Exhibit 10.1
Stock Purchase Agreement by and among Provo International, Inc.,
Xxxxxxx Xxxxxxxx del Rio Xxxxxxx and Xxxxxxx Xxxxxxxx del Rio Arrangoiz
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement is entered into on this 14th day of July,
2004, by and between Provo International, Inc., a Delaware corporation ("Seller"
or "Provo"); Xxxxxxx Xxxxxxxx del Rio Xxxxxxx ("Requejo"); and Xxxxxxx Xxxxxxxx
del Rio Arrangoiz ("Arrangoiz") (Requejo and Xxxxxxxxx shall sometimes be
referred to in the singular as "Buyer" and collectively as "Buyers").
RECITALS
WHEREAS, on Xxxxx 0, 0000, Xxxxxxxxx and Requejo, then the owners of all
of the issued and outstanding capital stock ("Provo Mexico Shares") of
Proyecciones y Ventas Organizadas, S.A. de C.V., a corporation organized under
the laws of the Republic of Mexico ("Provo Mexico"), sold such shares to Provo
and Provo Mexico became a wholly-owned subsidiary of Provo; and
WHEREAS, in exchange for the Provo Mexico Shares, Provo issued to Buyers
220,000 shares of Series C Convertible Preferred Stock, par value $.01 per
share, of Provo, which were subsequently converted into 220,000 shares of Series
E Convertible Preferred Stock, par value $.01 per share, of Provo, of which
shares 189,445 shares were converted into 18,944,500 shares of Common Stock, par
value $.01 per share, of Provo (such 18,944,500 shares of Common Stock and the
30,555 shares of Series E Convertible Preferred Stock that remain outstanding on
the date hereof are sometimes collectively referred to herein as the "Provo
Shares"); and
WHEREAS, Arrangoiz and Requejo wish to repurchase the Provo Mexico Shares
from Provo, and Provo wishes to repurchase the Provo Shares from Arrangoiz and
Requejo, subject to the terms and conditions described herein;
NOW, THEREFORE, in consideration of the above recitals, the promises
herein contained and such other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set
forth below:
(a) "Agreement" shall mean this Stock Purchase
Agreement, including any appendices, schedules and exhibits.
(b) "Best knowledge" and similar phrases shall
mean (i) in the case of a natural person, the particular fact
was known or not known, as the context requires, to such
person after reasonable investigation and inquiry by such
person, and (ii) in the case of an entity, the particular fact
was known or not known, as the context requires, to any
executive officer of such entity after reasonable
investigation and inquiry by the principal executive officers
of such entity.
(c) "Callisto Agreement" shall mean the proposed
agreement whereby Callisto Pharmaceuticals, Inc. will sell its
Superantigen program to Provo, or any other agreement whereby
Provo acquires a new line of business.
(d) "Closing" shall mean the closing of the
transactions contemplated by this Agreement, which shall occur
at 10:00 A.M., local time, on the Closing Date in the offices
of Blank Rome LLP, the Chrysler Building, 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, or at such other time and
place as shall be agreed in writing among the parties.
(e) "Closing Date" shall mean October 30, 2004, or
such other date as agreed upon, in writing, among the parties.
(f) "Common Stock" shall mean Common Stock, par
value $.01 per share, of Provo.
(g) "Dollar" or "Dollars" shall mean United States
dollars.
(h) "Encumbrance" shall mean any lien, security
interest, claim or any other hindrance whatsoever.
(i) "Exchange Act" shall mean the United States
Securities Exchange Act of 1934, as amended.
(j) "Person" shall mean an individual,
corporation, partnership, joint venture, trust, association,
unincorporated organization or other entity or governmental
body or subdivision, agency, commission or authority thereof,
or any equivalent entity under applicable law.
(k) "SEC" or "Commission" shall mean the
Securities and Exchange Commission.
(l) "Series E Preferred Stock" shall mean Series E
Convertible Preferred Stock, par value $.01 per share, of
Provo.
(m) "Securities Act" shall mean the United States
Securities Act of 1933, as amended.
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(n) "Transaction Documents" shall collectively
mean this Agreement and any other written agreement signed by
the parties that is expressly identified as a "Transaction
Document" hereunder, and any exhibits or attachments to any of
the foregoing, as the same may be amended from time to time.
Transaction Documents shall include the Reseller Agreement and
Written Consent of Shareholders as defined in Sections 7.01
and 7.02.
ARTICLE II
STOCK PURCHASE
Subject to the terms of this Agreement, Arrangoiz and Requejo hereby agree
to purchase and Provo hereby agrees to sell to Buyer all of the Provo Mexico
Shares. The Provo Mexico Shares shall be free of any and all Encumbrances, other
than Encumbrances imposed on the Provo Mexico Shares by, or with the consent of,
the Buyers.
ARTICLE III
CONSIDERATION
In return for the sale of all right, title and interest in the Provo
Mexico Shares, Arrangoiz and Requejo will return to Provo for cancellation an
aggregate total of 18,944,500 shares of Common Stock and 30,555 shares of Series
E Preferred Stock and said shares shall be free of any and all Encumbrances,
other than any Encumbrances imposed on such shares by, or with the consent of,
Provo.
ARTICLE IV
REGULATORY FILINGS
Section 4.01. Commission Filings. Prior to the Closing Date, Provo shall
properly prepare and file with the Commission all documents required pursuant to
the Exchange Act, in connection with the execution, delivery and performance of
this Agreement, and any of the transactions contemplated hereby, including,
without limitation, (a) any and all proxy materials deemed to be required to (i)
complete the transactions contemplated by this Agreement; (ii) notify
non-consenting shareholders of the approval of the transactions contemplated
hereby upon consent of holders of a majority of the outstanding shares of Common
Stock of Provo, including an information statement on Schedule 14C (the
"Information Statement"); and (b) any reports that may be required to be filed
utilizing Form 8-K, as promulgated by the Commission (collectively, the
"Filings").
