EXHIBIT 10.6
ATLANTICPACIFIC ACQUISITION AGREEMENT
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (which together with the attached exhibits,
are referred to herein as "Agreement") is entered into this 6th day of January
2000, by and between Eagle Wireless International, Inc., a Texas corporation
(the "Buyer") and the shareholders of Atlantic Pacific Communications, Inc., a
Texas corporation ("APCI") who agree to become parties to this Agreement (the
"Selling Shareholders") evidenced by their signatures hereto.
WHEREAS, the Selling Shareholders wish to sell and the Buyer desires to
purchase the APCI Shares, as defined below, in exchange for the Purchase Price,
as defined below, upon the terms and conditions set forth in this Agreement; and
WHEREAS, it is contemplated that the exchange of shares will qualify under
the Internal Revenue Code as a tax free exchange and it is of material
significance and importance to Buyer and APCI that the transaction will qualify
in its entirety, for reorganization, consolidation or similar accounting
treatment.
NOW, THEREFORE, in consideration of and in reliance on the mutual promises
and representations and warranties contained in this Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Selling Shareholders and the Buyer agree as follows:
1. Definitions
1.1 "Associate" means with respect to any person, (i) any member of the
immediate family of such person, (ii) any entity of which such person, or any
member of the immediate family of such person, directly or indirectly, owns any
equity interest, (iii) any entity of which such person, or any member of the
immediate family of such person, serves as a director or executive officer, and
(iv) any entity that directly or indirectly controls, or that is directly or
indirectly controlled by or under common control with, such person or any member
of the immediate family of such person.
1.2 "Buyer Disclosure Documents" means the Buyer Financials (as defined
herein), material agreements and corporate documents, and other information
related to the Buyer material to its operations for the two (2) fiscal years
ending August 31, 1999, and any and all interim data or filings through the date
hereof to be provided by the Buyer pursuant to this Agreement, including but not
limited to the Buyer Financials (as defined herein) and other information
required pursuant to the provisions of the Securities Exchange Act of 1934 (the
"'34 Act") or the Securities Act of 1933, as amended (the "'33 Act") as listed
in Exhibit "A" to this Agreement.
1.3 "Liabilities" means liabilities, obligations, or commitments of any
nature, absolute, accrued, contingent, or otherwise, known or unknown, whether
matured or unmatured.
1
1.4 "APCI Shares" means all the issued and outstanding shares of Atlantic
Pacific Communications, Inc., a Texas corporation, comprising 5,817,000 shares
of common stock, or such number of shares as is delivered.
1.5 "Buyer Shares" means shares of common stock in the Buyer issued in
exchange for the Purchase Price, as defined below.
1.6 "APCI Disclosure Documents" means the APCI Financials (as defined in
Section 5.4 herein) and the documents listed in Exhibit "B" to this Agreement.
1.7 "APCI" Assets means assets (excluding the books and records of the
Selling Shareholders), properties, leases, contracts, agreements, and rights of
APCI of every type and description, real, personal, and mixed, tangible and
intangible, including without limitation, all cash on hand and in banks, trade
accounts receivable, other accounts receivable, deposits, prepaid items,
furniture and fixtures, office equipment and supplies, real property and
improvements, leases and leasehold improvements, trademarks, other tangible
properties, and its business as a going concern, goodwill and proprietary
computer software operating system, as contained in the APCI Financials and more
fully described in Exhibit "C" hereto.
1.8 "Person" means any individual, corporation, professional corporation,
limited partnership, association, or any other legal entity through which an
individual or business might organize himself or itself.
1.9 "Subsidiary" means any corporation, joint venture, or other entity in
which either the Buyer, the Selling Shareholders, or any other person directly
or indirectly own any voting or equity interest.
1.10 "Tax" or "Taxes" mean any federal, state, local, or foreign income,
gross receipts, profits, franchise, doing business, transfer, sales, use,
payroll, occupation, real or personal property, excise and similar taxes
(including interest, penalties, or additions to such taxes).
1.11 "Tax Returns" or "Tax Reports" mean all returns, reports, estimates,
information returns, and statements of any nature with respect to Taxes.
2. Purchase and Sale of APCI Shares
2.1 Purchase and Sale. Upon the terms and subject to the conditions of
this Agreement, on the Closing Date, as defined in Paragraph 3.1, the Selling
Shareholders agree to sell and transfer the APCI Shares to the Buyer and the
Buyer agrees to purchase the APCI Shares for the consideration set forth in this
Agreement.
2.2 Purchase Price. In exchange for the APCI Shares, the Buyer shall issue
and deliver to the Selling Shareholders:
2.2.1 Three Million Five Hundred Eighteen Thousand Nine Hundred Nineteen
(3,518,919) shares of the Buyer's common stock as follows:
2
(A) Five Hundred Eighteen Thousand Nine Hundred Nineteen shares at
Closing.
(B) up to Three Million shares, collectively to Xxxxxxx Xxxxxxx
and Xxxxxxx Xxxxxxx, based upon the "Earn Out" Goals set forth
in Exhibit D.
2.3 Adjustment to Purchase Price. In the event one or more of the Selling
Shareholders listed on the signature page hereof are unable to deliver any of
the APCI Shares, the aggregate number of shares shall be decreased by the
percentage of APCI Shares which cannot be delivered at Closing.
3. Closing
3.1 Date and Place. The closing of the delivery and transfer of the APCI
Shares (the "Closing") shall occur on a date ("Closing Date") to be mutually
agreed upon by the Selling Shareholders and the Buyer after exchange of all
books, records, financial information, documents, and other materials reasonably
deemed necessary to completion of the transaction contemplated under this
Agreement. Exchange of documents under this Agreement shall begin as soon as
possible after execution. In any case, the Closing Date shall be no later than
January 15,2000, unless agreed upon by the parties, and the effective date of
this transaction shall be the date of Closing (the "Effective Date").
3.2 Transactions and Document Exchange at Closing. At the Closing, the
following transactions shall occur and documents shall be exchanged, all of
which shall be deemed to occur simultaneously:
(A) By the Selling Shareholders. The Selling Shareholders will deliver, or
cause to be delivered, to the Buyer:
(1) The documents necessary to transfer the APCI Shares to the Buyer
pursuant to this Agreement, in proper form and substance reasonably
acceptable to the Buyer;
(2) The Certificate of Representations and Warranties executed by the
President of APCI, as defined in Paragraph 7.1 ;
(3) The opinion of counsel as set forth in Paragraph 7.6;
(4) Such other documents, instruments, and/or certificates, if any, as
are required to be delivered pursuant to the provisions of this
Agreement, or which are reasonably determined by the parties to be
required to effectuate the transactions contemplated in this
Agreement, or as otherwise may be reasonably requested by the Buyer
to further the intent of this Agreement;
3
(5) Audited financial statements of APCI dated as of its most recent
year-end prior to the Closing Date covering all operations since the
inception of APCI. Such financial statements shall be audited by a
certified public accounting firm. The Selling Shareholders shall
also deliver or cause to be delivered all books and records of APCI
to the extent available and necessary to perform an audit of its
book as of its most recent month end prior to the Closing Date in
accordance with Regulation S-X, which books and records shall
present fairly the financial condition and results of operations of
APCI since the date of its audited financial statements, in
accordance with generally accepted accounting principles applied on
a basis consistent with prior accounting periods.
