SECURITIES PURCHASE AGREEMENT
AND PLAN OF REORGANIZATION
THIS SECURITIES PURCHASE AGREEMENT AND PLAN OF REORGANIZATION ("Agreement")
is entered into on July 3, 1996 by and among VIRTUAL TELECOM, INC., a Delaware
corporation ("VTI-Delaware"); and XXXX XXXXXXX and XXXXXX XXXXX. (Xx. Xxxxxxx
and Xx. Xxxxx are sometimes referred to herein as the "Selling Stockholders.")
R E C I T A L S
A. VTI-Delaware has authorized capital stock consisting of 20,000,000
shares of common stock, $.001 par value, and 10,000,000 shares of preferred
stock, $.001 par value. VTI-Delaware has no shares of Common Stock or Preferred
Stock issued or outstanding.
B. The Selling Shareholders are the sole stockholders of Virtual Telecom
SA, a Switzerland corporation ("Virtual-SA"). Virtual-SA has an authorized
capitalization consisting of 100 uncertificated shares of capital stock, all of
which are issued, outstanding and held by the Selling Shareholders.
C. The Selling Stockholders wish to sell, and VTI-Delaware wishes to
acquire, all of the issued and outstanding shares of Virtual-SA capital stock on
the Closing Date (as defined below), in exchange for VTI-Delaware's transfer to
the Selling Stockholders of an aggregate of 3,193,540 shares of VTI-Delaware
common stock, subject to and upon the terms and conditions hereinafter set
forth.
A G R E E M E N T
It is agreed as follows:
1. SECURITIES PURCHASE AND REORGANIZATION.
1.1 AGREEMENT TO EXCHANGE SECURITIES. Subject to and upon the terms
and conditions set forth herein, each Selling Stockholder agrees to sell,
assign, transfer and deliver to VTI-Delaware, and VTI-Delaware agrees to
purchase from each Selling Stockholder, on the Closing Date, all of the Selling
Shareholders' right, title and interest in and to the outstanding shares of
capital stock of Virtual-SA (collectively, the "Virtual-SA Shares") owned by the
respective Selling Stockholder, in exchange for the transfer, on the Closing
Date, by VTI-Delaware to each Selling Stockholder of 1,596,770 shares VTI-
Delaware's $.001 par value common stock (collectively, the "VTI-Delaware
Shares")
1.2 INSTRUMENTS OF TRANSFER.
(a) VIRTUAL-SA SHARES. Selling Stockholder hereby endorses,
assigns and transfers all of his right and interest in and to the Virtual-SA
Shares. From time to time after the Closing Date, and without further
consideration, the Selling Stockholders will execute and deliver such other
instruments of transfer and take such other actions as VTI-Delaware may
reasonably request in order to more effectively transfer to VTI-Delaware the
securities intended to be transferred hereunder.
(b) VTI-DELAWARE SHARES. VTI-Delaware shall deliver to the
Selling Stockholders on the Closing Date original certificates evidencing VTI-
Delaware Shares, in form and substance satisfactory to the Selling Stockholders,
in order to effectively vest in the Selling Stockholders all right, title and
interest in and to the VTI-Delaware Shares. From time to time after the Closing
Date, and without further consideration, VTI-Delaware will execute and deliver
such other instruments and take such other actions as the Selling Stockholders
may reasonably request in order to more effectively issue to them VTI-Delaware
Shares.
1.3 CLOSING. The closing ("Closing") of the exchange of the Virtual-
SA Shares and the VTI-Delaware Shares shall take place at the offices of
Virtual-SA, at 10:00 a.m., local time, on July 3, 1996, or at such other time
and place as may be agreed to by the Selling Shareholders and VTI-Delaware
("Closing Date").
2. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each
Selling Stockholder severally represents, warrants and covenants to and with
VTI-Delaware with respect to himself, as follows:
2.1 POWER AND AUTHORITY. The Selling Stockholder has all requisite
individual power and authority to enter into and to carry out all of the terms
of this Agreement and all other documents executed and delivered in connection
herewith (collectively, the "Documents"). All individual action on the part of
the Selling Stockholder necessary for the authorization, execution, delivery and
performance of the Documents by the Selling Stockholder has been taken and no
further authorization on the part of the Selling Stockholder is required to
consummate the transactions provided for in the Documents. When executed and
delivered by the Selling Stockholder, the Documents shall constitute the valid
and legally binding obligation of the Selling Stockholder enforceable in
accordance with their respective terms.
