STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is entered into effective this
31st day of October, 1996 by and between CONVERGENT COMMUNICATIONS, INC., a
Colorado corporation ("Convergent") whose address is 0000 Xxxxx Xxxxxxxx
Xxxxxxxxx, Xxxxx 000-0, Xxxxxx, Xxxxxxxx 00000, SERVICES-ORIENTED OPEN NETWORK
TECHNOLOGIES, INC., a Virginia corporation ("SONeTech") whose address is 000
Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000, and W. XXXX XXXXXXXX, an individual whose
address is 000 Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000 ("Seigneur") (hereinafter
collectively referred to as "the parties").
RECITALS
Seigneur is the President of SONeTech and owns or controls a majority of
the issued and outstanding shares of SONeTech;
Convergent wishes to acquire an interest in SONeTech, initially up to
forty-five percent (45%), of the total authorized shares of SONeTech;
Convergent wishes to engage SONeTech as its research and development
consultant to work with Convergent's wholly owned subsidiary, namely, Integrated
Communication Networks, Inc., a Colorado corporation ("ICN") and other companies
Convergent may acquire.
THEREFORE, IT IS AGREED AS FOLLOWS:
1. STOCK PURCHASE. SONeTech shall transfer, assign and deliver to
Convergent a total of One Hundred Thousand (100,000) shares of the common stock,
$0.02 par value ("SONeTech Stock"), which represents ten percent (10%) of the
issued and outstanding shares of SONeTech's stock ("Common Stock"), and
Convergent shall pay the sum of One Hundred Thousand Dollars ($100,000) and the
issuance of Three Hundred Seventy-Five Thousand (375,000) shares of the no par
value common stock of Convergent ("Convergent Stock"), subject to adjustment as
described herein (the cash consideration paid by Convergent together with the
Convergent
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Stock are collectively referred to herein as the "Purchase Price") as follows:
1.1 PAYMENT OF PURCHASE PRICE.
1.1.1 Application of the xxxxxxx money deposit in the amount of
Twenty Thousand Dollars ($20,000), which the parties acknowledge had been
previously paid by Convergent to SONeTech on or about August 28, 1996.
1.1.2 Eighty Thousand Dollars ($80,000) payable on April 1,
1997. Convergent shall have the right to pay the full balance due for the
SONeTech Stock at any time.
1.1.3 On the Closing Date, as defined herein, Convergent shall
issue the Convergent Stock to SONeTech, subject to the following terms and
conditions:
(i) The Certificates representing the Convergent Stock
will contain a restrictive legend as follows:
ATHE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED IN ANY WAY
UNTIL NOVEMBER 1, 2001."
(ii) The foregoing restriction shall not apply as to
Seventy-Five Thousand (75,000) shares beginning on the first anniversary
following the date of this Agreement and thereafter as to Seventy-Five Thousand
(75,000) shares on each of the 2nd, 3rd, 4th and 5th anniversary dates of this
Agreement, subject to any other restrictions on the sale, transfer or assignment
of the Convergent Stock as may be imposed by law. Following the expiration of
such period of time, SONeTech may forward its certificate(s) representing the
appropriate number of shares of Convergent Stock to Convergent's transfer agent
for removal of the restrictive legend described in 1.1.3(i) above.
(iii) During the five (5) year period following the date
of this Agreement and in the event that the Consulting Agreement, as defined
herein, is terminated by SONeTech or Seigneur without cause, or in the event
that Seigneur
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is unable to perform under the terms of the Consulting Agreement because of
death or disability, Convergent shall have the right to repurchase a percentage
of the Convergent Stock owned by SONeTech at a rate equal to six cents ($0.06)
per share. The number of shares of Convergent Stock that Convergent shall be
entitled to repurchase shall be calculated as follows: the number of years,
including any fraction thereof, remaining in the five (5) year period, that
SONeTech and Seigneur fail to perform under the Consulting Agreement divided by
5 and the quotient is then multiplied by 375,000.
(iv) In the event that Convergent elects to repurchase
Convergent Stock, Convergent shall notify SONeTech of its election within thirty
(30) days of the termination of the Consulting Agreement. Payment for the
Convergent Stock purchased must be made to SONeTech thirty (30) days after the
date of notice.
1.2 SONETECH STOCK ISSUANCE. Upon payment of the Purchase Price by
Convergent, SONeTech shall issue a stock certificate to Convergent in the amount
of One Hundred Thousand (100,000) shares of the Common Stock, which represents
ten percent (10%) of the total authorized shares of SONeTech's Common Stock.