(6) A certificate dated within 30 days of the Closing Date from the
Secretary of State of Texas to the effect that APCI is in good
standing in the State of Texas;
(7) All federal and state income payroll tax and sales tax returns filed
by APCI and all correspondence related thereto;
(8) The names for issuance of the shares.
(B) By the Buyer. The Buyer will deliver, or cause the following to be
delivered, to the Selling Shareholders:
(1) Stock certificate(s) in the name of the Selling Shareholders
aggregating 518,919 Buyer Shares.
(2) The Buyer Certificate of Representations and Warranties, as defined
in Paragraph 6.1;
(3) A certificate dated at or within 30 days of the date of the Closing
from the Secretary of State of Texas to the effect that the Buyer is
a corporation duly organized, validly existing, and in good standing
under the laws of the State of Texas;
(4) The opinion of counsel as set forth in Paragraph 6.7;
(5) Such other documents, instruments, and/or certificates, if any, as
are required to be delivered pursuant to the provisions of this
Agreement, or which are reasonably determined by the parties to be
required to effectuate the transactions contemplated in this
Agreement, or as otherwise may be reasonably requested by the
Selling Shareholders in furtherance of the intent of this Agreement.
3.3 Post-Closing Documents. From time to time after the Closing, upon the
reasonable request of any party, the party to whom the request is made shall
deliver such other and further documents, instruments, and/or certificates as
may be necessary to more fully vest in the requesting party the consideration
provided for in this Agreement or to enable the requesting
4
party to obtain the rights and benefits contemplated by this Agreement,
including but not limited to delivery of records of all books and records of
APCI since inception.
4. Representations and Warranties of the Buyer
The Buyer represents and warrants to the Selling Shareholders that:
4.1 Organization and Authority. The Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Texas, with the corporate power and authority to carry on its business as now
being conducted. The execution and delivery of this Agreement and the
consummation of the transactions contemplated in this Agreement have been, or
will be prior to closing, duly authorized by all requisite corporate actions on
the part of the Buyer. This Agreement has been duly executed and delivered by
the Buyer and constitutes the valid, binding, and enforceable obligation of the
Buyer.
4.2 Ability to Carry Out Agreement. To the best of the Buyer's knowledge
and belief, the execution and performance of this Agreement will not violate, or
result in a breach of, or constitute a default in, any provisions of applicable
law, any agreement, instrument, judgment, order or decree to which the Buyer is
a party or to which the Buyer is subject. No consents of any persons under any
contract or agreement required to be disclosed pursuant to this Agreement are
required for the execution, delivery, and performance by the Buyer of this
Agreement.
4.3 The Shares. The Shares to be issued pursuant to this Agreement will be
issued at Closing, free and clear of liens, claims, and encumbrances, and the
Buyer has all necessary right and power to issue the Shares to the Selling
Shareholders as provided in this Agreement without the consent or approval of
any person, firm, corporation, or governmental authority.
4.4 Capitalization of the Buyer. The capitalization of the Buyer, as of
the date hereof, consists of 100,000,000 shares of $.001 par value Common Stock,
14,188,253 of which are issued and outstanding and 5,000,000 shares of Preferred
Stock, none of which are issued and outstanding. All issued and outstanding
shares are legally issued, fully paid, and non-assessable, and are not issued in
violation of the preemptive or other right of any person.
4.5 Financial Information. The Buyer has provided to the Selling
Shareholders, or will provide prior to Closing, copies of its Annual Report on
Form 10-K and/or 10-KSB for the two (2) years ending at or prior to August 31,
1999 and the interim quarterly financial statements on Form 10-QSB. The
quarterly financial statements and such Annual Reports, and all other
information included in such reports, shall be referred to as the "Buyer
Financials". The Buyer has no obligations or liabilities (whether accrued,
absolute, contingent, liquidated or otherwise, including without limitation any
tax liabilities due or to become due) which are not fully disclosed and
adequately provided for in the Buyer Financials, excepting current liabilities
incurred and obligations under agreements entered into in the usual and ordinary
course of business since the date of the Buyer Financials, none of which
(individually or in the aggregate) are material except as expressly indicated in
the Buyer Financials. The Buyer is not a guarantor or otherwise contingently
liable for any material amount of such indebtedness. Except as indicated in the
Buyer Financials or the Buyer Disclosure Documents, there exists no default
5
under the provisions of any instrument evidencing such indebtedness or of any
agreement relating thereto.
4.6 Litigation. To the best knowledge and belief of the Buyer, except as
disclosed pursuant to this Agreement, there is neither pending nor threatened,
any action, suit or arbitration to which its property, assets or business is or
is likely to be subject and in which an unfavorable outcome, ruling or finding
will or is likely to have a material adverse effect on the condition, financial
or otherwise, or properties, assets, business or operations, which would create
a material liability on the part of the Buyer, or which would conflict with this
Agreement or any action taken or to be taken in connection with it.
4.7 Tax Matters. The Buyer has filed or will file all federal, state, and
local income, excise, property, and other tax returns, forms, or reports, which
are due or required to be filed by it and has paid, or made adequate provision
for payment of all taxes, interest, penalty fees, assessments, or deficiencies
shown to be due or claimed to be due or which have or may become due on or in
respect to such returns or reports.
4.8 Contracts. Except as disclosed pursuant to this Agreement, there are
no contracts, actual or contingent obligations, agreements, franchises, license
agreements, or other commitments between the Buyer and the Buyer or other third
parties which are material to the business, financial condition, or results of
operation of the Buyer, taken as a whole. For purposes of the preceding
sentence, the term "material" refers to any obligation or liability which by its
terms calls for aggregate payments of more than $25,000.
4.9 Material Contract Breaches; Defaults. To the best of the Buyer's
knowledge and belief, except as disclosed in the Buyer Financials, it has not
materially breached, nor has it any knowledge of any pending or threatened
claims or any legal basis for a claim that it has materially breached, any of
the terms or conditions of any agreements, contracts, or commitments to which it
is a party or is bound and which might give rise to a claim by anyone against
the Buyer Shares. To the best of its knowledge and belief, the Buyer is not in
default in any material respect under the terms of any outstanding contract,
agreement, lease, or other commitment which might give rise to a claim against
the Buyer Shares, and there is no event of default or other event which, with
notice or lapse of time or both, would constitute a default in any material
respect under any such contract, agreement, lease, or other commitment which
might give rise to a claim against the Buyer Shares in respect of which the
Buyer has not taken adequate steps to prevent such a default from occurring.
