Exhibit 2.2
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of June 25, 2004 (this "Agreement"),
by and among Xxxx Xxxxx ("Seller"); VoIP, Inc., a Texas corporation
("Purchaser"); and DTNet Technologies, Inc., a Florida corporation ("Company").
W I T N E S S E T H
WHEREAS, Seller desires to sell to Purchaser 3,800,000 shares of the
Company's common stock, par value of $0.05 (the "Common Stock") (the "Shares"),
representing 100% of the Company's issued and outstanding shares of the Common
Stock of the Company, on the terms and conditions set forth in this Stock
Purchase Agreement ("Agreement"), and
WHEREAS, Purchaser desires to buy the Shares on the terms and
conditions set forth herein, and
WHEREAS the Company joins in the execution of this Agreement for the
purpose of evidencing its consent to the consummation of the foregoing
transactions and for the purpose of making certain representations and
warranties to and covenants and agreements with the Purchaser.
NOW THEREFORE, in consideration of the promises and respective mutual
agreements herein contained, it is agreed by and between the parties hereto as
follows.
ARTICLE 1
SALE AND PURCHASE OF THE SHARES
1.1 Sale of the Shares. Subject to the terms and conditions herein set
forth, on the basis of the representations, warranties and agreements herein
contained, Seller hereby sells, assigns, transfers and delivers the Shares to
Purchaser, and Purchaser purchases the Shares from the Seller.
1.2 The Closing. The purchase of the Shares shall take place at the
office of the Purchaser in Ft. Lauderdale, Florida or such other place as
Purchaser and Seller may mutually agree contemporaneously with the execution
hereof. Such date is herein referred to as the "Closing Date".
1.3 Instruments of Conveyance and Transfer. At the Closing Date, Seller
shall deliver certificates representing the Shares to Purchaser, duly endorsed
by the Seller to the Purchaser, in form and substance satisfactory to Purchaser
("Certificates"), as shall be effective to vest in Purchaser all right, title
and interest in and to all of the Shares. See Article 8 below.
1.4 Consideration and Payment for the Shares. In consideration for the
Shares, Purchaser shall pay to the Seller a total purchase price consisting of
2,500,000 shares of Purchaser's restricted common stock (the "Purchase Price").
1.5 Excluded Assets. NONE
1.6 Prorations. All accrued but unpaid taxes and other assessments of
the Company shall be prorated on the Closing Date between Seller and Purchaser.
NONE
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents, warrants and undertakes to the Purchaser that,
except as set forth in the Disclosure Schedule:
2.1 Transfer of Title. Seller shall transfer all right, title and
interest in and to the Shares to the Purchaser free and clear of all liens,
security interests, pledges, encumbrances, charges, restrictions, demands and
claims, of any kind or nature whatsoever, whether direct or indirect or
contingent.
(a) Due Execution. This Agreement has been duly executed and
delivered by the Seller.
(b) Valid Agreement. This Agreement constitutes, and upon
execution and delivery thereof by the Seller, will constitute,
a valid and binding agreement of the Seller enforceable
against the Seller in accordance with its terms.
(c) Authorization. The execution, delivery and performance by the
Seller of this Agreement and the delivery by the Seller of the
Shares have been duly and validly authorized by the Company,
and no further consent or authorization of the Seller, the
Company, its Board of Directors, or its stockholders is
required.
(d) Seller' Title to Shares; No Liens or Preemptive Rights; Valid
Issuance. Seller has and at the Closing will have good and
valid title and control of the Shares; there will be no
existing impediment or encumbrance to the sale and transfer of
such Shares to the Purchaser; and on delivery to the Purchaser
of the Shares, good and valid title to all the Shares will
pass to Purchaser and all of the Shares will be free and clear
of all taxes, liens, security interests, pledges, rights of
first refusal or other preference rights, encumbrances,
charges, restrictions, demands, claims or assessments of any
kind or any nature whatsoever whether direct, indirect or
contingent and shall not be subject to preemptive rights,
tag-along rights, or similar rights of any of the stockholders
of the Company. The Shares have been legally and validly
issued in compliance with all applicable U.S. federal and
state securities laws, and are fully paid and non-assessable
shares of the Company's Common Stock; and the Shares have all
been issued under duly authorized resolutions of the Board of
Directors of the Company. At the Closing, Seller shall deliver
to the Purchaser Certificates representing the Shares free and
clear of all liens, security interests, pledges, encumbrances,
charges, restrictions, demands or claims in any other party
whatsoever with appropriate stock powers with medallion
guarantees.
2.2 No Governmental Action Required. The execution and delivery by the
Seller of this Agreement does not and will not, and the consummation of the
transactions contemplated hereby will not, require any action by or in respect
of, or filing with, any governmental body, agency or governmental official.
2.3 Compliance with Applicable Law and Corporate Documents. The
execution and delivery by the Seller and the Company of this Agreement does not
and will not, and the sale by the Seller of the Shares and the consummation of
the other transactions contemplated by this Agreement does not and will not
contravene or constitute a default under or violation of (i) any provision of
applicable law or regulation, (ii) the articles of incorporation or by-laws of
the Company or (iii) any agreement, judgment, injunction, order, decree or other
instrument binding upon the Seller or the Company's assets, or result in the
creation or imposition of any lien on any asset of the Seller.
2.4 Not a Voting Trust: No Proxies. None of the Shares are or will be
subject to any voting trust or agreement. No person holds or has the right to
receive any proxy or similar instrument with respect to the Shares. Except as
provided in this Agreement, the Seller is not a party to any agreement which
offers or grants to any person the right to purchase or acquire any of the
Shares. There is no applicable local, state or federal law, rule, regulation, or
decree which would, as a result of the sale contemplated by this Agreement,
impair, restrict or delay any voting rights with respect to the Shares.
2.5 Survival of Representations. The representations and warranties
herein by the Seller will be true and correct in all material respects on and as
of the Closing Date with the same force and effect as though said
representations and warranties had been made on and as of the Closing Date and
will survive the Closing Date as provided in Section 7.1(c).
