SHARE PURCHASE & SALE AGREEMENT
THIS AGREEMENT (the "Agreement"), dated as of June 6, 1997, is entered
into by and between 2d Interactive, Inc., a Delaware corporation ("2d"), and
Global One Distribution & Marketing, Inc., a Delaware corporation ("Global
One").
WHEREAS, 2d and Global One wish to provide for the mutual sale and
exchange of common stock, on the terms and conditions herein set forth.
NOW THEREFORE, in consideration of the premises and the mutual agreements
and understandings herein set forth:
1. ISSUANCE, SALE AND PURCHASE OF THE SHARES
(a) EXCHANGE, ISSUANCE, AND DELIVERY OF CERTIFICATES
(i) Within 30 days of the satisfaction of the conditions precedent
set forth in section 4(c)(i) of this Agreement, 2d shall issue and deliver to
Global One, 19,625 shares of 2d common stock, and Global One shall issue and
deliver to 2d, one-half of the number of Global One common stock shares
determined in accordance with section 1(b)(iii) below.
(ii) Within 30 days of the satisfaction of the conditions precedent
set forth in section 4(c)(ii) of this Agreement, 2d shall issue and deliver
to Global One, 19,625 shares of 2d common, and Global One shall issue and
deliver to 2d, one-half of the number of Global One common stock shares
determined in accordance with section 1(b)(iii) below.
(iii) The total number of common stock shares to be issued by Global
One pursuant to section 1(a)(i) and 1(a)(ii) shall be equal to 550,000 shares
of common stock at $2.00 per share.
(iv) 2d will, on the Closing Date, issue and deliver to Global One,
19,625 shares of 2d common stock, for and in consideration of Global One's
faithful and diligent performance of that certain Distribution Agreement,
subject to applicable cure periods as contained therein, to be entered into
by and between the parties as of the Closing Date, a copy of which is
attached hereto and made a part hereof. In the event of a material breach of
the Distribution Agreement by Global One during the initial term of such
Distribution Agreement, 2d shall have the right, in addition to any other
available remedies available at law or in equity, to repurchase the 2d Shares
issued pursuant to this paragraph (iv), at a purchase price of one cent
($.01) per share. Provided however, the number of 2d Shares that 2d may
purchase pursuant to this purchase option shall be reduced by 10% for each
year the Distribution Agreement remains in full force and effect.
(v) Within 30 days of Global One's satisfaction in every respect of
the conditions set forth in
paragraph 2(a) of the Distribution Agreement with respect to the placement of
1,000 2d PosterCruisers during the first year of the Distribution Agreement,
2d will issue and deliver to Global One, 19,625 shares of 2d common stock.
In the event that the conditions of paragraph 2(a) of the Distribution
Agreement are not satisfied in every respect by Global One or in the event
that there is a material breach of the Distribution Agreement by Global One,
then Global One's right to receive 2d Shares pursuant to this paragraph (iii)
shall terminate and have no further force or effect. In the event of a
material breach of the Distribution Agreement by Global One during the
initial term of such Distribution Agreement, 2d shall have the right to
repurchase the 2d Shares issued pursuant to this paragraph (v), at a purchase
price of one cent ($.01) per share. Provided however, the number of 2d
Shares that 2d may purchase pursuant to this purchase option shall be reduced
by the percentage of PosterCruisers actually placed by Global One (determined
by dividing actual PosterCruiser Placement by 1,000), further provided, that
Global One achieves a minimum placement of 75% of the 1,000 PosterCruisers.
(vi) The Global One and 2d common stock referred to above shall
collectively be referred to as "Shares", and shall be referred to separately
as either the "2d Shares" or the "Global One Shares."
(vii) Until and prior to the issuance of the 2d Shares, the number of
2d Share to be issued pursuant to this Agreement shall be subject to
adjustment (i) in the event that 2d at any time or from time to time after
the date hereof, but prior to the issuance thereof, shall declare or pay any
dividend on common stock payable in common stock, or effect a subdivision of
the outstanding shares of common stock into a greater number of shares of
common stock (by reclassification or otherwise than by payment of a dividend
in common stock), then, in any such event, the number of 2d shares shall be
increased proportionately, and (ii) in the event that the outstanding shares
of 2d common stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of 2d common stock, the number of
2d Shares to be issued to Global One shall, concurrently with the
effectiveness of such combination or consolidation, be proportionately
adjusted.
(b) RESTRICTED NATURE OF THE SHARES
(i) Global One recognizes and acknowledges that:
(1) the 2d Shares have been offered by 2d, and are being
purchased by Global One, without registration pursuant to, and in reliance on
the exemption from registration provided for in Section 4(2) of, the
Securities Act of 1933, as amended (the "Act"),
(2) the disposition of any or all of the 2d Shares by Global One
will be restricted under the Act and the rules and regulations thereunder, and
(3) the certificates for the 2d Shares will each bear a
conspicuous legend which states that the 2d Shares have not been registered
under the Act, and refers to the restrictions on the transferability of the
2d Shares, and the repurchase rights set forth in section 1(a) hereof.
(ii) 2d recognizes and acknowledges that:
(1) the Global One Shares have been offered by Global One, and
are being purchased by 2d without registration pursuant to, and in reliance
on the exemption from registration provided for in Section 4(2) of, the
Securities Act of 1933 as amended (the "Act"),
(2) the disposition of any or all of the Global One Shares by 2d
will be restricted under the Act and the rules and regulations thereunder, and
(3) the certificates for the Global One Shares will each bear a
conspicuous legend which states that the Global One Shares have not been
registered under the Act, and refers to the restrictions on the
transferability thereof.
