AGREEMENT
THIS AGREEMENT is made as of the 19th day of July, 1996, by
and among WORLDWIDE APPLIED TELECOM TECHNOLOGY, INC., a Delaware
corporation ("WWATT"), XXXXXX X. XXXXXXXXX ("Xxxxxxxxx"), and
XXXXXX X. XXXXXXX, XXXXXXX X. XXXXX, XXXX X. XXXXXX, XXXXXXX X.
XXXXXXX, and XXXX X. XXXXXXX (collectively, the "Xxxxxxx
Shareholders").
BACKGROUND
The Xxxxxxx Shareholders own all the outstanding capital
stock of Xxxxxxx Partners, Inc., an Illinois corporation
("Xxxxxxx"). WWATT wishes to acquire Xxxxxxx, and the Xxxxxxx
Shareholders wish to own common stock in WWATT and to continue to
conduct Xxxxxxx'x business as a subsidiary of WWATT.
Accordingly, in consideration of the mutual agreements set
forth herein, the parties agree as follows:
ARTICLE 1
STOCK FOR STOCK EXCHANGE
1.1 Exchange of Xxxxxxx Shares for WWATT Shares. Subject
to the terms and conditions of this Agreement, WWATT agrees to
issue to the Xxxxxxx Shareholders a total of 690,000 shares of
WWATT's common stock (the "WWATT Common Stock"), in exchange for
all the outstanding shares of capital stock of Xxxxxxx (the
"Xxxxxxx Stock"). Each Xxxxxxx Shareholder shall transfer to
WWATT at the Closing (as hereinafter defined) the number of
shares of Xxxxxxx Stock shown opposite such person's name on
Exhibit 1.1 and shall receive in exchange therefor the number of
shares of WWATT Common Stock shown opposite such person's name on
Exhibit 1.1.
The parties hereto, including the Xxxxxxx Shareholders, D.
Xxxx Xxxxxxx, Xxxxxxx and WWATT, intend for this exchange of
stock to be treated as a tax free reorganization as defined
within the U.S. Internal Revenue Code Section 368.
1.2 Closing. The exchange of WWATT Common Stock for
Xxxxxxx Stock shall take place at a closing (the "Closing") at
such place as shall be mutually agreed to by the parties at 10:00
a.m. on September 1, 1996, or as soon as practicable thereafter
upon the satisfaction or waiver of the conditions to Closing set
forth in Article 5 and in Section 7.1.1. The date on which the
Closing takes place is referred to as the "Closing Date." At the
Closing, each Xxxxxxx Shareholder shall deliver to WWATT stock
certificates representing the Xxxxxxx Stock owned by such Xxxxxxx
Shareholder, duly endorsed for transfer or with duly executed
stock powers attached, together with such other documents as
WWATT may reasonably request prior to the Closing. At the
Closing, WWATT shall deliver to each Xxxxxxx Shareholder a stock
certificate representing the WWATT Common Stock issued to such
Xxxxxxx Shareholder in exchange for his or her Xxxxxxx Stock,
together with such other documents as each Xxxxxxx Shareholder
may reasonably request prior to the Closing. The parties agree
to execute such additional documents after the Closing as may be
necessary or desirable to carry out the terms of this Agreement.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF XXXXXXX SHAREHOLDERS
The Xxxxxxx Shareholders, jointly (except where otherwise
expressly indicated to the contrary) and severally, represent and
warrant as follows:
2.1 Organization. To the best of their knowledge, Xxxxxxx
is duly incorporated, validly existing and in good standing under
the laws of the State of its incorporation, is qualified to do
business as a foreign corporation in each other jurisdiction in
which the failure to be so qualified would have a material
adverse effect on the transactions contemplated by this Agreement
or on the business, financial condition or results of operation
of Xxxxxxx, and has full corporate power and authority to
conduct its business as presently conducted and to enter into and
perform this Agreement.
