EXHIBIT 10.18
VOICE QUEST, INC.
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (hereinafter referred to as the
"Agreement") is made and entered into this 20th day of November, 1998 by and
between Carnegie International Corporation, a Corporation of the State of
Colorado (hereinafter referred to as "Carnegie"or "Purchaser") ▇▇▇▇ ▇. ▇▇▇▇▇▇,
Individually (hereinafter referred to as "▇▇▇▇▇▇"), ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
Individually (hereinafter referred to as "▇▇▇▇▇▇"), ▇▇▇▇▇▇ ▇▇▇▇▇▇, Individually
(hereinafter referred to as "Kitson"), ▇▇▇▇▇ ▇▇▇▇▇▇ (hereinafter referred to as
"▇▇▇▇▇▇") and Voice Quest, Inc. (hereinafter referred to as the "Company"), a
Corporation of the State of Florida. Ortner, Meckes, Kitson and ▇▇▇▇▇▇ shall
hereinafter collectively be referred to as "Seller".
EXPLANATORY STATEMENT
Seller owns One Hundred (100) shares of Common Stock of the Company,
which represents One Hundred Percent (100%) of the issued and outstanding
Company Stock, (hereinafter referred to as the "Shares"). The Company owns One
Hundred percent (100%) of the assets used in the operation of the Company
including but not limited to equipment, furniture, fixtures, inventory, contract
rights, leasehold, improvements, software rights, software development rights,
lease rights for the Premises of the Company located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (hereinafter referred to as the "Premises"), and
any and all other assets related to the business of the Company (hereinafter
referred to as the "Assets").
Carnegie shall purchase the Shares from Seller, together with such
relative rights, preferences and limitations as appertain to said Shares, as are
hereinafter provided by this Agreement. Seller shall issue, sell, transfer and
deliver said Shares to Carnegie upon the terms and conditions provided by this
Agreement.
NOW, THEREFORE, in consideration of the Explanatory Statement, which
shall constitute a substantive and binding part of this Agreement, and the
mutual covenants, promises, agreements, representations and warranties
hereinafter set forth, the receipt and sufficiency of which are hereby
acknowledged by the Parties hereto, Purchaser, Seller and the Company do hereby
covenant, promise, agree, represent and warrant as follows:
1. Closing: Purchase of Shares:
1.1. The closing (hereinafter referred to as the "Closing") of
the purchase of the Shares provided by this Agreement shall take place
simultaneously with the execution of this Agreement, or on such other day as
Purchaser and Seller shall agree in writing, at the law offices of ▇▇▇▇▇▇▇▇▇ and
Pearl, LLC through an escrow arrangement agreeable to the parties unless the
place and means of closing is changed pursuant to a writing signed by all
parties hereto (hereinafter, such day shall be referred to as the "Closing
Date", and such law offices shall be referred to as the "Closing Place.")
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1.2. On the Closing Date and at the Closing Place, Seller
shall issue, sell, transfer and deliver to Carnegie the Shares, which Shares
shall in each instance be represented by one or more stock certificates of the
Company duly endorsed to Carnegie or accompanied by stock powers duly executed
in blank for transfer on the books of the Company, which shall convey ownership
rights, title and interest to the shares and the Assets of the Company effective
as of the Closing Date, November 20, 1998, including all Assets on the List of
Assets (a copy of which is attached hereto as Exhibit A2).
1.2.1. Purchase Price Adjustment: The Parties hereby
agree that for purposes of calculating purchase price adjustments, if any, said
adjustments (See Exhibit A3) shall be made if the Company is not debt free as of
the Closing Date except for the obligations assumed by Purchaser under Section
1.3.2. of this Agreement.
1.3. Purchase Price: The Purchase Price of the Shares shall be
as follows:
1.3.1. Purchaser shall issue to ▇▇▇▇▇▇ and ▇▇▇▇▇▇
collectively Twenty-one Thousand Six Hundred (21,600) shares of Preferred Series
E restricted stock of Carnegie International Corporation which shall be
convertible to Rule 144 Restricted Legend Common Stock of Carnegie (hereinafter
"Rule 144 Stock") twenty-four (24) months (the "Period") from the Closing Date,
as follows:
1.3.1.1. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ shall receive
collectively in the conversion the greater of:
(i) Rule 144 Stock with a value of Two Hundred Seventy
Thousand Dollars ($270,000.00) based upon the conversion value set forth in
Section 1.3.1.2. below; or
(ii) Two Hundred Sixteen Thousand (216,000) shares of Rule 144
Stock, (which shall be considered higher in Values than the respective values to
each individual under 1.3.1.1.(i) above if the Value of the Common Stock of
Carnegie is above $1.25 per share as computed on the business day immediately
preceding the expiration of the Period.
1.3.1.2. The Value of each share of Rule 144
Stock for conversion calculation purposes shall be based on the average Market
closing price of Carnegie's Common Stock on the five (5) business days
immediately preceding the conversion date. For the purposes of this section "
Market" shall include the price quoted for Carnegie's Common Stock by the NASD
Over the Counter Bulletin Board Service (OTCBB) or the closing trading price on
the exchange on which Carnegie Common Stock is traded if said Stock is no longer
quoted on OTCBB.