1.3 SONETECH FUNDING COMMITMENT.
1.3.1 Convergent may, at Convergent's sole discretion, use
commercially reasonable efforts to develop a business plan for SONeTech and to
secure, on or before March 31, 1998, a commitment for private placement equity
financing for the capitalization of SONeTech's business plan in the amount of
One Million Dollars ($1,000,000)("SONeTech Funding Commitment"). In exchange
for the SONeTech Funding Commitment from a third party, SONeTech shall issue to
Convergent a certificate in the amount of One Hundred Fifty Thousand (150,000)
shares of SONeTech's Common Stock, which represents an additional fifteen
percent (15%) of the total authorized shares of Common Stock. Such issuance
shall be made within five (5) business days of receipt of the first installment
of funds pursuant to the SONeTech Funding Commitment by SONeTech.
1.3.2 In the event that Convergent elects to obtain the SONeTech
Funding Commitment, the shares of Common
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Stock to be issued to Convergent by SONeTech in exchange for the SONeTech
Funding Commitment shall be in addition to any other shares of Common Stock to
be issued pursuant to this Agreement.
1.3.3 In the event that Convergent obtains the SONeTech Funding
Commitment for an amount less than One Million Dollars ($1,000,000), the number
of shares of Common Stock to be issued to Convergent in exchange for the
SONeTech Funding Commitment shall be reduced proportionately.
1.3.4 SONeTech agrees to cooperate and not interfere with and
take all steps necessary to facilitate Convergent's efforts to obtain the
SONeTech Funding Commitment, including, without limitation, any steps required
by the investors or underwriters or their counsel.
1.4 FINANCING BY CONVERGENT.
1.4.1 Convergent shall have the right to provide the SONeTech
Funding Commitment from Convergent's own funds.
1.4.2 In the event that Convergent provides the SONeTech Funding
Commitment, SONeTech shall issue to Convergent a certificate in the amount of
Two Hundred Thousand (200,000) shares of SONeTech's Common Stock, which
represents an additional twenty percent (20%) of the total authorized shares of
Common Stock. Such issuance shall be made within five (5) business days of
receipt of the first installment of funds from Convergent.
1.5 BOARD OF DIRECTORS AND VOTING AGREEMENT.
1.5.1 Upon the execution of this Agreement, SONeTech and
Seigneur shall take all steps necessary to appoint a person designated by
Convergent to the three (3) member Board of Directors of SONeTech to serve until
the next regularly scheduled shareholders' meeting, or until his successor is
duly elected and qualified.
1.5.2 In the event that Convergent obtains or provides the
SONeTech Funding Commitment, SONeTech and Seigneur shall take all steps
necessary to expand the Board of Directors of SONeTech to four (4) persons, and
shall appoint a second
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person designated by Convergent to the four (4) member Board of Directors to
serve until the next regularly scheduled shareholders' meeting, or until his
successor is duly elected and qualified.
1.5.3 Seigneur and Convergent shall execute a voting agreement,
in substantially the same form as EXHIBIT 1.5.3 attached hereto ("SONeTech
Voting Agreement"), whereby Seigneur and Convergent will vote their shares of
Common Stock now owned or hereafter acquired: (i) to elect one person designated
by Convergent as a member of the Board of Directors of SONeTech until the
SONeTech Funding Commitment is obtained or provided; (ii) to elect two persons
designated by Convergent as members of the Board of Directors of SONeTech after
the SONeTech Funding Commitment has been obtained or provided; (iii) to elect
two persons designated by Seigneur as members of the Board of Directors of
SONeTech; and (iv) to elect Seigneur as President of SONeTech. The SONeTech
Voting Agreement shall continue in full force and effect until (i) the parties
mutually agree in writing to terminate the SONeTech Voting Agreement; or (ii)
Convergent owns more than fifty percent (50%) of the issued and outstanding
shares of Common Stock.
1.6 CONSULTING AGREEMENT. On the Closing Date, Convergent and
SONeTech shall enter into an exclusive consulting services agreement ("SONeTech
Consulting Agreement"), in substantially the same form as EXHIBIT 1.6 attached
hereto.
1.7 TECHNOLOGY LICENSE AGREEMENT.
1.7.1 SONeTech and Convergent shall enter into a technology
license agreement ("SONeTech License Agreement"), in substantially the same form
as EXHIBIT 1.7.1 attached hereto.
1.7.2 SONeTech shall use its best efforts to patent and/or
copyright the ROADS technology, at SONeTech's sole expense. Convergent shall
have the right to direct the efforts of SONeTech under this subsection if it so
desires, including, but not limited to, the right to select and/or supervise
patent or copyright counsel. All patents and/or copyrights obtained for the
ROADS technology shall be the property of SONeTech.