2.2 Authorization. Each Xxxxxxx Shareholder represents and
warrants that he or she has full power, capacity and authority to
execute, deliver and perform this Agreement subject to the
security interest held, and rights of approval or consent which
may be asserted, by Resource Bank. This Agreement has been duly
executed and delivered by such Xxxxxxx Shareholder and (assuming
the due execution and delivery by the other parties hereto)
constitutes the legal, valid and binding agreement of such
Xxxxxxx Shareholder enforceable against such person in accordance
with its terms, except as may be limited by applicable
bankruptcy, insolvency or other laws affecting the enforcement of
creditors' rights and remedies generally and by general
principles of equity. The Xxxxxxx Shareholders shall, at the
Closing, provide a fully executed resolution of the Xxxxxxx Board
of Directors indicated that there are no existing conditions that
preclude the transaction as defined in Section 1.1 except the
security interest held by Resource Bank and any and all rights
thereunder related thereto and authorizing such exchange as
documented by a Plan of Reorganization that references those
actions to accomplish the tax free result intended by the parties
in this transaction which will be incorporated within this
Xxxxxxx Board of Directors resolution.
2.3 No Consents, Conflicts. Other than the rights held by
Resource Bank arising in connection with its security interest
and any consent and approval rights arising therefrom each
Xxxxxxx Shareholder represents and warrants that (a) no consent,
approval or other action by any governmental authority or third
party is required in connection with the execution, delivery and
performance of this Agreement by such Xxxxxxx Shareholder; and
(b) neither the execution, delivery or performance of this
Agreement by such Xxxxxxx Shareholder will (i) violate, conflict
with or result in a breach of any provision of or constitute a
default or an event which with notice or lapse of time or both,
would constitute a default under Xxxxxxx'x articles of
incorporation or bylaws or any agreement or obligation to which
Xxxxxxx or such Xxxxxxx Shareholder is a party or by which either
of such persons may be bound or affected where such violation,
conflict, breach or default would have a material adverse effect
on the transactions contemplated by this Agreement, or
(ii)violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Xxxxxxx or such Xxxxxxx Shareholder
where such violation would have a material adverse effect on the
transactions contemplated by this Agreement.
2.4 Financial Statements. The Xxxxxxx Shareholders have
previously delivered to WWATT the balance sheets and related
statements of income, shareholders' equity and cash flows as of
and for the calendar year period ended December 31, 1995 and for
the nine months ended September 30, 1996 (the "Financial
Statements"). The Financial Statements have been prepared in
accordance with Xxxxxxx'x books and records, present fairly in
all material respects the financial position, results of
operations, shareholders' equity and cash flows for the year then
ended. There has been no material adverse change in the
business, financial condition, results of operations or prospects
of Xxxxxxx since September 30, 1996. Except as disclosed in the
Financial Statements, Xxxxxxx does not have any liabilities,
commitments or obligations (whether accrued, absolute, contingent
or otherwise), other than obligations incurred since the date of
the Financial Statements in the ordinary course of business and
consistent with past practice and none of which has or will have
a material adverse effect, on the business, financial condition,
results of operations or prospects of Xxxxxxx.
2.5 Compliance, No Litigation. To the best of their
knowledge, Xxxxxxx is in material compliance with all applicable
federal, state, local and foreign laws, ordinances, orders, rules
and regulations and with all agreements, commitments or
obligations to which it is a party or by which it or any of its
assets may be bound. To the best of their knowledge, there is no
proceeding, investigation or inquiry pending or threatened
against Xxxxxxx, its business or any of its assets, nor is there
any basis for any such proceeding, investigation or inquiry.
Neither Xxxxxxx nor, to the best of their knowledge, its business
or any of its assets is subject to any judgment, order, writ or
injunction of any court, arbitrator or governmental agents or
instrumentality.
2.6 Authorized Capital Stock. The authorized capital stock
of Xxxxxxx consists of 100,000 shares of common stock, of which
15,150 shares are issued and outstanding, all of which are owned
by the Xxxxxxx Shareholders. All the outstanding shares of
Xxxxxxx Stock have been validly issued and are fully paid and non
assessable. There are no outstanding options, warrants, rights
or other commitments obligating Xxxxxxx to issue any of its
capital stock. The capital stocks held by Xxxxxx X. Xxxxxxx are
pledged to the bank and to other lenders to support loans and
debt provided to Xxxxxxx Partners, Inc. and personally to Xxxxxx
X. Xxxxxxx and to D. Xxxx Xxxxxxx, held both individually,
jointly and severally.
