1
EXHIBIT 3.5
================================================================================
STOCK PURCHASE AGREEMENT
BY AND BETWEEN
WORLD COMMERCE ONLINE, INC.
AND
INTERPRISE TECHNOLOGY PARTNERS, L.P.
AND THE OTHER PARTIES LISTED HEREIN
NOVEMBER 11, 1999
================================================================================
2
================================================================================
CONTENTS
================================================================================
PAGE
----
Section 1. Authorization and Closing..................................................................1
1A. Authorization of the Stock.................................................................1
1B. Purchase and Sale of the Stock.............................................................1
Section 2. Conditions of the Purchasers' Obligations..................................................2
2A. Conditions to Closing......................................................................2
Section 3. Covenants..................................................................................3
3A. Financial Statements and Other Information.................................................4
3B. Inspection of Property.....................................................................5
3C. Restrictions...............................................................................5
3D. Affirmative Covenants......................................................................7
3E. Current Public Information.................................................................8
3F. Limited Preemptive Rights..................................................................8
3G. Public Disclosures.........................................................................9
3H. Xxxx-Xxxxx-Xxxxxx Xxxxxxxxxx...............................................................0
0X. Use of Proceeds............................................................................9
Section 4. Transfer of Restricted Securities..........................................................10
Section 5. Representations and Warranties of the Company..............................................10
5A. Organization and Corporate Power...........................................................10
5B. Capital Stock and Related Matters..........................................................11
5C. Authorization; No Breach...................................................................11
5D. Subsidiaries; Investments..................................................................12
5E. Conduct of Business; Liabilities...........................................................12
5F. Tax Matters................................................................................12
5G. Litigation, etc............................................................................13
5H. Xxxxxxxxx..................................................................................00
0X. Governmental Consent, etc..................................................................13
5J. ERISA......................................................................................13
5K. Compliance with Laws.......................................................................14
5L. Merger with WCO-Nevada.....................................................................14
5M. Disclosure.................................................................................14
5N. Closing Date...............................................................................15
Section 6. Definitions................................................................................15
Section 7. Miscellaneous..............................................................................19
7A. Expenses...................................................................................19
7B. Remedies...................................................................................19
7C. Purchasers'Investment Representations......................................................19
7D. Consent to Amendments......................................................................20
7E. Survival of Representations and Xxxxxxxxxx.................................................00
0X. Successors and Assigns.....................................................................21
-i-
3
7G. Generally Accepted Accounting Principles...................................................21
7H. Severability...............................................................................21
7I. Counterparts...............................................................................21
7J. Descriptive Headings; Interpretation.......................................................21
7K. Governing Law..............................................................................22
7L. Notices....................................................................................22
7M. Rights.....................................................................................23
7N. Amendments.................................................................................23
7O. Several Obligations........................................................................23
LIST OF EXHIBITS AND SCHEDULES
Purchase Schedule
Schedule of Exceptions
Schedule 2A(vii)(d) Form of Opinion of Counsel to the Company
Schedule 3I Use of Proceeds
Exhibit A-1 -- Certificate of Designation
Exhibit A-2 -- Articles of Incorporation
Exhibit A-3 -- Bylaws
Exhibit B -- Registration Rights Agreement
Exhibit C -- Agreement of Merger
-ii-
4
================================================================================
STOCK PURCHASE AGREEMENT
================================================================================
THIS STOCK PURCHASE AGREEMENT (this "AGREEMENT") is made as of
November 11, 1999, by and among WORLD COMMERCE ONLINE, INC., a Delaware
corporation (the "COMPANY"), INTERPRISE TECHNOLOGY PARTNERS, L.P., a Delaware
limited partnership ("INTERPRISE"), and the other Persons identified on the
signature pages attached hereto or selected by Interprise and added to the
signature pages prior to Closing (together with Interprise, the "PURCHASERS").
Except as otherwise indicated herein, capitalized terms used herein are defined
in Section 6 hereof.
In consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties to this Agreement, intending to be legally
bound, hereby agree as follows:
SECTION 1. AUTHORIZATION AND CLOSING.
1A. AUTHORIZATION OF THE STOCK. The Company shall authorize
the issuance and sale to the Purchasers of up to 5,110,000 shares of its Series
B Convertible Preferred Stock, par value $.001 per share (the "PREFERRED
STOCK"), having the rights and preferences set forth on the form of certificate
of designation attached hereto as Exhibit A-1 (the "CERTIFICATE OF
DESIGNATION").
1B. PURCHASE AND SALE OF THE STOCK.
(i) At the Closing (as defined below), the Company shall sell
to the Purchasers and, subject to the terms and conditions set forth
herein, Purchasers shall purchase from the Company, a minimum of
1,250,000 and a maximum of 5,000,000 shares of Preferred Stock at a
price of $4.00 per share, in such amounts and to such Purchasers as set
forth in the Purchase Schedule attached hereto and as amended according
to Section 1B below.. The closing of the purchase and sale of the
Preferred Stock pursuant hereto (the "CLOSING") shall take place at the
offices of Xxxxx & Xxxxxxx L.L.P., 000 Xxxxxxxxxx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000-0000 at 10:00 a.m. on December 15, 1999 or such
other time and date as agreed in writing by Interprise and the Company.
At the Closing, after the purchase and sale of the Preferred Stock
pursuant hereto, the Company shall deliver to each Purchaser stock
certificates evidencing the Preferred Stock to be purchased by such
Purchaser, registered in such Purchaser's name, upon payment of the
purchase price thereof by check, cancellation of indebtedness or wire
transfer of immediately available funds to such account as is
designated by the Company. In the event that payment by a Purchaser is
made, in whole or in part, by cancellation of indebtedness, then such
Purchaser shall surrender to the Company for cancellation at the
Closing any evidence of such indebtedness or shall execute an
5
instrument of cancellation in form and substance acceptable to the
Company. In addition, the Company shall deliver to any Purchaser
choosing to pay any part of the purchase price of the Preferred Stock
by cancellation of indebtedness, a check in the amount of any interest
accrued on such indebtedness through the Closing.
(ii) It is understood and agreed that prior to the Closing,
Interprise may select and add Purchasers (and their respective amounts)
to the Purchase Schedule and may increase the amount of Interprise's
investment in the Purchase Schedule, provided that the maximum number
of shares of Preferred Stock in the Purchase Schedule shall be
5,000,000.
SECTION 2. CONDITIONS OF THE PURCHASERS' OBLIGATIONS.
2A. CONDITIONS TO CLOSING. The obligation of the Purchasers to
purchase and pay for the Preferred Stock at the Closing is subject to the
satisfaction as of the Closing of the following conditions:
(i) REPRESENTATIONS AND WARRANTIES; COVENANTS. The
representations and warranties contained in Section 5 hereof shall be
true and correct at and as of the Closing as though then made, except
to the extent of changes caused by the transactions expressly
contemplated herein, and the Company shall have performed all of the
covenants required to be performed by it hereunder prior to the
Closing.
(ii) ARTICLES OF INCORPORATION; BYLAWS. The Company's
articles of incorporation, together will all amendments thereto, the
Certificate of Designation, and any other certificates of designation
or other similar documents, including but not limited to the Amended
and Restated Certificate of Designations of Series A Preferred Stock,
or instruments filed with the Secretary of State of Delaware
(collectively, the "ARTICLES OF INCORPORATION") shall be in form and
substance set forth in Exhibit A-2 hereto, shall be in full force and
effect under the laws of Delaware as of the Closing and shall not have
been amended or modified. The Company's bylaws (the "BYLAWS") shall be
in form and substance set forth in Exhibit A-3 hereto, shall be in full
force and effect under the laws of Delaware as of the Closing, and
shall not have been amended or modified.