Section 4.02. Exchange Filings. Provo shall prepare and file with the
American Stock Exchange (the "Exchange") all the documents required by the rules
of the Exchange in connection with the execution, delivery and performance of
this Agreement, and any of the transactions contemplated hereby, including, but
not limited to, any proxy filings and reports on Form 8-K.
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Section 4.03. Other Filings. In addition to the Filings that may be
required by the Commission and the Exchange, the parties will cooperate with
each other in order to make, as soon as appropriate, all governmental and
regulatory filings necessary in connection with the execution, delivery and
performance of this Agreement and any of the transactions contemplated hereby.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.01. Representations and Warranties of Buyers. The Buyers,
jointly and severally, represent and warrant to Provo that:
(a) No material litigation, other than litigation
in the ordinary course of business, or proceeding is pending
or threatened against the Buyers except those matters, if any,
described by the parties in SCHEDULE 5.01(A) attached and
incorporated by reference hereto. Neither the execution nor
delivery by the Buyers of this Agreement will give rise to a
material breach of any other agreement to which either of them
is a party, or interfere with or otherwise adversely affect
the ability of the Buyers to consummate the transaction
contemplated by this Agreement.
(b) The execution, delivery and performance of
this Agreement and the consummation of all transactions
contemplated hereby or thereby will not conflict with, or
result in any violation of, any law, statute, rule or
regulation to which either Buyer is subject.
(c) The Provo Shares to be transferred by
Arrangoiz and Requejo to Provo contemplated by this Agreement
will be free and clear of any taxes, options, warrants,
purchase rights, contracts, commitments or Encumbrances, other
than any Encumbrances imposed on such shares by, or with the
consent of, Provo.
(d) During such time as the Buyers were
shareholders and/or directors of Provo, they took no action,
incurred no liabilities, and made no commitments, on behalf of
Provo or any of its subsidiaries that are not disclosed in
Provo's filings with the Commission.
(e) There is no investment banker, broker, finder
or other intermediary that has been retained or authorized to
act on behalf of either of the Buyers who might be entitled to
any fee or commission from the parties upon the Closing of
this Agreement.
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Section 5.02. Representations and Warranties of Provo. Provo represents
and warrants to the Buyers that:
(a) Provo is a corporation duly organized and
validly existing under the laws of the State of Delaware and
has the corporate power to enter into and perform its
obligations under this Agreement. No material litigation,
other than litigation in the ordinary course of business, or
proceeding is pending or threatened against Provo except those
matters, if any, described by the parties in SCHEDULE 5.02(A)
attached and incorporated by reference hereto. Neither the
execution nor delivery by Provo of this Agreement will give
rise to a material breach of any other agreement to which it
is a party, or interfere with or otherwise adversely affect
the ability of Provo to consummate the transaction
contemplated by this Agreement.
(b) The Board of Directors of Provo, including a
majority of disinterested directors, as set forth in Delaware
General Corporation Law ss.144, has approved this Agreement,
and the transactions contemplated hereby, on behalf of Provo.
(c) The execution, delivery and performance of
this Agreement and the consummation of all transactions
contemplated hereby or thereby will not conflict with, or
result in any violation of, any provision of Provo's
Certificate of Incorporation or By-laws, or any law, statute,
rule or regulation to which Provo is subject.
(d) The Provo Mexico Shares to be transferred by
Provo to Arrangoiz and Requejo will be free and clear of any
taxes, options, warrants, purchase rights, contracts,
commitments, equities or Encumbrances, other than Encumbrances
imposed on the Provo Mexico Shares by, or with the consent of,
the Buyers.
(e) There is no investment banker, broker, finder
or other intermediary that has been retained or authorized to
act on behalf of Provo who might be entitled to any fee or
commission from the parties upon the Closing of this
Agreement.
(f) Provo's subsidiary, Provo Mexico, is currently
operating as a going concern.
(g) The transactions contemplated hereby represent
fair value to Provo, are reasonable in light of all existing
conditions and circumstances and are not effected for the
purpose of deferring, defrauding or hindering creditors.
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ARTICLE VI
COVENANTS OF THE PARTIES
Section 6.01. From the date hereof and to the Closing Date, and except as
may be approved in advance by the other parties or as specifically contemplated
by this Agreement, Provo shall not enter into any transaction out of the
ordinary course of its business, including, without limitation: (i) issuing any
shares of capital stock or other securities, other than pursuant to the exercise
of existing stock options or warrants; (ii) granting any stock options, warrants
or other rights to acquire capital stock or other securities, other than
pursuant to existing employee stock option plans and consistent with past
practices; (iii) entering into, amending or voluntarily terminating any
employment agreement with any new or existing employee, except for cause; (iv)
granting any increases in the compensation, bonuses, benefits or other
remuneration payable to any employee or consultant; (v) entering into, amending
or voluntarily terminating any license, royalty or distribution agreement; (vi)
entering into, amending or voluntarily terminating any lease or rental
agreement; or (vii) entering into any agreement or commitment with respect to
any of the foregoing.
Section 6.02. Each of the parties shall use its best efforts to cause all
conditions precedent to his or its obligations (and to the obligations of the
other party hereto) to consummate the transactions contemplated herein) to be
satisfied, including, but not limited to, using all reasonable efforts to obtain
all required consents, waivers, amendments, modifications, approvals,
authorizations, novations and licenses; provided, however, that nothing herein
contained shall be deemed to modify any of the absolute obligations imposed upon
any of the parties hereto under this Agreement or any agreement executed and
delivered pursuant hereto.
Section 6.03. The parties hereby agree to cooperate and make further
assurances to each other as follows:
(a) Each of the parties hereto shall cooperate
with the other parties hereto in preparing and filing any
notices, applications, reports and other instruments and
documents that are required by, or which are desirable in the
reasonable opinion of any of the parties hereto, or their
respective legal counsel, in respect of, any statute, rule,
regulation or order of any governmental or administrative body
in connection with the transactions contemplated by this
Agreement, including the Filings.
