AGREEMENT AND PLAN OF MERGER
AMONG
ENRON GLOBAL MARKETS, LLC,
WEBMODAL ACQUISITION CORP.
XXXXXXXXXXX X. XXXXXX
STONEPATH GROUP, INC.
AND
WEBMODAL, INC.
FEBRUARY 8, 2001
TABLE OF CONTENTS
ARTICLE I THE MERGER
1.1 The Merger..........................................................................................1
1.2 Closing Date........................................................................................1
1.3 Consummation of the Merger..........................................................................2
1.4 Effects of the Merger...............................................................................2
1.5 Certificate of Incorporation; Bylaws................................................................2
1.6 Directors and Officers..............................................................................2
1.7 Conversion of Securities............................................................................2
1.8 Exchange of Certificates............................................................................3
1.9 Lost Certificates...................................................................................4
1.10 Taking of Necessary Action; Further Action.........................................................4
ARTICLE II REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of EGM and Sub.......................................................4
(a) Organization...............................................................................4
(b) Authorization and Validity of Agreement....................................................4
(c) No Approvals or Notices Required; No Conflict with
Instruments to which EGM or Sub is a Party.................................................4
2.2 Representations and Warranties of Webmodal..........................................................5
(a) Organization and Compliance with Law.......................................................5
(b) Capitalization, Subsidiaries...............................................................5
(c) Authorization and Validity of Agreement....................................................7
(d) No Approvals or Notices Required; No Conflict with
Instruments to which Webmodal is a Party...................................................7
(e) Financial Statements.......................................................................8
(f) Absence of Undisclosed Liabilities.........................................................8
(g) Conduct of Business in the Ordinary Course; Absence of Certain Changes and Events..........8
(h) Litigation.................................................................................9
(i) Employee Benefit Plans.....................................................................9
(j) Taxes.....................................................................................11
(k) Environmental Matters.....................................................................12
(l) Insurance.................................................................................13
(m) Affiliate Transactions....................................................................13
(n) Contracts.................................................................................13
(o) Business Relationships....................................................................14
(p) Accounts Receivable.......................................................................14
(q) Intellectual Property.....................................................................14
(r) Labor Relations...........................................................................15
(s) Severance, Termination, Change in Control and Similar Agreements..........................16
(t) No Excess Parachute Payments..............................................................16
(u) Brokers...................................................................................16
(v) Disclosure................................................................................16
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2.3 Representations and Warranties of Stonepath........................................................16
(a) Organization..............................................................................16
(b) Authorization and Validity of Agreement...................................................16
(c) Webmodal Stock Ownership..................................................................17
ARTICLE III COVENANTS OF WEBMODAL PRIOR TO THE EFFECTIVE TIME
3.1 Conduct of Business by Webmodal Pending the Merger.................................................17
3.2 Notice to Warrant Holders..........................................................................19
3.3 Meeting of Stockholders of Webmodal................................................................19
3.4 Cancellation of Carrier Equity Program.............................................................19
3.5 Termination of Advisory Panel......................................................................20
3.6 Termination of External Sales Representatives......................................................20
3.7 Termination of Webmodal 401(k) Savings Plan........................................................20
3.8 No Solicitation....................................................................................20
ARTICLE IV ADDITIONAL AGREEMENTS
4.1 Voting Agreement and Proxies.......................................................................20
4.2 Filings; Consents; Reasonable Efforts..............................................................21
4.3 Notification of Certain Matters....................................................................21
4.4 Agreement to Defend................................................................................21
4.5 Termination of Stonepath Warrant...................................................................22
4.6 Repayment of Stonepath Debt........................................................................22
4.7 Escrow of Portion of Kravas' Merger Consideration..................................................22
4.8 Webmodal Employee Benefits.........................................................................24
4.9 Webmodal Options...................................................................................24
4.10 Cancellation of Vested and Vesting Webmodal Stock Options.........................................24
4.11 Post-Effective Time Mailing.......................................................................25
ARTICLE V CONDITIONS
5.1 Conditions to Obligation of Each Party to Effect the Merger........................................25
5.2 Additional Conditions to Obligations of EGM and Sub................................................26
5.3 Additional Conditions to Obligations of Webmodal...................................................27
ARTICLE VI INDEMNIFICATION
6.1 Indemnification by Kravas, Webmodal and Stonepath..................................................27
6.2 Indemnification by EGM and Sub.....................................................................29
6.3 Conditions of Indemnification......................................................................29
6.4 Exclusive Remedy for Breach........................................................................30
6.5 Indemnification of Kravas..........................................................................30
ARTICLE VII MISCELLANEOUS
7.1 Termination........................................................................................31
7.2 Waiver and Amendment...............................................................................32
7.3 Nonsurvival of Representations, Warranties and Agreements..........................................32
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7.4 Public Statements..................................................................................32
7.5 Assignment.........................................................................................33
7.6 Notices............................................................................................33
7.7 Governing Law......................................................................................34
7.8 Severability.......................................................................................34
7.9 Counterparts.......................................................................................34
7.10 Headings..........................................................................................34
7.11 Entire Agreement; Third Party Beneficiaries.......................................................34
7.12 Schedules.........................................................................................34
7.13 Disclosure........................................................................................34
7.14 Expenses..........................................................................................34
7.15 Binding Arbitration...............................................................................34
Schedules and Exhibits
Schedule 1.6 - Officers of Surviving Corporation
Schedule 2.2(b) - Capitalization
Schedule 2.2(d) - Approvals
Schedule 2.2(f) - Liabilities
Schedule 2.2(g) - Conduct of Business
Schedule 2.2(i) - Benefit Plans, Etc.
Schedule 2.2(j) - Tax Matters
Schedule 2.2(l) - Insurance
Schedule 2.2(m) - Affiliate Transactions
Schedule 2.2(n) - Contracts
Schedule 2.2(o) - Business Relationships
Schedule 2.2(q) - Intellectual Property
Schedule 2.2(s) - Severance, Termination and Change of Control
Agreements
Schedule 2.2(t) - Parachute Payments
Schedule 4.9 - Employment, Consulting and Severance Terms
Exhibit A - Form of Escrow Agreement
Exhibit B - Form of Guaranty
Exhibit C - Form of Legal Opinion of Xxxxx, Xxxxx & Xxxxx
Exhibit D - Form of Legal Opinion of Gardere Xxxxx Xxxxxx LLP
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger, dated as of the 8th day of February,
2001 (the "Agreement"), is among Enron Global Markets, LLC, a Delaware limited
liability company ("EGM"), Webmodal Acquisition Corp., a newly formed Delaware
corporation and a wholly owned subsidiary of EGM ("Sub"), Xxxxxxxxxxx X. Xxxxxx
("Kravas"), Stonepath Group, Inc. (formerly known as Net Value Holdings, Inc.),
a Delaware corporation ("Stonepath"), and Webmodal, Inc., a Delaware corporation
("Webmodal").
WITNESSETH:
WHEREAS, subject to and in accordance with the terms and conditions of
this Agreement, the respective Boards of Directors of Sub and Webmodal, and EGM
as sole stockholder of Sub, after determining that it is in the best interests
of their respective stockholders, have approved the merger of Sub with and into
Webmodal (the "Merger"), whereby each issued and outstanding share of Series A
Convertible Preferred stock, $1.00 par value per share, of Webmodal (the
"Webmodal Preferred Stock") and common stock, $0.0001 par value per share, of
Webmodal (the "Webmodal Common Stock") not owned directly or indirectly by
Webmodal will be converted into the right to receive cash as provided herein;
WHEREAS, the parties hereto desire to set forth certain
representations, warranties and covenants made by each to the other as an
inducement to the consummation of the Merger;
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties and covenants herein contained, the parties hereto
hereby agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Subject to and in accordance with the terms and
conditions of this Agreement and in accordance with the General Corporation Law
of the State of Delaware (the "DGCL"), at the Effective Time (as defined in
Section 1.3) Sub shall be merged with and into Webmodal. As a result of the
Merger, the separate corporate existence of Sub shall cease and Webmodal shall
continue as the surviving corporation (sometimes referred to herein as the
"Surviving Corporation"), and all the properties, rights, privileges, powers and
franchises of Webmodal and Sub shall vest in the Surviving Corporation, without
any transfer or assignment having occurred, and all debts, liabilities and
duties of Webmodal and Sub shall attach to the Surviving Corporation, all in
accordance with the DGCL.
1.2 Closing Date. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Gardere Xxxxx
Xxxxxx L.L.P., 0000 Xxxxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, as soon as
practicable after the satisfaction or waiver of the conditions set forth in
Article V or at such other time and place and on such other date as EGM and
Webmodal shall agree; provided, that the closing conditions set forth in Article
V shall have been satisfied or waived at or prior to such time. The date on
which the Closing occurs is herein referred to as the "Closing Date."
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1.3 Consummation of the Merger. As soon as practicable on the Closing
Date, the parties hereto will cause the Merger to be consummated by filing with
the Secretary of State of Delaware a certificate of merger in such form as
required by, and executed in accordance with, the relevant provisions of the
DGCL. The "Effective Time" of the Merger as that term is used in this Agreement
shall mean such time as the certificate of merger is duly filed with the
Secretary of State of Delaware.
1.4 Effects of the Merger. The Merger shall have the effects set forth
in the applicable provisions of the DGCL.
1.5 Certificate of Incorporation; Bylaws. At the Effective Time, the
Certificate of Incorporation and Bylaws of Webmodal, as in effect immediately
prior to the Effective Time, shall be the Certificate of Incorporation and
Bylaws, respectively, of the Surviving Corporation.
1.6 Directors and Officers. At and after the Effective Time, Xxxxx
Xxxxxxx, Xxxx X. Xxxxxxx, and Xxxxxxx X. XxXxxxxx shall be the directors of the
Surviving Corporation, and shall serve as such until the next annual meeting of
the Surviving Corporation (or until their earlier resignation or removal) or
until their respective successors are duly elected and qualified. At and after
the Effective Time, the officers of the Surviving Corporation shall be as set
forth on Schedule 1.6 hereof, each of whom shall serve in such capacities until
their successors are duly elected or until their earlier resignation or removal.
1.7 Conversion of Securities. Subject to the terms and conditions of
this Agreement, at the Effective Time, by virtue of the Merger and without any
action on the part of EGM, Webmodal, Sub or their stockholders:
(a) Each share of Webmodal Preferred Stock issued and
outstanding immediately prior to the Effective Time, other than shares
of Webmodal Preferred Stock to be cancelled pursuant to Section 1.7(d),
shall be converted into the right to receive a cash payment of $8.88
per share plus all accrued and unpaid dividends on each such share of
Webmodal Preferred Stock (the "Preferred Stock Consideration").