(iii) REGISTRATION AGREEMENT. The Company, the
Purchasers and all parties to the Registration Rights Agreement by and
between World Commerce Online, a Nevada corporation ("WCO-NEVADA"),
Interprise, and the other persons listed therein dated March 30, 1999
shall have entered into a registration rights agreement in form and
substance set forth in Exhibit B attached hereto (the "REGISTRATION
AGREEMENT"), and the Registration Agreement shall not have been amended
or modified, and shall be in full force and effect as of the Closing.
(iv) CONSENTS AND APPROVALS. The Company shall have
received or obtained all third-party and governmental and regulatory
consents and approvals necessary for the consummation of the
transactions contemplated hereby.
-2-
6
(v) COMPLIANCE WITH APPLICABLE LAWS. The sale of
Preferred Stock to the Purchasers hereunder shall not be prohibited by
any applicable law or governmental regulation, and shall be permitted
by laws and regulations of the jurisdictions to which the Company is
subject.
(vi) FEES AND EXPENSES. The Company shall have
reimbursed Interprise for its fees and expenses as provided in Section
7A hereof.
(vii) CLOSING DOCUMENTS. The Company shall have
delivered to Interprise all of the following documents:
(a) an Officer's Certificate, dated the date
of the Closing, stating that the conditions specified in
Sections 2A(ii) through 2A(vi), inclusive, have been fully
satisfied;
(b) certified copies of the resolutions duly
adopted by the Company's board of directors (its "BOARD")
authorizing the execution, delivery, and performance of this
Agreement, the Registration Agreement, and each of the other
agreements contemplated hereby, the filing of the Certificate
of Designation referred to in Section 1A, the issuance and
sale of the Preferred Stock and the consummation of all other
transactions contemplated by this Agreement;
(c) certified copies of (1) the Certificate
of Designation; (2) the Articles of Incorporation; and (3) the
Company's Bylaws, each as in effect at the Closing; and
(d) the opinion, addressed to the
Purchasers, of Xxxxxxxxx Traurig, P.A., counsel for the
Company, dated the date of the Closing, in the form attached
hereto as Schedule 2A(vii)(d).
(e) such other documents relating to the
transactions contemplated hereby as Interprise or its counsel
may reasonably request.
(viii) ABSENCE OF ADVERSE CHANGES. From the date
hereof until the Closing, there will have been no material adverse
change in the financial or business condition of the Company.
Any condition specified in this Section 2 may be waived only if such waiver is
set forth in a writing executed by Interprise.
SECTION 3. COVENANTS. As an inducement to enter into the
transactions contemplated by this Agreement, the Company hereby covenants to
undertake the obligations set forth in this Section 3. The covenants set forth
in Sections 3A through 3D below, shall, however, terminate upon the consummation
of a Qualified Public Offering.
-3-
7
3A. FINANCIAL STATEMENTS AND OTHER INFORMATION. The Company
shall deliver to Interprise, each holder of at least fifteen percent (15%) of
the Purchaser Preferred and each holder of at least fifteen percent (15%) of the
Purchaser Common:
(i) as soon as available but in any event within
forty-five (45) days after the end of each quarterly accounting period
in each fiscal year, unaudited consolidating and consolidated
statements of income and cash flows of the Company and its Subsidiaries
for such quarterly period and for the period from the beginning of the
fiscal year to the end of such quarter, and consolidating and
consolidated balance sheets of the Company and its Subsidiaries as of
the end of such quarterly period, all prepared in accordance with
generally accepted accounting principles, consistently applied, subject
to the absence of footnote disclosures and to normal year-end
adjustments;
(ii) accompanying the financial statements referred
to in Section 3A(i), an Officer's Certificate stating that neither the
Company nor any of its Subsidiaries is in default under any of its
other material agreements or, if any such default exists, specifying
the nature and period of existence thereof and what actions the Company
and its Subsidiaries have taken and propose to take with respect
thereto;
(iii) within ninety (90) days after the end of each
fiscal year, consolidating and consolidated statements of income and
cash flows of the Company and its Subsidiaries for such fiscal year,
and consolidating and consolidated balance sheets of the Company and
its Subsidiaries as of the end of such fiscal year, setting forth in
each case comparisons to the annual budget and to the preceding fiscal
year, all prepared in accordance with generally accepted accounting
principles, consistently applied, and accompanied by: (a) with respect
to the consolidated portions of such statements (except with respect to
budget data), an opinion containing no exceptions or qualifications
(except for qualifications regarding specified contingent liabilities)
of an independent accounting firm of recognized standing reasonably
acceptable to Interprise; and (b) a copy of such firm's annual
management letter to the Board;
(iv) promptly upon receipt thereof, any additional
reports, management letters or other detailed information concerning
significant aspects of the Company's operations or financial affairs
given to the Company by its independent accountants (and not otherwise
contained in other materials provided hereunder);
(v) at least thirty (30) days before the beginning of
each fiscal year, an annual budget prepared on a monthly basis for the
Company and its Subsidiaries for such fiscal year (displaying
anticipated statements of income and cash flows), and promptly upon
preparation thereof any other significant budgets prepared by the
Company and any revisions of such annual or other budgets, and within
thirty (30) days after any monthly period in which there is a material
adverse deviation from the annual budget, an Officer's Certificate
explaining the deviation and what actions the Company has taken and
proposes to take with respect thereto;
-4-
8
(vi) promptly (but in any event within five (5)
business days) after the discovery or receipt of notice of any default
under any material agreement to which the Company or any of its
Subsidiaries is a party or any other event or circumstance affecting
the Company or any of its Subsidiaries which is reasonably likely to
have a material adverse effect on the financial condition, operating
results, assets, operations, or business prospects of the Company or
any of its Subsidiaries (including the filing of any material
litigation against the Company or any of its Subsidiaries or the
existence of any material dispute with any Person which involves a
reasonable likelihood of such litigation being commenced), an Officer's
Certificate specifying the nature and period of existence thereof and
what actions the Company and its Subsidiaries have taken and propose to
take with respect thereto; and
(vii) with reasonable promptness, such other
information and financial data concerning the Company and its
Subsidiaries as any Person entitled to receive information under this
Section 3A may reasonably request.
Each of the financial statements referred to in Sections 3A(i) and (iii) shall
be consistent with the books and records of the Company (which in turn shall be
accurate and complete in all respects) and in accordance with GAAP applied on a
consistent basis shall present fairly the financial condition and results of
operation of the Company and its Subsidiaries as of the dates and for the
periods stated therein, subject in the case of the unaudited financial
statements to changes resulting from normal year-end audit adjustments (none of
which would, alone or in the aggregate, be materially adverse to the financial
condition, operating results, assets, operations or business prospects of the
Company and its Subsidiaries taken as a whole).
3B. INSPECTION OF PROPERTY. The Company shall permit
Interprise, each holder of at least fifteen percent (15%) of the Purchaser
Common, and each holder of at least fifteen percent (15%) of the Purchaser
Preferred, or the representatives of any such Person, upon reasonable notice and
during normal business hours and such other times as any such holder may
reasonably request, to: (i) visit and inspect any of the properties of the
Company and its Subsidiaries; (ii) examine the corporate and financial records
of the Company and its Subsidiaries and make copies thereof or extracts
therefrom; and (iii) discuss the affairs, finances, and accounts of any such
corporations with the directors, officers, key employees, and independent
accountants of the Company and its Subsidiaries; provided that the Company shall
have the right to have its chief financial officer present at any meetings with
the Company's independent accountants.
