Exhibit 10.29.1
Sale and Transfer of Stock of Novento Telecom AG and Multicall Telefonmarketing
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AG
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and Purchase and Assignment of Claims
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Xxxxx Xxxxxxxx,
resident of Xx Xxxxxxxxxx 00, 00000 Xxxxxxxxx,
- hereinafter referred to as the "Seller" -
and
Cybernet Internet Services International, Inc.
a company incorporated under the law of the State of Delaware, U.S.A.
Xxxxxx-Xxxxxx-Ring 19-23, 00000 Xxxxxx
- hereinafter referred to as the "Buyer" -
are hereby concluding the following agreement governing the purchase and the
transfer of stock and claims:
Preliminary remark
The Seller holds 51% of Novento Telecom AG and 100% of Multicall
Telefonmarketing AG stock and intends to sell a total of 51% of the stock
of Novento Telecom AG and 51% of stock of Multicall Telefonmarketing AG to
the Buyer. The Buyer intends to acquire 51% of stock of Novento Telecom AG
and 51% of stock of Multicall Telefonmarketing AG from the Seller.
(S) 1
Interests held
1. Novento Telecom AG (hereinafter referred to as "Novento AG") entered into
the registration court of the Dusseldorf local court under HRB 30784, has a
registered capital stock of DM 400,000.00 divided into 80,000 shares of
registered stock in the nominal amount of DM 5.00 (hereinafter referred to
as "Novento Stock"). Of the 80,000 units of Novento Stock the Seller shall
receive a total of 40800, i.e. the multiple share certificate No. 31997 -
72795 and the stock No. 80000.
2. Multicall Telefonmarketing AG (hereinafter referred to as "Multicall AG"),
entered into the registration court of the Wilhelmshaven local court under
HRB 1349, has a capital stock of DM 200,000.00, divided into 40,000 shares
of registered stock in the nominal amount of DM 5.00 (hereinafter referred
to as "Multicall Stock"), all of which are held by the Seller.
(S) 2
Sale and Transfer
1. The Seller hereby sells his 40,800 shares of Novento Stock to the Buyer in
accordance with (S) 1 subsection 1.
The Seller hereby sells another 20,400 shares of Multicall Stock. These are
evidenced in the global certificate No. 8001 - 28400.
2. The Seller hereby transfers the 40,800 shares of Novento Stock and the
20,400 shares of Multicall Stock to the Buyer via endorsement.
3. The transfer of stock in accordance with the preceding subsection 2 is
subject to payment of the consideration under (S) 3 below. The Seller shall
hand the share certificates carrying a blank endorsement over to the
trustee in accordance with the attached trust agreement from Annex
1. In it the parties irrevocably instruct the trustee to hand the stock
held in his custody after payment of the consideration in accordance with
(S) 3 below to the Buyer.
4. The sale and transfer of stock shall be made effective the day of payment
of the consideration in accordance with (S) 3 below (hereinafter referred
to as "transfer date") and with all rights and duties, in particular all
rights and duties resulting from the stock. The profit realized in the
current business year, payable to the stock sold and transferred, is solely
due to the Buyer. The same applies to any profits realized in the previous
business years and not paid out to the Seller.
(S) 3
Consideration
1. As consideration for the 40,800 Novento Stock sold with this agreement, the
Seller shall receive:
a) A sum of DM 1,900,000 (in words: one million nine hundred thousand
German marks); and
b) 39,412 (in words: thirty-nine thousand four hundred and twelve shares
of Common Stock) from the Buyer (hereinafter referred to as "Cybernet
Stock")
2. As consideration for the 20,400 shares of Multicall Stock sold through this
agreement, the Seller shall receive a sum of DM 102,000.00 (in words: one
hundred two thousand).
3. The total sum of DM 2,002,000 is payable into the Seller's account with
Volksbank Hannover, account No. 0581542000, bank code (BLZ) 00000000,
within four weeks from signing this agreement.
4. The 39,412 shares of the Buyer's Common Stock shall be transferred to the
Seller within the same period of time.
(S) 4
Loan Claims
1. From the agreements of March 1, 1999, March 9, 1999 and June 23, 1999 the
Seller has loan claims amounting to a total of DM 300,000 against Novento
Telecom AG. In regard to these shareholder loans priority-related notices
of rescission have been issued. Photocopies of the individual loan
agreements are attached as Annex 2.
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2. The Seller is entitled to loan claims against Multicall Telefon Marketing
AG totalling DM 403,000.00 from the agreements of August 27, 1998, October
21, 1998, November 20, 1998 and December 21, 1998. In regard to these
shareholder loans priority-related shareholder notices have been issued.
The individual shareholder loans are attached as Annex 3.
