EXHIBIT 3(vii)
AGREEMENT OF SALE
AGREEMENT OF SALE, made as Aug 6 1999, between Ray May, having an address at 000
XxXxxx Xxxx, Xxxxxxx Xxxx, XX 00000, ("Seller"), and Eurotelecom Communications,
Inc., a Delaware corporation, having an address at Mexborough Business Centre,
College Road, Mexborough, South Yorkshire England, S64 9P, ("Purchaser").
WHEREAS, Purchaser desires to acquire, and Seller desires to sell, the shares or
stock of RTC, Inc., upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the covenants and agreements hereafter set
forth, and other valuable consideration, the receipt and sufficiency of which
hereby are acknowledged, the parties hereto agree as follows:
1. AGREEMENT TO SELL
Seller agrees to sell, transfer and deliver to Purchaser, and Purchaser agrees
to purchase, upon the terms and conditions hereinafter set forth, all of shares
of the capital stock of RTC, Inc., a corporation organized under the laws of
Maryland (the "Corporation"), said 1,000 shares constituting all of the
authorized and issued shares of the Corporation (the "Shares").
2. THE ASSETS OF THE CORPORATION
It is the understanding of the parties that the Corporation is the owner of the
following assets (the "Assets"):
a) the inventory of merchandise, parts and supplies of the business (the
"Merchandise");
b) the equipment described in Exhibit A-1 hereto (the "Equipment");
c) the vehicles described in Exhibit A-2 hereto (the "Vehicles");
d) the furniture, fixtures and improvements described in Exhibit A-3
hereto (the "Improvements");
e) the leases described in exhibit A-4 hereto (the "Leases");
f) the accounts receivable of the business outstanding on the closing date
(the "Accounts Receivable");
g) the copyrights described in Exhibit A-5 hereto (the "Copyrights");
h) the patents and rights described in Exhibit A-6 hereto (the "Patents");
i) the contracts and agreement described in Exhibit A-7 hereto (the
"Contracts");
j) the books and records of the business;
k) all right, title and interest of Seller in the name RTC, Inc. and any
variants thereof (the "Name"); and
l) the goodwill of the business (the "Goodwill")
3. PURCHASE PRICE
Purchase price to be paid by Purchaser is 250,000 shares of common stock or the
Purchaser payable at the closing.
4. THE CLOSING.
The "closing" means the settlement of the obligations of Seller and Purchaser to
each other under this agreement, including the payment of the purchase price to
Seller as provided in Article I hereof and the delivery of the closing documents
provided for in Article I hereof. The closing shall be held at the offices of
Xxxxxxx X. Xxxx, 000 Xxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000, or at such other time
and place as maybe determined by the parties at 10A.M. on or about August 18
1999 (the "closing date")
5. CLOSING DOCUMENT
At the closing Seller shall execute and deliver to Purchaser;
(a) the certificate or certificates for the Shares, duly endorsed so as to
effectively transfer ownership of the Shares to Purchaser, together with all
appropriate Federal and State transfer tax stamps affixed
(b) letters of resignation from each director and officer of the Corporation,
effective as of the closing hereunder
(c) the Certificate of Incorporation or other organizational documents of the
Corporation, and the Bylaws. minute book, stock certificate book, and seal of
the Corporation; the Leases; any bills, vouchers, records showing the ownership
of the furniture, furnishings, equipment, other property used in the operation
of' the Corporation; and all other books of account, records and contracts of
the Corporation
(d) such other instruments as may be necessary or proper to transfer to
Purchaser all other ownership interests in the Corporation to be transferred
under this agreement
Sellor shall advise Purchaser of, and cause to be delivered to Purchaser, all
trade secrets and proprietary information pertaining to the business.
6. CREDITORS
Seller represents, to the best of sellers knowledge and belief, that the
Schedule of Creditors, annexed hereto as Exhibit B, sets forth the names and
business addresses of all of the creditors of the Corporation, as of the date
shown thereon, and the amounts owed to each of the creditors, and also the names
and business addresses of all persons who are known to Seller to assert claims
against the Corporation even though such claims are disputed and the amounts of
such disputed claims.