(b) Each of the parties hereto hereby further
agrees to execute, acknowledge, deliver, file and/or record or
cause such other parties to the extent permitted by law to
execute, acknowledge, deliver, file and/or record such other
documents as may be required by this Agreement or by their
respective legal counsel in order to document and carry out
the transactions contemplated by this Agreement.
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(c) Buyers agree to cooperate with Provo's
auditors, as requested, so that Provo may comply with its
continuing reporting obligations. Buyers agree to provide
financial statements of Provo Mexico for the three (3) months
ended June 30, 2004 no later than July 31, 2004. This covenant
shall survive the Closing until such time as Provo is not
required to reference or include the financial statements of
Provo Mexico in its Reports.
Section 6.04. Each party hereto agrees that prior to the Closing Date he
or it will enter into no transaction and take no action, and will use his or its
best efforts to prevent the occurrence of any event (but excluding events which
occur in the ordinary course of business and events over which each party has no
control), which will result in any of his or its representations, warranties or
covenants contained in this Agreement, or in any agreement, document or
instrument executed and delivered by him or it pursuant hereto not to be true
and correct, or not to be performed as contemplated, at and as of the time
immediately after the occurrence of such transaction or event.
Section 6.05. The parties hereby agree to and shall give prompt notice to
the other parties as the case may be, of (i) the occurrence, or non-occurrence,
of any event the occurrence or non-occurrence of which would be likely to cause
any representation contained in this Agreement to be untrue or inaccurate in any
material respect at or prior to the Closing Date and (ii) any material failure
of any of the parties to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it under the terms of this
Agreement; provided, however, that the delivery of any notice pursuant to this
Section 11.06 shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
Section 6.06. As soon as it is practicable after the date of this
Agreement, Provo shall, with the cooperation of the Buyers, prepare and file
with the SEC all necessary filings and documents required by the consummation of
the transactions contemplated by the terms of this Agreement including, but not
limited to, the Information Statement and any Form 8-K.
Section 6.07. The parties acknowledge that of the date hereof, Provo
Mexico is indebted to Provo in the amount of $___________ (the "Intercompany
Indebtedness"). Effective as of ______, 2004, Provo agrees to terminate and
forgive all Intercompany Indebtedness, including all interest and principal
thereunder. In consideration of the termination and forgiveness of the
Intercompany Indebtedness, Provo Mexico shall issue and deliver to Provo
__________ shares of Common Stock of Provo Mexico free and clear from any Liens
(the "New Shares"). The parties acknowledge that the New Shares shall be deemed
part of the Provo Mexico Shares and shall be transferred by Provo to the Buyers
at the Closing.
Section 6.08. Except as set forth on Schedule 6.06, it is the intent of
the parties that effective on the Closing Date and thereafter, Provo and Provo
Mexico shall each be solely responsible and liable for their respective
obligations and liabilities incurred by each of Provo or Provo Mexico prior to
the Closing Date. Moreover, at the Closing, Buyers, Provo Mexico and Provo shall
make the payment adjustments set forth on SCHEDULE 6.08 attached hereto.
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Section 6.09. The Paycard Business.
(a) The parties acknowledge that Provo has
developed a payroll debit card that offers a simple and
inexpensive way for your unbanked employees to receive their
pay via direct deposit (the "Paycard Business"). The parties
agree that the Paycard Business shall remain the property of
Provo directly and shall not be operated or held by or through
Provo Mexico. Notwithstanding the foregoing, for one year from
the date of this Agreement, the Buyers shall be given not less
than five (5) business days prior written notice of all
material terms of any proposed sale by Provo of the payroll
card business (the "Notice of Sale"). The Buyers shall have
the right during the five (5) business days following such
notice to notify Provo of their election to purchase the
payroll card business in accordance with the terms and
conditions set forth in the Notice of Sale (the "Election
Notice"). In the event such terms and conditions are modified
during the notice period, the Buyers shall be given prompt
notice of such modification and shall have the right during
the original notice period or for a period of five (5)
business days following the notice of modification, whichever
is longer, to exercise such right. The Election Notice shall
set forth the time period by which the parties shall execute a
written sale agreement, which shall not exceed thirty (30)
days from the date of the Election Notice. The closing of the
transaction shall take place within sixty (60) days of the
date of the Notice of Sale.
(b) Notwithstanding anything to the contrary
herein or in the Reseller Agreement, Provo agrees, as soon as
practicable after the execution of this Agreement, to
facilitate the introduction of Buyers to Provo's contact at
Xxxxxx Bank. It is understood that Buyers intend to negotiate
a reseller agreement with Xxxxxx Bank on substantially the
same terms as Provo's reseller agreement with Xxxxxx Bank,
and, in that event, the parties' obligations under the
Reseller Agreement, including the non-compete agreement, shall
cease.
Section 6.10. The parties agree that, subject to the approval of Provo's
auditors, the "closing" date for financial reporting purposes shall be June 29,
2004.
Section 6.11. Immediately following the execution of this Agreement by
Provo and Buyers, directors Xxxxxx Xxxxxx and Xxxxxx Xxxxx shall tender their
resignation from Provo's board of directors. Thereafter, the Buyers hereby agree
to appoint Xxxxx Xxxxxxxx and Xxxxxxx X. Xxxx-Xxxxxxxx to fill the vacancies on
the board of directors until their successors are duly elected and qualified.
Notwithstanding the foregoing, if Provo has not delivered the approval of
Berry-Shino Securities, Inc. as set forth in Section 7.01(e) of this Agreement
by June 30, 2004, Xxxxx Xxxxxxxx and Xxxxxxx X. Xxxx-Xxxxxxxx shall tender their
resignations from the board of directors.
