AGREEMENT
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THIS AGREEMENT (the "Agreement"), is made and entered into as of
April 20, 2000 by and among VDC Communications, Inc., a Delaware corporation
("Lender") and RARE TELEPHONY, INC. (f/k/a WASHOE TECHNOLOGY CORPORATION)
("Rare") AND CASH BACK REBATES XX.XXX, INC. ("Cash Back") a Nevada and Delaware
corporation, respectively (Rare and Cash Back collectively referred to as the
"Borrower").
W I T N E S S E T H:
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WHEREAS, Borrower wishes Lender to lend Borrower funds; and
WHEREAS, as a strict condition precedent to Lender lending said funds
to Borrower, Lender is requiring the execution of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements, promises
and covenants set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound, the parties do hereby agree as follows:
ARTICLE I
LOAN FUNDS
1.1 The Lender shall lend TWO HUNDRED THOUSAND DOLLARS AND NO/100
($200,000.00) to Borrower on the terms and conditions set forth in the
Promissory Note attached hereto as Exhibit "A" (the "Loan").
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF RARE AND CASH BACK
Rare and Cash Back hereby each represent and warrant that:
2.1 It is duly organized or duly formed, validly existing, and in
good standing under the laws of the jurisdiction of its incorporation or
formation and has the corporate or company power and authority to own its
property and carry on its business as owned and carried on at the date hereof
and as contemplated hereby. It is duly licensed or qualified to do business and
in good standing in each of the jurisdictions in which the failure to be so
licensed or qualified would have a material adverse effect on its financial
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condition or its ability to perform its obligations hereunder. It has the
individual, corporate, or company power and authority to execute and deliver
this Agreement and to perform its obligations hereunder and, if it is a
corporation or partnership, the execution, delivery, and performance of this
Agreement has been duly authorized by all necessary corporate or partnership
action. This Agreement constitutes its legal, valid, and binding obligation.
2.2 Neither the execution, delivery, and performance of this
Agreement nor the consummation by it of the transactions contemplated hereby (i)
will conflict with, violate, or result in a breach of any of the terms,
conditions, or provisions of any law, regulation, order, writ, injunction,
decree, determination, or award of any court, any governmental department,
board, agency, or instrumentality, domestic or foreign, or any arbitrator,
applicable to it or any of its wholly owned subsidiaries, (ii) will conflict
with, violate, result in a breach of, or constitute a default under any of the
terms, conditions, or provisions of the articles of incorporation, bylaws, or
company agreement of it or any of its wholly owned subsidiaries if it is a
corporation or company, or of any material agreement or instrument to which it
or any of its wholly owned subsidiaries is a party or by which it or any of its
wholly owned subsidiaries is or may be bound or to which any of its material
properties or assets is subject, (iii) will conflict with, violate, result in a
breach of, constitute a default under (whether with notice or lapse of time or
both), accelerate or permit the acceleration of the performance required by,
give to others any material interests or rights, or require any consent,
authorization, or approval under any indenture, mortgage, lease agreement, or
instrument to which it or any of its wholly owned subsidiaries is a party or by
which it or any of its wholly owned subsidiaries is or may be bound, or (iv)
will result in the creation or imposition of any lien upon any of the material
properties or assets of it or any of its wholly owned subsidiaries.
2.3 It is not in violation of any applicable law, or of any order,
writ, injunction or decree of any court or any governmental authority. It has
all the licenses, permits, consents, approvals and rights necessary to operate
its business.
2.4 In deciding to enter into this Agreement, it has not relied on
any statements, representations, promises or undertaking or inducements except
as set forth in this Agreement.
2.5 To the best of its knowledge (said knowledge to include the
knowledge of its agents and employees) if Rare and the Lender consummate the
transaction evidenced by the letter of intent (the "Letter") attached hereto as
Exhibit "B" (the "Transaction"):
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(a) The creditors of Borrower shall forgive approximately
$570,000 in debt, so that at the closing of the Transaction, the Borrower shall
not have more than $300,000 in outstanding indebtedness; and
(b) Network Consulting Services, Inc. shall continue to pay
on all equipment leases outstanding as of the date of this Agreement for
equipment used by Borrower in its business (the "Equipment") throughout the term
of said leases and, at the end of said leases, assuming Borrower has paid either
the $1 or FMV end of lease payment, shall ensure that title to the Equipment
passes to the Borrower.