4.10 Securities Laws. The Buyer is a public company and represents that,
except as disclosed in the Buyer Disclosure Documents and in Buyer Financials,
it has no existing or threatened liabilities, claims, lawsuits, or basis for the
same with respect to its original stock issuance to its founders, its initial
public offering, any other issuance of stock, or any dealings with its
stockholders, the public, the brokerage community, the SEC, any state regulatory
agencies, or other persons. The Buyer is required to file periodic reports under
Section 12(g) of the '34 Act. The Buyer represents that all reports required to
be filed pursuant to the '34 Act and any applicable U.S. state "Blue Sky" laws
have been filed.
6
4.11 Brokers. The Buyer has not agreed to pay any brokerage fees, finder's
fees, or other fees or commissions with respect to the transactions contemplated
in this Agreement which could give rise to a claim against the Shares, the APCI
Shares, or any portion thereof. To the best of the Buyer's knowledge, no person
or entity is entitled, or intends to claim that it is entitled, to receive any
such fees or commissions in connection with such transactions. The Buyer further
agrees to indemnify and hold harmless the other parties to this Agreement
against liability to any other broker claiming to act on behalf of the Buyer.
4.12 Corporate Records. Copies of all corporate books and records,
including, but not limited to, any other documents and records of the Buyer
relating to the proceeding of its shareholders and directors will be provided to
APCI prior to Closing at the request of APCI. All such records and documents are
and will be complete, true, and correct.
4.13 Approvals. Except as otherwise provided in this Agreement, no
authorization, consent, or approval of, or registration or filing with, any
governmental authority or any other person is required to be obtained or made by
the Buyer in connection with the execution, deliver, or performance of this
Agreement.
4.14 Full Disclosure. The information concerning the Buyer, set forth in
this Agreement, and in the Buyer Disclosure Documents, is, to the best of the
Buyer's knowledge and belief, complete and accurate in all material respects and
does not contain any untrue statement of a material fact or omit to state a
material fact required to make the statements made, in light of the
circumstances under which they were made, not misleading.
4.15 Date of Representations and Warranties. Each of the representations
and warranties of the Buyer set forth in this Agreement is true and correct at
and as of the Closing Date, with the same force and effect as though made at and
as of the Closing Date, except for changes permitted or contemplated by this
Agreement.
5. Representations and Warranties of the Selling Shareholders
The Selling Shareholders represent and warrant to the Buyer that:
5.1 Organization and Authority. APCI is a corporation duly organized,
validly existing and in good standing under the laws of the State of Texas, with
the power and authority to carry on its business as now being conducted. In
addition, APCI is duly qualified to do business in each jurisdiction in which
the nature of its business requires it to be so qualified, except to the extent
that the failure to so qualify does not have a material adverse effect on the
business of APCI, taken as a whole. The execution and delivery of this Agreement
and the consummation of the transactions contemplated in this Agreement have
been, or will be prior to closing, duly authorized by all requisite action on
the part of APCI as required, or otherwise, to the extent, if any, that such
authorizations are necessary. This Agreement has been duly executed and
delivered by APCI and constitutes the valid, binding, and enforceable obligation
of APCI, subject to equitable principles and laws of bankruptcy and similar
laws.
7
5.2 Ability to Carry out Agreement. To the best of the Selling
Shareholders' knowledge and belief, the execution and performance of this
Agreement will not violate, or result in a breach of, or constitute a default
in, any provisions of applicable law, any agreement, instrument, judgment, order
or decree to which APCI is a party or to which APCI is subject, other than such
violations, breaches, or defaults which, singly or in the aggregate, do not have
a material adverse effect on its business as a whole or on the enforceability or
validity of this Agreement. No consents of any persons under any contract or
agreement required to be disclosed or disclosed pursuant to this Agreement are
required for the execution, delivery, and performance by the Selling
Shareholders of this Agreement.
5.3 Capitalization of APCI. As of the date of execution of this Agreement,
the capitalization of APCI is comprised of one class of capital stock consisting
of _________________________ shares of Common Stock, without par value, of which
5,817,000 shares were issued and are presently outstanding and held, of record,
by the Selling Shareholders in the amounts opposite their names on the signature
page hereto. All of the issued and outstanding shares are duly authorized,
validly issued, fully paid, and have been offered, issued, sold, and delivered
by APCI in material compliance with all applicable federal and state securities
laws.
5.4 Financial Information. The Selling Shareholders have provided to the
Buyer, or will provide prior to Closing, financial statements of APCI for all
fiscal years ended since the inception of APCI and reports for such interim
periods ending since the latest fiscal year ended, and such other documents and
information relating to APCI's current financial condition including but not
limited to its purchase, operation and disposition, if any, of any APCI assets
and liabilities. Such financial statements and other financial information shall
be referred to as the "APCI Financials". If not audited, the Selling
Shareholders represent that all financial statements and reports included in the
APCI Financials have been prepared from the books and records of APCI (subject
to normal year-end adjustments) and present fairly the financial condition of
APCI and the results of their operations for the periods therein specified, all
in accordance with generally accepted accounting principles applied on a basis
consistent with prior accounting periods. Except as set forth in the APCI
Financials, APCI has no obligations or liabilities (whether accrued, absolute,
contingent, liquidated or otherwise, including without limitation any tax
liabilities due or to become due) which are not fully disclosed and adequately
provided for, excepting current liabilities incurred and obligations under
agreements entered into in the usual and ordinary course of business since
September 30, 1995, none of which (individually or in the aggregate) are
material. APCX is not a guarantor or otherwise contingently liable for any
material amount not disclosed in the APCI Financials, nor does there exist any
default under the provisions of any instrument evidencing any indebtedness of
APCI or of any agreement relating thereto.
5.5 Conduct of Business. Since September 30, 1999, except as disclosed in
the APCI Disclosure Documents, APCI has not (i) discharged or satisfied any
liens other than those securing, or paid any obligation or liability other than,
current liabilities shown on the APCI Financials and current liabilities
incurred since the date of the APCI Financials, in each case in the usual or
ordinary course ofbusiness, (ii) mortgaged, pledged or subjected to lien any of
their tangible or intangible assets (other than purchase money liens incurred in
the ordinary course of business for such assets not yet paid for), (iii) sold,
transferred or leased any of their assets
8
except in the usual and ordinary course of business, (iv) canceled or
compromised any material debt or claim, or waived or released any right of
material value, (v) suffered any physical damage, destruction or loss (whether
or not covered by insurance) materially adversely affecting its properties,
business or prospects, (vi) entered into any transaction other than in the usual
and ordinary course of business, except as contemplated by this Agreement, (vii)
encountered any labor difficulties or labor union organizing activities, (viii)
made or agreed to any wage or salary increase or entered into any employment
agreement, (ix) issued or sold any securities or granted any options with
respect thereto, except as disclosed pursuant to this Agreement, (x) amended its
Articles of Incorporation, (xi) agreed to declare or pay any distributions with
respect to their outstanding capital stock, or (xii) suffered or experienced any
change in, or condition affecting, the condition (financial or otherwise) of
their properties, assets, liabilities, business, operations or prospects, other
than changes, events or conditions in the ordinary course of their business none
of which has (individually or in the aggregate) been materially adverse, except
as disclosed in the APCI Financials or Disclosure Documents.