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Section 6.12. For good and valuable consideration received, each of the
Buyers individually and in their capacities as officers and/or directors of
Provo, agree to cause Provo (a) to comply with its obligations under Section
6.01 hereof, and (b) not to waive or amend any of the obligations of the other
parties hereto. This obligation shall be for the benefit of, and may be enforced
by, Xxxxx Xxxxxxxx.
Section 6.13. Provo shall use its best efforts to effectuate a name change
to a name which does not resemble "Provo International" as soon as practicable
after the Closing Date, or, at the latest, at its next annual meeting of
shareholders.
ARTICLE VII
CONDITIONS TO CLOSING
Section 7.01. The obligation of Provo to effect the sale of the Provo
Mexico Shares shall be subject to the fulfillment at or prior to the Closing
Date of the following requirements, any or all of which may be waived in writing
by Provo in its sole discretion:
(a) The representations and warranties of Buyers
contained in this Agreement and any other document delivered
by it in accordance with the terms of this Agreement shall
have been true when made and, in addition, shall be true in
all material respects on and as of the Closing Date with the
same force and effect as though made on and as of the Closing
Date.
(b) Each of the parties shall have executed and
delivered all of the Transaction Documents to which they are
parties, including the Reseller Agreement in substantially the
form annexed hereto as Exhibit A.
(c) The Buyers shall have performed, observed and
complied in all material respects with all of its obligations,
covenants and agreements, and shall have satisfied or
fulfilled in all material respects all conditions contained in
any document referenced herein and required to be performed,
observed or complied with, or to be satisfied or fulfilled by
the Buyers at or prior to the Closing Date.
(d) Provo shall have executed the Callisto
Agreement.
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(e) Provo shall have received approval of this
Agreement and the transactions contemplated hereby from a
majority of its shareholders, which majority shall include the
persons named on SCHEDULE 7.01(E) attended hereto.
(f) Provo shall have filed the Information
Statement with the SEC, the SEC shall have deemed the
Information Statement effective, Provo shall have mailed the
Information Statement and any required accompanying materials
to all shareholders of record, and twenty (20) days shall have
elapsed from the date of mailing.
(g) Provo shall have received an irrevocable
written consent executed by the Buyers in the form annexed
hereto as Exhibit B (the "Shareholder Written Consent").
(h) Provo shall have received an updated fairness
opinion from Xxxxxxx Race Securities, concluding that the
transaction contemplated by this Agreement is fair to Provo's
shareholders from a financial point of view.
(i) No order of any court or administrative agency
shall be in effect which constrains or prohibits the
transactions contemplated hereby, and no claim, suit, action,
inquiry, investigation or proceeding in which it will be, or
it is, sought to restrain, prohibit, or change the terms of or
obtain damages or other relief in connection with this
Agreement or any other transactions contemplated hereby, shall
have been instituted or threatened by any person or entity, in
which in the reasonable judgment of Provo (based on the
likelihood of success and material consequences of such claim,
suit, action, inquiry or proceeding) makes it inadvisable to
proceed with the consummation of such transactions.
(j) All filings with, and consents, waivers,
approvals, licenses and authorizations by, third parties and
governmental and administrative authorities (and all
amendments or modifications to existing agreements with third
parties) (the "Consents") required as a pre-condition to the
performance by the parties of their obligations hereunder and
under any agreement delivered pursuant hereto, shall have been
duly made or obtained and shall be in full force and effect.
(k) The validity of all transactions contemplated
by all of the Transaction Documents, as well as the form and
substance of all agreements, instruments, opinions,
certificates and other documents delivered by Provo Mexico
pursuant hereto, shall be satisfactory in all material
respects to Provo and its counsel.
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(l) The transactions contemplated hereby can be
effected on a tax-free basis for Provo.
Section 7.02. Conditions to Obligations of Buyers. The obligations of the
Buyers to effect the purchase of the Provo Mexico Shares from Provo shall be
subject to the fulfillment at or prior to the Closing Date of the following
requirements, any or all of which may be waived in writing by the Buyers in
their sole discretion:
(a) The representations and warranties of Provo
contained in any Provo documents delivered by Provo shall have
been true when made, and in addition, it shall be true in all
material respects on and as of the Closing Date with the same
force and effect as though made on and as of the Closing Date.
(b) Each of the parties shall have executed and
delivered all of the Transaction Documents to which they are
parties, including the Reseller Agreement in substantially the
form annexed hereto as Exhibit A.
(c) Provo shall have performed, observed and
complied in all material respects with all their obligations,
covenants and agreements, and shall have satisfied or
fulfilled in all material respects all conditions contained in
any document referenced herein and required to be performed,
observed or complied with, or to be satisfied or fulfilled by
Provo at or prior to the Closing Date.
(d) Provo shall have executed the Callisto
Agreement.
(e) Provo shall have received approval of this
Agreement and the transactions contemplated hereby from a
majority of its shareholders, which majority shall include the
persons named on SCHEDULE 7.01(E) attended hereto.
(f) Provo shall have filed the Information
Statement with the SEC, the SEC shall have deemed the
Information Statement effective, Provo shall have mailed the
Information Statement and any required accompanying materials
to all shareholders of record, and twenty (20) days shall have
elapsed from the date of mailing.
(g) No order of any court or administrative agency
shall be in effect which constrains or prohibits the
transactions contemplated hereby, and no claim, suit, action,
inquiry, investigation or proceeding in which it will be, or
it is, sought to restrain, prohibit, or change the terms of or
obtain damages or other relief in connection with this
Agreement or any other transactions contemplated hereby, shall
have been instituted or threatened by any person or entity, in
which in the reasonable judgment of Provo Mexico (based on the
likelihood of success and material consequences of such claim,
action, inquiry, investigation or proceeding) makes it
inadvisable to proceed with the consummation of such
transactions.