2. REPRESENTATIONS AND WARRANTIES
OF 2D AND GLOBAL ONE
2d and Global One hereby represent and warrant to each other that:
(a) ISSUE AND SALE OF THE SHARES
Except as otherwise provided in this Agreement, upon fulfillment of the
conditions precedent set forth in paragraph 4, each party will have all
necessary corporate and other power, and all necessary authorization of such
party's board of directors and shareholders, and any other authorization
necessary to issue and sell the Shares to the other party hereunder. The
Shares, when issued and sold hereunder, will be free and clear of any and all
liens, claims, encumbrances and restrictions of every kind, except for
restrictions imposed under the Act and other laws and governmental
regulations applicable to unregistered securities.
(b) CAPITALIZATION
(i) Upon execution of this Agreement, 2d's total outstanding capital
stock consists of 230,744 shares of common stock, exclusive of the 2d Shares
being issued pursuant to this Agreement, with a par value of $.01, and 195
shares of preferred stock, with a par value of $.01. Each share of preferred
stock has the right and option to convert into 461.35 shares of 2d common
stock. In addition, on the Closing Date, there is anticipated to be
outstanding warrants, options and other rights (both vested and non-vested)
to acquire up to 26,675 shares of 2d common stock. The 2d Shares will, when
delivered hereunder, be validly issued, fully authorized and paid, and
non-assessable.
(ii) Upon execution of this Agreement, Global One's outstanding
capital stock consists of 13,010,947, shares of common stock, exclusive of
the Global One Shares being issued pursuant to this Agreement, with a par
value of $.01, and 0 shares of preferred stock, with a par value of $.01. In
addition, on the Closing Date, there is anticipated to be outstanding
warrants, options and other rights (both vested and non-vested) to acquire up
to 3,143,033 shares of Global One common stock. The Global One Shares will,
when delivered hereunder, be validly issued, fully authorized and paid, and
non-assessable.
(c) CORPORATE EXISTENCE AND STANDING
(i) 2d is duly organized, validly existing and in good standing under
the laws of the State of Delaware, and has the corporate power and authority,
and all requisite governmental licenses and consents, to carry on its
business as it is contemplated to be conducted, and to own, lease and operate
its properties. The copies of 2d's Articles of Incorporation (certified as of
the date hereof by 2d's Secretary) and By-laws (certified as of the date
hereof by 2d's Secretary) which have been delivered to Global One are
complete and correct, and there have been no amendments thereto prior to the
Closing Date. The directors and officers of 2d will be at the Closing Date
set forth and certified by the Secretary of 2d. On the Closing Date, 2d will
deliver certified copies of resolutions from its Board of Directors (i)
authorizing the execution of this Agreement, (ii) the issuance of the 2d
Shares, and (iii) the performance of the transactions contemplated by this
Agreement and the Distribution Agreement. On the Closing Date, 2d will
deliver certificates of good standing from the State of Delaware.
(ii) Global One is duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has the corporate power
and authority, and all requisite governmental licenses and consents, to carry
on its business as it is contemplated to be conducted, and to own, lease and
operate its properties. Global One is, or will on the Closing Date be, duly
qualified and in good standing as a foreign corporation, and authorized to do
business in all other states or jurisdictions in which the nature of its
properties owned, or business conducted, necessitates such qualification or
authorization. The copies of Global One's Articles of Incorporation
(certified as of the date hereof by Global One's Secretary) and By-laws
(certified as of the date hereof by Global One's Secretary) which have been
delivered to 2d are complete and correct, and there have been no amendments
thereto prior to the Closing Date. The directors and officers of Global One
will on the Closing Date be set forth and certified by the Secretary of
Global One. On the Closing Date, Global One will deliver certified copies of
resolutions from its Board of Directors (i) authorizing the execution of this
Agreement, (ii) the issuance of the Global One Shares, and (iii) the
performance of the transactions contemplated by this Agreement and the
Distribution Agreement. On the Closing Date, Global One will deliver
certificates of good standing from the State of Delaware.
(d) AUTHORITY
(i) 2d, and any authorized agent signing this Agreement on behalf of
2d, have all necessary corporate, and other legal power, authority and
authorization to execute and deliver this Agreement, and to consummate the
transactions contemplated by this Agreement. This Agreement constitutes a
legal, valid and binding obligation of 2d enforceable in accordance with its
terms. Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated herein, will violate
any provision of the Articles of Incorporation or By-Laws, or violate or
constitute a default under any agreement, instrument or arrangement to or by
which 2d is a party or is bound, or any statute, regulation, order, judgment,
or decree or award of any governmental body, court or arbitrator binding upon
2d.
(ii) Global One, and any authorized agent signing this Agreement on
behalf of Global One, have all necessary corporate, and other legal power,
authority and authorization to execute and deliver this Agreement, and to
consummate the transactions contemplated by this Agreement. This Agreement
constitutes a legal, valid and binding obligation of Global One enforceable
in accordance with its terms. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated herein, will
violate any provision of the Articles of Incorporation or By-Laws, or violate
or constitute a default under any agreement, instrument or arrangement to or
by which Global One is a party or is bound, or any statute, regulation,
order, judgment, or decree or award of any governmental body, court or
arbitrator binding upon Global One.
