyer as shall be
required in connection with the preparation and filing of any
Registration Statement covering any AMNEX Shares; and
(b) Indemnify and hold harmless Buyer, each of its
directors, each of its officers who has signed a Registration
Statement, each person, if any, who controls Buyer within the meaning
of the Securities Act and any underwriter (as defined in the Securities
Act) for Buyer, against any losses, claims, damages or liabilities to
which Buyer or any such director, officer, controlling person or
underwriter may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) are caused by any untrue or alleged untrue statement
of any material fact contained in any preliminary prospectus (if used
prior to the effective date of the Registration Statement) or contained
on the effective date thereof, in any Registration Statement under
which AMNEX Shares were registered under the Securities Act, the
prospectus contained therein, or any amendment or supplement thereto,
or arising out of or based upon the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; in each case
to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with information furnished in writing
to Buyer by Seller expressly for inclusion in any of the foregoing
documents, and Seller shall reimburse Buyer and any such underwriter,
officer, director or controlling person for any legal or other expenses
reasonably incurred by Seller or any such director, officer or
controlling person in connection with investigating or defending any
such loss, claim, damage, liability or action. Notwithstanding the
foregoing provisions of this Section 9.5, Seller shall not be required
to indemnify Buyer or any such underwriter, officer, director or
controlling persons for any amount in excess of the amount of the
proceeds received by Seller.
9.6. Holdback Agreement. If Buyer at any time shall
register shares of stock under the Securities Act for sale to the public
(other than on Form S-4 or Form S-8 promulgated under the Securities Act or
any successor forms thereto), and the board of directors of Buyer reasonably
determines that public sales of AMNEX Shares would materially interfere with
such offering, then Seller shall not sell publicly, make any short sale of,
grant publicly any option for the purchase of, or otherwise dispose publicly
of, any AMNEX Shares (other than those AMNEX Shares included in such
registration pursuant to Sections 9.1 or 9.3). The board of directors shall,
as promptly as practicable, give Seller written notice of any such
development. In the event of a request by the board of directors of the Buyer
that Seller refrain from effecting any public sales of the AMNEX Shares (other
than those AMNEX Shares included in such registration statement pursuant to
Section 9.1 or 9.3), Buyer shall be required to lift such restrictions
regarding effecting public sales or distributions as soon as reasonably
practicable after the board of directors shall reasonably determine that
public sales by the Seller shall not interfere with such offering, provided,
that in no event shall any requirement that the Seller refrain from effecting
public sales of the AMNEX Shares extend for more than 90 days and provided
further, that in no event shall Seller be required to refrain from effecting
public sales of the AMNEX Shares for more than one 90 day period within any 12
month period.
Buyer shall obtain the agreement of any person permitted to sell shares of
stock in a registration to be bound by and to comply with this Section 9.6 as
if such person was a stockholder hereunder.
SECTION 10. Survival of Representations; Effect of
Certificates.
10.1. Survival. The parties hereto agree that all
representations, warranties, covenants, conditions and agreements contained
herein or in any instrument or other document delivered pursuant to this
Agreement or in connection with the transactions contemplated hereby shall
survive the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby and any investigation or audit made by any
party hereto.
SECTION 11. No Broker. Buyer, on the one hand, and Seller, on
the other hand, each represents to the other that no broker or finder has been
involved with any of the transactions relating to this Agreement. If a claim
by any broker or finder that such broker or finder represented or was retained
by Seller, on the one hand, or Buyer, on the other hand, in connection
herewith, Seller, on the one hand, or Buyer, on the other hand, as
the case may be, agrees to indemnify and hold the other harmless from and
against any and all loss, liability, cost, damage, claim and expense,
including, without limitation, attorneys' fees and disbursements, which may be
incurred in connection with such claim.
SECTION 12. Notices. All notices, requests, demands and other
communications provided for by this Agreement shall be in writing and shall be
deemed to have been given when hand delivered, when received if sent by
telecopier or by same day or overnight recognized commercial courier service
or three business days after being mailed in any general or branch office of
the United States Postal Service, enclosed in a registered or certified
postpaid envelope, addressed to the address of the parties stated below or to
such changed address as such party may have fixed by notice:
To Seller: TelePlus, Inc.
23705 I.H. 00 Xxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Fax: 000-000-0000
Attn: Xxxxxx X. Xxxxxx
- copy to -
Gresham, Davis, Xxxxxxx, Worthy
& Xxxxx
000 Xxxx Xxxxx, Xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxx 00000-0000
Fax: 000-000-0000
Attn: Xxxxx X. Xxxxx, Esq.
To Buyer: AMNEX, Inc.
000 Xxxx Xxxxxxx Xxxxxx,
Xxxxx 000,
Xxxxxxx, Xxxxxxx 00000
000-000-0000
Attn: Xxxx Xxxx
- copy to -
Stroock & Stroock & Xxxxx
Seven Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopier: 000-000-0000
Attn: Xxxxx X. Xxxxx, Esq.
provided, that any notice of change of address shall be effective only upon
receipt.
SECTION 13. Miscellaneous.
13.1. Entire Agreement. This Agreement, including the Exhibits
and Schedules hereto, sets forth the entire agreement and understanding
between the parties and merges and supersedes all prior discussions,
agreements and understandings of every kind and nature among them as to the
subject matter hereof, and no party shall be bound by any condition,
definition, warranty or representation other than as expressly provided for in
this Agreement or as may be on a date on or subsequent to the date hereof duly
set forth in writing signed by each party which is to be bound thereby. Unless
otherwise expressly defined, terms defined in the Agreement shall have the
same meanings when used in any Exhibit or Schedule and terms defined in any
Exhibit or Schedule shall have the same meanings when used in the Agreement or
in any other Exhibit or Schedule. This Agreement (including the Exhibits and
Schedules hereto) shall not be changed, modified or amended except by a
writing signed by each party to be charged and this Agreement may not be
discharged except by performance in accordance with its terms or by a writing
signed by each party to be charged.
