STOCK PURCHASE AGREEMENT
dated as of June 1, 2000
by and among
URSUS TELECOM CORPORATION,
XXXX XXXX XXXX
and
those certain other STOCKHOLDERS named herein
EXHIBIT A STOCKHOLDERS OF LOCAL SUBSIDIARIES
ANNEX I CERTIFICATE OF INCORPORATION AND BY-LAWS OF ACQUIROR
ANNEX II FORM OF ESCROW AGREEMENT
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is entered into and dated
as of ________, 2000 by and among Ursus Telecom Corporation, a Florida
corporation (the "Acquiror"), Xxxx Xxxx Xxxx ("Xxxx"), a resident of Florida,
and those certain other individuals listed on the signature page as
stockholders (such other persons are referred to as the "Other Stockholders"
and Xxxx and the Other Stockholders are collectively referred to as the
"Stockholders").
WHEREAS, Sitwell Corporation ("BVI"), a British Virgin Islands
corporation, beneficially owns those operating companies set forth in Exhibit
B attached hereto, organized in various countries in Latin America, and
engaged in one or more aspects of the telecommunications business (such
companies are referred to as the "Local Subsidiaries");
WHEREAS, Acquiror desires to acquire from the Stockholders all of the
outstanding capital stock and equity interests in the Local Subsidiaries (the
Local Subsidiaries may be referred to collectively as the "Companies" and each
separate entity may be referred to as a "Company")(all of the outstanding
capital stock and outstanding equity interests of any kind of the Companies in
the aggregate may be referred to as the "Companies' Equity Interests" and that
of each separate entity may be referred to as a "Company Equity Interest");
WHEREAS, Acquiror and the Stockholders desire to enter into this
Agreement setting forth the terms pursuant to which such acquisition (the
"Equity Purchase") will occur.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants, agreements and conditions contained herein, the
sufficiency of which is hereby acknowledged by the parties, the parties agree
as follows:
1. PURCHASE OF COMPANIES
On the Closing Date (as defined herein), and subject to the terms and
conditions set forth herein, the Stockholders will sell, transfer, convey,
assign and deliver to Acquiror, free and clear of any encumbrances, Liens, or
restrictions of any kind (except to the extent expressly set forth in this
Agreement) all of the Companies' Equity Interests.
2. PURCHASE PRICE
The purchase price to be paid by Acquiror for the Equity Interests (the
"Equity Consideration") shall be four hundred five thousand (405,000) shares
of common stock of Acquiror (the "Acquiror Stock").
2.2 The Acquiror Stock given as consideration for the Companies' Equity
Interests shall be allocated to each Company as set forth in Schedule 2.2.
3. ESCROW
A total of seventy thousand (70,000) shares of the Acquiror Stock
constituting the Equity Consideration (the "Escrow Stock") shall be deposited
at the Closing by Acquiror in an escrow account with Suntrust Bank, or such
other Person mutually agreeable to Acquiror and Xxxx (the "Escrow Agent"),
such escrow to be pursuant to the terms of that certain escrow agreement to be
entered into by and among Acquiror, the Stockholders and the Escrow Agent,
such agreement in substantially the form attached hereto as Annex II (the
"Escrow Agreement").
4. CLOSING
At the Closing, the Stockholders will deliver to Acquiror certificates
(and all other documents, instruments, certifications or other written
agreements) evidencing the Companies' Equity Interests, duly endorsed for
transfer and with all transfer stamps attached and such other endorsements as
may be requested by Acquiror to transfer irrevocable full legal and beneficial
ownership of the Companies' Equity Interests to Acquiror, free of all
encumbrances, Liens or restrictions. The date on which the actions described
above occur shall be referred to as the "Closing Date."
5. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Each of the Stockholders jointly and severally represents and warrants to
Acquiror that all of the following representations and warranties in this
Section 5 are true at the date of this Agreement and, subject to Section 7.7
hereof, shall be true on the Closing Date, and agree that such representations
and warranties shall survive the Closing Date for a period of one year (the
last day of such period being the "Expiration Date"), except that the
representations and warranties set forth in Sections 5.9 and 5.17 hereof shall
survive until such time as the applicable statute of limitations period has
run, which shall be deemed to be the Expiration Date for such purposes.
5.1. Due Organization. Each Company is a corporation duly incorporated,
validly existing and in good standing under the laws of its respective state
or country of incorporation as set forth on Schedule 5.1, and is duly
authorized and qualified to do business under all applicable laws,
regulations, ordinances and orders of public authorities to carry on its
business in the places and in the manner as now conducted, to own or hold
under lease the properties and assets it now owns or holds under lease, and to
perform all of its obligations under the Material Contracts; is duly qualified
in the jurisdictions listed in Schedule 5.1 and there are no other
jurisdictions in which the conduct of each Company's business or activities or
its ownership of assets requires any other qualification under applicable law,
the absence of which would have a materially adverse effect on the business,
condition (financial or other), properties, or results of operations of the
Companies taken as a whole or on the ability of each Company to consummate the
transactions contemplated by each Company's Material Contracts (as used herein
with respect to each Company, a "Company Material Adverse Effect"). True,
complete and correct copies of the Articles of Incorporation and By-laws, each
as amended, of each Company (the "Charter Documents") have been delivered to
Acquiror. The minute books and stock records of each Company, as heretofore
made available to Acquiror, are correct and complete in all material respects.
5.2. Authorization.
(a) Each Stockholder has full power and authority to execute and deliver
this Agreement and to consummate the Equity Purchase and the other
transactions contemplated on its part hereby. The execution and delivery by
each Stockholder of this Agreement and the consummation of the transactions
contemplated on its part hereby have been duly authorized by their respective
Board of Directors and stockholders and no other corporate proceedings on the
part of each Stockholder are necessary to authorize the execution and delivery
of this Agreement by the Stockholder or the consummation of the transactions
contemplated on their part hereby. This Agreement has been duly executed and
delivered by each Stockholder, and constitutes a legal, valid and binding
obligation of each Stockholder, enforceable against each Stockholder in
accordance with its terms, except to the extent that its enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights generally or by general
equitable principles. Each other agreement to be executed in connection with
this Agreement by each Stockholder on or prior to the Closing Date will be
duly executed and delivered by each Stockholder, and will constitute a legal,
valid and binding obligation of each Stockholder, enforceable against each
Stockholder in accordance with its respective terms, subject to applicable
bankruptcy, insolvency, moratorium, reorganization or other laws affecting the
enforcement of creditors' rights generally or by general equitable principles.
(b) Each Stockholder has the full legal right, power and authority to
enter into this Agreement. Each Stockholder owns beneficially and of record
all of the shares of the Equity Consideration identified on Schedule 5.2 as
being owned by such Stockholder, and, except as set forth on Schedule 5.3,
such Equity Consideration is owned free and clear of any and all Liens, voting
trusts and restrictions of every kind.
5.3 Capital Stock of the Companies. The entire authorized capital stock
of each Company is as set forth in Schedule 5.3. All of the issued and
outstanding shares of capital stock of each Company are owned by the
Stockholders, free and clear of any liens, claims, mortgages, encumbrances,
pledges, security interests, equities and charges of any kind ("Liens") (other
than Liens set forth on Schedule 5.3). Except as disclosed on Schedule 5.3,
there are no outstanding options, rights (preemptive or otherwise), warrants,
calls, convertible securities or commitments or any other arrangements
requiring or restricting the issuance, sale or transfer of any equity
securities of any Company or any securities convertible directly or indirectly
into equity securities of any Company, or evidencing the right to subscribe
for any equity securities of each Company, or giving any Person any rights
with respect to the capital stock of each Company. Except as contemplated by
this Agreement or disclosed on Schedule 5.3, there are no voting agreements,
voting trusts, or other agreements (including cumulative voting rights) with
respect to the voting of the capital stock of each Company. All of the issued
and outstanding shares of the capital stock of each Company (i) have been duly
authorized and validly issued, (ii) are fully paid and nonassessable, (iii)
are owned of record and beneficially by the Stockholders, (iv) were offered,
issued, sold and delivered by each Company in compliance with all applicable
state, federal and foreign laws concerning the issuance of securities, and (v)
were issued without violating the preemptive rights of any Person.
5.4. Subsidiaries. Schedule 5.4 contains a true and complete list of
all direct and indirect domestic and foreign subsidiaries and Affiliates of
each Company and sets forth the number and class of the authorized capital
stock of each of the Companies' subsidiaries and the number of shares of each
of the Companies' subsidiaries and Affiliates which are issued and
outstanding, all of which shares (except as set forth on Schedule 5.4) are
owned by each Company of record and beneficially, free and clear of any Liens.
Except as set forth in Schedule 5.4, (i) the Companies do not own, of record
or beneficially, or control, directly or indirectly, any capital stock,
securities convertible into capital stock or any other equity interest in any
Person and (ii) the Companies are not, directly or indirectly, a participant
in any Person.
5.5. Financial Statements. The Companies have delivered to Acquiror
copies of the following financial statements (collectively, the "Financial
Statements"): (a) Unaudited combined balance sheet, statement of operations,
statement of stockholders' equity and statement of cash flows for the
Companies at and for the years ended December 31,1998 and December 31, 1999;
and (b) Unaudited combined balance sheet, statement of operations, statement
of stockholders' equity, and statement of cash flows for the Companies at and
for the three months ended March 31, 2000 (the "Balance Sheet Date"). The
Financial Statements are consistent with the books and records of the
Companies (which, in turn, are accurate and complete in all material respects)
and fairly present the Companies' financial condition, assets and liabilities
as of their respective dates and the results of operations and cash flows for
the periods related thereto, and have been prepared on an income tax (not
GAAP) basis. The Financial Statements do not reflect any liability for
Deferred Revenue, arising from phone cards which have been sold but not used,
and Acquiror is accepting such liability. The Companies have not deferred
recognition of any of their respective accounts payable or accelerated
recognition of any of their respective accounts receivable. The Companies'
aggregate cash balance as of June 1, 2000 is $203,000.
5.6. Liabilities and Obligations. Except as set forth on Schedule 5.6,
since the Balance Sheet Date the Companies have not incurred any liabilities
or obligations in excess of $10,000 of any kind, character and description,
whether fixed, accrued, absolute, secured or unsecured, contingent or
otherwise, except liabilities and obligations incurred in the ordinary course
of business after the Balance Sheet Date.
5.7. Accounts and Notes Receivable. Schedule 5.7 sets forth a list,
which is accurate and complete in all material respects, of the accounts and
notes receivable of each Company as of the Balance Sheet Date. Except to the
extent reflected on Schedule 5.7, the accounts, notes and other receivables
shown on Schedule 5.7 and on the A/R Aging Reports are and shall be, and each
Company has no reason to believe that any such account receivable is not or
shall not be, collectible in the amounts shown net of reserves reflected in
the unaudited balance sheet as of the Balance Sheet Date referred to in
Section 5.5(b) (the "Unaudited Balance Sheet").
5.8. Intellectual Property.
(a) Certain Definitions. When used in this Section 5.8, the following
capitalized terms shall have the following meanings:
(i) the term "Development Environment" means any device,
programming, documentation, media and other objects, including compilers,
"workbenches," tools, and higher-level or "proprietary" languages, used by the
Companies for the development, maintenance and implementation of any Software,
to the extent such objects may be necessary for any subsequent maintenance or
enhancement of the same Software;
(ii) the term "Intellectual Property Rights" means intellectual
property rights arising from or in respect of the following, whether
protected, created or arising under the laws of the United States or any other
jurisdiction:
(1) registered and unregistered trademarks and service marks
and logos (including all Internet domain names), and applications therefor
(collectively, "Marks");
(2) patents, patent rights and all applications therefor,
including any and all continuation, divisional, continuation-in-part, or
reissue patent applications or patents issuing thereon, and including all
foreign counterparts thereof (collectively, "Patents"); and
(3) know-how, inventions, discoveries, concepts, ideas,
methods, processes, designs, formulae, technical data, drawings,
specifications, data bases and other proprietary and confidential information,
including customer lists, in each case to the extent not included in the
foregoing subparagraphs (1) or (2) (collectively, "Trade Secrets");
(iii) the term "Intellectual Property Assets" means all Intellectual
Property Rights owned or licensed by the Companies or used or exercised in or
necessary to the conduct of each Company's business, and all further uses of
the terms Marks, Patents, copyrights, and Trade Secrets in this Section_5.8
shall mean Marks, Patents, copyrights, and Trade Secrets that are Intellectual
Property Assets; and
(iv) the term "Software" means any and all (w) computer programs,
including any and all software implementations of algorithms, models and
methodologies, whether in source code or object code, (x) databases and
compilations, including any and all data and collections of data, whether
machine readable or otherwise, (y)_descriptions, flow-charts and other work
product used to design, plan, organize and develop any of the foregoing, and
(z) all documentation, including user manuals and training manuals, relating
to any of the foregoing, in each case developed or licensed by the Companies,
or used in or necessary for the conduct of their respective businesses,
specifically excluding those items prepared for customers in the operation of
each Company's business for which the customer contractually has vested title.