(e) FINANCIAL STATEMENTS
(i) 2d has furnished to Global One (I) its unaudited balance sheet as
of December 31, 1996, and its related income statement for the year then
ended, and (2) its April 30, 1997, unaudited interim financial statements.
Such statements reasonably present 2d's financial position as of the dates
thereof, and the results of its operations for the periods covered thereby.
Since April 30, 1997, there has been no material adverse change in 2d's
condition, (other than a material reduction in 2d's available cash and
working capital), properties or operations as shown on such financial
statements, except as otherwise disclosed in writing as part of this
transaction, or as reflected on the interim financial statements dated
April 30, 1997, and since such date no dividends have been declared or
paid on any 2d stock.
(ii) Global One has furnished to 2d (1) its audited balance sheet as
of December 31, 1996, and its related income statement for the year then
ended, certified by Deloitte & Touche, certified public accountants, and (2)
its March 31, 1997, interim unaudited financial statements. Such statements
were prepared in accordance with generally accepted accounting principles
consistently applied, and present Global One's financial position as of the
dates thereof, and the results of its operations for the periods covered
thereby. Since March 31, 1997, there has been no material adverse change in
Global One's condition (financial or otherwise), properties or operations as
shown on such financial statements, except as otherwise disclosed in writing
as part of this transaction, or as reflected on the interim financial
statements dated March 31, 1997, and since such date no dividends have been
declared or paid on any Global One stock.
(f) SUBSIDIARIES, JOINT VENTURES, ETC.
(i) As of the date hereof 2d has no subsidiaries, and is not a
shareholder, partner, member, or affiliate of any other corporation, limited
liability company, partnership, or joint venture.
(ii) As of the date hereof Global One has three subsidiaries: OSP
Publishing, Inc., Xxxxx Xxxxxxx Studios, Inc., BEx Corp., and is not a
shareholder, partner, member, or affiliate of any other corporation, limited
liability company, partnership, or joint venture.
(g) PROCEEDINGS
(i) There are no proceedings pending or threatened against or
affecting 2d in any court or before any governmental authority, arbitration
board or tribunal which, if adversely determined, would materially and
adversely affect 2d's business or condition (financial or otherwise), or the
ability of 2d to perform its respective obligations under this Agreement or
any other agreement relating to the transactions contemplated herein. To the
best of its knowledge, 2d is not in default with respect to any order,
judgment or decree of any court or governmental authority.
(ii) There are no proceedings pending or threatened against or
affecting Global One in any court or before any governmental authority,
arbitration board or tribunal which, if adversely determined, would
materially and adversely affect Global One's business or financial condition,
or the ability of Global One to perform their respective obligations under
this Agreement or any other agreement relating to the transactions
contemplated herein. To the best of its knowledge, Global One is not in
default with respect to any order, judgment or decree of any court or
governmental authority.
(h) ACCURACY OF INFORMATION
No information furnished in connection with the transactions contemplated
herein, as of the date hereof, contains any untrue statement or omission of a
material fact required to be stated therein or necessary to make the
statements contained therein not misleading.
(i) TAX RETURNS AND TAX LIABILITIES
Each party has filed all tax returns required to be filed prior to the
date hereof, and has paid in full, or made provisions in the financial
statements described in Section 2(e) for the payment of, all taxes due
thereon. There are no pending audits, assessments or deficiencies, and each
party has not executed or agreed to execute any waivers or extensions of
statutes of limitations with respect to any such taxes.
(j) INVESTMENT REPRESENTATION
(i) 2d is acquiring the Global One Shares for its own account for
investment and not with a view to distribution or resale, and the Global One
Shares will not be sold or transferred unless (i) such sale is registered in
accordance with the provisions of the Act and any applicable state laws or
(ii) 2d delivers an opinion of counsel reasonably satisfactory to Global One
that registration under the Act or any applicable state laws is not required.
2d has such knowledge and experience in financial and business matters that
it is capable of evaluating the merits and risks of an investment in the
Global One Shares, and its financial condition is such that there is no
present necessity or obligation requiring it to dispose
of the Global One Shares to satisfy any commitment, and it is able to bear
the economic risk of the investment in the Global One Shares for an
indefinite period of time. 2d acknowledges that Global One has made available
to 2d the opportunity to request and receive all requested information
concerning Global One and has independently conducted its own due diligence
concerning the facts, risks, and circumstances surrounding Global One's
business and the transactions contemplated by this Agreement.
(ii) Global One is acquiring the 2d Shares for its own account for
investment and not with a view to distribution or resale, and the 2d Shares
will not be sold or transferred unless (i) such sale is registered in
accordance with the provisions of the Act and any applicable state laws or
(ii) Global One delivers an opinion of counsel reasonably satisfactory to 2d
that registration under the Act or any applicable state laws is not required.
Global One has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of an
investment in the 2d Shares, and its financial condition is such that there
is no present necessity or obligation requiring it to dispose of the 2d
Shares to satisfy any commitment, and it is able to bear the economic risk of
the investment in the 2d Shares for an indefinite period of time. Global One
acknowledges that 2d has made available to Global One the opportunity to
request and receive all requested information concerning 2d and has
independently conducted its own due diligence concerning the facts, risks,
and circumstances surrounding 2d's business and the transactions contemplated
by this Agreement.