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3. The Seller shall sell and transfer the loan claim in accordance with
subsection 1 and subsection 2 at the purchase price of DM 703,000.00
including all rights and duties from the loan agreements according to
Annexes 2 and 3 to the accepting Buyer. The transfer is subject to the
payment of the purchase price.
4. For the payment of the purchase price (S) 3 subsection 3 shall apply.
(S)5
Warranties of the Seller
1. The Seller warrants to the Buyer at the transfer date and at the present
day of signing this agreement:
a) The Novento and Multicall Stock sold is not subject to any charges,
subparticipations, restraints on disposal or other commitments. The
Seller is unrestrictedly entitled to
dispose of the Novento and Multicall Stock. All agreements and
approvals of the conclusion and implementation of the agreement have
been obtained. All payments into the capital stock have been fully
made.
b) Novento AG exists with the bylaws as amended on July 30, 1998 (document
No. 161/1998 of notary public Xx Xxxxx Xxxxxxx, Wilhelmshaven). This
agreement is complete. With the exception of the trusteeships
announced to the Buyer, there are no subsidiary agreements concerning
the corporate relationships and the corporate relationship. The re-
formation concerning the agreement with Michielin & Partner GmbH of
July 20, 1998 (invoice value DM 68,905.96) has also been announced to
the Buyer. The non-certified extract from register from Annex 4
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correctly and completely contains all registration-required facts and
legal relationships, non-entered applications for the registration
court do not exist.
c) Multicall AG exists with the bylaws as amended on March 30, 1998
(document No. 63/1998 of the notary public Xxxxx Xxxxxxx,
Wilhelmshaven); this agreement is complete, furthermore, there are no
subsidiary agreements concerning the corporate relationship. The re-
formation concerning the agreements Xxxxx of June 30, 1998, VR Leasing
of December 14, 1998 and ITS Systeme Wilhelmshaven of August 18, 1998
has been announced to the Buyer. The non-certified extract from
register attached in Annex 5 correctly and completely contains all
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registration-required facts and legal relationships, non-entered
applications for the registration court do not exist.
d) The annual reports of Novento AG and Multicall AG, for the year ended
December 31, 1998, which were handed over to the Buyer, were
established in accordance with the generally recognized principles of
proper accounting and balance sheet preparation while maintaining
balance sheet continuity by the auditors/tax consultants/lawyers
Gorler Klosterkamp Tucking, Dusseldorf. These reports for the year
1998 are adequate and complete and correctly reflect the financial
situation and the business results at the relevant balance sheet dates
and for the periods indicated. The market value of the individual
assets corresponds at least to their balance sheet figure. The
companies had no other liabilities, none threatened, than those shown
or those covered by reserves. In the period from January 1, 1999 to
the transfer date and/or the
present day of signing this agreement, the companies exclusively
engaged in proper business transactions.
e) Dividends or hidden profit distributions of Novento AG or of Multicall
AG (hereinafter referred to commonly as "companies") have not been
made since the establishment of the companies.
f) The companies, except for commercial reservations of ownership, are
owners of the assets specified in the annual report for the year
ending December 31, 1998 and of the assets acquired since this balance
sheet date, except for those sold since December 31, 1998 in proper
business transactions. The assets of the companies, except for the
reservations of ownership, are their unrestricted property and are
free of rights of third parties.
g) Novento AG is the sole owner of the "Novento" brand (IR Xx. 000000 xxx
XX 000 00 906) and Multicall AG is the sole owner of the brand
"Multicall talking head communication" (IR No. 715 755 and 398 70
713), which is always free of rights of third parties.
h) The Seller has left the Buyer all agreements essential to the company,
completely and correctly in the original or as a copy for inspection,
including the Seller agreement with Star Telecommunications GmbH of
June 17, 1998, the Seller agreement with Colt Telecom GmbH of January
21, 1999, the rental agreement Xxxxxxxx Xxxxxx 00 in Dusseldorf of
July 20, 1998, the rental agreement Olympiastr. in 26419 Schortens,
the loan agreements, the Xxxxx commercial agent agreement, and the
cooperation agreement of Novento AG with Multicall AG dated September
1, 1998. Apart from the agreements made available for inspection,
there are no agreements essential to the companies which are industry-
untypical or are not backed by an adequate consideration.
i) With the exception of the contract for services between Novento AG and
the Seller and the loan agreements according to the Annexes 2 and 3
and according to Annex 6,
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there are no contracts or agreements between the companies and the
Seller or persons close to them.
j) Except for the staff agreements (commissions system) and the commercial
agent agreements, the companies have not signed any agreements with
profit- or sales-dependent remuneration, royalties etc.
k) The Seller has made all staff agreements with the companies available
to the Buyer for inspection as a true and complete copy or in the
original. Further employments, other agreements, plant agreements or
commitments from operations do not exist. Claims from a stock option
programme against the companies do not exist at the transfer date.