(b) Marks. The Companies do not own any right, title or interest in any
registered Marks, except as shown on Schedule 5.8(a).
(c) Owned Patents. The Companies do not own any right, title or
interest in any Patents. Except as may be set forth on Schedule 5.8(a):
(i) there is no patent or patent application issued to or filed by
any other person, which patent or patent application is potentially
interfering with the Companies' respective businesses; and
(ii) none of the process or know-how or other technology used or
practiced, by each Company in its business infringes or is alleged to infringe
any patent or any other Intellectual Property Right or other industrial
property right of any other person.
(d) Owned Copyrights. Except as may be set forth on Schedule 5.8(b):
(i) each Company is the owner of all right, title and interest in
and to each of the copyrights used by each Company in its business other than
those as to which the rights being exercised by each Company have been
licensed from another person (collectively, the "Owned Copyrights"), free and
clear of any and all Liens, covenants, conditions and restrictions or other
adverse claims or interests of any kind or nature (subject to written licenses
granted in the ordinary course of business), and the Stockholders have not
received any notice or claim (whether written, oral or otherwise) challenging
the Stockholders' complete and exclusive ownership of all Owned Copyrights or
suggesting that any other person has any claim of legal or beneficial
ownership with respect thereto;
(ii) the Stockholders have not received any notice or claim
(whether written, oral or otherwise) challenging or questioning the validity
or enforceability of any of the Owned Copyrights or indicating an intention on
the part of any person to bring a claim that any Owned Copyright is invalid,
is unenforceable or has been misused and, to the Stockholders' knowledge, no
Owned Copyright otherwise has been challenged or threatened in any way;
(iii) each Company has taken all reasonable steps to protect the
Companies' rights in and to the Owned Copyrights, in each case in accordance
with standard industry practice.
(iv) the Companies have not granted to any person any right, license
or permission to exercise any rights under any of the Owned Copyrights other
than non-exclusive licenses of Software granted in the ordinary course of
business to distributors or customers;
(v) no other person has infringed or is infringing in any material
respect in regards to any of the Owned Copyrights; and
(vi) none of the subject matter of any Owned Copyrights nor any other
work of authorship fixed in a tangible medium that is copied, modified,
displayed or distributed in connection with the conduct by each Company of its
business, including without limitation, any Owned Software, infringes,
violates or conflicts with, or is alleged to infringe, violate or conflict
with, any copyright or any other Intellectual Property Right or other
industrial property right of any other person.
(e) Trade Secrets. Each Company has taken reasonable precautions to
protect the secrecy, confidentiality and value of all of each Company's
material Trade Secrets ("Company Trade Secrets"). Except as may be set forth
in Schedule 5.8(c):
(i) each Company has the unrestricted right to use all of each
Company Trade Secrets and none of each Company Trade Secrets is subject to any
Liens, covenants, conditions and restrictions or other adverse claims or
interests of any kind or nature (subject to written licenses granted in the
ordinary course of business), and the Stockholders have not received any
notice or claim (whether written, oral or otherwise) challenging the
Companies' absolute and unrestricted right to use all of each Company Trade
Secrets or suggesting that any other person has any claim of any kind with
respect thereto;
(ii) none of the Company Trade Secrets has been, or is alleged to
have been, misappropriated from, any other person and none of the Company
Trade Secrets infringes, violates or conflicts with, or is alleged to
infringe, violate or conflict with, any patent, trade secret or any other
Intellectual Property Right or other industrial property rights of any third
party;
(iii) with respect to each Company Trade Secret in accordance with
standard industry practice, the documentation relating thereto is current,
accurate and sufficient in detail and content to identify and explain it and
to allow its full and proper use without reliance on the special knowledge or
memory of others; and
(iv) except under appropriate confidentiality obligations that, to
the knowledge of the Stockholders, have been fully observed and performed,
there has been no disclosure by any Company of material confidential
information or other Company Trade Secrets.
(f) Software. Schedule 5.8(d) sets forth a complete and accurate list
of all of the Software (excluding licensed software (other than Development
Environments or other software design tools) that is contained in standard
desktop applications and is available through commercial distributors or in
consumer retail stores). Schedule 5.8(d) specifically identifies all
Software that is owned exclusively by each Company (the "Owned Software") and
all Software that is used by each Company in the conduct of their business
that is not exclusively owned by each Company (the "Licensed Software")
(excluding licensed software that is contained in standard desktop
applications and is available through commercial distributors or in consumer
retail stores). Except as may be set forth in Schedule 5.8(d):
(i) the Companies are the owner of all right, title and interest in
and to all Owned Software, including without limitation all copyrights, Trade
Secrets and other Intellectual Property Rights relating thereto, free and
clear of any and all Liens, covenants, conditions and restrictions or other
adverse claims or interests of any kind or nature (subject to written licenses
granted in the ordinary course of business), and the Stockholders have not
received any notice or claim (whether written, oral or otherwise) challenging
the Companies' complete and exclusive ownership of all Owned Software and all
such Intellectual Property Rights relating thereto or claiming that any other
person has any claim of legal or beneficial ownership with respect thereto;
(ii) the Companies have not assigned, licensed, transferred or
encumbered any of their rights in or to any Software, including without
limitation any copyrights, Trade Secrets or other Intellectual Property Rights
with respect to any Owned Software, to any person;
(iii) no source code of any Owned Software has been licensed or
otherwise made available to any person other than the Companies, the Companies
have treated such source code, and the data associated therewith, as
confidential and proprietary business information, and have taken all
reasonable steps to protect the same as trade secrets of the Companies;
(iv) any person identified in Schedule 5.8(d) as having received
any such source code or data is bound by an appropriate confidentiality and
non-disclosure obligation with respect thereto and the Stockholders are not
aware of any material breach of any such agreement or any threatened disputes
or disagreements with respect thereto;
(v) the Companies have lawfully acquired the right to use the
Licensed Software, as it is used in the conduct of their respective businesses
as presently conducted, and have not exercised any rights in respect of any
Licensed Software, including without limitation, any reproduction,
distribution or derivative work rights, outside the scope of any license
expressly granted by the person from which the right to use such Licensed
Software was obtained; and
(vi) no royalties, fees, honoraria or other payments are payable by
the Companies to any person by reason of the ownership, use, sale, licensing,
distribution or other exploitation of any Software or any Intellectual
Property Asset.
(g) Performance of Existing Software Products. Except as may be set
forth in Schedule 5.8(e), all Software products that have been used by the
Companies in connection with their performance of data processing or other
services for any of their customers perform in all material respects, free of
significant bugs or programming errors.
(h) Software Documentation. Except as may be set forth in Schedule
5.8(f), the Companies have taken all actions customary in the software
industry to document the Software and its operation, such that the Software,
including the source code and documentation, have been written in a clear and
professional manner so that they may be understood, modified and maintained in
an efficient manner by reasonably competent programmers.
(i) Agreements in Respect of Licensed Technology. Schedule 5.8(g)
contains a complete and accurate specific list of all agreements and
arrangements pertaining to the Licensed Software (excluding licensed software
that is contained in standard desktop applications and available through
commercial distributors or in consumer retail stores) (collectively, "Licensed
Software Agreements") and a complete and accurate specific list of all
agreements and arrangements pertaining to any other technology used or
practiced by the Companies as to which a person other than the Companies owns
the applicable Intellectual Property Rights (collectively, "Other Licensed
Technology Agreements" and, together with Licensed Software Agreements, the
"Licensed Technology Agreements"). Schedule 5.8(g) sets forth a complete and
accurate list of all royalty obligations of the Companies under any Licensed
Technology Agreements. Except as may be set forth in Schedule_5.8(g):
(i) all Licensed Technology Agreements are in full force and
effect, and the Companies are not in material breach thereof, nor are the
Stockholders aware of any claim or information to the contrary;
(ii) all Licensed Technology Agreements will be maintained by the
Companies in full force and effect through the Closing;
(iii) there are no outstanding and, to the Stockholders' knowledge,
no threatened disputes or disagreements involving the Companies with respect
to any Licensed Technology Agreement;
(iv) the rights licensed under each Licensed Technology Agreement
shall be exercisable by the Companies on and after the Closing to the same
extent as prior to the Closing;
(v) the Licensed Technology Agreements together expressly confer on
the Companies valid and enforceable rights under or in respect of all of the
Intellectual Property Rights that are not owned exclusively by the Companies
and that are used or practiced in the Companies' businesses (collectively, the
"Licensed Intellectual Property"); and
(vi) neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will conflict with or
result in a breach of any of the terms, conditions or provisions of, or
constitute a default under, or result in the impairment of any rights under,
any Licensed Technology Agreement.
(j) Sufficiency of Owned and Licensed Intellectual Property. Except as
set forth in Schedule 5.8(h), the Marks, Owned Copyrights, Trade Secrets and
Licensed Intellectual Property, including without limitation the foregoing to
the extent they apply to any Software, constitute all of the Intellectual
Property Rights in the Companies' possession or control necessary for the
conduct of the Companies' businesses as presently conducted or contemplated to
be conducted and constitute all of the Intellectual Property Rights necessary
to operate such business after the Closing in substantially the same manner as
such business heretofore has been operated by the Companies.
(k) Rights of Third Parties. Except as may be set forth in Schedule
5.8(i), the Companies are not, nor have been during the three-year period
prior to the date hereof, a party to any action or proceeding, and there is
not pending or, to the Stockholders' knowledge, during the one-year period
prior to date hereof threatened, any action or proceeding that involves or
involved a claim of infringement, misappropriation or other wrongful use or
exploitation, either (i) by the Companies against any other person or (ii) by
any person against any Company, of any Intellectual Property Asset or other
Intellectual Property Right used or exploited by the Companies in the conduct
of its respective business, nor, to the knowledge of the Stockholders, is
there any reasonable basis therefor. Except as may be set forth in Schedule
5.8(i), no Intellectual Property Asset is subject to any outstanding order,
judgment, decree, stipulation or agreement restricting the use thereof by any
Company (subject to written licenses granted in the ordinary course of
business). Except as may be set forth in Schedule 5.8(i), the Companies have
the exclusive right to bring actions against any person that is infringing any
Intellectual Property Assets other than Licensed Intellectual Property.
(m) The components manufactured by the Companies and used in the
Companies' products are free of any disabling codes or instructions (a
"Disabling Code"), and any virus or other intentionally created, undocumented
contaminant (a "Contaminant"), that may, or may be used to, access, modify,
delete, damage or disable the Systems or that may result in damage thereto.
The components necessary for or implemented in the Owned Software obtained
from third party suppliers are, to the knowledge of the Stockholders, free of
any Disabling Codes or Contaminants that may, or may be used to, access,
modify, delete, damage or disable any of the Systems or that might result in
damage thereto. The Companies have taken reasonable steps and implemented
reasonable procedures to ensure that their internal computer systems
(consisting of hardware, software, databases or embedded control systems,
"Systems") are free from Disabling Codes and Contaminants. Except as may be
set forth in Schedule_5.8(j), the Companies have in place appropriate disaster
recovery plans, procedures and facilities and have taken all reasonable steps
to safeguard their Systems and restrict unauthorized access thereto.
(n) neither the Shareholders nor the Companies have received notice,
whether in writing or otherwise, from Kamil or any other entity in which such
entity claims that the Shareholders or the Companies are infringing any patent
such entity may hold over the process of selling, buying, marketing,
transferring or using a pre-paid calling card.
5.9 Environmental Matters. For purposes of this Section 5.9, references
to the "Company" or "Companies" shall also include each of their predecessors.
Except as set forth on Schedule 5.9:
(i) each Company is and at all times has been in compliance in all
material respects with all Environmental Requirements;
(ii) each Company possesses all permits, licenses and certificates
required by all Environmental Requirements (and a list thereof, which is
accurate and complete in all material respects, is set forth as Schedule 5.9);
(iii) no environmental clearances, approvals or consents are required
under applicable law from any Governmental Authority or entity in order to
continue operations after the Closing Date;
(iv) there are no pending or, to the knowledge of the Stockholders,
threatened claims, actions or proceedings (or notices of potential claims,
actions or proceedings) from any Governmental Authority or any other Person
regarding any matter relating to health, safety or protection of the
environment against any Company;
(v) no real property currently, or, to the Stockholders' knowledge,
formerly, owned or operated by any Company is or was listed on the National
Priorities List, the Comprehensive Environmental Response and Compensation
Liability Index System or any similar state or local list of potential or
confirmed hazardous waste sites;
(vi) to the Stockholders' knowledge, no conditions exist on adjacent
properties that threaten the environmental condition or safety of any property
owned, operated or used by any Company; and
(vii) no Company has released or disposed of any Hazardous Materials at
any property owned or used by each Company and, to the Stockholders'
knowledge, no other Person has released or disposed of Hazardous Materials at
any such property.