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(h) Provo shall have received an updated fairness
opinion from Xxxxxxx Race Securities, concluding that the
transaction contemplated by this Agreement is fair to Provo's
shareholders from a financial point of view.
(i) The validity of all transactions contemplated
by the Transaction Documents, as well as the form and
substance of all agreements, instruments, opinions,
certificates and other documents delivered by Provo pursuant
hereto, shall be satisfactorily in all material respects to
Provo Mexico's counsel.
(j) The transactions contemplated hereby can be
effected on a tax-free basis for Buyers.
Section 7.03. Deliveries by Provo at Closing. Provo shall deliver the
following:
(a) the stock certificates representing all of the
issued and outstanding capital stock of Provo Mexico with
proper instruments of transfer, transferring the ownership of
the Provo Mexico Shares to the Buyers;
(b) duly executed copies of all Transaction
Documents to which Provo is a party;
(c) a Secretary's certificate certifying copies of
(i) the resolutions adopted by the Provo Board of Directors
authorizing Provo and its officers to execute and deliver the
Provo documents to which it is a party and to perform its
obligations hereunder;
(d) a certificate executed by its President, dated
as of the Closing Date, to the effect that all representation
and warranties of Provo and true and complete in all material
respects and all covenants to be performed by Provo at or as
of the Closing have been performed in all material respects
and the conditions to be satisfied at or as of the Closing
have been satisfied in all material respects or waived in
accordance with terms of this Agreement.
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Section 7.04. Deliveries by Buyers at the Closing. At the Closing, Buyers
shall deliver the following:
(a) stock certificates representing the shares
of Common Stock and Series E Preferred Stock to
be transferred to Provo in accordance with the
terms of this Agreement;
(b) duly executed copies of all Transaction
Documents to which either of the Buyers is a
party;
(c) a certificate executed by Xxxxxxx and
Arrangoiz dated as of the Closing Date to the
effect that all representations and warranties
of Xxxxxxx and Xxxxxxxxx are true and complete
in all material respects and all covenants to
be performed by them at or as of the Closing
have been performed in all material respects
and conditions to be satisfied at or as of the
Closing have been satisfied in all material
respects or waived in accordance with the terms
of this Agreement; and
(d) Resignations of Xxxxxxx and Arrangoiz as
officers and directors of Provo.
ARTICLE VIII
RELEASES
Section 8.01. Provo knowingly and voluntarily releases, remises and
forever discharges each of the Buyers and all former, present and future agents,
representatives, employees, attorneys, successors and assigns of the Buyers,
including, without limitation, all current and future directors, officers,
agents, representatives, employees, attorneys, successors and assigns of Provo
Mexico (collectively, the "Buyer Released Parties") from any and all claims,
obligations, controversies, actions, causes of action, cross-claims,
counter-claims, rights, demands, debts, compensatory damages, liquidated
damages, punitive or exemplary damages, other damages, claims for costs and
attorneys' fees or expenses, or liabilities of any kind or nature whatsoever, in
law and in equity, past, present and future, and whether known or unknown,
accrued or unaccrued, liquidated or unliquidated, absolute or contingent,
suspected, or claimed against the Buyers or any of the Buyer Released Parties
which Provo or any its successors or assigns may have arising from, relating in
any way to, or in connection with: (i) the transactions contemplated by that
certain Stock Purchase Agreement dated as of January 24, 2003, as amended (the
"Original Agreement") between Provo and the Buyers; (ii) the Buyers actions or
inactions as directors and officers of Provo; (iii) the Intercompany
Indebtedness; and (iv) any other relationship or transaction between Provo and
the Buyers; (all of the foregoing collectively referred to herein as the "Provo
Claims"); provided, however, that Provo Claims shall not include any of the
foregoing that arise due to a breach of this Agreement by Buyers.
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Section 8.02. Each of the Buyers knowingly and voluntarily releases,
remises and forever discharges Provo and all former, present and future
directors, officers, agents, representatives, employees, attorneys, successors
and assigns of Provo and its direct or indirect subsidiaries (collectively, the
"Provo Released Parties") from any and all claims, obligations, controversies,
actions, causes of action, cross-claims, counter-claims, rights, demands, debts,
compensatory damages, liquidated damages, punitive or exemplary damages, other
damages, claims for costs and attorneys' fees or expenses, or liabilities of any
kind or nature whatsoever, in law and in equity, past, present and future, and
whether known or unknown, accrued or unaccrued, liquidated or unliquidated,
absolute or contingent, suspected, or claimed against Provo or any of Provo
Released Parties which the Buyers or any of their respective successors or
assigns may have arising from, relating in any way to, or in connection with:
(i) Original Agreement; and (ii) any other relationship or transaction between
the Buyers and Provo (all of the foregoing collectively referred to herein as
the "the Buyer Claims" and, collectively with Provo Claims, the "Claims");
provided, however, that the Buyer Claims shall not include any of the foregoing
that arise due to a breach of this agreement by Provo.
Section 8.03. Each party represents and warrants that it has made no
assignment or transfer of any of the Claims hereinabove mentioned or implied.
Section 8.04. In signing this Agreement, each party acknowledges and
intends that it shall be effective as a bar to each and every one of the Claims
hereinabove mentioned or implied. Each party expressly consents that this
Agreement shall be given full force and effect according to each and all of its
express terms and provisions, including those relating to unknown and
unsuspected Claims (notwithstanding any statute or legal principle that
expressly limits the effectiveness of a general release of unknown, unsuspected
or unanticipated Claims), if any, as well as those relating to any other Claims
hereinabove mentioned or implied. Each party further agrees that in the event it
should assert any Claim seeking damages against any of the Buyers or the Buyers
Released Parties, in the case of Provo, or Provo or any of Provo Released
Parties, in the case of the Buyers, this Agreement shall serve as a complete
defense to such Claim.