1.3.2. One Hundred Two Thousand Eighty-four Dollars
and Twenty-five Cents ($102,084.25) to be paid in quarterly installments over a
period of three (3) years in the amount of Eight Thousand Five Hundred Seven
Dollars and Two Cents ($8,507.02) per quarter, with the first payment to be paid
on January 1, 1999. The amount of this portion of monetary consideration is
based on any funds infused into the Company in the form of loans and/or equity
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contributions in excess of equity contributions of Fifty Thousand Dollars
($50,000.00) for a total of One Hundred Two Thousand Eighty-four Dollars and
Twenty-five Cents ($102,084.25) and is subject to audit by Carnegie or its
representatives within six (6) months from the Closing Date. Carnegie shall
assume the liabilities of the Company as set forth in Exhibit B as of the
closing date less any amounts due and payable as reflected in this paragraph.
The liabilities assumed shall be substantially the same as those reflected on
the tax return of the Company provided to Carnegie less amounts due and payable
as reflected in this paragraph. This monetary consideration shall be allocated
between Kitson and ▇▇▇▇▇▇.
1.3.3. On or before the Closing Date Kitson and
▇▇▇▇▇▇ shall each be issued One Hundred Fifteen Thousand (115,000) Rule ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇.
1.3.4. The purchase of the Shares shall vest in
Carnegie on the Closing Date, November 20, 1998, subject to the provisions of
this Agreement, complete possession, ownership and control of the Shares and the
management and operations of the Company and ownership of the Assets, including
but not limited to the leases, equipment, fixtures, inventory, cash, accounts
receivable, contract rights with equipment suppliers and others, goodwill, trade
secrets, software rights, software development rights, leasehold improvements
and assets relating thereto; provided, however, that ▇▇▇▇▇▇ shall continue to
manage the daily operations of the Company, including decisions on hiring and
terminating personnel. Seller and the Company shall cooperate in and facilitate
the immediate transfer of possession, ownership and control of the Shares and
Assets including all assets and operations relating to the Premises of the
Company.
1.3.5. There shall be no debt of the Company as of
and including the Closing Date, except for any amount assumed by Purchaser under
Section 1.3.2. above. Purchaser shall not be liable for any tax liability or
other liabilities of any kind whatsoever relating to or incurred by the Company
or its owners up to and including the Closing Date, and Seller shall indemnify
Purchaser and hold Purchaser harmless from any of said tax or other liabilities.
2. Representations and Warranties of the Seller and the Company:
Seller and the Company represent and warrant to Purchaser as follows:
2.1. Sellers are, and as of the Closing Time will be the valid
and legal owners of the Shares and related Assets being transferred hereby and
own the Shares free and clear of any and all liens and encumbrances (See
Certificate of No Debts - Exhibit B). The Seller through the ownership of the
Shares owns all of the Assets of and relating to the Company located at the
Premises, including but not limited to the leases, equipment, inventory,
furniture, fixtures and the like and assets relating thereto.
Sellers represent and warrant that they own the Shares that
represent one hundred
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percent (100%) of the stock of the Company and have fairly and accurately in all
material respects reflected and allocated all assets, liabilities, income and
expenses related to both the management and results of operations of the Company
on the books, records and tax returns of the Company, which have been presented
to Carnegie for the periods ended December 31, 1997, December 31, 1996 and
December 31, 1995, respectively.
2.2. Sellers have the requisite and proper authority to enter
into the within agreement and to transfer, assign and sell the Shares in
accordance with the terms hereof.
2.3. The Company is, and at the Closing Time will be, a
corporation duly organized, validly existing and in good standing under the laws
of Florida. The Company has and at the Closing Date will have, the power and
authority to own, lease and operate its properties and to conduct its business
as such business is now being conducted by the Company. A complete and correct
copy of the articles of incorporation, as amended, and the by-laws, as amended,
of the Company, are attached to this Agreement collectively as Exhibit C and are
incorporated by reference herein, and no changes therein will be made subsequent
to the date hereof and prior to the Closing Time.
2.4. The Company has validly authorized, issued, and has
outstanding, and on the Closing Date will have authorized, issued and
outstanding, fully paid and non-assessable, One Hundred (100) shares of its
common stock. Upon issuance, sale, transfer and delivery of the Shares to
Purchaser, the shares of the Company Common Stock issued and outstanding will
constitute One Hundred Percent (100%) of the issued and outstanding capital
stock of the Company. Except as hereinafter set forth in this Section 2.4, the
Company does not have outstanding, and on the Closing Date will not have
outstanding, any options to purchase, or any rights or warrants to subscribe
for, or any securities or obligations convertible into, or any contracts or
commitments to issue or to sell assets or shares of common stock or any such
options, rights, warrants, convertible securities or obligations of the Company.
The Company has not issued, and hereby warrants and represents that it shall not
issue any Stock Options (hereinafter referred to as the "Options"), which grant
to the holders thereof the right to purchase in the aggregate any shares of the
Company Common Stock.
2.5. The Shares are fully paid and non-assessable, free and
clear of all mortgages, pledges, liens, security interests, conditional sale
agreements, charges, encumbrances and restrictions of every nature, except for
those created pursuant to the terms of this Agreement.
2.6. Except as set forth on Exhibit D, Company has properly
and accurately filed all tax returns, as appropriate, country wide, state and
local, and all related information required to be filed prior to the date
hereof, and at the Closing Time shall have filed all tax returns, as
appropriate, and all related information required to be filed prior to the
Closing Time. To the best knowledge of Seller and the Company, the amounts
reflected in the Balance Sheet for taxes are sufficient for the payment of all
accrued and unpaid federal, state and local taxes of all types, including
interest and penalties thereon, of the Company for or on account of which
Company is
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or may become liable in any manner whatsoever for periods prior to the Closing
Date.