3. COVENANTS OF 2D AND GLOBAL ONE
Each party hereto hereby agrees that:
(a) CONDUCT OF BUSINESS PRIOR TO THE CLOSING DATE
Except for transactions expressly approved in writing by the other party
hereto, from the date hereof to the Closing Date each party will operate its
business only in the usual, regular and ordinary course of business.
(b) NO ORGANIC CHANGE
Except as provided in subparagraph (d) below, prior to the Closing Date
neither party shall: (i) amend its Articles of Incorporation or By-laws; (ii)
cause or allow a change to be made in its outstanding capital stock by
reclassification, subdivision, reorganization or otherwise; (iii) enter into
or negotiate a merger or consolidation with any other corporation or other
entity; or (iv) sell any substantial assets, or purchase substantially all of
the assets of any other entity.
(c) NO DIVIDENDS, ETC.
Prior to the Closing Date, neither party shall cause a dividend or other
distribution or payment to be declared, paid or made by it with respect to
shares of its capital stock, or cause a purchase,
redemption or other acquisition to be made by it with respect of any of such
shares.
(d) 2D STOCK OFFERING
Notwithstanding the foregoing, 2d shall have the right and opportunity to
pursue an offering of its authorized common or preferred stock, or any other
security, for the purpose of raising capital on such terms and conditions as
the shareholders and/or board of directors of 2d deem appropriate in order to
carry out the business plans and objectives of 2d.
4. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PARTIES
(a) 2d Conditions to Closing
The obligations of 2d to perform and carry out the terms and conditions
of this Agreement shall be contingent upon 2d securing (i) a written waiver
of certain pre-emptive rights of 2d's preferred stock Shareholders, within
twenty (20) business days of acceptance of this Agreement; and, (ii) a
resolution from 2d's Board of Directors approving of this transaction within
five (5) business days of acceptance of this Agreement.
(b) Global One Conditions to Closing
The obligations of Global One to perform and carry out the terms and
conditions of this Agreement shall be contingent upon Global One securing (i)
a resolution from its board of directors approving of this transaction with
five (5) business days of acceptance of this Agreement, and (ii) a Voting
Agreement by and between Global One and Xxxxxxx Xxxxx, Xxxxxxx Xxxxxxx and
Xxxxx Xxxxxxxx as trustees of that certain Voting Trust Agreement dated May
1, 1996, to vote certain common stock shares in accordance with paragraph
6(d) hereof, within five (5) business days of acceptance of this Agreement.
(c) Conditions to Issuance of Shares
(i) The issuance of the 2d Shares and Global One Shares as set forth
in section 1(a)(i) shall be conditioned upon and subject to 2d raising
capital in the aggregate amount of two and one half million dollars
($2,500,000), through an offering of equity, debt, or other securities, or
pursuant to a line-of-credit or equipment lease arrangement within eighteen
(18) months from the Closing Date. In the event that such capital is not
raised by 2d, then each party's obligation to issue such shares shall
terminate, provided however, Global One may elect to waive this condition by
written notice to 2d, upon which the obligations shall remain in full force
and effect, and shall as soon thereafter be completed.
(ii) The issuance of the 2d Shares and Global One Shares as set forth
in section 1(a)(ii) shall be conditioned upon and subject to 2d raising total
capital, including the amount raised pursuant to subparagraph (i) above, of
five million dollars ($5,000,000), through an offering of equity, debt, or
other
securities, or pursuant to a line-of-credit or equipment lease arrangement
within twenty-four (24) months from the Closing Date. In the event that such
capital is not raised by 2d, then each party's obligation to issue such
shares shall terminate, provided however, Global One may elect to waive this
condition by written notice to 2d, upon which the obligations shall remain in
full force and effect, and shall as soon thereafter be completed.
(c) Waiver & Best Efforts
Either party may waive the conditions precedent to its obligations to
perform this Agreement. Absent a waiver or extension of this Agreement for
the fulfillment of each condition, this Agreement shall automatically
terminate upon failure to meet each stated condition. Each party shall use
its best efforts to secure the necessary agreements, documents and approvals
stated herein.
5. CLOSING
(a) TIME AND PLACE
The closing of this transaction will take place at 2d Interactive, Inc.,
at 1:00 p.m. local time, on July 16, 1997 (the "Closing Date"), or at such
other time and date as the parties may agree.
(b) 2D DELIVERIES ON CLOSING DATE
(i) At the Closing, 2d shall deliver to Global One certificates for
the total amount of shares of common stock to be issued to Global One
pursuant to paragraph 1(a)(iv), which certificates shall have been, on the
Closing Date, registered in Global One's name in the stock transfer records
of 2d.
(ii) At the Closing, 2d shall execute and deliver to Global One two or
more fully executed copies of the Distribution Agreement.
(iii) At the Closing, 2d shall execute and deliver to Global One two or
more fully executed copies of the Standstill Agreement and 2d Voting
Agreement.
(iv) At the Closing, 2d shall deliver the resolutions and documents
set forth in paragraph 2(c) hereof.
(c) GLOBAL ONE DELIVERIES ON CLOSING DATE
(i) At the Closing, Global One shall execute and deliver to 2d, two
or more fully executed copies of the Distribution Agreement.
(ii) At the Closing, Global One shall execute and deliver to 2d, two
or more fully executed
copies of the Standstill Agreement and 2d Voting Agreement.