(b) Each of the 800,000 shares of Webmodal Common Stock issued
and outstanding immediately prior to the Effective Time and held of
record by Kravas shall be converted into the right to receive a cash
payment of $4.22.
(c) Each share of Webmodal Common Stock issued and outstanding
immediately prior to the Effective Time, other than any shares of
Webmodal Common Stock referred to in Section 1.7(b) or to be cancelled
pursuant to Section 1.7(d), shall be converted into the right to
receive a cash payment equal to the quotient obtained by dividing (i)
an amount equal to (A) $8,594,470 minus (B) the product of (x) the
Preferred Stock Consideration multiplied by (y) the number of shares of
Webmodal Preferred Stock issued and outstanding immediately prior to
the Effective Time, by (ii) the number of shares of Webmodal Common
Stock issued and outstanding (or deemed outstanding pursuant to Section
3.4 hereof) immediately prior to the Effective Time other than the
800,000 shares of Webmodal Common Stock held of record by Kravas (the
"Common Stock Consideration").
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(d) Each share of Webmodal Preferred Stock and Webmodal Common
Stock held in the treasury of Webmodal and each share of Webmodal
Preferred Stock and Webmodal Common Stock owned by Sub, EGM or any
direct or indirect wholly owned subsidiary of EGM or of Webmodal
immediately prior to the Effective Time shall be cancelled and
extinguished without any conversion thereof and no payment shall be
made with respect thereto.
(e) Any share of Webmodal Common Stock owned by any holder who
properly perfects its right to appraisal rights in accordance with the
DGCL (a "Dissenting Stockholder") shall not be converted into the right
to receive the Common Stock Consideration, but such Dissenting
Stockholder shall be entitled to only such payments as are provided by
the DGCL, which shall be paid by the Surviving Corporation. If any
Dissenting Stockholder shall effectively withdraw or lose (through
failure to perfect or otherwise) its right to appraisal, then, as of
the later of the Effective Time or the occurrence of such event, each
share of Webmodal Common Stock owned by such Dissenting Stockholder
shall automatically be converted into the right to receive the Common
Stock Consideration.
(f) Each share of common stock, par value $1.00 per share, of
Sub issued and outstanding immediately prior to the Effective Time
shall be converted into one share of common stock, $0.0001 par value
per share, of the Surviving Corporation.
1.8 Exchange of Certificates.
(a) From and after the Effective Time, each holder of a
certificate that prior thereto represented shares of Webmodal Preferred
Stock or Webmodal Common Stock shall be entitled, upon surrender
thereof to the Surviving Corporation, to receive in exchange therefor,
a cash payment which the shares of Webmodal Preferred Stock or Webmodal
Common Stock so surrendered shall have been converted as aforesaid.
Until so surrendered and exchanged, each certificate that prior to the
Effective Time represented shares of Webmodal Preferred Stock or
Webmodal Common Stock shall represent solely the right to receive cash.
(b) All cash issued upon the surrender for exchange of
certificates that prior to the Effective Time represented shares of
Webmodal Preferred Stock or Webmodal Common Stock in accordance with
the terms hereof shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of Webmodal
Preferred Stock or Webmodal Common Stock. At and after the Effective
Time, there shall be no further registration of transfers on the stock
transfer books of the Surviving Corporation of the shares of Webmodal
Preferred Stock or Webmodal Common Stock that were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
certificates which prior to the Effective Time represented shares of
Webmodal Preferred Stock or Webmodal Common Stock are presented to the
Surviving Corporation for any reason, they shall be cancelled and
exchanged as provided in this Article I.
(c) None of EGM, Sub, Webmodal, the Surviving Corporation or
their transfer agents shall be liable to a holder of shares of Webmodal
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Preferred Stock or Webmodal Common Stock for any amount properly paid
to a public official pursuant to applicable property, escheat or
similar laws.
1.9 Lost Certificates. If any certificate representing shares of
Webmodal Preferred Stock or Webmodal Common Stock shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming such certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation, the posting by such person of a bond in such
reasonable amount as the Surviving Corporation may direct as indemnity against
any claim that may be made against the Surviving Corporation with respect to
such certificate, and the cash payable in exchange for the shares represented by
such lost, stolen or destroyed certificate shall be paid to such person.
1.10 Taking of Necessary Action; Further Action. The parties hereto
shall take all such reasonable and lawful action as may be necessary or
appropriate in order to effectuate the Merger as promptly as possible. If, at
any time after the Effective Time, any such further action is necessary or
desirable to carry out the purposes of this Agreement and to vest the Surviving
Corporation with full right, title and possession to all assets, property,
rights, privileges, powers and franchises of Webmodal or Sub, such corporations
shall direct their respective officers and directors to take all such lawful and
necessary action.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of EGM and Sub. EGM and Sub hereby
jointly and severally represent and warrant to Webmodal that:
(a) Organization. EGM is a limited liability company, duly
organized, validly existing and in good standing under the laws of
Delaware. Sub is a corporation duly organized, validly existing and in
good standing under the laws of Delaware.
(b) Authorization and Validity of Agreement. EGM and Sub have
all requisite corporate power and authority to enter into this
Agreement and to perform their obligations hereunder. The execution and
delivery by EGM and Sub of this Agreement and the consummation by each
of them of the transactions contemplated hereby have been duly
authorized by all necessary corporate action. This Agreement has been
duly executed and delivered by EGM and Sub and is the valid and binding
obligation of EGM and Sub, enforceable against EGM and Sub in
accordance with its terms.
(c) No Approvals or Notices Required; No Conflict with
Instruments to which EGM or Sub is a Party. Neither the execution and
delivery of this Agreement nor the performance by EGM and Sub of their
respective obligations hereunder, nor the consummation of the
transactions contemplated hereby by EGM and Sub, will (i) conflict with
the LLC Agreement of EGM or the certificate of incorporation or the
bylaws of Sub; (ii) assuming satisfaction of the requirements set forth
in clause (iii) below, violate any provision of law applicable to EGM
and Sub; (iii) except for the filing of a certificate of merger in
accordance with the DGCL, require any consent or approval of, or filing
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with or notice to, any public body or authority, domestic or foreign,
under any provision of law applicable to EGM or Sub; or (iv) require
any consent, approval or notice under, or violate, breach, be in
conflict with or constitute a default (or an event that, with notice or
lapse of time or both, would constitute a default) under, or permit the
termination of any provision of, or result in the creation or
imposition of any lien upon any properties, assets or business of EGM
or Sub under, any note, bond, indenture, mortgage, deed of trust,
lease, franchise, permit, authorization, license, contract, instrument
or other agreement or commitment or any order, judgment or decree to
which EGM or Sub is a party or by which EGM or Sub or any of their
assets or properties is bound or encumbered, except those that have
already been given, obtained or filed or those where the failure to so
give, obtain or file would not have a material adverse effect on the
financial condition, results of operations or business of EGM and Sub,
taken as a whole.
2.2 Representations and Warranties of Webmodal. Webmodal and Kravas
hereby jointly and severally represent and warrant to EGM and Sub that:
(a) Organization and Compliance with Law. Webmodal is a
corporation duly organized, validly existing and in good standing under
the laws of Delaware and has all requisite corporate power and
authority and all necessary governmental authorizations to own, lease
and operate all of its properties and assets and to carry on its
business as now being conducted, except where the failure to be so
organized, existing or in good standing or to have such governmental
authority would not have a material adverse effect on the financial
condition, results of operations or business of Webmodal (a "Webmodal
MAE"). Webmodal is duly qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification necessary, except in such
jurisdictions where the failure to be duly qualified does not and would
not, either individually or in the aggregate, have a Webmodal MAE.
Webmodal is in compliance with all applicable laws, judgments, orders,
rules and regulations, domestic and foreign, except where failure to be
in such compliance would not have a Webmodal MAE.
(b) Capitalization, Subsidiaries.
(i) The authorized capital stock of Webmodal consists
of 10,000,000 shares of Webmodal Common Stock and 3,000,000
shares of preferred stock, par value $1.00 per share, of which
563,000 shares have been designated as Series A Convertible
Preferred Stock (previously defined in Section 1.7(a) as the
"Webmodal Preferred Stock"). As of the date hereof, there are
issued and outstanding 563,000 shares of Webmodal Preferred
Stock and 1,262,400 shares of Webmodal Common Stock, and,
except as set forth on Schedule 2.2(b) hereof, no shares of
Webmodal Common Stock or Webmodal Preferred Stock are held as
treasury shares. As of the date hereof and as of the Closing
Date, Kravas is the record and beneficial holder of 800,000
shares of Webmodal Common Stock, and Stonepath is the record
holder of 551,740 shares of Webmodal Preferred Stock and
122,100 shares of Webmodal Common Stock. Kravas has no
interest in any capital stock of Webmodal or any securities
exercisable for or convertible into shares of capital stock of
Webmodal other than as set forth in this Section 2.2(b). All
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issued shares of Webmodal Preferred Stock and Webmodal Common
Stock were duly authorized and validly issued, are fully paid
and nonassessable, and were issued in compliance with
applicable securities laws and not in violation of any
applicable preemptive rights. Except as set forth in Schedule
2.2(b) hereof, no holder of any issued and outstanding shares
of Webmodal Common Stock or Webmodal Preferred Stock is
entitled to preemptive rights. Except as set forth in Schedule
2.2(b) hereof, Webmodal is not a party to, and is not aware
of, any voting agreement, voting trust or similar agreement or
arrangement relating to any class or series of its capital
stock, or any agreement or arrangement providing for
registration rights with respect to any capital stock or other
securities of Webmodal.