5.10 Personal Property. Schedule 5.10 sets forth a list, that is
accurate and complete in all material respects, of (x) all personal property
with a fair market value in excess of $10,000 that, in accordance with GAAP,
would be included in "depreciable plant, property and equipment" (or similarly
named line item) in a balance sheet of each Company and (y) all other personal
property owned by each Company with a value individually in excess of $10,000
and (except as set forth in Schedule 5.10) all such personal property is owned
free and clear of all Liens. Except as set forth on Schedule 5.10, all
personal property with a value individually in excess of $10,000 used by any
Company in its business is either owned by the Company or leased by the
Company pursuant to a Material Contract and such personal property constitutes
all of the personal property with a value in excess of $10,000 which is
necessary for the conduct of the business of each Company as currently
conducted and presently proposed to be conducted.
5.11 Significant Customers; Material Contracts and Commitments.
Schedule 5.11(a) sets forth a list, that is accurate and complete in all
material respects, of all customers or Persons representing 5% or more of each
Company's total annual revenues as of the Balance Sheet Date (the "Significant
Customers"). Except to the extent set forth on Schedule 5.11(a), none of each
of the Company's Significant Customers has canceled or substantially reduced
or, to the knowledge of the Stockholders, is currently attempting or
threatening to cancel a contract or substantially reduce utilization of the
services provided by any Company. Except as listed or described on Schedule
5.11(b), no Company is a party to or bound by, nor does there exist any
written or oral contracts relating to or in any way affecting the operation or
ownership of each Company's business that are of a type described below (the
"Material Contracts"):
(a) any collective bargaining agreement or arrangement with any
labor union or any such agreement currently in negotiation or proposed;
(b) any contract for capital expenditures or the acquisition or
construction of fixed assets for or in respect to real property in excess of
$10,000;
(c) any contract with a term in excess of one year for the
purchase, maintenance, acquisition, sale or furnishing of materials, supplies,
merchandise, machinery, equipment, parts or other property or services which
requires aggregate future payments of greater than $10,000;
(d) any contract relating to the borrowing of money, or the
guaranty of another person's borrowing of money, including, without
limitation, all notes, mortgages, pledges, security agreements, bonds,
indentures and other obligations, agreements and other instruments for or
relating to any lending or borrowing, including assumed indebtedness;
(e) any contract granting any Person a Lien on any of the assets of
any Company, in whole or in part;
(f) any contract granting to any Person a first-refusal,
first-offer or similar preferential right to purchase or acquire any of the
assets or capital stock of any Company's business;
(g) any contract under which any Company is (i) a lessee or
sublessee of any machinery, equipment, vehicle or other tangible personal
property or real property, (ii) a lessor or sublessor of any real property or
tangible personal property owned or leased by any Company, or (iii) a lessor
or sublessor, or lessee or sublessee, of any Intellectual Property listed on
Schedule 5.8(a);
(h) any contract providing for the indemnification of any officer,
director, employee or other person;
(i) any joint venture or partnership contract;
(j) any employment or consulting agreements;
(k) any option, license, franchise or similar agreement; and
(l) any other contract with a term in excess of one year, whether
or not made in the ordinary course of business, which involves or may involve
payments in excess of $10,000, and any other agreement which is material to
each Company.
Each Company has provided Acquiror with a true and complete copy of each
written Material Contract, including all amendments or other modifications
thereto. Except as set forth on Schedule 5.11(b), each Material Contract is a
valid and binding obligation of the Company, enforceable in accordance with
its terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity
(whether applied in a proceeding at law or in equity) and is in full force and
effect. Except as set forth on Schedule_5.11(b), each Company has performed
all obligations required to be performed by it under each Material Contract
and neither any Company nor, to the knowledge of the Stockholders, any other
party to any Material Contract, is (with or without the lapse of time or the
giving of notice or both) in breach or default in any material respect
thereunder. The Stockholders have not been notified that any party to any
Material Contract intends to cancel, terminate, not renew or exercise an
option under any Material Contract, whether in connection with the
transactions contemplated hereby or otherwise.
5.12 Real Property. Schedule 5.12 sets forth a list, that is accurate
and complete in all material respects, copies of which have been delivered to
the Acquiror, of all real property owned, leased, or used by each Company in
the conduct of its business. Each Company has good and insurable title to the
real property owned by it, subject to no Lien except for:
(a) Liens listed on Schedules 5.12 as securing specified
liabilities under a specified Material Contract with respect to which no
material default exists;
(b) Liens for current Taxes not yet due and payable and assessments
not in default;
(c) easements for utilities serving the property only; and
(d) easements, covenants and restrictions and other exceptions to
title shown of record in the office of the county clerks, or other appropriate
official in which the properties and leasehold estates are located which do
not adversely affect the current use of the property.
5.13 Insurance. Schedule 5.13 sets forth a list, that is accurate and
complete in all material respects, (a) as of the Balance Sheet Date, of all
fire, products liability, general liability, vehicle, worker's compensation,
directors' and officers' liability, title and other insurance policies carried
by each Company, and (b) all insurance loss runs on workers compensation
claims received by each Company for the past three policy years. True,
complete and correct copies of all insurance policies concerning each Company,
its properties, businesses, officers and directors, or other employees
currently in effect have been delivered to Acquiror and such insurance
policies evidence all of the insurance that each Company carries. All of such
insurance policies are currently in full force and effect and will continue in
full force and effect following the Closing in accordance with their
respective terms. No insurance carried by any Company has been canceled by
the insurer and no Company has ever been denied coverage. Each Company has
paid all premiums due, and has otherwise performed all of its obligations,
under each such insurance policy.
5.14 Compensation; Organized Labor Matters. Schedule 5.14 sets forth a
list, that is accurate and complete in all material respects, of all officers,
directors and key employees of each Company and listing their respective rates
of compensation (and the portions thereof attributable to salary, bonus and
other compensation, respectively). Since the Balance Sheet Date, there have
been no increases in the compensation payable or any special bonuses to any
officer, director, key employee or other employee, except ordinary salary
increases implemented on a basis consistent with past practices. Except as
set forth on Schedule 5.14, (a)_no employees of any Company are represented by
any labor union and, to the knowledge of the Stockholders, no campaign to
establish such representation is in progress, and (b) there is no pending or,
to the best of the Stockholders' knowledge, threatened labor dispute involving
any Company and any group of its employees nor has any Company experienced any
labor interruption over the past three (3) years. Further, except as set
forth in Schedule 5.14, no Stockholder has received written notice of any
claim, or has knowledge of any facts which are likely to give rise to any
claim, that they have not complied in any material respect with any laws
relating to the employment of labor, including, without limitation, any
provisions thereof relating to wages, hours, collective bargaining, the
payment of social security and similar taxes, equal employment opportunity,
employment discrimination or employment safety.
5.15 Employee Plans.
(a) Schedule 5.15 contains a list, that is accurate and complete in
all material respects, of all Benefit Plans, including all agreements or
arrangements containing "golden parachute" or other similar provisions. True,
complete and correct copies of all Benefit Plans and agreements and any trusts
related thereto, and classifications of employees covered thereby have been
delivered to Acquiror.
(b) Except for the Benefit Plans, if any, described on Schedule 5.15
and the government sponsored Benefit Plans required by the laws of any
jurisdiction where a Company is located, no Company sponsors, maintains or
contributes to any plan program, fund or arrangement that constitutes an
"employee pension benefit plan," and no Company has any obligation to
contribute to or accrue or pay any benefits under any deferred compensation or
retirement funding arrangement on behalf of any employee or employees (such
as, for example, and without limitation, any individual retirement account or
annuity, any "excess benefit plan" (within the meaning of Section 3(36) of
ERISA or any non-qualified deferred compensation arrangement). For the
purposes of this Agreement, the term "employee pension benefit plan" shall
have the same meaning as is given that term in Section 3(2) of ERISA.
(c) No Company is now, or as a result of its past activities can it
reasonably be expected to become, liable to the Pension Benefit Guaranty
Corporation (other than for premium payments) or to any multi-employer
employee pension benefit plan under the provisions of Title IV of ERISA.
(d) All Benefit Plans listed on Schedule 5.15 and the administration
thereof are in compliance with their terms and all applicable provisions of
ERISA and the regulations issued thereunder, as well as with all other
applicable federal, state and local statutes, ordinances and regulations,
except for such noncompliance as would not be reasonably likely to have a
Company Material Adverse Effect. There have been no "reportable events" (as
that phrase is defined in Section 4043 of ERISA) with respect to a Benefit
Plan listed in Schedule 5.15.
(e) No circumstances exist pursuant to which any Company could
reasonably be expected to have any direct or indirect liability whatsoever
with respect to any Plan now or heretofore maintained or contributed to by any
Person other than any Company that is, or at any time was, a member of a
"controlled group" (as defined in Section 412(n)(6)(B) of the Code) that
includes each Company.
(f) All Benefit Plans listed on Schedule 5.15 that are intended to
qualify under Section 401(a) of the Code (the "Qualified Plans") are, and have
been so qualified and have been determined by the Internal Revenue Service to
be so qualified, and copies of such determination letters have been delivered
to Acquiror. Neither the Stockholders, any Qualified Plan nor any Company has
engaged in any transaction prohibited under the provisions of Section 4975 of
the Code or Section 406 of ERISA.
5.16 Conformity with Law; Litigation. Except as set forth on Schedule
5.16, each Company has complied with, and is in compliance with, and has not
received any notice of any alleged noncompliance with, all laws, rules,
statutes, ordinances, regulations, writs, injunctions, decrees, arbitration
awards, and orders (collectively, "Laws") applicable to it, to its properties,
or to the operation of its business, except for such noncompliance or alleged
noncompliance as would not be reasonably likely to have a Company Material
Adverse Effect. Except to the extent set forth on Schedule 5.16 (which shall
disclose the parties to, nature of, and relief sought for each matter
disclosed): (a) there is no legal action, suit, action, proceeding,
investigation, audit, claim or order pending or, to the Stockholders'
knowledge, threatened against either any Company or, to the knowledge of the
Stockholders, pending or threatened against any of the officers, directors or
employees of any Company, with respect to its respective business or proposed
business activities which would be reasonably likely to have a Company
Material Adverse Effect, or to which any Company is otherwise a party, before
any court, or before any Governmental Authority, and (b) no Company is subject
to any judgment, order or decree of any court or Governmental Authority.