1.8 RIGHT TO PURCHASE ADDITIONAL SONETECH SHARES.
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1.8.1 In the event SONeTech offers additional shares of its
Common Stock for sale to third parties, Convergent shall have the right to
purchase additional shares of SONeTech Common Stock at the price offered to
third parties and in an amount sufficient to maintain Convergent's percentage
ownership interest in SONeTech ("Convergent's Preemptive Rights"). Convergent
shall exercise its right to purchase the additional shares by giving SONeTech
written notice of its intent to do so accompanied by payment for the additional
shares of Common Stock within thirty (30) days from the date SONeTech notifies
Convergent of the completion of the Common Share offering.
1.8.2 SONeTech shall amend its articles of incorporation and/or
by-laws, if necessary, to provide for Convergent's Preemptive Rights as outlined
in subsection 1.8.1.
1.9 PIGGYBACK REGISTRATION. SONeTech shall have the right, subject
to the approval of Convergent's underwriters, if any, to include all or part of
the Convergent Stock in any registration by Convergent of any of its equity
securities under the Securities Act of 1933, as amended (the "Securities Act"),
in a manner that would permit the registration of the Convergent Stock for
resale.
2 CLOSING.
2.1 CLOSING DATE. The Closing Date shall be that date which is three
(3) days after any and all required approvals, including any required approval
of any regulatory agency, have become final and the transactions contemplated
under this Agreement are no longer subject to administrative or judicial review,
or such other date as shall be agreed upon by the parties.
2.2 CLOSING EVENTS. The following shall occur on the Closing Date
and at the Closing, each such requirement being considered as occurring
simultaneously:
2.2.1 SONeTech shall deliver to Convergent a stock certificate
representing the appropriate amount of the SONeTech Stock, free and clear of all
liens, encumbrances, equities and claims;
2.2.2 SONeTech shall deliver to Convergent a
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copy of the resolutions adopted by its Board of Directors approving the
transactions contemplated hereby, which shall be certified by SONeTech's
Secretary to be a true and correct copy of the original and that the original
thereof was duly, validly and regularly obtained;
2.2.3 SONeTech shall deliver to Convergent the officers'
certificate, in the form appended hereto as EXHIBIT 2.2.3 dated as of the
Closing Date, that the officers are not aware of any violation or breach of this
Agreement which exists or existed on or as of the date of this Agreement, the
Closing Date, or at any time between the date of this Agreement and the Closing
Date;
2.2.4 Convergent shall deliver to SONeTech the Purchase Price
(less the Xxxxxxx Money previously advanced to SONeTech by Convergent) as
provided in Section 1.1 hereof;
2.2.5 Convergent and SONeTech shall execute and deliver the
SONeTech Consulting Agreement.
2.2.6 Convergent and SONeTech shall execute and deliver the
SONeTech License Agreement.
2.2.7 Convergent and Seigneur shall execute and deliver the
SONeTech Voting Agreement.
2.3 CONTINUATION OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties of Seigneur and SONeTech given pursuant to this
Agreement shall be made on each such date as any additional shares of SONeTech
Stock may be delivered to Convergent, and shall be true and correct in all
material respects. Each such date that any additional shares of SONeTech Stock
may be delivered to Convergent shall be a AClosing Date" as such term may be
used, from time to time, in this Agreement.
2.4 ADDITIONAL REPRESENTATIONS AND WARRANTIES. Each of SONeTech and
Seigneur, as the case may be, agrees to provide additional representations and
warranties, as reasonably requested by Convergent and as is customary in
acquisition transactions, as and when Convergent acquires additional shares of
SONeTech Stock, including, without limitation, representations and warranties
with regard to the operations and financial condition of SONeTech. All such
additional representations and
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warranties shall be appended to this Agreement as an amendment and shall be
executed by all of the parties hereto.
3 CONDITIONS PRECEDENT TO OBLIGATIONS.
3.1 CONDITIONS PRECEDENT TO CONVERGENT'S OBLIGATIONS. The
obligations of Convergent to be performed under this Agreement at Closing are
subject to each and all of the following conditions, any one or more of which
may, however, be waived in whole or in part by Convergent, in which event the
waived condition(s) shall be treated as conditions subsequent to Convergent's
obligations pursuant to Section 6.1 hereof:
3.1.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of SONeTech and Seigneur herein contained shall be true on and as of
the date hereof and as of the Closing Date in all material respects with the
same force and effect as though made on and as of said date.
3.1.2 PERFORMANCE OF OBLIGATIONS. Seigneur and SONeTech shall
have performed in all material respects all of Seigneur's and SONeTech's
obligations and agreements under this Agreement and complied with all of the
material covenants and conditions contained in this Agreement to be performed by
SONeTech and Seigneur.
