Exhibit 10.1
SHARE EXCHANGE AGREEMENT
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SHARE EXCHANGE AGREEMENT, dated as of June 30, 2000, among TIS Worldwide,
Inc., a Delaware corporation ("TIS"), Xxxxxx Xxxxx ("XXXXX," and together with
TIS, the "Sellers") and XXXXXXX.XXX, Inc., a Delaware corporation (the "Buyer").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, TIS owns 45% of the outstanding limited liability company
interests in SPEEDIA, LLC ("SPEEDIA"), a Delaware limited liability company (the
"TIS Interest") and XXXXX owns 10% of the outstanding limited liability company
interests in SPEEDIA (the "XXXXX Interest," and together with the TIS Interest,
the "Purchased Interest") and the Buyer owns the remaining 45% of the
outstanding limited liability company interests in SPEEDIA; and
WHEREAS, on the terms and subject to the conditions of this Agreement, the
Sellers wish to sell to the Buyer, and the Buyer wishes to purchase from each of
the Sellers, all of the Sellers' rights, title and interests in the Purchased
Interest; and
WHEREAS, the parties desire that the transaction be structured as a
reorganization pursuant to Section 368(a)(1)(B) of the Internal Revenue Code of
1986, as amended;
NOW, THEREFORE, in consideration of the premises and the mutual promises,
agreements and covenants contained in this Agreement, each of the Parties hereby
agrees as follows:
Section 1. Sale and Purchase of the Purchased Interest
1.1. Sale of Purchased Interest. Subject to the terms and conditions set forth
in this Agreement and in reliance upon the representations and warranties of the
Sellers set forth below, on the Closing Date, the Buyer shall purchase: (i) from
TIS, and TIS shall sell, assign and transfer to Buyer; and (ii) from XXXXX, and
XXXXX shall sell, assign and transfer to the Buyer, all of the TIS Interest and
XXXXX Interest, respectively, free and clear of any Liens, other than Liens
created by the Buyer, in exchange for an aggregate of 950,000 shares (the
"Shares") of Common Stock of the Buyer under the terms and conditions provided
in Section 1.3, such number of Shares subject to adjustment as provided in this
Agreement.
(a) As a result of the sale of the Purchased Interests to Buyer, effective as of
the Closing, the Sellers, having conveyed to Buyer all of their interests in
SPEEDIA, shall cease to be members of SPEEDIA and, based on Buyer's continued
ownership of its present 45% limited liability interest in SPEEDIA, Buyer shall
be the sole member of SPEEDIA.
1.2. Time and Place of Closing. The closing of the sale and purchase of the
Purchased Interest (the "Closing") will take place at the offices of Xxxxxxx
Xxxx & Xxxxxxxxx, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 a.m. on the
date hereof or such other time and place as the parties may mutually agree upon
(the "Closing Date").
1.3. Transactions at Closing. At the Closing:
(a) TIS shall deliver to the Buyer:
(i) the TIS Interest, free and clear of any Liens other than Liens created by
the Buyer, under the following conditions:
(A) TIS shall sell, transfer and deliver the TIS Interest in exchange for
768,181 shares of Common Stock (the "TIS Shares"), of which 163,636
shares shall be included in a registration statement of Buyer that
will be filed with the SEC on or before 75 days from the Closing Date,
as provided in Section 10 of this Agreement.
(B) The remaining 604,545 TIS Shares shall be subject to the following
transfer restrictions:
(1) 201,515 TIS Shares may be sold pursuant to any exemption
which may be available to TIS pursuant to the Securities Act,
including, but not limited to a sale pursuant to Rule 144 of the SEC
pursuant to the Securities Act;
(2) 201,515 TIS Shares shall be subject to a two year transfer
restriction, commencing on the date of issuance, after which date such
TIS Shares may be sold pursuant to any exemption from registration
under the Securities Act; and
(3) 201,515 TIS Shares shall be subject to a three year transfer
restriction, commencing on the date of issuance, after which date such
TIS Shares may be sold pursuant to any exemption from registration
under the Securities Act.
(4) Except as provided in Section 14 of this Agreement, TIS may
not transfer any TIS Shares which are subject to restriction pursuant
to Paragraph 1.3(a)(i)(B)(1), (2) or (3) of this Agreement without the
prior written consent of the Buyer.
(ii) All restrictions on the transfer of the TIS Shares issued as part of this
transaction shall be terminated upon (A) the completion of an initial public
offering of SPEEDIA pursuant to which SPEEDIA shall receive net proceeds of at
least $20,000,000; or (B) the completion of one or more public offerings by
SPEEDUS subsequent to the date of this Agreement provided that the aggregate net
proceeds from such offerings shall be at least (I) $100,000,000 if the
VisionStar Contribution has been completed by the Buyer or (II) $35,000,000 if
the VisionStar Contribution has not been completed by the Buyer. Net proceeds
shall mean gross proceeds less any underwriting discounts and commissions.