7. REPRESENTATIONS AND WARRANTIES OF SELLER Seller represents and warrants to
Purchaser as follows:
a) Seller has full power and authority to carry out and perform his
undertakings and obligations as provided herein.
b) No action, approval, consent or authorization of any governmental authority
is necessary for Seller to consummate the transactions contemplated hereby.
c) The Corporation is a corporation duly organized in 1990 under the laws
of the State of Maryland, and the Corporation is validly existing and
has not been dissolved,
d) Seller is the owner of the Shares, and the Shares are all of the issued and
outstanding shares of stock of the Corporation. All of the Shares have no
par value, are fully paid and non-assessable, have not been assigned,
pledged or hypothecated, and are free of all liens, claims and encumbrances.
e) The Corporation is the owner of all of the Assets enumerated in Article 2
hereof, free of all liens, claims and encumbrances, except as may be set
forth herein.
f) There are no violations of any law or governmental rule or regulation
pending against Seller, the Shares or the Corporation.
g) The Corporation Schedule of Creditor set forth in Exhibit B is true and
complete in all material respects.
h) There are no judgments, liens, suits, actions ot proceedings pending against
Seller, the Shares or the Corporation.
i) The Corporation has not entered into, and is not subject to, any: (i)
written contract or agreement for the employment of any employee of the
business; (ii) contract with any labor union or guild; (iii) pension,
profit-sharing, retirement, bonus, insurance, or similar plan with respect
to any employee of the business; or (iv) similar contract or agreement
affecting or relating to the Corporation,
j) The Leases are in full force and effect and without any default by the
Corporation thereunder. All copies of the Leases provided by Seller to
Purchaser are true and complete copies of the original Leases.
k) The Contracts are in full force and effect and without any default by the
Corporation thereunder. All copies of the Contracts provided by Seller to
Purchaser arc true and complete copies of the original Contracts.
l) The Corporation has filed each tax return, including without limitation all
income, excise, property, gain, sales, franchise and license tax returns,
required to be filed by the Corporation prior to the date hereof. Each such
return is true, complete and correct, and the Corporation has paid all
taxes, assessments and charges of any governmental authority required to be
paid by it and has created reserves or made provision for all taxes accrued
but not yet payable. No government is now asserting, or to Seller's
knowledge threatening to assert, any deficiency or assessment for additional
taxes or any interest, penalties or fines with respect to the Corporation.
m) The financial statements, balance sheets and other information pertaining to
the Corporation set forth In Exhibit C hereto are true, correct and complete
as of the dates and for the periods set forth therein; have been prepared in
accordance with generally accepted accounting principles consistently
applied; and fairly represent the financial position of the Corporation at
such dates and for such periods. The Corporation had at said dates no
liabilities or obligations of any kind, contingent or otherwise, not
reflected in Exhibit C. Except as shown in Exhibit C, the Corporation owns
outright each asset or item of property reflected therein, free of all
liens, claims and encumbrances. Since said dates and periods, there has been
no material adverse change in the financial condition, assets or liabilities
of the Corporation.
8. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
a) Purchaser is a corporation duly organized and validly existing under the
laws of Delaware, and is duty qualified to do business in New Jersey.
Purchaser has full power and authority to carry out and perform its
undertakings and obligations as provided herein. The execution and delivery
by Purchaser of this agreement and the consummation of the transactions
contemplated herein have been duty authorized by the Board of Directors of
Purchaser and will not conflict with or breach any provision of the
Certificate of Incorporation or Bylaws of Purchaser.
b) No action, approval, consent or authorization of any governmental authority
is necessary for Purchaser to consummate the transactions contemplated
hereby.
9. NO OTHER REPRESENTATIONS
Purchaser acknowledges that neither Seller nor any representative or agent of
Seller has made any representation or warranty (expressed or implied) regarding
the Corporation, or any matter or thing affecting or relating to this agreement,
except as specifically set forth in this agreement. Seller shall not be liable
or bound in any manner by any oral or written statement, representation,
warranty, agreement or information pertaining to the Corporation or this
agreement furnished by any broker, agent or other person, unless specifically
set forth in this agreement
10. CONDUCT OF THE BUSINESS
Seller, until the closing, shall:
a) conduct the business in the normal, useful and regular manner;
b) use his best efforts to preserve the business and the goodwill of the
customers and suppliers of the business and others having relations with
Seller; and;
c) give Purchaser and its duly designated representatives reasonable access to
the premises of the Corporation and the books and records of the
Corporation, and furnish to Purchaser such data and information pertaining
to the Corporation as Purchaser from time to time reasonably may request.