3.1.3 PERFORMANCE AT CLOSING. Seigneur and SONeTech shall have
performed each of the acts they are required to perform and delivered each of
the certificates and other documents they are required to deliver, or appeared
at Closing ready, willing and able to perform each of the acts they are required
to perform and deliver each of the certificates and other documents they are
required to deliver.
3.1.4 ABSENCE OF RESTRAINING ACTION. No suit, action or other
proceeding shall be pending, or threatened, before any court or governmental
agency in which it will be, or it is, sought to restrain or prohibit or to
obtain damages or other relief in connection with this Agreement or the
consummation of the transactions contemplated hereunder, or threatened against
or affecting SONeTech or Seigneur which, if adversely determined, would have a
material adverse effect on the value of the business, assets, or properties of
SONeTech, or the value of the SONeTech Stock.
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3.1.5 NO ATTACHMENT. None of SONeTech's assets or properties
shall have been attached or levied upon or passed into the hands of a receiver
or assignee for the benefit of creditors. No petition or similar instrument
shall have been filed with respect to SONeTech under any bankruptcy or
insolvency law, and no injunction or restraining order shall have been
instituted against Seigneur or SONeTech that would have a material adverse
effect on SONeTech.
3.1.6 CONSENTS. All consents from third parties, including
without limitation any governmental or regulatory bodies, necessary for the
consummation of the transactions contemplated hereby shall have been obtained.
3.1.7 AUTHORIZED STOCK. The authorized capital stock of
SONeTech shall have been increased to One Million (1,000,000) shares of Common
Stock.
3.2 CONDITIONS PRECEDENT TO SONETECH'S AND SEIGNEUR'S OBLIGATIONS. The
obligations of SONeTech and Seigneur to be performed under this Agreement at
Closing are subject to each and all of the following conditions, any one or more
of which may, however, be waived in whole or in part by SONeTech and/or
Seigneur, as the case may be:
3.2.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Convergent set forth in this Agreement shall be true and correct
in all material respects on and as of the date hereof and as of the Closing Date
with the same effect as if made on and as of the said date.
3.2.2 PERFORMANCE OF OBLIGATIONS. Convergent shall have performed
all of Convergent's obligations and agreements herein to be performed on or
before Closing and complied with all of the covenants and conditions
contained in this Agreement to be performed by Convergent.
3.2.3 PERFORMANCE AT CLOSING. Convergent shall have performed
each of the acts it is required to perform and delivered each of the
certificates and other documents it is required to deliver, or appeared at
Closing ready, willing and able to perform each of the acts it is required to
perform and deliver each of the certificates and other documents it is
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required to deliver.
4 REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS AND WARRANTIES OF SONETECH AND SEIGNEUR.
SONeTech and Seigneur (for purposes hereof the term "Company" shall include
SONeTech's subsidiaries, if any, whether or not specific reference is made to
the subsidiaries in the representations and warranties set forth below), jointly
and severally, represent and warrant to Convergent as of the date hereof and as
of the Closing Date, as follows:
4.1.1 GOOD STANDING. SONeTech is a corporation duly organized,
validly existing and in good standing under the laws of the State of its
incorporation, with full corporate power and authority to own, operate and lease
its properties and to carry on its business as now being conducted. Each of
SONeTech's subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of the state where each such subsidiary was
incorporated, with full corporate power and authority to own, operate and lease
its properties and to carry on its business as now being conducted. SONeTech and
each of its subsidiaries are qualified to do business and in good standing in
all jurisdictions where their properties, assets and/or activities and
operations so require.
4.1.2 BINDING AGREEMENT. This Agreement, executed by Seigneur
and SONeTech, constitutes the valid and binding obligation of Seigneur and
SONeTech enforceable in accordance with its terms, and will not conflict with,
breach, violate or be in contravention of or result in a default under
SONeTech's Articles of Incorporation or any other organizational or governing
instrument of SONeTech, or of any contract, lease, indenture, promissory note,
agreement, mortgage or other instrument to which SONeTech and/or Seigneur is a
party or by which any of SONeTech's assets or property is bound or affected or,
to the best of SONeTech's and Seigneur's knowledge, any law, rule, license,
regulation, judgment, decree or order of any court, agency or other authority to
which jurisdiction SONeTech is subject. All corporate action necessary for the
approval and/or ratification of this Agreement has been taken.
4.1.3 AUTHORIZED STOCK. The only authorized capital stock of
SONeTech is currently One Hundred Thousand
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(100,000) shares of its $0.02 par value Common Stock, all of which are issued
and outstanding, as of the date hereof. SONeTech shall amend its Articles of
Incorporation to increase its authorized capital stock to One Million
(1,000,000) shares of Common Stock. Such amendment shall be effective on or
prior to the Closing.