(ii) As of the date hereof, there are outstanding
options (the "Webmodal Options") to purchase an aggregate of
294,350 shares of Webmodal Common Stock under the Webmodal,
Inc. Long-Term Stock Incentive Plan (the "Webmodal Stock
Option Plan"). Of the outstanding options under the Webmodal
Stock Option Plan, options to purchase an aggregate of 52,557
shares of Webmodal Common Stock with an exercise price of less
than $6.16 per share are vested and exercisable as of the date
hereof (the "Vested Webmodal Options") and options to purchase
an aggregate of 4,394 shares of Webmodal Common Stock with an
exercise price of less than $6.16 per share may vest and
become exercisable on or before March 30, 2001 (the "Vesting
Webmodal Options"). A complete listing of all such stock
options under the Webmodal Stock Option Plan, including the
vesting schedule for such options, is set forth in Schedule
2.2(b) hereof. As of the date hereof, Stonepath is the record
holder of warrants to purchase up to 166,600 shares of
Webmodal Common Stock at an exercise price of $8.88 per share
pursuant to Warrant Certificate No. 2 dated October 31, 2000
(the "Stonepath Warrant"), which warrants shall expire at the
Effective Time if not previously exercised. As of the date
hereof, Xxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxxxx, Trustees
under Trust Agreement dated July 6, 1998, are the record
holder of warrants to purchase up to 3,400 shares of Webmodal
Common Stock at an exercise price of $8.88 per share pursuant
to Warrant Certificate No. 3 dated October 31, 2000 (the
"Xxxxxxxx Warrant"), which warrants shall expire at the
Effective Time if not previously exercised. As of the date
hereof, Webmodal is obligated to issue an aggregate of 65,250
shares of Webmodal Common Stock to participants in the
Webmodal Carrier Equity Program, which shares of Webmodal
Common Stock shall be deemed issued immediately prior to the
Effective Time as set forth in Section 3.4 hereof. Other than
as set forth in this Section 2.2(b), there are not now, and at
the Effective Time there will not be, any (A) shares of
capital stock or other equity securities of Webmodal
outstanding, other than Webmodal Common Stock issued pursuant
to the exercise of Vested Webmodal Options or Vesting Webmodal
Options that become exercisable prior to the Effective Time,
or (B) outstanding options, warrants, scrip, rights to
subscribe for, calls or commitments of any character
whatsoever relating to, or securities or rights convertible
into or exchangeable for, shares of any class of capital stock
of Webmodal, or contracts, understandings or arrangements to
which Webmodal is a party, or by which it is or may be bound,
to issue additional shares of its capital stock or options,
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warrants, scrip or rights to subscribe for, or securities or
rights convertible into or exchangeable for, any additional
shares of its capital stock. Without limiting the foregoing,
(A) no subscription agreements were received or accepted in
connection with the proposed offering of up to $4,000,000 of
convertible subordinated notes by Webmodal pursuant to the
private placement memorandum dated October 23, 2000, no such
securities were issued by Webmodal in such proposed offering,
and Webmodal has no obligations or understandings to issue any
such securities in the future, and (B) upon the termination of
the External Sales Representative Agreements listed in
Schedule 2.2(n) hereof pursuant to Section 3.7 hereof,
Webmodal will not issue any shares of its capital stock or any
options, warrants, scrip or rights to subscribe for, or
securities or rights convertible into or exchangeable for, any
additional shares of its capital stock, nor will Webmodal have
any obligation to issue any such capital stock or other
securities, to any of the terminated external sales
representatives.
(iii) Webmodal has no subsidiaries and, except as set
forth in Schedule 2.2(b) hereof, does not own any capital
stock, limited partnership interests, general partnership
interests, or other equity interests in any organization or
entity.
(c) Authorization and Validity of Agreement. Webmodal has all
requisite corporate power and authority to enter into this Agreement
and to perform its obligations hereunder. The execution and delivery by
Webmodal of this Agreement and the consummation by it of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action (subject only, with respect to the Merger,
to approval of the Merger by the affirmative vote of the holders of a
majority of the outstanding shares of Webmodal Preferred Stock and of a
majority of the outstanding shares of Webmodal Common Stock as provided
for in Sections 3.3 and 5.1(a)). On or prior to the date hereof, the
Board of Directors of Webmodal has determined to recommend approval of
the Merger to the stockholders of Webmodal, and such determination is
in effect as of the date hereof. The member of the board of directors
of Webmodal designated by Stonepath pursuant to the Stockholders'
Agreement among Webmodal, Kravas and Stonepath dated May 9, 2000, has
voted in favor of the Merger. This Agreement has been duly executed and
delivered by Webmodal and Kravas and is the valid and binding
obligation of Webmodal and Kravas, enforceable against Webmodal and
Kravas in accordance with its terms.
(d) No Approvals or Notices Required; No Conflict with
Instruments to which Webmodal is a Party. Except as set forth in
Schedule 2.2(d) hereof, neither the execution and delivery of this
Agreement nor the performance by Webmodal of its obligations hereunder,
nor the consummation of the transactions contemplated hereby by
Webmodal, will (i) conflict with the certificate of incorporation or
the bylaws of Webmodal; (ii) assuming satisfaction of the requirements
set forth in clause (iii) below, violate any provision of law
applicable to Webmodal; (iii) except for the filing of a certificate of
merger in accordance with the DGCL, require any consent or approval of,
or filing with or notice to, any public body or authority, domestic or
foreign, under any provision of law applicable to Webmodal; or (iv)
require any consent, approval or notice under, or violate, breach, be
7
in conflict with or constitute a default (or an event that, with notice
or lapse of time or both, would constitute a default) under, or permit
the termination of any provision of, or result in the creation or
imposition of any lien upon any properties, assets or business of
Webmodal under, any note, bond, indenture, mortgage, deed of trust,
lease, franchise, permit, authorization, license, contract, instrument
or other agreement or commitment or any order, judgment or decree to
which Webmodal is a party or by which Webmodal or any of its assets or
properties is bound or encumbered, except those that have already been
given, obtained or filed or those where the failure to so give, obtain
or file would not have a Webmodal MAE.
(e) Financial Statements.
(i) Webmodal has previously furnished to EGM copies
of Webmodal's audited consolidated financial statements
(including a balance sheet as of December 31, 1999, and the
related statements of operations, stockholders equity, and
cash flows for the period from July 28, 1999 (inception)
through December 31, 1999), together with the related audit
report of KPMG LLP, independent certified accountants.
(ii) Webmodal has also previously furnished to EGM
unaudited consolidated financial statements of Webmodal
containing a balance sheet at November 30, 2000 and the
related statements of operations, stockholders equity, and
cash flows for the period from January 1, 2000 through
November 30, 2000.
(iii) The financial statements referred to in
Sections 2.2(e)(i) and (ii) (collectively, the "Financial
Statements") are true and complete in all material respects,
and have been prepared in accordance with U.S. generally
accepted accounting principles ("GAAP") applied on a
consistent basis from period to period, except such changes as
are required or permitted by changes in generally accepted
accounting principles and approved by Webmodal's certified
public accountants, and except that the unaudited consolidated
financial statements do not contain footnotes. The Financial
Statements fairly present in all material respects the
financial condition of Webmodal at the respective dates
thereof and the results of operations of Webmodal for the
periods then ended.
(f) Absence of Undisclosed Liabilities. Except as set forth on
Schedule 2.2(f), as of the date hereof Webmodal has no liabilities,
obligations or contingencies of any nature whatsoever (whether
absolute, accrued, contingent or otherwise) required to be disclosed on
a financial statement (or the notes thereto) prepared in accordance
with GAAP, except for (i) liabilities, obligations or contingencies
which are accrued or reserved against on the Financial Statements and
(ii) liabilities which were incurred after the date of the Financial
Statements in the ordinary course of business.
(g) Conduct of Business in the Ordinary Course; Absence of
Certain Changes and Events. Since December 31, 1999, except as
contemplated by this Agreement or as disclosed in the Financial
Statements or as set forth in Schedule 2.2(g) hereof, there has not
been (i) through the date hereof, any Webmodal MAE, or any condition,
8
event or development that reasonably may be expected to result in a
Webmodal MAE; (ii) any material change by Webmodal in its accounting
methods, principles or practices; (iii) any revaluation by Webmodal of
any of its assets, including, without limitation, writing down the
value of inventory or writing off notes or accounts receivable other
than in the ordinary course of business, other than a write down of its
investment in common stock of Stonepath; (iv) any entry by Webmodal
into any commitment or transaction material to Webmodal other than
pursuant to contracts and agreements listed Schedules 2.2(b), 2.2(i),
2.2(l), 2.2(m), 2.2(n), 2.2(q) or 2.2(s) hereof, (v) any declaration,
setting aside or payment of any dividends or distributions in respect
of the Webmodal Preferred Stock or Webmodal Common Stock or any
redemption, purchase or other acquisition of any of its securities;
(vi) any damage, destruction or loss (whether or not covered by
insurance) materially adversely affecting the properties or business of
Webmodal; (vii) any increase in indebtedness for borrowed money other
than borrowings from Stonepath incurred with the consent of EGM
pursuant to Section 3.1(e) hereof; or (viii) any granting of a security
interest or lien on any property or assets of Webmodal.
(h) Litigation. As of the date hereof, there are no claims,
actions, suits, investigations, inquiries or proceedings pending or, to
the knowledge of Webmodal, overtly threatened against or affecting
Webmodal or any of its properties at law or in equity, or any of its
employee benefit plans or fiduciaries of such plans, or before or by
any federal, state, municipal or other governmental agency or
authority, or before any arbitration board or panel, wherever located.
(i) Employee Benefit Plans.
(i) Schedule 2.2(i) hereof provides a list of each of
the following which is sponsored, maintained or contributed to
by Webmodal or any corporation, trade, business or entity
under common control with Webmodal within the meaning of
Section 414(b), (c), (m) or (o) of the Internal Revenue Code
of 1986, as amended (the "Code") or Section 4001 of ERISA (a
"Webmodal ERISA Affiliate") for the benefit of its employees,
or has been so sponsored, maintained or contributed to within
six years prior to the Closing Date:
(A) each "employee benefit plan," as such
term is defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended
("ERISA"), and any related trust or funding
arrangement ("Plan"); and
(B) each personnel policy, stock option
plan, collective bargaining agreement, bonus plan or
arrangement, incentive award plan or arrangement,
vacation policy, severance pay plan, policy or
agreement, deferred compensation agreement or
arrangement, executive compensation or supplemental
income arrangement, consulting agreement, employment
agreement and each other employee benefit plan,
agreement, arrangement, program, practice or
understanding that is not described in Section
2.1(i)(i)(A) ("Benefit Program or Agreement").
True, correct and complete copies of each of the
Plans, Benefit Programs or Agreements, and all amendments
thereto, have been furnished to EGM. There has also been
furnished to EGM, with respect to each Plan required to file
such report and description, the three most recent annual
reports on Form 5500 and the summary plan description.
9
(ii) Except as otherwise set forth in Schedule 2.2(i)
hereof:
(A) None of the Plans is subject to Title IV
of ERISA, and none of the Plans is a multiemployer
plan within the meaning of Section 3(37) of ERISA;
(B) Each Plan and each Benefit Program or
Agreement has been administered, maintained and
operated in all material respects in accordance with
the terms thereof and in compliance in all material
respects with its governing documents and applicable
law (including, where applicable, ERISA and the
Code);
(C) There is no matter pending with respect
to any of the Plans before any governmental agency,
and there are no actions, suits or claims pending
(other than routine claims for benefits) or, to the
knowledge of Webmodal, threatened against, or with
respect to, any of the Plans or Benefit Programs or
Agreements or their assets;
(D) No act, omission or transaction has
occurred which would result in imposition on Webmodal
or any Webmodal ERISA Affiliate of breach of
fiduciary duty liability damages under Section 409 of
ERISA, a civil penalty assessed pursuant to
Subsections (c), (i) or (l) of Section 502 of ERISA
or a tax imposed pursuant to Chapter 43 of Subtitle D
of the Code; and
(E) Except as provided in Sections 2.2(s),
4.8 or 4.9 hereof or in separate agreements entered
into between EGM and individual employees of
Webmodal, the execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby will not require Webmodal or any
Webmodal ERISA Affiliate to make a larger
contribution to, or pay greater benefits under, any
Plan, Benefit Program or Agreement than it otherwise
would or create or give rise to any additional vested
rights or service credits under any Plan or Benefit
Program or Agreement.