3C. RESTRICTIONS. Without the prior written consent of
Interprise, the Company shall not and shall not commit to:
(i) directly or indirectly declare or pay any
dividends or make any distributions upon any of its equity securities,
other than payments of dividends on, or redemption payments in respect
of, the Preferred Stock pursuant to the Articles of Incorporation;
-5-
9
(ii) except pursuant to this Agreement, directly or
indirectly redeem, purchase, or otherwise acquire, or permit any of its
Subsidiaries to redeem, purchase, or otherwise acquire, any of the
Company's or any Subsidiary's equity securities (including, without
limitation, warrants, options, and other rights to acquire equity
securities);
(iii) except as expressly contemplated by this
Agreement, authorize, issue, sell, or enter into any agreement
providing for the issuance (contingent or otherwise), or permit any of
its Subsidiaries to authorize, issue, sell, or enter into any agreement
providing for the issuance (contingent or otherwise) of any equity
securities or debt securities with equity features or securities
exercisable or convertible into equity securities or debt securities
with equity features;
(iv) merge or consolidate with any Person or permit
any of its Subsidiaries to merge or consolidate with any Person (other
than a wholly owned Subsidiary);
(v) sell, lease, or otherwise dispose of, or permit
any of its Subsidiaries to sell, lease, or otherwise dispose of, more
than ten percent (10%) of the consolidated assets of the Company and
its Subsidiaries (computed on the basis of book value, determined in
accordance with generally accepted accounting principles consistently
applied, or fair market value, determined by the Board in its
reasonable good faith judgment) in any transaction or series of related
transactions (other than sales of inventory in the ordinary course of
business);
(vi) liquidate, dissolve, or effect, or permit any of
its Subsidiaries to liquidate, dissolve, or effect, a recapitalization
or reorganization in any form of transaction (including, without
limitation, any reorganization into partnership form);
(vii) acquire, or permit any of its Subsidiaries to
acquire, any interest in any business (whether by a purchase of assets,
purchase of stock, merger, or otherwise), or enter into any joint
venture, in excess of $100,000;
(viii) enter into, or permit any of its Subsidiaries
to enter into, the ownership, active management, or operation of any
business that is materially different from the businesses in which the
Company and its Subsidiaries were engaged on the date of this
Agreement;
(ix) enter into, amend, modify, or supplement or
permit any of its Subsidiaries to enter into, amend, modify, or
supplement any agreement, transaction, commitment, or arrangement with
any of its or any of its Subsidiaries' officers, directors, or senior
executive employees;
(x) create, incur, assume, or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume, or suffer to
exist, Indebtedness or other non-ordinary course liabilities exceeding
the amounts approved therefor by the Board in the annual budget;
-6-
10
(xi) make, or permit any of its Subsidiaries to make,
any loans or advances to, guarantees for the benefit of, or Investments
in, any Person (other than a wholly-owned Subsidiary), except for: (a)
reasonable advances to employees in the ordinary course of business;
and (b) Investments having a stated maturity no greater than one year
from the date the Company makes such Investment in (1) obligations of
the United States government or any agency thereof or obligations
guaranteed by the United States government, (2) certificates of deposit
of commercial banks having combined capital and surplus of at least $50
million or (3) commercial paper with a rating of at least "Prime-1" by
Xxxxx'x Investors Service, Inc.;
(xii) except as expressly contemplated by this
Agreement, make any amendment to the Articles of Incorporation or the
Company's bylaws, or file any resolution of the Board or certificate of
designation with the Secretary of State of Delaware;
(xiii) make any capital expenditures (including,
without limitation, payments with respect to capitalized leases, as
determined in accordance with generally accepted accounting principles
consistently applied) exceeding $100,000, except as permitted by any
budget approved by the Board;
(xiv) hire, terminate, suspend, promote or demote any
senior executive employee of the Company or any of its Subsidiaries;
(xv) enter into, or cause any Subsidiary to enter
into, any agreement which would (under any circumstances) restrict the
Company's or any of its Subsidiaries' right or ability to perform the
provisions of this Agreement or any of the other agreements or
instruments contemplated hereby or to conduct its business as currently
conducted or as proposed to be conducted at any time; or
(xvi) approve any business plan or annual budget of
the Company or any of its Subsidiaries for any fiscal year.
3D. AFFIRMATIVE COVENANTS. Unless the Company obtains the
prior written consent of Interprise, the Company shall, and shall cause each
Subsidiary to:
(i) comply with all applicable laws, rules, and
regulations of all governmental authorities, the violation of which
would reasonably be expected to have a material adverse effect upon the
financial condition, operating results, assets, operations, or business
prospects of the Company and its Subsidiaries taken as a whole, and pay
and discharge when payable all Taxes, assessments, and governmental
charges (except to the extent the same are being contested in good
faith and adequate reserves therefor have been established);
(ii) enter into and maintain appropriate
non-disclosure, noncompete, and non-solicitation agreements with its
key employees; and
-7-
11
(iii) cause any agreement entered into by the Company
or any Subsidiary after the date hereof which provides for the sale of
capital stock of the Company (or the capital stock of any Subsidiary of
the Company) to, or employment of, a senior management to be in form
and substance substantially similar to the draft of such agreement
reviewed and approved by Interprise.
3E. CURRENT PUBLIC INFORMATION. At all times after the Company
has filed a registration statement with the Securities and Exchange Commission
pursuant to the requirements of either the Securities Act or the Securities
Exchange Act, the Company shall file all reports required to be filed by it
under the Securities Act and the Securities Exchange Act and the rules and
regulations adopted by the Securities and Exchange Commission thereunder and
shall take such further action as any holder or holders of Restricted Securities
may reasonably request, all to the extent required to enable: (i) such holders
to sell Restricted Securities pursuant to Rule 144 adopted by the Securities and
Exchange Commission under the Securities Act (as such rule may be amended from
time to time) or any similar rule or regulation hereafter adopted by the
Securities and Exchange Commission; or (ii) the Company to be eligible to
register its securities pursuant to a registration statement on Form S-2 or S-3
or any similar registration form hereafter adopted by the Securities and
Exchange Commission. Upon request, the Company shall deliver to any holder of
Restricted Securities a written statement as to whether it has complied with
such requirements. Until such time as the Company has filed a registration
statement with the Securities and Exchange Commission pursuant to the
requirements of either the Securities Act or the Securities Exchange Act, the
Company shall file all reports required to be filed by it by the National
Association of Securities Dealers, Inc., or any affiliate thereof (the "NASD"),
and shall comply with all rules and requirements of the NASD which are
applicable to the Company, and shall Comply with all rules and regulations
adopted by the Securities and Exchange Commission which apply to the Company's
current status as a "publicly traded company" on the NASD "bulletin board"
system.
3F. LIMITED PREEMPTIVE RIGHTS.
(i) Except for the issuance of Stock or any
securities containing options or rights to acquire any shares of Stock: (a) to
employees, consultants, officers, or directors of the Company or an Affiliate
thereof pursuant to arrangements approved by the Board; (b) in connection with
acquisitions approved by the Board; (c) in connection with financing
transactions approved by the Board; or (d) pursuant to a public offering
registered under the Securities Act, if the Company at any time after the
Closing and prior to the consummation of the earlier of a Sale of the Company or
Qualified Public Offering authorizes the issuance or sale of any shares of any
class of capital stock or any securities containing options or rights to acquire
any shares of any class of capital stock ("OPTIONS") (other than as a dividend
or distribution on outstanding shares of capital stock), then the Company shall
first offer to sell to each holder of Purchaser Stock a portion of such capital
stock or Options equal to the quotient determined by dividing (1) the number of
shares of Common Stock held by such holder, assuming the conversion of all
shares of all series of Preferred Stock by (2) the total number of shares of
Common
-8-
12
Stock outstanding immediately before such issuance assuming all shares
of all classes of Preferred Stock were converted. Each holder of
Purchaser Stock shall be entitled to purchase all or any portion of
such capital stock or Options at the most favorable price and on the
most favorable terms as such capital stock or Options are to be offered
to any other Persons.
(ii) In order to exercise its purchase rights
hereunder, a holder of Purchaser Stock must within fifteen (15) days
after receipt of written notice from the Company describing in
reasonable detail the stock or securities being offered, the purchase
price thereof, the payment terms, and such holder's percentage
allotment deliver a written notice to the Company describing its
election hereunder. If all of the capital stock and Options offered to
the holders of Purchaser Stock is not fully subscribed by such holders,
then the remaining stock and securities shall be reoffered by the
Company to the holders purchasing their full allotment upon the terms
set forth in this paragraph, except that such holders must exercise
their purchase rights within five (5) days after receipt of such
reoffer.