Section 8.05. Each party acknowledges that it (i) has read this Agreement,
(ii) has had the opportunity to consider this Agreement, (iii) has sought and
obtained legal counsel to the extent it chose to do so, (iv) understands this
Agreement and each and all of its respective terms, and (v) signs this Agreement
voluntarily and without duress.
ARTICLE IX
INDEMNIFICATION
Section 9.01. Subject to the provisions of this Article VIII, each party
(each an "Indemnifying Party") shall indemnify and save harmless each of the
other parties and their respective officers, directors, employees, agents and
successors and assigns, and each person who controls each of the parties within
the meaning of the Securities Act or the Exchange Act, from and against any and
all Liabilities, losses, damages, claims (whether or not meritorious),
judgments, fines, settlements and other costs and expenses (including reasonable
attorneys' fees and expenses) based upon, arising out of or resulting from any
breach of any representation or warranty, or any breach of or failure to perform
any covenant or agreement, by such Indemnifying Party set forth in this
Agreement or any of the other Transaction Documents or any Litigation brought by
any third party arising out of the transactions contemplated hereby and thereby.
The indemnification provisions of this Article VIII shall survive for two years
from the Closing Date.
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Section 9.02. The party seeking indemnification under this Article VIII
(the "Indemnified Party") shall, promptly after the receipt of notice of the
commencement of any Litigation against such Indemnified Party in respect of
which indemnity may be sought under this Article VIII, notify the Indemnifying
Party in writing of the commencement thereof (the "Indemnification Notice"). The
failure of any Indemnified Party to give the Indemnifying Party an
Indemnification Notice shall not relieve the Indemnifying Party from any
Liability which it may have to such Indemnified Party under this Article VIII
except to the extent that such Indemnifying Party shall have been prejudiced
thereby. In case any such Litigation shall be brought against any Indemnified
Party, the Indemnifying Party shall be entitled to participate therein, and to
the extent that it may wish, to assume the defense thereof, with counsel
reasonably satisfactory to the Indemnified Party by giving written notice of the
Indemnifying Party's election to assume the defense within thirty (30) days
after its receipt of the Indemnification Notice, and after timely written notice
from the Indemnifying Party to such Indemnified Party of its election so to
assume the defense thereof, such Indemnifying Party will not be liable to such
Indemnified Party under this Article VIII for any legal expense subsequently
incurred by such Indemnified Party in connection with the defense thereof nor
for any settlement thereof entered into by the Indemnified Party without the
consent of the corresponding Indemnifying Party; provided that (i) if an
Indemnifying Party shall elect not to assume (or shall fail within the time
period set forth above to elect to assume) the defense of such Litigation, or
shall subsequently fail to diligently maintain the defense thereof, or (ii) if
counsel for the Indemnified Party reasonably determines (x) that there is a
conflict between the positions of the Indemnifying Party and of the Indemnified
Party in defending such Litigation or (y) that there are legal defenses
available to such Indemnified Party different from or in addition to those
available to such Indemnifying Party, then separate counsel for the Indemnified
Party shall be entitled to participate in and conduct the defense, in the case
of clauses (i) and (ii) (x), or such different defenses, in the case of clause
(ii) (y), and such Indemnifying Party shall be responsible for the costs of such
counsel in connection therewith, and, in the case of clause (i), for any
settlement of such Litigation entered into by the Indemnified Party. The
corresponding Indemnifying Party shall not enter into any settlement of any such
Litigation without the consent of the Indemnified Party, which consent shall not
be unreasonably withheld or delayed.
Section 9.03. An Indemnifying Party shall not be obligated to indemnify an
Indemnified Party under this Article VIII unless and until all losses with
respect to which the Indemnifying Party has indemnification obligations
hereunder exceed Fifty Thousand Dollars ($50,000) in the aggregate, following
which the Indemnifying Party shall be obligated to indemnity or hold harmless
the Indemnified Party for all such losses in excess of such amount. In no event
shall the indemnification obligations of each of the parties hereunder exceed
One Million Dollars ($1,000,000) in the aggregate.
Section 9.04. The representations and warranties of the parties contained
in this Agreement shall survive until the date that is one hundred and eighty
(180) days the Closing Date. The obligation of an Indemnifying Party to hold
harmless an Indemnified Party shall be extended automatically to include any
time necessary to resolve a claim for indemnification that was made in
accordance with the terms hereof before the expiration of the survival period,
but not resolved prior to its expiration and any such extension shall apply as
to the specific claims asserted and not resolved within the survival period. The
liability associated with any such item shall continue until such claim shall
have been finally settled, decided or adjudicated.
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Section 9.05. Directors' and Officers' Insurance Provo will indemnify and
hold harmless each of the Buyers and each of the present and former director and
officer of Provo entitled to indemnification under the certificate of
incorporation and by-laws of the Company as in effect on the date hereof,
against any costs or expenses (including reasonable attorneys' fees) judgments,
fines, losses, claims, damages or liabilities (collectively, "Costs") (but only
to the extent such Costs are not otherwise covered by insurance and paid)
incurred in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative, arising
out of or pertaining to matters existing or occurring at or prior to the Closing
Date, whether asserted or claimed prior to, at or after the Closing Date, to the
fullest extent permitted under applicable law (and the Company shall advance
expenses as incurred to the fullest extent permitted under applicable law
provided the person to whom expenses are advanced provides an undertaking to
repay such advances if it is ultimately determined that such person is not
entitled to indemnification). Provo shall (i) include and maintain in effect in
its certificate of incorporation and by-laws, the same provisions regarding
exculpation and elimination of liability of directors and indemnification of
officers, directors, employees and other persons contained in the certificate of
incorporation and by-laws of Provo as of the date hereof and (ii) maintain for a
period of at least six years, the current policies of directors' and officers'
liability insurance and fiduciary liability insurance maintained by Provo
(provided that Provo may substitute therefor policies of at least the same
coverage and amounts containing terms and conditions which are, in the
aggregate, no less advantageous to the insured) with respect to claims arising
from facts or events that occurred on or before the Closing Date, including in
respect of the transactions contemplated by this Agreement. If Provo or any of
its successors or assigns (i) consolidates with or merges with or into any other
Person and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers or conveys all or substantially
all of its properties and assets to any Person, then, and in each such case, to
the extent necessary, proper provision shall be made so that the successors and
assigns of Provo assume the obligations set forth in this Section 9.05.