(iii) At the Closing, Global One shall deliver the resolutions and
documents set forth in paragraph 2(c) hereof.
6. POST CLOSING AGREEMENTS
(a) REGISTRATION COVENANTS
(i) If at any time after the Closing Date 2d shall determine to
register under the Act any of the shares of its common stock, 2d will
promptly notify Global One of such determination and give Global One an
opportunity to include any of the shares then held by Global One as part of
such registration, at no cost to Global One, except for its share of
applicable commissions, discounts, and underwriting fees.
(ii) If at any time after the Closing Date Global One shall determine
to register under the Act any of the shares of its common stock, Global One
will promptly notify 2d of such determination and give 2d an opportunity to
include any of the Global One Shares then held by 2d as part of such
registration, at no cost to 2d, except for its share of applicable
commissions, discounts, and underwriting fees.
(iii) Either party's obligation to effect registration of the Shares
for the other party shall include using its best efforts in attempting to
qualify under the Act and any other applicable Blue Sky or state securities
laws as may be necessary to enable such party to offer and sell such shares
or any part thereof. The shares registered pursuant to this section shall be
subject to such restrictions on transfer as may be determined by the board of
directors of the company registering such shares.
(iv) If a registration pursuant to this Section 6 involves an
underwritten offering and the managing underwriter shall advise the company
in writing that in its opinion the number of securities requested to be
included in such registration exceeds the number which can be sold in such
offering, the number of shares of Registrable Securities to be included in
such registration shall be allocated pro rata among all Selling Shareholders
on the basis of the relative number of shares of each shareholder.
(v) In the event of any registration of any securities of either
company under the Securities Act pursuant to Section 3 or 4 hereof, such
company will, and it hereby does, indemnify and hold harmless, to the extent
permitted by law, the seller of any Registrable Securities covered by such
registration statement, its directors and officers, each other Person who
participates as an underwriter in the offering or sale of such securities and
each other Person, if any, who controls such seller or any such underwriter
within the meaning of the Securities Act (collectively, the "Indemnified
Parties"), against any and all losses, claims, damages or liabilities, joint
or several, and expenses to which any of the Indemnified Parties may become
subject under the Securities Act, common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof, whether or not such Indemnified Party is a party thereto) arise out
of or are based upon (i) any untrue statement or alleged untrue statement of
any material fact contained in any registration statement under which such
securities
were registered under the Securities Act, any preliminary, final or summary
prospectus contained therein, or any amendment or supplement thereto, or (ii)
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 then existing. Such company will reimburse each
Indemnified Party for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
liability, action or proceeding; provided that such company shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out
of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement or amendment
or supplement thereto or in any such preliminary, final or summary prospectus
in reliance upon and in conformity with written information furnished to such
company through an instrument duly executed by such seller specifically
stating that it is for use in the preparation thereof, and provided further
that such company will not be liable to any Person who participates as an
underwriter in the offering or sale of Registrable Securities or any other
Person, if any, who controls such underwriter within the meaning of the
Securities Act, under the indemnity agreement in this Section 6(a) with
respect to any preliminary prospectus or the final prospectus or the final
prospectus as amended or supplemented, as the case may be, to the extent that
any such loss, claim, damage or liability of such underwriter or controlling
Person results from the fact that such underwriter sold Registrable
Securities to a person to whom there was not sent or given, at or prior to
the written confirmation of such sale, a copy of the final prospectus
(including any documents incorporated by reference therein) or of the final
prospectus as then amended or supplemented (including any documents
incorporated by reference therein), whichever is most recent, if such company
has previously furnished copies thereof to such underwriter. Such indemnity
shall remain in full force and effect regardless of any investigation made by
or on behalf of such seller or any Indemnified Party and shall survive the
transfer of such securities by such seller.
(vi) INDEMNIFICATION BY THE SELLERS. A party registering securities
pursuant to this Section 6 may require, as a condition to including any
Registrable Securities in any registration statement filed in accordance with
Section 5 hereof, that such company shall have received an undertaking
reasonably satisfactory to it from the prospective seller of such Registrable
Securities or any underwriter, to indemnify and hold harmless (in the same
manner and to the same extent as set forth in Subsection 6(v)) such party
with respect to any statement or alleged statement in or omission or alleged
omission from such registration statement, any preliminary, final or summary
prospectus contained therein, or any amendment or supplement, if such
statement or alleged statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to such
party through an instrument duly executed by such seller or underwriter
specifically stating that it is for use in the preparation of such
registration statement, preliminary, final or summary prospectus or amendment
or supplement, or a document incorporated by reference into any of the
foregoing. Such indemnification shall remain in full force and effect
regardless of any investigation made by or on behalf of such company or any
of the prospective sellers, or any of their respective affiliates, directors,
officers or controlling persons and shall survive the transfer of such
securities by such seller.
(vii) NOTICES OF CLAIMS, ETC. Promptly after receipt by an indemnified
party hereunder of written notice of the commencement of any action or
proceeding involving a claim referred to in the preceding subdivisions of
this Section 6, such indemnified party will, if a claim in respect thereof is
to be made against an indemnifying party, give written notice to the latter
of the commencement of such action; provided that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding subdivisions of
this Section 6, except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice. In case any such action is brought
against an indemnified party, unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist in respect of such claim, the indemnifying party will be
entitled to participate in and to assume the defense thereof, jointly with
any other indemnifying party similarly notified to the extent that it may
wish, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party, of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party for any legal or other expenses subsequently
incurred by the latter in connection with the defense thereof. No
indemnifying party will consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.