2.6 Adoption of Company's Representations. The Seller adopts and
remakes as his own each and every representation, warranty and undertaking made
by the Company in Article 3 below as if he had made such representations,
warranties and undertakings to the Purchaser directly.
2.7 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission payable by the Purchaser or the
Company in connection with the transactions contemplated by this Agreement.
2.8 Investment Intent. Seller represents that it is acquiring and will
acquire, as the case may be, the Purchase Price Shares issuable to it pursuant
hereto solely for its own account for investment purposes only and not with a
view toward resale or distribution thereof other than pursuant to an effective
registration statement or applicable exemption from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act").
Seller understands that such Purchase Price Shares will be issued in reliance
upon an exemption from the registration requirements of the Securities Act and
that subsequent sale or transfer of such securities is prohibited absent
registration or exemption from the provisions of the Securities Act. Seller
further acknowledges that under SEC Rule 144, the Purchase Price Shares may be
sold pursuant to all of the provisions of such Rule after a holding period of
one year and that the Purchase Price Shares will become fully tradable after a
holding period of two years. Seller hereby agrees that it will not sell, assign,
transfer, pledge or otherwise convey any of the Purchase Price Shares issuable
pursuant hereto, except in compliance with the provisions of the Securities Act
and in accordance with any transfer restrictions or similar terms set forth on
the certificates representing such securities or otherwise set forth herein.
Seller acknowledges receiving copies of Purchaser's most recent SEC disclosure
statements.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COMPANY
The Company represents, warrants and undertakes to the Purchaser that,
except as set forth on the Disclosure Schedule:
3.1 Due Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Florida (a)
with full power and authority to own, lease, use, and operate its properties and
to carry on its business as and where now owned, leased, used, operated and
conducted. The Company has no subsidiaries. The Company is not qualified to
conduct business in any jurisdiction other than the State of Florida, and (b)
all actions taken by the current directors and stockholders of the Company have
been valid and in accordance with the laws of the State of Florida and all
actions taken by the Company have been duly authorized by the current directors
and stockholders of the Company as appropriate.
3.2 (a) Company Authority. The Company has all requisite corporate
power and authority to enter into and perform this Agreement and to consummate
the transactions contemplated herein.
(b) Due Authorization. The execution, delivery and performance by
the Company of this Agreement has been duly and validly
authorized and no further consent or authorization of the
Company, its Board of Directors or its stockholders is
required. The Seller is not disqualified from acting as a
director with respect to the transactions contemplated hereby
by reason of his interest in the transactions.
(c) Valid Execution. This Agreement has been duly executed and
delivered by the Company.
(d) Binding Agreement. This Agreement constitutes, and upon
execution and delivery thereof by the Company, will
constitute, a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms,
except as may be limited by applicable bankruptcy, insolvency
or similar laws affecting creditor's rights generally or the
availability of equitable remedies.
(e) No Violation of Corporate Documents or Agreements. The
execution and delivery of this Agreement by the Company and
the performance by the parties hereto of their obligations
hereunder will not cause, constitute, or conflict with or
result in (i) any breach or violation, or give rise to a right
of termination, cancellation or acceleration of any obligation
or to loss of a material benefit under, or to increased,
additional, accelerated or guaranteed rights or entitlements
of any person under any of the provisions of, or constitute a
default under, any license, indenture, mortgage, charter,
instrument, articles of incorporation, bylaw, judgment, order,
decision, writ, injunction, or decree or other agreement or
instrument or proceeding to which the Company or its
stockholders are a party, or by which they may be bound, nor
will any consents or authorizations of any party other than by
those hereto required, (ii) an event that would cause the
Company to be liable to any party, or (iii) an event that
would result in the creation or imposition or any lien, charge
or encumbrance on any asset of the Company or on the
securities of the Company to be acquired by the Purchaser.
3.3 Authorized Capital, No Preemptive Rights, No Liens; Anti-Dilution.
As of the date hereof, the authorized capital of the Company is 3,800,000 shares
of Common Stock, with par value of $0.05. There is no authorized preferred stock
of any kind. The issued and outstanding capital stock of the Company is
3,800,000 shares of Common Stock, and the names and number of shares of all
owners of Common Stock are listed in the Disclosure Schedule. All of the shares
of capital stock are duly authorized, validly issued, fully paid and
non-assessable. No shares of capital stock of the Company are subject to
preemptive rights or similar rights of the stockholders of the Company or any
liens or encumbrances imposed through the actions or failure to act of the
Company, or otherwise. As of the date hereof (i) there are no outstanding
options, warrants, convertible securities, scrip, rights to subscribe for, puts,
calls, rights of first refusal, tag-along agreements, nor any other agreements,
understandings, claims or other commitments or rights of any character
whatsoever relating to, or securities or rights convertible into or exchangeable
for any shares of capital stock of the Company, or arrangements by which the
Company is or may become bound to issue additional shares of capital stock of
the Company, and (ii) there are no agreements or arrangements under which the
Company is obligated to register the sale of any of its securities under the
Securities Act of 1933, and (iii) there are no anti-dilution or price adjustment
provisions contained in any security issued by the Company (or in the Company's
articles of incorporation or by-laws or in any agreement providing rights to
security holders) that will be triggered by the transactions contemplated by
this Agreement. The Company has furnished to Purchaser true and correct copies
of the Company's articles of incorporation, by-laws and corporate minute book.
3.4 No Governmental Action Required. The execution and delivery by the
Company of this Agreement does not and will not, and the consummation of the
transactions contemplated hereby will not, require any action by or in respect
of, or filing with, any governmental body, agency or governmental official.
