Exhibit 10.1
STOCK EXCHANGE AGREEMENT
Dated as of June 16, 1999
by and among
World Callnet, Inc.
Xxxx Xxxxxxx-Xxxxxxx
Xxxxx Xxxxxxx-Xxxxxxx
and
Xxxxx Xxxxxxx
STOCK EXCHANGE AGREEMENT
THIS STOCK EXCHANGE AGREEMENT (the "Agreement"), dated as of June __,
1999, is entered into by and among World Callnet, Inc., a Delaware corporation
("Buyer"), Xxxx Xxxxxxx-Xxxxxxx, Xxxxx Xxxxxxx-Xxxxxxx, and Xxxxx Xxxxxxx
(collectively referred to herein, for reference purposes only, as "Sellers," and
each of them individually referred to herein, for reference purposes only, as a
"Seller"). The Buyer and the Sellers are collectively referred to herein as the
"Parties."
A. The Sellers own ___ shares (the "Callnet Shares") of the capital
stock (the "Callnet Stock") of Callnet Plc, a United Kingdom company (the
"Target") and options to purchase Callnet Stock (the "Callnet Options"), both as
set forth on Exhibit A.
B. This Agreement contemplates a transaction (the "Acquisition") in
which the Buyer will exchange with the Seller, and the Seller will exchange with
the Buyer, the Callnet Shares in return for the issuance of certain shares of
the common stock, par value $0.001 per share (the "WCN Common Stock"), of the
Buyer. In connection with the Acquisition, Buyer will seek to enter into similar
agreements with the other shareholders of Target with the objective of Buyer
acquiring all or substantially all of the Callnet Stock based on a similar
purchase price.
C. Buyer will also seek to acquire the Callnet Options and all or
substantially all of the other options to acquire Callnet Stock pursuant to
option exchange agreements (an "Option Exchange Agreement") based on a similar
exchange ratio.
Now, therefore, in consideration of the premises and the mutual
covenants and agreements herein made, and in consideration of the
representations, warranties, and covenants herein contained, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Special Definitions.
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and
fees, including court costs and reasonable attorneys' fees and expenses.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Financial Statements" means the unaudited financial statements of the
Target as of March 31, 1999.
"Government Entity" means any federal, state, municipal, domestic or
foreign court, tribunal, administrative agency, department, commission, board,
bureau or other governmental authority or instrumentality.
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"Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith, (d) all mask works and all
applications, registrations, and renewals in connection therewith, (e) all trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals), (f) all computer software (including data and
related documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium).
"Knowledge" means actual knowledge after reasonable investigation.
"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for taxes.
"Material Adverse Effect" shall mean a material adverse effect on a
Person's business, operations, properties, assets or condition (financial or
otherwise).
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Person" means an individual, a partnership, a corporation, an
association, a limited liability company, a joint stock company, a trust, a
joint venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, restriction (whether on voting, sale, transfer or disposition or
otherwise) or other security interest, whether imposed by agreement,
understanding, law or otherwise.
"Subsidiary" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
2. Purchase and Sale of the Callnet Shares; Irrevocable Proxy.
(a) Basic Transaction. Subject to the terms and conditions set forth in
this Agreement, the Sellers hereby irrevocably sell, assign, transfer and
deliver to the Buyer good and valid title to all of the Callnet Shares, free and
clear of all Security Interests (other than restrictions imposed under
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applicable securities laws). The respective amounts of the Callnet Shares to be
sold and delivered by each Seller are set forth in Exhibit A.
(b) Purchase Price. Subject to the terms and conditions set forth in
this Agreement, and in consideration of the sale, assignment, transfer and
delivery of the Target Shares, the Buyer will issue __________ shares (the "WCN
Shares") of WCN Common Stock (the "Purchase Price"), in the proportions set
forth in Exhibit A, in exchange for the Callnet Shares. Subject to the terms and
conditions set forth on this Agreement, each Callnet Share owned and held of
record by each of the Sellers is hereby exchanged for forty (40) shares of WCN
Common Stock.
(c) Conditions Precedent. The Buyer's obligation to purchase the
Callnet Shares from the Sellers is subject to and conditioned upon the
fulfillment on or prior to the Closing (as hereafter defined) of the following
conditions which may be waived in whole or in part by the Buyer: (i) the receipt
of a fairness opinion from its investment banker, Xxxxxxxx Xxxxx & Company,
Inc., that states that the Acquisition is fair from a financial point of view to
the Buyer and (ii) the acquisition by the Buyer of all or at least eighty
percent (80%) of the Callnet Stock.