(b) GLOBAL ONE RIGHT OF FIRST REFUSAL
In the event that at any time prior to the expiration of one year from
the Closing Date, 2d wishes to issue shares of common stock representing on
the date of issuance fifty-one percent of the outstanding common stock of 2d,
2d shall notify Global One of such desire and shall give Global One the first
right and opportunity, subject to the rights of the 2d Preferred Stock
shareholders, to purchase such shares on certain terms and conditions
determined by 2d. Thereafter, Global One shall have fifteen days in which to
accept such offer and immediately provide for the purchase of such shares, or
decline such offer. In the event that Global One declines such offer and 2d
is able to secure the sale of such shares on terms substantially similar to
the offer or more favorable than the offer, this option shall have no further
force or effect and shall terminate in all respects, provided however, in the
event that 2d is able to secure an offer to sell such interest on financial
terms that are less favorable to 2d then the offer made to Global One, then
Global One shall have the right to match such offer and immediately proceed
with the purchase of such shares in accordance with the terms and conditions
of such offer.
(c) STANDSTILL AGREEMENT
2d and Global One agree to execute and deliver at Closing the Standstill
Agreement attached hereto and made a part hereof.
(d) ELECTION OF 2D DIRECTORS
Within 5 business days of execution of this Agreement, 2d will use its
best efforts, subject to
applicable provisions of Delaware law, to secure the execution of a Voting
Agreement with the trustees of that certain Voting Trust dated May 1, 1996,
that will provide for the right to at all times during which Global One
remains the owner of 5% or more of the outstanding common stock:
(i) to vote his or its shares of stock to elect to the Board of
Directors of 2d one person nominated by Global One and reasonably
satisfactory to 2d, and
(ii) in the event of a vacancy in a position held by a director
nominated by Global One, to vote his or its shares of stock and/or to take
appropriate steps to cause the remaining directors to appoint a Global One
nominee to fill such vacancy.
The initial election of a Global One representative shall occur with 30 days
of the Closing Date. The covenants contained in this Section 6(d) shall be
binding upon all transferees and assigns of any voting securities of 2d now
or at any time held by the Shareholders or any of them, and the Shareholders
jointly and severally agree that all such securities shall bear a legend
referring to the terms of this Section 6(d).
(e) RIGHT TO PARTICIPATE IN GLOBAL ONE BOARD MEETINGS
From and after the Closing Date, 2d shall have the right to receive from
Global One reasonable advance written notice of all meetings of the Board of
Directors of Global One, and further, shall have the right to nominate a
representative of 2d who may participate in such meeting in person, by
telephone, by video conference, or by other means. Such 2d representative
shall not be entitled to any vote on the board of directors and shall have no
liability with respect to the actions taken by such Global One board of
directors. In addition, copies of any and all resolutions, minutes, and
other actions taken by the Board of Global One shall be timely given to such
2d representative.
(f) RIGHT OF FIRST REFUSAL ON TRANSFER OF SHARES
Provided the shares referred to herein have not been registered pursuant
to the Act,
(i) 2d and Global One each agrees that it will not sell, convey,
transfer, pledge, donate or assign any Shares except under the terms and
conditions set forth in this Section.
(ii) If 2d or Global One (the "Offering Party") shall at any time
receive a bona fide arms-length written offer ("Offer") from a responsible
party to purchase for cash any of the Shares being issued pursuant to this
Agreement and owned by the Offering Party (such Shares which are the subject
of the Offer being herein called the "Offered Shares"), which Offer such
party desires in good faith to accept, the Offering Party shall give to the
other party hereto written notice of the Offer by providing such other party
with a copy of the Offer and a full description of all terms thereof
including without limitation price, payment terms and the name and address of
the offerer.
(iii) If the other party hereto desires to purchase the Offered Shares
it shall have the option to purchase all, but not part, of the Offered Shares
at the purchase price and terms specified in the Offer within a period of
forty-five days following the giving of the written notice provided for in
the preceding paragraph.
(iv) If, but only if, such option is not exercised, the Offering Party
shall be free to sell the Offered Shares pursuant to the terms of the Offer
(provided that the purchaser pursuant to such purchase shall acquire such
shares subject to the provisions and restrictions of this Section), at any
time within forty-five days after the end of the forty-five-day period
referred to in the preceding paragraph.
(v) The option provided for in this Section shall be exercisable by
written notice from the party exercising such option to the Offering Party
given within the period of time provided in this Agreement for the exercise
of such option. The Offered Shares shall thereafter be transferred to such
party at a closing to be held at a mutually agreeable place and time not more
than thirty days after exercise of said option.