(iii) TIS shall deliver to the Buyer an opinion of counsel to TIS in form and
substance reasonably satisfactory to the Buyer, dated as of the Closing Date, as
to due authorization, execution, delivery and enforceability of this Agreement
by TIS.
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(b) XXXXX shall deliver to the Buyer:
(i) the XXXXX Interest, free and clear of any Liens other than Liens created by
the Buyer, under the following conditions:
(A) XXXXX shall sell, transfer and deliver the XXXXX Interest in exchange
for 181,819 shares of Common Stock (the "XXXXX Shares"), of which
36,364 shares shall be included in a registration statement of Buyer
that will be filed with the SEC on or before 75 days from the Closing
Date.
(B) The remaining 145,455 unregistered XXXXX Shares shall be subject to
the following transfer restrictions:
(1) 49,455 XXXXX Shares shall be free of any encumbrances and
restrictions, and may be sold pursuant to and in accordance with the
Securities Act, including any exemption from registration thereunder;
(2) 48,000 XXXXX Shares shall be subject to a two year transfer
restriction, commencing on the date of issuance, after which date such
XXXXX Shares may be sold in accordance with the Securities Act,
including any exemption from registration thereunder; and
(3) 48,000 XXXXX Shares shall be subject to a three year transfer
restriction, commencing on the date of issuance, after which date such
XXXXX Shares may be sold in accordance with the Securities Act,
including any exemption from registration thereunder.
Except as provided in Section 14 of this Agreement, XXXXX may not
transfer any XXXXX Shares which are subject to restriction pursuant to
Paragraph 1.3(b)(i)(B)(1), (2) or (3) of this Agreement without the
prior written consent of the Buyer.
(ii) All restrictions on the transfer of the XXXXX Shares issued as part of this
transaction shall be terminated upon (A) the completion of an initial public
offering of SPEEDIA pursuant to which SPEEDIA shall receive net proceeds of at
least $20,000,000; or (B)the completion of one or more public offerings by
SPEEDUS subsequent to the date of this Agreement provided that the aggregate net
proceeds from such offerings shall be at least of at least (I) $100,000,000 if
the VisionStar Contribution has been completed by the Buyer or (II) $35,000,000
if the VisionStar Contribution has not been completed by the Buyer.
(iii) XXXXX shall deliver to the Buyer an opinion of counsel to XXXXX in form
and substance reasonably satisfactory to the Buyer, dated as of the Closing
Date, as to the due authorization, execution, delivery and enforceability of
this Agreement by XXXXX.
(c) Buyer shall deliver:
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(i) the TIS Shares to TIS.
(ii) the XXXXX Shares to XXXXX.
(iii) an opinion of its counsel addressed to each Seller, in form and substance
reasonably satisfactory to the Sellers, dated as of the Closing Date, as to the
due authorization, execution, delivery and enforceability of this Agreement by
the Buyer.
(d) TIS and the SPEEDIA shall execute the License Agreement, and SPEEDIA shall
pay the $300,000 licensee fee provided for in the License Agreement.
1.4. Post-Closing Adjustments
(a) If SPEEDUS does not complete the VisionStar Contribution, SPEEDUS shall
issue (i) 150,000 additional shares of Common Stock to TIS and (ii) 33,334
additional shares of Common Stock to XXXXX.
(b) If the trading price of the Common Stock on the Nasdaq National Market
System is not equal to or greater than $10 per share for any 15 Business Days
during the 180-day period commencing on the effective date of the Registration
Statement, then SPEEDUS shall issue (i) an additional 150,000 shares of Common
Stock to TIS and (ii) an additional 33,334 shares of Common Stock to XXXXX.
(c) Of the shares issuable pursuant to Paragraph 1.4(a) and (b) of this
Agreement, 21.3% of the shares issuable to TIS and 20.0% of the shares issuable
to XXXXX shall be included in the Registration Statement, and one-third of the
remaining shares shall be subject to the restrictions set forth in Paragraphs
1.3(a)(i)(B)(1), (2) and (3) or 1.3(b)(i)(B)(1), (2) and (3), as the case may
be.
Section 2. Representations and Warranties of Sellers.
2.1. TIS hereby represents and warrants to the Buyer that:
(a) Organization and Authority. TIS is a corporation duly formed, validly
existing and in good standing under the laws of the State of Delaware. TIS has
all requisite power and authority to execute and deliver this Agreement, to
perform its obligations under this Agreement, and to consummate the transactions
contemplated in this Agreement.
(b) Software.
(i) The representations and warranties set forth in Paragraph 6(a) of the
License Agreement are incorporated in this Agreement as if set forth herein.
(ii) Nothing in this Agreement or the License Agreement will impair or grant
the Buyer any interest in the Licensed Software, other than the license rights
granted by the License Agreement. The Buyer acknowledges that TIS has granted
others licenses to, and it may, except as expressly provided in the License
Agreement, grant others right to use, practice or otherwise deal in the Licensed
Software.