Unless and until the closing shall take place, Purchaser shall hold in
confidence all information obtained in connection with this agreement, and, if
for any reason the closing shall not take place, Purchaser shall return to
Seller all documents received hereunder,
11. CONDITIONS TO CLOSING
The obligations of the parties to close hereunder are subject to the following
conditions:
a) All of the terms, covenants and conditions to be complied with or performed
by the either party under- this agreement on or before the closing shall
have been complied with or performed in all material respects.
b) All representations or warranties of the other party herein are true in all
material respects as of the closing date.
c) On the closing date, there shall be no liens or encumbrances against the
Corporation, except as may be provided for herein.
If Purchaser shall be entitled to decline to close the transactions contemplated
by this agreement, but Purchaser nevertheless shall elect to close, Purchaser
shall be deemed to have waived all claims of any nature arising from the failure
of Seller to comply with the conditions or other provisions of this agreement of
which Purchaser shall have actual knowledge at the closing.
12. INDEMNIFICATION
Each party hereto shall indemnify and hold the other party harmless from and
against all liability, claim, loss, damage or expense, including reasonable
attorneys' fees, incurred or required to be paid by such other party by reason
of any breach or failure of observance or performance of any representation,
warranty or covenant or other provision alibis agreement by such party.
13. EMPLOYMENT DURING TRANSITION PERIOD
In order to provide for an orderly transfer of the operations of the business,
Ray May shall continue to be employed by the Corporation for a period of 3 years
following the closing for the compensation set forth in a separate employment
agreement between the Corporation and Ray May, a copy of which is attached
hereto as Exhibit D.
14. COVENANT NOT TO COMPETE
The Seller shall deliver an agreement by Ray May not to establish, open, be
engaged in, nor in any manner whatsoever become interested, directly or
indirectly, either as employee, owner, partner, agent, shareholder, director,
officer, or otherwise, in any business, trade or occupation similar to the
business sold hereunder, for a period of 5 years from the closing date, within
the following area: Pennsylvania, Delaware, North and South Carolina, Maryland.
Virginia, Washington, D.C.
15. SECURITIES ACT.
A. The Seller represents that he understands that the Shares will be issued
without registration under the Securities Act of 1933, as amended (the
"Act") in reliance upon the private offering exemption contained under
Section 4(2) and 3 (a) of the Act as promulgated by the Securities Exchange
Commission, and that such reliance is based, in part, on the information
herein supplied. For the foregoing reasons, and to induce the Purchaser to
issue and deliver such Shares of Common Stock to the Seller, the Seller
represents and warrants that the information stated in this section 16 is
true, accurate and complete to the best of my knowledge and belief, and the
Seller agrees to notify and supply corrective information to the Purchaser
promptly, if, prior to the closing, any or such information becomes
inaccurate or incomplete.
B. The Seller is aware that no federal or state agency has made any findings or
determination as to the fairness for public or private investment, nor any
recommendation or endorsement, of the Shares as an investment.
C. The Seller is the sole party in interest as a purchaser of the Shares.
D. The Seller recognizes the speculative nature and risks of loss associated
with the Purchaser and confirms that the Shares constitute an investment
which is suitable and consistent with his investment program and that his
financial position enables him to bear the risks of this investment.
E. The Seller is aware that there is no public market for the Shares and, that
it will not be possible to readily liquidate his/her investment.
F. The Seller is acquiring the Shares for investment solely for his/her own
account and not with a view to, or for resale in connection with, any
distribution of such Shares of Common Stock within the meaning of the
Securities Act of 1933, as amended, and the Rules and Regulations
promulgated thereunder (the "Act"). The Seller is aware and agrees that a
restrictive legend will be placed on the certificate for the shares setting
forth this restriction on the sale of the Shares.
G. The Seller is aware and furthermore acknowledges being informed that the
shares have not been registered under the Securities Act of 1933 ("Act") by
reason of a specific exemption thereunder and that the Shares must be held
indefinitely unless they are subsequently registered under the Act or an
exemption from such registration is available and they are disposed of
pursuant to such exemption. In connection therewith, the Seller has been
advised that no party has undertaken an obligation to the undersigned to
cause the Shares to be registered or otherwise exempted under the Act.
H. The Seller further agrees that he will not resell any of the Shares
purchased herein prior to one (1) year from the date of purchase, and
thereafter only in compliance with the registration requirements of the Act
or an available exemption therefrom.
I. The Seller represents and agrees tat he has had sufficient opportunity to
make inquiries of the Purchaser respecting the Shares and the Purchaser, and
that any information so requested has been made available to his
satisfaction, and he has had the opportunity to verify such information. The
undersigned further agrees and represent that he has knowledge and
experience in business and financial matters, and with respect to
investments generally and, in particular, investments generally comparable
to the offering, so as to enable him to utilize such information to evaluate
the risks of this investment and to make an informed investment decision.