3.5 Compliance with Applicable Law and Corporate Documents. The
execution and delivery by the Company of this Agreement and the performance by
the parties hereto of the transactions contemplated hereby does not and will not
contravene or constitute a default under or violation of (i) any provision of
applicable law or regulation, including any environmental law, (ii) the
Company's articles of incorporation or bylaws, or (iii) any agreement, judgment,
injunction, order, decree or other instrument binding upon the Company or any
its assets, or result in the creation or imposition of any lien on any asset of
the Company. To the best of its knowledge, the Company is in compliance with and
conforms to all statutes, laws, ordinances, rules, regulations, orders,
restrictions and all other legal requirements of any domestic or foreign
government or any instrumentality thereof having jurisdiction over the conduct
of its businesses or the ownership of its properties.
3.6 Financial Statements. (a) The Purchaser has received a copy of the
unaudited financial statements of the Company for the fiscal year ended December
31, 2003 and the four weeks ended April 30, 2004 ("Financial Statements"). The
Financial Statements fairly present the financial condition of the Company at
the dates indicated and its results of their operations and cash flows for the
periods then ended and, except as indicated therein, reflect all claims against,
debts and liabilities of the Company, fixed or contingent, and of whatever
nature. (b) Since April 30, 2004 (the "Balance Sheet Date"), there has been no
material adverse change in the assets or liabilities, or in the business or
condition, financial or otherwise, or in the results of operations or prospects,
of the Company, whether as a result of any legislative or regulatory change,
revocation of any license or rights to do business, fire, explosion, accident,
casualty, labor trouble, flood, drought, riot, storm, condemnation, act of God,
public force or otherwise and no material adverse change in the assets or
liabilities, or in the business or condition, financial or otherwise, or in the
results of operation or prospects, of the Company except in the ordinary course
of business. (c) Since the Balance Sheet Date, the Company has not suffered any
damage, destruction or loss of physical property (whether or not covered by
insurance) affecting its condition (financial or otherwise) or operations
(present or prospective), nor has the Company issued, sold or otherwise disposed
of, or agreed to issue, sell or otherwise dispose of, any capital stock or any
other security of the Company and has not granted or agreed to grant any option,
warrant or other right to subscribe for or to purchase any capital stock or any
other security of the Company or has incurred or agreed to incur any
indebtedness for borrowed money.
3.7 No Litigation. The Company is not a party to any suit, action,
arbitration, or legal, administrative, or other proceeding, or pending or
threatened governmental investigation. The Company is not subject to or in
default with respect to any order, writ, injunction, or decree of any federal,
state, local, or foreign court, department, agency, or instrumentality.
3.8 No Taxes. With the exception of accrued taxes to be prorated in
accordance with Section 1.6, the Company is not, and will not become with
respect to any periods ending on or prior to the Closing Date, liable for any
income, sales, withholding, franchise, excise, license, real or personal
property taxes (a "Tax") to any foreign, United States federal, state or local
governmental agencies whatsoever. All United States federal, state, county,
municipality local or foreign income Tax returns and all other material Tax
returns (including information returns) that are required, or have been
required, to be filed by or on behalf of the Company have been or will be filed
as of the Closing Date and all Taxes due pursuant to such returns or pursuant to
any assessment received by the Company have been or will be paid as of the
Closing Date. The charges, accruals and reserves on the books of the Company in
respect of taxes or other governmental charges have been established in
accordance with the tax method of accounting. All returns that have been filed
relating to Tax are true and accurate in all material respects. No audit,
action, suit, proceeding or other examination regarding taxes for which the
Company may have any liability is currently pending against or with respect to
the Company and neither Seller nor the Company has received any notice (formally
or informally) of any audit, suit, proceeding or other examination. No material
adjustment relating to any Tax returns, no closing or similar agreement have
been entered into or issued or have been proposed (formally or informally) by
any tax authority (insofar as such action relate to activities or income of or
could result in liability of the Company for any Tax) and no basis exists for
any such actions. The Company has not changed any election, adopted or changed
any accounting method or period, filed any amended return for any Tax, settled
any claim or assessment of any Tax, or surrendered any right to claim any refund
of any Tax, or consented to any extension or waiver of the statute of
limitations for any Tax. The Company has not had an "ownership change" as that
term is defined in Section 382 of the Internal Revenue Code of 1986, as amended
and in effect.
3.9 Assets.
See attached Exhibit A
3.10 Licenses, Permits, Etc. The Company possesses adequate licenses,
clearances, ratings, permits and franchises, and all rights with respect
thereto, to conduct its business substantially as now and heretofore conducted,
and without any conflict with the rights of others in any such license,
clearance, rating, permit or franchise. Except for instances previously
remedied, the Company does not have knowledge of, nor has it received notice of,
any termination, revocation or limitation of, or of the pendency or threatened
commencement of any proceeding to terminate, revoke or limit any such licenses,
clearances, ratings, permits or other approvals by the governmental body issuing
same. No such right will be terminated as a result of the sale of the Shares
hereby. A list of all such permits and licenses is set forth in the Disclosure
Statement.
3.11 Conduct of the Business. From and after January 1, 2004 until the
Closing Date.
