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EXHIBIT 10.5
OPTION TO MERGE AGREEMENT
INTERCARRIER TRANSPORT CORPORATION
This Option to Merge Agreement is entered into as of June 9, 1999 by and
among MCC ACQUISITION CORP. ("Purchaser"), a wholly owned subsidiary of XXXXXXX
COMMUNICATIONS CORPORATION ("Xxxxxxx"), and the shareholders of INTERCARRIER
TRANSPORT CORPORATION ("ITC") (the "Shareholders"), all of whom are listed on
the signature page of this Agreement, and INTERCARRIER TRANSPORT CORPORATION.
RECITALS
A. Purchaser desires to have an option to merge ITC with a wholly-owned
subsidiary of Purchaser ("Merger Co.").
B. ITC desires to grant to Purchaser an option to merge ITC with Merger
Co.
C. The Shareholders desire to enter into this Agreement to facilitate the
Merger, as described below.
AGREEMENT
In consideration of the recitals and agreements set forth below, Purchaser
and each of the Shareholders agree:
1 Irrevocable Option to Purchase ITC Shares.
(a) The Shareholders hereby grant to Purchaser the continuing option
to merge ITC with a wholly-owned subsidiary of Purchaser, with ITC as the
surviving entity (the "Merger"), pursuant to the applicable laws of Texas and
Iowa, for the aggregate consideration described on Exhibit A. Purchaser may
exercise such option upon ten days' prior written notice to ITC.
(b) The closing (the "Closing") of the Merger shall take place at a
time and place agreed to by ITC and Purchaser. In the absence of such an
agreement, the closing shall be at 10 a.m. at Xxxxxxx'x executive office on the
first business day ten days after the exercise of the option set forth in
section 1(a) above. At the Closing: (i) the Shareholders shall receive
certificates for their proportional share of the Xxxxxxx common stock
constituting the purchase price described on Exhibit A; (ii) the Shareholders
shall deliver to Purchaser certificates for all of the outstanding shares of
capital stock of ITC (the "ITC
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Shares"), duly endorsed for transfer; and (iii) ITC, Purchaser and Merger Co.
shall execute and deliver a merger agreement among them, and articles of merger,
reasonably satisfactory in form and substance to Purchaser.
(c) This option may be exercised by notice to ITC given at any time
prior to August 31, 2001 (the "Option Period") at which time the option shall
expire if not exercised.
(d) The Shareholders and ITC agree that, during the Option Period,
they shall cause ITC to be managed so as to ensure that ITC shall not, unless it
receives the prior written consent of Purchaser: (i) merge or consolidate ITC
with any individual, partnership, corporation, limited liability company,
association, joint stock company, trust, joint venture, unincorporated
organization or a governmental entity or any department, agency or political
division thereof; (ii) sell, lease or otherwise dispose of any of ITC's assets;
(iii) liquidate, dissolve or effect a recapitalization or reorganization of ITC
in any form of transaction; (iv) create, incur, assume, guarantee, be or remain
liable for, contingently or otherwise, or suffer to exist any indebtedness,
other than indebtedness to Xxxxxxx and the indebtedness of ITC presently
existing; or (v) conduct discussions or negotiations with respect to a
transaction of the type described in clauses (i) through (iv) with any party.
Each Shareholder represents and warrants that such Shareholder's holdings of ITC
Shares are accurately described on Exhibit A.
(e) It is intended by the parties that the Merger shall qualify as a
non-taxable reorganization pursuant to section 368(a)(1)(B) of the Internal
Revenue Code of 1986, as amended, and the parties agree to use their reasonable
best efforts to obtain an opinion of tax counsel reasonably acceptable to them
that the Merger so qualifies.
(f) As of the date of this Agreement, 675,000 shares represents
approximately 3.34% of the issued and outstanding common stock of Xxxxxxx on a
fully-diluted basis, but without giving effect to the transactions contemplated
by the Option to Merge Agreement, dated the date hereof, to which Purchaser,
Xxxxxxx and AcNet USA are parties. The parties acknowledge that such percentage
may change, based on transactions Xxxxxxx may conduct, prior to the date of
Closing. The parties also agree that the number of Xxxxxxx shares issuable
hereunder will be adjusted proportionately if Xxxxxxx issues a stock split or
stock dividend or if there is a reverse stock split or similar recapitalization
of the Xxxxxxx common stock.
2. Injunctive Relief. The parties hereto agree that any party may apply
for and obtain from any U.S. state or federal court appropriate injunctive
relief prohibiting the violation of the terms of this Agreement. Such remedy
shall be cumulative and not exclusive.
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3. Waiver. Any party to this Agreement may, at any time prior to the
Closing, waive any of the terms or conditions of this Agreement or agree to an
amendment or modification to this Agreement by an agreement in writing.