l) There are no untypical guaranties, sureties or similar charges (surety
Colt for DM 30,000.00, guaranty commitments from rental agreements are
known). The companies assume no liabilities from furnishing collateral
for external commitments. The companies have given no promises of
loans.
m) There are no known public-legal restrictions that could prevent the
companies from running their operations in the way they do it now.
n) At present, except for Xxxxxxxxx versus Multicall, the companies are
conducting no litigation. Procedures against the companies before
administrative authorities or official investigations are neither
impending nor do they have to be expected to the best of one's
knowledge. The Buyer knows that presently Novento AG is withholding
sums from Star Telecom because of alleged compensation claims.
o) The companies submitted all income tax revenues properly and timely and
paid all due taxes or accumulated sufficient reserves for taxes.
Furthermore, the companies have no arrears in taxes and no tax risks.
Payments to staff for payroll tax and for contributions to legal
insurances have been adequately determined, calculated and
transferred.
p) For the companies there are no commitments outside usual business
transactions.
q) The Seller is free from rights of third parties in handling loan claims
in accordance with the above (S) 4 subsections 1. and 2. The loan
agreements attached in Annex 2 and 3 are true and complete.
2. If one of the above warranties proves incorrect or is not complied with,
the Seller shall place the Buyer, or after election of the Buyer, the
companies in the situation the Buyer and the companies would be in, if the
warranty were correct or had been complied with. One or several claims up
to an amount of a total of DM 100,000.00 shall not be considered.
3. In accordance with the above subsection 2 and regardless of it, the Seller
shall release the companies from compensation due to liabilities in
connection with the incorrectness or violation of the above warranties.
4. The Buyer may raise any claims resulting from the above subsections 2 and 3
until December 31, 2000, furthermore any claims in connection with the
implementation of a tax field audit of the companies within six months from
receipt of the legally effective advice based on such a tax field audit. In
order to comply with the deadline, it is sufficient to inform the Seller of
the claims in writing. After receipt of such information a one-year period
of limitation commences.
5. To the extent the Seller is affected by a tax audit (taxes and levies) of
the companies covering the period up to the transfer date, the Buyer shall
take care that the Seller is able to participate at his own costs and by an
authorized person who is professionally committed to a duty of discretion.
To the extent the Buyer does not appeal, the Seller may use the legal
remedies he considers appropriate for his own account and on behalf of the
companies. In such a case the Buyer shall take care that the Seller is
timely given all the necessary information or powers of attorney. Every
additional tax payment or other payment due to such tax audit shall be
borne by the Seller, unless otherwise provided in this agreement.
6. A cancellation of sale is excluded. Furthermore, the regulation contained
in the above subsections 2 and 3 does not limit or exclude the legal claims
and rights of the Buyer.
(S) 6
Warranties of the Buyer
1. The Buyer warrants to the Seller as of the transfer date and this day of
signing this agreement:
a) The Buyer is free to handle the Cybernet Stock without restrictions and
rights of third parties. The Seller knows that transferability of
Cybernet Stock is limited under relevant US law of negotiable
instruments, particularly since the transfer of Cybernet Stock to the
Seller is not registered with the US Securities Exchange Commission.
b) The company was duly established as a company under State of Delaware
law, it is validly existing and in "Good Standing". With the exception
of Cybernet Internet-Dienstleistungen AG, Germany, its subsidiaries,
Cybernet Network Services GmbH, Germany, its subsidiaries, Vianet
Telekommunikations AG, Austria, Flashnet S.P.A., Italy, Sunweb
Internet Services SIS AG, Switzerland, and its subsidiaries, the Buyer
has no subsidiaries.
c) The entire authorized capital of the Buyer consists of 50,000,000
shares of common stock of a nominal value of USD 0.001 and of
50,000,000 shares of preferred stock. At the moment of signing this
agreement, of the shares of common stock, 21,012,647 have been issued
and are outstanding, and so are 3,770,000 of the shares of preferred
stock. In accordance with the stock option plan of the Buyer, at the
time of signing this agreement, approximately 1,500,000 options have
to be issued. Furthermore, the Buyer issued warrants and convertible
bonds in accordance with Annexes 7 and 8.
d) In regard to his company law conditions the Buyer is entitled and
authorized to sign this agreement and execute it. The Buyer's board of
directors has agreed to the signing of this agreement and its
execution.
e) The Buyer made the audited annual reports of the Buyer for the year
ending December 31, 1997 and 1998 (the "annual reports") and the
unaudited interim report for the
period ending June 30, 1999 (the interim report) available to the
Seller as photocopies. The annual and interim reports were established
in accordance with US-GAAP and reflect the financial situation of the
Buyer at the given transfer dates adequately. For the period from June
30, 1999 to the transfer date the Buyer was exclusively active in
proper business transactions.
f) The signing of this agreement and its execution
1) will not impair the Buyer's enterprise, his assets or agreements
with third parties essentially.