2.7. Since June 9, 1995
2.7.1. The business of the Company has been operated,
and up to the Closing Date will be operated, only in the ordinary course.
2.7.2. Except as set forth in Exhibit D1, there has
been, and prior to the Closing Date there will be, no material adverse change,
individually or in the aggregate, in Company's condition (financial or
otherwise) or in Company's assets, liabilities or business. There also has been
no material adverse change, individually or in the aggregate, in the Company's
condition (financial or otherwise) or in the Company or its Assets, liabilities
or business from the status that was represented to Purchaser as existing at
December 31, 1997 compared to the status at the Closing Date.
2.7.3. There has been, and prior to the Closing Date
there will be, no damage, destruction or loss to the Company or any of its
contracts, assets, inventory, accounts, or other properties, or other events or
conditions of any character, or any pending or threatened developments,
individually or in the aggregate, which would materially and adversely affect
the Company's condition (financial or otherwise) or Company's assets,
liabilities or business.
2.8. Except as set forth in Exhibit D1 attached hereto and
incorporated by reference herein, there is, and on the Closing Date there will
be, no material action, suit, proceeding or investigation pending or, to the
knowledge of the Company and/or the Sellers, threatened, against or affecting
the Company or any of its assets. Company is not, and on the Closing Date will
not be, in default under or with respect to any judgment, order, writ,
injunction or decree of any court or of any federal, state, municipal or other
governmental authority, department, commission, board, agency or other
instrumentality. To Seller's and Company's knowledge, Company has, and on the
Closing Date will have, complied in all material respects with all laws, rules,
regulations and orders applicable to it and to its business; has, and on the
Closing Date will have, performed in all material respects all of its material
obligations and duties to be performed by it to the extent required in
accordance with their respective terms; and is not, and on the Closing Date will
not be, in default under or in material breach of any material contract,
agreement, commitment or other instrument to which it is subject or a party or
under which it is bound.
2.9. Seller and the Company have not, and on the Closing Date
will not have, incurred any liability, obligation or duty for any finder's,
agent's or broker's fee or commission in connection with this Agreement or the
transactions contemplated hereby.
2.10. The Board of Directors of the Company, pursuant to the
power and authority legally vested in it, has duly authorized the execution,
sealing and delivery of this Agreement by the Seller and the Company, Common
Stock of the Company, and the transactions
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hereby contemplated, and no action, confirmation or ratification by any
stockholder of the Company, Seller, or by any other person, entity or
governmental authority is required in connection therewith. The Seller and the
Company have the power and authority to execute, seal and deliver this
Agreement, to consummate the transactions hereby contemplated and to take all
other actions required to be taken by them pursuant to the provisions hereof.
The Seller and the Company have taken all actions required by law, the Company's
certificate of creation or incorporation, as amended, its bylaws, as amended, or
otherwise to authorize the execution, sealing and delivery of this Agreement and
the issuance, sale, transfer and delivery of the Shares and related Assets
pursuant to the provisions hereof. This Agreement is valid and binding upon the
Seller and the Company in accordance with its terms. Neither the execution,
sealing and delivery of this Agreement nor the consummation of the transactions
contemplated hereby will constitute a violation or breach of the Articles of
Incorporation, as amended, or the by-laws, as amended, of the Company, or any
agreement, stipulation, order, writ, injunction, decree, law, rule or regulation
applicable to the Company or the Seller.
2.11. Attached hereto as Exhibit E and incorporated by
reference herein is a list of all officers and directors of the Company and all
beneficial owners of the issued and outstanding Company Common Stock, and the
number of shares of the Company Common Stock owned of record and beneficially by
each such officer, director and beneficial owner. To the best knowledge of
Company, the information set forth on Exhibit E is true and correct.
2.12. To Seller's knowledge neither this Agreement nor any
written information, statement, list or certificate furnished or to be furnished
to Purchaser pursuant to this Agreement or in connection with this Agreement or
any of the transactions contemplated by this Agreement contains or, on the
Closing Date will contain any untrue statement of a material fact or omits or,
on the Closing Date will omit to state a material fact necessary in order to
make the statements contained therein, in light of the circumstances in which
they are made, not misleading.
2.13. Seller's and the Company's Release: Seller and the
Company hereby warrant, represent and acknowledge that they shall execute at the
time of closing a release of all claims which reflects Seller and the Company's
complete release and discharge of any claims it may have against the Company,
both individually and as an officer or Director of the Company, except for those
considerations due as set forth in this Agreement. Such release shall be
attached hereto and incorporated herein by reference as Exhibit F.
2.14. [Intentionally left blank]
2.15. Seller has and will continue until the Closing Date to
accurately maintain the books of account of the Company, or any other entity
operating at the Premises or as successor to the Company. Seller shall indemnify
and hold Purchaser harmless from any and all losses due to Seller's intentional
misconduct or gross negligence during the period in which Seller is managing the
financial operations of the Company.
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2.16. No Subsidiaries: The Seller and the Company hereby
acknowledge that the Company does not have any subsidiaries and does not,
directly or indirectly, own any interest in or control any corporation,
partnership, joint venture or other business entity.