2.7 Title to Xxxxxxx Stock. Each Xxxxxxx Shareholder owns
the Xxxxxxx Stock to be transferred to WWATT at the Closing, free
and clear of all liens, claims and encumbrances, and at the
Closing, WWATT will acquire good and valid title to such Xxxxxxx
Stock, free and clear of all liens, claims and encumbrances. The
only exception is that the Xxxxxxx stock held by Xxxxxx X.
Xxxxxxx is subject to certain liens, claims, and encumbrances as
described in Section 2.6.
2.8 Investment Representations. Each Xxxxxxx Shareholder
represents and warrants that he or she has such knowledge and
experience in financial and business matters as to be capable of
evaluating the merits and risks of an investment in the WWATT
Common Stock in exchange for the Xxxxxxx Stock owned by such
Xxxxxxx Shareholder, and has been given the opportunity to
examine all documents and ask questions of, and receive answers
from representatives of WWATT concerning the terms and conditions
of such exchange and the financial condition, business and
prospects of WWATT, and to obtain such additional information as
he or she deemed necessary in connection with the transaction
contemplated by this agreement. The WWATT common stock to be
acquired by such Xxxxxxx Shareholder pursuant to this agreement
is being acquired by such Xxxxxxx Shareholder pursuant to this
agreement is being acquired for such person's own account for
investment and not with a view to the public distribution
thereof, and such Xxxxxxx Shareholder will not effect any
transfer of such WWATT Common Stock except pursuant to an
effective registration statement under the Securities Act of 1933
or exemptions from registration thereunder and in compliance with
all applicable state securities laws. Each Xxxxxxx Shareholder
understands that the WWATT Common Stock to be received by such
person at the Closing will bear appropriate restrictive legends
referred to the foregoing transfer restrictions.
2.9 Reliance on Own Tax Advisors. The Xxxxxxx Shareholders
are relying on their own tax advisors in connection with
determining the tax consequences to them of the transactions
contemplated by this Agreement and are not relying on WWATT or
WWATT's attorneys, accountants or advisors for any such advice.
2.10 Brokers and Finders. Neither WWATT nor any of its
shareholders, officers, directors or agents is liable for any
brokers' or finders' fees or expenses in connection with this
Agreement or the transactions contemplated hereby.
2.11 No Misrepresentations. Neither this Agreement nor any
document executed or to be executed by any Xxxxxxx Shareholder in
connection with the transactions contemplated hereby contains or
will contain when executed any untrue statement of a material
fact or omits or will omit when executed to state a material fact
necessary in order to make the statements made, in the light of
the circumstances under which they were made, not misleading.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF WWATT
WWATT represents and warrants as follows:
3.1 Organization. WWATT is duly incorporated, validly
existing and in good standing under the laws of the State of its
incorporation, is qualified to do business as a foreign
corporation in each other jurisdiction in which the failure to be
so qualified would have a material adverse effect on the
transactions contemplated by this Agreement or on the business,
financial condition or results of operations of WWATT, and has
full corporate power and authority to conduct its business as
presently conducted and to enter into and perform this Agreement.
3.2 Authorization. WWATT has full power, capacity and
authority to execute, deliver and perform this Agreement. This
Agreement has been duly executed and delivered by WWATT and
(assuming the due execution and delivery by the other parties
hereto) constitutes the legal, valid and binding agreement of
WWATT enforceable against WWATT in accordance with its terms,
except as may be limited by applicable bankruptcy, insolvency or
other laws affecting the enforcement of creditors' rights and
remedies generally and by general principles of equity. WWATT
shall, at the Closing, provide a fully executed resolution of the
WWATT Board of Directors indicating that there are no existing
conditions that preclude the transaction as defined in Section
1.1 and authorizing such exchange as documented by a Plan or
Reorganization that references those actions to accomplish the
tax free result intended by the parties in this transaction which
will be incorporated within this WWATT Board of Directors
resolution.
3.3 No Consents, Conflicts. No consent, approval or other
action by any governmental authority or third party is required
in connection with the execution, delivery and performance of
this Agreement by WWATT and neither the execution, delivery or
performance of this Agreement by WWATT will (i) violate, conflict
with or result in a breach of any provision of, or constitute a
default or an event which with notice or lapse of time or both,
would constitute a default under WWATT's articles of incorporated
or bylaws or any agreement or obligation to which WWATT is a
party or by which it may be bound or effected where such
violation, conflict, breach or default would have a material
adverse effect on the transactions contemplated by this
Agreement, or (ii) violate any order, writ, injunctions, decree,
statue, rule or regulation applicable to WWATT where such
violation would have a material adverse effect on the
transactions contemplated by this Agreement.