(iii) Upon the expiration of the offering periods
described above, the Company shall be entitled to sell such stock or
securities which the holders of Purchaser Stock have not elected to
purchase during the ninety (90) days following such expiration on terms
and conditions no more favorable to the purchasers thereof than those
offered to such holders. Any stock or securities offered or sold by the
Company after such ninety (90) day period must be reoffered to the
holders of Purchaser Stock pursuant to the terms of this paragraph.
(iv) Nothing contained in this paragraph 3F shall be
deemed to amend, modify, or limit in any way the restrictions on the
issuance of shares of stock set forth in paragraph 3C hereof or
elsewhere in this Agreement, in the Articles of Incorporation, or in
any other agreement to which the Company is bound.
3G. PUBLIC DISCLOSURES. The Company shall not, nor shall it
permit any of its Subsidiaries or other Affiliates to, disclose Interprise's (or
its Affiliates') name or identity as an investor in the Company in any press
release or other public announcement or in any document or material filed with
any governmental entity, without the prior written consent of Interprise, unless
such disclosure is required by applicable law or governmental regulations or by
order of a court of competent jurisdiction, in which case, before making such
disclosure the Company shall give written notice to Interprise describing in
reasonable detail the proposed content of such disclosure and shall permit
Interprise to review and comment upon the form and substance of such disclosure.
3H. XXXX-XXXXX-XXXXXX COMPLIANCE. In connection with any
transaction in which the Company, or any Subsidiary is involved which is
required to be reported under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended from time to time (the "HSR ACT"), the Company, or any such
Subsidiary, shall prepare and file all documents with the Federal Trade
Commission and the United States Department of Justice which may be required
-9-
13
to comply with the HSR Act, and shall promptly furnish all materials thereafter
requested by any of the regulatory agencies having jurisdiction over such
filings, in connection with the transactions contemplated thereby. The Company,
or any such Subsidiary, shall take all reasonable actions and shall file and use
reasonable best efforts to have declared effective or approved all documents and
notifications with any governmental or regulatory bodies, as may be necessary or
may reasonably be requested under federal antitrust laws for the consummation of
the subject transaction.
3I. USE OF PROCEEDS. The Company shall us the proceeds of the
issuance and sale of the Preferred Stock solely as provided in Schedule 3I.
SECTION 4. TRANSFER OF RESTRICTED SECURITIES. Each Purchaser
acknowledges that the Restricted Securities are transferable only pursuant to:
(a) public offerings registered under the Securities Act; (b) Rule 144 or Rule
144A of the Securities and Exchange Commission (or any similar rule or rules
then in force) if such rule or rules are available; and (c) any other legally
available means of transfer. In connection with the transfer of any Restricted
Securities (other than a transfer described in clauses (a) or (b) above), the
holder thereof shall deliver written notice to the Company describing in
reasonable detail the transfer or proposed transfer. In addition, upon the
request of Interprise, the Company shall promptly supply to Interprise or its
prospective transferees all information regarding the Company required to be
delivered in connection with a transfer pursuant to Rule 144A of the Securities
and Exchange Commission.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. As a
material inducement to the Purchasers to enter into this Agreement and purchase
the Stock, the Company hereby represents and warrants to the Purchasers that,
except as expressly set forth on the Schedule of Exceptions attached hereto:
5A. ORGANIZATION AND CORPORATE POWER. The Company is a
corporation duly organized, validly existing, and in good standing under the
laws of Delaware and is qualified to do business in every jurisdiction in which
the failure to so qualify might reasonably be expected to have a material
adverse effect on the financial condition, operating results, assets,
operations, or business prospects of the Company and its Subsidiaries taken as a
whole. The Company has all requisite corporate power and authority and all
material licenses, permits, and authorizations necessary to own and operate its
properties, to carry on its businesses as now conducted and presently proposed
to be conducted, and to carry out the transactions contemplated by this
Agreement and by the Agreement of Merger. The copies of the Company's Articles
of Incorporation and Bylaws, and the copies of the articles of incorporation and
bylaws (or other similar organizational documents) of each Subsidiary of the
Company, which have been furnished to Interprise's counsel, reflect all
amendments made thereto at any time before the Applicable Date and are correct
and complete.
-10-
14
5B. CAPITAL STOCK AND RELATED MATTERS.
(i) The authorized capital stock of the Company
consists of 100,000,000 shares of capital stock, consisting of
90,000,000 shares of Common Stock, par value $.001 per share, and
10,000,000 shares of Preferred Stock, par value $.001 per share, of
which 4,250,000 are designated as Series A Convertible Preferred Stock,
par value $.001 per share. Immediately prior to the Closing, the
authorized capital stock of the Company shall consist of 100,000,000
shares of capital stock, consisting of 90,000,000 shares of Common
Stock, par value $.001 per share, and 10,000,000 shares of Preferred
Stock, par value $.001 per share, of which 4,250,000 shall be
designated as Series A Convertible Preferred Stock, par value $.001 per
share, and of which 5,110,000 shares shall be designated as Series B
Convertible Preferred Stock, par value $.001 per share. The Company
has, and immediately prior to the Closing shall have, 15,305,000 shares
of Common Stock and 4,000,000 shares of Series A Convertible Preferred
Stock issued and outstanding. Except for such issued and outstanding
shares, the Company does not have outstanding any stock or securities
convertible or exchangeable for any shares of its capital stock or
containing any profit participation features, nor does it have
outstanding any rights or options to subscribe for or to purchase its
capital stock or any stock or securities convertible into or
exchangeable for its capital stock or any stock appreciation rights or
phantom stock plans other than pursuant to, and as contemplated by,
this Agreement. The Company is not be subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire or retire
any shares of its capital stock or any warrants, options, or other
rights to acquire its capital stock, except pursuant to this Agreement
and its Certificate of Incorporation. All of the outstanding shares of
the Company's capital stock are and shall be validly issued, fully
paid, and nonassessable.
(ii) Except as set forth in the Stock Purchase
Agreement by and between WCO-Nevada and Interprise dated March 30,
1999, there are no statutory or contractual stockholders preemptive
rights or rights of refusal with respect to the issuance of any of the
Stock hereunder, except as expressly provided herein. Based in part on
the investment representations of the Purchasers in Section 7C hereof,
the Company has not violated any applicable federal or state securities
laws in connection with the offer, sale, or issuance of any of its
capital stock, and the offer, sale, and issuance of the Stock hereunder
does not and will not require registration under the Securities Act or
any applicable state securities laws. There are no agreements between
the Company's stockholders with respect to the voting or transfer of
the Company's capital stock or with respect to any other aspect of the
Company's affairs.
5C. AUTHORIZATION; NO BREACH. The execution, delivery, and
performance of this Agreement, the Registration Agreement, and all other
agreements contemplated hereby to which the Company is from time to time a party
and the filing of the Articles of Incorporation and the filing of the
Certificate of Designation have been duly authorized by the Company. This
Agreement, the Registration Agreement, the Certificate of Designation, the
Articles of Incorporation, and all other agreements contemplated hereby from
time to time to which the Company or any Subsidiary is a party each constitutes
a valid and binding obligation of such Person, enforceable in accordance with
its terms. The execution and delivery by the Company of
-11-
15
this Agreement, the Registration Agreement, and all other agreements
contemplated hereby to which the Company is a party, the offering, sale, and
issuance of the Stock hereunder, the Certificate of Designation, the Articles of
Incorporation and the fulfillment of and compliance with the respective terms
hereof and thereof by the Company do not and will not: (i) conflict with or
result in a breach of the terms, conditions, or provisions of; (ii) constitute a
default under; (iii) result in the creation of any Lien, security interest,
charge, or encumbrance upon the Company's capital stock or assets pursuant to;
(iv) give any third party the right to modify, terminate, or accelerate any
obligation under; (v) result in a violation of; or (vi) require any
authorization, consent, approval, exemption, or other action by or notice to any
court or administrative or governmental body pursuant to, the Articles of
Incorporation or Bylaws of the Company, or any law, statute, rule, or regulation
to which the Company is subject, or any agreement, instrument, order, judgment,
or decree to which the Company or any of its Affiliates, or employees is a party
or by which it or any of the foregoing Persons is bound.