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2.2. XXXXX hereby represents and warrants to the Buyer that:
(a) Financial Statements. XXXXX has furnished the Buyer with the following
financial statements: (i) the unaudited balance sheet of SPEEDIA at December 31,
1999 and the related unaudited statements of operations for the period ended
December 31, 1999 and (ii) the unaudited balance sheet of SPEEDIA at March 31,
2000 and the related unaudited statements of operations for the period ended
March 31, 2000 (the "Historical Financial Statements"). To the knowledge of
XXXXX, except if known to TIS or the Buyer, SPEEDIA has no debt, obligation or
liability (whether accrued, absolute, contingent, liquidated or otherwise,
whether due or to become due) arising out of any transaction entered into at or
prior to the Closing, which, individually or in the aggregate, would reasonably
be expected to have a material adverse effect on the business, condition
(financial or other), assets, properties, operations or prospects of SPEEDIA,
except for liabilities disclosed in the Historical Financial Statements,
liabilities incurred in the ordinary course of business since March 31, 2000 and
obligations under Contracts (as defined in Section 2.2(d) of this Agreement). .
(b) Capitalization. To the best of DOYON's knowledge, as of the Closing Date and
after giving effect to the transactions contemplated hereby (i) Buyer will own
all the authorized and outstanding limited liability company interests of
SPEEDIA and (ii) except if known by TIS or Buyer, SPEEDIA will not have
outstanding any other securities, including any debt, convertible into or
exchangeable for any limited liability company interests of SPEEDIA, any rights
to subscribe for or to purchase, or any options for the purchase of, or any
agreements providing for the issuance (contingent or other) of, or any calls,
commitments or claims of any other character relating to the issuance of, any
limited liability company interests of SPEEDIA.
(c) Litigation. Except as set forth on Schedule 2.2(c), to the best of DOYON's
knowledge, there are no claims, actions, suits, proceedings, disputes or
investigations in process by or against SPEEDIA or threatened either by a
written communication directed to SPEEDIA or by an oral communication directed
to SPEEDIA before any federal or state court, arbitrator or Governmental
Authority by or against SPEEDIA, and there are no outstanding judgments, decrees
or orders of any court or Governmental Authority against SPEEDIA.
(d) Contracts. To the best of DOYON's knowledge, (i) the agreements set forth on
Schedule 2.2(d) comprise all material agreements, contracts and other
arrangements (collectively, "Contracts") to which SPEEDIA is a party, including,
without limitation, joint venture agreements or similar arrangements and
agreements containing any covenant under which SPEEDIA may not compete in any
line of business with any person in any geographic area, (ii) no party to any
Contracts has given SPEEDIA subsidiaries written notice of or made a claim with
respect to any breach or default under any such Contract the consequences of
which, individually or in the aggregate, would reasonably be expected to have a
material adverse effect on the business, condition (financial or other), assets,
properties, operations or prospects of SPEEDIA, (iii) each of the Contracts is
valid, binding and enforceable against the other parties thereto and is in full
force and effect, and (iv) SPEEDIA has performed all material obligations
required to be performed by it to date under, and is not in default in any
material respect of, any of the Contracts and(v) no event exists which, with
notice or lapse of time, or both, would constitute such a default, other than
where failure to perform such obligations or such default would not reasonably
be expected to have an adverse effect on the business, condition (financial or
other), assets, properties, operations or prospects of SPEEDIA.
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(e) Compliance with Law. To the best of DOYON's knowledge, SPEEDIA has not
received notice of, or citation or summons for, and no complaint has been filed,
no penalty has been assessed and no investigation or review is in process or,
threatened by any Governmental Authority with respect to, any material violation
or alleged violation of any law, regulation, order or other legal requirement,
or failure by SPEEDIA to have any permit, certificate, license, approval,
registration or authorization required in connection with the operation of its
business, other than where such violation or failure would not reasonably be
expected to have a material adverse effect on the business, financial condition,
assets, properties or operations of SPEEDIA. To the best of DOYON's knowledge,
SPEEDIA is not in default with respect to any order, writ, judgment, award,
injunction or decree of any federal, state or local court or governmental or
regulatory authority or arbitrator, domestic or foreign, applicable to or in
connection with its business or any of its assets, properties or operations.
(f) Patents. XXXXX believes that there are four (4) potential patent
applications and two (2) potential trademark applications to be filed by
SPEEDIA, which are described in Schedule 2.2(f).