4.1.4 MARKETABLE TITLE. Convergent will obtain good and
marketable title to the shares of the SONeTech Stock to be transferred pursuant
to the terms hereof and such shares at the Closing will be presented to
Convergent, free and clear of all liens, encumbrances, equities and claims.
4.1.5 NO AGREEMENTS. There are no agreements with any person
with respect to (i) the sale, lease, exchange or other disposition of any of
SONeTech's properties or assets, except in the ordinary course of its business;
or (ii) the sale, hypothecation, transfer, assignment or other disposition of
the ownership, direct or indirect, of any of the shares of the SONeTech Stock,
the operation of which may in the future result in a change in control of
SONeTech.
4.1.6 FINANCIAL REPRESENTATIONS. Attached hereto as EXHIBIT
4.1.6 are a Balance Sheet, Statement of Income (Loss and Deficit) and Statement
of Changes in Financial Position (including notes to such financial statements)
at October 31, 1996 and for the fiscal year then ended (the "Financial
Statements"). The Financial Statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis, except
as disclosed therein, and present fairly the financial position of SONeTech as
of October 31, 1996, ("Financial Statement Date") and the results of operations
for the year then ended.
4.1.7 NO LITIGATION. To the best of SONeTech's and Seigneur's
knowledge there are no pending or threatened suits, actions, claims, or
litigation, administrative, arbitration or other proceedings or governmental
investigations or inquiries to which Seigneur or SONeTech is a party or to which
any of the properties or assets thereof is subject.
4.1.8 NO VIOLATION OF LAWS OR REGULATIONS. To the best of
SONeTech's and Seigneur's knowledge, SONeTech has materially complied with, and
is not in any material respect in
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default under or in violation of, any laws, ordinances, requirements,
regulations or orders applicable to its businesses or properties, including
without limitation the rules and regulations of the Federal Communications
Commission ("FCC"), nor is SONeTech or Seigneur in violation of or in default of
any order, writ, injunction, judgment or decree of any court, arbitrator, or
federal, state or local department, official, commission, authority, board,
bureau, agency or other instrumentality issued or pending against SONeTech which
might adversely affect Seigneur's or SONeTech's ability to execute, deliver and
perform their obligations under this Agreement or to consummate the transactions
contemplated hereby or which challenges or seeks to prevent, enjoin, alter or
materially delay any such transactions. Neither SONeTech nor Seigneur have
received notice, or otherwise have any reason to know, of any claimed default or
violation with respect to any of the foregoing. There have been no illegal
payments, kickbacks, bribes or political contributions made by Seigneur or
SONeTech to any person, entity or governmental or regulatory body in the United
States or any foreign country or political subdivision.
4.1.9 APPROVALS. All consents necessary or required for the
consummation of the transactions contemplated hereby will have been obtained, on
or before Closing. Neither the execution, delivery or performance of this
Agreement nor the conclusion of any transaction contemplated by this Agreement
will result in any violation of, be in conflict with or constitute a default
under any term or provision of the Articles of Incorporation or the Bylaws of
SONeTech or any such agreement, indenture or other instrument or the rules and
regulations of any regulatory body. SONeTech has furnished to Convergent
accurate and complete copies of the Articles of Incorporation and Bylaws of
SONeTech, each as in effect as of the date hereof.
4.1.10 COMPLIANCE WITH LAWS. The entering into and consummation
of the transactions contemplated hereunder will not result in any default under
or violation of any of the terms and provisions of any contract, lease or other
agreement to which SONeTech or Seigneur are a party or by which SONeTech or
Seigneur is bound or, to the knowledge of SONeTech and/or Seigneur, any law,
rule, license, regulation, judgment, order or decree governing or affecting
SONeTech and/or Seigneur.
4.1.11 STOCK REPRESENTATIONS. SONeTech (i)
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intends to acquire the shares of Convergent Stock pursuant to Section 1 hereof
solely for the purpose of investment and not for the resale and distribution
thereof, and has no present intention to offer, sell, pledge, hypothecate,
assign or otherwise dispose of the same; (ii) understands and acknowledges that
the sale of such shares of Convergent Stock will not be registered under the
Securities Act of 1933, as amended (the "Securities Act"), the Convergent Stock
being acquired pursuant to this Agreement constitutes Arestricted securities" as
that term is defined under Rule 144 promulgated under the Securities Act and may
not be sold except pursuant to a registration statement under the Securities Act
or pursuant to an exemption available under federal and applicable state
Securities laws, and such shares may be required to be held indefinitely unless
the shares are subsequently registered under the Securities Act or an exemption
from such registration is available, (iii) agrees that it will not offer, sell,
pledge, hypothecate, transfer, assign or otherwise dispose of any such shares of
Convergent Stock unless such shares and such offer, pledge, hypothecation,
transfer, assignment or other disposition shall be registered or exempt from
registration under the Securities Act and shall comply with all applicable
federal and state securities laws, and (iv) agrees and acknowledges that the
stock certificates representing the shares of Convergent Stock which will be
acquired by SONeTech under this Agreement will contain a legend restricting the
transferability of the shares as provided herein and that stop order
instructions may be imposed by Convergent's transfer agent restricting the
transferability of the Convergent Stock.