5.17 Taxes. Except as set forth on Schedule 5.17:
(a) All Returns required to have been filed by or with respect to
each Company and any affiliated, combined, consolidated, unitary or similar
group of which each Company is or was a member (a "Relevant Group") with any
Taxing Authority have been duly filed, and each such Return correctly and
completely reflects the Tax liability and all other information required to be
reported thereon. All Taxes (whether or not shown on any Return) owed by each
Company and any member of a Relevant Group (individually, the "Acquired Party"
and collectively, the "Acquired Parties") have been paid on or prior to the
due date for payment of such Taxes;
(b) To the knowledge of the Stockholders, the provisions for Taxes
due by each Company (as opposed to any reserve for deferred Taxes established
to reflect timing differences between book and Tax income) in the Financial
Statements are sufficient for all unpaid Taxes, being current taxes not yet
due and payable, of such Acquired Party;
(c) No Acquired Party is a party to any agreement extending the
time within which to file any Return. No claim has ever been made by any
Taxing Authority in a jurisdiction in which an Acquired Party does not file
Returns that it is or may be subject to taxation by that jurisdiction that is
unresolved or if adversely determined would be reasonably likely to have a
Company Material Adverse Effect;
(d) Each Acquired Party has withheld and paid all Taxes required to
have been withheld and paid in connection with amounts paid or owing to any
employee, creditor, independent contractor or other third party;
(e) There is no dispute or claim concerning any Tax liability of
any Acquired Party either (i) claimed or raised by any Taxing Authority or
(ii) otherwise known to any Acquired Party. Schedule 5.17 contains a list,
that is accurate and complete in all Material Respects, of all federal, state,
local and foreign income Tax Returns filed by or with respect to any Acquired
Party for all taxable periods ended on or after December 31, 1997 (and all
such Returns, reports and statements have been delivered to Acquiror)
indicates those Tax Returns, if any, that have been audited, and indicates (1)
those Returns that currently are the subject of audit, and (2) all Tax
examination reports and statements of deficiencies assessed against or agreed
to by, such Acquired Party since December 31, 1997;
(f) No Acquired Party has waived any statute of limitations, the
waiver of which remains in effect on the date hereof, in respect of Taxes or
agreed to any extension of time with respect to any Tax assessment or
deficiency;
(g) No Acquired Party has made any payments, is obligated to make
any payments, or is a party to any agreement that under certain circumstances
could require it to make any payments, that are not deductible under Section
280G of the Code;
(h) No Acquired Party is a party to any Tax allocation or sharing
agreement;
(i) None of the assets of any Acquired Party constitutes tax-exempt
bond financed property or tax-exempt use property, within the meaning of
Section 168 of the Code. No Acquired Party is a party to any "safe harbor
lease" that is subject to the provisions of Section 168(f)(8) of the Internal
Revenue Code as in effect prior to the Tax Reform Act of 1986, or to any
"long-term contract" within the meaning of Section 460 of the Code;
(j) No Acquired Party is a "consenting corporation" within the
meaning of Section_341(f)(1) of the Code, or comparable provisions of any
state statutes, and none of the assets of any Acquired Party is subject to an
election under Section 341(f) of the Code or comparable provisions of any
state statutes;
(k) There are no accounting method changes or proposed or
threatened accounting method changes, of any Acquired Party that could give
rise to an adjustment under Section_481 of the Code for periods after the
Closing Date;
(l) No Acquired Party has received any written ruling of a Taxing
Authority related to Taxes or entered into any written and legally binding
agreement with a Taxing Authority relating to Taxes;
(m) Each Acquired Party has disclosed (in accordance with Section
6662(d)(2)(B)(ii) of the Code) on its federal income Tax Returns all positions
taken therein that could give rise to a substantial understatement of federal
income Tax within the meaning of Section 6662(d) of the Code;
(n) No Acquired Party has any liability for Taxes of any Person
other than such Acquired Party (i) under Section 1.1502-6 of the Treasury
regulations (or any similar provision of state, local or foreign law), (ii) as
a transferee or successor, (iii) by contract or (iv) otherwise;
(o) Prior to Acquiror's acquisition of the Companies' Equity
Interests pursuant to this Agreement, there currently are no limitations on
the utilization of the net operating losses, built-in losses, capital losses,
Tax credits or other similar items of any Acquired Party (collectively, the
"Tax Losses") under (i) Section 382 of the Code, (ii) Section 383 of the Code,
(iii) Section 384 of the Code, (iv)_Section 269 of the Code, (v) Section
1.1502-15 and Section 1.1502-15A of the Treasury regulations, (vi) Section
1.1502-21 and Section_1.1502-21A of the Treasury regulations or (vii) Sections
1.1502-91 through 1.1502-99 of the Treasury regulations, in each case as in
effect both prior to and following the Tax Reform Act of 1986; and
(p) No Company is under the jurisdiction of a court in a Title 11
or similar case within the meaning of Section 351(e)(2) of the Code.
5.18 No Violations or Consents. Except as set forth on Schedule 5.18,
the execution of this Agreement and the performance by each Company and the
Stockholders of their obligations hereunder and the consummation by each
Company and the Stockholders of the transactions contemplated hereby will not
(i) result in any violation or breach of, or constitute a default under, any
of the terms or provisions of the Charter Documents or (ii) require the
consent, approval, waiver of any filing with or notice to, any other Person
(other than (a) in connection with or in compliance with the provisions of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
Securities Act of 1933, as amended (the "Securities Act"), the Communications
Act of 1934, as amended (the "Telecommunications Act") or the "blue sky" or
"public utility" laws of various states, and (b) any consents required under
the Material Contracts or other filings and approvals expressly contemplated
by this Agreement), (iii) violate, conflict with or result in a breach of or
the acceleration of any obligation under, or constitute a default (or an event
which with notice or the lapse of time or both would become a default) under,
or give to others any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a Lien on any property or asset
of any Stockholder pursuant to any provision of any contract to which any
Stockholder is bound, lien, order, judgment or decree to which such party is
subject or by which any Stockholder or any of his property or assets is bound,
or (iv) violate or conflict with any law, rule, regulation, permit, ordinance
or regulation applicable to any Stockholder or by which any property or asset
of any Stockholder is bound or affected. No Company is in violation of any
Charter Document.
5.19 Business Conduct. Except as set forth on Schedule 5.19, since the
Balance Sheet Date, each Company has conducted its business only in the
ordinary course consistent with past custom and practices and has incurred no
liabilities other than in the ordinary course of business consistent with past
custom and practices. Except as forth on Schedule 5.19, since the Balance
Sheet Date, there has not been any:
(a) Material adverse change in any Company's operations, condition
(financial or otherwise), operating results, assets, liabilities, employee,
customer or supplier relations or business prospects;
(b) Loan or advance by any Company to any Persons in excess of
$5,000 in the aggregate other than sales to customers on credit in the
ordinary course of business consistent with past custom and practices;
(c) Declaration, setting aside, or payment of any dividend or other
distribution in respect to each Company's capital stock, any direct or
indirect redemption, purchase, or other acquisition of such capital stock, or
the payment of principal or interest on any note, bond, debt instrument or
debt to any Affiliate;
(d) Incurrence of any debts, liabilities or obligations except
current liabilities incurred in connection with or for services rendered or
goods supplied in the ordinary course of business consistent with past custom
and practices, liabilities on account of taxes and governmental charges but
not penalties, interest or fines in respect thereof, and obligations or
liabilities incurred by virtue of the execution of this Agreement;
(e) Issuance by any Company of any notes, bonds, or other debt
securities or any equity securities or securities convertible into or
exchangeable for any equity securities;
(f) Cancellation, waiver or release by any Company of any debts,
rights or claims;
(g) Change in accounting principles, methods or practices
(including, without limitation, any change in depreciation or amortization
policies or rates) utilized by each Company;
(h) Capital expenditures or commitments therefor by any Company in
excess of $10,000 in the aggregate;
(i) Adoption, amendment or termination of, or increase in the
benefits provided under, any Benefit Plan; or
(j) An occurrence or event not included in clauses (a) through (i)
that has or might be expected to have a Company Material Adverse Effect.
5.20 Prohibited Activities. Except as set forth on Schedule 7.3, no
Company has, between the Balance Sheet Date and the date hereof, taken any of
the actions set forth in Section 7.3.
5.21 Predecessor Status; etc. Set forth on Schedule 5.21 is a listing
of all names of all predecessor companies of each Company, including the names
of any entities acquired by each Company (by stock purchase, merger or
otherwise) or owned by each Company or from whom each Company previously
acquired material assets. Except as disclosed on Schedule 5.21, no Company
has been a subsidiary or division of another Person or a part of any
acquisition which was later rescinded.
5.22 Affiliate Relationships. Except as set forth on Schedule 5.22,
neither the Stockholders nor any Affiliate of the Stockholders, and no
director, officer or employee of or consultant to each Company owns, directly
or indirectly, in whole or in part, any property, assets or right, tangible or
intangible, which is associated with any property, asset or right owned by any
Company or which each Company is operating or using or the use of which is
necessary for its business or otherwise engages in business or any transaction
with each Company. Schedule 5.22 describes any relationships which any
Stockholder or any director, officer, employee, agent or consultant of each
Company has with any other Person which is a competitor, potential competitor
(based upon the nature of such potential competitor's business as of the
Closing Date), supplier or customer of each Company.
5.23 Brokers. Except as set forth in Schedule 5.23, no Company has paid
or become obligated to pay any fee or commission to any broker, finder,
investment banker or other intermediary in connection with this Agreement.
5.24 Government Authorizations and Intangibles. Except as set forth in
Schedule 5.24, each Company holds all federal, state and foreign licenses,
franchises, permits and governmental authorizations, including without
limitation all licenses and authorizations required by the United States
Federal Communications Commission (the "FCC"), by state public utilities
commissions and foreign regulatory authorities ("Company Permits") necessary
to conduct each Company's business as presently conducted and the absence of
any of which could have a Company Material Adverse Effect. To the
Stockholders' knowledge, the Companies licenses, franchises, permits and other
governmental authorizations of the Companies are valid and in effect. No
Company or Stockholder has received any notice that any Governmental Authority
intends to cancel, terminate or not renew any license, franchise, permit or
other governmental authorization. To the Stockholders' knowledge, each
Company is in compliance with the requirements, standards, criteria and
conditions set forth in all of its licenses, franchises, permits and other
governmental authorizations and has made all required filings and paid all
required fees, except where such non-compliance or violation would not have a
Company Material Adverse Effect. Except as set forth on Schedule 5.24(b), the
Stockholders have not received notice from the FCC, any state public utilities
commissions or any foreign regulatory authority of any complaint filed
therewith concerning any Company, its operations or services.
5.25 Misrepresentation. To the knowledge of the Stockholders, none of
the representations and warranties set forth in this Agreement, or in any of
the certificates, schedules, exhibits, lists, documents or other instruments
delivered or to be delivered to Acquiror by the Companies or the Stockholders
pursuant hereto, taken as a whole, contains any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
contained herein or therein not misleading.
5.26 Preemptive Rights. No Stockholder has, or hereby waives, any
preemptive or other right to acquire shares of Equity Consideration or
Acquiror Stock.
5.27 No Retained Rights. No Stockholder will retain any right after the
Closing in any Equity Consideration except for the rights received in
accordance with this Agreement.
5.28 Law Obeyed. Except as described in Schedule 5.24, Xxxx and each
Company have obeyed the laws of such jurisdictions to which they are or have
been subject, including without limitation, the Federal Corrupt Practices Act,
except where such failure to obey the law would not have a Company Material
Adverse Effect.
6.REPRESENTATIONS AND WARRANTIES OF ACQUIROR
Acquiror represents and warrants to each Company and the Stockholders
that all of the following representations and warranties in this Section 6 are
true at the date of this Agreement and, subject to Section 7.7 hereof, shall
be true at the time of the Closing Date, and that such representations and
warranties shall survive the Closing Date for a period of one year (the
"Acquiror Expiration Date").
6.1 Due Organization. Acquiror is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Florida,
and is duly authorized and qualified to do business under all applicable laws,
regulations, ordinances and orders of public authorities to carry on its
business in the places and in the manner as now conducted, to own or hold
under lease the properties and assets it now owns or holds under lease, and to
perform all of its obligations under any material agreement to which it is a
party or by which its properties are bound; is duly qualified in the
jurisdictions listed in Schedule 6.1 and there are no other jurisdictions in
which the conduct of Acquiror's business or activities or its ownership of
assets requires any other qualification under applicable law, the absence of
which would have an Acquiror Material Adverse Effect. True, complete and
correct copies of the Certificate or Articles of Incorporation and By-laws,
each as amended, of Acquiror (the "Acquiror Charter Documents") are all
attached hereto as Annex I.
6.2 Authorization. Acquiror has full corporate power and authority to
execute and deliver this Agreement and to consummate the Equity Purchase and
the other transactions contemplated on its part hereby. The execution,
delivery and performance by Acquiror of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Acquiror. This Agreement has been
duly executed and delivered by Acquiror, and is a legal, valid and binding
obligation of Acquiror, enforceable against Acquiror in accordance with its
terms, except to the extent that its enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or other laws affecting the
enforcement of creditors' rights generally or by general equitable principles.
Each other agreement to be executed in connection with this Agreement by
Acquiror on or prior to the Closing Date will be duly executed and delivered
by Acquiror and will constitute a legal, valid and binding obligation of
Acquiror, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium, reorganization or other laws
affecting the enforcement of creditors' rights generally or by general
equitable principles.
6.3 Capital Stock. The authorized capital stock of the Acquiror
consists in its entirety of (a) 20,000,000 shares of Acquiror Stock, $0.01 par
value, of which, as of March 31, 2000, 7,506,815 were issued and outstanding
and (b) 1,000,000 shares of Preferred Stock, $0.01 par value per share, of
which, as of March 31, 2000, 1,000 were issued and outstanding. All
outstanding shares of Acquiror Stock have been duly authorized and validly
issued, are fully paid and non-assessable, are free of preemptive rights and
were issued in compliance with all applicable securities laws and regulations.
To the knowledge of Acquiror and except as otherwise contemplated by this
Agreement, there are no voting trusts or other agreements, arrangements or
understandings with respect to the voting of Acquiror Stock.