2.17. Licenses; Permits; Related Approvals: The Company
possesses all licenses, permits, consents, approvals, authorizations,
qualifications and orders (hereinafter collectively referred to as the
"Permits") of all governments and governmental agencies lawfully required for
the Company to conduct its business in all jurisdictions where business is
conducted. All of the Permits are in full force and effect and no suspension,
modification, or cancellation of any business or permits is pending or
threatened. A list of the business/permits is attached hereto as Exhibit G and
incorporated herein by reference.
2.18. No Real Property: Except as set forth on Exhibit H
attached hereto and incorporated herein by reference, the Company does not own
or have any interest in any real estate.
2.19. Condition of Personal Property: Attached hereto as
Exhibit I and incorporated by reference herein is a true, correct and complete
list of all personal property, owned by the Company or used by the Company in
the conduct of its business, including, but not limited to, all inventory,
equipment, machinery and fixtures, (collectively, the "Personal Property"),
indicating whether it is owned or the manner in which the Personal Property is
otherwise utilized by the Company. The Company has sole and exclusive, good and
merchantable title to all of the Personal Property owned by it, free and clear
of all pledges, claims, liens, restrictions, security interests, charges and
other encumbrances, except as provided to the contrary in Exhibit I.
2.20. Certain Contracts. Attached hereto as Exhibit J and
incorporated by reference herein is a true, correct and complete list and copy
of all contracts under which the Company is provided or is providing services
(collectively, the "Service Contracts"). To Seller's knowledge, each of the
Service Contracts is in full force and effect, is valid and binding upon each of
the parties thereto and is fully enforceable by the Company against the other
party thereto in accordance with its terms. Neither Seller nor the Company has
any notice of, or any reason to believe that there is or has been any actual,
threatened or contemplated, termination or modification of any of the Service
Contracts. To Seller's knowledge, no party to any of the Service Contracts is in
breach of or in default thereunder, nor has any event occurred which, with the
lapse of time, notice or election, may become a breach or default by the Company
or any other party to or under any of the Service Contracts. All payments
required to be made by Seller pursuant to the Service Contracts have been paid
in full through the Closing Date. See Exhibit J.
2.21. Contracts, Licenses, and Other Agreements. Attached
hereto and incorporated by reference herein are the following:
2.21.1. Exhibit K, a true, correct and complete list
and copy (or where
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they are oral, true, correct and complete written summaries) of all leases of
the Company relating to real property.
2.21.2. Exhibit L, a true, correct and complete list
and copy (or where they are oral, true, correct and complete written summaries)
of all leases of the Company relating to personal property.
2.21.3. Exhibit M, a true, correct and complete list
and copy (or where they are oral, true, correct and complete written summaries)
of all licenses, franchises, assignments or other agreements of the Company
and/or Seller relating to trademarks, trade names, patents, copyrights and
service marks (or applications therefor), unpatented designs or styles, know-how
and technical assistance.
2.21.4. Exhibit O, a true, correct and complete list
and copy (or where they are oral, true, correct and complete written summaries)
of all employment, compensation and consulting agreements, contracts,
understandings or arrangements of the Company with any officer, director,
employee, broker, agent, consultant, salesman or other Person, including the
names, starting dates of employment, term of employment, functions and aggregate
compensation (including salary, bonuses, commissions and other forms of
compensation).
2.21.5. Exhibit P, a true, correct and complete list
and copy (or where they are oral, true, correct and complete written summaries)
of all agreements of the Company for the purchase, sale or lease of goods,
materials, supplies, machinery, equipment, capital assets and services having a
cost in excess of Two Thousand Five Hundred Dollars ($2,500.00) in any one
instance or in excess of Ten Thousand Dollars ($10,000.00) in the aggregate.
2.21.6. Exhibit Q, a true, correct and complete list
and copy (or where they are oral, true, correct and complete written summaries)
of all agreements and arrangements of the Company for the borrowing or lending
of money, on a secured or unsecured basis, or guaranteeing, indemnifying or
otherwise becoming liable for the obligations or liabilities of any other Person
or entity.
2.21.7. Exhibit R, a true, correct and complete list
and copy (or where they are oral, true, correct and complete written summaries)
of all agreements and understandings of the Company other than those listed in
Exhibits O through Q which are material in nature, involve the payment or
receipt, in any twelve (12) month period, of more than Five Thousand Dollars
($5,000.00) or have a term of more than the twelve (12) months.
To Seller's knowledge, each of the agreements, arrangements
and understandings listed in Exhibits K through R (hereinafter collectively
referred to as the "Commitments") is in full force and effect, is valid and
binding upon each of the parties thereto and is fully enforceable by the Company
against the other party thereto in accordance with its terms. Neither Seller nor
the Company has any notice of, or any reason to believe, that there is or has
been any actual,
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threatened or contemplated termination or modification of any of the
Commitments. To Seller's knowledge, no party to any of the Commitments is in
breach of or in default thereunder, nor has any event occurred which, with the
lapse of time, notice or election, may become a breach or default by the Company
or any other party to or under any of the Commitments. The Company has the right
to quiet enjoyment of all real properties leased to it for the full term of the
lease thereof. All payments required to be made by the Company pursuant to any
of the Commitments have been paid in full through the Closing Date. See Exhibits
K-R.