5D. SUBSIDIARIES; INVESTMENTS. The Company does not own or
hold any shares of stock or any other security or interest in any other Person
or any rights to acquire any such security or interest, and the Company has
never had any Subsidiary.
5E. CONDUCT OF BUSINESS; LIABILITIES. Other than the
negotiation, execution and delivery of this Agreement, the Registration
Agreement and the other agreements contemplated hereby and thereby, and except
as has been disclosed or made available to Interprise, prior to the Closing, the
Company (including WCO-Nevada prior to the consummation of the Merger) has not:
(i) conducted any business; (ii) incurred any material expenses, obligations or
liabilities (whether accrued, absolute, contingent, unliquidated or otherwise,
whether or not known to the Company and whether due or to become due and
regardless of when asserted); (iii) owned any material assets; (iv) entered into
any material contracts or agreements; or (v) violated any laws or governmental
rules or regulations.
5F. TAX MATTERS. The Company (including WCO-Nevada prior to
the consummation of the Merger) has filed all tax returns (if any) which it is
required to file under applicable laws and regulations; all such returns are
complete and correct in all material respects; the Company (including WCO-Nevada
prior to the consummation of the Merger) has paid all taxes due and owing by it
and has withheld and paid over all taxes which it is obligated to withhold from
amounts paid or owing to any employee, stockholder, creditor or other third
party; the Company (including WCO-Nevada prior to the consummation of the
Merger) has not waived any statute of limitations with respect to taxes or
agreed to any extension of time with respect to a tax assessment or deficiency;
the assessment of any additional taxes for periods for which returns have been
filed is not expected; no foreign, federal, state or local tax audits are
pending or being conducted with respect to the Company (including WCO-Nevada),
no information related to tax matters has been requested by any foreign,
federal, state or local taxing authority and no notice indicating an intent to
open an audit or other review has been received by the Company (including
WCO-Nevada) from any foreign, federal, state or local taxing authority; and
there are no unresolved questions or claims concerning the Company's (including
WCO-Nevada's) tax liability. The Company (including WCO-Nevada prior to the
consummation of the Merger) has not made an election under ss.341(f) of the IRC.
-12-
16
5G. LITIGATION, ETC. There are no actions, suits, proceedings,
orders, investigations or claims pending or, to the best of the Company's
knowledge, threatened against or affecting the Company (including WCO-Nevada)
(or to the best of the Company's knowledge, pending or threatened against or
affecting any of the officers, directors or employees of the Company (including
WCO-Nevada) with respect to their business or proposed business activities) at
law or in equity, or before or by any governmental department, commission,
board, bureau, agency or instrumentality (including, without limitations, any
actions, suits, proceedings or investigations with respect to the transactions
contemplated by this Agreement) which could have a material adverse effect on
the financial condition, operating results, assets, operations or business
prospects of the Company, taken as a whole; the Company (including WCO-Nevada)
is not subject to any arbitration proceedings under collective bargaining
agreements or otherwise or, to the best of the Company's knowledge, any
governmental investigations or inquiries; and, to the best of the Company's
knowledge, there is no basis for any of the foregoing. The Company (including
WCO-Nevada prior to the consummation of the Merger) is not subject to any
judgment, order or decree of any court or other governmental agency. The Company
(including WCO-Nevada) has not received any opinion or memorandum or legal
advice from legal counsel to the effect that it is exposed, from a legal
standpoint, to any liability or disadvantage which may be material to its
business.
5H. BROKERAGE. There are no claims for brokerage commissions,
finders, fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement binding
upon the Company. The Company shall pay, and hold each Purchaser harmless
against, any liability, loss or expense (including, without limitation,
attorneys fees and out-of-pocket expenses) arising in connection with any such
claim.
5I. GOVERNMENTAL CONSENT, ETC. No permit, consent, approval or
authorization of, or declaration to or filing with, any governmental authority
is required in connection with the execution, delivery and performance by the
Company of this Agreement or the other agreements contemplated hereby, or the
consummation by the Company of any other transactions contemplated hereby or
thereby.
5J. ERISA. The Company does not maintain or have any
obligation to contribute to or any other liability with respect to or under
(including but not limited to current or potential withdrawal, liability), nor
has either of them ever maintained or had any obligation to contribute to or any
other liability with respect to or under: (i) any plan or arrangement whether or
not terminated, which provides medical, health, life insurance or other welfare
types benefits for current or future retired or terminated employees (except for
limited continued medical benefit coverage required to be provided under Section
4980B of the IRC or as required under applicable state law); (ii) any
"mutliemployer plan" (as defined in Section 3(37) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"); (iii) any employee plan which
is a tax-qualified "defined benefit plan" (as defined in Section 3(35) of
ERISA), whether or not terminated; (iv) any employee plan which is tax-qualified
"defined contribution plan" (as defined in Section 3(34) of ERISA), whether or
not terminated; or (v) any other plan or arrangement
-13-
17
providing benefits to current or former employees, including any bonus plan,
plan for deferred compensation, employee health or other welfare benefit plan or
other arrangement, whether or not terminated. For purposes of this Section 5J,
the term "Company" includes all organizations under common control with the
Company pursuant to Section 414(b) or (c) of the IRC.
5K. COMPLIANCE WITH LAWS. The Company has not violated any law
or any governmental regulation or requirement which violation would reasonably
be expected to have a material adverse effect upon the financial condition,
operating results, assets, operations or business prospects of the Company, and
the Company has not received notice of any such violation (including violations
by WCO-Nevada prior to the consummation of the Merger). Prior to the
consummation of the Merger, WCO-Nevada did not violate any law or any
governmental regulation or requirement which violation would reasonably be
expected to have had a material adverse effect upon the financial condition,
operating results, assets, operations or business prospects of WCO-Nevada or
would reasonably be expected to have a material adverse effect upon the
financial condition, operating results, assets, operations or business prospects
of the Company, and WCO-Nevada did not receive notice of any such violation. The
Company is not subject to any clean up liability, and the Company has no reason
to believe it may become subject to any clean up liability, under any federal,
state or local environmental law, rule or regulation.
5L. MERGER WITH WCO-NEVADA.
(i) The Company and WCO-Nevada have consummated the
Merger, and the Merger was effective October 18, 1999.
(ii) Neither the Company nor WCO-Nevada materially
breached or is in material breach of the Agreement of Merger.
(iii) No temporary restraining order, preliminary or
permanent injunction or other order preventing the consummation of or
unwinding, voiding or nullifying the Merger was issued by any court of
competent jurisdiction.
(iv) There is not pending or threatened any Legal
Proceeding in which a Governmental Body or any of the stockholders of
the Company or WCO-Nevada is or is threatened to become a party or is
otherwise involved: (a) challenging or seeking to restrain or prohibit
the consummation of the Merger or any of the other transactions
contemplated in the Agreement of Merger; (b) relating to the Merger; or
(c) which would materially and adversely affect the right of the
Company to own the assets or operate the business of the Company.
5M. DISCLOSURE. Neither this Agreement nor any of the
schedules, attachments, written statements, documents, certificates or other
items prepared or supplied to the Purchasers by or on behalf of the Company with
respect to the transactions contemplated hereby contain any untrue statement of
a material fact or omit a material fact necessary to make each statement
contained herein or therein not misleading. There is no fact which the Company
-14-
18
has not disclosed to the Purchasers in writing and of which any of its officers,
directors or executive employees is aware and which has had or might reasonably
be anticipated to have a material adverse effect upon the existing or expected
financial condition, operating results, assets, customer or supplier relations,
employee relations or business prospects of the Company (including facts
relating to WCO-Nevada prior to the consummation of the Merger).