2.3. Each Seller severally represents and warrants as to such Seller to the
Buyer that:
(a) Due Authorization etc. The execution, delivery and performance by such
Seller of this Agreement has been authorized by all necessary action on the
behalf of such Seller (or in the case of XXXXX, XXXXX represents that he has the
legal capacity to execute, deliver and perform this Agreement). Such Seller has
duly executed and delivered this Agreement. This Agreement constitutes a legal,
valid and binding obligation of such Seller, enforceable against such Seller in
accordance with its terms, except as enforceability may be affected by
bankruptcy, insolvency, reorganization, fraudulent conveyance and other laws of
general application affecting the enforcement of creditors' rights and except
that no representation is made as to the availability of specific performance or
other equitable relief..
(b) No Conflicts. The execution, delivery and performance by such Seller of this
Agreement, and the consummation of the transactions contemplated by this
Agreement, do not and will not conflict with, contravene, result in a violation
or breach of or default under (with or without the giving of notice or the lapse
of time, or both) (i) to the best of such Seller's knowledge, any Applicable
Law, or (ii) any material contract, agreement or other instrument to which such
Seller is a party or by which such Seller's properties or assets is bound.
(c) Consents and Approvals. Such Seller is not required to obtain any
Governmental Approval or other Consent in connection with the execution and
delivery of this Agreement, or the consummation of the transactions contemplated
by this Agreement.
(d) Title to Purchased Interest. Such Seller owns, beneficially and of record,
such Seller's Purchased Interest, free and clear of any Liens other than Liens
created by the Buyer. Upon the payment for the Purchased Interest at the Closing
under this Agreement, the Buyer will acquire good and valid title to the
Purchased Interest free and clear of any Liens other than Liens created by the
Buyer.
(e) No Actions. Except for this Agreement, such Seller has not taken any action
(i) binding, or purporting to bind, SPEEDIA or any of its respective assets in
any manner; or (ii) committing,
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or purporting to commit, SPEEDIA to issue any additional limited liability
company interests or any future common interests or admit any Person as a member
of SPEEDIA. To the best of such Seller's knowledge, SPEEDIA has no liabilities
or obligations of any nature, except those set forth on Schedule 2.3, the
Historical Financial Statements or the other Schedules delivered pursuant to
this Agreement.
(f) Brokers, Finders. There are no claims for brokerage commissions or finder's
fees or similar compensation in connection with the transactions contemplated by
this Agreement based on any arrangement made by or on behalf of such Seller and
such Seller agrees to indemnify and hold the Buyer harmless against any costs or
damages incurred as a result of any such claim.
(g) Acquisition for Investment. Such Seller is acquiring the Shares for
investment and not with a view toward any resale or distribution of the Shares
except in compliance with the Securities Act.
Section 3. Representations and Warranties of the Buyer.
The Buyer hereby represents and warrants to each of the Sellers that:
3.1. Organization and Authority. The Buyer is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware.
The Buyer has all requisite corporate power and authority to execute and deliver
this Agreement, to perform its obligations under this Agreement, and to
consummate the transactions contemplated in this Agreement.
3.2. Due Authorization. The execution, delivery and performance by the Buyer of
this Agreement will have been authorized by all necessary corporate action on
the Buyer's behalf on the Closing Date. The Buyer has duly executed and
delivered this Agreement. This Agreement constitutes a legal, valid and binding
obligation of the Buyer, enforceable against the Buyer in accordance with its
terms.
3.3. No Conflicts. The execution, delivery and performance by the Buyer of this
Agreement, and the consummation of the transactions contemplated by this
Agreement, do not and will not conflict with, contravene, result in a violation
or breach of or default under (with or without the giving of notice or the lapse
of time, or both) (i) any Applicable Law; (ii) the certificate of incorporation
or by-laws or other organizational documents of the Buyer; or (iii) any material
contract, agreement or other instrument to which the Buyer is a party or by
which its properties or assets may be bound.
3.4. Consents. Except as set forth in Schedule 3.4, the Buyer is not required to
obtain any Governmental Approval or other Consent in connection with the
execution and delivery of this Agreement, or the consummation of the
transactions contemplated by this Agreement.
3.5. Brokers, Finders. There are no claims for brokerage commissions or finder's
fees or similar compensation in connection with the transactions contemplated by
this Agreement based on any arrangement made by or on behalf of the Buyer and
the Buyer agrees to indemnify and hold each of the Sellers harmless against any
costs or damages incurred as a result of any such claim.
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3.6. Shares. The Shares, when issued and delivered in accordance with the terms
of this Agreement, will have been duly authorized and validly issued and will be
fully-paid and non-assessable.
3.7. Acquisition for Investment. Buyer is acquiring the Purchased Investments
for investment and not with a view to the sale or distribution thereof.