3.4 Business of WWATT. WWATT has had no business
operations to date except as set forth on Exhibit 3.4. WWATT will
deliver at the closing to each Xxxxxxx Shareholder a statement of
financial condition as of September 30, 1996, which has been
prepared in accordance with the books and records of WWATT, and
presents fairly in all material respects the financial position
of WWATT as of the date thereof. There has been no material
adverse change in the business, financial condition, results of
operations or prospects of WWATT since the date of WWATT's
balance sheet referred to above. Except as disclosed in such
balance sheet and as otherwise herein specifically noted, WWATT
does not have any liabilities, commitments or obligations
(whether accrued, absolute, contingent or otherwise), other than
obligations incurred since the date of the Financial Statements
in the ordinary course of business and consistent with past
practice and none of which has or will have a material adverse
effect, on the business, financial conditions, results of
operations or prospects of WWATT.
3.5 Compliance, No Litigation. WWATT is in material
compliance with all applicable federal, state, local and foreign
laws, ordinances, orders, rules and regulations and with all
agreements, commitments or obligations to which it is a party or
by which it or any of its assets may be bound. There is no
proceeding, investigation or inquiry pending or threatened
against WWATT, its business or any of its assets, nor is there
any basis for any such proceeding, investigation or inquiry.
Neither WWATT nor its business or any of its assets is subject to
any judgment, order, writ or injunction of any court, arbitrator
or governmental agency or instrumentality.
3.6 Authorized Capital Stock. The authorized capital stock
of the Company is 20,000,000 shares, consisting of 5,000,000
shares of convertible preferred Stock, $.001 par value per share,
none of which are issued or outstanding and 15,000,000 shares of
Common Stock, $.001 par value per share, of which 1,810,000
shares have been validly issued and are outstanding, and
1,300,000 shares are presently being offered for sale.
3.7 Title to WWATT Stock. The WWATT Common Stock to be
issued to each Xxxxxxx Shareholder will be duly and validly
issued, fully paid and non assessable, and each Xxxxxxx
Shareholder will acquire title to the WWATT Common Stock to be
issued to such person hereunder free and clear of all liens,
claims and encumbrances.
3.8 Investment Representations. WWATT represents and
warrants that it has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits
and risks of an investment in the Xxxxxxx Stock in exchange for
the WWATT Common Stock, and has been given the opportunity to
examine all documents and ask questions of and receive answers
from representatives of Xxxxxxx concerning the terms and
conditions of such exchange and the financial condition, business
and prospects of Xxxxxxx, and to obtain such additional
information as it deems necessary in connection with the
transactions contemplated by this Agreement the Xxxxxxx Stock to
be acquired by WWATT pursuant to this Agreement is being acquired
for WWATT's own account for investment and not with a view to the
public distribution thereof, and WWATT will not effect any
transfer of such Xxxxxxx Stock except pursuant to an effective
registration statement under the Securities Act of 1933 or
exemptions from registration thereunder and in compliance with
all applicable state securities laws. WWATT understands that the
Xxxxxxx Common Stock to be received by WWATT at the Closing will
bear appropriate restrictive legends referred to the foregoing
transfer restrictions. WWATT agrees to comply with Blue Sky Laws
in the States of Illinois and Wisconsin.
3.9 Reliance on Own Tax Advisers. WWATT is relying on
their own tax advisors in connection with determining the tax
consequences to them of the transactions contemplated by this
Agreement and are not relying on Xxxxxxx or Xxxxxxx'x attorneys,
accountants or advisors for any such advice.
3.10 Brokers and Finders. Neither Xxxxxxx nor any of its
shareholders, officers, director or agents is liable for any
brokers' or finders' fees or expenses in connection with this
Agreement or the transactions contemplated hereby.
3.11 No Misrepresentations. Neither this Agreement nor any
document executed or to be executed by WWATT in connection with
the transactions contemplated hereby contains or will contain
when executed any untrue statement of a material fact or omits or
will omit when executed to state a material fact necessary in
order to make the statements made, in light of the circumstances
under which they were made, not misleading.