ARTICLE X
DEFAULT
Section 10.01. Default. The following are "Events of Default" under this
Agreement:
(a) a party shall duly fail to observe any other
covenant, condition or agreement of this Agreement, which
failure shall continue for thirty (30) days after written
notice thereof is received from any of the other parties.
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(b) any warranty or representation made in this
Agreement shall be breached by a party or shall prove to be
false or misleading in any material respect at any time prior
to or following the Closing.
(c) if a party is or becomes the subject of a
bankruptcy, reorganization, rearrangement, or voluntary
insolvency proceeding under applicable bankruptcy, insolvency,
creditor's rights or similar laws in effect in the
jurisdiction of the party's organization or any other
jurisdiction in which a party may seek or be subject to any
such protection or proceedings, or in voluntary proceeding, if
such proceeding is not dismissed within sixty (60) days.
(d) if a party shall seek, consent to or acquiesce
in the appointment of any trustee, receiver or liquidator of,
or if a trustee, receiver or liquidator is otherwise appointed
for it, or all or any material part of its assets.
(e) if a party shall make any general assignment
for the benefit of creditors.
(f) in any proceeding a party shall be alleged to
be insolvent or unable generally to pay its debts as they
become due if such proceeding is not dismissed within sixty
(60) days.
(g) a party commences any one or more of the
processes of dissolution, termination or liquidation.
Notwithstanding the above provisions, any cure periods provided for in this
Section shall not apply with respect to any Event of Default of the same type or
nature which is repeated more than twice in any twelve month period.
Section 10.02. The remedies identified in this Agreement shall be
cumulative and not exclusive and the parties shall be entitled to all other
remedies available under law or in equity.
Section 10.03. The parties shall be entitled to enforce their rights under
this Agreement specifically and to recover damages by reason of any Event of
Default or any breach of any provision of this Agreement and to exercise all
other rights existing in their favor. The parties hereto agree not to oppose any
final judgments of specific performance. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party in its sole discretion may
apply to any court of law or in equity of competent jurisdiction for specific
performance or injunctive relief (without posting a bond or other security) in
order to enforce or prevent any violation of the provisions of this Agreement.
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ARTICLE XI
TERMINATION
Section 11.01. Termination. This Agreement and the other transactions
contemplated hereby may be terminated at any time prior to the Closing:
(a) by mutual written agreement of the Parties;
(b) by any party if the Closing shall have not
been consummated by October 30, 2004; provided, however, that
no party may terminate this Agreement pursuant to this clause
(b) if the Closing shall not have been consummated by October
30, 2004 by reason (i) of the failure of such party or any of
its affiliates to perform in all material respects any of its
or their respective covenants or agreements contained in this
Agreement; or (ii) actions of a third party regulatory agency,
in which case the aforementioned date shall be extended for a
period of time equal to the delay caused by the regulatory
agency.
(c) by Buyers if the Callisto Agreement shall have
not been executedby July 30, 2004.
(d) by either party if there shall be any
applicable law that makes consummation of the transactions
contemplated hereby illegal or otherwise prohibited or if
consummation of the transactions contemplated hereby would
violate any non-appealable final order, decree or judgment of
any governmental authority having competent jurisdiction over
such person.
Any party desiring to terminate this Agreement pursuant to this Section
9.01 shall give written notice of such termination to the other parties.
Section 11.02. Effect of Termination.
(a) If this Agreement is terminated as permitted
by Section 10.01, (i) this Agreement shall forthwith become
void and of no further force and effect, except for the
following provisions, which shall remain in full force and
effect: (a) Section 11.02 (relating to confidentiality), (b)
Section 11.09 (relating to expenses), (c) this Section 10.02
and (d) Sections 11.06 and 11.08; and (ii) such termination
shall be without liability of any party (or any affiliate,
stockholder, consultant or representative of such party) to
the other parties to this Agreement; provided, however, that
if the transactions contemplated hereby fail to close as a
result of a breach of the provisions of this Agreement by any
of the parties, such party shall be fully liable for any and
all damages or losses incurred or suffered by the other
parties as a result of all such breaches if the other
party(ies) is/are ready, willing and able to otherwise satisfy
its obligations under this Agreement.
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(b) The rights and remedies provided in this
Section 10.02 shall be cumulative and not exclusive of any
rights or remedies provided by applicable law.
ARTICLE XII
MISCELLANEOUS
Section 12.01. This Agreement shall be binding upon and inure to the
benefit of the parties named in this Agreement and their respective successors
and permitted assigns. No party may assign either this Agreement or any of its
rights, interests or obligations hereunder or under any other Transaction
Documents without the prior written approval of each of the other parties.
Section 12.02. Except as otherwise required by law, including, without
limitation, Provo's reporting obligations under the Exchange Act, no public
disclosure of the terms of the Contemplated Transactions shall be made by either
party without the prior written consent of the other parties, which will not be
unreasonably withheld or delayed. Each party shall furnish to the other parties
advance copies of any releases which it proposes to make concerning the
transaction.
Section 12.03. All information obtained by the parties from each other
will be treated as confidential and the parties agree not to disclose,
disseminate, reveal, share, or release all or any portion of such information to
third parties, including their respective parent, subsidiaries, or affiliates,
without the express written consent of the party providing the information.
Section 12.04. Any holding that a provision of this Agreement is
unenforceable, in whole or in party, will not affect the validity of the other
provisions of this Agreement.