(a) The Company has continued to be operated in the usual and
ordinary manner in which its business has been conducted in the past
and during such period. The Company has not made any expenditures or
entered into any commitments which, when compared to past operations of
its business, are unusual or extraordinary or outside the scope of the
normal course of routine operations;
(b) The Company has kept in a normal state of repair and
operating efficiency all tangible personal property used in the
operation of its business;
(c) The Company has used its best efforts to maintain the good
will associated with its business, and the existing business
relationships with its agents, customers, lessors, key employees,
suppliers and other persons having relations with it;
(d) The Company has not entered into any contract, agreement
or action, or relinquished or released any rights or privileges under
any contracts or agreements, the performance, violation, relinquishment
or release of which could, on the date on which such contract or
agreement was entered into, or such rights or privileges were
relinquished or released, be reasonably foreseen to have a material
adverse effect;
(e) The Company has not made, or agreed to make, any
acquisition of stock or assets of, or made loans to, any person not in
the ordinary course of business;
(f) The Company has not sold or disposed of any assets or
created or permitted to exist any encumbrance on its assets except (x)
in the ordinary course of business and which could not, on the date of
such sale, disposition, creation or permission, be reasonably foreseen
to have a material adverse effect or (y) as otherwise permitted by this
Agreement;
(g) The Company has kept true, complete and correct books of
records and accounts with respect to its business, in which entries
will be made of all transactions on a basis consistent with past
practices and in accordance with the tax method of accounting
consistently applied by the Company;
(h) The Company has paid current liabilities as and when they
became due and has paid or incurred no fees and expenses not in the
ordinary course of its business;
(i) There has been no declaration, setting aside or payment of
any dividend or other distribution in respect of any Shares or any
other securities of the Company (whether in cash or in kind);
(j) The Company has not redeemed, repurchased, or otherwise
acquired any of its securities or entered into any agreement to do so;
(k) The Company has not made any sale or pledge of accounts
receivable;
(l) Except for normal annual increases resulting from the
application of existing formulae under existing plans, agreements or
policies relating to non-officer/director, employee compensation, and
except as set forth in this Agreement and in the Disclosure Schedule,
there has not been any material increase in the rate of compensation
payable or to become payable to employees in the aggregate, or any
increase in the amounts paid or payable to the Company's officers or
directors, or payable to such officers, directors or employees in the
aggregate under any bonus, insurance, pension or other benefit plan, or
any arrangements therefor made for or with any of said officers or
employees;
(m) The Company has not made any loan to, or entered into any
other transaction with, any of its directors, officers, and employees;
(n) The Company has not made or pledged to make any charitable
or other capital contribution outside the ordinary course of business;
and
(o) There has not been any other occurrence, event, incident,
action, failure to act or transaction outside the ordinary course of
business that would have a material adverse effect.
3.12 Liabilities.
(a) The Company has no liabilities or obligations, other than
(A) liabilities and obligations which are stated or provided for in the
Financial Statements and which continue to exist, (B) liabilities and
obligations incurred by the Company in the ordinary course of business
consistent with past practices subsequent to the date of the Financial
Statements which do not and will not have a material adverse effect
(none of which results from, arises out of, relates to, is in the
nature of, or was caused by any breach of contract, breach of warranty,
tort, infringement, or violation of Law).
(b) Except as set forth in the Disclosure Schedule, since
January 1, 2004, the Company has not:
(i) subjected to encumbrance, or agreed to do so to
any of its assets, tangible or intangible other than purchase
money liens in the ordinary course of business on equipment
used in the conduct of business and incurred to finance the
purchase price of the equipment involved and which do not
cover any other asset of the Company;
(ii) except as otherwise contemplated hereby, engaged
in any transactions affecting its business or properties not
in the ordinary course of business consistent with past
practice or suffered any extraordinary losses or waived any
rights of substantial value except in the ordinary course of
business; or
(iii) other than in the ordinary course of business
consistent with past practice, granted or agreed to grant, or
paid or agreed to pay any increase in the rate of wages,
salaries, bonuses or other remuneration of any officer,
director or consultant of the Company or any increase of 5% or
more in the rate of wages, salaries, bonuses or other
remuneration of any non-officer/director or employee or become
a party to any employment contract or arrangement with any of
its directors, officers, consultants or employees or become a
party to any contract or arrangement with any director,
officer, consultant or employee providing for bonuses, profit
sharing payments, severance pay or retirement benefits, other
than as set forth in any Exhibit or Schedule hereto.
3.13 ERISA Compliance.
(a) The Disclosure Schedule contains a list of each pension,
profit sharing, thrift or other retirement plan, employee stock
ownership plan, deferred compensation, stock option, stock purchase,
performance share, bonus or other incentive plan, severance plan,
health, group insurance or other welfare plan, or other similar plan,
agreement, policy or understanding, including without limitation, any
"employee benefit plan" within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974 ("ERISA"), under which
the Company or any ERISA Affiliate has any current or future obligation
or liability or under which any employee of the Company or any ERISA
Affiliate has any current or future right to benefits (each such plan,
agreement, policy or understanding being hereinafter referred to
individually as a "Plan"). The Company ---- has delivered to Purchaser
true and complete copies of (A) each Plan, (B) the summary plan
description, if any, for each Plan, (C) the most recent Internal
Revenue Service determination letter with respect to each Plan, if
applicable, (D) the latest annual report (Form 5500 or 5500-C) for the
past three (3) years, if any, which has been filed with the Internal
Revenue Service for each Plan, and (E) copies of any related materials
that have been furnished to participants or beneficiaries of each Plan
or to any Governmental Body.
(b) Each Plan is in compliance in all material respects with
the provisions of ERISA, the Code and all other applicable federal and
state laws and the rules and regulations promulgated thereunder
interpreting or applying these laws and each Plan (and related trust or
funding vehicle, if any) has at all times been administered and
maintained in accordance with its terms and applicable Laws, including,
without limitation, the filing of all applicable reports.
(c) Each Plan shall be terminated at or prior to the Closing.
3.14 Insurance. The Disclosure Schedule includes a true and correct
list of all policies or binders of insurance of the Company in force, specifying
the insurer, policy number (or covering note number with respect to binders) and
amount thereof and describing each pending claim thereunder. Such policies are
in full force and effect. The Company is not in default with respect to any
provisions contained in any such policy or binder, nor has it failed to give any
notice or present any claim under any such policy or binder in due and timely
fashion. There are no outstanding unpaid claims under any such policy or binder,
or claims for worker's compensation. The Company has not received notice of
cancellation or non-renewal of any such policy or binder. The Company has never
been, and is not now, the subject of any claim relating to damage or injury in
excess of the Company's then-current product liability policy limits or which
has been disclaimed by the Company's insurer. Such insurance will lapse on the
Closing Date.
3.15 Compliance with Law. To the best of its knowledge, the Company has
complied with, and is not in violation of any provision of laws or regulations
of federal, state or local government authorities and agencies. There are no
pending or threatened proceedings against the Company by any federal, state or
local government, or any department, board, agency or other body thereof.
3.16 Consents. The Disclosure Schedule lists all consents ("Consents")
of third parties required to be obtained as a result of the change of control of
the Company hereby.