2.22. Insurance: Attached hereto as Exhibit S and incorporated
by reference herein is a list of all insurance policies of the Company, setting
forth with respect to each policy the name of the insurer, a description of the
policy, the dollar amount of coverages, the amount of the premium, the date
through which all premiums have been paid, and the expiration date. Each
insurance policy relating to the insurance referred to in Exhibit S is in full
force and effect, is valid and enforceable, and the Company is not in breach of
or in default under any such policy. Neither Seller nor the Company have any
notice of or any reason to believe that there is or has been any actual,
threatened, or contemplated termination or cancellation of any insurance policy
relating to the insurance referred to in Exhibit S.
2.23. Pension Plans: Seller and the Company hereby acknowledge
that the Company does not maintain any pension, profit sharing, ESOP, stock
option, incentive bonus, hospitalization, major medical, dental, optical,
prescription, drug, health insurance, life insurance, or other benefit plan for
the benefit of any employee as the term "Employee Benefit Plan" is defined in
ERISA, Section 3, except as set forth on Exhibit T.
2.24. Employee Relations and Employment Agreements:
2.24.1. None of the Company's employees is
represented by a labor organization, and no petition for representation has ever
been filed with the National Labor Relations Board. Seller and the Company are
not aware of any union organizational activity with respect to the Company, and
have no reason to believe that any such activity is being contemplated.
2.24.2. To Seller's knowledge, the Company is not in
violation in any material respect of any applicable equal employment opportunity
laws, wage and hour laws, occupational safety and health laws, federal labor
laws or any other laws of any government or governmental agency relating to
employment.
2.24.3. The Company has not entered into written
employment agreements and all employees can be terminated at will except as
provided in Exhibit T1. The Company has no contractual obligation or special
termination or severance arrangements with respect to any employee. The Company
and Seller further represent and warrant that there have been and will be no
changes in employment or corporation salary agreements between the Company and
its employees, officers, directors or contractors from January 1, 1998 up till
and
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including the date of Closing.
2.24.4. The Company has paid all wages due including
all required taxes, insurance and withholding thereon, and will continue to do
so through the Closing Date.
2.24.5. Attached hereto as Exhibit U and incorporated
herein by reference, is a list of all accrued vacation, sick leave, and accrued
bonuses, if any, as of the Cut-Off Date.
2.24.6. Seller and the Company shall supply to
Purchaser a list of all employees of the Company, including the date of hire of
each, position, present salary, amount of bonus paid in the last year, and
announced termination date, if any, as Exhibit V.
2.24.7. Patents; Trademarks; Service Marks; Related
Contracts. Attached hereto as Exhibit W and incorporated by reference herein, is
a true, correct and complete list of all patents, trademarks, trade names, or
trademark or trade name registrations, service marks, and copyrights or
copyright registrations (the "Proprietary Rights") related to the Company. To
Seller's knowledge, all of the Proprietary Rights are valid, enforceable, in
full force and effect and free and clear of any and all security interests,
liens, pledges and encumbrances of any nature or kind. Neither Seller or the
Company has licensed, leased or otherwise assigned, transferred or granted any
right to use any of its Proprietary Rights to any other Person or entity, and to
Seller's knowledge, no Person or entity is infringing upon the Proprietary
Rights. The Company has not infringed and are not infringing upon any patent,
trademark, trade name, or trademark or trade name registration, service ▇▇▇▇,
copyright, or copyright registration of any other Person or entity. Seller and
the Company have filed all necessary and appropriate documents and paid all
necessary fees to maintain the integrity of the Proprietary Rights until the
year see Exhibit W.
2.25. Seller agrees that after Closing Seller shall execute
any and all documents which may be reasonably necessary to carry out the terms,
conditions and intention of this agreement and to facilitate the transfer of the
property, to ratify unto Purchaser the Shares and the Assets and to facilitate
the operations of the Company by Purchaser.
2.26. Seller and the Company shall transfer to Purchaser or
Purchaser's designee all title, rights and interests in any deposits (as
reflected on Exhibit X) owned by Seller or the Company related to the Premises
and/or the Company's business.
2.27. There are no bulk transfer laws in Florida applicable to
this transaction (See Opinion Letter of Counsel, Exhibit B1).
2.28. To the best knowledge of such Seller and the Company,
the issuance, sale, transfer and delivery of the Shares and the Assets pursuant
to the provisions of this Agreement will not constitute a violation or breach of
any agreement, stipulation, order, writ, injunction or decree applicable to the
Seller or the Company.
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3. Representations, Warranties and Covenants of Purchaser.
Purchaser represents, warrants and covenants to Seller as
follows:
3.1. Purchaser is, and on the Closing Date will be, a
corporation duly organized, validly existing and in good standing under the laws
of the State of Colorado.
3.2. The Board of Directors of Purchaser, pursuant to the
power and authority legally vested in it, has duly authorized the execution,
sealing and delivery of this Agreement by Purchaser and the transactions hereby
contemplated, and no action, confirmation or ratification by the stockholders of
Purchaser or by any other person, entity or governmental authority is required
in connection therewith. Purchaser has the power and authority to execute, seal
and deliver this Agreement, to consummate the transactions hereby contemplated
and to take all other actions required to be taken by it pursuant to the
provision, hereof. Purchaser has taken all actions required by law, its articles
of incorporation, its by-laws or otherwise to authorize the execution, sealing
and delivery of this Agreement. This Agreement is valid and binding upon
Purchaser in accordance with its terms. Neither the execution, sealing and
delivery of this Agreement nor the consummation of said transactions will
constitute any violation or breach of the articles of incorporation or the
by-laws of Purchaser, or any agreement, order, writ, injunction, decree, law,
rule or regulation applicable to Purchaser.