(d) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of the Buyer,
commencing at 2:00 p.m. local time on the first business day following the
satisfaction or waiver of all conditions to the obligations of the Buyer to
consummate the transactions contemplated hereby or such other date as the Buyer
and the Sellers may mutually determine (the "Closing Date").
(e) Irrevocable Proxy. This Agreement also constitutes each Seller's
irrevocable proxy in favor of Buyer to vote all of the Callnet Shares in favor
of the merger (the "Merger") of Target with and into the Buyer, or a
wholly-owned subsidiary of the Buyer, on the same terms as the Acquisition in
the event that the Buyer and the Target agree to pursue the Merger instead of
the Buyer purchasing all or substantially all of the Callnet Stock and Callnet
Options directly from the Callnet shareholders and Callnet optionholders. This
irrevocable proxy is acknowledged and deemed to be coupled with an interest and
shall be irrevocable until the earlier of three months from the date hereof or
the Buyer acquiring the Callnet Shares.
(f) Deliveries. At the Closing, (i) the Sellers will deliver to the
Buyer stock certificates representing all of their Callnet Shares, endorsed in
blank or accompanied by duly executed assignment documents, and (ii) the Buyer
will deliver to the Sellers certificates representing the whole number of shares
of WCN Common Stock into which each Seller's Callnet Shares shall be exchanged
as specified in Section 2(b) above.
3. Representations and Warranties of the Sellers. The Sellers represent
and warrant to the Buyer that the statements contained in this Section 3(a) are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section
3(a)).
(a) Authorization of Transaction. The Sellers have full power and
authority to execute and deliver this Agreement and to perform their obligations
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hereunder. This Agreement constitutes the valid and legally binding obligation
of the Sellers, enforceable in accordance with its terms and conditions. The
Sellers need not give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any Government Entity or any Person.
(b) Callnet Shares and Options. The Sellers hold of record and own
beneficially the issued and outstanding Callnet Shares as shown on Exhibit A,
free and clear of any restrictions on transfer (other than any restrictions
under the Securities Act and state securities laws), Security Interests,
options, warrants, purchase rights, contracts, commitments, equities, claims,
and demands. None of the Sellers are a party to any option, warrant, purchase
right, or other contract or commitment that could require any of the Sellers to
sell, transfer, or otherwise dispose of any capital stock of the Target (other
than this Agreement) except for the Callnet Options as set forth on Exhibit A.
None of the Sellers are a party to any voting trust, proxy, or other agreement
or understanding with respect to the voting of any capital stock of the Target.
There are no actions, suits or proceedings pending or threatened involving the
ownership by the Sellers of the Callnet Shares or the Sellers' Callnet Options.
(c) Investment Representations. The Seller certifies that he is not a
U.S. person, as defined in Rule 902 of the Securities Act of 1933, as amended
(the "Securities Act"), and is not acquiring the WCN Shares for the account or
benefit of any U.S. person or he is a U.S. person who purchased securities in a
transaction that did not require registration under the Securities Act. Seller
agrees to resell the WCN Shares only in accordance with the provisions of
Regulation S, pursuant to registration under the Securities Act, or pursuant to
an available exemption from registration; and agrees not to engage in hedging
transactions with regard to such securities unless in compliance with the
Securities Act. The Seller further acknowledges that he has been informed that
the shares of WCN Shares issued or to be issued pursuant to Section 2(b) will
bear a restrictive legend (as set forth in Section 3(d)) preventing transfer
except in accordance with the Securities Act and applicable state securities
laws and that stop transfer instructions will be given to the transfer agent for
the shares of WCN Common Stock issued or to be issued pursuant to Section 2(b).
(d) WCN Common Stock Certificates. The shares of WCN Common Stock
issued pursuant to this Agreement shall bear a legend substantially in the
following form: THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
STATE SECURITIES ACT AND CANNOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO
REGISTRATION UNDER THE ACT OR PURSUANT TO AN AVAILABLE EXEMPTION. ALSO SUCH
SHARES ARE "RESTRICTED SECURITIES" WITHIN THE MEANING OF RULE 144 PROMULGATED BY
THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT AND MAY BE
SUBJECT TO THE LIMITATIONS AND REPORTING REQUIREMENTS OF SAID RULE UPON RESALE
OR OTHER DISPOSITION THEREOF. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES
MAY NOT BE CONDUCTED.