3.17 Agreements. Except as set forth in the Disclosure Schedule, the
Company is not a party to any material agreement, loan, credit, lease, sublease,
franchise, license, contract, commitment or instrument or subject to any
corporate restriction. The Disclosure Schedule identifies every loan or credit
agreement, and every fully or partially executory agreement or purchase order
pursuant to which the Company is obligated to deliver goods or perform services,
pay for goods, services or other property, or repay any loan, including, without
limitation, any agreement with present or former officers, directors,
consultants, agents, brokers, vendors, customers and/or dealers of any nature.
True, correct and complete copies of all such agreements have been delivered to
Purchaser. Neither the Company nor any other party is in default under any such
agreement, loan, credit, lease, sublease, franchise, license, contract,
commitment, instrument or restriction. No such instrument requires the consent
of any other party thereto in order to consummate the sales of the Shares
hereby.
3.18 Intellectual Property. The Disclosure Schedule sets forth a true,
correct and complete list and description of all registered Intellectual
Property and applications therefore owned by the Company (the "Intellectual
Property"). The Intellectual Property constitutes all Intellectual Property used
in or necessary for the conduct of the Company's business as heretofore
conducted. The Company is the sole owner of, and has the exclusive right to use,
free and clear of any payment, restriction or encumbrance, the Intellectual
Property. No claims have been asserted by any person or entity that challenge
the Company's exclusive rights in the Intellectual Property. The Intellectual
Property does not infringe on, misappropriate, or otherwise violate a valid and
enforceable intellectual property right of any other person or entity.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Unless specifically stated otherwise, Purchaser represents and warrants
that the following are true and correct as of the date hereof and will be true
and correct through the Closing Date as if made on that date:
4.1 Agreement's Validity. This Agreement has been duly executed and
delivered by Purchaser and constitutes a legal, valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms, except as
may be limited by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally or the availability of equitable remedies.
4.2 Investment Intent. Purchaser is acquiring the Shares for its own
account for investment and not with a view to, or for sale or other disposition
in connection with, any distribution of all or any part thereof.
4.3 Restricted Securities. Purchaser understands that the Shares have
not been registered pursuant to the Securities Act or any applicable state
securities laws, that the Shares will be characterized as "restricted
securities" under federal securities laws, and that under such laws and
applicable regulations the Shares cannot be sold or otherwise disposed of
without registration under the Securities Act or an exemption therefrom.
ARTICLE 5
COVENANTS OF THE PARTIES
5.1 General. In case at any time after the Closing Date any further
action is necessary or desirable to carry out the purposes of this Agreement,
each of the Parties will take such further action (including the execution and
delivery of such further instruments and documents) as any other Party may
request, all at the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefor under Article 7 below).
The Seller agrees that from and after the Closing Date, the Purchaser will be
entitled to review and inspect all documents, books, records (including Tax
records), properties, agreements, field operations, environmental records and
compliance, and financial data of any sort relating to the Company, and to
discuss the Company with its employees, customers and vendors. If for any reason
the Closing Date does not occur, Purchaser agrees to maintain the
confidentiality of and not use for its benefit any information obtained about
the Company in the course of such review.
5.2 Notices and Consents. The Seller will, and will cause the Company
to, give any notices to third parties, and the Seller will use his best efforts,
and will cause the Company to use its best efforts, to obtain any third-party
Consents that the Purchaser may request. Each of the Parties will (and the
Seller will cause the Company to) give any notices to, make any filings with,
and use its best efforts to obtain any required authorizations, Consents, and
approvals of governmental bodies.
5.3 Transition. Seller will not take any action that is designed or
intended to have the effect of discouraging any lessor, licensor, customer,
supplier, or other business associate of the Company from maintaining the same
business relationships with the Company after the Closing as it maintained with
the Company prior to the Closing. The Seller will refer all customer inquiries
relating to the business of the Company to the Purchaser from and after the
Closing.
5.4 Covenant Not to Compete. The Seller acknowledges that he has
special knowledge, expertise, contacts and other information with respect to the
Restricted Business (as defined below). In further consideration of the sale
hereby, the Seller agrees to be bound by the terms of this Section 5.4. Seller
acknowledges that the restrictions set forth in this Section 5.4 are necessary
and appropriate to protect the interest of the Company and the Purchaser and to
ensure that the Purchaser obtains all of the benefits intended to be conveyed to
the Purchaser by the Seller pursuant to this Agreement, including the good will
of the Company.
(a) Certain Defined Terms. The following words and phrases
shall have the meaning set forth below:
(i) "Restricted Business" means any business in which
the Company or the Purchaser is engaged, directly or
indirectly, on the date hereof or the Closing Date, or any
business in which the Company has been engaged at any time
during the twelve months prior to the date hereof.
(ii) "Territory" means the States of Florida, Texas,
California and Georgia. Seller acknowledges that the Purchaser
must protect itself on such basis. Seller recognizes and
acknowledge that the Purchaser will be engaged, directly or
indirectly (including through the Company), in the Restricted
Business throughout the Territory and that it is reasonable
and necessary for Purchaser to protect its interest on such
basis.
(b) Non-competition. Seller hereby agrees that for five years
after the Closing Date, that the Seller will not jointly or
individually, directly or indirectly, (i) have any ownership interest
(whether as proprietor, partner, stockholder or otherwise) in, (ii) be
an officer, director or general or managing partner of, or hold a
similar position in, (iii) act as agent, broker or distributor for, or
adviser or consultant to, (iv) be employed in, or (v) otherwise engage
in, any business or business activities (without regard to the form in
which conducted) which is engaged, or which the Seller reasonably knows
are undertaking to become engaged, in the Territory in the Restricted
Business. The ownership by the Seller of less than one percent (1%) of
the shares of capital stock of a publicly held corporation shall in no
event be deemed a violation of the foregoing.
(c) No Interference With Employees. Seller hereby agrees that
during a period of five years after the Closing Date, the Seller will
not, directly or indirectly, solicit, request, induce, assist or
encourage any other employee of the Company, the Purchaser or any of
its subsidiaries to terminate his or her employment with the Company,
the Purchaser or any of its subsidiaries, respectively.