2.3 OWNERSHIP OF AND TITLE TO SECURITIES. The Selling Stockholders
represent that they are the sole owner of all of the issued and outstanding
shares of capital stock of Virtual-SA and that there are no warrants, options,
subscriptions, calls, or other similar rights of any kind for the issuance or
purchase of any securities of Virtual-SA held by the Selling Stockholder or any
other persons. The Selling Stockholder represents that the Selling Stockholder
has and will transfer to VTI-Delaware good and marketable title to the Virtual-
SA Shares which he owns, free and clear of all pledges, security interests,
mortgages, liens, claims, charges, restrictions or encumbrances.
2.4 NO GOVERNMENTAL OR OTHER PROCEEDING OR LITIGATION. The Selling
Stockholder represents that, to his best knowledge, no order of any court or
administrative agency is in effect which restrains or prohibits the Selling
Stockholder from consummating the transactions contemplated hereby, and no suit,
action, investigation, inquiry or proceeding by any governmental body or other
person or legal or administrative proceeding has been instituted or threatened
which
questions the validity or legality of the Selling Stockholder's consummation of
the transactions contemplated hereby.
2.5 APPROVALS AND CONSENTS. The Selling Stockholder represents that,
to his best knowledge, there are no permits, consents, mandates or approvals of
public authorities, either Swiss or foreign, federal, state or local, or of any
third party necessary for the Selling Stockholder's consummation of the
transactions contemplated hereby.
2.6 INVESTMENT AND RELATED REPRESENTATIONS. The Selling Stockholder
is aware that neither the VTI-Delaware Shares nor the offer or sale thereof to
the Selling Stockholder has been registered under the U.S. Securities Act of
1933, as amended ("Securities Act"), or under any foreign or state securities
law. The Selling Stockholder acknowledges that the VTI-Delaware Shares are
being offered pursuant to Regulation S under the Securities Act. The Selling
Stockholder acknowledges that it is not a "U.S. person" as defined by Rule
902(o) under the Securities Act, and that it is not acquiring the VTI-Delaware
Shares for the account or benefit of any "U.S. person." The Selling Stockholder
understands that to the extent Regulation S does not apply to VTI-Delaware's
issuance of VTI-Delaware Shares to the Selling Stockholder, the VTI-Delaware
Shares will be characterized as "restricted" securities under U.S. federal
securities laws inasmuch as they are being acquired in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the Securities Act only
in certain limited circumstances. The Selling Stockholder agrees that the
Selling Stockholder will not sell all or any portion of VTI-Delaware Shares
except in accordance with Regulation S, pursuant to registration under the
Securities Act or pursuant to an available exemption from registration under the
Securities Act. The Selling Stockholder understands that each certificate for
VTI-Delaware Shares issued to the Selling Stockholder or to any subsequent
transferee shall be stamped or otherwise imprinted with an appropriate legend
summarizing the restrictions described in this Section 2.6 and that VTI-Delaware
shall refuse to transfer the VTI-Delaware Shares except in accordance with such
restrictions.
3. MISCELLANEOUS.
3.1 CUMULATIVE REMEDIES. Any person having any rights under any
provision of this Agreement will be entitled to enforce such rights
specifically, to recover damages by reason of any breach of any provision of
this Agreement, and to exercise all other rights granted by law, which rights
may be exercised cumulative and not alternatively.
3.2 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto will bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed or
not.
3.3 SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement or the other documents.
3.4 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts when taken together will constitute one and the
same agreement.
3.5 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and understanding of the parties with respect to the subject matter
thereof, and supersedes all prior and contemporaneous agreements and
understandings.
IN WITNESS WHEREOF, each of the parties to this Agreement has executed or
caused this Agreement to be executed as of the date first above written.
"VTI-Delaware"
VIRTUAL TELECOM, INC.,
a Delaware corporation
By: /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx, Chief Executive Officer
"Selling Shareholders"
/s/ Xxxx Xxxxxxx /s/ Xxxxxx Xxxxx
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Xxxx Xxxxxxx Xxxxxx Xxxxx