(e) Investment Purpose. The Seller represents and warrants that he is
acquiring WCN Shares solely for his own account, for investment purposes, and
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not with a view to or for resale in connection with any distribution or public
offering thereof, within the meaning of any applicable securities laws and
regulations. The Seller understands that the WCN Shares have not been registered
under the Securities Act or any applicable securities laws of any state by
reason of specific exemptions under the provisions thereof that depend in part
upon the investment intent of the Seller.
(f) Sophistication. The Seller by reason of his own business and
financial experience or that of those persons retained by him, who are
unaffiliated with and not compensated by the Buyer or its officers, to advise
him with respect to this investment. The Seller has such knowledge,
sophistication and experience in business and financial matters in general and
with respect to investments of a nature similar to an investment in the Buyer so
as to be capable of evaluating the merits and risks of, and making an informed
business decision with regard to, the acquisition of the WCN Shares, and has the
capacity to protect his own interests.
(g) Access to SEC Reports. The Seller acknowledges that he (a) has
received all the information he has deemed necessary to make an informed
investment decision with respect to an acquisition of the WCN Shares; (b)
understands that the Buyer is subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and has had
the opportunity to review all publicly available filings (the "SEC Reports")
made by Buyer with the Securities and Exchange Commission pursuant to either the
Securities Act or the Exchange Act; (c) has had the unrestricted opportunity to
make such investigation as it has desired pertaining to Buyer and the
acquisition of an interest therein and to verify the information that is, and
has been, available to it; and (d) has had the opportunity to ask questions to
the Buyer, and representatives of the Buyer concerning the Buyer.
4. Representation and Warranty of the Buyer. The Buyer will not
register any transfer of the WCN Common Stock not made in accordance with the
provisions of Regulation S, pursuant to registration under the Securities Act,
or pursuant to an available exemption from registration; provided, however, that
if the securities are in bearer form or foreign law prevents the Buyer from
refusing to register securities transfers, other reasonable procedures will be
implemented to prevent any transfer of the securities not made in accordance
with the provisions of Regulation S.
5. Representations and Warranties Concerning the Target. The Sellers
represent and warrant to the Buyer that the statements contained in this Section
5 are correct and complete as of the date of this Agreement and will be correct
and complete as of the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement throughout this
Section 5).
(a) Organization, Qualification, and Corporate Power. The Target is a
corporation duly incorporated, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation. The Target is duly authorized to
conduct business and is in good standing under the laws of each jurisdiction
where such qualification is required. The Target has, and upon consummation of
the purchase and sale of the Callnet Shares contemplated hereby, the Target will
have full corporate power and authority and all licenses, permits, and
authorizations necessary to carry on the businesses in which it is presently
engaged and to own and use the properties owned and used by it, and except for
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those licenses, permits and authorizations, the failure of which to obtain would
not have a Material Adverse Effect on the Target. The minute books (containing
the records of meetings of the stockholders, the board of directors, and any
committees of the board of directors), the stock certificate books, and the
stock record books of the Target are correct and complete. The Target is not in
default under or in violation of any provision of its charter or bylaws
(Memorandum and Articles of Association) the result of which could have a
Material Adverse Effect on the Target.
(b) Authorization of Transaction. The Target has full corporate power
and authority to execute and deliver this Agreement and to perform its
obligations hereunder. This Agreement constitutes the valid and legally binding
obligation of the Target, enforceable in accordance with its terms and
conditions. The Target need not give notice to, make any filing with, or obtain
any authorization, consent, or approval of any government or Government Entity
(including any approvals under the laws or regulations of the United Kingdom) in
order to consummate the transactions contemplated by this Agreement.
(c) Capitalization. The entire authorized, issued and outstanding
capital stock of the Target, all outstanding securities convertible into or
exchangeable or exercisable for shares of capital stock of the Target, including
Callnet Options, and all rights, agreements or other commitments of the Target
to issue, transfer or sell its capital stock is as set forth in Schedule 5(c)
hereto. All of the issued and outstanding Callnet Shares have been duly
authorized, and are validly issued, fully paid, and nonassessable and none of
such shares have been issued in violation of the preemptive rights of any
Person. There are no voting trusts, proxies, or other agreements or
understandings with respect to the voting of the capital stock of the Target.