(d) Trade Secrets; Confidential Information. Seller recognizes
and acknowledges that he has had access to certain highly sensitive,
special or unique information that is confidential or proprietary, and
agree that they shall not at any time after the date hereof, use or
divulge, furnish or make accessible to anyone (other than in the
regular course of the business of the Company) any knowledge or
information of a confidential or secret nature with respect to the
business affairs (including, but not limited to, any information
concerning customers or accounts) of the Company except as may
otherwise be required by law or may otherwise become public knowledge
from a source, other than the Seller, who is entitled to disclose such
information.
(e) Miscellaneous. If the final judgment of a court of
competent jurisdiction declares that any term or provision of this
Section 5.4 is invalid or unenforceable, the Parties agree that the
court making the determination of invalidity or unenforceability shall
have the power to reduce the scope, duration, or area of the term or
provision, to delete specific words or phrases, or to replace any
invalid or unenforceable term or provision with a term or provision
that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this
Agreement shall be enforceable as so modified after the expiration of
the time within which the judgment may be appealed.
5.5 Registration Rights. In addition to the rights of Seller under SEC
Rule 144, if at any time during the two years after the Closing, Purchaser shall
prepare and file one or more registration statements under the Securities Act of
1933 (the "Act") with respect to public offering of equity securities of
Purchaser, other than a registration statement on Forms X-0, X-0, or similar
form, Purchaser will include in any such registration statement such information
as is required, and such number of shares of Common Stock held by the Seller to
permit a public offering of such shares of Common Stock in an amount of shares
equal to 15% of the Purchase Price shares; provided, however, that if, in the
written opinion of the Purchaser's managing underwriter, if any, for such
offering, the inclusion of the shares requested to be registered, when added to
the securities being registered by Purchaser or the selling security holder(s),
would exceed the maximum amount of Purchaser's securities that can be marketed
without otherwise materially and adversely affecting the entire offering, then
Purchaser may exclude from such offering that portion of the shares required to
be so registered so that the total number of securities to be registered is
within the maximum number of shares that, in the opinion of the managing
underwriter, may be marketed without otherwise materially and adversely
affecting the entire offering. Purchase shall bear all fees and expenses other
than the fees and expenses of Seller's counsel incurred in the preparation and
filing of such registration statement and related state registrations, to the
extent permitted by applicable law, and the furnishing of copies of the
preliminary and final prospectus thereof to such Seller. This right shall be
personal to Seller and not transferable.
ARTICLE 6
INDEMNIFICATION
6.1 Purchaser Claims. (a) Seller shall indemnify and hold harmless
Purchaser, its successors and assigns, against, and in respect of:
(i) Any and all damages, losses, liabilities, costs,
and expenses incurred or suffered by Purchaser that result
from, relate to, or arise out of:
(A) Any failure by Seller to carry out any
covenant or agreement contained in this Agreement;
(B) Any material misrepresentation or breach
of warranty by Seller contained in this Agreement,
the Disclosure Schedule, or any certificate,
furnished to Purchaser by Seller pursuant hereto; or
(C) Any claim by any Person for any
brokerage or finder's fee or commission in respect of
the transactions contemplated hereby as a result of
Seller' dealings, agreement, or arrangement with such
Person.
(ii) Any and all actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines,
judgments, costs, and other expenses (including, without
limitation, reasonable legal fees and expenses) incident to
any of the foregoing including all such expenses reasonably
incurred in mitigating any damages resulting to Purchaser from
any matter set forth in subsection (i) above.
(b) The amount of any liability of Seller under this Section
6.1 shall be computed net of any tax benefit to Purchaser from the
matter giving rise to the claim for indemnification hereunder and net
of any insurance proceeds received by Purchaser with respect to the
matter out of which such liability arose.
(c) The representations and warranties of Seller contained in
this Agreement, the Disclosure Schedule, or any certificate delivered
by or on behalf of Seller pursuant to this Agreement or in connection
with the transactions contemplated herein shall survive the
consummation of the transactions contemplated herein and shall continue
in full force and effect for the periods specified below ("Survival
Period"):
(i) The representations and warranties contained in
Sections 3.8 and 3.13 shall survive until the expiration of
any applicable statutes of limitation provided by law; and
(ii) All other representations and warranties of
Seller shall be of no further force and effect after eighteen
(18) months from the Closing Date.
Anything to the contrary notwithstanding, the Survival period shall be
extended automatically to include any time period necessary to resolve
a written claim for indemnification which was made in reasonable detail
before expiration of the Survival Period but not resolved prior to its
expiration, and any such extension shall apply only as to the claims so
asserted and not so resolved within the Survival Period. Liability for
any such item shall continue until such claim shall have been finally
settled, decided, or adjudicated.
(d) Purchaser shall provide written notice to Seller of any
claim for indemnification under this Article as soon as practicable;
provided, however, that failure to provide such notice on a timely
basis shall not bar Purchaser's ability to assert any such claim except
to the extent that Seller is actually prejudiced thereby, provided that
such notice is received by Seller during the applicable Survival
Period. Purchaser shall make commercially reasonable efforts to
mitigate any damages, expenses, etc. resulting from any matter giving
rise to liability of Seller under this Article.
6.2 Defense of Third-Party Claims. With respect to any claim by
Purchaser under Section 6.1, relating to a third party claim or demand,
Purchaser shall provide Seller with prompt written notice thereof and Seller may
defend, in good faith and at their expense, by legal counsel chosen by them and
reasonably acceptable to Purchaser any such claim or demand, and Purchaser, at
its expense, shall have the right to participate in the defense of any such
third party claim. So long as Seller is defending in good faith any such third
party claim, Purchaser shall not settle or compromise such third party claim. In
any event Purchaser shall cooperate in the settlement or compromise of, or
defense against, any such asserted claim.