6.4 Acquiror Stock. The Acquiror Stock to be issued in connection with
the Equity Purchase has been duly authorized and, when issued as contemplated
hereby at the Closing, will be validly issued, fully paid and non-assessable,
and not subject to any preemptive rights or other rights or interests of third
parties.
6.5 No Violations or Consents. The execution, delivery and performance
of this Agreement by the Acquiror and the consummation of the transactions
contemplated hereby, will not (i) violate or conflict with any provision of
any charter or bylaws of the Acquiror, (ii) require the consent, waiver,
approval, license or authorization of or any filing by the Acquiror with any
public authority, other than (a) in connection with or in compliance with the
provisions of the Exchange Act, the Securities Act, the Telecommunications Act
and the rules and regulations arising thereunder, the rules and regulations of
The Nasdaq Stock Market, Florida Law or the "takeover", "blue sky" or "public
utilities" laws of various states and (b) any other filings and approvals
expressly contemplated by this Agreement, (iii) violate, conflict with or
result in a breach of or the acceleration of any obligation under, or
constitute a default (or an event which with notice or the lapse of time or
both would become a default) under, or give to others any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of a Lien on any property or asset of the Acquiror pursuant to any
provision of any indenture, mortgage, lien, lease, agreement, instrument,
order, judgment or decree to which the Acquiror is subject or by which the
Acquiror or any of its property or assets is bound, or (iv) violate or
conflict with any Law applicable to the Acquiror or by which any of its
property or assets is bound or affected except, in each of the instances set
forth in items (i) through (iv) above, where failure to give such notice, make
such filings, or obtain such authorizations, consents or approvals, or where
such violations, conflicts, breaches or defaults, in the aggregate, would not
have an Acquiror Material Adverse Effect.
6.6 Financial Statements and Reports. The Acquiror heretofore has
delivered to the Company true and complete copies of (a) its Registration
Statement on Form S-1 dated May 12, 1998, Registration No. 333-48559, (b) its
Registration Statement on Form S-3, dated March 13, 2000, Registration No.
333-32434, (c) its Annual Report on Form 10-K for the fiscal year ended March
31, 1999 and (d) its Quarterly Reports on Form 10-Q for the quarter ended
September 30, 1999 and December 31, 1999 (collectively, "Acquiror SEC
Filings"). The Acquiror SEC Filings made in compliance with the Exchange Act
were filed in a timely manner pursuant to the rules and regulations thereof.
As of the respective times such documents were filed or, as applicable, became
effective, the Acquiror SEC Filings complied as to form and content, in all
material respects, with the requirements of the Securities Act and the
Exchange Act, as the case may be, and the rules and regulations promulgated
thereunder, and did not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading. The consolidated financial statements of the
Acquiror included in the Acquiror SEC Filings were prepared in accordance with
GAAP, applied on a consistent basis and (except as may be indicated therein or
in the notes thereto) present fairly the consolidated financial position,
results of operations and cash flows of the Acquiror and its consolidated
subsidiaries as of the dates and for the periods indicated subject, in the
case of unaudited interim consolidated financial statements, to normal
recurring year-end adjustments.
6.7 Brokers. Acquiror has not paid or become obligated to pay any fee
or commission to any broker, finder, investment banker or other intermediary
in connection with this Agreement.
6.8 No Adverse Change. Except as set forth on Schedule 6.8, since March
31, 2000, there has not been any occurrence or event that has or might be
expected to have an Acquiror Material Adverse Effect.
7.COVENANTS PRIOR TO CLOSING
7.1 Access and Cooperation: Due Diligence.
(a) Between the date of this Agreement and the Closing Date, each
Company will afford to the officers and authorized representatives of Acquiror
access during business hours to all of the Companies' and its subsidiaries'
sites, properties, books and records and will furnish Acquiror with such
additional financial and operating data and other information as to the
business and properties of each Company and its respective subsidiaries as
Acquiror may from time to time reasonably request. Each Company will
cooperate with Acquiror and its representatives, including Acquiror's auditors
and counsel, in the preparation of any documents or other material which may
be required in connection with the transactions contemplated by this
Agreement.
(b) Between the date of this Agreement and the Closing Date,
Acquiror will afford to the officers and authorized representatives of each
Company access during business hours to all of Acquiror's sites, properties,
books and records and will furnish each Company with such additional financial
and operating data and other information as to the business and properties of
Acquiror as each Company may from time to time reasonably request. Acquiror
will cooperate with each Company, its representatives, auditors and counsel in
the preparation of any documents or other material which may be required in
connection with the transactions contemplated by this Agreement.
(c) Acquiror and the Stockholders will treat all information
obtained in connection with the negotiation and performance of this Agreement
or the due diligence investigations conducted as confidential in accordance
with the provisions of Section 15 hereof. The parties and their respective
representatives will take such reasonable steps as are necessary to ensure
they (i) do not disrupt the Companies' or Acquiror's business as the case may
be and (ii) maintain the confidentiality of the transactions contemplated by
this Agreement in accordance with Section 15 until the Closing Date.
7.2 Conduct of Business Pending Closing. Between the date of this
Agreement and the Closing Date, each Company will, and will cause each of its
subsidiaries to, except as set forth on Schedule 7.2:
(a) carry on its business in the ordinary course substantially as
conducted heretofore and not introduce any new method of management, operation
or accounting;
(b) maintain its properties and facilities, including those held
under Leases, in as good working order and condition as at present, ordinary
wear and tear excepted;
(c) perform in all material respects its obligations under
agreements relating to or affecting its assets, properties or rights;
(d) keep in full force and effect present insurance policies or
other comparable insurance coverage;
(e) maintain and preserve its business organization intact and use
its best efforts to retain its present key employees and relationships with
suppliers, customers and others having business relations with each Company or
such subsidiary;
(f) maintain compliance with all permits, laws, rules and
regulations, consent orders, and all other orders of applicable courts,
regulatory agencies and similar Governmental Authorities;
(g)maintain present debt and lease instruments in accordance with their
respective terms and not enter into new or amended debt or lease instruments,
provided that debt and/or lease instruments may be replaced if such
replacement instruments are on terms at least as favorable to the Company or
such subsidiary as the instruments being replaced; and
(h) except in the ordinary course of business or as required by law
or contractual obligations or other understandings or arrangements existing on
the date hereof or with Acquiror's prior approval, each Company or such
subsidiary will not (i) increase in any manner the base compensation of, or
enter into any new bonus or incentive agreement or arrangement with, any of
the employees engaged in the Company's or such subsidiary's business, (ii) pay
or agree to pay any additional pension, retirement allowance or other employee
benefit to any such employee, whether past or present, (iii) enter into any
new employment, severance, consulting, or other compensation agreement with
any existing employee engaged in the Company's or such subsidiary's business,
(iv) amend or enter into a new Plan (except as required by Law) or amend or
enter into a new collective bargaining agreement (except as required by this
Agreement), or (v) engage in any transaction with any Affiliates.
7.3 Prohibited Activities. Except as disclosed on Schedule 7.3 between
the date hereof and the Closing Date, each Company will not, and will cause
each of its subsidiaries not to, without the prior written consent of
Acquiror:
(a) make any change in its Articles of Incorporation or By-laws;
(b) grant or issue any securities, options, warrants, calls,
conversion rights or commitments of any kind relating to its securities of any
kind other than in connection with the exercise of options or warrants listed
on Schedule 5.3;
(c) declare or pay any dividend, or make any distribution in
respect of its capital stock whether now or hereafter outstanding, or
purchase, redeem or otherwise acquire or retire for value any shares of its
stock or engage in any transaction that will significantly affect the cash
reflected on the Unaudited Balance Sheet;
(d) enter into any contract or commitment or incur or agree to
incur any liability or make any capital expenditure, except if it is in the
ordinary course of business (consistent with past practice and each Company's
capital budget as in effect on the date hereof, a copy of which has been
delivered to Acquiror) or involves an amount not in excess of $10,000;
(e) create, assume or permit to exist any Lien upon any assets or
properties whether now owned or hereafter acquired, except (1) with respect to
purchase money Liens incurred in connection with the acquisition of equipment
with an aggregate cost not in excess of $10,000 necessary or desirable for the
conduct of the business of each Company or such subsidiary, (2)_(A)_Liens for
Taxes either not yet due or being contested in good faith and by appropriate
proceedings (and for which adequate reserves have been established and are
being maintained) or (B)_materialmen's, mechanics', workers', repairmen's,
employees' or other like Liens arising in the ordinary course of business (the
liens set forth in clause (2) of this Section 7.3(e) being referred to herein
as "Statutory Liens");
(f) sell, assign, lease or otherwise transfer or dispose of any
property, assets or equipment (except for immaterial transfers or dispositions
in the ordinary course of business);
(g) negotiate for the acquisition of any business or the start-up
of any new business;
(h) merge or consolidate or agree to merge or consolidate with or
into any other corporation;
(i) waive any material right or claim of each Company or such
subsidiary;
(j) commit a material breach of, materially amend or terminate any
Material Contract;
(k) enter into any other transaction outside the ordinary course of
its business or prohibited hereunder; or
(l) cancel, fail to renew, or cause to be cancelled, or fail to
renew, any Company Permit.
7.4 No Shop. In consideration of the substantial expenditure of time,
effort and expense undertaken by Acquiror in connection with its due diligence
review and the preparation and execution of this Agreement, the Stockholders
agree that neither they nor their representatives, agents or employees will,
after the execution of this Agreement until the earlier of (i) the termination
of this Agreement in accordance with Section 13.1 or (ii) the Closing,
directly or indirectly, solicit, encourage, negotiate or discuss with any
third party (including by way of furnishing any information concerning any
Company) any acquisition proposal relating to or affecting each Company or any
part of it, or any direct or indirect interests in each Company, whether by
purchase of assets or stock, purchase of interests, merger or other
transaction ("Acquisition Transaction"), and that the Stockholders will
promptly advise Acquiror of the terms of any communications any of the
Stockholders may receive or become aware of relating to any bid for all or any
part of any Company.
7.5 Termination of Related Party Agreements. The Stockholders and each
Company shall terminate (i) any stockholders' agreements, voting agreements,
voting trusts, options, warrants and employment agreements between any Company
and any employee and (ii) any existing agreement between any Company and any
Stockholder, on or prior to the Closing Date, as set forth on Schedule 7.5.
Copies of each such agreement have been provided to counsel for Acquiror.
7.6 Notification of Certain Matters. The Stockholders shall give prompt
notice to Acquiror of (i) the occurrence or non-occurrence of any event of
which the Stockholders have knowledge, the occurrence or non-occurrence of
which, would cause any representation or warranty of the Stockholders
contained herein to be untrue or inaccurate in any material respect at or
prior to the Closing and (ii) any material failure of any Stockholder to
comply with or satisfy any covenant, condition or agreement to be complied
with or satisfied by such person hereunder. Acquiror shall give prompt notice
to the Stockholders of (i) the occurrence or nonoccurrence of any event of
which Acquiror has knowledge, the occurrence or non-occurrence of which, would
cause any representation or warranty of Acquiror contained herein to be untrue
or inaccurate in any material respect at or prior to the Closing and (ii) any
material failure of Acquiror to comply with or satisfy any covenant, condition
or agreement to be complied with or satisfied by it hereunder. The delivery
of any notice pursuant to this Section 7.6 shall not be deemed to (i) modify
the representations or warranties hereunder of the party delivering such
notice, which modification may only be made pursuant to Section 7.7, (ii)
modify the conditions set forth in Sections 8 and 9 or (iii) limit or
otherwise affect the remedies available hereunder to the party receiving such
notice with respect to any breach or other matters specified herein; provided,
however, that if a party shall disclose any breach of its representations or
warranties to the other party in writing prior to Closing (a "Disclosed
Breach"), then the other party's sole remedy for such Disclosed Breach shall
be to either: (1) terminate this Agreement, whereupon the parties shall be
released from all obligations and liability hereunder; or (2) waive the
Disclosed Breach and proceed to consummate the Closing as originally
contemplated hereby.
7.7 Amendment of Schedules.
(a) Each party hereto agrees that, with respect to the
representations and warranties of such party contained in this Agreement, such
party shall have the continuing obligation until the Closing Date to
supplement or amend promptly the Schedules hereto with respect to any matter
hereafter arising or discovered which, if existing or known at the date of
this Agreement, would have been required to be set forth or described in the
Schedules.