5N. CLOSING DATE. The representations and warranties of the
Company contained in this Section 5 and elsewhere in this Agreement and all
information contained in any exhibit, schedule or attachment hereto or in any
writing delivered by, or on behalf of, the Company to the Purchasers shall be
true and correct in all respects on the date of the Closing as though then made,
except as affected by the transactions expressly contemplated by this Agreement.
SECTION 6. DEFINITIONS. For the purposes of this Agreement,
the following terms have the meanings set forth below:
"AFFILIATE" of any particular person or entity means any other
person or entity controlling, controlled by, or under common control with such
particular person or entity.
"AFFILIATED GROUP" means an affiliated group as defined in
Section 1504 of the IRC (or any analogous combined, consolidated, or unitary
group defined under state, local, or foreign income Tax law).
"COMMON STOCK" means the Company's common stock, par value
$0.001 per share.
"GOVERNMENTAL BODY" means any: (a) nation, state,
commonwealth, province, territory, county, municipality, district or other
jurisdiction of any nature; (b) federal, state, local, municipal, foreign or
other government; or (c) governmental or quasi-governmental authority of any
nature (including any governmental division, department, agency, commission,
instrumentality, office, official, ministry, organization, unit, body or entity
and any court or other tribunal).
"INDEBTEDNESS" means all indebtedness for borrowed money
(including purchase money obligations), all indebtedness under revolving credit
arrangements, all capitalized lease obligations, and all guarantees of any of
the foregoing, involving any amount or amounts in excess of $100,000.
"INVESTMENT" as applied to any Person means: (i) any direct or
indirect purchase or other acquisition by such Person of any notes, obligations,
instruments, stock, securities, or ownership interest (including partnership
interests and joint venture interests of any other Person, and; (ii) any capital
contribution by such Person to any other Person.
-15-
19
"IRC" means the Internal Revenue Code of 1986, as amended, and
any reference to any particular IRC section shall be interpreted to include any
revision of or successor to that section regardless of how numbered or
classified.
"LEGAL PROCEEDING" means any action, suit, litigation,
arbitration, proceeding (including any civil, criminal, administrative,
investigative or appellate proceeding), hearing, inquiry, audit, examination or
investigation commenced, brought, conducted or heard by or before, or otherwise
involving, any court or other Governmental Body or any arbitrator or arbitration
panel.
"LIEN" means any mortgage, pledge, security interest,
encumbrance, lien, or charge of any kind (including, without limitation, any
conditional sale or other title retention agreement or lease in the nature
thereof), any sale of receivables with recourse against the Company, any of its
Subsidiaries or any of its Affiliates, any filing or agreement to file a
financing statement as debtor under the Uniform Commercial Code or any similar
statute other than to reflect owner-ship by a third party of property leased to
the Company or any of its Subsidiaries under a lease which is not in the nature
of a conditional sale or title retention agreement, or any subordination
arrangement in favor of another Person (other than any subordination arising in
the ordinary course of business).
THE "MERGER" means the merger of the Company with WCO-Nevada,
pursuant to the Agreement and Plan of Merger by and between the Company and
WCO-Nevada, attached hereto as Exhibit C (the "AGREEMENT OF Merger"), in which
WCO-Nevada merged with and into the Company, such that the separate existence of
WCO-Nevada ceased and the Company continued as the surviving corporation.
"OFFICER'S CERTIFICATE" means a certificate signed by the
Company's President or its Chief Financial Officer, stating that: (i) the
officer signing such certificate has made or has caused to be made such
investigations as are necessary in order to permit him to verify the accuracy of
the information set forth in such certificate; and (ii) such certificate does
not misstate any material fact and does not omit to state any fact necessary to
make the certificate not misleading.
"PERSON" means an individual, a partnership, a limited
liability company, a corporation, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization, and a governmental
entity or any department, agency, or political subdivision thereof.
"PREFERRED STOCK" means the Company's Series B Convertible
Preferred Stock, par value $0.001 per share.
"PURCHASER COMMON" means: (i) the Common Stock issued to
Purchasers upon the conversion of the Preferred Stock; and (ii) any capital
stock issued or issuable with respect to the Common Stock referred to in clause
(i) above by way of stock dividends or stock splits or in connection with a
combination of shares, recapitalization, merger, consolidation, or other
reorganization. As to any particular shares of Purchaser Common, such shares
shall cease to be
-00-
00
Xxxxxxxxx Xxxxxx when they have been: (a) effectively registered under the
Securities Act and disposed of in accordance with the registration statement
covering them; or (b) distributed to the public through a broker, dealer, or
market maker pursuant to Rule 144 under the Securities Act (or any similar rule
then in force).
"PURCHASER PREFERRED" means (i) the Preferred Stock issued to
Purchasers hereunder; and (ii) any capital stock issued or issuable with respect
to the Preferred Stock referred to in clause (i) above by way of stock dividends
or stock splits or in connection with a combination of shares, recapitalization,
merger, consolidation, or other reorganization. As to any particular shares of
Purchaser Preferred, such shares shall cease to be Purchaser Preferred when they
have been: (a) converted into Common Stock; (b) redeemed by the Company; (c)
effectively registered under the Securities Act and disposed of in accordance
with the registration statement covering them; or (d) distributed to the public
through a broker, dealer, or market maker pursuant to Rule 144 under the
Securities Act (or any similar rule then in force).
"PURCHASER STOCK" means the Purchaser Preferred and the
Purchaser Common.
"QUALIFIED PUBLIC OFFERING" means an underwritten public
offering of shares of Common Stock registered under the Securities Act in which
the aggregate price paid by the public for such shares is at least $15 million.
For purposes of this Agreement, a Qualified Public Offering shall be deemed to
have occurred upon the effectiveness of the registration statement filed with
respect to such offering, subject to any consequences under this Agreement of
such Qualified Public Offering having been deemed to have occurred being
reversed and nullified if the closing of the sale of such shares pursuant to
such offering does not occur within ten business days after such effectiveness.
"RESTRICTED SECURITIES" means: (i) the Stock issued hereunder;
and (ii) any securities issued with respect to the securities referred to in
clause (i) above by way of a stock dividend or stock split or in connection with
the conversion of stock, or in connection with combination of shares,
recapitalization, merger, consolidation, or other reorganization. As to any
particular Restricted Securities, such securities shall cease to be Restricted
Securities when they have: (a) been effectively registered under the Securities
Act and disposed of in accordance with the registration statement covering them;
(b) become eligible for sale pursuant to Rule 144(k) (or any similar provision
then in force) under the Securities Act; or (c) been otherwise transferred and
new certificates for them not bearing the Securities Act legend set forth in
Section 7C have been delivered by the Company in accordance with Section 7C.
Whenever any particular securities cease to be Restricted Securities, the holder
thereof shall be entitled to receive from the Company, without expense, new
securities of like tenor not bearing a Securities Act legend of the character
set forth in Section 7C.
"SALE OF THE COMPANY" means: (i) any sale, transfer, or
issuance or series of sales, transfers, and/or issuances of capital stock of the
Company by the Company or any holders thereof which results in any Person or
group of Persons (as the term "group" is used under the Securities Exchange
Act), other than the holders of Common Stock and Preferred Stock as of the
Closing, owning capital stock of the Company possessing the voting power (under
ordinary circumstances) to elect a majority of the Board; and (ii) any sale or
transfer of all or substantially
-17-
21
all of the assets of the Company and its Subsidiaries in any transaction or
series of transactions (other than sales in the ordinary course of business).
"SECURITIES ACT" means the Securities Act of 1933, as amended,
or any similar federal law then in force.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended, or any similar federal law then in force.
"SECURITIES AND EXCHANGE COMMISSION" includes any governmental
body or agency succeeding to the functions thereof.