6.3 Seller Claims. Purchaser shall indemnify and hold harmless Seller
against, and in respect of, any and all damages, claims, losses, liabilities,
and expenses, including without limitation, legal, accounting and other
expenses, which may arise out of: (a) any material breach or violation by
Purchaser of any covenant set forth herein or any failure to fulfill any
obligation set forth herein; (b) any material breach of any of the
representations or warranties made in this Agreement by Purchaser; or (c) any
claim by any Person for any brokerage or finder's fee or commission in respect
of the transactions contemplated hereby as a result of Purchaser's dealings,
agreement, or arrangement with such Person.
6.4 Settlement of Disputes. (a) Arbitration. All disputes with respect
to any claim for indemnification under this Article VII and all other disputes
and controversies of every kind and nature between the parties hereto arising
out of or in connection with this Agreement shall be submitted to arbitration
pursuant to the following procedures:
(i) After a dispute or controversy arises, either
party may, in a written notice delivered to the other party,
demand such arbitration. Such notice shall include a statement
of the matter in controversy;
(ii) Within 30 days after receipt of such demand, an
arbitrator shall be chosen by the American Arbitration
Association ("AAA"); ---
(iii) The arbitration hearing shall be held within 30
days of the appointment of the arbitrator in Ft. Lauderdale,
Florida, at a location designated by the arbitrator. The
Commercial Arbitration Rules of the AAA shall be used and the
substantive laws of the State of Florida (excluding conflict
of laws provisions) shall apply;
(iv) An award rendered by the arbitrator appointed
pursuant to this Agreement shall be final and binding on all
parties to the proceeding, shall deal with the question of
costs of the arbitration and all related matters, shall not
award punitive damages, and judgment on such award may be
entered by either party in a court of competent jurisdiction;
and
(v) Except as set forth in subsection (b) below, the
parties stipulate that the provisions of this Section 6.4
shall be a complete defense to any suit, action or proceeding
instituted in any federal, state, or local court or before any
administrative tribunal with respect to any controversy or
dispute arising out of this Agreement. The arbitration
provisions hereof shall, with respect to such controversy or
dispute, survive the termination or expiration of this
Agreement.
(b) Emergency Relief. Notwithstanding anything in this Section
6.4 to the contrary, either party may seek from a court any provisional
remedy that may be necessary to protect any rights or property of such
party pending the establishment of the arbitral tribunal or its
determination of the merits of the controversy.
ARTICLE 7
CLOSING, DELIVERY OF DOCUMENTS AND POST CLOSING COVENANTS
7.1 Closing. The Closing referred to in Section 1.2 hereof shall occur
as a single integrated transaction, as follows.
(a) Delivery by Seller. Seller shall deliver to Purchaser:
(i) The Shares;
(ii) copies of resolutions by the Board of Directors of
the Company approving the terms of this Agreement and
the execution of the Agreement by the Company;
(iii) copies of all books, records and documents relating
to the Company, including the corporate records and
stock records of the Company;
(iv) resignations as directors and officers;
(v) any other such instruments, documents and
certificates as are required to be delivered by
Seller or its representatives pursuant to the
provisions of this Agreement; and
(vi) the Consents.
(b) Delivery by Purchaser. Purchaser shall deliver to Seller:
(i) the Purchase Price Shares;
(ii) copies of resolutions of the Board of Directors of
Purchaser approving the terms of the Agreement and
the execution of this Agreement by the Purchaser.
ARTICLE 8
MISCELLANEOUS
8.1 Entire Agreement. This Agreement sets forth the entire agreement
and understanding of the parties hereto with respect to the transactions
contemplated hereby, and supersedes all prior agreements, arrangements and
understanding related to the subject matter hereof. No understanding, promise,
inducement, statement of intention, representation, warranty, covenant or
condition, written or oral, express or implied, whether by statute or otherwise,
has been made by any party hereto which is not embodied in this Agreement or the
written statement, certificates, or other documents delivered pursuant hereto or
in connection with the transactions contemplated hereby, and no party hereto
shall be bound by or liable for any alleged understanding, promise, inducement,
statement, representation, warranty, covenant or condition not set forth.
8.2 Notices. Any notice or communications hereunder must be in writing
and given by depositing same in the United States mail addressed to the party to
be notified, postage prepaid and registered or certified mail with return
receipt requested or by delivering same in person. Such notices shall be deemed
to have been received on the date on which it is hand delivered or on the third
business day following the date on which it is to be mailed. For purpose of
giving notice, the addresses of the parties shall be:
If to Purchaser to:
-------------------
VoIP, Inc.
00000 00xx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
Fax: 000-000-0000
If to Seller:
-------------
DTNet Technologies, Inc.
0000 Xxxxxxxx Xx. Xxxxx 000
Xxxxx, XX 00000
Fax: 000-000-0000
8.3 Governing Law. This Agreement shall be governed in all respects,
including validity, construction, interpretation and effect, by the laws of the
State of Florida (without regard to principles of conflicts of law).
8.4 Consent to Jurisdiction. Each party irrevocably submits to the
exclusive jurisdiction of the appropriate state or federal court in the State of
Florida for the purposes of any suit, action or other proceeding arising out of
this Agreement or any transaction contemplated hereby or thereby. Each party
agrees to commence any such action, suit or proceeding in Ft. Lauderdale,
Florida. The parties agree that any service of process to be made hereunder may
be made by certified mail, return receipt requested, addressed to the party at
the address appearing in Section 8.2. Such service shall be deemed to be
completed when mailed and sent and received by Telecopier. Seller and Purchaser
each waives any objection based on forum non-conveniens. Nothing in this
paragraph shall affect the right of Seller or Purchaser to serve legal process
in any other manner permitted by law.