3.8. SEC Documents. Buyer has provided Sellers with a copy of (i) Buyer's Form
10-K, as amended by an amendment on Form 10-K/A, for the year ended December 31,
1999, (ii) Buyer's Form 10-Q for the quarter ended March 31, 2000, and (iii)
Buyer's proxy statement for its 1999 annual meeting (collectively, the "SEC
Documents"). Buyer has not filed any current report on Form 8-K since January 1,
2000. Buyer has filed all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the twelve months prior to the date
of this Agreement, and is eligible to register the TIS Shares and XXXXX Shares
to be registered pursuant to Paragraphs 1.3(a)(i)(A) and 1.3(b)(i)(A) on a Form
S-3. The SEC Documents, as of their respective dates, complied in all material
respects with the requirements of the Securities Exchange Act, and the rules and
regulations of the Commission thereunder, and none of the SEC Documents
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading.
Section 4. Acknowledgments, Covenants and Further Agreements.
4.1. Shares. Each of the Sellers acknowledges that until such time as the Shares
are registered under the Securities Act, the Shares cannot be sold except
pursuant to an exemption from such registration.
4.2. Further Actions and Assurances.
(a) Each of the Parties agrees to cooperate fully with the other Parties and any
authorized representatives and to execute and deliver or cause to be executed
and delivered at all reasonable times and places such additional instruments and
documents as the other Parties may reasonably request for the purpose of
carrying out the purposes and intent of this Agreement.
(b) From time to time after the Closing Date and at the expense of each of the
Sellers and without further consideration, each of the Sellers shall execute and
deliver such instruments and documents and take such other actions as the Buyer
may reasonably request of either Seller in order to confirm and assure the
rights and obligations provided under this Agreement and render effective the
consummation of the transactions contemplated by this Agreement or otherwise
carry out the purposes and intent of this Agreement.
(c) From time to time after the Closing Date and at the expense of the Buyer and
without further consideration, the Buyer shall execute and deliver such
instruments and documents and take such other actions as either Seller may
reasonably request in order to confirm and assure the rights and obligations
provided under this Agreement and render effective the consummation of the
transactions contemplated by this Agreement or otherwise carry out the purposes
and intent of this Agreement.
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4.3. Confidentiality; Publicity. As to so much of the information and other
material furnished under or in connection with this Agreement (whether furnished
before, on or after the date hereof), as constitutes or contains confidential
business, financial or other information of the Parties, each of the Parties
covenants for itself and its directors, officers and partners, affiliates,
agents, and representatives that it or he (as the case may be) will use due care
to prevent its officers, directors, partners, employees, agents, counsel,
accountants and other representatives, as applicable, from disclosing such
information to Persons other than their respective authorized employees, agents,
counsel, accountants, shareholders, partners, limited partners and other
authorized representatives; provided, however, that each Party may disclose or
deliver any information or other material disclosed to or received by it or him
(as the case may be) should such Party be advised by its or his (as the case may
be) counsel that such disclosure or delivery is required by law, regulation or
judicial or administrative order. In the event of any termination of this
Agreement prior to the Closing Date, each Party shall return to the rightful
owner, all confidential material previously furnished to such Party or its or
his (as the case may be) officers, directors, partners, employees, agents,
counsel, accountants and other representatives in connection with the
transactions contemplated by this Agreement. For purposes of this Section 4.3,
"due care" means at least the same level of care that such Party would use to
protect the confidentiality of its or his (as the case may be) own sensitive or
proprietary information, and this obligation shall survive termination of this
Agreement. The obligations of Buyer pursuant to this Section 4.3, to the extent
that they relate to the Licensed Software, are in addition to, and not in
limitation of, the obligations of confidentiality set forth in the License
Agreement.
Section 5. Survival of Representations and Warranties.
5.1. Survival of Representations and Warranties. All representations and
warranties contained in this Agreement will survive the execution and delivery
of this Agreement and the Closing for a period of twelve months, and the
covenants shall survive the execution, delivery and performance of this
Agreement as set forth therein. No Seller shall have any liability or
obligations to Buyer to the extent that the claim shall exceed the value of the
Shares delivered at the Closing, and a Seller may satisfy any claim by
delivering Shares to Buyer valued at the greater of the value on the date of
claim or the value on the Closing Date.
Section 6. Expenses.
Each party shall be responsible for and bear all its own costs and expenses
(including any broker's or finder's fees and the expenses of its
representatives) incurred at any time in connection with pursuing or
consummating the transactions contemplated by this Agreement.
Section 7. Amendments and Waivers.
This Agreement constitutes the entire understandings of the Parties hereto
and supersedes all prior agreements or understandings with respect to the
subject matter hereof among such Parties. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, with (and only with) the
written consent of each of the Parties.
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Section 8. Successors and Assigns.
This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the Parties.
Section 9. Notices.
All notices and other communications under this Agreement shall be
delivered by hand or facsimile or mailed by overnight courier services which
provides evidence of delivery or by registered mail or certified mail return
receipt requestedas follows:
(a) if to TIS , to:
TIS Worldwide, Inc.
000 Xxxxxxxx, 00xx xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxx
Facsimile: (000) 000-0000
With copies to:
Xxx X. Xxxxxx, Esq.