(F) For each Plan that is intended to
qualify under Section 401(a) of the Code, Webmodal
has delivered to EGM a copy of the most recent
determination letter issued by the IRS as to the
qualification thereof, and there have been no
developments or occurrences since the dates of such
determination letter, including, but not limited to
amendment or operation, which would result in the
loss of such qualification.
10
(iii) Each Plan which is an "employee welfare benefit
plan," as such term is defined in Section 3(1) of ERISA,
provides that it may be unilaterally amended or terminated in
its entirety without liability, and no such plan provides for
the accrual of additional liability after such amendment or
termination.
(j) Taxes. Except as set forth in Schedule 2.2(j) hereof, all
federal, state, local, and foreign returns, declarations, reports,
including claims for refunds, estimates, information returns and
statements (including any amendments thereof) ("Tax Returns") of or
relating to any Tax (as defined below) that are required to be filed on
or before the Closing Date by or with respect to Webmodal or any other
corporation that is or was a member of an affiliated group (within the
meaning of Section 1504 (a) of the Code) of corporations of which
Webmodal was a member for any period ending on or prior to the Closing
Date, have been or will be duly and timely filed with appropriate
governmental authorities, and all Taxes, including interest and
penalties, due and payable pursuant to such Tax Returns or otherwise
required to be duly paid or deposited by or with respect to Webmodal
have been paid or adequately provided for in reserves established by
Webmodal. There is no claim against Webmodal with respect to any Taxes,
and no assessment, deficiency or adjustment has been asserted or
proposed with respect to any Tax Return of or with respect to Webmodal
that has not been adequately provided for in reserves established by
Webmodal in the Financial Statements. The total amounts set up as
liabilities for current and deferred Taxes in the Financial Statements
have been prepared in accordance with generally accepted accounting
principles and are sufficient to cover the payment of all Taxes,
including any penalties or interest thereon and whether or not assessed
or disputed, that are, or are hereafter found to be, or to have been,
due with respect to the operations of Webmodal through the periods
covered thereby. Webmodal has (and as of the Closing Date will have)
made all deposits (including estimated tax payments for taxable years
for which its federal income tax return is not yet due) required with
respect to Taxes. No waiver or extension of any statute of limitations
as to any federal, state, local or foreign Tax matter has been given by
or requested from Webmodal. Except for statutory liens for current
Taxes not yet due, no liens for Taxes exist upon the assets of
Webmodal. Webmodal (i) has not filed consolidated income Tax Returns
with any other corporation, (ii) is not a party to any tax sharing or
indemnity agreement, and (iii) has no liability for Taxes of any other
person under Treasury Regulation ss.1.1502-6 (or any similar provision
of state, local or foreign law), as a transferee or successor, by
contract or otherwise.
Webmodal has previously provided to EGM true and correct
copies of all federal, state and local income and franchise Tax
Returns, examination reports and statements of deficiencies asserted or
assessed against or agreed to by Webmodal for all open Tax periods.
None of the assets of Webmodal (i) is property that is required to be
treated as being owned by any other person pursuant to the "safe harbor
lease" provisions of former Section 168(f)(8) of the Code, (ii) is
"tax-exempt use property" within the meaning of Section 168(h) of the
Code, or (iii) secures any debt the interest on which is tax-exempt
under Section 103(a) of the Code.
For purposes of this Agreement, "Tax" or "Taxes" means any and
all taxes, fees, levies, duties, tariffs, imposts and other charges of
any kind (together with any and all interest, penalties, additions to
11
tax and additional amounts imposed with respect thereto) imposed by any
government or taxing authority, including, without limitation: taxes or
other charges on or with respect to income, franchises, windfall
profits, severance, gross receipts, property, sales, use, capital
stock, payroll, employment, social security, workers' compensation,
unemployment compensation, disability or net worth; taxes or other
charges in the nature of excise, withholding, ad valorem, stamp,
transfer, value added or gains taxes; license, registration and
documentation fees; and custom duties, tariffs and similar charges
whether or not disputed; and including any transferee or secondary
liability in respect of any tax (whether imposed by law, contractual
agreement or otherwise) and any liability in respect of any tax as a
result of being a member of any affiliated, consolidated, combined,
unitary or similar group.
(k) Environmental Matters. Webmodal has complied in all
material respects and is in compliance in all material respects with
all applicable Environmental Laws (as defined below) pertaining to its
assets and ownership thereof, and to the operation of its business. As
of the date hereof, Webmodal has not received any written notice, or,
to Webmodal's knowledge, any other notice, alleging that it is in
violation of any applicable Environmental Law relating to any of its
assets or to the use or ownership thereof, or to the operation of its
business.
Neither Webmodal nor, to the knowledge of Webmodal, any other
person has caused or taken any action that will result in, and Webmodal
is not subject to, any material liability or obligation (other than
restrictions on the use of such property or assets imposed by law, none
of which restrictions materially affect the operation of the business
of Webmodal as presently conducted) relating to (i) the environmental
conditions on, under, or about the properties or assets of Webmodal
owned, leased, operated or used by Webmodal or any predecessor thereto
at the present time or in the past, including, without limitation, the
air, soil and groundwater conditions at such properties or (ii) the
past or present use, management, handling, transport, treatment,
generation, storage, disposal or release of any Hazardous Materials.
Webmodal has disclosed and made available to EGM all material
information, including, without limitation, all studies, analyses and
test results, in the possession, custody or control of or otherwise
known to Webmodal relating to (i) the environmental conditions on,
under or about the properties or assets of Webmodal owned, leased,
operated or used by Webmodal or any predecessor in interest thereto at
the present time or in the past, and (ii) any Hazardous Materials used,
managed, handled, transported, treated, generated, stored or released
by Webmodal or any other person on, under, about or from any of the
properties or assets of Webmodal or in connection with the operation of
Webmodal's business.
For purposes of this Agreement, the term "Environmental Laws"
shall mean, as to any given asset or operation of Webmodal, all
applicable laws, statutes, ordinances, rules and regulations of any
public, governmental or regulatory body, agency, department,
commission, board, bureau or other authority or instrumentality
(domestic or foreign), including any court or tribunal pertaining to
protection of the environment. For purposes of this Agreement, the term
"Hazardous Materials" shall mean any substance which is listed or
12
defined as a hazardous substance, hazardous constituent or solid waste
pursuant to any applicable Environmental Law.
(l) Insurance. Schedule 2.2(l) hereof sets forth a list and
brief description of the insurance policies of Webmodal relating to its
properties and the conduct of its business. All premiums due and
arising thereon have been paid and such policies are in full force and
effect. True, correct and complete copies of all such insurance
policies have been provided to EGM.
(m) Affiliate Transactions. Schedule 2.2(m) hereof contains a
list of all contracts, agreements, transactions or commitments between
any stockholder or former stockholder of Webmodal, any officer,
employee or director of Webmodal, any family member of any of the
foregoing or any other affiliate of any of the foregoing (including any
entity in which any of the foregoing has a 5% (or more) ownership
interest), on the one hand, and Webmodal, on the other hand, other than
compensation paid as part of the employment relationship for services
rendered.
(n) Contracts. Set forth on Schedule 2.2(n) hereof is a
complete and accurate list as of the date hereof of all agreements,
licenses, contracts, leases and commitments of the following types (and
all amendments thereto), to which Webmodal is a party or by which it or
any of its properties is bound as of the date hereof, true and correct
copies of which have been provided by Webmodal to EGM:
(i) mortgages, indentures, security agreements and
other agreements and instruments relating to the borrowing of
money or advances of credit;
(ii) partnership or joint venture agreements;
(iii) sales agency or sales representative
agreements, distributorship agreements, supply agreements,
marketing agreements, advertising or other media agreements
and any agreements relating to Intellectual Property not
listed on Schedule 2.2(q);
(iv) agreements to provide funds or to make any
investment (in the form of a loan, capital contribution or
otherwise) in any entity or business;
(v) contracts or binding commitments limiting the
freedom of Webmodal to compete in any line of business or in
any geographical area or with any person or entity;
(vi) contracts or binding commitments obligating
Webmodal to purchase minimum amounts of goods or services,
including a summary of such requirements and a good faith
estimate of Webmodal's purchases of such goods or services as
of January 26, 2001;
(vii) all agreements, contracts or commitments
relating to the Webmodal Carrier Equity Program;
13
(viii) all agreements, contracts or commitments
relating to any real property owned or leased by Webmodal; and
(ix) all other agreements, contracts and commitments
(excluding purchase orders and sales orders created in the
ordinary course of business) (i) any one (or series) of which
in any way involve payments or receipts of more than $50,000
in the course of the year following the date hereof or (ii)
which cannot be cancelled on thirty (30) days' (or less)
notice at no cost or penalty.
As of the date hereof, all of the agreements, licenses,
contracts, leases and commitments and other arrangements listed or
referred to in Schedule 2.2(m) or Schedule 2.2(n) are in full force and
effect and enforceable in accordance with their terms, and except as
listed in Schedule 2.2(n), Webmodal and, to the knowledge of Webmodal,
no other party to such agreement, license, contract, lease or
commitment or other arrangement, has breached any provisions of, or is
in default under, the terms thereof, and to the knowledge of Webmodal,
no event that with the giving of notice, lapse of time or the happening
of any event, or both, would become a default, has occurred thereunder.
(o) Business Relationships. Except as set forth in Schedule
2.2(o) hereof, as of the date hereof Webmodal has not received any
written or, to Webmodal's knowledge, any other notice, that any person
or entity with whom Webmodal does a material amount of business will
not continue to do business with Webmodal after the Effective Time on
terms and conditions substantially the same as those prevailing during
the past 12 months.
(p) Accounts Receivable. All the accounts and notes receivable
of Webmodal as of the Closing Date will be bona fide, will reflect
actual transactions, and will have arisen in the ordinary course of
business, and to Webmodal's knowledge, such accounts will be
collectible in the ordinary course of business (subject to
uncollectible accounts not in excess of Webmodal's historical
experience). Webmodal has delivered to EGM an accurate listing and
dating of all the accounts and notes receivable of it as of January 19,
2001.
(q) Intellectual Property.