"STOCK" means the Company's Preferred Stock and Common Stock.
"SUBSIDIARY" means, with respect to any Person, any
corporation, limited liability company, partnership, association, or other
business entity of which: (i) if a corporation, a majority of the total voting
power of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers, or trustees thereof
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other Subsidiaries of that Person or a combination thereof;
or (ii) if a limited liability company, partnership, association, or other
business entity, a majority of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of that Person or a combination thereof.
For purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a limited liability company, partnership, association, or
other business entity if such Person or Persons shall be allocated a majority of
limited liability company, partnership, association, or other business entity
gains or losses or shall be or control any managing director or general partner
of such limited liability company, partnership, association, or other business
entity. References to a "SUBSIDIARY" of the Company shall be given effect only
at such times as the Company has one or more Subsidiaries.
"TAX" OR "TAXES" means any: (i) federal, state, local, or
foreign income, gross receipts, franchise, estimated, alternative minimum,
add-on minimum, sales, use, transfer, registration, value added, excise, natural
resources, severance, stamp, occupation, premium, windfall profit,
environmental, customs, duties, real property, personal property, capital stock,
social security, unemployment, disability, payroll, license, employee or other
withholding, or other tax, of any kind whatsoever, including any interest,
penalties, or additions to tax or additional amounts in respect of the
foregoing; (ii) liability of the Company for the payment of any amounts of the
type described in clause (i) arising as a result of being (or ceasing to be) a
member of any Affiliated Group (or being included (or required to be included)
in any Tax Return relating thereto); and (iii) liability of the Company for the
payment of any amounts of the type described in clause (i) as a result of any
express or implied obligation to indemnify or otherwise assume or succeed to the
liability of any other person (including, but not limited to, as a successor or
transferee).
-18-
22
"TAX RETURNS" means returns, declarations, reports, claims for
refund, information returns, or other documents (including any related or
supporting schedules, statements, or information) filed or required to be filed
in connection with the determination, assessment, or collection of Taxes of any
party or the administration of any laws, regulations, or administrative
requirements relating to any Taxes.
SECTION 7. MISCELLANEOUS.
7A. EXPENSES. As an inducement for the general partner of
Interprise to provide services to the Company in connection with the
transactions contemplated hereby and as a further inducement for Interprise to
consummate the transactions contemplated hereby, the Company agrees to pay to
the general partner of Interprise a closing fee of $350,000, payable at the
Closing. In addition, the Company shall reimburse Interprise for its reasonable
fees and expenses (including its reasonable fees and expenses of its counsel and
other advisors) which Interprise has incurred in connection with the
transaction. In addition, the Company agrees to pay, and hold each of
Interprise, the Purchasers and the other holders of Purchaser Stock harmless
against liability for the payment of: (i) its reasonable fees and expenses
(including its reasonable fees and expenses of its counsel and other advisors)
arising in connection with the interpretation and enforcement of its rights
under, this Agreement, the Registration Agreement, the other agreements
contemplated hereby and thereby, the Articles of Incorporation and the Company's
Bylaws, and the consummation of the transactions contemplated hereby and thereby
(including, but not limited to, reasonable fees and expenses arising with
respect to any subsequent or proposed acquisitions, sales, mergers, or
recapitalizations by the Company and its Subsidiaries); (ii) the reasonable fees
and expenses incurred with respect to any amendments or waivers (whether or not
the same become effective) under or in respect of this Agreement, the
Registration Agreement, the other agreements contemplated hereby, and thereby
and the Articles of Incorporation and the Company's Bylaws; (iii) reasonable
travel expenses and other reasonable out-of-pocket fees and expenses as have
been or may be incurred by Interprise, its directors, officers and employees in
connection with the transactions contemplated hereby (including, but not limited
to, reasonable fees and expenses incurred in attending Company-related
meetings); and (iv) stamp and other Taxes which may be payable in respect of the
execution and delivery of this Agreement or the issuance, delivery, or
acquisition of any shares of Stock purchased hereunder.
7B. REMEDIES. Each holder of Stock issued hereunder shall have
all rights and remedies set forth in this Agreement and the Articles of
Incorporation and all rights and remedies which such holders have been granted
at any time under any other agreement or contract and all of the rights which
such holders have under any law. Any Person having any rights under any
provision of this Agreement shall be entitled to enforce such rights
specifically, to recover damages by reason of any breach of any provision of
this Agreement, and to exercise all other rights granted by law.
7C. PURCHASERS' INVESTMENT REPRESENTATIONS. Each Purchaser
hereby represents that such Purchaser is acquiring the Restricted Securities
purchased hereunder or
-19-
23
acquired pursuant hereto for its own account with the present intention of
holding such securities for purposes of investment, and that it has no intention
of selling such securities in a public distribution in violation of the federal
securities laws or any applicable state securities laws; provided that nothing
contained herein shall prevent such Purchaser and subsequent holders of
Restricted Securities from transferring such securities in compliance with the
provisions of Section 4 hereof.
Each certificate for Restricted Securities shall be imprinted with a legend in
substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE
ORIGINALLY ISSUED ON ___________ __, 1999, AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE
TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO THE CONDITIONS SPECIFIED IN THE STOCK PURCHASE
AGREEMENT, DATED AS OF NOVEMBER 11, 1999, BETWEEN THE ISSUER
(THE "COMPANY") AND CERTAIN INVESTORS, AND THE COMPANY
RESERVES THE RIGHT TO REFUSE THE TRANSFER OF SUCH SECURITIES
UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH RESPECT TO SUCH
TRANSFER. A COPY OF SUCH CONDITIONS SHALL BE FURNISHED BY THE
COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT
CHARGE."
If the holder of the Restricted Securities delivers to the Company an
opinion of qualified securities counsel reasonably acceptable to the Company
that no subsequent transfer of such Restricted Securities shall require
registration under the Securities Act, however, the Company shall promptly upon
such contemplated transfer deliver new certificates for such Restricted
Securities which do not bear the Securities Act legend set forth in this Section
7C.
7D. CONSENT TO AMENDMENTS. Except as otherwise expressly
provided herein, the provisions of this Agreement may be amended and the Company
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if and when the Company has obtained the written
consent of Interprise, unless or until Interprise no longer has any rights under
this Agreement, at which time the Company need only obtain the written consent
of a successor to the rights and obligations of Interprise. No other course of
dealing between the Company and the holder of any Stock or any delay in
exercising any rights hereunder or under the Articles of Incorporation shall
operate as a waiver of any rights of any such holders. For purposes of this
Agreement, shares of Stock held by the Company or any Subsidiaries shall not be
deemed to be outstanding.
7E. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained herein or made in writing by any party
in connection herewith shall survive
-20-
24
the execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement, regardless of any investigation
made by any Purchaser or on its behalf.
7F. SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, all covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto shall bind and inure to the benefit of
the respective successors and assigns of the parties hereto whether so expressed
or not; provided that this Agreement may not be assigned by the Company without
the consent of Interprise. In addition, and whether or not any express
assignment has been made, the provisions of this Agreement which are for a
Purchaser's benefit as a purchaser or holder of Stock are also for the benefit
of, and enforceable by, any subsequent holder of such Stock. The rights and
obligations of Interprise under this Agreement and the agreements contemplated
hereby may be assigned by Interprise at any time, in whole or in part, to any
investment fund managed by Xxxxxx Technology Management, L.P. or its Affiliates,
or any successor thereto.
7G. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. Where any
accounting determination or calculation is required to be made under this
Agreement or the exhibits hereto, such determination or calculation (unless
otherwise provided) shall be made in accordance with generally accepted
accounting principles, consistently applied, except that, if because of a change
in generally accepted accounting principles the Company would have to alter a
previously utilized accounting method or policy in order to remain in compliance
with generally accepted accounting principles, then such determination or
calculation shall continue to be made in accordance with the Company's previous
accounting methods and policies. All numbers set forth herein which refer to
share prices or numbers or amount will be appropriately adjusted to reflect
stock splits, stock dividends, combinations of shares, and other
recapitalizations affecting the subject class of stock.