(b) Notwithstanding the foregoing clause (a), no amendment or
supplement to a Schedule prepared by the Stockholders under Article 5 that
constitutes or reflects a material event or occurrence, individually or
cumulatively with any other events or occurrences, may be made unless Acquiror
consents in writing to such amendment or supplement; and provided further,
that no amendment or supplement to a Schedule prepared by Acquiror under
Article 6 that constitutes or reflects a material event or occurrence,
individually or cumulatively with any other events or occurrences, may be made
unless the Stockholders consent in writing to such amendment or supplement.
In the event that the Stockholders seek to amend or supplement a Schedule
pursuant to this Section 7.7 and Acquiror does not consent to such amendment
or supplement, as provided above, this Agreement shall be deemed terminated by
mutual consent as set forth in Section 13.1(a) hereof, whereupon the parties
shall be released from all obligations and liability hereunder. In the event
that Acquiror seeks to amend or supplement a Schedule pursuant to this Section
7.7 and the Stockholders do not consent to such amendment or supplement, as
provided above, this Agreement shall be deemed terminated by mutual consent as
set forth in Section 13.1(a) hereof, whereupon the parties shall be released
from all obligations and liability hereunder.
(c) For all purposes of this Agreement, including without
limitation for purposes of determining whether the conditions set forth in
Articles 8, 9 and 10 have been fulfilled, the Schedules hereto shall be deemed
to be the Schedules as amended or supplemented pursuant to this Section 7.7.
No party to this Agreement shall be liable to any other party if this
Agreement shall be terminated pursuant to the provisions of this Section 7.7,
except that, notwithstanding anything to the contrary contained in this
Agreement, if the Stockholders on the one hand, or Acquiror on the other hand,
amend or supplement a Schedule which results in a termination of this
Agreement and such amendment or supplement arises out of or reflects facts or
circumstances which such party knew about at the time of execution of this
Agreement and had reason to believe would result in a termination of this
Agreement, or if such amendment or supplement otherwise is proposed in bad
faith, the injured party may seek such legal and equitable remedies it deems
appropriate.
7.8 Further Assurances. The parties hereto agree to execute and
deliver, or cause to be executed and delivered, such further instruments or
documents or take such other action as may be reasonably necessary or
convenient to carry out the transactions contemplated hereby.
7.9 A/R Aging Reports. Within ten (10) days prior to Closing, the
Stockholders shall provide Acquiror (i) an accurate list of all outstanding
receivables obtained subsequent to the Balance Sheet Date and as of a date
which is within ten (10) calendar days of the Closing Date and (ii) an aging
of all such accounts and notes receivable showing amounts due in 30 day aging
categories (the "A/R Aging Reports").
8. CONDITIONS PRECEDENT
8.1 Conditions to Each Party's Obligation to Effect the Equity Purchase.
The respective obligations of each party to effect the Equity Purchase shall
be subject to the fulfillment at or prior to the Closing Date of the following
conditions:
(a) The shares of Acquiror Stock issuable in the Equity Purchase or
thereafter shall have been authorized for listing on the Nasdaq National
Market, upon official notice of issuance.
(b) There shall not have been instituted or pending any action or
proceeding by or before any Governmental Authority or other regulatory or
administrative agency or commission, domestic or foreign, by any government or
governmental authority, nor shall there by any determination by any
government, Governmental Authority, regulatory or administrative agency or
commission which, in either case, would require either party to take any
action or do anything in connection with the foregoing which would result in a
Material Adverse Effect to their respective businesses or materially impair
Acquiror's ownership or operation of all or a material portion of the business
or assets of any Company or compel Acquiror to dispose of all or a material
portion of the business or assets of Acquiror.
(c) The receipt by the parties of any required consents to the
transfer of control of the Companies Permits, except where, in the sole
discretion of the Acquiror, failure to transfer or obtain a consent would not
have a Company Material Adverse Effect.
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE STOCKHOLDERS
The obligations of the Stockholders with respect to actions to be taken
on the Closing Date are subject to the satisfaction (or waiver by the
Stockholders) on or prior to the Closing Date of all of the conditions set
forth in this Article 9; provided, that (except as otherwise provided in
Section 7.6) no such waiver shall constitute a waiver of, or otherwise affect
the Stockholders' rights under, Section 12.2.
9.1 Representations and Warranties. All representations and warranties
of Acquiror contained in this Agreement (a) that are qualified as to
materiality shall be true and (b)_that are not qualified as to materiality
shall be true and correct in all material respects, in each case as of the
Closing Date with the same effect as though such representations and
warranties had been made on and as of such date; and a certificate
representing the foregoing dated the Closing Date and signed by the President
or any Vice President of Acquiror shall have been delivered to the
Stockholders.
9.2 Performance of Obligations. All of the terms, covenants and
conditions of this Agreement to be complied with and performed by Acquiror on
or before the Closing Date shall have been duly complied with and performed in
all material respects on or before the Closing Date and certificates to the
foregoing effect dated the Closing Date and signed by the President or any
Vice President of Acquiror shall have been delivered to the Stockholders.
9.3 No Litigation. No action or proceeding before any Governmental
Authority or body shall have been instituted or threatened to restrain or
prohibit the Equity Purchase or the transactions contemplated by this
Agreement.
9.4 Consents and Approvals. All necessary consents of and filings
required to be obtained or made by Acquiror with any Governmental Authority or
agency relating to the consummation of the transactions contemplated by this
Agreement shall have been obtained and made.
9.5 Good Standing Certificates. Acquiror shall have delivered to the
Stockholders a certificate, dated as of a date no earlier than 10 days prior
to the Closing Date, duly issued by the Florida Secretary of State and in each
state in which Acquiror is authorized to do business, showing that Acquiror is
in good standing and authorized to do business.
9.6 Secretary's Certificate. The Stockholders shall have received a
certificate or certificates, dated the Closing Date and signed by the
secretary of Acquiror, certifying the truth and correctness of attached copies
of the Acquiror's Certificate of Incorporation (including amendments thereto),
By-laws (including amendments thereto), and resolutions of the board of
directors and, if required, the stockholders of Acquiror approving Acquiror's
entering into this Agreement and the consummation of the transactions
contemplated hereby.
9.7 No Material Adverse Change. As of the Closing Date, no event or
circumstance shall have occurred with respect to Acquiror which would
constitute an Acquiror Material Adverse Effect.
9.8 Opinion of Counsel. The Stockholders shall have received from
Xxxxxxx Berlin Shereff Xxxxxxxx, LLP, counsel to Acquiror, an opinion dated
the Closing Date and in a form reasonably satisfactory to the Stockholders.
10. CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIROR
The obligations of Acquiror with respect to actions to be taken on the
Closing Date, are subject to the satisfaction (or waiver by Acquiror) on or
prior to the Closing Date of all of the conditions set forth in this Section
10; provided, that (except as otherwise provided in Section 7.6) no such
waiver shall constitute a waiver of, or otherwise affect Acquiror's or any of
its respective Affiliates' rights under Section 12.1.
10.1 Representations and Warranties. All the representations and
warranties of the Stockholders contained in this Agreement (a) that are
qualified as to materiality shall be true and correct and (b) that are not
qualified as to materiality shall be true and correct in all material
respects, in each case as of the Closing Date with the same effect as though
such representations and warranties had been made on and as of such date; and
the Stockholders shall have delivered to Acquiror certificates representing
the foregoing dated the Closing Date signed by the Stockholders and which
shall have been delivered to Acquiror.
10.2 Performance of Obligations. All of the terms, covenants and
conditions of this Agreement to be complied with or performed by the
Stockholders and each Company on or before the Closing Date shall have been
duly complied with and performed in all material respects on or before the
Closing Date and the Stockholders shall have delivered to Acquiror a
certificate dated the Closing Date and signed by them to such effect.
10.3 No Litigation. No action or proceeding before any Governmental
Authority or body shall have been instituted or threatened to restrain or
prohibit the Equity Purchase or the transactions contemplated by this
Agreement and no Governmental Authority or body shall have taken any other
action or made any request of Acquiror as a result of which the management of
Acquiror deems it inadvisable to proceed with the transactions hereunder.
10.4 Secretary's Certificate. Acquiror shall have received a
certificate, dated the Closing Date and signed by Xxxx on behalf of each
Company and BVI, certifying the truth and correctness of attached copies of
the Articles of Incorporation (including amendments thereto), and By-laws
(including amendments thereto) of each Company and BVI, and resolutions of the
board of directors and the stockholders of BVI approving BVI's execution of
this Agreement and its consummation of the transactions contemplated hereby.
10.5 No Material Adverse Change. As of the Closing Date, no event or
circumstance shall have occurred with respect to any Company which would
constitute a Company Material Adverse Effect, and no Company shall have
suffered any material loss or damages to any of its properties or assets
whether or not covered by insurance, which change, loss or damage materially
affects or impairs the ability of each Company to conduct its business.
10.6 Stockholders' Release. The Stockholders shall have delivered to
Acquiror an instrument dated the Closing Date releasing each Company from any
and all (i) claims of the Stockholders against each Company and (ii)
obligations of each Company to the Stockholders, except for obligations
arising under this Agreement or the transactions contemplated hereby.
10.7 Termination of Related Party Agreements. All agreements specified
in Section 7.5 hereof shall have been terminated effective prior to or as of
the Closing Date.
10.8 Opinion of Counsel. The Acquiror shall have received from (i)
Xxxxxx & Xxxxx LLP, domestic counsel to the Companies, an opinion dated the
Closing Date and in the form of Schedule 10.8, and (ii) counsel for the
Companies located in Brazil, Argentina and Spain, an opinion dated the Closing
Date and in the form of Schedule 10.8A.
10.9 Consents and Approvals. All necessary consents of and filings
required to be obtained or made by each Company with any Governmental
Authority or agency relating to the consummation of the transactions
contemplated herein shall have been obtained and made and all consents and
approvals of third parties listed on Schedule 5.17 shall have been obtained.
10.10 Good Standing Certificates. Each Company shall have delivered to
Acquiror a certificate, dated as of a date no earlier than ten days prior to
the Closing Date, duly issued by the Secretary of State (or equivalent
thereof) of each Company's respective state or country of incorporation and,
unless waived by Acquiror, in each state, or country, in which each Company is
authorized to do business, showing each Company is in good standing and
authorized to do business in such state or country.
10.11 Employment Agreements. The persons named in Schedule 10.11 shall
have entered into employment arrangements with the Acquiror under the terms
set forth in such Schedule.
10.12 Letters of Resignation. Acquiror shall have received letters of
resignation addressed to each Company from those members of each Company's
board of directors and officers as listed on Schedule 5.14, which resignations
shall be effective as of the Closing.
10.13 [Intentionally deleted]
10.14 Nominee Agreements. Each of the Nominees listed in Schedule 10.14
(except Xxxxx Xxxxxx Xxxxx) shall have entered into a Nominee agreement with
Acquiror in the form attached as Schedule 10.14A.
11. COVENANTS AFTER CLOSING
11.1 Preparation and Filing of Tax Returns.
(a) Each Company shall, if possible, file or cause to be filed all
separate Returns of any Acquired Party for all taxable periods that end on or
before the Closing Date. Each Stockholder shall pay or cause to be paid all
Tax liabilities (in excess of all amounts already paid with respect thereto or
properly accrued or reserved with respect thereto on the Company Financial
Statements) shown by such Returns to be due.
(b) Acquiror shall file or cause to be filed all separate Returns
of, or that include, any Acquired Party for all taxable periods ending after
the Closing Date.
(c) Each party hereto shall, and shall cause its subsidiaries and
Affiliates to, provide to each of the other parties hereto such cooperation
and information as any of them reasonably may request in filing any Return,
amended Return or claim for refund, determining a liability for Taxes or a
right to refund of Taxes or in conducting any audit or other proceeding in
respect of Taxes. Such cooperation and information shall include providing
copies of all relevant portions of relevant Returns, together with relevant
accompanying schedules and relevant work papers, relevant documents relating
to rulings or other determinations by Taxing Authorities and relevant records
concerning the ownership and Tax basis of property, which such party may
possess. Each party shall make its employees reasonably available on a
mutually convenient basis at its cost to provide explanation of any documents
or information so provided. Subject to the preceding sentence, each party
required to file Returns pursuant to this Agreement shall bear all costs of
filing such Returns.