(i) For purposes of this Section 2.2(q), the term
"Intellectual Property" means the United States and foreign
trademarks, trade names, trade dress, copyrights, and similar
rights, including registrations and applications to register
or renew the registration of any of the foregoing, the United
States and foreign letters patent and patent applications, and
inventions, processes, designs, formulae, trade secrets,
know-how, confidential information, computer software, data
and documentation, and all similar intellectual property
rights, tangible embodiments of any of the foregoing (in any
medium including electronic media), and licenses of any of the
foregoing.
(ii) Schedule 2.2(q) hereof sets forth a complete and
correct list of all patents and patent applications, trademark
14
registrations and trademark applications and material
unregistered trademarks, and copyright registrations, mask
work, copyright and mask work applications, and material
unregistered copyrights, in each case owned by Webmodal
(together with all other Intellectual Property owned by
Webmodal, the "Owned Intellectual Property"). Except as set
forth in Schedule 2.2(q), Webmodal owns the Owned Intellectual
Property free and clear of any liens or encumbrances. The
Owned Intellectual Property constitutes all of the
Intellectual Property used or held for use in connection with,
necessary for the conduct of, or otherwise material to
Webmodal's business as presently conducted, except for
computer software licensed to Webmodal by third parties and
any other Intellectual Property Licenses (as defined below)
under which Webmodal is a licensee. Schedule 2.2(q) sets forth
a complete and correct list of all licenses and arrangements
(i) pursuant to which the use by any person of Owned
Intellectual Property is permitted by Webmodal and (ii)
pursuant to which the use by Webmodal of Intellectual Property
(other than standard commercially available computer software)
is permitted by any person (collectively, together with any of
the foregoing relating to computer software, the "Intellectual
Property Licenses"). All Intellectual Property Licenses are in
full force and effect in accordance with their terms, and are
free and clear of any liens, claims or encumbrances, except as
set forth in Schedule 2.2(q). Neither Webmodal nor, to the
knowledge of Webmodal, any other party thereto, is in default
under any Intellectual Property License, except where such
default would not have a Webmodal MAE, and, to the knowledge
of Webmodal, no such default is currently threatened. The
conduct of Webmodal's business does not infringe the rights of
any third party in respect of any Intellectual Property,
except as set forth on Schedule 2.2(q). Except as set forth on
Schedule 2.2(q), to the knowledge of Webmodal, none of the
Owned Intellectual Property is being infringed by third
parties. Except as set forth on Schedule 2.2(q), there is no
claim or demand of any person pertaining to, or any proceeding
which is pending or, to Webmodal's knowledge, threatened that
challenges the rights of Webmodal in respect of any Owned
Intellectual Property or Intellectual Property License, or
that claims that any default exists under any Intellectual
Property License. Except as set forth on Schedule 2.2(q), the
Owned Intellectual Property has been duly registered with,
filed in or issued by, as the case may be, the United States
Patent and Trademark Office and United States Copyright Office
or other filing offices, domestic or foreign, to the extent
necessary or, in the reasonable judgment of Webmodal,
desirable, to ensure sufficient protection under any
applicable law, and the same remain in full force and effect.
The consummation of the Merger will not adversely affect any
of Webmodal's rights to any Intellectual Property used by it
in its business.
(r) Labor Relations. Webmodal is not a party to, or bound by,
any collective bargaining agreement, contract or other agreement or
understanding with respect to a labor union or labor organization, and
to the knowledge of Webmodal, there are no organizational efforts with
respect to the formation of a collective bargaining unit presently
being made or threatened involving employees of Webmodal. As of the
date hereof, there are no unfair labor practice complaints against
Webmodal pending before the National Labor Relations Board and there is
no labor strike, dispute, slow down or stoppage, or any union
15
organizing campaign, actually pending or, to the knowledge of Webmodal,
threatened against Webmodal.
(s) Severance, Termination, Change in Control and Similar
Agreements. Except as set forth on Schedule 2.2(s) hereof, Webmodal is
not a party to or bound by any agreement, commitment or arrangement
with or for the benefit of any current or former employee, officer,
director or consultant providing for any severance, termination, change
in control or retention payments or benefits or for the vesting,
enhancement or acceleration of any payments or benefits in connection
with or as a result of, directly or indirectly, any change in control
of Webmodal, nor will Webmodal be a party to or bound by any such
agreement, commitment or arrangement at the Effective Time.
(t) No Excess Parachute Payments. Except as disclosed in
Schedule 2.2(t) hereof, any amount that could be received (whether in
cash or property or the vesting of property) as a result of any of the
transactions contemplated by this Agreement by any employee, officer or
director of Webmodal or any of its affiliates who is a "Disqualified
Individual" (as such term is defined in proposed Treasury Regulation
1.280G-1) under any employment, severance or termination agreement,
other compensation arrangement or benefit plan currently in effect
would not be characterized as an "Excess Parachute Payment" (as such
term is defined in Section 280G(b)(1) of the Code).
(u) Brokers. All negotiations relative to this Agreement and
the transactions contemplated hereby have been carried out by Webmodal
directly with EGM, without the intervention of any person on behalf of
Webmodal in such manner as to give rise to any valid claim by any
person against Webmodal, the Surviving Corporation, EGM or any of their
subsidiaries for a finders' fee, brokerage commission or similar
payment.
(v) Disclosure. This Agreement and each certificate or other
instrument or document furnished by or on behalf of Webmodal or Kravas
at the Closing to EGM, Sub or any agent or representative of EGM or Sub
pursuant hereto, or in connection herewith, taken as a whole, do not
contain any untrue statement of material fact, or omit to state a
material fact, required to be stated herein or therein, or necessary to
make the statements contained herein or therein, in light of the
circumstances under which they were made, not materially misleading.
2.3 Representations and Warranties of Stonepath. Stonepath hereby
represents and warrants to EGM and Sub that:
(a) Organization. Stonepath is a corporation duly organized,
validly existing and in good standing under the laws of Delaware.
(b) Authorization and Validity of Agreement. Stonepath has all
requisite corporate power and authority to enter into this Agreement
and to perform its obligations hereunder. The execution and delivery by
Stonepath of this Agreement and the consummation by it of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action. This Agreement has been duly executed and
16
delivered by Stonepath and is the valid and binding obligation of
Stonepath, enforceable against Stonepath in accordance with its terms.
(c) Webmodal Stock Ownership. Stonepath is the record and
beneficial owner of 551,740 shares of Webmodal Preferred Stock, 122,100
shares of Webmodal Common Stock and warrants to purchase 166,600 shares
of Webmodal Common Stock at an exercise price of $8.88 per share
pursuant to the Stonepath Warrant. Stonepath has no interest in any
capital stock of Webmodal or any securities exercisable for or
convertible into shares of capital stock of Webmodal other than as set
forth in this Section 2.3(c).
ARTICLE III
COVENANTS OF WEBMODAL PRIOR TO THE EFFECTIVE TIME
Webmodal covenants and agrees as follows, and Kravas covenants and
agrees to cause Webmodal to do as follows:
3.1 Conduct of Business by Webmodal Pending the Merger. From the date
of this Agreement until the Effective Time, unless EGM shall otherwise agree in
writing or as otherwise expressly contemplated by this Agreement:
(a) The business of Webmodal shall be conducted only in, and
Webmodal shall not take any action except in, the ordinary course of
business and consistent with past practice;
(b) Webmodal shall not directly or indirectly: (i) issue,
sell, pledge, dispose of or encumber any capital stock of Webmodal
except upon the exercise of Vested Webmodal Options or Vesting Webmodal
Options that shall have become exercisable prior to the Effective Time;
(ii) amend or propose to amend the certificate of incorporation or
bylaws of Webmodal; (iii) split, combine or reclassify any outstanding
capital stock, or declare, set aside or pay any dividend or other
distribution payable in cash, stock, property or otherwise with respect
to its capital stock whether now or hereafter outstanding; (iv) redeem,
purchase or acquire or offer to acquire any of its capital stock; (v)
enter into any contract, agreement, commitment or arrangement with
respect to any of the matters set forth in this Section 3.1(b); (vi)
enter into, adopt or amend or terminate any bonus, profit sharing,
compensation, severance, termination, stock option, stock appreciation
right, restricted stock, performance unit, stock equivalent, stock
purchase, pension, retirement, deferred compensation, employment,
severance or other employee benefit agreement, trust, plan, fund or
other arrangement for the benefit or welfare of any consultant,
director, officer or employee; (vii) increase in any manner the
compensation or fringe benefits of any director, officer, employee or
consultant; (viii) pay to any director, officer or employee any benefit
not required by any employee benefit agreement, trust, plan, fund or
other arrangement as in effect on the date hereof; (ix) commence any
legal proceedings against any party or settle any legal proceedings or
claims against Webmodal; or (x) lend or advance any funds or otherwise
extend credit to any person other than advances to employees for
17
business related expenses consistent with past practice and trade
credit extended in the ordinary course of business;
(c) Webmodal shall use its reasonable efforts (i) to preserve
intact the business organization of Webmodal, (ii) to maintain in
effect any authorizations or similar rights of Webmodal, (iii) to keep
available the services of the current officers and key employees of
Webmodal, (iv) to preserve the goodwill of those having business
relationships with it, (v) to maintain and keep its properties in as
good a repair and condition as presently exists, except for
deterioration due to ordinary wear and tear and damage due to casualty;
and (vi) to maintain in full force and effect insurance comparable in
amount and scope of coverage to that currently maintained by it;
(d) Webmodal shall not make or agree to make capital
expenditures that in the aggregate exceed $25,000;
(e) Webmodal shall not (i) sell, pledge, dispose of or
encumber any material portion of its assets, (ii) incur, assume or
guarantee indebtedness for money borrowed, or (iii) prepay any
indebtedness or other material liability, except prepayments made to
obtain prepayment discounts consistent with past practice;
(f) Webmodal shall not authorize, propose or announce an
intention to authorize or propose, or enter into an agreement with
respect to, any merger, consolidation or business combination (other
than the Merger) or any acquisition of a material amount of assets or
securities, form any subsidiaries, or otherwise acquire direct or
indirect control over any other person, except for (i) investments in
connection with cash management activities consistent with past
practice, or (ii) purchases of inventory, spares and replacements
consistent with past practice;
(g) Unless the other party thereto breaches its obligations
thereunder, Webmodal shall perform its obligations under any material
contracts and agreements to which it is a party or to which any of its
assets is subject;
(h) Webmodal shall not intentionally take any action that
would result in any of the representations and warranties set forth in
this Agreement becoming untrue or any of the conditions to the Merger
set forth in Article V not being satisfied;
(i) Webmodal shall make available to EGM and its
representatives such information with respect to the business and
affairs of Webmodal as EGM shall reasonably request, and shall confer
at such times as EGM may reasonably request with one or more
representatives of EGM with respect to Webmodal's material operational
matters and the general status of its operations;
(j) Webmodal shall prepare and timely file all Tax Returns
required to be filed by Webmodal (except for any Tax Return for which
an extension has been granted as permitted hereunder) on or before the
Effective Date, and shall pay all Taxes (including estimated Taxes) due
on such Tax Returns (or due with respect to Tax Returns for which an
extension has been granted as permitted hereunder) or which are
otherwise required to be paid at any time prior to or during such
period. Such Tax Returns shall be prepared in accordance with the most
18
recent Tax practices as to elections and accounting methods except for
new elections that may be made therein that were not previously
available, subject to EGM's consent (which shall not be unreasonably
withheld or delayed);
(k) To the extent Webmodal has knowledge of the commencement
or scheduling of any Tax audit, the assessment of any Tax, the issuance
of any notice of Tax due or any xxxx for collection of any Taxes, or
the commencement or scheduling of any other administrative or judicial
proceeding with respect to the determination, assessment or collection
of any Tax of Webmodal, Webmodal shall provide prompt notice to EGM of
such matter, setting forth information (to the extent known) describing
any asserted Tax liability in reasonable detail and including copies of
any notice or other documentation received from the applicable Tax
authority with respect to such matter; and
(l) Webmodal shall not take any of the following actions: (i)
make, revoke or amend any Tax election; (ii) execute any waiver of
restrictions on assessment or collection of any Tax; or (iii) enter
into or amend any agreement or settlement with any Tax authority.