5.6 Litigation. To the best knowledge and belief of APCI, except as
disclosed in the APCI Disclosure Documents, there is neither pending nor
threatened, any action, suit or arbitration to which APCI's property, assets or
business is or is likely to be subject and in which an unfavorable outcome,
ruling or finding will or is likely to have a material adverse effect on the
condition, financial or otherwise, or properties, assets, business or operations
of APCI, or create any material liability on the part of APCI or conflict with
this Agreement or any action taken or to be taken in connection herewith.
5.7 Tax Matters. APCI has filed all federal, state and local income,
payroll and sales tax returns and reports which are due or required to be filed
by it, and, except as disclosed in the APCI Disclosure Documents, has paid, or
made adequate provision for the payment of, all taxes, interest, penalties,
assessments or deficiencies shown to be due or claimed to be due or which have
or may become due on or in respect to such tax returns and reports. Such federal
and state income, payroll and sales tax returns, to the best of the Selling
Shareholders' knowledge and belief, have not been audited and are not being
audited by any governmental authority.
5.8 Contracts and Options. Except as disclosed in the APCI Disclosure
Documents, there are no contracts, actual or contingent obligations, agreements,
franchises, license agreements, or other commitments to which APCI is a party or
by which it or any of its properties or assets are bound which are material to
the business, financial condition, or its results of operation. For purposes of
the preceding sentence, the term "material" refers to any obligation or
liability which by their terms calls for aggregate payments of more than
$25,000.
5.9 Material Contract Breaches; Defaults. Except as disclosed by the APCI
Financials or as reserved for therein, to the best of their knowledge and belief
of the Selling Shareholders, APCI has not materially breached, nor have they any
knowledge of any pending or threatened claims or any legal basis for a claim
that APCI has materially breached, any of the terms or conditions of any
agreements, contracts, or commitments to which they are a party or is bound and
which are material to the business, financial condition, or results of operation
of APCI, taken as a whole. Except as disclosed by the APCI Financials or as
reserved for therein, to the best of their knowledge and belief, neither the
Selling Shareholders nor APCI are not in default in any
9
material respect under the terms of any outstanding contract, agreement, lease,
or other commitment which is material to the business, operations, properties,
assets, or condition of APCI, and there is no event of default or other event
which, with notice or lapse of time or both, would constitute a default in any
material respect under any such contract, agreement, lease, or other commitment
in respect of which APCI has not taken adequate steps to prevent such a default
from occurring.
5.10 Selling Shareholders. Exhibit "F" hereto accurately sets forth the
identity of and their relationship with APCI, and the names, and titles of the
persons serving as directors and officers of a Selling Shareholder, if any such
Selling Shareholder is a corporation.
5.11 Employee and Labor Matters. The APCI Disclosure Documents accurately
set forth the names, positions, and annual salary of each person employed by
APCI, including officers, whose annual salary including bonuses exceeds Ten
Thousand Dollars ($10,000). Except as disclosed in the APCI Disclosure
Documents, APCI has no employment agreement that cannot be canceled on thirty
(30) days notice, or collective bargaining agreement covering any of its
employees and has encountered no material labor difficulties. The APCI
Disclosure Documents also set forth a complete and accurate list of all employee
benefit plans, including all profit sharing, bonus, stock, pension, or similar
plans to which APCI is a party or by which APCI is bound. The Selling
Shareholders will deliver or cause to be delivered to the Buyer prior to Closing
complete and correct copies of all the agreements, plans, or other written
materials identified in the APCI Disclosure Documents. There is no existing
default by under any of the agreements, plans, or arrangements identified in the
APCI Disclosure Documents, and there exists no condition or circumstance which,
with notice or lapse of time or both, would constitute such a default. Except as
disclosed in the APCI Disclosure Documents, there is no pending or threatened
labor dispute, strike, slowdown, or work stoppage, no unfair labor practice
pending against APCI before the National Labor Relations Board, APCI is not
engaged in any unfair labor practice, and there is no grievance or arbitration
proceeding pending against, or threatened to be asserted or commenced against
APCI under any collective bargaining agreement or other labor contract. All
Taxes relating to APCI which APCI is required by law to withhold or collect have
been duly withheld or collected and have been timely paid over to the proper
authorities to the extent due and payable.
5.12 Real Properties. Except as disclosed pursuant to this Agreement, APCI
has good and marketable fee simple title to all of the real properties owned by
it, including without limitation those reflected in the APCI Financials, free
and clear of any liens or encumbrances except for current local property taxes
not yet payable and any utility or other easements that do not and will not
affect operations upon or about such real properties or the economic value or
marketability thereof.
5.13 Other Properties and Equipment. Except as disclosed pursuant to this
Agreement, APCI has good title, subject to no security interests, liens,
encumbrances, or claims of others, to all structures, facilities, machinery and
equipment, supplies, raw materials, vehicles, tools, parts, office equipment,
furniture, furnishings, and all items of personal property and equipment in, at,
on or about such real properties owned or leased by it, or used or necessary in
its operations or business, including without limitation those reflected in the
APCI Financials. All such structures,
10
facilities, equipment, machinery, vehicles and tools are in reasonably good
operating condition and repair and are sufficient to enable APCI to carry on its
operations.
5.14 Trademarks. APCI does not own or use any trademark, service xxxx,
trade name, copyright or patent, or any registration or application for
registration of any of the foregoing, and (ii) to the best of APCI's knowledge
and belief, it has not infringed or is infringing upon any trademark, service
xxxx, trade name, copyright, or patent that is owned or used by any other
person.
5.15 Leaseholds and Executory Contracts. Except as disclosed pursuant to
this Agreement, each and every lease or executory contract to which APCI is a
party is valid and enforceable. APCI has not received any notice of default by
it under the terms of any such lease or executory contract which default remains
uncured, and it is not in material breach or default by them under the terms of
any such lease or executory contract, except as disclosed on the APCI Disclosure
Documents.
5.16 Investments. APCI has provided, or will provide to the Buyer, prior
to Closing, a complete and accurate description of the APCI Assets, including
but not limited to a list of all investments of APCI, which accurately sets
forth the nature of APCI's interest or ownership in each investment and, if
applicable, the jurisdictions in which the respective investments have been
incorporated, organized, and currently doing business. Except for the entities
identified on the list to be provided to the Buyer, there is no corporation,
limited partnership, joint venture, association, trust, or other entity or
organization which APCI directly or indirectly controls or in which APCI
directly or indirectly owns any equity interest or any other interest.