Esanu Katsky Xxxxxx & Siger, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
(b) if to Xxxxxx Xxxxx, to:
Xxxxxx Xxxxx
Chief Executive Officer
SPEEDIA, LLC
000 00xx Xxxxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
With copies to:
Putney Xxxxxxx Xxxx & Xxxxxx, LLP
000 0xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
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(c) if to Buyer, to:
XXXXXXX.XXX, Inc.
000 00xx Xxxxxx, Xxxxx 0X
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxx
Facsimile: (000) 000-0000
With copies to:
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
or to such other persons or addresses, as may be designated in writing by the
Party to receive such notice. Notice shall be deemed given when received;
provided, however, that any notice by facsimile shall be deemed given when
confirmation of receipt if given by the recipient or confirmation of
transmission is given by one of the other methods of notice provided in this
Section 9.
Section 10. Registration Covenant
(a) Within 75 days after the Closing Date, time being of the essence, the Buyer
will file a registration statement (the "Registration Statement") under the
Securities Act covering the shares issuable to TIS pursuant to Paragraph 1.3
(a)(i)(A) of this Agreement and issuable to XXXXX pursuant to Paragraph
1.3(b)(i)(A) of this Agreement together with the maximum number shares issuable
pursuant to Paragraph 1.4(a) and (b) which are to be included in the
Registration Statement pursuant to Paragraph 1.4(c) (collectively, the
"Registrable Shares") and shall use it best efforts to have such registration
statement declared effectively as promptly as possible thereafter. If Buyer is
eligible to register the Shares on a Form S-3 or similar short-form registration
statement, Buyer shall use such form to register the Registrable Shares. The
Buyer will keep the registration statement current and effective until all of
the Registrable Shares shall have been sold. Each Seller shall provide the Buyer
with such information as Buyer may reasonably request with respect to such
Seller's stock ownership in Buyer and such Seller's plan of distribution.
(b) The Buyer shall bear the entire cost and expense of any registration of the
Registrable Shares pursuant to this Section 10; provided, however, that each
Seller shall pay any transfer taxes or underwriting discounts or commissions
applicable to the Registrable Shares sold by such Seller pursuant to the
Registration Statement and, if such Seller engages his own counsel in connection
with the Registration Statement, such Seller shall pay the fees and expenses of
such counsel.
(c) In connection with the Registration Statement, the Buyer shall supply
prospectuses and qualify the Registrable Shares for sale in such states as
Sellers may reasonably designates, provided, that the Buyer shall not be
required to qualify or register the Registrable Shares in any
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jurisdiction where such qualification or registration would require the Buyer to
submit generally to the jurisdiction of such state.
(d) The Buyer shall indemnify and hold harmless each Seller and each
underwriter, within the meaning of the Securities Act, who may purchase from or
sell for any such holder any Registrable Shares from and against any and all
losses, claims, damages and liabilities (including fees and expenses of counsel,
which counsel shall, if, in the reasonable opinion of counsel for Sellers, the
representation by such counsel of both Buyer and the indemnified parties
constitutes a conflict of interest under applicable Code of Professional
Responsibility, be separate from counsel for the Buyer, provided, that the Buyer
shall not be required to pay the fees of more than one firm representing both
Sellers and any transferees of Sellers whose Registrable Shares are included in
the registration statement, which counsel shall be selected by Sellers) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the registration statement or any post-effective amendment thereto or any
registration statement under the Securities Act or any prospectus included
therein required to be filed or furnished by reason of this Section 10 or any
application or other filing under any state securities law caused by any
omission or alleged omissions to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading to
which such holder or any such underwriter or any of them may become subject
under the Securities Act, the Securities Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or alleged untrue statement or omission or alleged omission based upon
information furnished to the Buyer or any underwriter expressly for use therein,
which indemnification shall include each person, if any, who controls any such
underwriter within the meaning of the Securities Act; provided, however, that
any such holder or underwriter shall at the same time indemnify the Buyer, its
directors, each officer signing the related registration statement, each person,
if any, who controls the Buyer within the meaning of the Securities Act and each
other holder, in the manner set forth in this Section 10(d), from and against
any and all losses, claims, damages and liabilities caused by any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement or any prospectus required to be filed or furnished by
reason of this Section 10 or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, insofar as such losses, claims, damages or
liabilities are caused by any untrue statement or alleged untrue statement or
omission based upon information furnished in writing to the Buyer by any such
holder or underwriter expressly for use therein.
(e) The Buyer agrees that, as long as Sellers own any Shares, it will file in a
timely manner all reports required by Sections 13 and 15(d) of the Securities
Exchange Act , and that such reports will, when filed, comply with the
requirements of the Securities Exchange Act, and it will take such action is
necessary to maintain the listing of the Common Stock on the Nasdaq National
Market System.