4. Further Agreements:
4.1. Seller's Agreement Not to Compete: The Parties hereby
acknowledge that Seller shall not establish a business telephone sales,
installation and/or services business in the same market as the Company operates
at the time of acquisition of the shares, directly or indirectly, for a period
of three (3) years from the date of this Agreement.
5. Conditions Precedent to Obligation and Duty of Purchaser to Acquire
the Property:
5.1 The obligation and duty of Purchaser to purchase the
Property from Seller as contemplated by this Agreement are subject to the
fulfillment and satisfaction on the Closing Date of each of the following
conditions precedent, any or all of which may be waived in writing in whole or
in part at or prior to the Closing Date by Purchaser:
5.1.1. All representations and warranties of the
Seller and the Company contained in this Agreement and expressly made at the
Closing Date shall be true and correct at the Closing Date, in all material
respects, and all of the other representations and warranties of Seller and the
Company contained in this Agreement shall be true and correct at the Closing
Date as though each of such representations and warranties was made at such
time.
5.1.2. Seller and the Company shall have performed
and complied in all material respects with all covenants and agreements on their
part required by this Agreement in
11
material respects to be performed or complied with prior to or at the Closing
Date.
5.1.3. Purchaser shall have received certificates of
the officers and directors of Company, whose signatures, such as President,
shall be attested by the Secretary of Company or an independent third party if
Signatory and Secretary are the same person, dated as of the Closing Date, in
form reasonably satisfactory to Purchaser, certifying to the fulfillment and
satisfaction of each of the same conditions precedent specified in Sections
5.1.1. and 5.1.2. of this Agreement for Seller and the Company.
5.1.4. Purchaser shall receive the written opinions
of the legal counsel (See Exhibit B1) for Seller and the Company, dated the
Closing Date, stating that:
(a) The Company is a corporation duly
organized, validly existing and in good standing. The Company has the power and
authority to own, lease and operate its properties and to conduct its business
as such business is now being conducted by them.
(b) Except as set forth on Exhibit D1 to
this Agreement, such counsel does not know of any material action, suit,
proceeding or investigation pending or threatened against the Company or
affecting the Company or any of its assets.
(c) The Board of Directors of Company,
pursuant to the powers and authority legally vested in it, has duly authorized
the execution, sealing and delivery of this Agreement by Company, the
transactions hereby contemplated, and no action, confirmation or ratification by
the stockholders or Personal Representatives or Executors of any deceased
stockholders of Company or by any other person, entity or governmental authority
is required in connection therewith which has not been obtained. Seller and the
Company have the power and authority to execute, seal and deliver this
Agreement, to consummate the transactions hereby contemplated and to take all
other actions required to be taken by or pursuant to the provisions hereof.
Company has taken all actions required by law, its certificate of incorporation,
as amended, its by-laws, as amended, or otherwise to authorize the execution,
sealing and delivery of this Agreement and the issuance, sale, transfer and
delivery of the Shares pursuant to the provisions hereof. This Agreement is
valid and binding upon Seller and the Company.
(d) There are no Bulk Sales laws in Maryland
applicable to this transaction.
5.2. The obligation and duty of Seller to sell the Shares and
related Assets to Purchaser as contemplated by this Agreement are subject to
fulfillment and satisfaction on the Closing Date of each of the following
conditions precedent, any or all of which may be waived in whole or in part
prior to the Closing Date by Seller:
5.2.1. All representations and warranties of the
Purchaser contained in this Agreement shall be true and correct in all material
respects at the Closing Date as though each of
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such representations and warranties was made at such time.
5.2.2. Purchaser shall have performed and complied in
all material respects with all covenants and agreements on their part required
by this Agreement to be performed or complied with prior to or at the Closing
Date.
5.2.3. Seller shall have received certificates of the
officers and directors of Purchaser, whose signatures, such as President, shall
be attested by the Secretary of Purchaser or an independent third party if
Signatory and Secretary are the same person, dated as of the Closing Date, in
form reasonably satisfactory to Seller, certifying to the fulfillment and
satisfaction of each of the conditions precedent specified in Section 5.2.1. and
5.2.2. of this Agreement.
5.2.4. Seller shall have received the written opinion
of legal counsel for Purchaser, dated the Closing Date, containing the opinions
with respect to Purchaser which Seller's counsel is required to provide with
respect to the Companies under Section 5.1.4(a) and (d) and that Purchaser has
reserved for issuance the common stock reasonably for the transaction
contemplated herein.
6. Indemnification:
6.1 Sellers individually and collectively and the Company
shall each indemnify and hold harmless Purchaser from and against any and all
actions, suits, proceedings, demands, causes of action, damages, liabilities,
claims, losses, costs and expenses (including reasonable attorneys' and experts'
fees) paid or incurred by Purchaser by reason of or arising out of or in
connection with:
6.1.1 The breach by Sellers (individually and
jointly) or the Company of any representation or warranty contained in this
Agreement or in any certificate delivered to Purchaser pursuant to the
provisions of this Agreement.
6.1.2 The failure of Sellers individually or
collectively and or the Company to perform or comply with any covenant or
agreement required by this Agreement to be performed or complied with by each
such person or entity.