5.17 Permits. Except as disclosed pursuant to this Agreement, APCI has
obtained and maintained in full force and effect all franchises, permits,
certificates, authorizations, licenses and other similar authority required by
law or governmental regulations from all applicable federal, state or local
authorities and any other regulatory authorities, which are necessary for the
conduct of its business as now being conducted by it and as planned to be
conducted, and it is not in default or noncompliance in any material respect
under any of such franchises, permits, certificates, authorizations, licenses or
other similar authority.
5.18 Compliance with Laws, Rules, Etc. The capitalization, business and
operations of APCI is and has been conducted in compliance with all applicable
federal, state, and local laws, rules and regulations, and it is not in
violation of any terms of any mortgage, indenture, contract, agreement,
instrument, judgment, decree, order, statute, rule or regulation to which it is
subject, except to the extent any violation or noncompliance would not
materially and adversely affect its business, operations, properties, assets, or
financial condition, except to the extent that any violation or noncompliance
would not result in the incurring of any material liability. Further, APCI not
been notified by any regulatory or governmental authority that it is now in
violation of any law, rule, regulation, ordinance, or order.
5.19 Conflict of Interest Transactions. Except as disclosed in the APCI
Disclosure Documents, no past or present shareholder or employee of APCI, or any
affiliate, and no
11
Associate of any past or present shareholder or employee of APCI or any
affiliate, (i) is indebted to, or has any financial, business, or contractual
relationship or arrangement with APCI or any affiliate, (ii) has any direct or
indirect interest in any property, asset, or right which is owned or used by
APCI or any affiliate, or (iii) has been directly or indirectly involved in any
transaction with APCI or any affiliate.
5.20 Corporate Records. Copies of all corporate books and records,
including but not limited to stock transfer ledgers, and any other documents and
records of APCI will be provided to the Buyer at Closing. All such records and
documents are complete, true, and correct.
5.21 Banking Records. A true, correct, and complete list of the names of
each bank in which APCI has an account and the names of all persons authorized
to draw thereon will be delivered to the Buyer as part of the APCI Disclosure
Documents; APCI has no safe deposit box.
5.22 Brokers. APCI has not agreed to pay any brokerage fees, finder's
fees, or other fees or commissions with respect to the transactions contemplated
in this Agreement which could give rise to a claim against the Shares, the APCI
Shares, or any portion thereof. To the best of the APCI's knowledge, no person
or entity is entitled, or intends to claim that it is entitled, to receive any
such fees or commissions in connection with such transactions. APCI further
agrees to indemnify and hold harmless the other parties to this Agreement
against liability to any other broker claiming to act on behalf of APCI.
5.23 Approvals. Except as otherwise provided in this Agreement, to the
best knowledge and belief of the Selling Shareholders, no authorization,
consent, or approval of, or registration or filing with, any governmental
authority or any other person is required to be obtained or made by the Selling
Shareholders or APCI in connection with the execution, delivery, or performance
of this Agreement.
5.24 Full Disclosure. The information concerning APCI set forth in this
Agreement, in the APCI Disclosure Documents, and in the APCI Financials is, to
the best of the Selling Shareholders' knowledge and belief, complete and
accurate in all material respects and does not contain any untrue statement of a
material fact or omit to state a material fact required to make the statements
made, in light of the circumstances under which they were made, not misleading.
5.25 Date of Representations and Warranties. Each of the representations
and warranties of the Selling Shareholders set forth in this Agreement are joint
and several, and are true and correct at and as of the Closing Date, with the
same force and effect as though made at and as of the Closing Date, except for
changes permitted or contemplated by this Agreement.
6. Conditions Precedent to Obligations of the Selling Shareholders
All obligations of the Selling Shareholders under this Agreement are
subject to the fulfillment, prior to or as of the Closing Date, of each of the
following conditions:
6.1 Representations and Warranties. The representations and warranties by
the Buyer set forth in this Agreement shall be true and correct at and as of the
Closing Date, with the same
12
force and effect as though made at and as of the Closing Date, except for
changes permitted or contemplated by this Agreement. The Buyer shall deliver on
the Closing Date a certificate to this effect, referred to as the Buyer
Certificate of Representations and Warranties.
6.2 No Breach or Default. The Buyer shall have performed and complied with
all covenants, agreements, and conditions required by this Agreement to be
performed or complied with by it prior to or at the Closing.
6.3 Action to Pay Purchase Price. The Buyer shall have taken all corporate
and other action necessary to issue and deliver the shares representing the
Purchase Price to the Selling Shareholders pursuant to this Agreement.
6.4 Buyer Disclosure Documents. Before Closing, the Buyer will have
delivered to the Selling Shareholders, or caused the delivery of, the Buyer
Disclosure Documents.
6.5 Approval of Other Instruments and Documents by the Selling
Shareholders. All instruments and documents delivered to the Selling
Shareholders pursuant to the provisions of this Agreement, shall be reasonably
satisfactory to their legal counsel.
6.6 [Deleted]
6.7 Opinion of Counsel. The Buyer shall have delivered to the Selling
Shareholders an opinion of counsel dated the Closing Date to the effect that:
(A) The Buyer is duly organized, validly existing, and in good standing
under the laws of the United States, State of Texas.
(B) The Buyer has the corporate power to conduct business and,
specifically, to carry on its business as now being conducted and is
duly qualified to do business in the United States, State of Texas.
(C) All corporate actions and director approvals have been properly
obtained and completed by the Buyer, to the extent, if any, that
they are necessary, for all actions required under this Agreement
prior to Closing.
(D) This Agreement has been duly authorized, executed, and delivered by
the Buyer and is a valid and binding obligation of the Buyer and, in
this regard, the Buyer shall provide the Selling Shareholders at
Closing with a certified copy of the resolution or resolutions of
the Board of Directors of the Buyer, approving and authorizing the
issuance by the Buyer of the shares upon the terms and conditions
herein set forth.
7. Conditions Precedent to Obligations of the Buyer
All obligations of the Buyer under this Agreement are subject to the
fulfillment, prior to or as of the Closing Date, of each of the following
conditions:
13
7.1 Representations and Warranties. The representations and warranties
executed by the President of APCI on behalf of the Selling Shareholders set
forth in this Agreement shall be true and correct at and as of the Closing Date,
with the same force and effect as though made at and as of the Closing Date,
except for changes permitted or contemplated by this Agreement. The Selling
Shareholders shall cause to be delivered on the Closing Date the certificate to
this effect, referred to in this Agreement as the Certificate of Representations
and Warranties executed by the President and Chief Executive Officer of APCI.
7.2 No Breach or Default. The Selling Shareholders shall have performed
and complied with all covenants, agreements, and conditions required by this
Agreement to be performed or complied with by them prior to or at the Closing.