(d) Brokers' Fees. Neither the Target nor the Buyer has Liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the Acquisition, including the transaction with the Buyer
contemplated by this Agreement.
(e) Title to Assets. The Target has good and indefeasible title to, or
a valid leasehold interest in, the properties and assets used by it, real,
personal and mixed, tangible and intangible, free and clear of all Security
Interests, except for properties and assets disposed of in the Ordinary Course
of Business for full and fair value since the date of the latest balance sheet.
(f) Subsidiaries. The Target does not have any Subsidiaries, and the
Target does not control directly or indirectly any corporation, partnership,
trust, or other business association. The only direct or indirect equity
investment that Target holds is in the Buyer.
(g) Absence of Certain Changes. Since March 31, 1999, there has not
been any event or occurrence which could result in a Material Adverse Effect on
the Target. Neither has there been any other material occurrence, event,
incident, action, failure to act, or transaction outside the Ordinary Course of
Business involving the Target.
(h) Undisclosed Liabilities. The Target has no Liability (and there is
no Basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against the Target giving
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rise to any Liability), except for (i) Liabilities set forth on the face of the
Financial Statements (rather than in any notes thereto) and (ii) Liabilities
which have arisen after the most recent Financial Statements in the Ordinary
Course of Business (none of which results from, arises out of, relates to, is in
the nature of, or was caused by any breach of contract, breach of warranty,
tort, infringement, or violation of law), none of which, either individually or
in the aggregate, could have a Material Adverse Effect on the Target.
(i) Legal Compliance. The Target (i) has complied in all material
respects with all applicable laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and charges thereunder) of
federal, state, local, and foreign governments (and all agencies thereof), (ii)
to the Knowledge of the Sellers, has no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand, or notice filed or commenced
against any of them alleging any failure so to comply, and (iii) is not subject
to or in default with respect to any judgment, writ, injunction, decree, rule or
regulation of any Government Entity that could have a Material Adverse Effect on
the Target.
(j) Tax Matters.
(i) The Financial Statements make full provision or reserve
for all taxation (including deferred taxation) which is liable to be or
could be assessed on the Target, or for which it may be accountable, in
respect of the period covered.
(ii) All returns, computations and payment which should be, or
should have been, made by the Target for any taxation purpose have been
made within the requisite periods and are up to date, correct and on a
proper basis and none of them is, or is likely to be, the subject of
any dispute with the Inland Revenue or other taxation authorities.
(iii) The Target has duly deducted and accounted for all
amounts which it has been obliged to deduct in respect of taxation and,
in particular, has properly operated the PAYE system, by deducting tax,
as required by law, from all payments made, or treated as made, to its
employees or former employees, and accounting to the Inland Revenue for
all tax so deducted and for all tax chargeable on benefits provided for
its employee or former employees.
(k) Intellectual Property.
(i) The Target owns or has the right to use pursuant to
license, sublicense, agreement, or permission all Intellectual Property
used in the operation of the businesses of the Target as presently
conducted. Each item of Intellectual Property owned or used by the
Target immediately prior to the Closing hereunder will be owned or
available for use by the Target on identical terms and conditions
immediately subsequent to the Closing hereunder. The Target has taken
all necessary action to maintain and protect each item of Intellectual
Property that it owns or uses.
(ii) The Target has not interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual
Property rights of third parties, and none of the Sellers and the
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directors and officers (and employees with responsibility for
Intellectual Property matters) of the Target has ever received any
charge, complaint, claim, demand, or notice alleging any such
interference, infringement, misappropriation, or violation (including
any claim that the Target must license or refrain from using any
Intellectual Property rights of any third party). To the Knowledge of
the Sellers, no third party has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual
Property rights of the Target.
(iii) The Sellers have delivered to the Buyer correct and
complete copies of all patents, registrations, applications, licenses,
agreements, and permissions (as amended to date) (the "Patents") and
have made available to the Buyer correct and complete copies of all
other written documentation evidencing ownership and prosecution (if
applicable) of each such item.