(g) MUTUAL INDEMNIFICATION
In consideration of the mutual covenants, agreements, and undertakings
set forth therein, each party (the "Indemnifying Party") hereto hereby agrees
to indemnify and hold harmless the other party and its affiliates and the
respective directors, officers, agents, representatives, advisors and
employees and its affiliates and each other person, if any, controlling such
other party or any of its affiliates (each an "Indemnified Person") from and
against all losses, claims, damages, liabilities, actions, taxes and expenses
incurred by any Indemnified Person (including fees and disbursements of
counsel) which are related to or arise, directly or indirectly, out of or in
connection with (i) any material breach of this Agreement or the agreements
attached hereto, or (ii) actions taken or omitted to be taken (including any
untrue statements made or any statements omitted to be made) by the
Indemnifying Party or any of its affiliates. The Indemnifying Party will
reimburse any Indemnified Person for all expenses (including fees and
disbursements of counsel) as they are incurred by such Indemnified Person in
connection with investigating, preparing or defending any such action or
claim, whether or not in connection with pending or threatened litigation in
which such Indemnified Person is a party. The Indemnifying Party also agrees
that no Indemnified Person shall have any liability to the Indemnifying Party
or its affiliates for or in connection, except for such liability for losses,
claims, damages, liabilities, actions, taxes or expenses incurred by the
Indemnifying Party or its affiliates insofar as a court of competent
jurisdiction has determined in a final and nonappealable order that such
liability has resulted primarily from the gross negligence, recklessness, bad
faith or willful misconduct of the Indemnified Person, and the Indemnifying
Party agrees that it will not, and will procure that its affiliates will not,
make any claim against any Indemnified Person in respect of any such
liability. The Indemnifying Party further agrees that it will not, without
the prior written consent of the Indemnified Person (such consent not to be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder.
Promptly after receipt by an Indemnified Person of notice of any
complaint or the commencement of any claim, action, suit or proceeding with
respect to which indemnification is being sought hereunder, such person will
notify the Indemnifying Party in writing of such complaint or of the
commencement of such claim, action, suit or proceeding, but failure so to
notify the Indemnifying Party will not relieve the Indemnifying Party from
any liability for indemnification or reimbursement of expenses hereunder. If
the Indemnifying Party so elects or is requested by such Indemnified Person,
the Indemnifying Party will assume the defense of such action or proceeding,
including the employment of counsel reasonably satisfactory to the
Indemnified Person, and the Indemnifying Party agrees to pay the fees and
disbursements of such counsel. In the event, however, that counsel for such
Indemnified Person reasonably determines in its judgment that having common
counsel would present such counsel with a conflict of interest or if the
Indemnifying Party fails to assume the defense of the claim, action, suit or
proceeding in a timely manner, then such Indemnified Person may employ
separate counsel to represent or defend it in any such claim, action, suit or
proceeding and the Indemnifying Party agrees to pay the fees and
disbursements of such counsel; provided, however, that the Indemnifying Party
will not be required to pay the fees and disbursements of more than one
separate counsel for all Indemnified Persons in any jurisdiction in any
single claim, action, suit or proceeding. In any claim, action, suit or
proceeding the defense of which the Indemnifying Party assumes, the
Indemnified Person will have the right to participate in such litigation and
to retain its own counsel at such Indemnified Person's own expense.
(h) 2D REPURCHASE OPTION
In the event that Global One (i) issues common stock which equals fifty
percent or more of the then outstanding common stock, (ii) receives a tender
offer for the purchase of fifty percent or more of the outstanding shares of
Global One common stock, (iii) declares bankruptcy, becomes insolvent or
makes an assignment for the benefit of creditors, or (iv) replaces two or
more of its directors or executive officers, during any six month period, and
in the reasonable good faith opinion of 2d such circumstances materially
jeopardize Global One's ability to carry out the strategic purposes of this
Distribution Agreement, then 2d shall have the right and option to repurchase
the 2d Shares for the then current fair market value of the 2d Shares as
determined by an independent appraisal to be conducted by an appraiser
selected by the mutual agreement of the parties, or in the event that the
parties cannot agree upon an appraiser, than an appraiser shall be appointed
by an arbitrator who shall be selected pursuant to section 9(b) below. All
2d Shares not yet issued pursuant to this Agreement, shall upon exercise of
this option terminate in all respects along with all rights and obligations
of Global One to issue Global One Shares. Upon exercise of this option by 2d,
the Distribution Agreement shall terminate and all obligations contained
therein shall terminate, except for obligations which would otherwise extend
beyond the term of the Distribution Agreement.. In the event that 2d shall
own any Global One stock at the time of the exercise of this option, it may,
at its election use such stock as part of the purchase price to be paid in
accordance herewith. The value of the Global One stock held by 2d shall be
equal to the value of the stock on the date of exercise of this option as
quoted on the NASDAQ Stock Exchange (Symbol "GOGO").
(i) INCOME TAX ALLOCATIONS/ELECTIONS
On or before the Closing Date, 2d and Global One agree to value for
income tax purposes the stock being transferred to Global One pursuant to
sections 1(a)(iv) and 1(a)(v), and to make any and all income tax elections
that may be necessary in order to preserve the income tax effects of such
allocations. In the event that the parties do not agree on or before the
Closing to such allocations, or in the event that they cannot otherwise
agree, an arbitrator selected pursuant to section 9 shall be appointed to
select an independent account to make such a determination.
7. MISCELLANEOUS
(a) ENTIRE AGREEMENT
This document and the documents referenced herein, set forth the entire
agreement and understanding among the parties relating to the subject matter
contained herein and merges and supersedes all prior and contemporaneous
discussions and documents relating thereto.
(b) WAIVERS
The failure of a party at any time to require another party's performance
of any obligation under this Agreement shall not affect the right to require
performance of that obligation in the future. Any waiver by any party of any
breach of any provision hereof shall not be construed as a waiver of any
continuing or succeeding breach of such provision, a waiver or modification
of the provision itself, or a waiver or modification of any other right under
this Agreement.