6.1.3 Debts and or liabilities incurred, accruing or
arising up to and including the Cut-Off Date attributable to Seller or the
Company including, but not limited to, contract liabilities, tort liability and
tax liability, other than those assumed by Purchaser pursuant to the terms of
this Agreement. Purchaser shall have the right to setoff against any and all
amounts owed by Purchaser to Seller for any amounts owed or incurred by
Purchaser in connection with any and all liability imposed by this Section 6.
Notwithstanding anything to the contrary contained in this agreement, this
provision 6.1.3 shall be fully enforceable with no time limitation.
6.2. Carnegie shall indemnify and hold Seller and the Company
harmless from
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and against any and all actions, suits, proceedings, demands, causes of actions,
damages, liabilities, claims, losses, costs and expenses (including reasonable
attorneys' and experts' fees) paid or incurred by any of them by reason of or
arising out of in connection with:
6.2.1. The breach by Purchaser of any of the
representations or warranties contained in this Agreement or in any certificate
delivered to Seller pursuant to provisions of this Agreement;
6.2.2. The failure by Purchaser to perform or comply
with any covenant or agreement required by this Agreement to be performed or
complied by Purchaser.
6.2.3. Debts and liabilities incurred or arising
after the Cut-Off Date attributable to Purchaser or the Company, except Seller
shall be responsible for such debts and liabilities incurred or arising after
the Cut-Off Date due to the negligence of Seller and or the Company up to and
including the Cut-Off Date.
6.3. With respect to any claim, action, suit, liability, loss,
damage or expense asserted, threatened, instituted, paid or incurred or
discovered by or against an indemnified party, within the applicable
Indemnification Period, if any, the obligation to indemnify shall continue
through the final disposition or settlement of any such matter and the full
satisfaction of the indemnification obligation.
6.4. [Intentionally Left Blank]
6.5. If a party (an "Indemnified Party"), receives notice or
has knowledge of any matter which it believes the other party hereto (the
"Indemnitor") is obligated to provide indemnification pursuant to this Section 6
(a "Claim"), the Indemnified Party will within a reasonable period of time (A)
after receipt of such notice or otherwise first becoming knowledgeable of a
Claim, give the Indemnitor written notice of the assertion of such Claim; and
(B) furnish the Indemnitor with all relevant information and copies of all
pertinent documents relating to the Claim in the Indemnified Party's possession
or control or within a reasonable period of time after the Indemnified Party's
receipt thereof, as the case may be.
6.6. The failure of the Indemnified Party to give notice of
the Claim promptly will not affect the Indemnified Party's rights to
indemnification hereunder, except if, and only to the extent that, the
Indemnitor's defense of such Claim is actually prejudiced by reason of such
failure to give timely notice.
6.7. The Indemnitor will undertake and continuously defend
such Claim with counsel of reputable standing, and the Indemnified Party may
participate in such defense by counsel of its own choosing at its own expense.
6.8. If the Indemnified Party is required to pay any amount
with respect to said Claim, such amount shall be promptly paid by the Indemnitor
to the Indemnified Party upon the Indemnified Party giving the Indemnitor a
written request therefor.
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6.9. If the Indemnitor does not timely undertake or
continuously defend any such Claim, then the Indemnified Party will have the
right to employ separate counsel in any such action and to participate in the
defense thereof, and the reasonable fees and expenses of such counsel will be
the Indemnitor's obligation and direct responsibility. Furthermore, the
Indemnified Party will then have the right to defend or dispose of the Claim in
such manner as it deems advisable for Indemnitor's account and risk and for the
purpose hereof as if such defense or disposition had been made or undertaken by
the Indemnitor.
6.10. The Indemnitor agrees, unless it timely assumes the
defense of any Claim hereunder, to pay the Indemnified Party's costs of
defending any Claim, including, without limitation, reasonable attorney's and
paralegal fees, accountants' fees, witness fees and court costs, promptly after
written demand therefor is given by the Indemnified Party to the Indemnitor.
6.11. If the Indemnitor timely undertakes the defense of any
Claim, then so long as the Indemnitor, in good faith, is continuously contesting
or defending the Claim: (A) the Indemnified Party shall not admit any liability
with respect thereto, or settle, compromise, pay or discharge the same without
the prior written consent of the Indemnitor; (B) the Indemnified Party shall
cooperate with the Indemnitor in the contest or defense of the Claim; (C) the
Indemnified Party shall accept any settlement of the Claim, provided such
settlement is effected by monetary payment only and adequate arrangements for
such payment, to the Indemnified Party's reasonable satisfaction, are made by
the Indemnitor and the Indemnified Party is provided with a full release of all
Claims made; and (D) the Indemnitor will provide the Indemnified Party with all
information regarding the contest or defense of the Claim and allow counsel for
the Indemnified Party to monitor, at the Indemnified Party's sole expense, all
proceedings in connection with the Claim.
6.12. Neither the Indemnitor nor the Indemnified Party may
admit any liability with respect to any Claim or settle, compromise, pay or
discharge the same without the prior written consent of the other party if such
settlement, compromise, payment or discharge could in any way expose such other
party to the payment of funds which are not subject to a claim of reimbursement
or indemnification from the settling, compromising or paying party.
6.13. The Indemnified Party shall use reasonable efforts to
preserve the status quo, not incur any penalties and not prejudice the
Indemnitor's defense of any Claim prior to the Indemnitor undertaking the
defense of such Claim.