(iv) With respect to each Patent owned or used by the Target
in the operation of the businesses of the Target as presently
conducted:
(A) the Target possesses all right, title, and
interest in and to the item, free and clear of any Security
Interest, license, or other restriction;
(B) the item is not subject to any outstanding
injunction, judgment, order, decree, ruling, or charge;
(C) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending
or, to the Knowledge of the Sellers is threatened which
challenges the legality, validity, enforceability, use, or
ownership of the item; and
(D) the Target has never agreed to indemnify any
Person for or against any interference, infringement,
misappropriation, or other conflict with respect to the item.
(v) The Sellers have delivered to the Buyer correct and
complete copies of all licenses, sublicenses, agreements, and
permissions (as amended to date) for Intellectual Property that any
third party owns and that the Target uses pursuant to such licenses
(the "Licenses"). With respect to each item of Intellectual Property
which use is subject to a License:
(A) the license, sublicense, agreement, or permission
covering the item is legal, valid, binding, enforceable, and
in full force and effect;
(B) the license, sublicense, agreement, or permission
will continue to be legal, valid, binding, enforceable, and in
full force and effect on identical terms following the
Closing;
(C) no party to the license, sublicense, agreement,
or permission is in breach or default, and no event has
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occurred which with notice or lapse of time would constitute a
breach or default or permit termination, modification, or
acceleration thereunder;
(D) no party to the license, sublicense, agreement,
or permission has repudiated any provision thereof;
(E) with respect to each sublicense, the
representations and warranties set forth in subsections (A)
through (D) above are true and correct with respect to the
underlying license;
(F) the underlying item of Intellectual Property is
not subject to any outstanding injunction, judgment, order,
decree, ruling, or charge;
(G) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending
or, to the Knowledge of the Sellers, is threatened which
challenges the legality, validity, or enforceability of the
underlying item of Intellectual Property; and
(H) the Target has not granted any sublicense or
similar right with respect to the license, sublicense,
agreement, or permission.
(vi) The Target will not interfere with, infringe upon,
misappropriate, or otherwise come into conflict with, any Intellectual
Property rights of third parties as a result of the continued operation
of its business as presently conducted and as presently proposed to be
conducted.
(vii) None of the Sellers has any Knowledge of any new
products, inventions, procedures, or methods that any competitors or
other third parties have developed which reasonably could be expected
to supersede or make obsolete any product or process of the Target.
(viii) All of the Target's personnel, including without
limitation, employees, agents, consultants, contractors, and
sub-contractors, who have had access to, contributed to or participated
in the conception, development and/or enhancement of the Intellectual
Property have executed an assignment in favor of the Target or
otherwise have executed agreements containing appropriate and adequate
restrictions on the disclosure, dissemination and use of the
Intellectual Property.
(ix) The Target warrants that all of the Intellectual Property
is Year 2000 compliant.
(l) Tangible Assets. The Target owns or leases all buildings, machinery,
equipment, and other tangible assets necessary for the conduct of its business
as presently conducted and as presently proposed to be conducted. Each such
tangible asset is free from material defects (patent and latent), has been
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maintained in accordance with normal industry practice, is in good operating
condition and repair (subject to normal wear and tear), and is suitable for the
purposes for which it presently is used and presently is proposed to be used.
(m) Litigation. The Target is neither (i) subject to any outstanding
injunction, judgment, order, decree, ruling, or charge nor (ii) a party or, to
the Knowledge of the Sellers and the directors and officers (and employees with
responsibility for litigation matters) of the Target, threatened to be made a
party to any action, suit, proceeding, hearing, or investigation of, in, or
before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any arbitrator. None of the
Sellers have any reason to believe that any such action, suit, proceeding,
hearing, or investigation may be brought or threatened against the Target which,
if determined adversely, would have a Material Adverse Effect on the Target.
(n) Guaranties. The Target is not a guarantor or otherwise liable for
any Liability or obligation (including indebtedness) of any other Person.
(o) Certain Business Relationships with the Target. Except for the
employment agreements attached hereto as Exhibit B (the "Employment
Agreements"), none of the Sellers nor their Affiliates have been involved in any
business arrangement or relationship with the Target within the past 12 months,
and none of the Sellers or their Affiliates own any asset, tangible or
intangible, which is used in the business of the Target. The transaction with
Global Technology Partners will not constitute an event that terminates the
Sellers' Salary Deferral Agreement. The Target is not in default of any
obligation to the Sellers pursuant to the Employment Agreements or otherwise and
none of the Sellers has any claim against the Target except for salary expense
reimbursement and other employee benefits that have accrued and are consistent
with past practices of the Target in type and amount.