4.1.12 FULL DISCLOSURE. None of the written information
provided by Seigneur and SONeTech to Convergent in connection with the
negotiation of this Agreement contains any untrue or misleading statement of a
material fact. There is no fact which Seigneur or SONeTech has not disclosed to
Convergent in writing which materially affects or which will materially affect
adversely SONeTech's business, sales, income, properties, assets, liabilities,
activities, customers, or the ability of SONeTech and Seigneur to perform under
this Agreement.
4.2 REPRESENTATIONS AND WARRANTIES OF CONVERGENT. Convergent
represents to SONeTech and Seigneur as follows:
4.2.1 GOOD STANDING. Convergent is a corporation duly
organized, validly existing and in good standing
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under the laws of the state of Colorado, with full corporate power and authority
to own, operate and lease its properties and to carry on its business as now
being conducted. Convergent is qualified to do business and in good standing in
all jurisdictions where its properties, assets and operations so require.
Convergent has all requisite power and authority to enter into this Agreement
and perform its obligations under this Agreement.
4.2.2 BINDING AGREEMENT. This Agreement, as executed by
Convergent, constitutes the valid and binding obligation of Convergent
enforceable in accordance with its terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, moratorium or similar laws
affecting the rights of creditors generally. This Agreement and the performance
of this Agreement by Convergent will not conflict with, breach, violate or be in
contravention of or result in a default under Convergent's Articles of
Incorporation or any other organizational or governing instrument of Convergent,
or of any agreement, mortgage or other instrument to which Convergent is a party
or by which any of its assets or property is bound or affected or, to the best
of Convergent's knowledge, any law, rule, license, regulation, judgment, decree
or order of any court, agency or other authority which has jurisdiction over the
business, properties, assets and activities of Convergent. All corporate action
necessary for the approval and/or ratification of this Agreement has been taken.
4.2.3 STOCK ACQUIRED FOR INVESTMENT. Convergent (i) intends to
acquire the SONeTech Stock solely for the purpose of investment and not for the
resale and distribution thereof and has no present intention to offer, sell,
pledge, hypothecate, assign or otherwise dispose of the same, (ii) understands
and acknowledges that the sale of the SONeTech stock will not be registered
under the Securities Act, and such shares may be required to be held
indefinitely unless the share are subsequently registered under the Securities
Act or an exemption from such registration is available, and (iii) agrees that
it will not offer, sell, pledge, hypothecate, transfer, assign or otherwise
dispose of any such shares unless such shares and such offer, pledge,
hypothecation, transfer, assignment or other disposition shall be registered or
exempt from registration under the Securities Act and shall comply with all
applicable federal and state securities laws.
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4.2.4 LITIGATION; COMPLIANCE WITH LAWS. There are no pending or
threatened suits, actions, claims, arbitrations, administrative or legal or
other proceedings or governmental investigations or inquires pending or to which
Convergent is a party or to which any of its properties or assets thereof is
subject, nor in any material respect any failure to comply with, nor any default
under, any law, ordinance, requirement, regulation or order applicable to
Convergent and its businesses and properties nor any violation of or default
with respect to any order, writ, injunction, judgment or decree of any court,
arbitrator, or federal, state or local department, official, commission,
authority, board, bureau, agency or other instrumentality, issued or pending
against Convergent which might adversely affect Convergent's ability to execute,
deliver and perform its obligations under this Agreement or to consummate the
transactions contemplated hereby or which challenges or seeks to prevent,
enjoin, alter or materially delay any such transaction.
5. CONFIDENTIALITY. Convergent shall retain in confidence all
information obtained by it pursuant to any investigations made by Convergent
pursuant to this Agreement (the "Confidential Information"). Seigneur.
SONeTech, its officers, directors and employees and SONeTech's Representatives
shall retain in confidence, all information obtained by them in connection with
any investigation undertaken by such persons as a result of Convergent providing
such persons such access to information of Convergent as provided in this
Agreement. The parties agree that Confidential Information shall not include
information which (i) was or becomes generally available to the public other
than as a result of a disclosure by Convergent, SONeTech, Seigneur or any of
their officers, directors or employees, agents or representatives, (ii) was or
becomes available to Convergent, SONeTech, Seigneur, any of their officers,
directors or employees or their agents or representatives on a non-confidential
basis from a source other than Convergent, SONeTech or Seigneur, provided that
such source is not bound by a confidentiality agreement or (iii) was, or in the
future is, developed independently by Convergent or by SONeTech or Seigneur
without reference to the information furnished by Convergent, SONeTech or
Seigneur, as the case may be. The parties understand and agree that all of the
Confidential Information supplied to Convergent or to SONeTech or Seigneur is
provided on the understanding that such Confidential Information remains the
property of Convergent
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or SONeTech, as the case may be, and that all copies and originals will be
returned to any such party promptly upon its request after termination of this
Agreement pursuant to Section 6 hereof.
6. TERMINATION
6.1 EVENTS OF TERMINATION. Anything contained elsewhere in this
Agreement to the contrary notwithstanding, prior to the Closing Date, this
Agreement may be terminated by written notice of termination as follows:
6.1.1 MUTUAL CONSENT. Anytime by mutual consent of SONeTech and
Convergent;
6.1.2 PRIOR TO CLOSING DATE. By SONeTech or Convergent if the
other party shall have (i) misstated any representation or been in breach of any
warranty contained herein, (ii) been in breach of any covenant, undertaking or
restriction contained herein and such misstatement or breach has not been cured
by the earlier of (a) thirty (30) days after the giving of notice by the
non-breaching party of such misstatement or breach or (b) the Closing Date; or
(iii) the failure to consummate the transactions contemplated herein through the
fault of the other party;
6.2 CONSEQUENCES OF TERMINATION. In the event of a termination and
abandonment hereof pursuant to the provisions of this Section 6, this Agreement
shall become void and have no effect, without any liability on any of the
parties or their directors or officers or stockholders in respect of this
Agreement. Notwithstanding anything contained in the foregoing to the contrary,
if this Agreement is terminated be Convergent due to a failure of SONeTech or
Seigneur to perform the conditions precedent to the Closing hereunder, the
Xxxxxxx Money shall be refunded to Convergent in full by Seigneur and SONeTech.
If this Agreement is terminated by SONeTech as a result of a failure of
Convergent to perform the conditions precedent to the Closing hereunder, the
Xxxxxxx Money deposited by Convergent shall be retained by SONeTech.
7. MISCELLANEOUS
7.1 NOTICES. Any notices under this Agreement shall
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be in writing, signed by the party giving the same and transmitted by registered
or certified United States Mail or by a generally accepted national courier
service providing confirmation of delivery, and addressed to the party to
receive the notice at the address set forth below or such other address as any
party may specify by notice to the other party, and shall be deemed properly
given and received when actually given and received:
If to Convergent: Convergent Communications, Inc.
0000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 000-0
Xxxxxx, Xxxxxxxx 00000
Attn.: Chief Executive Officer
if to SONeTech: Services-oriented Open Network
Technologies, Inc.
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn.: President
7.2 SUCCESSORS AND ASSIGNS. This Agreement is personal to the
parties hereto and may not be assigned, transferred, delegated or nullified
without the prior written consent of all of the parties hereto. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and permitted assigns.
7.3 ARBITRATION. Notwithstanding anything to the contrary herein,
any dispute arising pursuant to or in any way related to this Agreement or the
transactions contemplated hereby shall be settled by arbitration; provided,
however, that nothing in this Section shall restrict the right of either party
to apply to a court of competent jurisdiction for emergency relief pending final
determination of a claim by arbitration in accordance with this Section. All
arbitration shall be conducted in accordance with the rules and regulations of
the American Arbitration Association, in force at the time of any such dispute,
by a panel of three (3) arbitrators. In the event that SONeTech elects to file
a claim, the arbitration shall take place in Denver, Colorado. In the event that
Convergent elects to file a claim, the arbitration shall take place in the
Washington, DC area. Each party shall pay its own expenses associated with such
arbitration, provided that the prevailing party in any
17
arbitration shall be entitled to reimbursement of reasonable attorneys' fees and
expenses (including, without limitation, arbitration expenses) relating to such
arbitration. The decision of the arbitrators, based upon written findings of
fact and conclusions of law, shall be binding upon the parties; and judgment in
accordance with that decision may be entered in any court having jurisdiction
thereof. In no event shall the arbitrators be authorized to grant any punitive,
incidental or consequential damages of any nature or kind whatsoever.
7.4 NO ORAL MODIFICATIONS. No amendments or modifications to this
Agreement shall be made or deemed to have been made unless in writing and
executed and delivered by the party to be bound thereby. Any provision of this
Agreement may be waived, amended, supplemented or modified only by agreement in
writing of the parties hereto.
7.5 WAIVER. The failure of any party to this Agreement to insist
upon strict performance of any of the terms of this Agreement will not
constitute a waiver of any of its rights under this Agreement or its right
subsequently to assert, rely upon, or enforce any provision of this Agreement.
7.6 GOVERNING LAW. This Agreement shall be interpreted, governed by
and enforced according to the laws of the State of Colorado.
7.7 SEVERABILITY. If any provision of this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Agreement will not in any way be affected or
impaired thereby.
7.8 HEADINGS AND CAPTIONS FOR CONVENIENCE. The headings and
captions contained in this Agreement are for convenience only and shall not be
considered in interpreting the provisions hereof.
7.9 COUNTERPARTS. This agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, all of
which together shall constitute one and the same instrument.
7.10 REPRESENTATIONS, WARRANTIES AND COVENANTS. Notwithstanding any
investigation made by or on behalf of
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SONeTech or Convergent prior to or after the Closing Date, all representations,
warranties and covenants of the parties hereto contained herein shall survive
and remain in full force and effect for a period of three (3) years after the
Closing Date.
7.11 SONETECH'S INDEMNIFICATION. Notwithstanding the Closing and
regardless of any investigation at any time made by or on behalf of Convergent
or of any information Convergent may have in respect thereof, SONeTech will
indemnify, defend and save and hold Convergent harmless from and against any
costs, expenses, damages, liabilities, losses or deficiencies, including,
without limitation, reasonable attorneys' fees and other costs and expenses
incident to any suit, action or proceeding (collectively ALosses") suffered or
incurred by Convergent arising out of or resulting from, and will pay Convergent
on demand the full amount of any such amounts which Convergent may pay or may
become obligated to pay in respect of:
(a) any material inaccuracy in any representation or document
delivered under or pursuant to this Agreement or the material breach of any
warranty made by SONeTech or Seigneur in or pursuant to this Agreement;
(b) any misrepresentations in or omission from any Exhibit,
Schedule or other attachment to this Agreement;
(c) any failure by SONeTech or Seigneur duly to perform or
observe any term, provision, covenant, or agreement in this Agreement to be
performed or observed on the part of SONeTech or Seigneur; or
(d) any action, suit, investigation, proceeding, demand,
assessment, audit, judgment and claim, including any employment-related claim
arising out of the foregoing (collectively "Convergent's Claims") against
Convergent or any of its subsidiaries, even though such Claims may not be filed
or come to light until after the Closing Date.
7.12 CONVERGENT'S INDEMNIFICATION. Convergent agrees that
notwithstanding the Closing and regardless of any investigation at any time made
by or on behalf of SONeTech or any information SONeTech may have in respect
thereof, Convergent will indemnify and save and hold SONeTech harmless from and
against any Losses suffered or incurred by SONeTech arising out of or
19
resulting from, and will pay SONeTech or demand the full amount of any such
amounts which SONeTech may pay or may become obligated to pay in respect of:
(a) any material inaccuracy in any representation or the breach
of any warranty made by Convergent in or pursuant to this Agreement;
(b) any failure by Convergent duly to perform or observe any
item, provision, covenant or agreement in this Agreement to be performed or
observed on the part of Convergent; or
(c) any action, suit, investigation, proceeding, demand,
assessment, audit, judgment and claim, including any employment-related claim
arising out of the foregoing (collectively "SONeTech's Claims") against
SONeTech, even though such Claims may not be filed or come to light until after
the Closing Date.
7.13 NO BENEFIT TO OTHERS. The representations, warranties, covenants
and agreements contained in this Agreement are for the sole benefit of the
parties hereto and their respective heirs, successors, assigns, and such
representations, warranties, covenants and agreements shall not be construed as
conferring, and are not intended to confer, any rights on any other persons.
8. ENTIRE AGREEMENT. This Agreement, together with the Exhibits,
Schedules and Attachments hereto, represents the entire agreement between the
parties hereto with respect to the subject matter hereof and all prior
agreements, understandings or negotiations shall be deemed merged herein. No
representations, warranties, promises or agreements, express or implied, shall
exist between the parties, except as stated herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized representatives the day and year first above written.
CONVERGENT COMMUNICATIONS, INC.,
a Colorado corporation
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By: /s/ Xxxx X. Xxxxx
------------------------------------
Its: Chief Executive Office
------------------------------------
W. XXXX XXXXXXXX
/s/ W. XXXX XXXXXXXX
-----------------------------------------
SERVICES-ORIENTED OPEN NETWORK
TECHNOLOGIES, INC.,
a Virginia corporation
By: /s/ W. XXXX XXXXXXXX
-------------------------------------
Its: President
------------------------------------
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