7.3 Action to Transfer APCI Shares. The Selling Shareholders shall have
taken all action necessary to transfer the APCI Shares to the Buyer pursuant to
this Agreement. In this regard, the conveyance(s) of the APCI Shares shall
contain such good and sufficient stock powers, and other good and sufficient
instruments of sale, conveyance, transfer, and assignment, in form and substance
reasonably satisfactory to the Buyer's counsel and with all requisite
documentary stamps, if any, affixed, as shall be required or as may be
appropriate in order effectively to vest in the Buyer's good, indefeasible, and
marketable title to the APCI Shares free and clear of all liens, mortgages,
conditional sales, and other title retention agreements, pledges, assessments,
covenants, restrictions, reservations, easements, and all other encumbrances of
every nature.
In addition to the conveyance and delivery of the APCI Shares, the Selling
Shareholders shall have taken all action necessary to deliver all of APCI's
corporate books and records, including but not limited to its files, documents,
papers, agreements, formulas, books of account, and records pertaining to its
business, and evidence of compliance with the Texas Corporations Code with
respect to its securities, if required and requested by the Buyer's counsel.
7.4 APCI Financials. Before Closing, the Selling Shareholders will have
delivered the APCI Financials and all APCI Disclosure Documents to the Buyer.
The APCI Disclosure Documents shall specifically include income statements
related to the operations of APCI's business interests up to and including
December 31, 1998 and as updated through the quarters ending March 31, 1999,
June 30, 1999 and September 30, 1999.
7.5 Approval of Other Instruments and Documents by the Buyer. All
instruments and documents delivered to the Buyer pursuant to the provisions of
this Agreement shall be reasonably satisfactory to the Buyer and its legal
counsel.
7.6 Opinions, Affidavits and Declarations by the Selling Shareholders. The
Selling Shareholders shall have delivered to the Buyer evidence reasonably
satisfactory to the Buyer, and their counsel and auditors, dated as at the
Closing Date, that:
(A) APCI is duly organized, validly existing, and in good standing under
the laws of Texas and that the APCI Shares are free and clear of any
and all liens,
14
encumbrances or contingent liabilities except as disclosed pursuant
to this Agreement.
(B) APCI has the corporate power to carry on its business as now being
conducted and is duly qualified to do business in Texas and in any
qther jurisdiction where required or where the non-qualification to
do business would have a material adverse affect on the value of its
business.
(C) All action and approvals required in connection to the transfer of
the APCI Shares to the Buyer have been properly taken, completed or
obtained by the Selling Shareholders, to the extent, if any, that
they are necessary.
(D) This Agreement has been duly authorized, executed, and delivered by
the Selling Shareholders and is a valid and binding obligation of
the Selling Shareholders.
7.7 Employment Agreements. APCI shall have entered into employment
agreements and non-competition agreements with key employees identified by
Buyer.
7.8 Release of Claims. The Selling Stockholders shall have executed and
delivered the Release of Claims Against APCI attached hereto as Exhibit F.
8. Covenants and Agreements of the Selling Shareholders
Up to and including the Closing Date, the Selling Shareholders covenant
that:
8.1 Access and Information. After the execution of this Agreement, the
Selling Shareholders will cause APCI to permit the Buyer to have reasonable
access to all information necessary to verify the representations and warranties
made herein. After the Closing, the Selling Shareholders will cause APCI to
continue to permit the Buyer access to such additional documentation and
information as is reasonably necessary to completion of the transactions
contemplated under this Agreement.
8.2 Conduct of Business as Usual. Up until the Closing Date, the Selling
Shareholders shall insure that APCI's operations shall be conducted only in the
usual and ordinary course, and that no change will be made to such operations
which might adversely affect the value of the APCI Shares to be transferred to
the Buyer.
8.3 Best Efforts. The Selling Shareholders shall use their best efforts to
fulfill all conditions of the Closing including the timely solicitation of
affirmative consent of all third parties necessary to effect a Closing under
this Agreement.
8.4 Assent to Sale of APCI Shares. In the event the sale of APCI Shares is
consummated, then each of the Selling Shareholders agrees to such sale and
waives, surrenders, and agrees not to exercise any rights which such Selling
Shareholders might have to purchase any APCI Shares or have APCI redeem any APCI
Shares.
15
9. Covenants and Agreements of the Buyer
Up to and including the Closing Date, the Buyer covenants that:
9.1 Maintenance of Capital Structure. Up until the Closing Date, or
termination hereof, whichever is the earlier, except as disclosed herein or
required under the terms of this Agreement, no change shall be made in the
Articles of Incorporation or Bylaws of the Buyer, or the authorized capital
stock of the Buyer.
9.2 Avoidance of Distributions. Up until the Closing Date, the Buyer shall
not declare any dividends, make any payments or distributions to its
stockholders or purchase for cash or redeem any of its shares of capital stock.
9.3 Conduct of Business as Usual. Up until the Closing Date, the Buyer
Shareholders shall conduct its operations only in the usual and ordinary course,
and that no change will be made to such operations which might adversely affect
the value of the Buyer.
9.4 Access and Information. After the execution of this Agreement, the
Buyer will permit the Selling Shareholders to have reasonable access to all
information necessary to verify the representations and warranties of the Buyer.
After the Closing, the Buyer will continue to permit the Selling Shareholders
access to such additional documentation and information regarding the Buyer as
is reasonably necessary to completion of the transactions contemplated under
this Agreement.
9.5 Best Efforts. The Buyer shall use its best efforts to fulfill or
obtain the fulfillment of all conditions of the Closing, including the timely
solicitation of affirmative consent of all third parties necessary to effect a
Closing under this Agreement.
9.6 Post Closing Undertaking. The Buyer shall allow the two (2) current
directors of APCI to continue as directors of APCI. However, Buyer will appoint
two (2) additional persons to APCI's board. If APCI's board of directors is
expanded to five ( 5) persons, then Buyer shall be entitled to appoint 3 out of
the 5 directors.
10. Termination
10.1 Termination Without Cause. This Agreement may be terminated at any
time prior to the Closing Date without cost or penalty to either party:
(A) Mutual Consent. By mutual consent of the Selling Shareholders and
the Buyer.
(B) Actions or Proceedings. By the Selling Shareholders or the Buyer
(unless the action or proceeding referred to is caused by a breach
or default on the part of the Selling Shareholders or the Buyer of
any of their representations, warranties, or obligations under this
Agreement), if there shall be any actual or threatened action or
proceeding by or before any court or any other governmental body
which shall seek to restrain, prohibit, or invalidate the
transactions contemplated by this
16
Agreement and which, in the judgment of the Selling Shareholders or
the Buyer, made in good faith and based upon the advice of legal
counsel, makes it inadvisable to proceed with the transactions
contemplated by this Agreement.