(f) The Buyer recognizes that its agreement to have the Registration Statement
filed and the Shares registered pursuant to the Securities Act in a timely
manner (with time being of the essence) as provided in Paragraph 10(a) of this
Agreement was a material inducement for Sellers to enter into this Agreement and
perform their obligations under this Agreement, and that the failure of the
Buyer to have such Shares so registered would cause damage to the Sellers.
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Accordingly, if the Registration Statement is not filed within 75 days after the
Closing Date or the Registration Statement is not declared effective by the SEC
by the 120th day after the Closing Date, the Buyer shall pay the Sellers, as
liquidated damages for such failure and not as a penalty, the Registration
Payment. The Registration Payment shall mean two-thirds of one cent ($.0066 2/3)
for each Share which is included in the Registration Statement for each day
subsequent to 75 days from the Closing Date that the Registration Statement
shall not have been filed with the SEC and for each day subsequent to 120 days
from the Closing Date that the Registration Statement shall not have been
declared effective by the SEC, provided, however, that (i) no Registration
Payment shall be made with respect to the Shares issuable pursuant to Paragraph
1.4 of this Agreement unless (and only to the extent that) the Seller's rights
to such Shares accrued prior to the effectiveness of the Registration Statement
and (ii) no Registration Payment shall be made for any day that the failure of
the Registration Statement to have been declared effective by the 120th day
after the Closing Date results from an SEC Delay.
Section 11. Governing Law.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York, without regard to principles
of conflicts of laws.
Section 12. Descriptive Headings.
The descriptive headings in this Agreement are for convenience of reference
only and may not be deemed to alter or affect the meaning or interpretation of
any provision of this Agreement.
Section 13. Entire Agreement.
This Agreement constitutes the entire agreement of the Parties and
supersedes all prior oral or written agreements, understandings, representations
and warranties, and courses of conduct and dealing among the Parties on the
subject matter hereof.
Section 14. Assignment.
This Agreement may not be assigned or otherwise transferred by any Party
without the prior written consent of all other Parties, provided that the Buyer
may assign its rights and transfer its obligations under this Agreement (other
than the obligation to deliver and Register the Shares) to any of its
majority-owned subsidiaries. TIS may transfer any TIS Shares which are subject
to restrictions (a) in connection with a merger or sale by TIS of all or
substantially all of its business and assets or (b) to a majority-owned
subsidiary. The transfer by TIS of all or substantially all of its e-Business
solutions business shall be deemed, for purposes of this Section 14, to be a
sale of all or substantially all of its business. A majority-owned subsidiary
shall mean a corporation or other entity in which the transferring party has (i)
a majority of the voting rights, (ii) a majority of the equity interests and
(iii) binding agreements which will provide that the transferring party shall
continue to maintain a majority of both the voting rights and the equity
interests. XXXXX may transfer any XXXXX Shares by will or pursuant to the laws
of descent and distribution or to a member of his immediate family or trusts for
their benefit. Any transfer pursuant to this Section 14 shall be subject to any
restrictions which are in effect at the date of the transfer, and the Buyer may
condition effecting any transfer
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of TIS Shares or XXXXX Shares upon receipt of an agreement pursuant to which the
transferee agrees to be bound by such restrictions.
Section 15. Counterparts.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original and all of which taken together shall be
deemed to constitute one and the same instrument.
Section 16. Placement Services. If requested by the Buyer, TIS shall use its
commercially reasonable efforts to identify and recommend to SPEEDIA a senior
operating executive. TIS agrees that, if SPEEDIA requests such services, it will
charge a placement fee for placing the senior operating executive which is equal
to 50% of TIS' standard placement fees.
Section 17. Defined Terms.
For the purposes of this Agreement, the following words and phrases have
the following meanings:
"Affiliate" of a Person means a Person that directly or
indirectly through one or more intermediaries, controls, is controlled
by, or is under common control with, the first Person or entity.
"Control" (including the terms "controlled by" and "under the common
control with") means the possession, directly or indirectly, of the
power to direct or cause the direction of the management policies of a
Person, whether through the ownership of voting securities, by
contract, as trustee or executor, or otherwise.
"Applicable Law" means all applicable provisions of all (i)
constitutions, treaties, statutes, laws (including, but not limited
to, the common law), rules, regulations, ordinances, codes or orders
of any Governmental Authority, and (ii) orders, decisions,
injunctions, judgments, awards and decrees or consents of or
agreements with any Governmental Authority, that are binding on a
Party.
"Business" means the business operations of SPEEDIA, which
includes, but is not limited to device independent messaging services
and wireless application services.
"Buyer" has the meaning specified in the preamble to this
Agreement.
"Buyer Notice" has the meaning specified in Section 1.3.
"Closing" has the meaning specified in Section 1.2.
"Closing Date" has the meaning specified in Section 1.2.
"Common Stock" means the common stock of SPEEDUS.