2.6 As of April 19, 2000, Rare and Cash Back have not individually
or jointly executed promissory notes or similar instruments resulting in
outstanding indebtedness in excess of $870,000.
ARTICLE III
BREAK UP FEE
3.1 In consideration of Lender's willingness to make the Loan to
Borrower and Lender's willingness to forego interest on principal amount of the
Loan (other than default interest) and in full recognition that Lender would not
make the Loan to Borrower without the agreement contained in this paragraph,
Rare and Cash Back agree that if Rare does not consummate the Transaction with
Lender on the terms set forth in the Letter (as the same may be modified as
mutually agreed by Rare and Lender) after Lender has completed its due diligence
on the Transaction and received board approval for a transaction on
substantially the terms set forth in the Letter within 3 months of said board
approval, then (to compensate Lender for the loss of a benefit of the bargain
(and not as a penalty)) Rare and Cash Back shall immediately upon demand from
Lender jointly and severally pay to Lender a sum of TWO MILLION DOLLARS
($2,000,000) in cash or cash equivalent (the "Fee"). The parties agree, in this
regard, that the Fee is reasonable and the damages associated with failure to
consummate the Transaction are difficult to estimate.
ARTICLE IV
MISCELLANEOUS
4.1 The parties shall, at their own costs and expense and without
further consideration, execute and deliver such further documents and
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instruments and shall take such other actions as may be reasonably required or
appropriate to carry out the intent and purposes of this Agreement.
4.2 This Agreement shall be in all respects governed by the laws
of the State of New Jersey in the United States of America.
4.3 By signing this agreement, the parties hereto agree and
acknowledge that they have read this Agreement, understand it, and sign it of
their own free will.
4.4 All notices, consents, waivers, and other communications under
this Agreement must be in writing and will be deemed to have been duly given
when (a) delivered by hand (with written confirmation of receipt), (b) sent by
telecopier (with written confirmation of receipt), provided that a copy is
mailed by registered mail, return receipt requested, or (c) when received by the
addressee, if sent by an overnight delivery service.
4.5 The captions or headings of the paragraphs or other
subdivision hereof are inserted only as a matter of convenience or for reference
and shall have no effect on the meaning of the provisions hereof.
4.6 The invalidity or unenforceability of any term of this
Agreement shall not affect the validity or enforeceability of this Agreement or
any of its other terms; in the event that any court or arbitrator determines
that any provision of this Agreement is invalid or unenforceable, as the case
may be, then, and in either such event, neither the enforceability nor the
validity of said paragraph or section as a whole shall be affected. Rather, the
scope of said paragraph or section shall be revised by the court or arbitrator
as little as possible to make the paragraph or section enforceable. If the court
or arbitrator will not revise said paragraph or section, then this Agreement
shall be construed as though the invalid or unenforceable term(s) were not
included herein.
4.7 The recitals to this Agreement shall be deemed a part of this
Agreement.
4.8 No rule of construction requiring interpretation against the
drafting party shall apply to the interpretation of this Agreement.
4.9 Unless otherwise specified, all money references in this
Agreement and all Exhibits thereto are in United States currency.
4.10 Time is of the essence of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first above written.
ATTEST: "RARE"
RARE TELEPHONY, INC.
/s/ Xxxxx X. Santa Xxxxx
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Signature By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Xxxxx X. Santa Xxxxx President
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Print Name
ATTEST: "CASH BACK"
CASH BACK REBATES XX.XXX, INC.
/s/ Xxxxx X. Santa Xxxxx
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Signature By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Xxxxx X. Santa Xxxxx President
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Print Name
ATTEST: "LENDER"
VDC COMMUNICATIONS, INC
/s/ Xxxxx X. Xxxxx
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Signature By: /s/ Xxxxxxxxx X. Xxxxx
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Xxxxx X. Xxxxx Xxxxxxxxx X. Xxxxx
------------------------ Chief Executive Officer
Print Name
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