Section 12.05. This Agreement (including the exhibits, schedules and
appendices attached hereto), including the documents referred to herein,
embodies the entire agreement and understanding of the parties hereto and
supersedes all prior agreements and understandings of the parties hereto
relating to the subject matter herein contained.
Section 12.06. This Agreement shall be construed, interpreted, governed,
and enforced by and under the laws of the State of New York, without giving
effect to the conflicts of law principles thereof.
Section 12.07. All notices under this Agreement, including reports, shall
be in writing in the English language addressed to the appropriate party at the
address set forth by its name on this Agreement, and shall be deemed given when
received by the recipient and shall be delivered directly by hand to authorized
personnel or by registered mail, return receipt requested, authenticated
facsimile message or electronic mail, confirmed by registered mail.
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All notices shall be addressed:
If to Arrangoiz, Xxxxxxx: Provo Mexico, S.A. de C.V.
Xxxxxx Xxxxxxx No. 121,
Penthouse, Mexico City, Xxxxxxxx Roo Xx. 00
Xxx. Xxxx Xxx
00000 Xxxxxx, D.F.
Fax: 000-000-0000
Attention: Xxxxxxx Xxxxxxxx del Rio Arrangoiz
With a copy, which shall not constitute
notice, to:
Xxxxxxx Berlin Sheriff Xxxxxxxx, LLP
The Washington Harbour
0000 X Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxxx X. Pin
If to Provo: Provo Communications Corp.
Xxx Xxxx Xxxx Xxxxx, 0xx Xxxxx
Xxxxx Xxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
With a copy to:
Xxx Xxxxxx-Xxxx
000 Xxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Section 12.08. All controversies relating to the interpretation and/or
enforcement of this Agreement and the transactions contemplated herein shall be
settled by binding arbitration in accordance with the International Rules of
Arbitration of the American Arbitration Association in effect on the date the
notice for arbitration is given to the other party or parties. In the event of
any conflict between those rules and the provisions of this Section 11.08, the
provisions of this Section 11.08 shall govern. The parties shall attempt to
select a single arbitrator, but if they are unable to agree within ten (10) days
from the date of an arbitration demand served by any of the parties, then each
of the parties shall appoint one arbitrator and the arbitrators so chosen shall
in turn choose an additional arbitrator. If the arbitrators chosen by the
parties cannot agree on the choice of the final arbitrator within a period of
ten (10) days after their nomination, then the final arbitrator shall be
appointed by the American Arbitration Association. Any arbitration proceedings
initiated hereunder shall be held in New York, New York, or such other place as
the parties may mutually agree. The arbitration shall take place in the English
language. No decision of the arbitrator(s) shall be subject to appeal, and
judgment on the award or decision rendered by the arbitrator(s) may be entered
in any court having jurisdiction thereof. To assure predictability, any
arbitrators chosen by the parties or otherwise pursuant to this section shall be
attorneys-in-law with experience in sophisticated commercial transactions. The
arbitrator(s) shall base the decision solely on the provisions of this
Agreement; provided, however, that to the extent the subject matter for the
decision is not provided for in such provisions, the decision shall be based on
applicable principles of law and judicial precedent as established in the law of
the jurisdiction provided under Section 11.06 and, upon request of a party, will
include in the award findings of facts and conclusions of law upon which the
award is based. The arbitrator(s) may grant such legal or equitable relief as
appropriate, including money damages, specific performance and injunctive
relief. Questions of whether the dispute is subject to arbitration shall also be
decided by the arbitrator(s). The final arbitration award shall be issued within
ninety (90) days after the arbitration is initiated. Subject to the award of the
arbitrator(s), each party to the arbitration shall pay an equal share of the
fees and costs of the arbitration, except the arbitrator(s) shall have the power
to award all expenses (including attorneys' fees and costs) to the prevailing
party, as determined by the arbitrator(s). Each of the parties waives any
defense of inconvenient forum to the maintenance of an action or proceeding
brought under this Section 11.08 and waives any bond, surety, or other security
that might be required of any other party with respect thereto. Any party may
make service on any other party by sending or delivering a copy of the process
to the party to be served at the address and in the manner provided for the
giving of notices in Section 11.07 above. Nothing in this Section 11.08,
however, shall affect the right of any party to serve legal process in any other
manner permitted by law. Each party agrees that a final judgment in any action
or proceeding so brought shall be conclusive and may be enforced by suit on the
judgment or in any other manner provided by law or at equity.
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Section 12.09. Each of the parties shall bear and shall pay their
respective costs and expenses (including reasonable legal fees and expenses)
incurred in connection with this Agreement and the transactions contemplated
hereby.
Section 12.10. 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.
Section 12.11. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which, when executed and delivered, shall be effective for purposes of
binding the parties hereto, but all of which shall together constitute one and
the same instrument. Any signature page delivered by a fax machine or telecopy
machine shall be binding to the same extent as an original signature page, with
regard to any of the transaction documents or any amendment thereto. Any party
who delivers such a signature page agrees to later deliver an original
counterpart to any party which requests it.
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IN WITNESS WHEREOF, and for the consideration herein stated, the parties
have executed this Agreement the day and year first above written.
PROVO COMMUNICATIONS CORPORATION
By: _______________________________
Name: Xxxxx Xxxxxxxx
Title: President, Provo US Division
____________________________________ _____________________________________
Xxxxxxx Xxxxxxxx del Rio Xxxxxxx, Xxxxxxx Xxxxxxxx del Rio Arrangoiz,
Individually Individually
The undersigned hereby agree to be bound by the provisions of Section 6.11 of
the foregoing agreement.
_______________________________
Xxxxxx Xxxxx
_______________________________
Xxxxxx Xxxxxx
_______________________________
Xxxxx Xxxxxxxx
_______________________________
Xxxxxxx X. Xxxx-Xxxxxxxx
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