13.2. Governing Law; Arbitration. THIS AGREEMENT AND
ITS VALIDITY, CONSTRUCTION AND PERFORMANCE SHALL BE GOVERNED IN
ALL RESPECTS BY THE LAWS OF NEW YORK, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW. THE PARTIES HERETO AGREE TO
ARBITRATE IN LIEU OF LITIGATION. ALL CLAIMS, CONTROVERSIES,
DISPUTES, DIFFERENCES OR QUESTIONS BETWEEN THE PARTIES HERETO ARISING OUT OF
OR RELATING TO THE PERFORMANCE, BREACH, CONSTRUCTION, INTERPRETATION OR EFFECT
OF THIS AGREEMENT OR ANY CLAUSE CONTAINED HEREIN, OR CONCERNING ANY SUCH
RIGHTS AND LIABILITIES OF THE PARTIES HERETO, SHALL BE SUBMITTED TO BINDING
ARBITRATION UNDER THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION
ASSOCIATION. SUBJECT TO THE TERMS AND PROVISIONS SET FORTH HEREIN, SUCH
ARBITRATOR(S) SHALL HAVE FULL POWER AND AUTHORITY TO AWARD ANY AND ALL
APPROPRIATE DAMAGES AND OTHER RELIEF, INCLUDING BUT NOT LIMITED TO DAMAGES FOR
LOST PROFITS OR REVENUES, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, AND
SPECIFIC PERFORMANCE. THE ARBITRATION PROCEEDINGS SHALL TAKE PLACE IN THE CITY
OF NEW YORK, NEW YORK, AND THE JUDGMENT AND DETERMINATION OF SUCH PROCEEDINGS
SHALL BE BINDING ON ALL PARTIES HERETO. JUDGMENT UPON ANY AWARD RENDERED BY
ANY ARBITRATOR(S) APPOINTED HEREUNDER MAY BE ENTERED INTO ANY COURT HAVING
COMPETENT JURISDICTION THEREOF. ALL COSTS OF ARBITRATION SHALL BE BORNE
EQUALLY BY THE ARBITRATING PARTIES HERETO, EXCEPT FOR ATTORNEYS' FEES, AS TO
WHICH EACH SUCH PARTY SHALL BEAR ITS OWN COSTS. WITHIN FIFTEEN DAYS AFTER
WRITTEN NOTICE BY ONE PARTY TO THE OTHER PARTY OF ITS DEMAND FOR ARBITRATION,
WHICH DEMAND SHALL SET FORTH THE NAME AND ADDRESS OF ITS DESIGNATED
ARBITRATOR, THE OTHER PARTY SHALL SELECT ITS DESIGNATED ARBITRATOR AND SO
NOTIFY THE DEMANDING PARTY. WITHIN FIFTEEN DAYS THEREAFTER, THE TWO
ARBITRATORS SO SELECTED SHALL SELECT THE THIRD ARBITRATOR. THE DISPUTE SHALL
BE HEARD BY THE ARBITRATORS WITHIN SIXTY DAYS AFTER SELECTION OF THE THIRD
ARBITRATOR. THE DECISION OF ANY TWO ARBITRATORS SHALL BE BINDING UPON THE
PARTIES. IN DEFAULT OF EITHER SIDE NAMING ITS ARBITRATOR AS AFORESAID OR IN
DEFAULT OF THE SELECTION OF THE SAID THIRD ARBITRATOR AS AFORESAID, THE
AMERICAN ARBITRATION ASSOCIATION SHALL DESIGNATE SUCH ARBITRATOR UPON THE
APPLICATION OF EITHER PARTY.
13.3. Benefit of Parties; Assignment. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns. The Agreement may not be assigned
by Seller except with the prior written consent of Buyer. Nothing herein
contained shall confer or is intended to confer on any third party or entity
which is not a party to this Agreement any rights under this Agreement.
13.4. Pronouns. Whenever the context requires, the
use in this Agreement of a pronoun of any gender shall be deemed
to refer also to any other gender, and the use of the singular
shall be deemed to refer also to the plural.
13.5. Headings. The headings in the sections, para graphs,
Schedules and Exhibits of this Agreement are inserted for convenience of
reference only and shall not constitute a part hereof. The words "herein,"
"hereof," "hereto" and "hereunder," and other words of similar import refer to
this Agreement as a whole and not to any particular provision of this
Agreement.
13.6. Counterparts. This Agreement may be executed in
counterparts, all of which together shall constitute one Agreement binding on
all the parties hereto, notwithstanding that such parties are not signatories
to the original or the same counterpart. The parties also agree that for
purposes of satisfying Section 3.2, hereof, a facsimile copy of an executed
counter-part original shall be treated as an original instrument until
replaced by the executed counter-part original.
13.7. Further Assurances. Buyer and Seller shall do and
perform such further acts and execute and deliver such further instruments as
may be required by law or reasonably requested by either party at such
requesting party's expense to carry out and effectuate the purposes of this
Agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed on the day and year first above written.
TELEPLUS, INC.
By:_______________________
Name:
Title:
AMNEX, INC.
By:_______________________
Name:
Title:
