EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement is entered as of April 20, 2004, among USURF
America, Inc., a Nevada corporation, ("Purchaser" or "USURF"), and Xxxxxxx
Xxxxx, Xxxxx Xxxxx and Xxxxx Xxxxx, (individually referred to as the
"Shareholder" and collectively referred to as the "Shareholders"). The
Shareholders are owners of all of the outstanding shares of the capital stock of
Connect Paging, Inc., a Texas corporation d/b/a Get A Phone (the "Acquired
Company" or "GAP").
In order to consummate this Agreement, the Purchaser and Shareholders, in
consideration of the Purchase Price, the mutual covenants contained herein and
on the basis of the representations and warranties set forth, agree as follows:
ARTICLE 1
PURCHASE AND SALE OF CAPITAL STOCK
OF ACQUIRED COMPANY
Transfer of Acquired Company's Capital Stock
1.01. Subject to the terms and conditions of this Agreement and the payment
of the Purchase Price pursuant to Section 1.02 and 1.03(b) herein, each
Shareholder will transfer and deliver to Purchaser, on the Closing Date,
certificates for all of the shares of the capital stock of the Acquired Company,
duly endorsed in blank with signatures bearing a Signature Guaranty, as follows:
Number of Shares of Capital
Name and Address of Shareholder Stock of Acquired Company
------------------------------- -------------------------
Xxxxxxx Xxxxx 30,000
000 X. Xxxxxxxx Xxxxx Xxxxx X
Xxxx Xxxxx, Xxxxx 00000
Xxxxx Xxxxx 30,000
000 X. Xxxxxxxx Xxxxx Xxxxx X
Xxxx Xxxxx, Xxxxx 00000
Xxxxx Xxxxx 30,000
000 X. Xxxxxxxx Xxxxx, Xxxxx X
Xxxx Xxxxx, Xxxxx 00000
Consideration for Transfer
1.02. In exchange for the number of shares of capital stock transferred by
each Shareholder pursuant to Paragraph 1.01, Purchaser will deliver, on the
Closing Date the following consideration:
(a) Purchaser shall pay to the Shareholders, Two Million and No/100
Dollars ($2,000,000.00) in immediately certifiable funds, payable to each
Shareholder in proportion to the number of shares of capital stock of Acquired
Company owned by each as follows (the "Cash Payment"):
-1-
Number of Shares of Capital
Name and Address of Shareholder Stock of Acquired Company Cash Payment
------------------------------- ------------------------- ------------
Xxxxxxx Xxxxx 30,000 $666,666.66
Xxxxx Xxxxx 30,000 $666,666.66
Xxxxx Xxxxx 30,000 $666,666.66
(b) Purchaser will issue and cause to be delivered to each
Shareholder, in proportion to the number of shares of capital stock of Acquired
Company owned by each, an aggregate of 14,250,000 shares of Purchaser's common
stock, as follows (the "Restricted Stock Payment"):
Number of Shares of
Common Stock of
Name of Shareholder Purchaser
------------------- ---------
Xxxxxxx Xxxxx 4,750,000
Xxxxx Xxxxx 4,750,000
Xxxxx Xxxxx 4,750,000
(the Cash Payment, and Restricted Stock Payment sometimes collectively referred
to herein as the "Purchase Price")
The Closing; Closing Date
1.03. Subject to the conditions precedent set forth in this Agreement, and
the other obligations of the parties set forth in this Agreement:
(a) This Agreement shall be consummated (the "Closing") at the offices
of Xxxxxx Xxxxxxxx Xxxxxx & Pulman, P.C., 000 X. Xxxxx Xx., Xxxxx 000, Xxx
Xxxxxxx, Xxxxx 00000, on the date that is three (3) business days after every
-2-
condition precedent to this Agreement shall have been satisfied, or otherwise
waived by either party in writing. Notwithstanding the foregoing, the Closing
may occur at any other place, date or time as the parties fix by mutual consent
in writing. The Closing shall include the delivery by the Shareholders of their
respective shares of the capital stock of Acquired Company, as provided in
Paragraph 1.01 of this Agreement, and the delivery by the Purchaser of its
shares of common stock and the cash payment, as provided in Paragraph 1.02 of
this Agreement, subject to the provisions of sub-section 1.03 (b) below. The
date of the Closing is referred to as the "Closing Date".
(b) In the event this Agreement is terminated for any reason other
than due to a result of an uncured default by the Shareholders, or due to that
event described in Sections 10.03 herein and the Break-Up Fee (as defined
herein) is due and owing by Purchaser to the Shareholders, the Shareholders
shall deduct and offset the Break Up Fee from the Cash Payment.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF
SHAREHOLDERS OF ACQUIRED COMPANY
Organization and Standing of Acquired Company
2.01. GAP is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Texas, with corporate power to own
property and carry on its business as it is now being conducted. A copy of the
Articles of Incorporation of GAP, as amended to date and certified by the
Secretary of State of Texas, are included in Exhibit 2.01(a) attached to this
Agreement and are complete and accurate as of the date of this Agreement. GAP is
qualified to transact business as a foreign corporation and is in good standing
in all jurisdictions in which it carries on business or in which any of its
principal properties are located. A list of all jurisdictions in which GAP is
qualified to transact business as a foreign corporation is included in Exhibit
2.01(b) attached to this Agreement.
A copy of the Bylaws of GAP, as amended to date and certified by the
Secretary of GAP, are included in Exhibit 2.01(c) attached to this Agreement and
are complete and accurate as of the date of this Agreement.
Subsidiaries
2.02. GAP has no subsidiaries or any interest in any other corporation,
firm, partnership or other juridical entity except for certain contract rights
to acquire certain assets from Extel Enterprises Incorporated (the "Extel
Contract").
Capitalization
2.03. GAP has an authorized capitalization of 100,000 shares, all of which
are $.10 par value common shares. As of the Closing Date, 90,000 shares of
common stock will be issued and outstanding, fully paid and non-assessable.
There are no outstanding subscriptions, options, contracts, commitments or
demands relating to the authorized but unissued capital stock of GAP or other
agreements of any character under which GAP would be obligated to issue or
purchase shares of its capital stock. Shareholders have waived, and do hereby
waive, any preemptive or prescriptive right to purchase shares of GAP that they
have or may have had in the past.
-3-
Ownership of Acquired Company's Capital Stock
2.04. Each Shareholder will be on the Closing Date, the lawful owner of the
shares of capital stock of GAP that is set forth opposite the Shareholder's name
in Paragraph 1.01 of this Agreement. Subject to any and all applicable federal
and state securities laws, regulations or rulings, each Shareholder has the
legal right and power to sell, assign and transfer the shares of the Shareholder
in the capital stock of GAP. The delivery of the described shares to the
Purchaser pursuant to the provisions of this Agreement will transfer valid title
to the shares free and clear of all liens, encumbrances, claims and other
restrictions of any kind, with the exception of any restrictions imposed by any
applicable securities laws, regulations or rulings. USURF acknowledges that the
shares of capital stock of GAP were formally issued to Shareholders in
connection with the transaction contemplated by this Agreement.
Financial Statements
2.05. (a) Shareholders have delivered to Purchaser that certain Independent
Auditor's Report dated February 9, 2004 prepared by Xxxxx X. Xxx, Certified
Public Accountant for the year ending December 31, 2003 (the "Independent
Auditor's Report"). A copy of the Independent Auditor's Report delivered to
Purchaser is included in Exhibit 2.05 attached to this Agreement.
(b) Other than changes in the usual and ordinary conduct of the
business since December 31, 2003 including the entering into of the Extel
Contract and the additional paid-in capital by the Shareholders on or before
Closing for the purposes of satisfying the obligations of Extel Contract, to the
best of the Shareholders' actual knowledge, there have been, and at the Closing
Date there will be, no materially adverse changes in the financial condition of
GAP. For purposes of this Agreement, the term "material" shall mean a change in
an amount equal to or exceeding $50,000.
(c) Subject to any changes as a result of the ordinary and usual
course of business including the entering into of the Extel Contract, the assets
of GAP, as of the Closing Date, will be substantially those owned by it as shown
in the Independent Auditor's Report attached hereto plus the assets purchased
pursuant to the Extel Contract being more particularly described on Exhibit 2.08
(the "Assets"). PURCHASER ACKNOWLEDGES THAT GAP PURCHASED THE ASSETS PURSUANT TO
THE EXTEL CONTRACT AS IS, WHERE IS, WITH ALL FAULTS AND GAP MAKES NO
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED WITH RESPECT TO THE DESIGN,
CONDITION, CAPACITY, VALUE, UTILITY, PERFORMANCE, NUMBER OF CUSTOMERS ON THE
CLOSING DATE, OR QUALITY OF THE ASSETS, AND GAP MAKES NO, AND SPECIFICALLY
DISCLAIMS, IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR ANY OTHER EXPRESS OR IMPLIES WARRANTY WITH RESPECT THERETO.
Operations Since Balance Sheet Date
2.06. To the best of the Shareholders' actual knowledge, since December 31,
2003, GAP has not, and prior to the Closing Date will not have, without written
notice to Purchaser:
(a) Issued or sold any stock, bond or other corporate securities,
with the exception of the capital stock issued or sold to the Shareholders by
GAP to formalize the ownership of the Shareholders in anticipation of this
transaction events related thereto;
(b) Except for current liabilities incurred and obligations entered
into in the ordinary course of business including the Extel Contract, incurred
any absolute or contingent obligation, including long-term debt, except as
otherwise disclosed herein;
-4-
(c) Except for current liabilities shown on the Independent Auditor's
Report and current liabilities incurred since that date in the ordinary course
of business, discharged or satisfied any lien or encumbrance, or paid any
obligation or liability;
(d) Mortgaged, pledged or subjected to lien any of its assets;
(e) Except in the ordinary course of business, sold or transferred
any of its tangible assets, or canceled any debts or claims, or waived any
rights of material value;
(f) Sold, assigned or transferred any patents, formulas, trademarks,
trade names, copyrights, licenses or other intangible assets;
(g) Incurred any materially adverse losses or damage, or become
involved in any strikes or other labor disputes; and
(h) Entered into any transaction other than in the ordinary course of
business, except for the transaction that is the subject matter of this
Agreement, the Extel Contract and events related thereto.
Title to Assets
2.07. On Closing, GAP will have good and marketable title to all the assets
reflected in Exhibit 2.08. None of such assets is subject to any mortgage,
pledge, lien, charge, security interest, encumbrance or restriction, except
those that:
(a) Are disclosed on the Independent Auditor's Report as securing
specified liabilities; or
(b) Are disclosed in Exhibit 2.08.
Schedule of Assets to be owned by GAP on Closing
2.08. Attached to this Agreement is Exhibit 2.08, which schedule shall have
been delivered to Purchaser by the Shareholders on or before the date of
execution of this Agreement. Exhibit 2.08 shall contain a list of assets
containing a true and complete:
(a) Legal description of all real property owned by GAP and any real
property in which GAP has a leasehold interest;
(b) Aged list of accounts receivable as of the time of delivery of
Exhibit 2.08 and as of the Closing Date;
(c) Approximate number of customer accounts as of the date of
transfer from Extel to GAP;
(d) List of all capitalized machinery, tools, equipment and rolling
stock owned by GAP that sets forth any liens, claims, encumbrances, charges,
restrictions, covenants and conditions concerning the listed items;
-5-
(e) Description of all machinery, tools, equipment and rolling stock
in which GAP has a leasehold interest, with a description of each interest;
(f) A true and complete list of all patents, licenses, trademarks,
trademark registrations, trade names, copyrights, and copyright registrations
owned by GAP, including the licenses referenced in Exhibit 2.11 attached hereto;
and
(g) List of all fire and other casualty and liability policies of GAP
in effect at the time of delivery of Exhibit 2.08 and as of the Closing Date.
Indebtedness
2.09. (a) Except as set forth in the Independent Auditor's Report, included
in Exhibit 2.05 and to the best of the Shareholders actual knowledge, GAP
presently has no outstanding indebtedness other than liabilities incurred in the
ordinary course of business or in connection with the transaction contemplated
herein. To the best of the Shareholders actual knowledge, GAP is not in default
with respect to any terms or conditions of any indebtedness.
(b) GAP has not made any assignment for the benefit of creditors, nor
has any involuntary or voluntary petition in bankruptcy been filed by or against
GAP.
Litigation
2.10. (a) To the best of the Shareholders' actual knowledge, GAP is not
party to, nor has it been threatened with, any litigation or governmental
proceeding that, if decided adversely to it, would have a materially adverse
affect on the financial condition, net worth, prospects or business of GAP. To
the best of all Shareholders' actual knowledge, they are not aware of any facts
that might result in any action, suit or other proceeding that would result in
any material adverse change in the business or financial condition of GAP.
(b) To the best of the Shareholders' actual knowledge, GAP is not
infringing on, or otherwise acting adversely to, any copyrights, trademark
rights, patent rights or licenses owned by any other person, and there is no
pending claim or threatened action with respect to such rights. To the best of
the Shareholders' actual knowledge, GAP is not obligated to make any payments in
the form of royalties, fees, or otherwise to any owner or licensor of any
patent, trademark, trade name or copyright.
Compliance with Law and Other Instruments
2.11. (a) To the best of the Shareholders' actual knowledge, the business
operation of GAP has been, and currently is being, conducted in accordance with
all applicable laws, rules and regulations of all authorities, including,
without limitation, state franchise registration and/or business opportunity
laws and regulations, or laws similar thereto. Specifically, GAP possesses a
valid and subsisting license to operate as a Competitive Local Exchange Carrier
("CLEC") in the State of Texas;
(b) In addition, GAP has or will be making applications for
regulatory authority, as follows:
(i) to operate as a CLEC in the State of California; and
-6-
(ii) to operate as a CLEC in the State of Florida.
Copies of licenses and or applications described in this paragraph are included
in Exhibit 2.11 attached to this Agreement and incorporated herein by this
reference.
(c) GAP is not, to the best of the Shareholders' actual knowledge, in
violation of, or in default under, any term or provision of its Articles of
Incorporation, its Bylaws or of any lien, mortgage, lease, agreement,
instrument, order, judgment or decree, or any other type of restriction that
would prevent consummation of the transaction contemplated by this Agreement.
Contractual Obligations
2.12. GAP is not a party to, or bound by, any written:
(a) Contract not disclosed on Exhibit 2.12 attached to this Agreement
(with the exception of the Extel Contract and the lease described on Exhibit
2.08), a copy of each such contract being included in Exhibit 2.12;
(b) Employment or consultant contract that is not terminable at will
without cost or other liability to GAP or any successor, with the exception of
any employment or consulting contracts to be entered into at Closing;
(c) Contract with any labor union;
(d) Other than as disclosed in Exhibit 2.12, any bonus, pension,
profit-sharing, retirement, stock option, hospitalization, group insurance or
similar plan providing employee benefits;
(e) Any real or personal property lease as lessor other than
disclosed in Exhibit 2.12;
(f) Advertising contract or contract for public relations services;
(g) Other than as disclosed on the enclosed Exhibit 2.12, deed of
trust, mortgage, conditional sales contract, security agreement, pledge
agreement, trust receipt or any other agreement subjecting any of the assets or
properties of GAP to a lien, encumbrance or other restriction; or
(h) Contract that contains a re-determination of price or similar
type of provision.
To the best of the Shareholders' actual knowledge, GAP has performed all
obligations required to be performed by it to date and to the best of the
Shareholder's actual knowledge, is not in material default under any of the
contracts, leases or other arrangements by which it is bound. To the best of the
Shareholders' actual knowledge, none of the parties with whom GAP has
contractual arrangements is in default of its obligations.
Changes in Compensation
2.13 Since the date of the Independent Auditor's Report, GAP has not
granted any general pay increase to employees or changed the rate of
compensation, commission or bonus payable to any officer, employee, director,
agent or shareholder.
-7-
Inventories
2.14 Intentionally Omitted.
Records
2.15. To the best of the Shareholders' actual knowledge, as of the date of
Closing, all of the account books, minute books, stock certificate books and
stock transfer ledgers of GAP will be complete and accurate. Purchaser
acknowledges that additional paid-in capital by the Shareholders for the
satisfaction of the obligations created by the Extel Contract and the formal
issuance of stock by GAP to Shareholders is occurring in anticipation of this
transaction and that all minutes, resolutions, bylaws organizational minutes and
actions on behalf of the Board of Directors of GAP and the Officers of GAP are
occurring and being ratified by GAP in anticipation of this transaction.
No Brokers or Finders
2.16. All negotiations on the part of the Shareholders related to this
Agreement have been accomplished solely by the Shareholders or Shareholders'
legal counsel without the assistance of any person employed as a broker or
finder. The Shareholders have done nothing to give rise to any valid claims
against Purchaser or GAP for a brokerage commission, finder's fee or any similar
charge, except as to persons acting in the role of consultant, which agreement
has been made separate and apart from this Agreement.
Taxes
2.17. (a) With the exception of 2003 tax filings not yet due, GAP has filed
all federal income tax returns and, in each state where qualified or
incorporated, all state income tax and franchise tax returns that are required
to be filed. GAP has paid all taxes as shown on the returns as have become due,
and has paid all assessments received that have become due. Purchaser
acknowledges that mistakes and inaccuracies relating to the ownership interests
of GAP may appear in GAP's prior years' tax returns. Purchaser acknowledges that
GAP is amending its prior years' tax returns to reflect the proper ownership of
GAP in conjunction with this transaction.
(b) Shareholders will indemnify and hold Purchaser harmless from any
and all fines, suits, claims, demands, losses and actions of any kind (including
attorneys' fees) resulting from or related to any claim against Purchaser or GAP
for a deficiency in the payment or reporting of federal or state taxes
pertaining to any period prior to the Closing Date.
Full Disclosure
2.18. As of the Closing Date, the Shareholders will have disclosed all
known events, conditions and facts materially affecting the business of GAP. The
Shareholders have not withheld knowledge of any events, conditions or facts that
they have reasonable grounds to know may materially adverse affect the business
of GAP. To the best of the Shareholders' actual knowledge, none of the
representations and warranties made by the Shareholders in this Agreement, or
set forth in any exhibit attached to this Agreement, contain any untrue
statement of a material fact, or fail to state facts necessary to make the
statements of fact made not misleading.
2.19. Shareholders acknowledge they have had reasonable and adequate
opportunity to review Purchaser's (i) last-filed Annual Report on Form 10-KSB,
as filed with the SEC, (ii) Quarterly Reports on Form 10-QSB, as filed with the
SEC, (iii) a draft of the next Form SB-2 to be filed with the SEC, and (iv)
Current Reports on Form 8-K, as amended and as filed with the SEC. The foregoing
reports (i) contain information with respect to Purchaser's business and
-8-
prospects, as well risks associated with ownership of Purchaser's common stock,
and (ii) disclose all events, conditions and facts materially affecting the
business and prospects of Purchaser. Purchaser has not withheld disclosure of
any events, conditions or facts, of which it has knowledge, that may materially
affect the business and prospects of Purchaser. Shareholders further
acknowledges that Purchaser has adequately, and to the complete satisfaction of
the Shareholders, answered any and all questions of the officers of Purchaser
relating to the Purchaser, its business and its stock.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Organization and Standing of Purchaser
3.01. Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada, with corporate power to own
property and carry on its business as it is now being conducted. A copy of the
Articles of Incorporation of Purchaser, as amended to date, are included in
Exhibit 3.01 attached to this Agreement and are complete and accurate as of the
date of this Agreement. Purchaser is qualified to transact business as a foreign
corporation and is in good standing in all jurisdictions in which it carries on
business or in which any of its principal properties are located. A list of all
jurisdictions in which Purchaser is qualified to transact business as a foreign
corporation is included in Exhibit 3.01 attached to this Agreement.
Subsidiaries
3.02. Purchaser owns all of the issued and outstanding capital stock of the
following inactive entities: (1) Missouri Cable TV Corp., a Louisiana
corporation; (2) Santa Fe Wireless Internet, Inc., a New Mexico corporation; (3)
USURF Wireless, Inc., a Louisiana corporation;(4) USURF America Internet Design,
Inc., a Louisiana corporation; (5) USURF Telecom, Inc., a Colorado corporation.
Purchaser owns all of the issued and outstanding capital stock in the following
active entities: (6) USURF Development, Inc., a Colorado corporation; (7) USURF
Systems & Technologies, Inc., a Colorado corporation; (8) USURF Communications,
Inc., a Colorado corporation; and (9) NeighborLync, Inc., a Colorado
corporation. Each of such active corporations is duly organized, existing and in
good standing under the laws of their respective states of incorporation, with
corporate power to own property and to carry on business as now conducted.
Capitalization
3.03. At December 31, 2003, Purchaser had an authorized capitalization of
400,000,000 shares of common stock of the par value of $.0001 per share, of
which 114,684,486 shares were issued, outstanding, fully paid and non-assessable
as of the date of this Agreement. Except for 9,543,393 shares of authorized but
unissued stock that are reserved for stock options, warrants or other stock
issuable upon conversion of Purchaser securities or issuable as payment for
employment, consulting fees and finder's fees, there were no outstanding
options, contracts, calls, commitments or demands relating to the authorized but
unissued stock of Purchaser, at December 31, 2003.
Financial Statements
3.04. Purchaser has delivered to the Shareholders:
(a) The audited financial statements of Purchaser for the fiscal
years ended December 31, 2002, 2001 and 2000. These statements have been audited
by Xxxx + Associates, LLP, as to the year ended December 31, 2002, and by
Postlethwaite & Xxxxxxxxxxx as to the years ended December 31, 2001 and 2000.
-9-
(b) An unaudited balance sheet of Purchaser and its subsidiaries as
of December 31, 2003, and the related statements of income and cash flows for
the year ended December 31, 2003. These statements are subject to year-end
audit.
Copies of each of the described financial statements are included in
Exhibit 3.04 attached to this Agreement.
All of the financial statements listed in this paragraph present fairly the
financial condition of Purchaser at the specified dates and the results of its
operations for the periods specified. The statements were prepared in accordance
with generally accepted accounting principles applied in a manner consistent
with prior accounting periods.
Financial Condition Since Balance Sheet Date
3.05. Since the balance sheet date of December 31, 2003, no change, event
or condition has occurred that materially and adversely affects the financial
condition, assets, business or prospects of Purchaser, to the knowledge of any
of its officers.
Status of Receivables
3.06. None of the accounts receivable or contracts receivable indicated in
the financial statements included in Exhibit 3.04 is subject to any counterclaim
or setoff, and all such accounts receivable and contracts receivable are current
and collectible at the aggregate recorded amount.
Title to Assets
3.07. All book assets of Purchaser are in existence in its possession, are
in good condition and repair and conform to all applicable laws, regulations and
ordinances. Purchaser has good and marketable title to all of its assets and,
except as shown on its financial statements as of December 31, 2003, holds such
assets subject to no mortgage, lien or encumbrance.
Status of Shares to be Delivered
3.08. The shares of Purchaser common stock that are to be issued and
delivered to the Shareholders pursuant to the terms of this Agreement will be
validly authorized and issued, and will be fully paid and nonassessable and will
be free and clear of all liens, claims and encumbrances of any kind or nature.
No shareholder of Purchaser will have any preemptive right of subscription or
purchase with respect to the shares to be issued and delivered. In addition,
Purchaser's issuance of the shares of the Purchaser common stock to the
Shareholders shall be in compliance with all securities laws, rules and
regulations enacted or otherwise promulgated by all appropriate federal or state
governmental bodies or agencies and shall be in compliance with any applicable
rules and regulations of the American Stock Exchange, or the then current
listing exchange.
Indebtedness
3.09. (a) Except as set forth in the consolidated balance sheet of
Purchaser and its subsidiaries as of December 31, 2003, there is no outstanding
indebtedness, other than liabilities incurred in the ordinary course of business
or in connection with this transaction. Purchaser and its subsidiaries are not
in default with respect to any terms or conditions of any indebtedness.
-10-
(b) Purchaser has not made any assignment for the benefit of
creditors, nor has any involuntary or voluntary petition in bankruptcy been
filed or threatened by or against Purchaser. Litigation
3.10. (a) Except as described in Exhibit 3.10 attached to this Agreement,
Purchaser and its subsidiaries are not a party to, nor have any of them been
threatened with any litigation or governmental proceeding that could have a
materially adverse affect on the transaction contemplated by this Agreement or
on the financial condition of Purchaser or its subsidiaries.
(b) To the best knowledge of Purchaser, Purchaser is not
infringing on, or otherwise acting adversely to, any copyrights, trademark
rights, patent rights or licenses owned by any other person, and there is no
pending claim or threatened action with respect to such rights. Purchaser is not
obligated to make any payments in the form of royalties, fees, or otherwise to
any owner or licensor of any patent, trademark, trade name or copyright.
Compliance with Law and Other Instruments
3.11. To the best knowledge of Purchaser, the business operation of
Purchaser has been, and currently is being, conducted in accordance with all
applicable laws, rules and regulations of all authorities, including, without
limitation, state franchise registration and/or business opportunity laws and
regulations, or laws similar thereto. Purchaser is not, to the best knowledge of
Purchaser, in violation of, or in default under, any term or provision of its
Articles of Incorporation, its Bylaws or of any lien, mortgage, lease,
agreement, instrument, order, judgment or decree, or any other type of
restriction that would prevent consummation of the exchange of securities
contemplated by this Agreement.
Purchaser's Authority
3.12. The execution and performance of this Agreement have been duly
authorized by all requisite corporate action. This Agreement constitutes a valid
and binding obligation of Purchaser, in accordance with its terms. No provision
of the Purchaser's Articles of Incorporation, Bylaws, minutes, share
certificates or contracts prevents Purchaser from delivering good title to its
shares of common stock or the Cash Payment in the manner contemplated by this
Agreement.
Brokers and Finders
3.13. Purchaser has not utilized the services of a finder or broker, other
than Atlas Capital Services, LLC, in connection with the transaction
contemplated by this Agreement. Purchaser shall be solely responsible for
payment of any finder or brokerage fee owed to any party in connection with this
transaction and agrees to indemnify and hold the Shareholders harmless from any
claims for such fees.
Taxes
3.14. (a) Except as described on Exhibit 3.14 attached hereto,
Purchaser and its subsidiaries have filed all federal income tax returns or all
state income tax or franchise tax returns that are required to be filed.
Purchaser represents and warrants to the Shareholders that Purchaser has
incurred significant net operating losses over the past several years and does
not currently have any federal or state income tax liabilities. Purchaser
-11-
further represents and warrants to the Shareholders that all requisite federal
and state fiduciary taxes including withholding taxes, have been paid current
and there exists no action against Purchaser, either pending or threatened, for
collection of any such taxes.
(b) Purchaser will indemnify and hold Shareholders harmless from
any and all fines, suits, claims, demands, losses and actions (including
attorneys' fees) resulting from any claim related to the payment or reporting of
federal or state taxes against Purchaser or that accrue against USURF, its
subsidiaries, affiliates, or GAP after the Closing Date.
Full Disclosure
3.15 As of the Closing Date, Purchaser will have disclosed to Shareholders
all events, conditions and facts materially affecting the business of Purchaser.
The Purchaser has not withheld knowledge of any events, conditions or facts that
it has reasonable grounds to know may materially affect the business of
Purchaser. To the best of Purchaser's knowledge, none of the representations and
warranties made by the Purchaser in this Agreement, or set forth in any other
instrument furnished to the Shareholders, contain any untrue statement of a
material fact, or fail to state facts necessary to make the statements of fact
made not misleading.
ARTICLE 4
CONDUCT OF BUSINESS OF ACQUIRED COMAPNY
PENDING CLOSING DATE
Conduct of Business in Its Ordinary Course
4.01. The Shareholders will cause GAP to carry on its business in
substantially the same manner as previous to the date of execution of this
Agreement, and to:
(a) Continue in full force the amount and scope of any insurance
coverage carried prior to that date;
(b) Use their reasonable efforts to cause GAP to maintain its
business organization and keep it intact, to retain its present employees and to
maintain its goodwill with suppliers, customers and others having business
relationships with it;
(c) Exercise due diligence in safeguarding and maintaining
confidential reports and data used in its business; and
(d) Maintain its assets and properties in good condition and repair,
and not sell or otherwise dispose of any of its assets or properties, except
sales of inventory in the ordinary course of business.
Notwithstanding anything contained in this Section 4.01 to the contrary,
the Shareholders' shall not be required to act in contravention of the Bylaws
and Articles of Incorporation of GAP or the Texas Corporation Act.
Satisfy Conditions Precedent
4.02. The Shareholders will use their best efforts to cause GAP to satisfy
all conditions precedent contained in this Agreement.
-12-
Access to Information and Documents
4.03. (a) The Shareholders will cause GAP to afford the officers and
representatives of Purchaser, from the date of this Agreement until consummation
hereof, reasonable access during normal business hours to all properties, books,
accounts, contracts, commitments and any other records of any kind of GAP.
Reasonable access shall be allowed to provide Purchaser with full opportunity to
make any investigation it desires to make of GAP and to keep itself fully
informed of the affairs of GAP.
(b) In addition, the Shareholders will cause GAP to permit Purchaser
to make extracts or copies of all such books, accounts, contracts, commitments
and records, and to furnish to Purchaser, on reasonable demand and at the sole
expense of Purchaser, any further financial and operating data of GAP as
Purchaser reasonably requests.
(c) Purchaser will use any information obtained under this paragraph
only for its own purposes in connection with the consummation of the transaction
contemplated by this Agreement, and will not divulge the information to any
person other than its professional tax, legal or financial advisors. In the
event the transaction contemplated by this Agreement is not consummated prior to
April 28, 2004, all documents or information gathered by Purchaser hereunder
will be immediately returned to GAP forthwith.
Negative Covenants
4.04. Except with the prior written consent of Purchaser and specifically
excluding from this Section 4.04 the additional paid-in capital by the
Shareholders on or before Closing for the satisfaction of the obligations
created by the Extel Contract, the Shareholders agree that GAP will not:
(a)______Incur any liabilities in excess of $20,000.00, other than
current liabilities incurred in the ordinary course of business, the Extel
Contract;
(b)______Incur any mortgage, lien, pledge, hypothecation, charge,
encumbrance or restriction of any kind;
(c) Become a party to any contract, or renew, extend or modify any
existing contract, except in the ordinary course of business, the Extel
Contract.
(d) Make any capital expenditures in excess of $20,000.00, except for
ordinary repairs, maintenance and replacement;
(e) Declare or pay any dividend, or make any other distribution, to
shareholders;
(f) Purchase, retire or redeem any shares of its capital stock;
(g) Issue or sell additional shares of its capital stock to any
person or entity, except for the issuance of GAP stock to the Shareholders to
formalize their ownership of GAP in anticipation of this transaction , whether
or not such shares have been previously authorized or issued;
(h) Issue or sell any warrants, rights or options to acquire any
shares of its capital stock;
-13-
(i) Amend its Articles of Incorporation or Bylaws
(j) Pay or agree to pay any bonus, increase in compensation,
pension or severance pay to any director, shareholder, officer, consultant,
agent or employee;
(k) Discharge or satisfy any lien or encumbrance, nor pay any
obligation or liability, except current liabilities shown on the Independent
Auditor's Report, or incurred in the ordinary course of business since that
date;
(l) Merge or consolidate with any other entity;
(m) Enter into any transactions or take any acts that would
constitute a breach of the representations, and warranties contained in this
Agreement; and
(n) Institute, settle, or agree to settle any action or proceeding
before any court or governmental body.
ARTICLE 5
CONDUCT OF BUSINESS OF PURCHASER
PENDING CLOSING DATE
Conduct of Business in Its Ordinary Course
5.01. Purchaser will carry on its business in substantially the same manner
as before the date of execution of this Agreement.
Satisfy Conditions Precedent
5.02. Purchaser will use its best efforts to satisfy all conditions
precedent contained in this Agreement.
Access to Information and Documents
5.03. (a) Purchaser will provide the Shareholders, from the date of this
Agreement until the consummation hereof, full access during normal business
hours to all properties, books, accounts, contracts, commitments and records of
Purchaser. Sufficient access shall be allowed to provide the Shareholders with
full opportunity to make any investigation they desire to make of Purchaser and
to keep themselves fully informed of the affairs of Purchaser.
(b) Purchaser will permit the Shareholders to make extracts or
copies of all books, accounts, contracts, commitments and records. Additionally,
Purchaser will furnish to the Shareholders, within five (5) days after demand,
any further financial and operating data and other information concerning its
business and assets that the Shareholders reasonably request.
(c) The Shareholders may use any information secured pursuant to this
paragraph only for their own purposes in connection with the consummation of the
transaction contemplated by this Agreement and may not divulge the information
to any persons other than their professional tax, legal or financial advisors.
Further, the Shareholders acknowledge that information obtained pursuant to this
-14-
paragraph may constitute "inside information" as that term is used in the
securities laws of the United States, and the Shareholders agree that they will
neither purchase nor sell any of the common stock of Purchaser on the public
markets during the period of this Agreement, plus ten (10) days after the
Closing Date.
Negative Covenants
5.04. Except with the prior written consent of the Shareholders, Purchaser
may not declare or pay any dividend or make any other distribution to its
shareholders other than those relating to dividend distributions of the capital
stock of Conexyn Corporation (f/k/a New Wave Media Corporation), Argo Petroleum
Corporation and Woodcomm, Inc., heretofore declared and announced.
5.05 Except with the prior written consent of the Shareholders, prior to
the Closing Date, Purchaser covenants not to complete any combination,
consolidation, split, reverse split, or any other similar transaction that would
have the effect of diluting the Restricted Stock Payment.
ARTICLE 6
CONDITIONS PRECEDENT TO OBLIGATIONS OF SHAREHOLDERS
Conditions Precedent to Closing
6.01. The obligations of the Shareholders to consummate this Agreement
shall be subject to the conditions precedent specified in this Article 6.
Truth of Representations and Warranties and Compliance With Covenants
6.02. The representations and warranties of Purchaser contained in this
Agreement shall be true as of the Closing Date with the same effect as though
made on the Closing Date. Purchaser shall have performed all obligations and
complied with all covenants required by this Agreement to be performed or
complied with by it prior to the Closing Date. Purchaser shall deliver to the
Shareholders a certificate dated as of the Closing Date and signed by the
President or a Vice President and the Secretary or an Assistant Secretary of
Purchaser, certifying the truth of the representations and warranties.
Employment Agreement, Confidentiality Agreement and Non-Competition Agreement
6.03. Each of the Shareholders shall be employed by GAP and each
Shareholder and GAP shall execute, at or prior to the Closing, an Employment
Agreement substantially in the form attached hereto as Exhibit 6.03. By
execution of this Agreement and in anticipation of being the sole shareholder of
GAP, USURF shall ratify and confirm the Employment Agreements on the Closing
Date and agree to abide by the terms, conditions and covenants of such
Employment Agreements.
Registration Rights Letter Agreement
6.04 Purchaser shall execute, at or prior to the Closing, a Registration
Rights Letter Agreement substantially in the form attached hereto as Exhibit
6.04.
-15-
Opinion of Counsel for Purchaser
6.05. On the Closing Date, Purchaser shall furnish to the Shareholders an
opinion of counsel for Purchaser, dated the Closing Date, to the effect that
Purchaser is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Nevada and that the shares of common
stock of Purchaser delivered to the Shareholders hereunder have been duly
authorized, issued and delivered and are validly issued and outstanding, fully
paid and non-assessable shares of common stock of Purchaser. Moreover, said
opinion shall state that this Agreement is the valid and binding obligation of
Purchaser in accordance with its terms, except as limited by bankruptcy,
insolvency or other laws affecting the enforcement of creditor's rights.
Approval of Texas Public Utilities Commission
6.06 (a) By execution of this Agreement, Purchaser agrees and acknowledges
that the change in ownership contemplated by this Agreement has been approved
the Texas Public Utilities Commission ("PUC") pursuant to that certain PUC
Notice of Approval attached hereto as Exhibit 6.06(a) attached hereto and
incorporated herein. The Shareholders make no representations or warranties, and
specifically disclaim all representations and warranties regarding the approval
of the Texas Public Utilities Commission to the change in ownership contemplated
by this Agreement. Purchaser expressly assumes any and all obligations of GAP,
after the date this Agreement is fully executed, to initiate, pursue, apply for
any further approval by the Texas Public Utilities Commission to the change of
ownership contemplated by this Agreement.
(b) Purchaser further agrees and acknowledges that GAP has filed a
joint application with Southwestern Xxxx Telephone, L.P. d/b/a SBC Texas ("SBC")
in PUC Docket No. 29323 requesting the right to adopt certain provisions of the
AccuTel Resale Agreement for the State of Texas ("AccuTel of Texas, Inc.
Agreement") pursuant to Section 252(i) of the Telecommunications Act of 1996
(the "AccuTel Opt-In"), based upon the terms and conditions previously agreed
upon by GAP and SBC. The Shareholders make no representations or warranties
regarding the Accutel Opt-In. By execution of this Agreement, Purchase
represents and warrants to the Shareholders that Purchaser has familiarized
itself with the AccuTel Opt-In docket and the documents attached hereto as
Exhibit 6.06(b), is satisfied with its examination of the AccuTel Opt-In docket
and of the documents attached hereto as Exhibit 6.06(b), and is relying on
Purchaser's own examination of AccuTel Opt-In docket and the documents attached
hereto as Exhibit 6.06(b) and not on any representations or warranties of the
Shareholders. The approval by the PUC of the AccuTel Opt-In being attached
hereto in Exhibit 6.06(b) and incorporated herein for all purposes.
Receipt of Funds
6.07 Shareholders shall have confirmed receipt from Purchaser of the Cash
Payment in immediately certifiable funds. Purchaser shall have obtained funds
from one or more of the following sources in the minimum amounts indicated and
shall provide to the Shareholders written confirmation of same satisfactory to
Shareholders, as follows:
(a) Purchaser shall have received not less than $3,000,000 through a
financing arrangement facilitated by or through Atlas Capital Services, LLC;
(b) Purchaser shall have received not less than $3,000,000 pursuant to
a private placement of its equity securities; or
-16-
(c) Purchaser shall have received not less than $3,000,000 pursuant to
a loan or other debt transaction, the maturity date of which shall be not less
than 18 months from the date of closing of such transaction.
No Restrictions
6.08. No action or proceeding by any governmental body or agency shall have
been threatened, asserted or instituted to prohibit the consummation of the
transactions contemplated by this Agreement.
Ratification of the Extel Contract and Employment, Confidentiality
and Non-Compete Agreement
6.09 On Closing, Purchaser shall ratify the Extel Contract, the
corresponding transfer of assets to GAP and further ratify the Employment,
Confidentiality and Non-Compete Agreement as a valid and binding obligation of
GAP.
ARTICLE 7
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
Conditions Precedent to Closing
7.01. The obligations of Purchaser to consummate this Agreement shall be
subject to the conditions precedent specified in this Article 7.
Truth of Representations and Warranties and Compliance With Covenants
7.02. The representations and warranties of the Shareholders contained in
this Agreement shall be true as of the Closing Date, with the same effect as
though made on the Closing Date. The Shareholders shall have performed all
obligations and complied with all covenants required by this Agreement to be
performed or complied with by them prior to the Closing Date. The Shareholders
shall deliver to Purchaser a certificate dated the Closing Date and signed by
each of the Shareholders, certifying the truth of the representations and
warranties to the best of their actual knowledge.
Acceptability of Papers and Proceedings
7.03. Intentionally Omitted.
Opinion of Counsel for Shareholders
7.04. The Shareholders shall deliver to the Purchaser an opinion of counsel
for the Shareholders, referred to as "Counsel", dated the Closing Date, to the
effect that:
(a) GAP is a corporation duly organized, validly existing and in good
standing under the laws of the State of Texas with full corporate power to carry
on the business in which it is engaged;
(b) (i) The shares of capital stock of GAP which are the subject of
this Agreement, have been duly authorized and validly issued, and are fully paid
and non-assessable;
(ii) The shares of capital stock of GAP exchanged in this
transaction constitute 100% percent of all of the issued and outstanding shares
of capital stock of GAP;
-17-
(c) The Articles of Incorporation, the Bylaws, the minutes,
share certificates to which GAP or any Shareholder is a party do not prevent any
Shareholder from delivering good title to the shares of such capital stock in
the manner specified in this Agreement; and
(d) This Agreement is the valid and binding obligation of each
Shareholder in accordance with its terms, except as limited by bankruptcy,
insolvency or other laws affecting the enforcement of creditor's rights.
In rendering the opinion specified in this paragraph, Counsel may rely on
certificates of public officials, certificates of officers of GAP and the
Shareholders and any other evidence that is appropriate and required by
Shareholders' counsel.
Certified Financial Statements
7.05. Purchaser acknowledges its receipt and reliance on the Independent
Auditor's Report in evaluating the financial strength of GAP.
Retention of Officers and Directors
7.06. The present officers and directors of GAP shall remain in office
subsequent to the Closing and until their earlier resignation or removal.
Employment Agreement, Confidentiality Agreement and Non-Competition Agreement
7.07. Each Shareholder shall be employed by GAP and each Shareholder and
GAP shall execute, at or prior to the Closing, an Employment Agreement
substantially in the form attached hereto as Exhibit 6.03.
Registration Rights Letter Agreement
7.08 Shareholders shall execute, at or prior to the Closing, a Registration
Rights Letter Agreement substantially in the form attached hereto as Exhibit
6.04.
Approval of Texas Public Utilities Commission
7.09 The parties acknowledge approval by the PUC of the change in control
contemplated by this Agreement and approval of the AccuTel Opt-In as evidenced
by Exhibit 6.06(a) and Exhibit 6.06(b) attached hereto.
Investment Letters
7.10. Each Shareholder shall deliver to the Purchaser an executed written
statement or investment letter as specified in paragraph 9.01 of this Agreement
and in form and substance acceptable to counsel for Purchaser.
No Restrictions
7.11. No action or proceeding by any governmental body or agency shall be
threatened, asserted or instituted that prohibits the consummation of the
transactions contemplated by this Agreement.
-18-
No Contracts Terminated
7.12. GAP shall not have terminated any contracts prior to the Closing Date
that, in the aggregate, would materially and adversely affect its business.
No Damage to Assets
7.13. At the Closing Date, the machinery, equipment, inventory or other
tangible property of GAP shall not be damaged by fire, flood, accident, labor
strife, act of war or any other cause beyond the reasonable power and control of
the GAP or the Shareholders to an extent that substantially affects the value of
the property and assets. Loss or damage shall be considered to affect
substantially the value of the properties and assets within the meaning of this
paragraph, if the book value of the properties and assets lost or damaged
exceeds ten percent (10%) of the total book value of all assets of GAP.
ARTICLE 8
SURVIVAL OF WARRANTIES AND INDEMNIFICATION
Nature and Survival of Representations and Warranties
8.01. All statements of fact contained in this Agreement, or in any
memorandum, certificate, letter, document or other instrument delivered by or on
behalf of Purchaser, GAP or the Shareholders pursuant to this Agreement shall be
deemed representations and warranties made by any such party, respectively, to
each other party under this Agreement. The covenants, representations and
warranties of Purchaser and Shareholders shall survive the Closing Date, and all
inspections, examinations or audits on behalf of the parties and the
Shareholders for a period of one (1) year following the Closing Date.
Indemnification
8.02. Shareholders agree to indemnify, jointly and severally, and hold the
Purchaser and Acquired Company harmless after the date of this Agreement in
respect to any damages as defined in this paragraph 8.02. Damages, as used in
this paragraph, shall include any claim, action, demand, loss, cost, expense,
liability, penalty and other damage, including, but not limited to, reasonable
attorneys' fees and other reasonable costs and expenses incurred attempting to
avoid damages or in enforcing this indemnity, resulting to the Purchaser or
Acquired Company from:
(a) Any inaccurate representation made by or on behalf of the
Shareholders in or pursuant to this Agreement;
(b) Breach of any of the warranties by the Shareholders in or
pursuant to this Agreement; or
(c) Breach or default of any of the obligations to be performed by
the Shareholders under this Agreement.
Shareholders shall reimburse Purchaser for any payment made or loss
suffered by Purchaser or Acquired Company, at any time after the Closing Date,
based on the final judgment of any arbitrator or any court of competent
jurisdiction or pursuant to a bona fide compromise or settlement of claims,
demands or actions with respect to any damages described in this paragraph.
-19-
8.03. Purchaser agrees to indemnify and hold the Shareholders, and each of
them, harmless after the date of this Agreement in respect to any damages as
defined in this paragraph 8.03. Damages, as used in this paragraph, shall
include any claim, action, demand, loss, cost, expense, liability, penalty and
other damage, including, but not limited to, reasonable attorneys' fees and
other reasonable costs and expenses incurred attempting to avoid damages or in
enforcing this indemnity, resulting to the Shareholders, or any of them, from:
(a) Any inaccurate representation made by or on behalf of the
Purchaser in or pursuant to this Agreement;
(b) Breach of any of the warranties by the Purchaser in or pursuant
to this Agreement; or
(c) Breach or default of any of the obligations to be performed by
the Purchaser under this Agreement.
Purchaser shall reimburse Shareholders for any payment made or loss
suffered by Shareholders, or any of them, at any time after the Closing Date,
based on the final judgment of any arbitrator or any court of competent
jurisdiction or pursuant to a bona fide compromise or settlement of claims,
demands or actions with respect to any damages described in this paragraph.
Expenses
8.04. Shareholders shall pay all of their own expenses incurred by them
arising out of this Agreement and the transactions contemplated in this
Agreement, including, but not limited to, all fees and expenses of their counsel
and accountants; provided, however, in the event this Agreement is terminated
for any reason other than due to a result of an uncured default by the
Shareholders, or due to that event described in Section 10.03 herein, Purchaser
agrees to pay to the Shareholders, for costs and expenses incurred by
Shareholders in connection with this transaction, the amount of Sixty Five
Thousand and No/100 Dollars ($65,000.00) (the "Break-up Fee"). In the event of a
termination, the Break-up Fee shall be deducted and offset by the Shareholders
against the Cash Payment. In the event this Agreement is not terminated, each of
the parties shall bear all expenses incurred by it or him in connection with
this Agreement and in the consummation of the transactions contemplated by, and
in preparation of, this Agreement.
ARTICLE 9
COMPLIANCE WITH SECURITIES LAWS
Unregistered Stock Under Federal Securities Act
9.01. (a) Each Shareholder acknowledges that the Restricted Stock Payment
of Purchaser's common stock to be delivered to the Shareholders pursuant to this
Agreement have not been registered under the Securities Act of 1933, as amended
(the "1933 Act"), and that, therefore, the Purchaser common stock is not freely
transferable, except as permitted under various exemptions contained in the 1933
Act and the rules of the Securities and Exchange Commission under the 1933 Act.
The provisions contained in this paragraph 9.01 are intended to ensure
compliance with the 1933 Act.
(b) Purchaser acknowledges that the shares of the Acquired Company's
capital stock to be delivered by the Shareholders pursuant to this Agreement
have not been registered under the Securities Act of 1933, as amended, referred
to in this Agreement as the "1933 Act", and that, therefore, the Acquired
-20-
Company's capital stock is not freely transferable, except as permitted under
various exemptions contained in the 1933 Act and the rules of the Securities and
Exchange Commission under the 1933 Act. The provisions contained in this
paragraph 9.01 are intended to ensure compliance with the 1933 Act.
No Distribution of Stock to Public
(c) Each Shareholder represents and warrants to Purchaser that the
Shareholder is acquiring the shares of Purchaser's common stock under this
Agreement for the Shareholder's own account for investment, and not for the
purpose of resale or any other distribution of the shares. Each Shareholder also
represents and warrants that the Shareholder has no present intention of
disposing of all or any part of such shares at any particular time, for any
particular price or on the happening of any particular circumstances. Each
Shareholder acknowledges that the Purchaser is relying on the truth and accuracy
of the warranties and representations set forth in this paragraph in issuing the
shares, without first registering the shares under the 1933 Act.
(d) Purchaser represents and warrants to the Shareholders that
Purchaser is acquiring the shares of the Acquired Company's capital stock under
this Agreement for Purchaser's own account for investment, and not for the
purpose of resale or any other distribution of the shares. Purchaser also
represents and warrants that the Purchaser has no present intention of disposing
of all or any part of such shares at any particular time, for any particular
price or on the happening of any particular circumstances. Purchaser
acknowledges that the Shareholders are relying on the truth and accuracy of the
warranties and representations set forth in this paragraph in issuing the
shares, without first registering the shares under the 1933 Act.
Investment Letters
(e) Each Shareholder shall deliver, at the Closing, to the Purchaser
an executed investment letter in the form of Exhibit 9.01 (e) attached hereto.
(f) Purchaser shall deliver, at the Closing, to the Shareholders an
executed investment letter in the form of Exhibit 9.01 (f) attached hereto.
No Transfers in Violation of the 1933 Act
(g) Each Shareholder covenants and represents that none of the shares
of the Restricted Stock Payment will be offered, sold, assigned, pledged,
transferred or otherwise disposed of, except after full compliance with all of
the applicable provisions of the 1933 Act and the rules and regulations of the
Securities and Exchange Commission under the 1933 Act. Therefore, each
Shareholder agrees not to sell or otherwise dispose of any of the shares of the
Purchaser's common stock received pursuant to this Agreement, unless the
Shareholder:
(i) Has delivered to the Purchaser a written legal opinion in
form and substance satisfactory to counsel for Purchaser, to the effect that the
disposition is permissible under the terms of the 1933 Act and regulations under
the 1933 Act;
(ii) Has complied with the registration and prospectus
requirements of the 1933 Act relating to such a disposition; or
(iii) Has presented Purchaser satisfactory evidence that such a
disposition is exempt from registration under the 1933 Act.
-21-
Purchaser shall place a stop transfer order against transfer of shares, until
one of the conditions set forth in this sub-paragraph has been met.
(h) Purchaser covenants and represents that none of the shares of
GAP's capital stock to be delivered to Purchaser pursuant to this Agreement will
be offered, sold, assigned, pledged, transferred or otherwise disposed of,
except after full compliance with all of the applicable provisions of the 1933
Act and the rules and regulations of the Securities and Exchange Commission
under the 1933 Act.
Investment Legend on Certificates
(i) The parties to this Agreement agree that any certificates
evidencing the shares of (i) the Restricted Stock Payment, and (ii) capital
stock of GAP to be delivered to Purchaser under this Agreement will contain the
following, or substantially similar, legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND HAVE BEEN TAKEN FOR INVESTMENT.
THE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE UNLESS A
REGISTRATION STATEMENT UNDER THE FEDERAL SECURITIES ACT OF 1933, AS
AMENDED, IS IN EFFECT AS TO THE SECURITIES, OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT IS IN FACT APPLICABLE TO SUCH
OFFER OR SALE.
Indemnification
(j) If, at any time in the future, any of the Shareholders sell or
otherwise dispose of any of the shares of common stock received from Purchaser
without registration under the 1933 Act or any similar federal statute that may
then be in effect, such Shareholder agrees to indemnify and hold harmless
Purchaser against any claims, liabilities, penalties, costs and expenses that
may be asserted against or suffered by Purchaser as a result of such
disposition.
(k) If, at any time in the future, Purchaser sells or otherwise
disposes of any of the shares of GAP capital stock received from the
Shareholders without registration under the 1933 Act or any similar federal
statute that may then be in effect, Purchaser agrees to indemnify and hold
harmless the Shareholders, and each of them, against any claims, liabilities,
penalties, costs and expenses that may be asserted against or suffered by the
Shareholders, or any of them, as a result of such disposition.
ARTICLE 10
TERMINATION
Default
10.01. Purchaser or the Shareholders may, on or at any time prior to the
Closing Date, terminate this Agreement by notice to the other party in the
event:
(a) One party has determined that any material representation of the
other party is untrue;
(b) The other party has defaulted under the Agreement by failing to
perform any of its covenants and agreements contained in this Agreement; and
-22-
(c) Each default has not been fully cured within three (3) days after
receipt of written notice specifying particularly the nature of the default.
Delay
10.02. If consummation of the transaction specified in this Agreement has
not occurred by 11:59 p.m., San Antonio, Texas time, on April 28, 2004, any
party that is not in default in the timely performance of any of its covenants
and conditions may terminate this Agreement subsequent to that time by giving
written notice of termination to the other party. The written notice of
termination shall be effective upon the delivery of the notice in person to an
officer of the party or, if served by mail, upon the receipt of the notice by
such party.
Damage or Loss
10.03. Purchaser may, at its option, terminate this Agreement prior to the
Closing Date, if GAP has suffered any damage, destruction or loss (whether or
not covered by insurance) that materially and adversely affects the property,
business or financial condition of GAP Damage, destruction or loss shall be
considered materially and adversely to affect the properties, business or
financial condition of GAP, if the book or market value (whichever is lower) of
the assets damaged, destroyed or lost exceeds ten percent (10%) in book or
market value (whichever is lower) of all assets of GAP.
10.04. The Shareholders, jointly and not severally, may, at their option,
terminate this Agreement prior to the Closing Date, if Purchaser (i) has
suffered any damage, destruction or loss (whether or not covered by insurance)
that materially and adversely affects the property, business or financial
condition of Purchaser; or (ii) is threatened with or placed in involuntary or
voluntary bankruptcy. Damage, destruction or loss shall be considered materially
and adversely to affect the properties, business or financial condition of
Purchaser if the book or market value (whichever is lower) of the assets
damaged, destroyed or lost exceeds ten percent (10%) in book or market value
(whichever is lower) of all assets of Purchaser.
ARTICLE 11
MISCELLANEOUS
Public Announcements
11.01. Purchaser shall have the exclusive right to issue a press release or
otherwise make any public statements with respect to the existence of this
Agreement or the transactions contemplated by this Agreement.
Amendments
11.02. This Agreement may be amended or modified at any time and in any
manner only by an instrument in writing executed by the President of Purchaser
and all of the Shareholders.
Waiver
11.03. Purchaser or the Shareholders jointly may, in writing:
-23-
(a) Extend the time for the performance of any of the obligations of
any other party to the Agreement, including Purchaser, GAP or the Shareholders.
(b) Waive any inaccuracies and misrepresentations contained in this
Agreement or any document delivered pursuant to this Agreement made by any other
party to this Agreement, including Purchaser, GAP or the Shareholders.
(c) Waive compliance with any of the covenants or performance of any
obligations contained in this Agreement by any other party to this Agreement,
including Purchaser, GAP or the Shareholders.
(d) Waive the fulfillment of any condition precedent to the
performance by any other party to the Agreement, including Purchaser, GAP or the
Shareholders.
Arbitration
11.04. All parties agree that any dispute arising between or among them
related to this Agreement or the performance hereof shall be submitted for
resolution to the American Arbitration Association for arbitration in the San
Antonio, Texas office of the Association under the then-current rules of
commercial arbitration. The Arbitrator or Arbitrators shall have the authority
to award to the prevailing party its reasonable costs and attorneys' fees. Any
award of the Arbitrators may be entered as a judgment in any court competent
jurisdiction.
Assignment
11.05.(a) Neither this Agreement nor any right or obligation created
by this Agreement shall be assignable by either the Shareholders or Purchaser,
without the prior written consent of the other, except by the laws of
succession.
(b) Except as limited by the provisions of paragraph (a), this
Agreement shall be binding on, and inure to the benefit of, the respective
successors and assigns of the parties, as well as the parties.
(c) Nothing in this Agreement, expressed or implied, is intended to
confer upon any person, other than the parties and their successors, any rights
or remedies under this Agreement.
Notices
11.06. Any notice or other communication required or permitted by this
Agreement must be in writing and shall be deemed to be properly given when
delivered in person to each Shareholder or an officer of Purchaser, when
deposited in the United States mails for transmittal by certified or registered
mail, postage prepaid, provided that the communication is addressed:
(a) In the case of Purchaser, to: USURF America, Inc.
0000 Xxxxxxxxx Xxxxx,Xxxxx 000
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
with a copy to: Xxxxxxxxxxx Xxxxxxx
Xxxxxxxxxxx X. Xxxxxxx, P.C.
000 X. Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
-24-
(b) In the case of the
Shareholders, to: Xxxxxxx Xxxxx
000 X. Xxxxxxxx Xxxxx, Xxxxx X
Xxxx Xxxxx, Xxxxx 00000
Xxxxx Xxxxx
000 X. Xxxxxxxx Xxxxx, Xxxxx X
Xxxx Xxxxx,Xxxxx 00000
Xxxxx Xxxxx
000 X. Xxxxxxxx Xxxxx, Xxxxx X
Xxxx Xxxxx, Xxxxx 00000
with a copy to: Xxxxxxx X. Xxxxxxxxx
J. Xxxxxxx Xxxxx
Xxxxx Xxxxxxxx Xxxxxx & Pulman
000 X. Xxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Paragraph Headings
11.07. Paragraph and other headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Entire Agreement
11.08. This instrument and the exhibits to this instrument contain the
entire Agreement between the parties with respect to the transaction
contemplated by the Agreement. It may be executed in any number of counterparts,
but the aggregate of the counterparts together constitute only one and the same
instrument.
Effect of Partial Invalidity
11.09. In the event that any one or more of the provisions contained in
this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, but this Agreement
shall be constructed as if it never contained any such invalid, illegal or
unenforceable provisions.
Controlling Law
11.10. The validity, interpretation and performance of this agreement shall
be controlled by and construed under the laws of the State of Texas, the State
in which this Agreement is being performed.
[Signatures on next page]
-25-
EXECUTED as of the date first above written, at Fort Worth, Texas, and Colorado
Springs, Colorado.
PURCHASER: SHAREHOLDERS:
USURF AMERICA, INC.
By: /s/ /s/
----------------------------- -------------------------------
Xxxxxxx X. XxXxxxxx, Xxxxxxx Xxxxx
President and CEO
/s/
-------------------------------
Xxxxx Xxxxx
/s/
-------------------------------
Xxxxx Xxxxx
-26-
-27-
Exhibit 2.01(a)
Articles of Incorporation of Connect Paging, Inc.
-------------------------------------------------
See Attached.
-28-
Exhibit 2.01(b)
List of Foreign Jurisdictions GAP is Qualified to Transact Business
See Attached.
-29-
Exhibit 2.01(c)
Bylaws of Connect Paging, Inc.
See Attached.
-30-
Exhibit 2.05
Independent Auditor's Report of Connect Paging, Inc., dated December 31, 2003
-----------------------------------------------------------------------------
See Attached.
-31-
Exhibit 2.08
Assets of Connect Paging, Inc.
------------------------------
ASSET--(PART OF SALE) QUANTITY ESTIMATED TOTAL VALUE
VALUE (EACH)
--------------------------------------------------------------------------------------------------------------
BANQUET TABLE 18 $5.00 $90.00
CHAIRS 36 $10.00 $360.00
COFFEE MAKER 1 $10.00 $10.00
EMACHINE COMPUTER (MOUSE AND KEYBOARD INCLUDED) 35 $200.00 $7,000.00
EMACHINE COMPUTER MONITORS 35 $50.00 $1,750.00
(ATTACHED UCC LIST OF SERIAL NUMBERS)
CUBICLES (SET OF 26 BUILT IN) 1 $1,500.00 $1,500.00
CUSTOMERS (APPROX NUMBER) 14506 $10.00 $145,060.00
DISTRIBUTOR and STORE NETWORK
MICROWAVE 2 $10.00 $20.00
ESI PHONE SYSTEM (INC. 30 PHONES AND HEADSETS) 1 $3,000.00 $3,000.00
POINT OF PURCHASE MATERIAL--(APPROX VALUE) $2,000.00 $2,000.00
PORTABLE FAN 4 $25.00 $100.00
PUC TEXAS LICENSE--(GET A PHONE LICENSE #60530) 1 $5,000.00 $5,000.00
REFRIGERATOR 1 $100.00 $100.00
SERVER 1 $5,000.00 $1,000.00
Total Value of Assets to be Sold: $166,990.00
EXCLUDED ASSETS*
--------------------------------------------------------------------------------------------------------------
POWER DIALER--(NOT PART OF SALE) 1 $- $1,000.00
2ND SERVER--(NOT PART OF SALE) 1 $- $1,500.00
BRIAN'S DESK--(PERSONAL PROPERTY--NOT PART OF SALE) 1 $- $200.00
Extel CLEC UNE-P and Resell TEXAS License #60145 $5,000.00
2003 Mitsubishi Montero Sport $20,000.00
Storefront Phone America sign $2,000.00
Storefront Phone America Inventory $1,000.00
Storefront Phone America fixtures $1,000.00
*These assets are specifically excluded from transaction contemplated by the
Extel Contract
Leasehold Interest:
That certain Lease Agreement dated November 21, 2002 between FWIS, Ltd. d/b/a
Fort Worth Town Center, as Landlord, and Connect Paging, Inc., as successor in
interest to Extel Enterprises, Inc., for the lease of approximately 1,752 square
feet of office space in the Fort Worth Town Center located in Fort Worth, Texas.
-32-
Exhibit 2.11
Seller's Licenses and Applications
----------------------------------
See Attached.
-33-
Exhibit 2.12
Seller's Contracts
------------------
None, except for the agreements related to the Extel Contract and the leasehold
interest described on Exhibit 2.08. Said lease being attached hereto.
-34-
Exhibit 3.01
Purchaser's Representations and Warranties
------------------------------------------
Articles of Incorporation, Foreign Jurisdictions qualified to do Business
-------------------------------------------------------------------------
Articles of Incorporation (and amendments thereto) are attached.
USURF America, Inc. is qualified to do business in the State of Nevada. It is
not currently registered or qualified to do business in any other jurisdiction.
-35-
Exhibit 3.04
Purchaser's Financial Statements
--------------------------------
See Attached.
-36-
Exhibit 3.10
Purchaser's Litigation
----------------------
On September 29, 2000, an involuntary bankruptcy petition was filed against
CyberHighway in the Idaho Federal Bankruptcy Court, styled In Re: CyberHighway,
Inc., Case No. 00-02454. The petitioning creditors were ProPeople Staffing, CTC
Telecom, Inc. and Xxxxxxx-Xxxxx. In December 2000, CyberHighway and the
petitioning creditors filed a joint motion to dismiss this proceeding. The joint
motion to dismiss was denied because the creditors believe that CyberHighway's
as-yet unasserted damage claims against the original petitioning creditors and
their law firm and a claim against Dialup USA, Inc. represent CyberHighway's
most valuable assets. These as-yet unasserted claims include claims for bad
faith filing of the original bankruptcy petition as to the original petitioning
creditors and their law firm, as well as claims for tortious interference with
beneficial business relationships as to Dialup USA, Inc. It is likely that, at
some time in the future, a final order of bankruptcy will be entered with
respect to CyberHighway. No prediction of the timing of such an order can be
made, although we believe that such an order would come only after the final
adjudication of the claims described above.
In January 2000, we instituted arbitration proceedings against Xxxxxxxxxxx X.
Xxxxxxx, our former vice president of finance and chief financial officer. At a
recent hearing, we alleged that Xx. Xxxxxxx violated certain terms of his
employment agreement and sought damages resulting from those violations, while
Xx. Xxxxxxx claimed wrongful termination under his employment agreement. The
arbitrator has awarded Xx. Xxxxxxx $75,000, plus legal expenses of approximately
$25,000. The award was entered as a judgment in Louisiana on September 15, 2003
and filed in Colorado on December 3, 2003. This case is styled: USURF America,
Inc. vs. Xxxxxxxxxxx X. Xxxxxxx, American Arbitration Association, Case No.
71-160-00087-01. On February 27, 2004, we entered into a settlement agreement
with Xx. Xxxxxxx under which a total amount of $124,486.36 will be paid to Xx.
Xxxxxxx as follows: (i) a downpayment $30,000 was made on February 27, 2004, and
(ii) we will make six monthly payments of $15,747.72 to Xx. Xxxxxxx on the 25th
day of each month commencing on March 25, 2004.
In June 2003, one of our subsidiaries, USURF Telecom, Inc., was named as a
defendant in a lawsuit filed by Qwest Corporation. USURF Telecom has filed its
answer, denying any liability. Our management believes that Qwest's allegations
are without merit. This case is styled: Qwest Corporation vs. Maxcom, Inc.
(f/k/a Mile High Telecom, CLEC for Sale, Inc. and Mile High Telecom, Inc.), et.
al.; in the District Court, City and County of Denver, Colorado; Xxxx Xx. 00 XX
0000.
-37-
Exhibit 3.14
Tax Returns Not Filed by Purchaser and Explanation Regarding Same
-----------------------------------------------------------------
USURF has not filed federal or state income tax returns for the years 2003,
2002, ___________. Failure to file returns is attributable primarily to
significant net losses for such years and the lack operating capital to pay fees
for tax return preparation.
-38-
Exhibit 6.03
Form of Employment Agreement
----------------------------
EMPLOYMENT, CONFIDENTIALITY AND NON-COMPETE AGREEMENT
-----------------------------------------------------
This Employment Agreement is made by and between Connect Paging, Inc., a Texas
corporation d/b/a Get A Phone, with offices at ________________________________
(the "Company"), and ______________________________, residing at
_____________________________________ (the "Employee"), and is effective as of
________________, 2004 (the "Effective Date").
WHEREAS, concurrently with the execution of this Agreement, USURF America,
Inc., a Nevada corporation ("USURF"), has acquired all of the issued and
outstanding common stock of the Company, pursuant to that certain Stock Purchase
Agreement, dated April _________, 2004 (the "Purchase Agreement");
WHEREAS, on the date of the Purchase Agreement, the Employee was a
stockholder of the Company, and, immediately prior to the execution of this
Agreement, was employed by, and a key executive of, the Company;
WHEREAS, the Company desires to retain Employee and the Employee is willing
to accept and continue his employment with the Company, under the terms and
conditions set forth in this Agreement;
THEREFORE, the parties agree as follows:
1. Employment; Term. The Company hereby employs the Employee as
_______________ on the terms set forth herein for a period of two (2) years from
the Effective Date, and the Employee hereby accepts such employment.
2. Duties. The Employee will render services to Company in such executive,
supervisory and general administrative capacities as the Board of Directors of
the Company shall from time to time determine. Without limiting the foregoing,
the Employee's duties will generally consist of the duties specified on the
attached Exhibit "A," which may be amended from time to time by the Company's
Board of Directors. The office of the Company, as identified above, will
constitute the Employee's base of operations; provided, however, that Employee
will render services away from the office on a temporary basis and travel on a
temporary basis but in no event more than three (3) days in any calendar month
wherever the Company may reasonably require. In connection with all such trips,
the Employee will be advanced or reimbursed for all reasonable travel and living
expenses provided the Employee submits appropriate documentation for such
expenses satisfactory to the Company. If elected a director or officer of the
Company or of any affiliate of the Company, the Employee will serve in that
capacity without compensation other than as expressly provided in this
Agreement. In no event will Company, without the written consent of Employee,
transfer Employee to USURF or any of its affiliates, parents or subsidiaries or
require Employee to provide the duties described herein to any other entity
other than Company. In no event shall Employer, without written consent of
Employee, require Employee to relocate outside the Dallas/Ft. Worth area.
3. Exclusivity. During the term of this Agreement, Employee will devote all
of his working time to performing his duties under this Agreement, and during
his employment with the Company, the Employee will not (i) act for his own
account in any manner which is Directly Competitive (as defined herein) with any
of the business of the Company or which would interfere with the performance of
-39-
his duties under this Agreement, or (ii) serve as an officer, director or
employee of or paid advisor to any other business entity with the exception of
Extel Enterprises Incorporated and Express Cash and Phone, Inc., or (iii) invest
or have any financial interest, direct or indirect, in any business that is
Directly Competitive with any of the business of the Company, provided, however,
that notwithstanding the foregoing, the Employee may own up to 1% of the
outstanding equity securities of any company engaged in any such competitive
business whose shares are listed on a national securities exchange or regularly
quoted in an over-the-counter market by one or more members of a national or an
affiliated securities association. The Employee will be deemed to have an
indirect financial interest in any business in which any of the following has
any financial interest: the Employee's spouse; any lineal descendant or ancestor
of the Employee; any brother or sister of the Employee; and any child (but not
grandchild) of any such brother or sister. Notwithstanding the foregoing,
Employee is authorized to retain his ownership and position on the Board of
Directors and employment, as the case may be, in Extel Enterprises, Inc. and
Express Cash and Phone, Inc. (collectively, the "Excepted Entities") for the
sole purpose of maintaining the Excepted Entities in good standing under the
laws of the State of Texas; provided that Employee's continued involvement in
the Excepted Entities does not materially interfere with the performance of his
duties under this Agreement. For the purposes of this Section 3, the term
Directly Competitive shall mean engaging in any business in which the Company is
engaged at any time during the term of this Agreement.
4. Compensation.
4.1 (i) Signing Bonus. In consideration of, and as an inducement for,
Employee's executing this Employment Agreement, USURF shall issue to Employee,
as a bonus, 1,000,000 shares of its $.0001 par value common stock. It is agreed
by Employer and Employee that such bonus shares shall be valued at $.09 per
share, or $90,000, in the aggregate.
USURF agrees that the shares to be issued to Employee pursuant to this
Employment Agreement shall be issued to Employee and registered under a Form S-8
Registration Statement filed in connection with this Employment Agreement. Upon
issuance, the shares shall be duly registered under the Securities Act of 1933,
as amended, and shall be freely tradable in the markets of the United States.
(ii) Salary. During the first two (2) years of his employment, the
Company will pay the Employee a salary at the rate of One Hundred Twenty
Thousand and No/100 Dollars ($120,000.00) per year in equal, semi-monthly
installments. Thereafter the Company will review the Employee's salary at least
annually, but, in any event, although the Company may increase, decrease or not
change the Employee's salary, his salary will not at any time be less than
$120,000.00 per year payable in equal, semi-monthly installments. The Employee
will not be entitled to overtime or other additional compensation as a result of
services performed during evenings, weekends, holidays or at other times.
4.2 Additional Compensation. Employee will be entitled to additional
compensation pursuant to the following ("Stock Compensation"):
(i) if, at any time during the term of this Agreement, the Company
maintains an aggregate average of 45,000 customers and maintains such aggregate
average for a period of ninety (90) consecutive days, Company shall cause to be
delivered to Employee 1,111,111 shares of $0.0001 par value common stock of
USURF; and
(ii) if, at any time during the term of this Agreement, the Company
maintains an aggregate average of 85,000 customers and maintains such aggregate
average for a period of ninety (90) consecutive days, Company shall cause to be
-40-
delivered to Employee 1,111,111 shares of $0.0001 par value common stock of
USURF; provided, however, that no portion of the Stock Compensation shall be
payable to the Employee unless Employee is a fulltime employees of GAP or other
affiliate of Company at time each of the benchmark customer levels are obtained;
and provided further that any customers who receive service at a discount rate
shall not be counted in determining the benchmark customer levels described in
subparagraphs (i) and (ii) above, unless the discount rate has been pre-approved
in writing by the President of Company.
(iii) Company agrees to execute a Registration Rights Agreement with
Employee granting Employee demand and piggyback registration rights in
connection with all Stock Compensation issued to Employee under the terms of
this Employment Agreement.
4.3 Deductions. The Company will deduct and withhold from any
compensation payable to the Employee under this Agreement such amounts as the
Company is required to deduct and withhold by federal or state law. The Company
may also deduct and withhold from any such compensation, to the extent permitted
by law, such amounts as the Employee may owe to the Company.
5. Expenses. The Company will reimburse the Employee for all proper, normal
and reasonable expenses incurred by the Employee in performing his obligations
under this Agreement upon the Employee's furnishing the Company with
satisfactory evidence of such expenditures. The Employee will not incur any
expenditures in excess of $2,000.00 without the Company's prior written
approval. Without limiting the foregoing, the Employee will not, without the
Company's prior written approval, incur any travel expenses (including the cost
of transportation, meals and lodging) in excess of $2,000.00 in the aggregate
for any one trip.
6. Benefits.
6.1 Insurance. The Company will provide the Employee, at the Company's
expense, with medical and other insurance which is not less favorable than that
which is provided to any other employee of the Company in a similarly situated
job position.
6.2 Vacation. The Employee will be entitled to three (3) weeks paid
vacation during each calendar year (January 1 to December 31) in addition to any
holidays which the Company observes. Vacation time must be used during each
calendar year; if it is not used, it will be forfeited. No payment will be made
for unused vacation time.
6.3 Absences. The Employee's salary and other rights and benefits under
this Agreement will not be suspended or terminated because the Employee is
absent from work due to illness, accident or other disability; but the Company
may deduct from the Employee's salary under Section 4.1 any payment received by
the Employee under any disability insurance which the Company provides the
Employee pursuant to Section 6.1. The provisions of this Section 6.3 will not
limit or affect the rights of the Company under Section 7.
7. Death and Disability.
7.1 Death. If the Employee dies prior to expiration of the term of his
employment, all obligations of the Company to the Employee will cease as of the
date of the Employee's death; provided, however, this Section shall not apply to
any amounts owed to Employee pursuant to Section 4.2 above.
-41-
7.2 Disability. If the Employee is unable to perform substantially all
of his duties under this Agreement because of illness, accident or other
disability (collectively referred to as "Disability"), and the Disability
continues for more than three consecutive months or an aggregate of more than
six months during any twelve-month period, then the Company may suspend its
obligations to the Employee under Section 4.1 on or after the expiration of such
three or twelve-month period until the Company terminates such suspension as
hereinafter provided. The Company will terminate any such suspension after the
Disability has, in fact, ended and after it has received written notice from the
Employee that the Disability has ended and that he is ready, willing and able to
perform fully his services under this Agreement. Termination of such suspension
will be no later than one week after the Company has received such notice from
the Employee. If any one or more periods of suspension continue pursuant to the
provisions of this Section for three consecutive months or six months in the
aggregate, then the Company may at any time prior to termination of the then
current period of suspension, terminate the Employee's employment hereunder.
If the Employee or the Company asserts at any time that the Employee is
suffering a Disability, the Company may cause the Employee to be examined, at
the sole cost and expense of Company, by a doctor or doctors selected by the
Company, and the Employee will submit to all required examinations and will
cooperate fully with such doctor or doctors and, if requested to do so, will
make available to them his medical records.
8. Termination.
8.1 Just Cause. Company agrees not to terminate this Agreement except
for "just cause", and agrees to give Employee written notice of acts or events
constituting "just cause." Employee has the right to cure, if possible, within
thirty (30) days of Company's giving of such notice, the acts, events or
conditions which led to Company's notice. For purposes of this Agreement, "just
cause" shall mean (1) the willful failure or refusal of Employee to implement or
follow the written policies or directions of Company's Board of Directors,
provided that Employee's failure or refusal is not based upon Employee's belief
in good faith, as expressed to Company in writing, that the implementation
thereof would be unlawful, (2) conduct which is inconsistent with Employee's
position with Company or which results in an adverse effect (financial or
otherwise) or misappropriation of assets of Company, (3) conduct which violates
any provision of this Agreement, and (4) any act involving personal dishonesty
or criminal conduct against Company.
8.2 Employee Remedies. Although Company retains the right to terminate
Employee for any reason not specified above, Company agrees that if it
discharges Employee for any reason other than just cause, as defined above,
Employee will be entitled to full compensation under this Agreement, including
participation in all benefit programs, for one year or the remainder of the
current term, original or renewal, as the case may be, of employment, whichever
is greater and the Non-Compete restrictions contained in this Agreement shall be
null and void and of no force or effect whatsoever.
8.3 Voluntary Termination. If Employee should cease his employment
hereunder voluntarily for any reason, or is terminated for just cause, all
compensation and benefits payable to Employee shall thereupon, without any
further writing or act, cease, lapse and be terminated. However, all defined
compensation, benefits and reimbursements which accrued prior to Employee's
ceasing employment or termination, will become immediately due and payable to
Employee and shall be payable to Employee's estate should his employment cease
due to death. Should Employee voluntarily cease his employment, Employee retains
the right to participate for the period of this Agreement in Employee's medical
insurance plan and will be responsible for 100% of the cost of participation.
-42-
9. Results of Employee's Services.
9.1 Company Ownership. The Company will be entitled to and will own all
the results and proceeds of the Employee's services under this Agreement,
including, without limitation, all rights throughout the world to any copyright,
patent, trademark or other right and to all ideas, inventions, products,
programs, procedures, formats and other materials of any kind created or
developed or worked on by the Employee during his employment by the Company; the
same shall be the sole and exclusive property of the Company; and the Employee
will not have any right, title or interest of any nature or kind therein.
Without limiting the foregoing, it will be presumed that any copyright, patent,
trademark or other right and any idea, invention, product, program, procedure,
format or material created, developed or worked on by the Employee at any time
during the term of his employment will be a result or proceed of the Employee's
services under this Agreement. The Employee will take such action and execute
such documents as the Company may request to warrant and confirm the Company's
title to and ownership of all such results and proceeds and to transfer and
assign to the Company any rights which the Employee may have therein. The
Employee's right to any compensation or other amounts under this Agreement will
not constitute a lien on any results or proceeds of the Employee's services
under this Agreement.
9.2 Right to Proceeds. The Company will also own, and promptly on
receipt thereof the Employee will pay to the Company, any monies and other
proceeds to which the Employee is entitled on account of rights pertaining to
any of the Company's products which the Employee acquired before the date of
this Agreement.
9.3 Remedies. The Employee acknowledges that the violation of any of the
provisions of Section 9.1 will cause irreparable loss and harm to the Company
which cannot be reasonably or adequately compensated by damages in an action at
law, and, accordingly, that the Company will be entitled to request in
accordance with state law injunctive and other equitable relief to enforce the
provisions of that Section; but no action for any such relief shall be deemed to
waive the right of the Company to an action for damages.
10. Use of Employee's Name, Etc. The Company is hereby granted the right,
upon written consent of Employee only, during the term of Employee's employment
to make use of and to permit others to make use of the Employee's name,
pictures, photographs, and other likenesses, and voice, in connection with the
advertising, publicity and exploitation of any products, or in connection with
the use or implementation of any of the Employee's services hereunder or the
proceeds thereof. This right shall continue in perpetuity as a non-exclusive and
non-compensable right after termination of his employment for any reason
whatsoever including, without limitation, termination by either party for cause
or wrongful termination by either party. In no event, however, shall the
Employee, directly or indirectly, be represented as endorsing any product or
commodity without the Employee's written consent.
11. Insurance. If the Company desires at any time or from time to time to
apply for, in its own name or otherwise, but at its expense, life, health,
accident or other insurance covering the Employee, the Company may do so and may
take out such insurance for any sum that it deems desirable. The Employee will
have no right, title or interest in or to such insurance. The Employee
nevertheless will assist the Company in procuring the same by submitting from
time to time to the customary medical, physical and other examinations, and by
signing such applications, statements and other instruments as any reputable
insurer may require.
12. Uniqueness of Services. The Employee acknowledges that (i) USURF
acquired the stock of Company in reliance on the Employee entering into this
Agreement, and (ii) that Employee's services hereunder are of a special, unique,
unusual, extraordinary and intellectual character, the loss of which cannot be
reasonably or adequately compensated by damages in an action at law.
Accordingly, the Company will be entitled to request in accordance with state
law injunctive and other equitable relief to prevent or cure any breach or
-43-
threatened breach of this Agreement by the Employee, but no action for any such
relief shall be deemed to waive the right of the Company to an action for
damages.
13. Covenants.
13.1 Non-disclosure; Confidentiality. Employee acknowledges and agrees
as follows:
(a) In connection with his employment with the Company, Employee
may become aware of or familiar with processes, formulae, procedures,
information and materials which the Company has spent a great deal of time and
money to develop, which are essential to the business of the Company, and which
comprise confidential information and trade secrets of the Company (collectively
called "Trade Secrets"). The term "Trade Secret" does not include any process,
formula, procedure, information or material which is currently in the public
domain, currently known by Employee or which hereafter becomes public knowledge
in a way that does not involve a breach of an obligation of confidentiality.
Notwithstanding the foregoing, Employee acknowledges and agrees that any
process, formula, procedure, information or material of which he becomes aware
during his employment with the Company is presumed to be a Trade Secret unless
the Company advises Employee, in writing, that it is not a Trade Secret.
(b) Employee will not during the term of his employment with the
Company and at all times thereafter, either directly or indirectly, use or
disclose to anyone any Trade Secret, except that while Employee is employed by
the Company he may use Trade Secrets in the performance of his services for the
Company and may disclose Trade Secrets to employees of the Company who need to
know them in the performance of their services for the Company and who are bound
by confidentiality agreements.
13.2 Non-Solicitation. Employee will not for a period of one (1) year
following the termination of his employment with the Company:
(a) attempt to cause any person, corporation, partnership or other
entity which is a customer of or has a contractual relationship with the Company
at the time of the termination of his employment to terminate such relationship
with the Company, and this provision shall apply regardless of whether such
customer has a valid contractual arrangement with the Company;
(b) attempt to cause any employee of the Company to leave such
employment;
(c) engage any person who was an employee of the Company at the
time of the termination of his employment or induce such person otherwise to
become associated with the Employee or with any other person, corporation,
partnership or other entity with which the Employee may thereafter become
associated; or
(d) engage in any activity or perform any services Directly
Competitive (as defined in Section 3 herein) with any business conducted by the
Company at the time of such termination.
13.3 Non-Compete.
(a) Employee agrees that for a period of one (1) year from the
date Employee's employment with Company is terminated, Employee will not
directly or indirectly engage (whether as an employee, consultant, proprietor,
partner, director or otherwise) in, or have any ownership interest in, or
participate in the financing, operation, management or control of, any person,
firm, corporation or business that engages in a "Restricted Business" in a
-44-
"Restricted Territory" (as such terms are defined below); provided, however,
that notwithstanding the foregoing, the Employee may own up to 1% of the
outstanding equity securities of any company engaged in a Restricted business
whose shares are listed on a national securities exchange or regularly quoted in
an over-the-counter market by one or more members of a national or an affiliated
securities association. This Section 13.3 shall not apply if the Employee's
termination of employment with Company is due to (i) a breach by Company of the
terms of this Agreement as adjudicated by a court of competent jurisdiction
(except for a failure of Company to pay Employee's salary as provided in Section
4.1 above which, for purposes of this Section 13.3, will not require such
adjudication) or (ii) a final adjudication of Company as bankrupt under any
federal or state law.
(b) For purposes of this Section 13.3, the following terms are
defined:
(i) "Restricted Business" shall mean any and all business
activity in which Company is engaged at the time of execution of this Employment
Agreement.
(ii) "Restricted Territory" shall mean any county,
regardless of the state, in which Company engages in a Restricted Business at
the time Employee's employment with the Company terminates.
In the event Company fails to make any payment due to Employee hereunder,
including any payment of Stock Compensation, the provisions of this Section 13.3
shall be null and void and of no further force or effect whatsoever.
13.4 Remedies. Employee acknowledges that the violation of any of the
provisions of this Section 13 will cause irreparable loss and harm to the
Company which cannot be reasonably or adequately compensated by damages in an
action at law, and, accordingly, that the Company will be entitled to request in
accordance with state law injunctive and other equitable relief to prevent or
cure any breach or threatened breach thereof, but no action for any such relief
shall be deemed to waive the right of the Company to an action for damages.
13.5 Survival of Covenants. The obligations of Employee and the rights
of the Company under this agreement will remain in full force and effect
regardless of the reason for or cause of the termination of Employee's
employment.
14. Governing Law; Remedies
14.1 This Agreement shall be governed by and construed in all respects
in accordance with the laws of the State of Texas.
14.2 Except as otherwise expressly provided in this Agreement, any
dispute or claim arising under or with respect to this Agreement will be
resolved by arbitration in San Antonio, Texas, in accordance with the Rules for
the Resolution of Employment Disputes of the American Arbitration Association
before a panel of three (3) arbitrators, one appointed by the Employee, one
appointed by the Company, and the third appointed by said Association. The
decision or award of a majority of the arbitrators shall be final and binding
upon the parties. Any arbitral award may be entered as a judgment or order in
any court of competent jurisdiction.
14.3 Notwithstanding the provisions for arbitration contained in this
Agreement, the Company will be entitled to injunctive and other equitable relief
from the courts as provided in Sections 9.3, 12 and 13.4 and as the courts may
otherwise determine appropriate; and the Employee agrees that it will not be a
-45-
defense to any request for such relief that the Company has an adequate remedy
at law. For purposes of any such proceeding, the Company and the Employee submit
to the non-exclusive jurisdiction of the courts of the State of Texas and of the
United States located in the State of Texas, and each agrees not to raise, and
waives, any objection to or defense based on the venue of any such court or
forum non conveniens.
14.4 A court of competent jurisdiction, if it determines any provision
of this Agreement to be unreasonable in scope, time or geography, is hereby
authorized by the Employee and the Company to enforce the same in such narrower
scope, shorter time or lesser geography as such court determines to be
reasonable and proper under all the circumstances.
14.5 The Company will also have such other legal remedies as may be
appropriate under the circumstance including, but not limited to, recovery of
damages occasioned by a breach. The Company's rights and remedies are cumulative
and the exercise or enforcement of any one or more of them will not preclude the
Company from exercising or enforcing any other right or remedy.
15. Indemnity. To the extent permitted by law, the Company will indemnify
the Employee against any claim or liability and will hold the Employee harmless
from and pay any expenses (including, without limitation, legal fees and court
costs), judgments, fines, penalties, settlements and other amounts arising out
of or in connection with any act or omission of the Employee performed or made
in good faith on behalf of the Company pursuant to this Agreement, except for
any intentional unlawful or grossly negligent act or omission. The Company will
not be obligated to pay the Employee's legal fees and related charges of counsel
during any period that the Company furnishes, at its expense, counsel to defend
the Employee; but any counsel furnished by the Company must be reasonably
satisfactory to the Employee. The foregoing provisions will survive termination
of the Employee's employment with the Company for any reason whatsoever and
regardless of fault.
16. Severability of Provisions. If any provision of this Agreement or the
application of any such provision to any person or circumstance is held invalid,
the remainder of this Agreement, and the application of such provision other
than to the extent it is held invalid, will not be invalidated or affected
thereby.
17. Waiver. No failure by Company or Employee to insist upon the strict
performance of any term or condition of this Agreement or to exercise any right
or remedy available to it will constitute a waiver. No breach or default of any
provision of this Agreement will be waived, altered or modified, and the neither
Company nor Employee may waive any of its rights, except by a written instrument
executed by the party to be bound. No waiver of any breach or default will
affect or alter any term or condition of this Agreement, and such term or
condition will continue in full force and effect with respect to any other then
existing or subsequent breach or default thereof.
18. Miscellaneous.
18.1 Amendment. This Agreement may be amended only by an instrument in
writing signed by the Company and the Employee.
18.2 Assignment. This Agreement shall be binding upon the parties and
their respective successors and assigns. The Company may not, without the
Employee's written consent (which consent shall not be unreasonably withheld),
transfer or assign any of its rights and obligations under this Agreement. In
the event Company, without Employee's prior written consent, transfers or
assigns any of its or his rights or obligations under this Agreement, any such
transfer or assignment or attempt thereat without such consent shall be null and
void.
-46-
18.3 Notice. All notices under or in connection with this Agreement
shall be in writing and may be delivered personally or sent by mail, courier,
fax, or other written means of communication to the parties at their addresses
and fax numbers set forth below or to such other addresses and fax numbers as to
which notice is given:
if to the Company:
Connect Paging, Inc.
Attn: Xxx Xxxxxxx
0000 Xxxxxxxxx Xx., Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
Fax: (000) 000-0000
if to the Employee:
--------------------------
--------------------------
Fax: ( )
------------------
With a copy to: Xxxxxxx X. Xxxxxxxxx
J. Xxxxxxx Xxxxx
Xxxxx Xxxxxxxx Xxxxxx & Pulman, P.C.
000 X. Xxxxx Xx. Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Notice will be deemed given on receipt.
18.4 Headings. Section headings are for purposes of convenient
reference only and will not affect the meaning or interpretation of any
provision of this Agreement.
18.5 Entire Agreement. This Agreement constitutes the entire agreement
of the parties and supersedes any and all prior agreements or understandings
between them.
[Signatures on next page]
-47-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Effective Date.
Company Employee
CONNECT PAGING, INC.
BY:
-------------------------------- -----------------------------------
--------------------------------
Printed Name
--------------------------------
Title
-48-
SCHEDULE 1
EMPLOYEE DUTIES
-49-
Exhibit 6.04
Form of Registration Rights Letter Agreement
--------------------------------------------
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is entered into as of
__________, 2003, by and between USURF America, Inc., a Nevada corporation (the
"Company"), and ______________________, a _________________ ("Shareholder").
WHEREAS, in connection with the issuance of _____________ shares of the
Company's common stock (the "Shares") to Shareholder, the Company desires to
provide Shareholder and the Holders (as defined below) certain rights with
respect to the Shares as an inducement to Shareholder to enter into that certain
Stock Purchase Agreement between Company and Shareholder dated April __, 2004.;
NOW, THEREFORE, in consideration of the mutual agreements, covenants and
conditions contained herein, the Company and Shareholder hereby agree as
follows.
SECTION 1.
RESTRICTIONS ON TRANSFER
------------------------
1.1 Restrictive Legend. Each certificate representing (i) the Shares and (ii)
any other securities issued in respect of the Shares upon conversion of the
Shares upon any stock split, stock dividend, recapitalization, merger,
consolidation or similar event, shall (unless otherwise permitted by the
provisions of Section 1.2 below) be stamped or otherwise imprinted with a legend
in substantially the form specified in the Stock Purchase Agreement between the
parties dated ________________, 2004. Shareholder agrees that the Company shall
make notation on its records and give appropriate instructions to any transfer
agent of the Shares in order to implement the restrictions on transfer
established in this Section 1. Such legend shall be removed by the Company from
any certificate upon request at such time as the Holder of the shares
represented by the certificate satisfies the requirements of Rule 144 under the
Securities Act of 1933, as amended (the "Act"), provided that Rule 144 as then
in effect does not differ substantially from Rule 144 as in effect as of the
date of this Agreement, and provided further that the Company has received from
the Holder a written representation that (i) such Holder is not an affiliate of
the Company and has not been an affiliate during the preceding three months,
(ii) such Holder has beneficially owned the shares represented by the
certificate for a period of at least one year, (iii) such Holder otherwise
satisfies the requirements of Rule 144 as then in effect with respect to such
shares, and (iv) such Holder will submit the certificate for any such shares to
the Company for reapplication of the legend at such time as the holder becomes
an affiliate of the Company or otherwise ceases to satisfy the requirements of
Rule 144 as then in effect.
1.2 Notice of Proposed Transfers. The Holder of each certificate representing
Registrable Securities (as defined below) by acceptance thereof agrees to comply
in all respects with the provisions of this Section 1.2. Prior to any proposed
sale, assignment, transfer or pledge of any Registrable Securities, unless there
is in effect a registration statement under the Act covering the proposed
transfer, the Holder thereof shall give written notice to the Company of such
holder's intention to effect such transfer, sale, assignment or pledge. Each
such notice shall describe the manner and circumstances of the proposed
transfer, sale, assignment or pledge in sufficient detail, and shall be
accompanied at such Holder's expense by either (i) a written opinion of legal
counsel who shall, and whose legal opinion shall, be reasonably satisfactory to
-50-
the Company addressed to the Company, to the effect that the proposed transfer
of the Registrable Securities may be effected without registration under the
Act, or (ii) a "no action" letter from the SEC to the effect that the transfer
of such securities without registration will not result in a recommendation by
the staff of the Securities and Exchange Commission (the "SEC") that action be
taken with respect thereto, whereupon the holder of such Registrable Securities
shall be entitled to transfer such Registrable Securities in accordance with the
terms of the notice delivered by the Holder to the Company. The Company will not
require such a legal opinion or "no action" letter (a) in any transaction in
compliance with Rule 144, or (b) in any transaction in which a Holder that is a
partnership, limited liability company or corporation distributes Shares after
six months after the purchase of such securities hereunder solely to partners,
members or shareholders (as the case may be) thereof for no consideration,
provided that each transferee agrees in writing to be subject to the terms of
this Section 1.2. Each certificate evidencing the Registrable Securities
transferred as above provided shall bear, except if such transfer is made
pursuant to Rule 144, the appropriate restrictive legend set forth in Section
1.1 above, except that such certificate shall not bear such restrictive legend
if in the opinion of counsel for such holder and the Company such legend is not
required in order to establish compliance with any provisions of the Act.
SECTION 2
REGISTRATION RIGHTS
-------------------
The Company hereby grants to each of the Holders the registration rights set
forth in this Section 2, with respect to the Registrable Securities (as defined
below) owned by such Holders. The Company, Shareholder and the Holders agree
that the registration rights provided herein set forth the sole and entire
agreement, and supersede any prior agreement, between the Company, Shareholder
and the Holders with respect to registration rights for the Company's
securities.
2.1 Certain Definitions. As used in this Agreement:
(a) The terms "register," "registered" and "registration" refer to a
registration effected by filing with the SEC a registration statement (the
"Registration Statement") in compliance with the Act, and the declaration or
ordering by the SEC of the effectiveness of such Registration Statement.
(b) The term "Registrable Securities" means (i) the Shares, (ii) any securities
of the Company issued or issuable as a dividend or other distribution with
respect to, or in exchange or in replacement of, the Shares or any other
Registrable Securities; provided, however, that Shares or other securities shall
only be treated as Registrable Securities if and so long as (A) they have not
been sold to or through a broker or dealer or underwriter in a public
distribution or a public securities transaction, (B) they have not been sold in
a transaction exempt from the registration and prospectus delivery requirements
of the Act under Section 4 (1) thereof so that all transfer restrictions and
restrictive legends with respect thereto are removed upon the consummation of
such sale, and (C) the registration rights associated with such securities have
not been terminated pursuant to Section 2.12 hereof.
(c) The term "Holders" means Shareholder and any transferee who acquires
Registrable Securities in accordance with Section 2.8 hereof for so long as
Shareholder or such transferee, as the case may be, holds Registrable
Securities.
(d) The term "Initiating Holders" means any Holder or Holders of at least a
majority of the Registrable Securities then outstanding and not registered at
the time of any request for registration made pursuant to Section 2.2 of this
Agreement.
-51-
2.2 Demand Registration.
(a) Demand for Registration. If the Company shall receive from Initiating
Holders a written demand that the Company effect a registration (a "Demand
Registration") of the Registrable Securities (other than a registration on Form
S-3 or any related form of registration statement, such a request being provided
for under Section 2.9 hereof), the Company will:
(i) promptly (but in any event within 10 days) give written notice of the
proposed registration to all other Holders; and
(ii) use its best efforts to effect such registration as soon as practicable
in order to permit or facilitate the sale and distribution of such Initiating
Holders' Registrable Securities which are covered by such demand, together with
all or such portion of the Registrable Securities of any Holder or Holders
joining in such demand as are specified in a written demand received by the
Company within 15 days after the Company's written notice of proposed
registration is given, provided that the Company shall not be obligated to take
any action to effect any such registration pursuant to this Section 2.2:
(A) After the Company has completed one (1) such registration pursuant
to this Section 2.2 and the sale of all Shares covered by such registration
(without underwriter cutback pursuant to Section 2.2(b) below) has closed;
or
(B) If each Holder is eligible to sell all of their Registrable
Securities without any volume limitation pursuant to Rule 144 under the Act.
(b) Underwriting. If the Initiating Holders intend to distribute the Registrable
Securities covered by their demand by means of an underwriting, they shall so
advise the Company as part of their demand made pursuant to this Section 2.2,
and the Company shall include such information in the written notice referred to
in Section 2.2(a)(i). In such event, the right of any Holder to registration
pursuant to this Section 2.2 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein.
The Company shall, together with all holders of capital stock of the Company
proposing to distribute their securities through such underwriting, enter into
an underwriting agreement in customary form with the underwriter or underwriters
selected by a majority-in-interest of the Initiating Holders and reasonably
satisfactory to the Company. Notwithstanding any other provision of this Section
2.2, if the underwriter shall advise the Company that marketing factors
(including, without limitation, an adverse effect on the per-share offering
price) require a limitation of the number of shares to be underwritten, then the
Company shall so advise all Holders of Registrable Securities that have
requested to participate in such offering, and the number of shares of
Registrable Securities that may be included in the registration and underwriting
shall be allocated pro-rata among such Holders in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities held by such
Holders at the time of filing the Registration Statement. No Registrable
Securities excluded from the underwriting by reason of the underwriter's
marketing limitation shall be included in such registration.
If any Holder disapproves of the terms of the underwriting, such Holder may
elect to withdraw therefrom by written notice to the Company, the underwriter
and the Initiating Holders. The Registrable Securities so withdrawn shall also
be withdrawn from registration.
If the underwriter has not limited the number of Registrable Securities to be
underwritten, the Company may include securities for its own account (or for the
account of other shareholders) in such registration if the underwriter so agrees
and if the number of Registrable Securities would not thereby be limited.
-52-
(c) Exercise of Demand Rights. Shareholder hereby exercises its Demand
Registration pursuant to this Section 2.2. The Company acknowledges such demand
and confirms that no further notice is required under this Agreement with
respect to such demand.
(d) Registration Delay. If in connection with any Demand Registration pursuant
to this Section 2.2, a registration statement is not declared effective on or
before 180 days after the Holders' written demand, then the Company agrees to
issue additional shares of common stock (the "Additional Shares") to the Holders
participating in such Demand Registration. Additional Shares shall be treated as
Registrable Securities for purposes of this Agreement. The number of Additional
Shares to be issued to each Holder participating in the Demand Registration
shall be computed as follows:
(i) if the registration statement is declared effective more than 180 days,
but not more than 210 days, after the Holders' written demand, the Company shall
issue to each Holder participating in the Demand Registration that number of
Additional Shares which is equal to 5% of the number of Registrable Securities
included by such Holder in the Demand Registration;
(ii) if the registration statement is declared effective more than 210 days,
but not more than 240 days, after the Holders' written demand, then the Company
shall issue to each Holder participating in the Demand Registration that number
of Additional Shares which is equal to 10% of the number of Registrable
Securities included by such Holder in the Demand Registration;
(iii) if the registration statement is declared effective more than 240
days, but not more than 270 days, after the Holders' written demand, then the
Company shall issue to each Holder participating in the Demand Registration that
number of Additional Shares which is equal to 15% of the number of Registrable
Securities included by such Holder in the Demand Registration;
(iv) if the registration statement is declared effective more than 270 days,
but not more than 300 days, after the Holders' written demand, then the Company
shall issue to each Holder participating in the Demand Registration that number
of Additional Shares which is equal to 20% of the number of Registrable
Securities included by such Holder in the Demand Registration;
(v) if the registration statement is declared effective more than 300 days,
but not more than 330 days, after the Holders' written demand, then the Company
shall issue to each Holder participating in the Demand Registration that number
of Additional Shares which is equal to 25% of the number of Registrable
Securities included by such Holder in the Demand Registration; and
(vi) if the registration statement is declared effective more than 330 days
after the Holders' written demand, then the Company shall issue to each Holder
participating in the Demand Registration that number of Additional Shares which
is equal to 30% of the number of Registrable Securities included by such Holder
in the Demand Registration.
2.3 Piggyback Registration.
(a) Company Registration. If at any time or from time to time the Company
undertakes to register any of its securities, either for its own account or for
the account of security holders, other than a registration relating solely to
employee benefit plans, a registration on Form S-4 relating solely to an SEC
Rule 145 transaction or a registration pursuant to Section 2.2 hereof, the
Company will:
(i) promptly (but in any event within 10 days) give to each Holder written
notice thereof; and
(ii) include in such registration (and any related qualification under state
securities laws or other compliance), and in any underwriting involved therein,
all the Registrable Securities specified in a written request or requests, made
-53-
within 15 days after receipt of such written notice from the Company, by any
Holder or Holders, except as set forth in Section 2.3(b) below. Such Registrable
Securities shall only be included to the extent that inclusion will not diminish
the number of securities initially intended to be registered by the Company. The
Company's obligations under this Section 2.3 shall terminate at such time as all
Holders are eligible to sell all of their Registrable Securities without any
volume limitation pursuant to Rule 144 under the Act.
(b) Underwriting. If the registration of which the Company gives notice is for
an underwritten public offering, the Company shall so advise the Holders as a
part of the written notice given pursuant to Section 2.3(a)(i). In such event
the right of any Holder to registration pursuant to this Section 2.3 shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their Registrable
Securities through such underwriting shall, together with the Company and the
other parties distributing their securities through such underwriting, enter
into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by the Company. Notwithstanding any
other provision of this Section 2.3, if the underwriter determines that
marketing factors require a limitation of the number of shares to be
underwritten, the underwriter may limit the number of Registrable Securities to
be included in the registration and underwriting, or may exclude Registrable
Securities entirely from such registration and underwriting subject to the terms
of this Section 2.3. The Company shall so advise all holders of the Company's
securities that would otherwise be registered and underwritten pursuant hereto,
and the number of shares of such securities, including Registrable Securities,
that may be included in the registration and underwriting shall be allocated in
the following manner: shares, other than Registrable Securities and other
securities that have contractual rights with respect to registration similar to
those provided for in this Section 2.3, requested to be included in such
registration by shareholders shall be excluded, and if a limitation on the
number of shares is still required, the number of Registrable Securities and
other securities that have contractual rights with respect to registration that
may be included shall be allocated among the holders thereof in proportion, as
nearly as practicable, to the amounts of Registrable Securities and such other
securities held by each such holder at the time of filing the Registration
Statement. For purposes of any such underwriter cutback, all Registrable
Securities and other securities held by any holder that is a partnership or
corporation, shall also include any Registrable Securities and other securities
held by the partners, retired partners, shareholders or affiliated entities of
such holder, or the estates and family members of any such partners and retired
partners and any trusts for the benefit of any of the foregoing persons, and
such holder and other persons shall be deemed to be a single "selling holder,"
and any pro rata reduction with respect to such "selling holder" shall be based
upon the aggregate amount of shares carrying registration rights owned by all
entities and individuals included in such "selling holder," as defined in this
sentence. No securities excluded from the underwriting by reason of the
underwriter's marketing limitation shall be included in such registration.
Nothing in this Section 2.3(b) is intended to diminish the number of securities
to be included by the Company in the underwriting. If any Holder disapproves of
the terms of the underwriting, it may elect to withdraw therefrom by written
notice to the Company and the underwriter. The Registrable Securities so
withdrawn shall also be withdrawn from registration.
(c) Right to Terminate Registration. The Company shall have the right to
terminate or withdraw any registration initiated by it under this Section 2.3
prior to the effectiveness of such registration whether or not any Holder has
elected to include securities in such registration.
2.4 Expenses of Registration. All expenses incurred in connection with all
registrations effected pursuant to this Agreement, including, without
limitation, all registration, filing and qualification fees (including state
securities law fees and expenses), printing expenses, escrow fees, fees and
disbursements of counsel for the Company (and, if it is reasonably determined
that a separate special counsel for the participating Holders is necessary, the
-54-
reasonable fees and disbursements of one such counsel) and expenses of any
special audits incidental to or required by such registration shall be borne by
the Company; provided, however, that the Company shall not be required to pay
stock transfer taxes or underwriters' discounts or selling commissions relating
to Registrable Securities. Notwithstanding anything to the contrary above, the
Company shall not be required to pay for any expenses of any registration
proceeding under Section 2.2 if the registration request is subsequently
withdrawn at the request of the Holders of a majority of the Registrable
Securities to have been registered, provided, however, that in the event that
Holders holding at least a majority of the Registrable Securities agree to
forfeit their right to a demand registration pursuant to Section 2.2 (in which
event such right shall be forfeited by all Holders), then the Company shall be
required to pay the expenses of such withdrawn registration. In the absence of
such an agreement to forfeit, the Holders of Registrable Securities to have been
registered shall bear all such expenses pro rata on the basis of the Registrable
Securities to have been registered. Notwithstanding the preceding sentence,
however, if at the time of the withdrawal, the Holders have learned of a
materially adverse change in the condition, business or prospects of the Company
from that known to the Holders at the time of their request, then the Holders
shall not be required to pay any of said expenses and shall retain their rights
pursuant to Section 2.2.
2.5 Obligations of the Company. Whenever required under this Section 2 to effect
the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(a) prepare and file with the SEC an appropriate Registration Statement with
respect to such Registrable Securities and use its diligent efforts to cause
such Registration Statement to become effective, and keep such Registration
Statement effective for the lesser of 120 days or until the Holder or Holders
have completed the distribution relating thereto;
(b) prepare and file with the SEC such amendments and supplements to such
Registration Statement and the prospectus used in connection with such
Registration Statement as may be necessary to keep such Registration Statement
effective and to comply with the provisions of the Act with respect to the
disposition of all securities covered by such registration statement;
(c) furnish to the Holders such numbers of copies of a prospectus, including
a preliminary prospectus, in conformity with the requirements of the Act, and
such other documents as they may reasonably request in order to facilitate the
disposition of Registrable Securities owned by them;
(d) use its diligent efforts to register or otherwise qualify the securities
covered by such Registration Statement under such other securities laws of such
states and other jurisdictions as shall be reasonably requested by the Holders
or the managing underwriter, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions;
(e) in the event of any underwritten public offering, enter into and perform
its obligations under an underwriting agreement, in usual and customary form,
with the managing underwriter of such offering. Each Holder participating in
such underwriting shall also enter into and perform its obligations under such
an agreement;
(f) notify each Holder of Registrable Securities covered by such
Registration Statement, at any time when a prospectus relating thereto is
required to be delivered under the Act, of the happening of any event as a
result of which the prospectus included in such Registration Statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing;
-55-
(g) use diligent efforts to list the Registrable Securities covered by such
Registration Statement with any securities exchange on which the Company's stock
is then listed;
(h) make available for inspection by each Holder including Registrable
Securities in such registration, any underwriter participating in any
distribution pursuant to such registration, and any attorney, accountant or
other agent retained by such Holder or underwriter, all financial and other
records, pertinent corporate documents and properties of the Company, as such
parties may reasonably request, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such Holder,
underwriter, attorney, accountant or agent in connection with such Registration
Statement; and
(i) cooperate with Holders including Registrable Securities in such
registration and the managing underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be sold, such certificates to be in such denominations and registered in such
names as such Holders or the managing underwriters may request at least two
business days prior to any sale of Registrable Securities.
2.6 Indemnification.
(a) The Company will, and does hereby undertake to, indemnify and hold
harmless Shareholder and each Holder of Registrable Securities, each of
Shareholder's or Holder's officers, directors, partners and agents, and each
person controlling Shareholder or any Holder, with respect to any registration,
qualification or compliance effected pursuant to this Section 2, and each
underwriter, if any, and each person who controls any underwriter, of the
Registrable Securities held by or issuable to Shareholder or any Holder, against
all claims, losses, damages and liabilities (or actions in respect thereto) to
which they may become subject under the Act, the Securities Exchange Act of
1934, as amended (the "1934 Act"), or other federal or state law arising out of
or based on (i) any untrue statement (or alleged untrue statement) of a material
fact contained in any prospectus, offering circular or other similar document
(including any related Registration Statement, notification, or the like)
incident to any such registration, qualification or compliance, or based on 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 in
light of the circumstances in which they were made, (ii) any violation or
alleged violation by the Company of any federal, state or common law rule or
regulation applicable to the Company in connection with any such registration,
qualification or compliance, or (iii) any failure to register or qualify
Registrable Securities in any state where the Company or its agents have
affirmatively undertaken or agreed in writing that the Company (the undertaking
of any underwriter chosen by the Company being attributed to the Company) will
undertake such registration or qualification on behalf of the Shareholder or
Holders of such Registrable Securities (provided that in such instance the
Company shall not be so liable if it has undertaken its best efforts to so
register or qualify such Registrable Securities) and will reimburse, as
incurred, the Shareholder or each such Holder, each such underwriter and each
such director, officer, partner, agent and controlling person, for any legal and
any other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action; provided that the
Company will not be liable in any such case to Shareholder or any Holder to the
extent that any such claim, loss, damage, liability or expense arises out of or
is based on any untrue statement or omission made in conformity with written
information furnished to the Company by an instrument duly executed by
Shareholder or any Holder or underwriter and stated to be specifically for use
therein.
(b) Each Holder will, and does hereby undertake to indemnify and hold
harmless the Company, each of its directors and officers, and each person
controlling the Company, each underwriter, if any, and each person who controls
any underwriter, of the Company's securities covered by any Registration
Statement filed pursuant to this Agreement, each other Holder, and each of such
other Holder's officers, partners, directors and agents and each person
-56-
controlling such other Holder, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such Registration Statement, prospectus, offering circular or other
document, or 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 in light of the circumstances in which they were made, and will
reimburse, as incurred, the Company, each such underwriter, each such other
Holder, and each such director, officer, partner and controlling person of the
foregoing, for any legal or any other expenses reasonably incurred in connection
with investigating or defending any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) was
made in such Registration Statement, prospectus, offering circular or other
document, in reliance upon and in conformity with written information furnished
to the Company by an instrument duly executed by such Holder and stated to be
specifically for use therein; provided, however, that the liability of each
Holder hereunder shall be limited to the proportion of any such claim, loss,
damage or liability that is equal to the proportion that the public offering
price of the shares sold by such Holder under such Registration Statement bears
to the total public offering price of all securities sold thereunder, but in any
event not to exceed the net proceeds received by such Holder from the sale of
securities under such Registration Statement, It is understood and agreed that
the indemnification obligations of each Holder pursuant to any underwriting
agreement entered into in connection with any Registration Statement shall be
limited to the obligations contained in this subsection 2.6(b).
(c) Each party entitled to indemnification under this Section 2.6 (the
"Indemnified Party") shall give notice to the party required to provide such
indemnification (the "Indemnifying Party") of any claim as to which
indemnification may be sought promptly after such Indemnified Party has actual
knowledge thereof, and shall permit the Indemnifying Party to assume the defense
of any such claim or any litigation resulting therefrom; provided that counsel
for the Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be subject to approval by the Indemnified Party (whose
approval shall not be unreasonably withheld) and the Indemnified Party may
participate in such defense at the Indemnifying Party's expense if
representation of such Indemnified Party would be inappropriate due to actual or
potential conflicting interests between such Indemnified Party and any other
party represented by such counsel in such proceeding; and provided further that
the failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Section 2.6, except
to the extent that such failure to give notice shall materially adversely affect
the Indemnifying Party in the defense of any such claim or any such litigation.
An Indemnifying Party, in the defense of any such claim or litigation, may,
without the consent of each Indemnified Party, consent to entry of any judgment
or enter into any settlement that includes as an unconditional term thereof the
giving by the claimant or plaintiff therein, to such Indemnified Party, of a
release from all liability with respect to such claim or litigation.
(d) In order to provide for just and equitable contribution to joint
liability under the Act in any case in which either (i) any Holder exercising
rights under this Agreement, or any controlling person of any such Holder, makes
a claim for indemnification pursuant to this Section 2.6 but it is judicially
determined (by the entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the last
right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 2.6 provides for indemnification in
such case, or (ii) contribution under the Act may be required on the part of any
such Holder or any such controlling person in circumstances for which
indemnification is provided under this Section 2.6; then, and in each such case,
the Company and such Holder will contribute to the aggregate claims, losses,
damages or liabilities to which they may be subject (after contribution from
others) in such proportion so that such Holder is responsible for the portion
represented by the percentage that the public offering price of the securities
offered by such Holder pursuant to the Registration Statement bears to the
public offering price of all securities offered by such Registration Statement,
-57-
and the Company will be responsible for the remaining portion; provided,
however, that, in any case, (A) no such Holder will be required to contribute
any amount in excess of the public offering price of all securities offered by
it pursuant to such Registration Statement, after deduction of underwriting
discounts and commissions; and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 1l(f) of the Act) will be
entitled to contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.
(e) The indemnities provided in this Section 2.6 shall survive the transfer
of any Registrable Securities by such Holder.
2.7 Information by Holder. The Holder or Holders of Registrable Securities
included in any registration shall furnish to the Company such information
regarding such Holder or Holders and the distribution proposed by such Holder or
Holders as the Company may reasonably request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to in this Section 2.
2.8 Transfer of Registration Rights.
(a) The rights contained in this Agreement to cause the Company to register
the Registrable Securities may be assigned or otherwise conveyed to a transferee
or assignee of Registrable Securities, who shall be considered a "Holder" for
purposes of this Section 2, provided that (i) such transfer is effected in
compliance with Section 1.2 hereof and (ii) such transfer is a "Permitted
Transfer" as defined herein.
(b) For purposes of this Agreement, a "Permitted Transfer" shall mean: (i) a
transaction not involving a change in beneficial ownership; (ii) transactions
involving distribution without consideration by Shareholder to any of its
owners; (iii) transfers by any Holder who is an individual to a trust for the
benefit of such Holder or his family; or (iv) transfers by gift, will or
intestate succession to the spouse, lineal descendants or ancestors of any
Holder who is an individual or spouse of such Holder.
2.9 Delay of Registration. No Holder shall have any right to obtain or seek an
injunction restraining or otherwise delaying any such registration as the result
of any controversy that might arise with respect to the interpretation,
construction or implementation of this Agreement.
2.10 Rule 144 Reporting. With a view to making available to the Holders the
benefits of certain rules and regulations of the SEC that may permit the sale of
the Registrable Securities to the public without registration, the Company
agrees to use its diligent efforts to:
(a) make and keep current public information available within the meaning of
Rule 144 under the Act or any similar or analogous rule promulgated under the
Act;
(b) file with the SEC, in a timely manner, all reports and other documents
required of the Company under the Act and 1934 Act; and
(c) so long as a Holder owns any Registrable Securities, furnish to such
Holder forthwith, upon request, a written statement by the Company as to its
compliance with the reporting requirements which are relevant to compliance with
Rule 144 (at any time commencing 90 days after the effective date of the first
registration filed by the Company for an offering of its securities to the
general public), the Act and the 1934 Act (at any time after it has become
subject to such reporting requirements); a copy of the most recent annual or
quarterly report of the Company; and such other reports and documents as a
Holder may reasonably request in availing itself of any rule or regulation of
the SEC allowing it to sell any such securities without registration.
-58-
2.11 Amendment of Registration Rights. Any provision of this Section 2 may be
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holders of at least a majority of the
Registrable Securities then outstanding and not registered. Any amendment or
waiver effected in accordance with this Section shall be binding upon each
Holder, each future Holder of Registrable Securities and the Company.
2.12 Termination of Registration Rights. The rights of any particular Holder to
cause the Company to register securities under Sections 2.2 or 2.3 hereof shall
terminate as to a particular Holder on the date such Holder is able to dispose
of all of its Registrable Securities in any 90-day period pursuant to Rule 144
under the Act (or any similar or analogous rule promulgated under the Act).
SECTION 3. MISCELLANEOUS
-------------
3.1 Governing Law. This Agreement shall be governed by, and construed and
interpreted in accordance with the laws of the State of Colorado.
3.2 Successors and Assigns. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
3.3 Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement among the parties with regard to the subjects
hereof. Nothing in this Agreement, express or implied, is intended to confer
upon any party, other than the parties hereto and their successors and assigns,
any rights, remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided herein.
3.4 Severability. Any invalidity, illegality or limitation of the enforceability
of any provision of this Agreement with respect to any Holder, whether arising
by reason of the law of any such person's domicile or otherwise, shall in no way
affect or impair the validity, legality or enforceability of this Agreement with
respect to any other Holder. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, it shall, to the extent practicable, be
modified so as to make it valid, legal and enforceable and to retain as nearly
as practicable the intent of the parties, and the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
3.5 Amendment and Waiver. Except as otherwise expressly provided herein, any
term of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance, either
retroactively or prospectively and either for a specified period of time or
indefinitely) with the written consent of the Company and Shareholder (or its
transferees) holding at least a majority of the Shares, voting together as a
single group. Any amendment or waiver effected in accordance with this Section
3.5 shall be binding upon each Holder. Upon the effectuation of each such
amendment or waiver, the Company shall promptly give written notice thereof to
the Holders who have not previously consented thereto in writing.
3.6 Delays or Omissions; Waiver. No delay or omission to exercise any right,
power or remedy accruing to the Company or any Holder shall impair any such
right, power or remedy, nor shall it be construed to be a waiver of any such
breach, default or noncompliance, or any acquiescence therein, or of any similar
breach, default or noncompliance thereafter occurring. It is further agreed that
any waiver, permit, consent or approval of any kind or character on the part of
-59-
the Company or the Holders of any breach, default or noncompliance under this
Agreement or any waiver on the Company's or the Holders' part of any provisions
or conditions of this Agreement must be in writing and shall be effective only
to the extent specifically set forth in such writing and that all remedies,
either under this Agreement, by law, or otherwise afforded to the Company and
the Holders, shall be cumulative and not alternative.
3.7 Notices, etc. All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed effectively given upon
personal delivery or upon confirmed delivery by facsimile or telecopy, or on the
fifth day (or the tenth day if to a party with an address outside of the United
States) following mailing by registered or certified mail, return receipt
requested, postage prepaid, addressed: (a) if to a Holder, at such Holder's
address as the Company maintains for the Holder in its stock transfer records,
or at such other address as such Holder shall have furnished to the Company in
writing, or (b) if to the Company, at 0000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000, or at such other address as the Company shall have
furnished to the Holders in writing.
3.8 Titles and Subtitles. The titles of the sections and subsections of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.
3.9 Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one instrument.
[Signatures are on next page.]
-60-
IN WITNESS WHEREOF, this Registration Rights Agreement has been duly executed
and delivered by the parties as of the date first above written.
USURF AMERICA, INC.
By:
-------------------------------
----------------------------------
Printed Name
----------------------------------
Title
----------------------------------
By:
-------------------------------
----------------------------------
Printed Name
----------------------------------
Title
-61-
Exhibit 6.06(a)
PUC Notice of Approval of Change of Ownership
---------------------------------------------
-62-
Exhibit 6.06(b)
AccuTel Opt-In Documents
------------------------
See Attached.
-63-
Exhibit 9.01 (e)
Form of Investment Letter of Shareholders
-----------------------------------------
May 4, 2004
To the Board of Directors
USURF America, Inc.
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
Re: Stock purchase transaction by and between USURF America, Inc. ("USURF") and
the stockholders of Connect Paging, Inc. ("GAP") (the "Transaction")
Gentlemen:
In connection with the above-referenced transaction, and, particularly, our
receipt of shares of the $.0001 par value common stock of USURF (the "Stock"),
as fully set forth and governed by that certain Stock Purchase Agreement, dated
April______, 2004 (the "Purchase Agreement"), we, as the stockholders of GAP,
acknowledge and represent to USURF the following:
1. We have carefully reviewed the Purchase Agreement and the exhibits
attached thereto and understand and have relied on the information contained
therein and information otherwise provided to us in writing by USURF relating to
the Transaction;
2. All documents, records and books pertaining to the Transaction have been
made available to us for inspection by USURF;
3. We have had a reasonable opportunity to ask questions of and receive
answers from persons acting on behalf of USURF concerning the Transaction and
all such questions have been answered to our complete satisfaction;
4. No oral or written representations have been made or oral or written
information furnished to us or our advisors in connection with the Transaction
which were in any way inconsistent with the information contained in the
Purchase Agreement;
5. We are not acquiring the Stock as a result of or subsequent to any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising, or any solicitation of a subscription by a
person not previously known to the undersigned in connection with investments in
securities generally;
6. Each of us (i) has reached the age of majority in the state in which we
reside, (ii) has adequate means of providing for our current needs and personal
contingencies, (iii) is able to bear the substantial economic risks of acquiring
and holding the Stock for an indefinite period of time, and, (iv) at the present
time, could afford a complete loss of the Stock;
-64-
7. We, alone or together with our advisors, have such knowledge and
experience in financial, tax and business matters so as to enable us to utilize
the information made available to us in connection with the Transaction in order
to evaluate the merits and risks of accepting the Stock as consideration for the
Transaction and to make an informed decision with respect thereto;
8. We are not relying on USURF with respect to the tax and other economic
considerations relating to the Transaction. With regard to such considerations,
we have relied solely on the advice of our own professional advisors;
9. We are acquiring the Stock solely for our own account as principals, for
investment purposes only and not with a view to the resale or distribution
thereof, in whole or in part, and no other person has a direct or indirect
beneficial interest in such Stock;
10. We will not sell or otherwise transfer the Stock without registration
under applicable United Stated securities laws or an exemption therefrom and
fully understand and agree that we must bear the economic risk of this
Transaction for an indefinite period of time because, among other reasons, the
Stock has not yet been registered under any federal or state securities laws
and, therefore, cannot be immediately resold, pledged, assigned or otherwise
disposed of unless they are subsequently so registered or unless an exemption
from such registration is available;
11. We acknowledge that acquisition of the Stock involves a number of
significant risks, including those identified in the most recent periodic
reports filed by USURF with the United Stated Securities and Exchange
Commission, and we hereby accepts such risks; and
12. We acknowledge that, in consummating the Transaction, USURF is relying
on the representations contained in this letter.
Very truly yours,
-----------------------------
Xxxxxxx Xxxxx
-----------------------------
Xxxxx Xxxxx
-----------------------------
Xxxxx Xxxxx
-65-
Exhibit 9.01 (f)
Form of Investment Letter of Purchaser
--------------------------------------
See Attached.
-66-