8.5 Counterparts. This Agreement may be executed by the parties hereto
in separate counterparts each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
8.6 Waivers and Amendments; Non-Contractual Remedies; Preservation of
Remedies. This Agreement may be amended, superseded, canceled, renewed, or
extended, and the terms hereof may be waived, only by a written instrument
signed by authorized representatives of the parties or, in the case of a waiver,
by an authorized representative of the party waiving compliance. No such written
instrument shall be effective unless it expressly recites that it is intended to
amend, supersede, cancel, renew or extend this Agreement or to waive compliance
with one or more of the terms hereof, as the case may be. No delay on the part
of any party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any waiver on the part of any party of any such
right, power or privilege, or any single or partial exercise of any such right,
power of privilege, preclude any further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided are
cumulative and are not exclusive of any rights or remedies that any party may
otherwise have at law or in equity. The rights and remedies of any party based
upon, arising out of or otherwise in respect of any inaccuracy in or breach of
any representation, warranty, covenant or agreement contained in this Agreement
shall in no way be limited by the fact that the act, omission, occurrence or
other state of facts upon which any claim of any such inaccuracy or breach is
based may also be the subject of any other representation, warranty, covenant or
agreement contained in this Agreement (or in any other agreement between the
parties) as to which there is no inaccuracy or breach.
8.7 Binding Effect; No Assignment, No Third-Party Rights. This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and permitted assigns. This Agreement is not
assignable without the prior written consent of each of the parties hereto or by
operation of law. This Agreement is for the sole benefit of the parties hereto
and their permitted assigns, and nothing herein, expressed or implied, shall
give or be construed to give to any person, including any union or any employee
or former employee of Seller, any legal or equitable rights, benefits or
remedies of any nature whatsoever, including any rights of employment for any
specified period, under or by reason of this Agreement.
8.8 Further Assurances. Each party shall, at the request of the other
party, at any time and from time to time following the Closing Date promptly
execute and deliver, or cause to be executed and delivered, to such requesting
party all such further instruments and take all such further action as may be
reasonably necessary or appropriate to carry out the provisions and intents of
this Agreement and of the instruments delivered pursuant to this Agreement.
8.9 Severability of Provisions. If any provision or any portion of any
provision of this Agreement or the application of any such provision or any
portion thereof to any person or circumstance, shall be held invalid or
unenforceable, the remaining portion of such provision and the remaining
provisions of the Agreement, or the application of such provision or portion of
such provision is held invalid or unenforceable to person or circumstances other
than those as to which it is held invalid or unenforceable, shall not be
affected thereby and such provision or portion of any provision as shall have
been held invalid or unenforceable shall be deemed limited or modified to the
extent necessary to make it valid and enforceable, in no event shall this
Agreement be rendered void or unenforceable.
8.10 Exhibits and Schedules. All exhibits annexed hereto, and all
schedules referred to herein, are hereby incorporated in and made a part of this
Agreement as if set forth herein. Any matter disclosed on any schedule referred
to herein shall be deemed also to have been disclosed on any other applicable
schedule referred to herein.
8.11 Captions. All section titles or captions contained in this
Agreement or in any schedule or exhibit annexed hereto or referred to herein,
and the table of contents to this Agreement, are for convenience only, shall not
be deemed a part of this Agreement and shall not affect the meaning or
interpretation of this Agreement. All references herein to sections shall be
deemed references to such parts of this Agreement, unless the context shall
otherwise require.
8.12 Expenses. Except as otherwise expressly provided in this
Agreement, whether or not the Closing Date occurs, each party hereto shall pay
its own expenses incidental to the preparation of this Agreement, the carrying
out of the provisions hereof and the consummation of the transactions
contemplated. For the avoidance of doubt, any fees and expenses incurred by the
Seller or the Company in connection with entering into this Agreement and the
transactions contemplated hereby shall be paid by the Seller and not the
Company.
8.13 Public Announcements. The parties agree to consult with each other
before issuing any press release or making any public statement or completing
any public filing with respect to this Agreement or the transactions
contemplated hereby and, except as may be required by applicable law or any
listing agreement with any national securities exchange or quotation system,
will not issue any such press release or make any such public statement prior to
consultation.
8.14 Non-confidentiality. Notwithstanding Section 8.13, the Company,
Seller and Purchaser, and each employee, representative or other agent of the
same (collectively the "Covered Parties"), may disclose to any and all persons,
without limitation of any kind, the tax treatment and tax structure of the
transaction and all materials of any kind (including opinions or other tax
analyses) that are provided to a Covered Party relating to such tax treatment
and tax structure.
8.15 Disclosure Schedule. Seller and the Company shall prepare and
deliver the Disclosure Schedule upon execution of this Agreement, and shall
amend it as necessary to keep current the information therein. The Disclosure
Schedule shall make reference to any Section of this Agreement and contain all
information necessary to make such disclosure accurate and not misleading.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as
of the date first written herein above.
VOIP, INC.
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------
Xxxxxx Xxxxxxx, CEO/President
DTNET TECHNOLOGIES, INC.
By: /s/ Xxxx Xxxxx
-----------------------------------
Xxxx Xxxxx, Chief Executive Officer
/s/ Xxxx Xxxxx
--------------------------------------
Xxxx Xxxxx
EXHIBIT A
---------
April 30, 04
ASSETS
Current Assets
Checking/Savings
Bank of Tampa 24,741.71
Total Checking/Savings 24,741.71
Accounts Receivable
Accounts Receivable 178,310.23
Total Accounts
Receivable 178,310.23
Other Current Assets
Related Party
Receivable 296,048.52
Inventory Asset 210,450.35
Officer Receivable 10,000.00
Prepaid Commissions 17,457.81
Prepaid Convention 1,694.75
Prepaid Insurance 4,875.79
Total Other Current
Assets 540,527.22
Total Current Assets 743,579.16
Fixed Assets
Accumulated
Depreciation -59,529.68
Computer Equipment 71,505.09
Computer Equipment-Pre 12,000.00
Furniture and Fixtures 35,731.60
Telephone System 6,916.64
Van 20,000.00
Total Fixed Assets 86,623.65
Other Assets
Closing Cost 1,339.35
Deposit-Refundable 469.05
Goodwill
Amortization -5,334.00
Goodwill-Other 20,000.00
Total Goodwill 14,666.00
Total Other Assets 16,747.40
----------
TOTAL ASSETS 846,677.21