ARTICLE 4
ACTIONS PRIOR TO CLOSING
4.1 Ordinary Course. From the date hereof until the
Closing, each Xxxxxxx Shareholder agrees to use reasonable best
efforts to cause Xxxxxxx to conduct its business only in the
ordinary course, consistent with past practice.
4.2 Best Efforts. Each party agrees to use reasonable best
efforts to cause the fulfillment at the earliest practicable date
of all the conditions to the Closing.
4.3 Access. During the period prior to Closing, WWATT
shall give each Xxxxxxx Shareholder, and the Xxxxxxx Shareholder
shall cause Xxxxxxx to give WWATT, and their respective
representatives reasonable access during normal business hours to
all of its books and records, and to cause to be furnished to
each other and their representatives all information with respect
to their respective businesses and affairs as the other may
reasonably request.
4.4 Plan of Reorganization. Xxxxxxx and WWATT will effect
a plan of Reorganization that documents the actions it is taking
to accomplish transactions in accordance with tax free intent of
the parties, including the Xxxxxxx Shareholders, D. Xxxx Xxxxxxx,
Xxxxxxx and WWATT, as defined in Section 1.1 above.
ARTICLE 5
CONDITIONS TO CLOSING
5.1 Xxxxxxx Shareholders' Obligations to Close. Each and
every obligation of each Xxxxxxx Shareholder to be performed on
the Closing Date shall be subject to the satisfaction or waiver
of each of the following conditions:
5.1.1 Representations, Warranties and Covenants.
The representations and warranties of WWATT set forth in this
Agreement shall be true and correct in all material respects when
made and as of the Closing Date as though such representations
and warranties were made on and as of the Closing Date, and WWATT
shall have performed all obligations required to be performed by
it under this Agreement on or before the Closing Date.
5.1.2 Tax Consequences. The Xxxxxxx Shareholders
shall have determined, in consultation with their own tax
advisors, that the transactions to be consummated at the Closing
will not result in taxable income to them (the parties agree to
use reasonable best efforts to restructure the transactions
contemplated hereby in the event that the Xxxxxxx Shareholders
are unable to make such a determination, so that the foregoing
condition can be satisfied).
5.1.3 Employment Agreements. WWATT shall have
caused Xxxxxxx to enter into an employment agreement with each
Xxxxxxx key employee in substantially the form set forth for each
such Xxxxxxx Shareholder in Exhibit 5.12.3.
5.1.4 WWATT Directorship. D. Xxxx Xxxxxxx shall
have been elected as a director of WWATT, effective as of the
Closing and D. Xxxx Xxxxxxx shall be elected for a term of four
(4) years, or if WWATT's By-Laws calls for a shorter term, then
such shorter term shall be used along with a guarantee renewal of
such term or terms to cover the intended four (4) year period.
5.1.5 Consent and Release by Bank. The Resource
Bank shall have consented to the sale, transfer and exchange of
the shares of Xxxxxxx stock and to the transaction therein
contemplated and shall agree in writing to release its security
interest in said shares and in the personal assets of Xxxxxx X.
Xxxxxxx and D. Xxxx Xxxxxxx and to waive and release Xxxxxxx,
Xxxxxx X. Xxxxxxx and D. Xxxx Xxxxxxx from any and all
outstanding obligations or guaranties directly involving Xxxxxxx
Partners to the said bank.
5.2 WWATT's Obligations to Close. Each and every
obligation of WWATT to be performed on the Closing Date shall be
subject to the satisfaction or waiver of each of the following
conditions:
5.2.1 Representations, Warranties and Covenants.
The representations and warranties of each Xxxxxxx Shareholder
set forth in this Agreement shall be true and correct in all
material respects when made and as of the Closing Date as though
such representations and warranties were made on and as of the
Closing Date, and each Xxxxxxx Shareholder shall have performed
all obligations required to be performed by such person under
this Agreement on or before the Closing Date.
5.2.2 Tax Consequences. WWATT shall have
determined, in consultation with their own tax advisors, that the
transactions to be consummated at the Closing will not result in
taxable income to them (the parties agree to use reasonable best
efforts to restructure the transactions contemplated hereby in
the event that WWATT is unable to make such a determination, so
that the foregoing condition can be satisfied).
5.2.3 Employment Agreements. Each of the Xxxxxxx
key employees shall have entered into the Employment Agreements
referred to in Section 5.1.3.