(C) Less than 80% of APCI Shares Participate. By the Buyer, if less than
80% of the outstanding shares of APCI are tendered to the Buyer at
the Closing.
10.2 Termination with Cause
This Agreement may be terminated, with the terminating party to be
reimbursed by the other party of all expenses and costs related to this
Agreement, if:
(A) Breach or Noncompliance by the Selling Shareholders. The Selling
Shareholders shall fail to comply in any material aspect with any of
their representations, warranties, or obligations under this
Agreement, or if any of the representations or warranties made by
the Selling Shareholders, or anyone of them, under this Agreement
shall be inaccurate in any material respect and is not cured within
ten (10) business days of notice of such breach.
(B) Breach or Noncompliance by the Buyer. The Buyer shall fail to comply
in any material aspect with any of its representations, warranties,
or obligations under this Agreement, or if any of the
representations or warranties made by the Buyer under this Agreement
shall be inaccurate in any material respect and is not cured within
ten (10) business days of notice of such breach.
11. Securities Registration; Disclosure
11.1 Private Transaction. The Selling Shareholders understand that the
Company Shares issued pursuant to this Agreement, have not been nor will they be
registered under the Securities Act of 1933 as amended ("'33 Act"), but are
issued pursuant to exemptions from registration including but not limited to
Regulation D and Section 4(2) of the '33 Act, and the Buyer's reliance on such
exemptions in issuing the Company Shares is predicated in part on the
representations of the Selling Shareholders set forth herein and in the
Investment Letter attached hereto as Exhibit "E" (the "Investment Letter"), to
be executed by each of the Selling Shareholders and delivered to the Buyer at
Closing.
11.2 Access to Information. Each of the Selling Shareholders represents
that, by virtue of their respective economic bargaining power or otherwise,
he/she has had access to or have been furnished with, prior to or concurrently
with Closing, the same kind of information that would be available in a
registration statement under the '33 Act should registration of the Notes issued
pursuant to this Agreement have been necessary, and that they have had the
opportunity to ask questions of and receive answers from the Buyer's officers
and directors, or any party acting on their behalf, concerning the business of
the Buyer and that they have had the opportunity to obtain any additional
information, to the extent that the Buyer possesses such information or can
acquire it without unreasonable expense or effort, necessary to verify the
accuracy of information obtained or furnished by the Buyer.
17
12. Indemnification
As provided herein, the Selling Shareholders and the Buyer shall each
indemnify and hold harmless the other for two (2) years following the date of
Closing under this Agreement against and in respect of any liability, damage, or
deficiency, all actions, suits, proceedings, demands, assessments, judgments,
costs and expenses resulting from any misrepresentations, breach of covenant or
warranty, or from any misrepresentation contained in any certificate furnished
hereunder.
13. Covenant Not to Compete
Each Selling Shareholder agrees that for a period of five (5) years from
and after the date of the Closing, he will not, unless acting with the Buyer's
prior written consent, directly or indirectly, own, manage, operate, join,
control, or participate in the ownership, management, operation, or control of,
or be connected as an officer, employee, partner, or otherwise, with any
business substantially similar to Buyer's business activities within the United
States, except any Selling Shareholder may own not more than five percent (5%)
of the common stock of any company whose stock is traded in any stock exchange
or over-the-counter. The Selling Shareholders agree that the remedy at law for
any breach of the foregoing will be inadequate and that the Buyer and APCI shall
be entitled, inter alia, to temporary and permanent injunctive relief without
the necessity of proving actual damage to the Buyer or APCI.
14. [omitted]
15. [omitted]
16. Confidential Information
Notwithstanding any termination of this Agreement, the Buyer, APCI and the
Selling Shareholders, and their representatives, agree to hold in confidence any
information not generally available to the public received by them from the
Buyer, APCI or the Selling Shareholders pursuant to the terms of this Agreement.
If this Agreement is terminated for any reason, the Buyer, APCI and the Selling
Shareholders and their representatives will continue to hold such information as
to APCI in confidence and will, to the extent requested by the Selling
Shareholders, promptly return to them all written material and all copies or
abstracts thereof furnished to the Buyer, APCI and the Selling Shareholders
pursuant hereto. Notwithstanding any termination of this Agreement, the Selling
Shareholders and their representatives agree to hold in confidence any
information not generally available to the public received by them from the
Buyer pursuant to the terms of this Agreement. If this Agreement is terminated
for any reason, the Selling Shareholders and their representatives will continue
to hold such information in confidence and will, to the extent requested by the
Buyer, promptly return to the Buyer all written material and all copies or
abstracts thereof given to them or their representatives pursuant thereto.
18
17. [Omitted]
18. Miscellaneous Provisions
18.1 Survival of Representations and Warranties. All representations,
warranties, and covenants made by any party in this Agreement shall survive the
Closing hereunder and the consummation of the transactions contemplated hereby
for three (3) years from the Closing Date. The Selling Shareholders and the
Buyer are executing and carrying out the provisions of this Agreement in
reliance on the representations, warranties, and covenants and agreements
contained in this Agreement or at the Closing of the transactions herein
provided for including any investigation upon which they might have made or any
representations, warranty, agreement, promise, or information, written or oral,
made by the other party or any other person other than as specifically set forth
herein.
18.2 Approval of the Selling Shareholders. The Buyer and the Selling
Shareholders understand that this Agreement requires approval and participation
by a majority of the Selling Shareholders holding at least 80% of the APCI
Shares, and thus that all rights and obligations hereunder are subject to
securing such approval. Each Selling Shareholder, by its execution hereof,
hereby gives its consent to the transaction contemplated by this Agreement. In
the event that the requisite number of Selling Shareholders shall fail to
approve this Agreement, then notwithstanding anything contained herein to the
contrary, this Agreement shall be terminated without liability to either the
Selling Shareholders or the Buyer.
18.3 Costs and Expenses. Subject to paragraph 10 herein, all costs and
expenses in the proposed sale and transfer described in this Agreement shall be
borne by the Buyer.
18.4 Further Assurances. At any time and from time to time, after the
effective date, each party will execute such additional instruments and take
such action as may be reasonably requested by the other party to confirm or
perfect title to any property transferred hereunder or otherwise to carry out
the intent and purposes of this Agreement.
18.5 Waiver. Any failure of any party to this Agreement to comply with any
of its obligations, agreements, or conditions hereunder may be waived in writing
by the party to whom such compliance is owed. The failure of any party to this
Agreement to enforce at any time any of the provisions of this Agreement shall
in no way be construed to be a waiver of any such provision or a waiver of the
right of such party thereafter to enforce each and every such provision. No
waiver of any breach of or non-compliance with this Agreement shall be held to
be a waiver of any other or subsequent breach or non-compliance.
18.6 Notices. All notices and other communications hereunder shall either
be in writing and shall be deemed to have been given if delivered in person,
sent by overnight delivery service or sent by facsimile transmission, to the
parties hereto, or their designees, as follows:
To APCI
Xxxxxxx X. Xxxxxxx
President
19
Atlantic Pacific Communications, Inc.