3.2 Notice to Warrant Holders. Webmodal shall give written notice to
Xxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxxxx, Trustees under Trust Agreement dated
July 6, 1998, of the Merger at least 30 days prior to the Effective Time in
accordance with the terms of Xxxxxxxx Warrant, or shall obtain a written waiver
of such notice in a form reasonably acceptable to EGM.
3.3 Meeting of Stockholders of Webmodal. Webmodal shall promptly take
all action reasonably necessary in accordance with the DGCL and the certificate
of incorporation and bylaws of Webmodal to convene a meeting of its stockholders
(including any adjournments thereof, the "Webmodal Stockholders' Meeting") to
consider and vote upon the adoption and approval of this Agreement and the
Merger, including but not limited to giving notice to such stockholders of
appraisal rights pursuant to Section 262 of the DGCL.
3.4 Cancellation of Carrier Equity Program. Promptly after the date
hereof, Webmodal shall provide written notice, the form and content of which
shall be reasonably acceptable to EGM, to all participants in the Carrier Equity
Program that the Carrier Equity Program will be cancelled immediately prior to
the Effective Time, that the shares to which they would be entitled under such
program will be determined as of the date hereof, informing each participant of
the number of shares of Webmodal Common Stock it will be entitled to receive
under the plan as so terminated, and the cash amount each such participant will
receive in lieu of such shares of Webmodal Common Stock upon conversion as set
forth in Section 1.7 hereof. Such notice shall also solicit the consent of each
participant in the Carrier Equity Program to such cancellation and the terms
thereof, and Webmodal shall use its reasonable efforts to obtain such consents.
The 65,250 shares of Webmodal Common Stock issuable under the Carrier Equity
Plan shall be deemed, for the purposes of this Agreement, to be issued and
outstanding immediately prior to the Effective Time, and the participants
therein shall be entitled to receive cash payments as if they held such shares
immediately prior to the Effective Time under Section 1.7(c).
19
3.5 Termination of Advisory Panel. Prior to the Effective Time,
Webmodal shall terminate the advisory services of all of the members of
Webmodal's Advisory Panel in accordance with the terms of the Advisory Panel
Agreement with each such advisor.
3.6 Termination of External Sales Representatives. Prior to the
Effective Time, Webmodal shall terminate the sales representative arrangements
with each of the three external sales representatives of Webmodal pursuant to
the terms of the External Sales Representative Agreement with each such person.
3.7 Termination of Webmodal 401(k) Savings Plan. Prior to the Effective
Time, Webmodal shall terminate the Webmodal 401(k) Savings Plan.
3.8 No Solicitation. From and after the date of this Agreement and
until the sooner of the Effective Time or the expiration or termination of this
Agreement, Webmodal shall not, directly or indirectly, through any officer,
director, employee, representative or agent of Webmodal, (i) solicit or
knowingly encourage, including by way of furnishing information, the initiation
of any inquiries or proposals regarding (A) any merger, tender offer, sale of
shares of capital stock or similar business combination transactions involving
Webmodal, or (B) any sale of 5% or more of the assets of Webmodal (any of the
foregoing transactions being referred to herein as a "Webmodal Acquisition
Transaction"), (ii) negotiate or otherwise engage in discussions with any person
(other than EGM, Sub or their respective directors, officers, employees, agents
and representatives) with respect to any Webmodal Acquisition Transaction, or
(iii) enter into any agreement, arrangement or understanding requiring it to
abandon, terminate or fail to consummate the Merger or any other transactions
contemplated by this Agreement.
ARTICLE IV
ADDITIONAL AGREEMENTS
4.1 Voting Agreement and Proxies.
(a) In consideration of the mutual covenants and agreements in
this Agreement, each of Stonepath and Kravas agree to vote all of the
shares of capital stock of Webmodal held of record by it or him as of
the date hereof, and any additional shares of capital stock of Webmodal
acquired by it or him after the date hereof and on or before the record
date for determining the stockholders entitled to vote at the Webmodal
Stockholders' Meeting, in favor of the Merger. In furtherance of such
agreements, Stonepath and Kravas agree not to dispose of any such
shares of capital stock of Webmodal after the date hereof until the
sooner of the Effective Time or the expiration or termination of this
Agreement.
(b) Stonepath and Kravas each hereby irrevocably appoint EGM
as proxy to vote all of their shares of capital stock of Webmodal,
including shares of Webmodal Preferred Stock and Webmodal Common Stock,
held on the record date for determining the stockholders entitled to
vote at the Webmodal Stockholders' Meeting, in favor of the Merger at
the Webmodal Stockholders' Meeting. The parties acknowledge and agree
20
that these proxies are coupled with the interest of EGM in Webmodal
arising out of the mutual rights and obligations of the parties under
this Agreement.
(c) Stonepath agrees to take any and all actions necessary to
cause the director of Webmodal designated by it pursuant to the
Stockholders' Agreement among Webmodal, Kravas and Stonepath dated May
9, 2000, to vote in favor of the Merger, including but not limited to
removing the designated director if he fails to vote in favor of the
Merger and designating a new director.
(d) Stonepath and Kravas shall take such further actions and
execute such additional documents as may be necessary or desirable to
effect the voting of such shares of capital stock of Webmodal in favor
of the Merger at the Webmodal Stockholders' Meeting or, upon the
request of EGM, by written consent in accordance with the provisions of
the DGCL.
4.2 Filings; Consents; Reasonable Efforts. Subject to the terms and
conditions of this Agreement, Webmodal and EGM shall (i) use all reasonable
efforts to obtain all consents, waivers, approvals, authorizations and orders
required in connection with the authorization, execution and delivery of this
Agreement and the consummation of the Merger; and (ii) take, or cause to be
taken, all appropriate action, and do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement.
4.3 Notification of Certain Matters. Webmodal shall give prompt written
notice by facsimile to EGM, and EGM shall give prompt written notice by
facsimile to Webmodal of (i) the occurrence, or failure to occur, of any event
which occurrence or failure would be likely to cause any of its representations
or warranties contained in this Agreement to be untrue or inaccurate in any
material respect (without regard to any materiality qualifications contained
therein) at any time from the date hereof to the Effective Time, (ii) any change
or event having, or which, insofar as reasonably can be foreseen, would have, a
Webmodal MAE, and (iii) any material failure by it or any of its officers,
directors, employees or agents to comply with or satisfy any covenant, condition
or agreement to be complied with or satisfied by it hereunder.
Any such disclosure shall supplement and amend the appropriate Schedule
hereto. No such supplement or amendment to any Schedule shall be deemed to cure
any breach for purposes of Section 5.2(a) or limit any liability for any such
breach if EGM and Sub do not waive the conditions set forth in Section 5.2(a).
If EGM and Sub waive any failure to satisfy the conditions set forth in Section
5.2(a) caused by the disclosure in such supplement and amendment and proceed
with the Closing, any such supplement and amendment will be effective to cure
and correct for all purposes any breach of any representation, warranty or
covenant that would have existed if such amendment and supplement had not been
made and all references to any Schedule hereto that is supplemented and amended
as provided in this Section shall for all purposes (except as provided in the
immediately preceding sentence) be deemed to be a reference to such Schedule as
so supplemented and amended.
4.4 Agreement to Defend. If any claim, action, suit, investigation or
other proceeding by any governmental body or other person or other legal or
administrative proceeding is commenced that questions the validity or legality
21
of the transactions contemplated hereby or seeks damages in connection
therewith, the parties hereto agree to cooperate and use their reasonable
efforts to defend against and respond thereto.
4.5 Termination of Stonepath Warrant. Stonepath hereby waives any and
all required notice of the Merger or any of the other transactions contemplated
by this Agreement pursuant to the terms of the Stonepath Warrant and agrees that
at the Effective Time, without any further action by the parties, the Stonepath
Warrant will by its terms terminate and expire, and Stonepath shall have no
further rights thereunder.
4.6 Repayment of Stonepath Debt. EGM agrees to cause the Surviving
Corporation to repay (i) the $500,000 principal amount of indebtedness currently
owed by Webmodal to Stonepath pursuant to that certain Loan Agreement dated
December 22, 2000, plus accrued and unpaid interest thereunder, (ii) the
$500,000 principal amount of indebtedness currently owed by Webmodal to
Stonepath pursuant to that certain Loan Agreement dated January 29, 2001, plus
accrued and unpaid interest thereunder, and (iii) any additional indebtedness
incurred by Webmodal from Stonepath after the date hereof pursuant to and in
accordance with Section 3.1(e) hereof, promptly after the Effective Time.
4.7 Escrow of Portion of Kravas' Merger Consideration.
(a) In recognition that the value of Webmodal will be
significantly less than the merger consideration contemplated by this
Agreement if Kravas does not continue to be associated with Webmodal
after the Effective Time, Kravas agrees that $2,000,000 of the merger
consideration he is entitled to receive under Section 1.7(b) hereof
will be deposited in escrow pursuant to an Escrow Agreement in the form
of Exhibit A hereto (the "Escrow Agreement") and will be subject to
forfeiture as set forth in this Section 4.7. As of the date hereof,
Kravas and EGM have entered into an employment agreement (the "Kravas
Employment Agreement"), which shall become effective as of the
Effective Time, and which provides for Kravas' continued association
with Webmodal as an employee of EGM.