16. BROKERAGE
The parties hereto represent and warrant to each other that they have not dealt
with any broker or finder in Connection with this agreement or the transactions
contemplated hereby, and no broker or any other person is entitled to receive
any brokerage commission, finder's fee or similar compensation in connection
with this agreement or the transactions contemplated hereby. Each of the parties
shall indemnify and hold the other harmless from and against all liability,
claim, loss, damage or expense, including reasonable attorneys' fees, pertaining
to any broker, finder or other person with whom such party has dealt
17. ARBRITRATION
Any dispute or controversy arising between the parties hereto regarding any
term, covenant or condition of this agreement or the breach thereof shall, upon
written demand or any party hereto, be submitted to and determined by
arbitration before the American Arbitration Association, in Somerset. New
Jersey, by a panel of three arbitrators, in accordance with the rules of the
Association then in effect. Any awarded rendered shall be made by means of a
written opinion explaining the arbitrators' reasons for the award. The
arbitrators may not amend or vary any provision of this agreement. Judgment upon
the award rendered by the arbitrators may be entered in any court of competent
jurisdiction, which court shall have the power to review such award for
compliance with this agreement.
18. NOTICES
All notices, demands and other communications required or permitted to be given
hereunder shall be in writing and shall be deemed to have been properly given if
delivered by hand or by Federal Express courier or by registered or certified
mail, return receipt requested, with postage prepaid, to Seller or Purchaser, as
the case may be, at their addresses first above written, or at such other
addresses as they may designate by notice given hereunder.
19. SURVIVAL.
The representations, warranties and covenant contained herein shall survive the
delivery of the Xxxx of Sale and shall continue in full force and effect after
the closing, except to the extent waived in writing.
20. FURTHER ASSURANCES
In connection with the transactions contemplated by this agreement, the parties
agree to execute and deliver such further instruments, and to take such further
actions, as may be reasonably necessary or proper to effectuate and carry out
the transactions contemplated in this agreement.
21. ENTIRE AGREEMENT
This agreement contains all of the terms agreed upon between Seller and
Purchaser with respect to the subject matter hereof. This agreement has been
entered into after full investigation. All prior oral or written statements,
representations, promises, understandings and agreements of Seller and Purchaser
are merged into and superseded by this agreement, which alone fully and
completely expresses their agreement.
22. CHANGES MUST BE IN WRITING
No delay or omission by either Seller or Purchaser in exercising any right shall
operate as a waiver of such right or any other right, This agreement may not be
altered, amended, changed, modified, waived or terminated in any respect or
particular unless the same shall be in writing signed by the party to be bound.
No waiver by any party of any breach hereunder shall be deemed a waiver of any
other or subsequent breach.
23. CAPTIONS AND EXHIBITS
The captions in this agreement are for convenience only and are not to be
considered in construing this agreement. The Exhibits annexed to this agreement
are an integral part of this agreement, and where there is any reference to this
agreement it shall be deemed to include said Exhibits.
24. GOVERNING LAW
This agreement shall be governed by and construed in accordance with the laws of
the State of Maryland. If any provisions of this agreement shall be
unenforceable or invalid, such unenforceable or invalidity shall not affect the
remaining provisions of this agreement.
25. BINDING EFFECT
This agreement shall not be considered an offer or an acceptance of an offer by
Seller, and shall not be binding upon Seller until executed and delivered by
both Seller and Purchaser. Upon such execution and delivery, this agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, successors and permitted assigns.
IN WITNESS WHEREOF, the parties have executed this agreement as of the date
above written.
/s/ Ray May
-------------------------------------
Ray May
EUROTELECOM COMMUNICATIONS INC
By:
-------------------------------------
President
EXHIBIT A-1
EQUIPMENT
Computers
Dell
HP
Toshiba
Fax Phone
HP
Printer
Xxxxxx
Cell Phone
Spirit
EXHIBIT A-2
VEHICLES
EXHIBIT A-3
IMPROVEMENTS
EXHIBIT A-4
THE LEASES
EXHIBIT A-5
COPYRIGHTS
EXHIBIT A-6
PATENTS
EXHIBIT A-7
CONTRACTS
EXHIBIT B
SCHEDULE OF CONTRACTS
EXHIBIT C
FINANCIAL STATEMENTS OF THE CORPORATION