6. Indemnification
(a) In the event any of the Sellers breach (or in the event any third
party alleges facts that, if true, would mean any of the Sellers had breached)
any of their representations, warranties, or covenants contained herein,
provided that the Buyer makes a written claim for indemnification against the
Sellers, then the Sellers, severally, agree to indemnify the Buyer from and
against any Adverse Consequences the Buyer may suffer through and after the date
of the claim for indemnification (including any Adverse Consequences the Buyer
may suffer after the end of any applicable survival period) resulting from,
relating to, in the nature of, or caused by the breach (or the alleged breach)
only for that portion of such claim that equals the full value of each Seller's
Callnet Shares and Callnet Options.
(b) The Sellers, severally, agree to indemnify the Buyer from and
against any Adverse Consequences the Buyer may suffer resulting from, arising
out of, relating to, in the nature of, or caused by any regulatory
non-compliance, including but not limited to any regulatory non-compliance
arising out of or relating to the manner in which the business of the Target has
been conducted prior to the Closing Date or arising out of or relating to the
transactions with the Buyer contemplated hereby, only for that portion of such
Liability that equals the full value of each Seller's Callnet Shares and Callnet
Options.
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(c) The foregoing indemnification provisions are in addition to, and
not in derogation of, any statutory, equitable, or common law remedy any Party
may have for breach of representation, warranty, or covenant. The Sellers hereby
agree that they will not make any claim for indemnification against the Target
by reason of the fact that either of them was a director, officer, employee, or
agent of the Target or was serving at the request of the Target as a partner,
trustee, director, officer, employee, or agent of another entity (whether such
claim is for judgments, damages, penalties, fines, costs, amounts paid in
settlement, losses, expenses, or otherwise and whether such claim is pursuant to
any statute, charter document, bylaw (Memorandum and Articles of Association),
agreement, or otherwise) with respect to any action, suit, proceeding,
complaint, claim, or demand brought by the Buyer against the Sellers or the
Target (whether such action, suit, proceeding, complaint, claim, or demand is
pursuant to this Agreement, applicable law, or otherwise).
7. Miscellaneous.
(a) Survival of Representations and Warranties. The representations,
warranties and covenants of the Parties contained in this Agreement shall
survive the Closing.
(b) Press Releases and Public Announcements. The Sellers shall not
issue any press release or make any public announcement relating to the subject
matter of this Agreement prior to the Closing without the prior written approval
of the Buyer.
(c) Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement among the Parties and supersedes any
prior understandings, agreements, or representations by or among the Parties,
written or oral, to the extent they related in any way to the subject matter
hereof.
(d) Succession and Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the Parties and their
respective successors and permitted assigns. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any party
without the prior written consent of the others. Nothing contained herein,
express or implied, is intended to confer on any person other than the Parties
or their respective successors and permitted assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
(e) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer, the Target and the Sellers. No waiver by any Party of any default,
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misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(h) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(i) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement.
(j) Specific Performance. Each of the Parties acknowledges and agrees
that in the event of any breach of this Agreement, the non-breaching party would
be irreparably harmed and could not be made whole by monetary damages. It is
accordingly agreed that the Parties will waive the defense in any action for
specific performance, that a remedy at law would be adequate and that the
Parties, in addition to any other remedy to which they may be entitled at law or
in equity, shall be entitled to compel specific performance of this Agreement in
any action instituted in any court thereof having jurisdiction of such action.
(k) Post-Closing. In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of this Agreement,
each of the Parties will take such further action (including, without
limitation, the execution and delivery of such further instruments and
documents, including, without limitation, an Option Exchange Agreement) as any
other Party reasonably may request, all at the sole cost and expense of the
requesting Party.
[Remainder of page intentionally left blank; signature page follows]
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
SELLERS:
-----------------------------------
Xxxx Xxxxxxx-Xxxxxxx
-----------------------------------
Xxxxx Xxxxxxx-Xxxxxxx
-----------------------------------
Xxxxx Xxxxxxx
-----------------------------------
BUYER:
WORLD CALLNET, INC.
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
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