(b) The $2,000,000 deposited in escrow pursuant to the Escrow
Agreement shall be invested in common stock of Enron Corp. as set forth
therein. The shares of Enron Corp. common stock held in escrow pursuant
to the Escrow Agreement after such investment is referred to herein as
the "Escrowed Property." Kravas shall have the right to vote the
Escrowed Property, but all dividends or other distributions thereon
shall be held in escrow under the Escrow Agreement.
(c) The escrow agent under the Escrow Agreement (the "Escrow
Agent") shall release from escrow and deliver to Kravas one third of
the Escrowed Property, along with all dividends and other distributions
on such one third of the Escrowed Property, on each of the first,
second and third anniversaries of the Effective Date if Kravas
continues as an employee of EGM on such date. As a result, if Kravas
continues as an employee of EGM on the third anniversary of the
Effective Date, all of the Escrowed Property and all dividends and
distributions thereon will have been released from escrow and delivered
to Kravas, and the Escrow Agreement will terminate.
22
(d) If Kravas ceases to be an employee of EGM due to his
resignation without Good Reason (as defined below) or EGM's termination
of Kravas for Cause (as defined below), all of the Escrowed Property
that is held in escrow under the Escrow Agreement at the time of such
resignation or termination shall be forfeited to EGM, and the Escrow
Agent shall release the Escrowed Property from escrow and deliver it to
EGM. If Kravas ceases to be an employee of EGM other than by his
resignation without Good Reason or EGM's termination of Kravas for
Cause, all of the Escrowed Property that is held in escrow under the
Escrow Agreement at the time Kravas ceases to be an employee of EGM
shall be released from escrow and delivered by the Escrow Agent to
Kravas.
(e) As used in this Section 4.7, "Cause" shall mean (i)
Kravas' gross negligence or willful misconduct in the performance of
the duties and services as an employee of EGM or any other Enron
affiliate; (ii) Kravas' final conviction of a felony by a trial court;
(iii) Kravas' material breach of any provision of the Kravas Employment
Agreement, which, if possible to correct, remains uncorrected for 30
days following EGM's written notice to Kravas of such breach; or (iv)
Kravas' material violation of any material policy of EGM, Enron, or any
Enron affiliate for which Kravas provides services, which, if possible
to correct, remains uncorrected for 30 days following EGM's written
notice to Kravas of such violation. As used in this Section 4.7, Kravas
will have "Good Reason" to resign as an employee of EGM if (i) EGM
materially breaches its obligations under the Kravas Employment
Agreement and such breach continues unremedied for 30 days following
Kravas' written notice to EGM of such breach, (ii) EGM significantly
and adversely changes Kravas' duties and responsibilities, (iii) Kravas
is required to relocate outside of the greater Houston area without his
consent, or (iv) after the expiration of the Kravas Employment
Agreement, EGM reduces Kravas' compensation below the levels payable
under the Kravas Employment Agreement at the expiration thereof.
(f) The parties acknowledge and agree that all of the merger
consideration Kravas is entitled to receive under Section 1.7(b) hereof
in connection with the Merger will be paid as consideration for the
shares of Webmodal Common Stock owned by Kravas immediately prior to
the Effective Time, and none of such consideration will be paid to him
in consideration for his future services to the Surviving Corporation,
but that the forfeiture provisions set forth in the Escrow Agreement
are intended as an estimate of the decreased value of Webmodal as of
the Effective Time if Kravas is not associated with Webmodal for a
period of at least three years after the Effective Time as set forth
herein.
(g) In the event any of the EGM Indemnitees (as defined in
Article VI hereof) are entitled to recover and EGM Damages (as defined
in Article VI hereof) from Kravas pursuant to Article VI hereof, EGM
shall be entitled to receive distributions of the Escrowed Property
under the terms of the Escrow Agreement in satisfaction thereof.
(h) The parties agree to deliver to the Escrow Agent
certificates and such other instructions as may be required under the
Escrow Agreement in order to implement the provisions of this Section
4.7.
23
4.8 Webmodal Employee Benefits. As soon as practicable after the
Effective Time, those employees of Webmodal who become employees of the
Surviving Corporation or EGM (the "Webmodal Employees") shall be entitled to
participate in the employee benefit plans maintained for the benefit of
similarly situated employees of EGM (the "EGM Plans"), except that those
employees who become employees of the Surviving Corporation shall not be
entitled to participate in any severance plan of EGM or any of its affiliates
(including but not limited to Enron Corp.). With respect to eligibility and
vesting requirements (but not benefit accrual, employer contributions, benefit
formulas incorporating service, or employer subsidies) of such employee benefit
plans, except for retiree medical benefits, the Webmodal Employees shall be
given credit for past service with Webmodal, to the extent recognized under
Webmodal's equivalent Plans.
4.9 Webmodal Options.
(a) Either before or promptly after the date hereof, EGM shall
make offers of transfers of employment to some of the current employees
of Webmodal, and Webmodal shall provide a retention bonus arrangement
to all such employees who do not accept such transfer offer and all
Webmodal employees who are not offered transfers of employment by EGM,
all as set forth in Schedule 4.9 hereof. In the event that any such
employee does not accept such retention offer, Webmodal shall provide
such employee severance as set forth in Schedule 4.9 hereof upon
execution of a Waiver and Release Agreement. Each such offer and any
Waiver and Release Agreement shall provide that the employee cancels
and waives all rights under any existing Webmodal Options held by such
employee (other than the Vested Webmodal Options and the Vesting
Webmodal Options that become exercisable prior to the Effective Date)
by accepting such offer. All such employment, retention, and severance
and the related cancellation and waiver of Webmodal Options shall be
effective upon the Effective Time. Webmodal and EGM shall use their
reasonable efforts to obtain such agreements from each current employee
of Webmodal.
(b) At the Effective Time, each outstanding Webmodal Option
under the Webmodal Stock Option Plan that has not been cancelled
pursuant to the agreements described in Section 4.9(a) (other than the
Vested Webmodal Options and the Vesting Webmodal Options that become
exercisable prior to the Effective Date) shall be deemed to constitute
an option to acquire a cash amount per share equal to the Common Stock
Consideration.
(c) The Board of Directors of Webmodal shall, prior to or as
of the Effective Time, take all necessary actions, pursuant to and in
accordance with the terms of the Webmodal Stock Option Plan and the
instruments evidencing the Webmodal Options, to provide for the
conversion of the Webmodal Options into the right to acquire cash as
set forth in Section 4.9(b), and to ensure that no consent of the
holders of the Webmodal Options is required in connection with such
conversion.
4.10 Cancellation of Vested and Vesting Webmodal Stock Options. Prior
to or promptly after the date hereof, Webmodal shall have offered or shall offer
in writing, the form and content of which shall be reasonably acceptable to EGM,
to pay each holder of Vested Webmodal Stock Options and Vesting Webmodal Stock
24
Options that vest prior to the Effective Time a cash payment, payable at the
Effective Time, equal to the number of such vested options multiplied by the
excess of the Common Stock Consideration over the exercise price per share of
such vested options. The acceptance of such offer shall require the holder of
such options to agree to the cancellation of and waiver of all rights under any
unvested Webmodal Stock Options held by him as of the Effective Time, to the
extent such cancellation and waiver has not already been received from the
holder of such options under Section 4.9 hereof. The Surviving Corporation shall
pay such amounts to the holders of such options at the Effective Time. Such
agreements shall not constitute an exercise of the Vested Webmodal Stock Options
or the Vesting Webmodal Stock Options.
4.11 Post-Effective Time Mailing. As soon as practicable following the
Effective Time, the Surviving Corporation shall cause to be mailed to each
holder of certificates that represented shares of Webmodal Common Stock
immediately prior to the Effective Time, at such holder's address as it appears
on Webmodal's stock transfer records, a letter of transmittal and other
information advising such holder of the consummation of the Merger along with
information and instructions to enable such holder to effect the conversion of
their Webmodal stock as contemplated by Article I of this Agreement.
ARTICLE V
CONDITIONS
5.1 Conditions to Obligation of Each Party to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment at or prior to the Closing Date of the following conditions:
(a) This Agreement shall have been approved and adopted by the
requisite vote of the stockholders of Webmodal, as may be required by
law and by any applicable provisions of Webmodal' certificate of
incorporation or bylaws;
(b) No order shall have been entered and remain in effect in
any action or proceeding before any foreign, federal or state court or
governmental agency or other foreign, federal or state regulatory or
administrative agency or commission that would prevent or make illegal
the consummation of the Merger;
(c) There shall have been obtained any and all material
permits, approvals and consents of any governmental body or agency that
reasonably may be deemed necessary so that the consummation of the
Merger and the transactions contemplated thereby will be in compliance
with applicable laws, the failure to comply with which would have a
material adverse effect on the business, financial condition or results
of operations of the Surviving Corporation after consummation of the
Merger; and
(d) All approvals of private persons or corporations, (i) the
granting of which is necessary for the consummation of the Merger or
the transactions contemplated in connection therewith and (ii) the
non-receipt of which would have a material adverse effect on the
25
business, financial condition or results of operations of the Surviving
Corporation after the consummation of the Merger, shall have been
obtained.