ARTICLE 6
TERMINATION
6.1 Termination by Either Party. This Agreement may be
terminated, without liability, By WWATT or by the Xxxxxxx
Shareholders if the terminating party is not itself in default
hereunder by written notice of such election to the other if the
closing has not occurred by September 1, 1996. If for any
reason, other than a failure by WWATT to perform according to
this Agreement or a failure of any condition to closing set forth
in Section 5.1 hereof or the failure to close by September 1,
1996, Xxxxxxx chooses to withdraw from the merger, Xxxxxxx and/or
the Xxxxxxx Shareholders, jointly and severally, shall pay to
WWATT, as liquidated damages in lieu of any and all claims,
damages, costs and expenses incurred by WWATT, and not as a
penalty, the sum of $25,000 to be paid within thirty (30) days
after written notice of said election to withdraw. If for any
reason, other than a failure by Xxxxxxx or the Xxxxxxx
Shareholders to perform according to this Agreement or a failure
of any condition to closing set forth in Section 5.2 hereof or
the failure to close by September 1, 1996, WWATT chooses to
withdraw from the merger, WWATT and/or Xxxxxx Xxxxxxxxx, jointly
and severally shall pay to Xxxxxxx, as liquidated damages, in
lieu of any and all claims, damages, costs and expenses incurred
by Xxxxxxx or the Xxxxxxx Shareholders, and not as a penalty, the
sum of $25,000 to be paid within thirty (30) days after written
notice of said election to withdraw.
6.2 Breach. In the event of any breach by one or more
Xxxxxxx Shareholders and D. Xxxx Xxxxxxx hereunder, including a
breach of representations and warranties, prior to the Closing,
WWATT shall have the option to (i) terminate this Agreement, (ii)
close the transactions contemplated hereby notwithstanding such
breach, or (iii) seek specific performance of this Agreement. In
the event of a breach by WWATT hereunder, including a breach of
representations and warranties, prior to the Closing, the Xxxxxxx
Shareholders shall have the options to (I) terminate this
Agreement, (ii) close the transactions contemplated hereby
notwithstanding such breach, or (iii) seek specific performance
of this Agreement. Nothing contained in this section is intended
to preclude or limit the right of any party to seek a remedy in
damages in lieu of or in addition to any other remedy set forth
herein.
ARTICLE 7
POST-CLOSING COVENANTS
7.1 Post-Closing Covenants of WWATT. WWATT covenants from
and after the Closing as follows:
7.1.1 Stock Plans. WWATT agrees to use reasonable
best efforts to implement within one hundred twenty (120) days
after the Closing Date a stock purchase program for the
executives of WWATT and its subsidiaries, including the
executives of Xxxxxxx, Additionally, WWATT agrees that each
Xxxxxxx Shareholder shall have a right of first refusal to
acquire shares of Common Stock of WWATT and that WWATT expects to
sell in a Regulation D private placement at $1.00 per share, with
each Xxxxxxx Shareholder having the right to acquire that amount
of stock in such offering as shall equal such person's regular
compensation (as defined in such person's Employment Agreement).
Additionally, WWATT shall use reasonable best efforts to
implement within one hundred twenty (120) days after the Closing
Date a stock option plan for the Xxxxxxx Shareholders and other
key employees of Xxxxxxx giving them an opportunity to purchase
additional shares of Common Stock of WWATT, with vesting of
options to be tied to the achievement of predetermined
performance goals.
7.1.2 Registration of Shares. WWATT shall use
reasonable best efforts to cause the registration under the
Securities Act of 1933 of the WWATT Common Stock issued to the
Xxxxxxx Shareholders at the Closing no later than twelve (12)
months after WWATT's Common Stock has been registered under
Section 12 of the Securities Exchange Act of 1934. WWATT agrees
to use reasonable best efforts to accomplish such 1934 Act
registration within twelve (12) months after the Closing.
7.2 Operation of Xxxxxxx'x Business Following the Closing.
The parties agree as follows with respect to the operation of
Xxxxxxx'x business following the Closing:
7.2.1 Location. Xxxxxxx shall continue to conduct
its business at its present facility in Elgin, Illinois until
such time as Xxxxxxx'x Board and WWATT's Board of Directors
mutually agree that a change would be beneficial to the business
of WWATT and its subsidiaries taken as a whole.