7H. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but, if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, then such provision shall be ineffective
only to the extent of such prohibition or invalidity, without invalidating the
remainder of this Agreement.
7I. COUNTERPARTS. This Agreement may be executed
simultaneously in two or more counterparts, any one of which need not contain
the signatures of more than one party, but all such counterparts taken together
shall constitute one and the same Agreement.
7J. DESCRIPTIVE HEADINGS; INTERPRETATION. The descriptive
headings of this Agreement are inserted for convenience only and do not
constitute a substantive part of this Agreement. Whenever required by the
context, any pronoun used in this Agreement shall include the corresponding
masculine, feminine, or neuter forms, and the singular form of nouns, pronouns,
and verbs shall include the plural and vice versa. The use of the word
"INCLUDING" in this Agreement shall be by way of example rather than by
limitation. Reference to any
-21-
25
agreement, document, or instrument means such agreement, document, or instrument
as amended or otherwise modified from time to time in accordance with the terms
thereof, and if applicable hereof. Without limiting the generality of the
immediately preceding sentence, no amendment or other modification to any
agreement, document, or instrument that requires the consent of any Person
pursuant to the terms of this Agreement or any other agreement will be given
effect hereunder unless such Person has consented in writing to such amendment
or modification.
7K. GOVERNING LAW. The corporate law of Delaware shall govern
all issues concerning the relative rights of the Company and its stockholders.
All other questions concerning the construction, validity, and interpretation of
this Agreement and the exhibits and schedules hereto shall be governed by and
construed in accordance with the internal laws of the State of Delaware, without
giving effect to any choice of law or conflict of law provision or rule (whether
of the State of Delaware or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Delaware.
7L. NOTICES. All notices, demands, or other communications to
be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally to the recipient, upon machine-generated acknowledgment of receipt
after transmittal by facsimile, sent to the recipient by reputable express
courier service (charges prepaid) or mailed to the recipient by certified or
registered mail, return receipt requested, and postage prepaid. Such notices,
demands, and other communications shall be sent to the Purchasers and to the
Company at the address indicated below:
If to the Company:
World Commerce Online, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxx
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxxxx Xxxxxxx, P.A.
000 Xxxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
-22-
26
If to any Purchaser:
c/x Xxxxxx Technology Management, L.P.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxx & Xxxxxxx L.L.P.
000 Xxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxx X. Xxxx
Facsimile: (000) 000-0000
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
7M. RIGHTS. This Agreement shall not confer any rights or
remedies upon any Person, other than the parties hereto and their respective
heirs, successors, and permitted assigns.
7N. AMENDMENTS. Any reference contained herein to any
agreement, instrument, or other document shall include any amendments or
modifications made to such agreement, instrument, or other document made from
time to time in accordance with the terms thereof, and if applicable, hereof.
7O. SEVERAL OBLIGATIONS. The obligations of the Purchasers
hereunder shall be several obligations, and not joint and several obligations.
[THIS SPACE INTENTIONALLY LEFT BLANK]
-23-
27
IN WITNESS WHEREOF, the parties hereto have executed this
Stock Purchase Agreement on the date first written above.
WORLD COMMERCE ONLINE, INC.
By: /s/ Xxxxxx Xxxx
--------------------------------------
Xxxxxx Xxxx, Chief Executive Officer
and President
INTERPRISE TECHNOLOGY PARTNERS, L.P.
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------
Xxxxx X. Xxxxxx, Managing Principal
-24-
28
================================================================================
PURCHASE SCHEDULE
================================================================================
This Purchase Schedule relates to that certain Stock Purchase Agreement (the
"PURCHASE AGREEMENT"), dated as of November 11, 1999, by and between Interprise
Technology Partners, L.P. ("INTERPRISE") and World Commerce Online, Inc. (the
"COMPANY"), and sets forth the Purchasers and their respective amounts of the
Company's Series B Convertible Preferred Stock, par value $0.001 per share (the
"PREFERRED STOCK"). Pursuant to Section 1B(ii) of the Purchase Agreement, prior
to the Closing, Interprise may select and add Purchasers (and their respective
amounts) to this Purchase Schedule and may increase the amount of Interprise's
investment in the Purchase Schedule, provided that the maximum number of shares
of Preferred Stock in the Purchase Schedule shall be 5,000,000. Purchases of the
Preferred Stock shall be made subject to the terms and conditions set forth in
the Purchase Agreement. Numbers set forth in this Purchase Schedule shall be
equitably adjusted for subsequent stock splits, stock combinations, stock
dividends and recapitalizations.
-------------------------------------------------------------------------------------------------------------------
PURCHASER NUMBER OF SHARES OF PREFERRED INVESTMENT IN SHARES OF PREFERRED STOCK
STOCK (FOR INTERPRISE, INCLUDING PRINCIPAL OF
BRIDGE LOAN TO BE CONVERTED AT CLOSING)
-------------------------------------------------------------------------------------------------------------------
Interprise 1,250,000 $5,000,000
-------------------------------------------------------------------------------------------------------------------
[INSERT]
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
29
================================================================================
SCHEDULE OF EXCEPTIONS
================================================================================
5D: SUBSIDIARY; INVESTMENTS.
World Commerce Online - Floraplex, Inc., a Florida
corporation, is a wholly-owned subsidiary of the Company.
FPN (Fresh Products Network) B.V., a Dutch Company, is a
wholly-owned subsidiary of the Company.
World Commerce Online B.V., i.o., a Dutch Company being
registered, will be a wholly-owned subsidiary of the Company.
5G: LITIGATION, ETC.
The following lawsuits and/or judgments remain outstanding
against World Commerce Online - Floraplex, Inc., f/k/a World Commerce Online,
Inc., and f/k/a The Floral Foundation, Inc.
1. VISBEEN FLORAL BV, vs. THE FLORAL FOUNDATION, INC., (Orange
County) - Trade credit claim for $20,993.93 through October
17, 1996 plus interest. Suit filed but no adjudication. The
vendor has already received a significant payment from its
credit insurance company on this unpaid obligation.
2. AABLO BV AALSMEER, vs. THE FLORAL FOUNDATION, INC., (Orange
County) - Trade credit claim reduced to a judgment on March
14, 1997 in the amount of $10,728.62 plus interest. The vendor
has already received a significant payment from its credit
insurance company on this unpaid obligation.
3. HOLEX FLOWER BV, vs. THE FLORAL FOUNDATION, INC., (Orange
County) - Trade credit claim for $47,595.52 through December
31, 1997. Suit filed but no adjudication. Company paid the
balance due after the vendor received a credit insurance
payment for unpaid obligation.
5J: ERISA.
Company provides and pays 100% of the premiums for the
following benefits for employees, spouses, and children, through Team America,
its Professional Employer Organization (PEO):
30
Health Insurance through: United Health Care - USA Policy No. 203318
X.X. Xxx 00000
Xxxx Xxxx Xxxx, Xxxx 00000
Tel: (000) 000-0000
Dental and Vision through: Ameritas Policy No. 385191
Group Claim Office
X.X. Xxx 00000
Xxxxxxx, XX 00000
Tel: (000) 000-0000 (Dental)
Tel: (000) 000-0000 (Vision)
Life Insurance through: Guardian Policy No. G334759
Tel: (000) 000-0000
Company also has established bonus plans for the following
employees:
Xxxx Xxxxxxxxx
Xxxx Xxxxxx
Xxxxxx Xxxxxx
Xxxx Xxxxxxxx
Xxxxxx Xxxx
Xxxxx Xxxxxxxxxx
Xxxx Xx Xxxxxxxx
Xxxx Xxxxxxx
Xxxxx Xxxxx
Xxxxxxx Xxxxx
Xxx Xxxxx
Xxxxx Xxxxx