0000 X. Xxx Xxxxxxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
Telephone
Facsimile
To the Selling Shareholders:
As their names and addresses
appear on the signature page hereto
To the Buyer:
H. Xxxx Xxxxxx
President
Eagle Wireless International, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxxx Xxxx, XX 00000
Telephone (000) 000-0000
Facsimile (000) 000-0000
With a copy to:
Xxxxxxx 0. Weed
Weed & Co. L.P.
0000 XxxXxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Telephone (000) 000-0000
Facsimile (000) 000-0000
18.7 Headings. The paragraph and subparagraph headings in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
18.8 Counterparts. This Agreement may be executed simultaneously 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.
18.9 Governing Law. This Agreement shall be governed by the laws of the
United States, State of Texas.
18.10 Binding Effect. This Agreement shall be binding upon the parties
hereto and inure to the benefit of the parties, their respective heirs,
administrators, executors, successors, and assigns.
18.11 Entire Agreement. This Agreement contains the entire agreement
between the parties hereto and supersedes any and all prior agreements,
arrangements, or understandings between the parties relating to the subject
matter of this Agreement. No oral understandings,
20
statements, promises, or inducements contrary to the terms of this Agreement
exist. No representations, warranties, covenants, or conditions, express or
implied, other than as set forth herein, have been made by any party.
18.12 Severability. If any part of this Agreement is deemed to be
unenforceable the balance of the Agreement shall remain in full force and
effect.
18.13 Amendment. This Agreement may be amended only by a written
instrument executed by the parties or their respective successors or assigns.
18.14 Facsimile Counterparts. A facsimile, telecopy or other reproduction
of this Agreement may be executed by one or more parties hereto and such
executed copy may be delivered by facsimile of similar instantaneous electronic
transmission device pursuant to which the signature of or on behalf of such
party can be seen, and such execution and delivery shall be considered valid,
binding and effective for all purposes. At the request of any party hereto, all
parties agree to execute an original of this Agreement as well as any facsimile,
telecopy or other reproduction hereof.
18.15 Time is of the Essence. Time is of the essence of this Agreement and
of each and every provision hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
"Buyer"
Eagle Wireless International, Inc.
By: __________________________
Name: ________________________
Title: _________________________
"APCI"
Atlantic Pacific Communications, Inc.
By: __________________________
Name: ________________________
Title: _________________________
[continued on following pages]
21
"Selling Shareholders"
22
EXHIBIT A
The Company Disclosure Documents
23
EXHIBIT B
The APCI Disclosure Documents
24
EXHIBIT C
The APCI Financials
25
EXHIBIT D
The Earn Out Goals
GOAL NUMBER 1
(a) $10,000,000 (Ten Million) in cumulative net revenue, (b) 25% gross profit
margin, and (c) 10% net profit margin within 24 months of Closing.
GOAL NUMBER 2
(a) 30,000,000 (Thirty Million) in cumulative net revenue, (b) 25% gross profit
margin, and (c) 10% net profit margin within 48 months after Closing.
GOAL NUMBER 3
(a) 60,000,000 (Sixty Million) in cumulative net revenue, (b) 25% gross profit
margin, and (c) 10% net profit margin within 48 months after Closing.
Upon achievement of Goal Number 1 by APCI, Buyer shall deliver unto Xxxxxxx
Xxxxxxx and Xxxxxxx Xxxxxxx 250,000 shares each of Buyer's common stock. Upon
achievement of Goal Number 2 by APCI, Buyer shall deliver unto Xxxxxxx Xxxxxxx
and Xxxxxxx Xxxxxxx 500,000 shares each of Buyer's common stock. Upon
achievement of Goal Number 3 by APCI, Buyer shall deliver unto Xxxxxxx Xxxxxxx
and Xxxxxxx Xxxxxxx 750,000 shares each of Buyer's common stock.
26
EXHIBIT E
Selling Shareholders Investment Representation Letter
INVESTMENT LETTER
The undersigned hereby represents to Eagle Wireless International, Inc.
("Eagle"), that:
(1) The shares of common stock of Eagle (the "Securities"), which are being
acquired by the undersigned, are being acquired for the Undersigned's own
account and for investment and not with a view to the public resale or
distribution thereof;
(2) The undersigned will not sell, transfer or otherwise dispose of the
Securities except in compliance with the Securities Act of 1933, as
amended (the "Act"), and are being transferred in reliance on exemptions,
including but not limited to Section 4(2) of the Act;
(3) The undersigned acknowledges that the Undersigned has been furnished with
the Company Disclosure Documents, as defined in the Agreement, which the
undersigned feels necessary to make an economic decision to acquire the
Securities;
(4) The undersigned further acknowledges that it has had an opportunity to ask
questions of and receive answers from duly designated representatives of
Eagle concerning the terms and conditions pursuant to which the Securities
are being acquired. The undersigned has been afforded an opportunity to
examine such documents and other information which it has requested for
the purpose of verifying the financial stability of Eagle;
(5) The undersigned is fully aware of the applicable limitations on the resale
of the Securities. These restrictions for the most part are set forth in
Rule 144. If Rule 144 is available to the undersigned, the undersigned may
make only routine sales of the securities in limited amounts, in
accordance with the terms and conditions of that Rule;
(6) By reason of the undersigned's knowledge and experience in financial and
business matters in general, and investments in particular, the
undersigned is capable of evaluating the merits and bearing the economic
risks of an investment in the Securities and fully understands the
speculative nature of the Securities and the possibility of such loss;
(7) The present financial condition of the undersigned is such that it is
under no present or contemplated future need to dispose of any portion of
the Securities to satisfy an existing or contemplated undertaking, need or
indebtedness.
Dated:______________, 2000 __________________________
Name: ____________________
27
EXHIBIT F
Release of Claims Against APCI
RELEASE
Know all men by these presents, that the undersigned, for and in
consideration of Ten Dollars ($10) plus other good and valuable consideration to
be paid to the undersigned, hereby releases and forever discharges Atlantic
Pacific Communications, Inc., a Texas corporation, its directors, officers,
employees, and agents, of and from any and all manner of actions and causes of
action, suits, debts, dues, sums of money, accounts, controversies, agreements,
promises, damages, judgments, executions, claims, and demands whatsoever, in law
or in equity, and particularly from all claims and demands whatsoever, arising
in or out of, or in connection with, any and all securities transactions, or any
other matter, which the undersigned ever had, or now possesses, or which the
undersigned, or its successors and assigns, hereafter can, shall, or may have
against Atlantic Pacific Communications, Inc., a Texas corporation, its
directors, officers, employees, and agents, for, upon, or by reason of any
matter, cause or thing whatever.
Dated:______________, 2000 __________________________
Name: ____________________
28