7.3 Budgets and Business Plans. Senior management of
Xxxxxxx shall prepare an annual operating budget and capital
budget for review by WWATT's Board of Directors at least ninety
(90) days prior to the beginning of each fiscal year which shall
exclude the first fiscal year or such period of shorter than one
year that includes the closing date. Such budgets shall be
reviewed and may be revised quarterly. Implementation of all
such budgets and revisions thereto must be approved both by
Xxxxxxx'x senior management and WWATT's Board of Directors.
Additionally, Xxxxxxx'x senior management shall prepare a
five-year business plan for review and approval by WWATT's Board of
Directors, in conjunction with the preparation and review and
approval of Xxxxxxx'x annual operating and capital budgets. The
five-year business plan shall be reviewed and may be revised
annually, with the approval of WWATT's Board of Directors.
Xxxxxxx'x Chairman and Chief Executive Officer shall have
authority to approve capital expenditures of up to $25,000.00
each made within the guidelines established by the annual
operating and capital budgets and five-year business plan
approved by WWATT';s Board of Directors. Any individual capital
expenditure in excess of $25,000.00 must be approved by WWATT's
Board of Directors. Additionally, all individual salaries in
excess of $40,000.00 per year and the total number of Xxxxxxx
employees shall be subject to approval by WWATT's Board of
Directors each year.
7.4 Employee Benefits. Xxxxxxx'x existing 401(k) Plan and
employee benefits shall be continued in the same form as prior to
the Closing, except to the extent modified pursuant to the
Employment Agreements referred to in Section 5.1.3.
7.5 Accounts Receivable. No accounts receivable of Xxxxxxx
shall be factored unless agrees to by the Chief Executive Officer
and Chief Financial Officer of Xxxxxxx and WWATT's Board of
Directors.
ARTICLE 8
OTHER
8.1 Survival. The representations and warranties set forth
in Articles 2 and 3 shall survive the Closing for a period of six
(6) months. Xxxxxxx and each Xxxxxxx Shareholder agrees to
defend, indemnify and hold harmless WWATT and WWATT agrees to
defend, indemnify and hold harmless each Xxxxxxx Shareholder for
any damages, losses, liabilities or claims incurred by the other
as a result of the breach by the other of such representations
and warranties made by it herein.
8.2 Miscellaneous. This Agreement may be amended only in
writing signed by the party against whom enforcement is sought.
This Agreement may not be assigned by any party hereto without
the prior written consent of the other parties. This Agreement
shall be governed and construed in accordance with the laws of
the State of Illinois, without regard to principles of conflicts
of law. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original. The
headings contained in this Agreement are only for convenience and
shall not affect the meaning or interpretation of this Agreement.
The invalidity or unenforceability of any provision of this
Agreement shall not affect any other provisions of this
Agreement, which shall remain in full force and effect. Each
party agrees that the others would be irreparably harmed in the
even of any breach of this Agreement. Accordingly, the parties
agree that each shall be entitled to specific performance of this
Agreement to injunctive relief to prevent any breach of this
Agreement. In the event of any litigation arising out of or
relating to this Agreement, the prevailing party shall be
entitled to reasonable attorney's and expenses from the losing
party.
Company Signature Name and Title
Worldwide Applied
Telecom Technology, Inc. Xxxxxx X.Xxxxxxxxx,
President
(Corporate Seal)
Xxxxxx X. Xxxxxxxxx,
personnally
Xxxxxxx Partners, Inc.
Xxxxxx X. Xxxxxxx,
Shareholder
Xxxxxxx X. Xxxxx,
Shareholder
Xxxx X. Xxxxxx,
Shareholder
Xxxxxxx X. Xxxxxxx,
Shareholder
Xxxx X. Xxxxxxx,
Shareholder
(Corporate Seal)
Exhibit 1.1
Exchange of Xxxxxxx Shares for WWATT Shares
Xxxxxxx Shareholder Xxxxxxx Shares WWATT Shares
Xxxxxx X.Xxxxxxx 10,000 423,500
Xxxxxxx X.Xxxxx 1,060 63,700
Xxxx X. Xxxxxx 1,515 74,000
Xxxxxxx X. Xxxxxxx 1,515 74,000
Xxxx X. Xxxxxxx 1,060 54,800
Totals 15,150 690,000