"Consent" means any consent, approval, authorization, waiver,
permit, grant, franchise, concession, agreement, license, certificate,
exemption, order, registration, declaration, filing, report or notice
of, with or to any Person.
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"Contracts" has the meaning specified in Section 2.2.
"XXXXX" has the meaning specified in the recitals to this
Agreement.
"XXXXX Interest" has the meaning specified in the recitals to
this Agreement.
"XXXXX Notice" has the meaning specified in Section 1.3.
"XXXXX Shares" has the meaning specified in Section 1.3.
"Governmental Approval" means any Consent of, with or to any
Governmental Authority.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof; any entity, authority or
body exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, including,
without limitation, any government authority, agency, department,
board, commission or instrumentality of the United States, any State
of the United States or any political subdivision thereof; any court,
tribunal or arbitrator; and any self-regulatory organization.
"Historical Financial Statements" has the meaning specified in
Section 2.2.
"License Agreement" means the license agreement dated the date of
this Agreement between TIS and SPEEDIA, LLC."Licensed Software" has
the meaning set forth in the License Agreement.
"Liens" means any mortgage, pledge, deed of trust, hypothecation,
right of others, claim, security interest, encumbrance, burden, title
defect, title retention agreement, lease, sublease, license, occupancy
agreement, easement, covenant, condition, encroachment, voting trust
agreement, interest, option, right of first offer, negotiation or
refusal, proxy, lien, charge or other restrictions or limitations of
any nature whatsoever.
"Parties" means the Buyer, each of the Sellers and any of their
successors or assigns.
"Person" means any natural person, firm, partnership,
association, corporation, company, trust, business trust, Governmental
Authority or other entity.
"Purchased Interest" has the meaning specified in the recitals to
this Agreement.
"Registration Payment" shall have the meaning set forth in
Section 10(f) of this Agreement.
"Registration Statement" has the meaning set forth in Section
10(a) of this Agreement.
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"SEC" shall mean the Securities and Exchange Commission.
"SEC Delay" shall mean any delay in the Registration Statement
not being declared effective within 120 days after the Closing Date to
the extent that it results from (i) the failure of the SEC to provide
comments on the initial filing of the Registration Statement more than
four weeks from the filing date or (ii) the failure of the SEC to
provide comments on the first or second amendment to the Registration
Statement more than ten days from the date of filing. Any delay
resulting from the need to file more than two amendments shall not be
deemed to be an SEC Delay.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated
thereunder.
"Seller" or "Sellers" has the meaning specified in the preamble
to this Agreement.
"Shares" means the TIS Shares and the XXXXX Shares, collectively.
"SPEEDIA" has the meaning specified in the recitals to this
Agreement.
"SPEEDUS" has the meaning specified in the recitals to this
Agreement.
"TIS" has the meaning specified in the recitals to this
Agreement.
"TIS Interest" has the meaning specified in the recitals to this
Agreement.
"TIS Shares" has the meaning specified in Section 1.3.
"TIS Notice" has the meaning specified in Section 1.3.
"VisionStar" shall mean VisionStar, Inc., a corporation wholly
owned by Xxxxx X. Xxxxxxxxx, the Chairman and Chief Executive Officer
of the Buyer, a company that holds a license from the Federal
Communications Commission (the "FCC"), granted in May 1997, to
construct, launch and operate a telecommunications satellite operating
in the radio frequency range of 28 GHz.
"VisionStar Contribution" shall mean either (a) the execution and
delivery of an agreement by Buyer and VisionStar pursuant to which
VisionStar agrees to hold VisionStar's FCC license for the sole and
exclusive benefit of Buyer or any subsidiary of Buyer that is at least
90% owned (directly or indirectly) by Buyer and VisionStar provides
reasonable provisions to assure that the FCC license will not be
subject to attachment, levy or claim by creditors, and the
consummation of the transaction contemplated by such agreement within
six months following the Closing Date, or (b) (i) the execution and
delivery of an agreement by Buyer, VisionStar and Xxxxx Xxxxxxxxx
within six months following the Closing Date pursuant to which Xxxxx
Xxxxxxxxx shall contribute, subject only to FCC approval, at least 90%
of VisionStar to Buyer, (ii) the
16
approval by the FCC of such contribution within twelve months
following the Closing Date, and (iii) the consummation of such
contribution within ten business days after FCC approval is obtained.
IN WITNESS WHEREOF, each of the Sellers and the Buyer have duly executed
this Share Exchange Agreement, effective as of the date first above written.
TIS WORLDWIDE, INC.,
as "Seller"
By: /s/ Xxxx Xxxxxxxx
------------------------------
Name: Xxxx Xxxxxxxx
Title: Chairman and CEO
XXXXXX XXXXX,
as "Seller"
By: /s/ Xxxxxx Xxxxx
------------------------------
Xxxxxx Xxxxx
XXXXXXX.XXX, INC.
as "Buyer"
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Chairman and CEO
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