(c) ASSIGNMENTS
Neither this Agreement nor any right or obligation hereunder is
assignable in whole or in part, whether by operation of law or otherwise, by
any party without the prior written consent of the other party.
(d) FURTHER DOCUMENTS
Following the execution hereof the parties will, to the extent deemed
reasonably necessary, execute and deliver all such additional documents or
instruments of further assurance as shall be necessary or appropriate to
carry out the intent of this Agreement.
(e) NOTICES
Except as otherwise specifically provided herein, any notice hereunder
may be given by one party to the others in writing and by delivery or tender
either in person or by depositing it in the United
States mail in a sealed envelope, with postage prepaid, addressed:
If to 2d: Xxxxxxx Xxxxx
000 Xxxxx Xx.
Xxxxxx, Xxxxxxxxxxxxx 00000
with copy to: Xxxxxx X. Xxxxxx
Xxxxxx & Associates, Ltd.
000 X. Xxxxxx Xx., Xxxxx 0000
Xxxxxxx, XX 00000
If to Global One: Xxxxxx Xxxxxxx
Global One Distribution & Marketing, Inc.
0000 Xxxxxxxxx Xxxx
Xxxx, XX 00000
with copy to: Xxxxxx X. Xxxxx
Weissmann, Wolff, Xxxxxxx,
Xxxxxxx & Xxxxxxxxx, LLP
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000-0000
or to such other address as the party to which it is addressed shall have
previously designated by notice given in accordance with this Section 7(e).
All such notices shall be effective when delivered in person, or two days
after deposit in the U.S. mail, or one day after deposit with an overnight
courier.
(f) HEADINGS
Descriptive headings contained in this Agreement are for convenience only
and shall not control or affect the meaning or construction of any provisions
hereof.
(g) COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which, when all of the parties have signed one counterpart, shall constitute
together but one and the same instrument. The parties may execute this
Agreement and exchange signatures by facsimile, provided there is proof of
transmission and provided original copies of the same are mailed to the
other party within 3 business
days of execution.
(h) TERMINATION
This Agreement may be terminated or extended any time prior to the
closing by the mutual consent of all of the parties hereto.
(i) EXPENSES
Each party shall bear its legal, accounting and other fees and costs
incurred by such party in negotiating, preparing and carrying out the terms
of this Agreement, whether the issuance and exchange is consummated or this
Agreement is terminated.
(j) SURVIVAL OF WARRANTIES, ETC.
Notwithstanding any investigation made by or on behalf of either party,
all warranties and representations of the parties contained herein or in
documents or certificates delivered pursuant hereto on or prior to the
closing, and all agreements hereunder which shall not have been fully
performed at or prior to the closing, shall survive the closing and the
consummation at the closing of the transactions herein provided to be
consummated at the closing.
(k) AMENDMENT
This Agreement may be amended only by a writing signed by both parties
hereto.
(l) SEVERABILITY
Every provision of this Agreement is intended to be severable, and, if any
term or provision is determined to be illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the legality or
validity of the remainder of this Agreement, and, where possible, such
provision shall be modified to the extent necessary to make it legal, valid,
and enforceable.
(m) BINDING EFFECT
This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective legal representatives,
successors, and permitted assigns.
8. LAW TO GOVERN
The validity, construction and enforceability of this Agreement shall be
governed in all respects by the laws of the State of Delaware without giving
effect to choice of law principles.
9. ARBITRATION OF DISPUTES
(a) AGREEMENT TO ARBITRATE
Except as otherwise provided in herein, any controversy, dispute or claim
between the parties arising out of, related to or in connection with this
Agreement or the performance or breach hereof, shall be submitted to and
settled by arbitration conducted by the American Arbitration Association in
the State of Delaware, or any other mutualy agreeable place,, in accordance
with its commercial arbitration rules then in effect.
(b) ARBITRATOR
Such arbitration shall be by a single arbitrator mutually selected by 2d
and Global One , and if 2d and Global One do not agree within twenty (20)
days after the date of notification of a request for such arbitration made by
either of the parties, the selection of the single arbitrator shall be made
by the American Arbitration Association in accordance with its rules then in
effect.
(c) RELIEF
In addition to, and not in substitution for, any and all other relief in
law or equity that may be granted by the arbitrator, the arbitrator may grant
equitable relief and specific performance to compel compliance hereunder.
(d) DETERMINATION
The determination of the arbitrator shall be accompanied by a written
opinion of the arbitrator and shall be final, binding and conclusive on the
parties, and judgment on the arbitrator's award, including without limitation
equitable relief and specific performance, may be entered in and enforced by
any court having competent jurisdiction thereof.
(e) FEES AND EXPENSES
Fees and expenses of the American Arbitration Association and of the
arbitrator shall be borne as shall be determined by the arbitrator, and the
arbitrator may in his or her discretion award attorneys' fees and expenses in
addition to any other remedy that is allowed, regardless of whether such
remedy includes an award of damages.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first above written.
GLOBAL ONE DISTRIBUTION &
MERCHANDISING, INC.
Attest:
By: /s/ Xxxxxx Xxxxxx
-------------------------- ----------------------------------
CEO , Secretary
------------------------
2D INTERACTIVE, INC.
Attest:
By: /s/ Xxxxxxx Xxxxx
-------------------------- ----------------------------------
Xxxxxxx Xxxxx, President , Secretary
------------------------