6.14. Anything in this Section 6 to the contrary
notwithstanding, if there is a reasonable probability that an indemnifiable
Claim may materially and adversely affect the Indemnified Party other than as a
result of money damages or other money payments, the Indemnified Party, upon
giving the Indemnitor reasonably prompt written notice thereof, shall have the
right to defend, compromise or settle such indemnifiable Claim; provided,
however, that no compromises or settlement which would result in the payment of
money shall be made, executed or delivered without the prior written consent of
the Indemnitor, which consent shall not be unreasonably withheld.
15
6.15. Any payment required by an Indemnitor pursuant to this
Section 6 shall be reduced by any insurance proceeds actually recovered
(excluding any deductible or self-insured retention) by the Indemnified Party as
a result thereof from a policy of insurance owned by any person. Any tax benefit
received by the Indemnified Party by reason of any action of the Indemnitor
shall reduce any payment required to be made by the Indemnitor to the
Indemnified Party arising therefrom.
7. Miscellaneous:
7.1. All of the covenants, promises, agreements,
representations and warranties set forth in this Agreement shall survive all
closings under this Agreement for the periods herein provided, and shall be
binding and enforceable notwithstanding any knowledge (other than as
specifically herein disclosed) on the part of a party hereto with respect to the
matter involved.
7.2. At any reasonable time upon prior reasonable notice by
Purchaser (whether at or after the Closing Date), Seller and the Company shall
execute, acknowledge, seal and deliver such further instruments and documents
and take such other actions as Purchaser may reasonably request more effectively
to vest in Purchaser full right, title and interest in and to the Shares and
related Assets as shall be issued, sold, transferred and delivered under this
Agreement, and to secure for Purchaser the full benefits intended to be secured
by this Agreement.
7.3. All writings, notices and other communications under this
Agreement shall be in writing and addressed as follows:
If to Purchaser, to: ▇▇▇▇▇▇ ▇▇▇▇▇▇, President
Carnegie International Corporation
Executive ▇▇▇▇▇ ▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
▇▇▇▇▇▇▇▇▇ and Pearl, LLP
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Seller, to: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇
c/o Voice Quest, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
16
Any such writing, notice or communication by telegram shall be deemed given when
received at the address specified above. Any such writing, notice or
communication other than by telegram shall be deemed given when deposited in the
appropriate international or United States mails, postage prepaid, first class,
registered or certified mail, return receipt requested, and addressed as
herein-above provided. Any such address may be changed by notice to the other
parties to this Agreement as provided in this Section 7.3.
7.4. This Agreement shall be governed by and construed and
enforced in all respects in accordance with the laws of the State of Maryland,
United States of America.
7.5. This Agreement contains the full, complete and exhaustive
agreement between the parties hereto. This Agreement may be amended only by an
instrument in writing executed, sealed and delivered by Seller, the Company and
Purchaser.
7.6. Nothing expressed or implied in this Agreement is
intended or shall be construed to confer or give any person or entity other than
the parties hereto any rights or remedies under or by reason of this Agreement.
7.7. This Agreement may be executed simultaneously or in
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same instrument.
7.8. Unless the context otherwise requires, the words such as
"herein", "hereinafter", "hereby", "hereto", "hereof" and "hereunder" refer to
this Agreement as a whole and not merely to a Section in which such words
appear. As used herein and unless the context otherwise requires, the singular
shall include the plural and vice-versa, and the masculine gender shall include
the feminine and neuter, and vice-versa.
7.9. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective heirs, legal representatives,
successors and permitted assigns.
7.10. The headings for this Agreement are intended for
convenience of reference only and shall be given no effect in the construction
or interpretation of this Agreement.
7.11. Carnegie shall have the right to assign its rights,
title and interests under this Agreement and to the Property to any of its
wholly owned subsidiaries, except as provided to the contrary herein. This shall
not impair any of Carnegie's obligations under this Agreement.
8. Employment of Seller:
Seller and Purchaser shall enter into mutually agreeable
Employment Agreements simultaneously herewith that provide for a salary to
▇▇▇▇▇▇ of Seventy-five Thousand Dollars ($75,000.00) for one (1) year following
the Closing Date, Eighty-seven Five Hundred Dollars ($87,500.00) in the second
year following the Closing Date and One Hundred Thousand Dollars ($100,000.00)
in the third year following closing. A cost of living adjustment of twenty-five
17
percent (25%) will be included, if ▇▇▇▇▇▇ is required to move to Maryland.
▇▇▇▇▇▇ shall receive three percent (3%) of the gross profit from the sale of the
Personal operator or ▇▇▇▇▇ ▇▇▇▇▇(TM) software by the Company, to be paid fifty
percent (50%) in cash and fifty percent (50%) in Rule 144 Legend Shares of
Carnegie at the end of each calendar year.
IN WITNESS WHEREOF, the parties have executed, sealed and delivered
this Agreement the day and year first herein above set forth.
PURCHASER:
ATTEST: CARNEGIE INTERNATIONAL CORPORATION
/s/ BY: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------- --------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, President
THE COMPANY:
ATTEST: Voice Quest, Inc.
/s/ /s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------- ------------------------------
▇▇▇▇ ▇▇▇▇▇▇, President
WITNESS: SELLERS:
/s/ /s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------- ------------------------------
▇▇▇▇ ▇▇▇▇▇▇, Individually
WITNESS:
/s/ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------- ------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, Individually
18
WITNESS:
/s/ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------- ------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇, Individually
WITNESS:
/s/ /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------- ------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Individually
19