12. INDEMNIFICATION
The Stockholders and Acquiror each make the following covenants that are
applicable to them, respectively:
12.1 General Indemnification by the Stockholders. The Stockholders
covenant and agree that they, jointly and severally, will indemnify, defend,
protect and hold harmless Acquiror, each Company and their respective
Affiliates (other than the Stockholders) at all times, from and after the
Closing Date until the Expiration Date, from and against all claims, damages,
actions, suits, proceedings, demands, assessments, adjustments, costs and
expenses (including specifically, but without limitation, reasonable
attorneys' fees, court costs, witness fees and reasonable expenses of
investigation) (collectively, "Losses") incurred by Acquiror, each Company, or
any of their respective Affiliates (other than the Stockholders) as a result
of or arising from (i) any breach of the representations and warranties of the
Stockholders set forth herein or on the schedules or certificates delivered in
connection herewith, (ii) any breach of any agreement or certificate on the
part of the Stockholders contained in this Agreement, or (iii) any Tax imposed
upon any Company or relating to any third party or Acquired Party for any
period ending on or prior to the Closing Date relating to matters known by or
under the control of the Stockholder, including, in each case, any such Tax
arising out of or in connection with the transactions effected pursuant to
this Agreement or any such Tax for which an Acquired Party may be liable under
Section 1.1502-6 of the Treasury Regulations (or any similar provisions of
state, local or foreign law), as a transferee or successor, by contract or
otherwise, (but excluding Taxes accrued or reserved properly on the Company
Financial Statements and Taxes accruing in the ordinary course of business
after the date of the Company Financial Statements).
12.2 Indemnification by Acquiror. Acquiror covenants and agrees that it
will indemnify, defend, protect and hold harmless the Stockholders at all
times from and after the Closing Date until the Acquiror Expiration Date, from
and against all Losses incurred by the Stockholders as a result of or arising
from (i) any breach by Acquiror of its representations and warranties set
forth herein or on the schedules or certificates delivered in connection
herewith, (ii) any breach of any agreement on the part of Acquiror contained
in this Agreement, or (iii) any liability under any federal or state law or
regulation, at common law or otherwise, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact relating to
Acquiror, or arising out of or based upon any omission or alleged omission by
Acquiror to state a material fact relating to Acquiror required to be stated
or necessary to make the statements not misleading.
12.3 Third Person Claims. Promptly after any party hereto (hereinafter
the "Indemnified Party") has received notice of or has knowledge of any claim
by a Person not a party to this Agreement (a "Third Person"), of the
commencement of any action or proceeding by such Third Person, the Indemnified
Party shall, as a condition precedent to a claim with respect thereto being
made against any party obligated to provide indemnification pursuant to
Section 12.1 or 12.2 hereof (hereinafter the "Indemnifying Party"), give the
Indemnifying Party written notice of such claim or the commencement of such
action or proceeding. Such notice shall state the nature and the basis of
such claim and a reasonable estimate of the amount thereof. The Indemnifying
Party shall have the right to defend and settle, at its own expense and by its
own counsel, any such matter so long as the Indemnifying Party pursues the
same in good faith and diligently, provided that the Indemnifying Party shall
not settle any proceeding without the written consent of the Indemnified
Party, such consent not to be unreasonably withheld or delayed. If the
Indemnifying Party undertakes to defend or settle, it shall promptly notify
the Indemnified Party of its intention to do so, and the Indemnified Party
shall cooperate, at the Indemnifying Party's expense, with the Indemnifying
Party and its counsel in the defense thereof and in any settlement thereof.
If the Indemnifying Party desires to accept a final and complete settlement of
any such Third Person's claim and the Indemnified Party refuses to consent to
such settlement, then the Indemnifying Party's liability pursuant to this
Section with respect to such Third Person's claim shall be limited to the
amount so offered in settlement to said Third Person plus all indemnifiable
costs and expenses incurred to date, the Indemnifying Party shall be relieved
of its duty to defend and shall tender the Third Person's claim back to the
Indemnified Party, who shall thereafter, at its own expense, be responsible
for the defense and negotiation of such Third Person's claim. If the
Indemnifying Party does not undertake to defend such matter to which the
Indemnified Party is entitled to indemnification hereunder, or fails
diligently to pursue such defense, the Indemnified Party may undertake such
defense through counsel of its choice, at the cost and expense of the
Indemnifying Party, and the Indemnified Party may settle such matter on terms
as it determines in its sole discretion, and the Indemnifying Party shall
reimburse the Indemnified Party for the amount paid in such settlement and any
other liabilities or expenses incurred by the Indemnified Party in connection
therewith.
12.4 Exclusive Remedy. The indemnification provided for in this Article
12 shall be the exclusive remedy in any action seeking damages or any other
form of relief brought by any party to this Agreement against another party,
provided that nothing herein shall be construed to limit the right of a party,
in a proper case, to seek injunctive relief for a breach of Articles 14 or 15
of this Agreement or to seek relief for a breach of any employment agreement
with, or any promissory note, stock option or warrant issued by Acquiror.
12.5 Limitations on Indemnification. Notwithstanding anything to the
contrary contained in this Agreement:
(a) The Persons entitled to be indemnified pursuant to Section 12.1
or 12.2, as applicable, shall not be entitled to recover Losses with respect
to any claim for indemnification hereunder until such time as, and solely to
the extent that, the aggregate amount of Losses in respect of all claims for
indemnification under Section 12.1 or 12.2, as applicable, exceeds $35,000
(the "Threshold"), and thereafter, such Persons shall only be entitled to
recover Losses in excess of the Threshold. No Person shall be entitled to
indemnification under this Article 12 if and to the extent that such Person's
claim for indemnification is directly or indirectly related to a breach by
such Person of any representation, warranty, covenant or other agreement set
forth in this Agreement.
(b) Acquiror shall have the right, upon written notice, to offset
indemnification amounts due to it pursuant to this Agreement against payments
due to the Stockholders under this Agreement.
(c) After Closing, (i) the indemnification obligations of the
Stockholders under Section 12.1 shall be limited, in the aggregate, to an
amount equal to fifty percent (50%) of the Equity Consideration, and (ii) the
indemnification obligations of Acquiror under Section 12.2 shall be limited,
in the aggregate, to an amount equal to fifty percent (50%) of the Equity
Consideration. Notwithstanding the foregoing, the limitations contained in
this subsection (c) shall be (1) an amount equal to the entire Equity
Consideration for all Stockholders in the aggregate, with respect to any
liability arising from the Stockholders' breach of the representations
contained in Section 5.2 or 5.3; and (2) an amount equal to the entire Equity
Consideration for the Acquiror with respect to any liability arising from the
Acquiror's breach of the covenants or representations contained in Sections
6.2 or 6.4.
(d) Stockholders may, at their option, pay for Losses, with cash or
with Acquiror Stock. Any Acquiror Stock used to pay Losses shall be valued at
the time of payment and as set forth in the Escrow Agreement.
(e) In no event shall either party be liable for special, punitive,
indirect or consequential damages.
13. TERMINATION OF AGREEMENT
13.1 Termination. This Agreement may be terminated at any time prior to
the Closing Date solely:
(a) by mutual consent of the boards of directors of Acquiror and
each Company;
(b) by the Stockholders or the Companies (acting through its board
of directors), on the one hand, or by Acquiror (acting through its board of
directors), on the other hand, if the transactions contemplated by this
Agreement to take place at the Closing shall not have been consummated by June
30, 2000, unless the failure of such transactions to be consummated is due to
the willful failure of the party seeking to terminate this Agreement to
perform any of its obligations under this Agreement to the extent required to
be performed by it prior to or on the Closing Date;
(c) by the Stockholders or the Companies, on the one hand, or by
Acquiror, on the other hand, if a material breach or default shall be made by
the other party in the observance or in the due and timely performance of any
of the covenants, agreements or conditions contained herein, and the curing of
such default shall not have been made on or before three (3) days prior to the
Closing Date or, if later, within seven (7) days of notice thereof; or
(d) pursuant to Section 7.7 hereof.
13.2 Liabilities in Event of Termination. Except as otherwise provided
in Sections 7.6 or 7.7 hereof, the termination of this Agreement will in no
way limit any obligation or liability of any party based on or arising from a
breach or default by such party with respect to any of its representations,
warranties, covenants or agreements contained in this Agreement including, but
not limited to, legal costs and out of pocket expenses.
14. NONCOMPETITION
14.1 Prohibited Activities. Subject to subsection (f) below, the
Stockholders agree severally and not jointly that each such Stockholder will
not, for a period of three (3) years following the Closing Date, for any
reason whatsoever, directly or indirectly, for themselves or on behalf of or
in conjunction with any other Person, of whatever nature:
(a) engage, as an officer, director, stockholder, owner, partner,
joint venturer, or in a managerial capacity, or as an employee, independent
contractor, consultant or advisor, or as a sales representative, in any
business selling any products or services in direct competition with Acquiror
or any of the subsidiaries thereof;
(b) call upon any person who is, at that time, an employee of
Acquiror (including the subsidiaries thereof) in a sales representative or
managerial capacity for the purpose or with the intent of enticing such
employee away from or out of the employ of Acquiror (including the
subsidiaries thereof), provided that each Stockholder shall be permitted to
call upon and hire any member of his or her immediate family;
(c) call upon any Person which is, at that time, or which has been,
within three (3) years prior to the Closing Date, a customer of Acquiror
(including the subsidiaries thereof), or any Company for the purpose of
soliciting or selling products or services in direct competition with Acquiror
(including its subsidiaries);
(d) call upon any prospective acquisition candidate, on any
Stockholder's own behalf or on behalf of any competitor in similar or
incidental businesses or activities, which candidate, to the actual knowledge
of such Stockholder after due inquiry, was called upon by Acquiror (including
the subsidiaries thereof) or for which, to the actual knowledge of such
Stockholder after due inquiry, Acquiror (or any subsidiary thereof) made an
acquisition analysis, for the purpose of acquiring such entity; or
(e) disclose customers, whether in existence or proposed, of any
Company to any Person for any reason or purpose whatsoever except to the
extent that each Company has in the past disclosed such information to the
public for valid business reasons or disclosure is specifically required by
law.
(f) Xxxx has developed and patented a telephone switching device
(the "Device") described in Schedule 14.1 hereto. Notwithstanding the terms
of this Section 14.1, Xxxx'x continued development, sale, lease, marketing and
exploitation of the Device after the date hereof shall not be considered a
breach of subsections (a) or (c) above.
14.2 Damages. Because of the difficulty of measuring economic losses to
Acquiror as a result of a breach of the foregoing covenant, and because of the
immediate and irreparable damage that could be caused to Acquiror for which it
would have no other adequate remedy, each Stockholder agrees that, in the
event of breach by such Stockholder, the foregoing covenant may be enforced by
Acquiror by injunctions and restraining orders.
14.3 Reasonable Restraint. It is agreed by the parties hereto that the
foregoing covenants in this Section 14 impose a reasonable restraint on the
Stockholders in light of the activities and business of Acquiror (including
the subsidiaries thereof) on the date of the execution of this Agreement and
the current plans of Acquiror.
14.4 Severability, Reformation. The covenants in this Article 14 are
severable and separate, and the unenforceability of any specific covenant
shall not affect the provisions of any other covenant. Moreover, in the event
any court of competent jurisdiction shall determine that the scope, time or
territorial restrictions set forth are unreasonable, then it is the intention
of the parties that such restrictions be enforced to the fullest extent which
the court deems reasonable, and this Agreement shall thereby be reformed.
14.5 Independent Covenant. All of the covenants in this Article 14
shall be construed as an agreement independent of any other provision in this
Agreement, and the existence of any claim or cause of action of any
Stockholder against Acquiror (including the subsidiaries thereof), whether
predicated on this Agreement or otherwise, shall not constitute a defense to
the enforcement by Acquiror of such covenants.
14.6 Materiality. The Stockholders hereby agree that the covenants in
this Article 14 are a material and substantial part of this transaction and
the consideration for this transaction.
15. NONDISCLOSURE OF CONFIDENTIAL INFORMATION
15.1 Stockholders. The Stockholders recognize and acknowledge that they
had in the past, currently have, and in the future may have, access to certain
confidential information of the Company and/or Acquiror, such as operational
policies, and pricing and cost policies that are valuable, special and unique
assets of each Company's and/or Acquiror's respective businesses
(collectively, the "Confidential Information"). The Stockholders, severally
and not jointly, agree that they will not disclose such Confidential
Information to any person, firm, corporation, association or other entity for
any purpose or reason whatsoever, except (a) to authorized representatives of
Acquiror who need to know such Confidential Information in connection with the
transactions contemplated hereby, who have been informed of the confidential
nature of such Confidential Information and who have agreed to keep such
Confidential Information confidential as provided hereby, (b) following the
Closing, such Confidential Information may be disclosed by Stockholders who
are employees of Acquiror if and to the extent required in the course of
performing their duties for Acquiror and (c) to counsel and other advisers,
provided that such advisers (other than counsel) agree to the confidentiality
provisions of this Section 15.1, unless (i) such Confidential Information
becomes known to the public generally through no fault of any such
Stockholders or (ii) disclosure is required by law or the order of any
Governmental Authority under color of law, provided, that prior to disclosing
any Confidential Information pursuant to this clause (ii), the Stockholders
shall, if possible, give prior written notice thereof to Acquiror and provide
Acquiror with the opportunity to contest such disclosure. In the event of a
breach or threatened breach by any of the Stockholders of the provisions of
this Section 15, Acquiror shall be entitled to an injunction restraining such
Stockholders from disclosing, in whole or in part, such Confidential
Information. Nothing herein shall be construed as prohibiting Acquiror from
pursuing any other available remedy for such breach or threatened breach,
including the recovery of damages. In the event the transactions contemplated
by this Agreement are not consummated, the Stockholders shall have none of the
above-mentioned restrictions on their ability to disseminate Confidential
Information with respect to Acquiror.