2) will not violate provisions of the establishing document or the
bylaws of the Buyer and
3) will not violate a law or other provisions and court or official
orders
2. If one of the above warranties proves incorrect or is not complied with,
the Buyer shall place the Seller in the situation the Seller would be in,
if the warranty were correct or had been complied with. One or several
claims up to an amount of a total of DM 100,000.00 shall not be considered.
3. The Buyer may raise any claims resulting from the above subsection 2 until
December 31, 2000, furthermore any claims in connection with the
implementation of a tax field audit of the companies within six months from
receipt of the legally effective advice based on such a tax field audit. To
comply with the deadline, it is sufficient to inform the Seller of the
claims in writing. After receipt of such information a one-year period of
limitation commences.
4. The regulation contained in the above subsection 2 does not restrict or
exclude the legal claims and rights of the Buyer.
(S) 7
Agreement to the Assignment of Stock
Both Novento AG and Multicall AG (board of directors and supervisory board) have
declared their agreement to the transfers contained in this agreement of stock
according to (S) 7 of the bylaws of the companies.
(S) 8
Prohibition to Compete
1. For the period of three years from the day of signing this agreement the
Seller undertakes to refrain from any competition in the geographical and
technical area of activity below with companies or the Buyer, particularly
from participating directly or indirectly in competing enterprises,
entering the services of a competing enterprise or promoting such an
enterprise in other ways directly or indirectly by advice or action.
Geographical area of activity as defined by this prohibition to compete is
the Federal Republic of Germany, Austria, Italy and Switzerland, technical
area of activity in the sense of this prohibition to compete is the
furnishing of services of telecommunication, particularly the recruitment
of customers for fixed network telephony and the Internet.
2. Excluded from the prohibition to compete according to the above subsection
1 are participations smaller than 5 percent in stock exchange listed
enterprises.
3. Compliance with the prohibition to compete is settled by the payment of the
purchase price.
4. Unless mandatory provisions provide otherwise, the provisions of (S) 74 ff
HGB shall not be applied to this prohibition to compete.
5. In the event of any violation of the above prohibition to compete the
Seller shall pay to the Buyer a contract penalty of DM 100,000.00. If the
violation is continued by the Buyer despite
an adhortatory letter for each additional month of violation or fraction
thereof a contract penalty of DM 100,000.00 shall be paid. The Buyer's
claims to compensation of a more substantial damage and restraint from
future anti-prohibition behaviour shall not be affected.
6. The prohibition to compete according to the above subsections 1. through 5.
shall not be applied to the Seller, if and to the extent the employment
contract signed between the Seller and the Buyer today is cancelled upon
the Buyer`s prompting within three years from the signing of the agreement
or is terminated in any other way, unless the Buyer was entitled to cancel
the employment contract extraordinarily.
(S) 9
Person authorized to accept service
1. The Seller hereby irrevocably authorizes the lawyers
Gorler Klosterkamp Tucking, Xxxxxxxx. 0, 00000 Xxxxxxxxxx
to accept all declarations, particularly process services, and services in
connection with this agreement.
2. The Buyer hereby irrevocably authorizes the lawyers
Besner Xxxxxxxx Xxxxx, Xxxxxxxxxxxxx. 00, 00000 Xxxxxxx
to accept all declarations, particularly process services, and services in
connection with this agreement.
(S) 10
Secrecy
The parties are committed to observe the strictest secrecy concerning the
conclusion and the contents of this agreement, unless law or this agreement
compels them to disclosure.
(S) 11 Annulment, preliminary contract
This agreement replaces all written and oral declarations of intent issued
in connection with any contract negotiations of the parties, also where
such declarations deviate from the contents of preceding agreements.
(S) 12 Costs
The costs and fees of their consultants shall be borne by the parties
themselves.
(S) 13 Applicable law, jurisdiction
1. German law shall be applied to this agreement unless the application of
another law is imperative.
2. Jurisdiction and place of performance in connection with this agreement is
Munich, to the extent this can be admissibly agreed.
(S) 14 Severability
If individual provisions of this agreement or parts thereof should be or
become ineffective or unenforceable, the effectiveness of the other
provisions shall not be affected thereby. Instead of the ineffective or
unenforceable provision a provision shall be considered agreed upon which
comes closest to the economic purpose, particularly the intended economic
purpose, of the ineffective or unenforceable provisions. The same shall
apply to any gap in this agreement.
Munich, October 1, 1999
/s/ Illegible Signature /s/ Xxxxxxx Xxxxxxxx
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Cybernet Internet Services International. Inc. Xxxxx Xxxxxxxx