4. Notices. All notices and other communications among the parties shall
be in writing and shall be deemed to have been duly given when (i) delivered in
person, (ii) two days after delivery to a reputable overnight courier service,
or (iii) five days after posting in the United States mail having been sent
registered or certified mail return receipt requested:
(a) If to Purchaser, to:
MCC Acquisition Corp.
Attn: Xxxxxx X. Xxxxxxx
0000 00xx Xxxxxx, X.X.
Xxxxx Xxxxxx, XX 00000
Telephone No.: 000-000-0000
(b) If to ITC and/or any Shareholder, to:
X.X. Xxxxxx
c/o AcNet USA, Inc.
000 Xxxxx 00xx Xxxxxx
Xxxxx 000
XxXxxxx, Xxxxx 00000-0000
Telephone No.: 000-000-0000
or to such other address or addresses as the parties may from time to time
designate in writing.
5. Reliance. Each of the parties to this Agreement shall be deemed to
have relied upon the accuracy of the written representations and warranties made
to it in or pursuant to this Agreement, notwithstanding any investigations
conducted by or on its behalf or notice, knowledge or belief to the contrary.
6. Construction; Governing Law. This Agreement shall be construed and
enforced in accordance with the laws of the State of Iowa, U.S.A., without
regard to conflicts of law principles. The parties have participated jointly in
the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any
provisions of this Agreement.
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7. Captions; Counterparts. The captions in this Agreement are for
convenience only and shall not be considered a part of or affect the
construction or interpretation of any provision of this Agreement. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
8. Other Agreements. The parties acknowledge that in connection with the
Merger certain other agreements will be entered into. The parties agree to
negotiate the terms and conditions of such definitive agreements in good faith.
The parties further agree as follows:
(a) Certain of the Shareholders have relationships with other
companies that are active in various technology markets. Accordingly, the
following companies shall not be deemed competitors with ITC in connection with
any noncompetition clauses incorporated in the definitive agreements: Ashton
Systems Corporation; The Ashton Group, Inc.; Texas Facilities Service
Corporation; L&L Consultores S.A. de C.V.; CSX S.A. de C.V.; and ICT Consulting,
Inc., except as Xxxxxxx may consent in writing.
(b) A new Mexican corporation known as AcNet Internet S.A. de C.V.
has been formed to transact value added services in Mexico. This newly-formed
entity has issued 49,999 shares of its 50,000 total authorized shares directly
to ITC.
(c) All authorized and issued shares of AcNet Panama, S.A. are held
by ITC.
9. Irrevocable Proxies; Enforceability. Each Shareholder hereby grants to
Xxxxxxx an irrevocable proxy to vote such Shareholder's ITC Shares in connection
with any shareholder vote required in connection with the Merger. Each
Shareholder acknowledges that such proxy is coupled with an interest by virtue,
among other things, of Xxxxxxx'x loans to AcNet, S.A. de C.V. Each Shareholder
hereby irrevocably waives any statutory dissenter's or appraisal rights in
connection with the Merger. ITC and each Shareholder represent and warrant to
Purchaser and Xxxxxxx that the ITC board of directors has duly approved the
Merger and that this Agreement is a valid and binding obligation of each of
them, enforceable according to its terms, except as such enforceability may be
limited by bankruptcy or creditors' rights laws. ITC and each Shareholder agree
that, without limiting their other remedies, Purchaser and Xxxxxxx may
specifically enforce this Agreement in any court of appropriate jurisdiction.
10. Amendments. This Agreement may be amended or modified in whole or in
part, only by a duly authorized agreement in writing executed in the same manner
as this Agreement and which makes reference to this Agreement.
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11. Publicity. All press releases or other public communications of any
nature whatsoever relating to the transactions contemplated by this Agreement,
and the method of the release for publication thereof, shall be subject to the
prior mutual approval of Purchaser and ITC, which approval shall not be
unreasonably withheld by any party; provided, however, that nothing herein shall
prevent any party from publishing such press releases or other public
communications as such party may consider necessary in order to satisfy such
party's legal or contractual obligations.
IN WITNESS WHEREOF the parties have hereunto caused this Agreement to be
duly executed as of the date first above written.
MCC ACQUISITION CORP.
By:/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx,
Chief Executive Officer
SHAREHOLDERS
/s/ Xxx Xxxxxxx Ashton
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Xxx Xxxxxxx Ashton
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
XXXXXXX COMMUNICATIONS CORPORATION
By:/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx,
Chief Executive Officer
INTERCARRIER TRANSPORT CORPORATION
By:/s/ Xxx Xxxxxxx Ashton
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Xxx Xxxxxxx Ashton,
Chief Executive Officer
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EXHIBIT A
INTERCARRIER TRANSPORT CORPORATION
Xxxxxxx Common Stock Payable as
Purchase Price Total ITC Shares
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Xxx Xxxxxxx Ashton 634,500 940
Xxxxxxx X. Xxxxxxx 40,500 60