15.2 Acquiror. Acquiror recognizes and acknowledges that it has in the
past, currently has, and in the future may have, access to certain
Confidential Information of each Company, such as operational policies, and
pricing and cost policies that are valuable, special and unique assets of each
Company's business. Acquiror agrees that, prior to the Closing, or if the
transactions contemplated by this Agreement are not consummated, it will not
disclose such Confidential Information to any person, firm, corporation,
association or other entity for any purpose or reason whatsoever, except (a)
to the Stockholders and to authorized representatives of each Company, and (b)
to counsel and other advisers, provided that such advisors (other than
counsel) agree to the confidentiality provisions of this Section 15.2, unless
(i) such Confidential Information becomes known to the public generally
through no fault of Acquiror or (ii) disclosure is required by law or the
order of any Governmental Authority under color of law, provided, that prior
to disclosing any Confidential Information pursuant to this clause (iii),
Acquiror shall, if possible, give prior written notice thereof to each Company
and the Stockholders and provide each Company and the Stockholders with the
opportunity to contest such disclosure. In the event of a breach or
threatened breach by Acquiror of the provisions of this Section, each Company
and the Stockholders shall be entitled to an injunction restraining Acquiror
from disclosing, in whole or in part, such confidential information. Nothing
herein shall be construed as prohibiting each Company and the Stockholders
from pursuing any other available remedy for such breach or threatened breach,
including the recovery of damages.
15.3 Damages. Because of the difficulty of measuring economic losses as
a result of the breach of the foregoing covenants in Sections 15.1 and 15.2,
and because of the immediate and irreparable damage that would be caused for
which they would have no other adequate remedy, the parties hereto agree that,
in the event of a breach by any of them of the foregoing covenants, the
covenant may be enforced against the other parties by injunctions and
restraining orders.
15.4 Survival. The obligations of the parties under this Article 15
shall survive for a period of three (3) years from the Closing Date.
16. FEDERAL SECURITIES ACT REPRESENTATIONS
The Stockholders acknowledge that the shares of Acquiror Stock to be
delivered to the Stockholders pursuant to this Agreement have not been and
will not be registered under the Securities Act or under any state securities
or "blue sky" laws, and therefore may not be sold, transferred or otherwise
conveyed without compliance with the Securities Act and such laws or pursuant
to an exemption therefrom. The Acquiror Stock to be acquired by the
Stockholders pursuant to this Agreement is being acquired solely for their own
respective accounts, for investment purposes only, and with no present
intention of distributing, selling or otherwise disposing of it in connection
with a distribution.
16.1 Compliance with Law. The Stockholders covenant, warrant and
represent that none of the shares of Acquiror Stock issued to the Stockholders
will be offered, sold, assigned, pledged, hypothecated, transferred or
otherwise disposed of except after full compliance with all of the applicable
provisions of the Securities Act and the rules and regulations of the SEC.
All the Acquiror Stock shall bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE SHARES HAVE
BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, ASSIGNED, EXCHANGED,
TRANSFERRED, ENCUMBERED, PLEDGED, DISTRIBUTED, APPOINTED OR OTHERWISE DISPOSED
OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER
THE SECURITIES ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS AND, IF REQUIRED BY
URSUS TELECOM CORPORATION, AN OPINION OF COUNSEL TO URSUS TELECOM CORPORATION
STATING THAT REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT.
16.2 Economic Risk: Sophistication. The Stockholders represent and
warrant that they are able to bear the economic risk of an investment in the
Acquiror Stock acquired pursuant to this Agreement, can afford to sustain a
total loss of such investment and have such knowledge and experience in
financial and business matters that they are capable of evaluating the merits
and risks of the proposed investment in the Acquiror Stock. The Stockholders
represent and warrant that they have had an adequate opportunity to ask
questions and receive answers from the officers of Acquiror concerning any and
all matters relating to the transactions described herein including, without
limitation, the background and experience of the current and proposed officers
and directors of Acquiror, business, operations, financial conditions and
plans for Acquiror, and any plans for additional acquisitions and the like.
Each Stockholder represents that after taking into consideration the
information and advice provided herein each Stockholder has the requisite
knowledge and experience in financial and business matters to be capable of
evaluating the merits and risks of this investment.
17. GENERAL
17.1 Cooperation. Each Company, the Stockholders and Acquiror shall
each deliver or cause to be delivered to the other on the Closing Date, and at
such other times and places as shall be reasonably agreed to, such additional
instruments as the other may reasonably request for the purpose of carrying
out this Agreement. The Stockholders will cooperate and use their reasonable
efforts to have the present officers, directors and employees of each Company
cooperate with Acquiror on and after the Closing Date in furnishing
information, evidence, testimony and other assistance in connection with any
Tax Return filing obligations, actions, proceedings, arrangements or disputes
of any nature with respect to matters pertaining to all periods prior to the
Closing Date.
17.2 Successors and Assigns. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefits of the parties hereto
and their respective successors and permitted assigns. Neither this Agreement
nor any of the rights, interests or obligations shall be assigned by any of
the parties hereto without the prior written consent of the other. This
Agreement is not intended to confer upon any other person any rights or
remedies hereunder.
17.3 Entire Agreement. This Agreement (including the schedules,
exhibits and annexes attached hereto), and the documents and other agreements
executed and delivered pursuant hereto constitute the entire agreement and
understanding among the Stockholders, each Company and Acquiror and supersede
any prior agreement and understanding relating to the subject matter of this
Agreement. This Agreement, upon execution, constitutes a valid and binding
agreement of the parties hereto enforceable in accordance with its terms and
may be modified or amended only by a written instrument executed by the
Stockholders and each of the Companies and Acquiror, acting through their
respective officers or trustees, duly authorized by their respective boards of
directors. Any disclosure made on any Schedule delivered pursuant hereto
shall be deemed to have been disclosed for purposes of any other Schedule
required hereby, provided that each Company and the Stockholders shall make a
good faith effort to cross reference disclosure, as necessary or advisable,
between related Schedules.
17.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.
17.5 Expenses.
(a) Whether or not the transactions herein contemplated shall be
consummated, each of the parties hereto will pay its own fees, expenses and
disbursements and those of its agents, representatives, accountants and
counsel incurred in connection with the subject matter of this Agreement and
any amendments thereto, including all costs and expenses incurred in the
performance and compliance with all conditions to be performed by it under
this Agreement.
(b) Each Stockholder shall pay all sales, use, transfer, real
property transfer, recording, gains, stock transfer, stamp, and other similar
taxes and fees ("Transfer Taxes") imposed on each pursuant to federal and
state law in connections with the transactions contemplated hereby, except
that Acquiror shall pay all Transfer Taxes due on the issuance of the Acquiror
Stock. Each Stockholder shall file all necessary documentation and Returns
with respect to such Transfer Taxes. In addition, each Stockholder
acknowledges that he, and not any Company or Acquiror, will pay all Taxes due
upon receipt of the consideration payable pursuant to Section 2 hereof, and
will assume all Tax risks and liabilities of such Stockholder in connection
with the transactions contemplated hereby.
17.6 Notices. All notices or communications required or permitted
hereunder shall be in writing and may be given by depositing the same in
United States mail, addressed to the party to be notified, postage prepaid and
registered or certified with return receipt requested, via reputable overnight
courier, so addressed and charges prepaid, or by delivering the same in person
to an officer or agent of such party.
(a) If to Acquiror, addressed to them at:
Ursus Telecom Corporation
000 Xxxxxxxx Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xx. Xxxxxxx X. Xxxxxxx
with copies to:
Xxxxxxx Berlin Shereff Xxxxxxxx, LLP
0000 X Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attn: Xxxx X. Xxxxxxxxx, Esquire
Xxxxx X. Xxxxxxx, Esquire
(b) If to the Stockholders, addressed to them at:
c/o Xxxx Xxxx Xxxx
Latin American Enterprises, Inc.
0000 XX 000 Xxxxx
Xxxxx, XX 00000
with copies to:
Xxxxxx & Xxxxx, LLP
0000 Xxxxx Xxxxxx
000 X. Xxxxxxxx Xxxxxxxxx
Xxxxx, XX 00000
ATTN: Xxxx xx Xxxxx, Esquire
or to such other address or counsel as any party hereto shall specify pursuant
to this Section 17.6 from time to time.
17.7 Governing Law. The validity and interpretation of this Agreement
shall be governed by and construed in accordance with the laws of the State of
Florida, without reference to the conflicts of laws principles thereof.
17.8 Exercise of Rights and Remedies. Except as otherwise provided
herein, no delay of or omission in the exercise of any right, power or remedy
accruing to any party as a result of any breach or default by any other party
under this Agreement shall impair any such right, power or remedy, nor shall
it be construed as a waiver of or acquiescence in any such breach or default,
or of any similar breach or default occurring later; nor shall any waiver of
any single breach or default be deemed a waiver of any other breach or default
occurring before or after that waiver.
17.9 Time. Time is of the essence with respect to this Agreement.
17.10 Reformation and Severability. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, it shall, to the extent
possible, be modified in such manner as to be valid, legal and enforceable but
so as to most nearly retain the intent of the parties, and if such
modification is not possible, such provision shall be severed from this
Agreement, and in either case the validity, legality and enforceability of the
remaining provisions of this Agreement shall not in any way be affected or
impaired thereby.
17.11 Captions. The headings of this Agreement are inserted for
convenience only, shall not constitute a part of this Agreement or be used to
construe or interpret any provision hereof.
17.12 Amendments and Waivers. Except as otherwise provided herein, any
term of this Agreement may be amended and the observance of any term of this
Agreement may be waived only with the written consent of Acquiror and each of
the Stockholders and any such amendment or waiver shall be binding upon each
of the parties hereto, any other Person receiving Acquiror Stock in connection
with the Equity Purchase and each future holder of such Acquiror Stock.
17.13 Publicity. The parties hereto shall not, and shall cause their
Affiliates not to, issue or cause the publication of any press release or
other announcement with respect to the Equity Purchase or this Agreement
without delivering a draft of any such press release to such parties.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties hereto have executed this Stock Purchase
Agreement as of the day and year first above written.
URSUS TELECOM CORPORATION
By: (SEAL)
----------------------------
Name: [ ]
Title: Chairman of the Board
STOCKHOLDERS:
Xxxx Xxxx Xxxx, Individually and as
Nominee
For Sitwell Corporation
Xxxxxx Xxxxxxxxx Xxxx, Individually and as
Nominee For Sitwell Corporation
SITWELL CORPORATION
By:
Name:
Title:
SCHEDULE 10.14
CERTAIN NOMINEES
Xxxxx Xxxxxxx (Ecuador)
Mario Xxxxxxx Xxxxxxxxxx (El Xxxxxxxx (?), Brazil, Dominican Republic)
Xxxxxxx Xxxx Xxxxxxxxx-Xxxx (El Salvador (?), Brazil, Dominican Republic,
Puerto Rico)
Xxxxxx Xxxx Canton Xxxxxxx (Honduras and El Salvador (?))
Xxxxxxxxx Xxxxxx Ancora (or Xxxxxx Xxxxxx Xxxxxxxx?) (Brazil)
Mario Xxxx Xxxxxxxxx (Dominican Republic)
Xxxx X. Xxxxxx Xxxxxxxx (Dominican Republic)
Xxxxx Xxxx Xxxxxxx (Dominican Republic)
Xxxxxx X. Xxxxxxx Xxxx (Dominican Republic)
Xxxxxx Xxxxxxxx Ameraga (Puerto Rico)
Xxxx X. Xxxxxxx Xxxxxxx (Puerto Rico)
Xxxxx Xxxxxx Xxxxx (Spain)
Francisco de Xxxxx Xxxxxxx Xxxxx Xxxxxx (Columbia)
Xxxx Xxxxxxx Xxxxxxxx Xxxxxxx (Guatemala)
Xxxxx Xxxxxxxx (Uruguay)