5.2 Additional Conditions to Obligations of EGM and Sub. The obligation
of EGM and Sub to effect the Merger is, at the option of EGM and Sub, also
subject to the fulfillment at or prior to the Closing Date of the following
conditions:
(a) The representations and warranties of Webmodal and Kravas
contained in Sections 2.2 and of Stonepath contained in Section 2.3
shall be accurate as of the date of this Agreement and (except to the
extent such representations and warranties speak specifically as of an
earlier date) as of the Closing Date as though such representations and
warranties had been made at and as of that time; all of the terms,
covenants and conditions of this Agreement to be complied with and
performed by Webmodal, Kravas and Stonepath on or before the Closing
Date shall have been duly complied with and performed in all material
respects; and a certificate to the foregoing effect dated the Closing
Date and signed by the chief executive officer of Webmodal shall have
been delivered to EGM and Sub;
(b) If Webmodal shall have received prior to the taking of the
vote at the Webmodal Stockholders' Meeting a written demand for
appraisal under the DGCL in connection with the Merger from any holder
of shares of Webmodal Preferred Stock or from holders of more than 3%
of the shares of Webmodal Common Stock outstanding immediately prior to
the Effective Time, then each such holder of Webmodal Preferred Stock
making demand shall have either voted in favor of the Merger at the
Webmodal Stockholders' Meeting or waived or otherwise withdrawn such
demand in writing to the satisfaction of EGM, and a number of the
holders of the Webmodal Common Stock making such demand shall have
either voted in favor of the Merger at the Webmodal Stockholders'
Meeting or waived or otherwise withdrawn such demand in writing to the
reasonable satisfaction of EGM such that the holders of not more than
3% of the Webmodal Common Stock outstanding immediately prior to the
Effective Time shall have perfected and retain appraisal rights under
the DGCL immediately prior to the Effective Time; and a certificate to
the foregoing effect dated the Closing Date and signed by the chief
executive officer of Webmodal shall have been delivered to EGM and Sub;
(c) Neither Kravas nor Xxx Xxxxx shall have taken any action
or given any notice that would breach (anticipatorily or otherwise),
cancel or terminate the employment agreements between each such person
and EGM entered into on the date hereof (which agreements by their
terms are to be effective as of the Effective Time). Each such person
shall be ready, willing and able to begin their services under such
agreements as of the Effective Time, and such employment agreements
shall be in full force and effect (subject to becoming effective as of
the Effective Time);
(d) The holders of the Vested Webmodal Options and any Vesting
Webmodal Options that become exercisable prior to the Effective Time
shall have agreed to the cancellation of such options and all other
Webmodal Options held by them as set forth in Section 4.10 hereof, and
options to acquire not more than either (i) 12,000 shares of Webmodal
26
Common Stock held by all option holders, or (ii) 5,500 shares of
Webmodal Common Stock held by any single option holder, shall remain
outstanding under the Webmodal Stock Option Plan after giving effect to
the cancellations and waivers of Webmodal Options as set forth in
Sections 4.9 and 4.10 hereof;
(e) Webmodal shall have received consents from each
participant in the Carrier Equity Program to the termination of such
program and the terms and conditions of such termination as set forth
in Section 3.4 hereof, and Webmodal shall have provided copies of such
consents to EGM; and
(f) EGM shall have received from Xxxxx, Xxxxx & Xxxxx, counsel
to Webmodal, an opinion dated the Closing Date in the form of Exhibit C
hereto.
5.3 Additional Conditions to Obligations of Webmodal. The obligation of
Webmodal to effect the Merger is, at the option of Webmodal, also subject to the
fulfillment at or prior to the Closing Date of the following conditions:
(a) The representations and warranties of EGM and Sub
contained in Section 2.1 shall be accurate as of the date of this
Agreement and (except to the extent such representations and warranties
speak specifically as of an earlier date) as of the Closing Date as
though such representations and warranties had been made at and as of
that time; all the terms, covenants and conditions of this Agreement to
be complied with and performed by EGM or Sub on or before the Closing
Date shall have been duly complied with and performed in all material
respects; and a certificate to the foregoing effect dated the Closing
Date and signed by an authorized officer of EGM shall have been
delivered to Webmodal;
(b) EGM shall have delivered to Webmodal on the date hereof a
Guaranty of the obligations of EGM and Sub hereunder by Enron in the
form of Exhibit B hereto, and such Guaranty shall be in full force and
effect on the Closing Date; and
(c) Webmodal shall have received from Gardere Xxxxx Xxxxxx
LLP, counsel to EGM, an opinion dated the Closing Date in the form of
Exhibit D hereto.
ARTICLE VI
INDEMNIFICATION
6.1 Indemnification by Kravas, Webmodal and Stonepath.
(a) Subject to the terms and conditions set forth herein,
Kravas and Webmodal, jointly and severally, shall indemnify EGM, Sub,
the Surviving Corporation and their respective affiliates and officers,
directors, employees, agents, advisors and representatives
(collectively, the "EGM Indemnitees"), and hold such EGM Indemnitees
harmless from and against, and pay and reimburse the EGM Indemnitees
for, any and all demands, claims, actions, losses, damages,
liabilities, obligations, fines, Taxes, royalties, deficiencies,
penalties, costs and expenses (including reasonable attorneys' fees and
costs of investigation), whether or not resulting from third-party
claims (collectively, "EGM Damages"), asserted against or incurred or
27
sustained by an EGM Indemnitee as a result of or arising out of any
misrepresentation or breach of any representation, warranty, covenant
or agreement of Kravas or Webmodal contained in or made pursuant to
this Agreement or in any schedule or other instrument, certificate,
agreement or document delivered by Kravas or Webmodal at the Closing
pursuant to this Agreement (in the case of any such representation or
warranty, without taking into account any qualification as to the
materiality or material adverse effect contained in such representation
or warranty); provided, however, that a notice of a Claim (as defined
in Section 6.3 hereof) by an EGM Indemnitee shall have been given to
Kravas not later than one year after the Effective Time; and provided,
further, that the indemnification obligations of Webmodal hereunder
shall not survive the Effective Time.
(b) Since following the Effective Time Webmodal will be merged
with Sub and will be the Surviving Corporation, Kravas agrees that he
has no right of reimbursement or contribution against the Surviving
Corporation with respect to any claim sought against him after the
Effective Time.
(c) Subject to the terms and conditions set forth herein,
Stonepath shall indemnify the EGM Indemnitees, and hold such EGM
Indemnitees harmless from and against, and pay and reimburse the EGM
Indemnitees for, any and all EGM Damages asserted against or incurred
or sustained by an EGM Indemnitee as a result of or arising out of any
misrepresentation or breach of any representation, warranty, covenant
or agreement of Stonepath contained in or made pursuant to this
Agreement or in any schedule or other instrument, certificate,
agreement or document delivered by Stonepath at the Closing pursuant to
this Agreement (in the case of any such representation or warranty,
without taking into account any qualification as to the materiality or
material adverse effect contained in such representation or warranty);
provided, however, that the indemnification obligations of Stonepath
hereunder shall not survive the Effective Time.
(d) In the event of any Claim for indemnity under Section
6.1(a) against Kravas, the EGM Indemnitees making such Claim shall not
be entitled to indemnification for any Claim for EGM Damages of less
than $7,500, and shall not be entitled to indemnification for any Claim
for EGM Damages unless the aggregate amount of EGM Damages for
individual Claims for EGM Damages in excess of $7,500 is greater than
$300,000, in which case the EGM Indemnitees shall be entitled to
indemnification only for EGM Damages in excess of such $300,000.
Notwithstanding anything herein to the contrary, in no event shall
Kravas' liability for indemnification hereunder arising after the
Effective Time exceed the lesser of (i) $2,000,000 or (ii) the market
value at the time of payment of such Claim of (A) the cash and property
held under the Escrow Agreement and (B) any cash and property
distributed from escrow to Kravas under the Escrow Agreement prior to
the time of payment of such Claim. In the event any EGM Indemnitee is
entitled to recover any EGM Damages from Kravas pursuant to Section
6.1(a), such EGM Indemnitee shall recover such amount from the assets
held in escrow under the Escrow Agreement until no such assets remain
prior to recovering any amount directly from Kravas. The liability of
Kravas for any indemnification hereunder shall be reduced by the amount
of other indemnity or insurance proceeds actually received by the EGM
Indemnities with respect to the applicable Claim. Each EMG Indemnitee
28
shall use all commercially reasonable efforts to obtain such indemnity
and insurance proceeds and, if any such proceeds are received by an EMG
Indemnitee with respect to any EMG Damages after Kravas has made a
payment to the EMG Indemnitee with respect thereto, the EMG Indemnitee
shall promptly pay to Kravas the amount of such proceeds (up to the
amount of the payment previously made by Kravas).
6.2 Indemnification by EGM and Sub. Subject to the terms and conditions
set forth herein, EGM and Sub, jointly and severally, shall indemnify Kravas,
Webmodal and Stonepath and their respective affiliates, agents, advisors and
representatives (collectively, the "Seller Indemnitees") and hold the Seller
Indemnitees harmless from and against, and pay and reimburse the Seller
Indemnitees for, any and all demands, claims, actions, losses, damages,
liabilities, obligations, fines, Taxes, royalties, deficiencies, costs and
expenses, whether or not resulting from third-party claims, including interest
and penalties with respect thereto (collectively, "Seller Damages"), asserted
against or incurred or sustained by any Seller Indemnitee as a result of or
arising out of any misrepresentation or breach of any representation, warranty,
covenant or agreement of EGM or Sub contained in or made pursuant to this
Agreement or in any schedule or other instrument, certificate, agreement or
document delivered by EGM or Sub at the Closing pursuant to this Agreement.
6.3 Conditions of Indemnification. The right of any EGM Indemnitee or
any Seller Indemnitee, as the case may be (any such indemnitee, an
"Indemnitee"), to indemnity with respect to claims for EGM Damages or Seller
Damages under Section 6.1 or 6.2, as the case may be (any such claim, a
"Claim"), shall be subject to the following terms and conditions:
(a) Such Indemnitee shall give the party or parties from which
indemnity is sought (any such recipient of any such notice, the
"Indemnifying Parties") prompt notice of any Claim asserted against or
incurred by such Indemnitee (but in no event later than the date set
forth in Section 6.1(a) hereof) and shall specify in reasonable detail
the fact alleged to constitute a basis for such Claim. Such Indemnitee
shall permit the Indemnifying Parties (at their own expense) to assume
the defense of any claim or any litigation resulting therefrom,
provided that (i) counsel for the Indemnifying Parties who shall
conduct the defense of such claim or litigation shall be reasonably
satisfactory to such Indemnitee, and (ii) such Indemnitee may
participate in such defense at the expense of such Indemnitee. Except
with the prior written consent of such Indemnitee, the Indemnifying
Parties, in the defense of any such Claim, shall not consent to entry
of any judgment or enter into any settlement that provides for
injunctive or other non-monetary relief affecting such Indemnitee.
Except with the consent of the Indemnifying Parties, in the defense of
any such Claim in which the Indemnifying Parties have assumed the
defense, such Indemnitee shall not consent to the entry of any judgment
or enter into any settlement. After notice from the Indemnifying
Parties to such Indemnitee of their election to assume the defense of
such claim or action, the Indemnifying Parties shall not be liable to
such Indemnitee under Sections 6.1, 6.2 or 6.3 for any legal or other
expenses subsequently incurred by such Indemnitee in connection with
the defense thereof, other than reasonable costs of investigation;
provided, however, that such Indemnitee shall have the right to employ
separate counsel in any such action and to participate in the defense
thereof, but the fees and expenses for such counsel shall be at the
expense of such Indemnitee unless (x) the employment thereof has been
specifically authorized by the Indemnifying Parties or (y) such
29
Indemnitee shall have been advised by counsel that there may be one or
more legal defenses available to it which are different from or
additional to those available to the Indemnifying parties and in the
reasonable judgment of such counsel it is advisable for such
Indemnitees to employ separate counsel.
(b) In the event that within thirty (30) business days after
the Indemnifying Parties' receipt of an Indemnitee's delivery of notice
of any Claim pursuant to Section 6.3(a), the Indemnifying Parties fail
to notify such Indemnitee of their intention to defend such claim, such
Indemnitee shall (upon further notice to the Indemnifying Parties) have
the right to undertake the defense, compromise, settlement or payment
in full of such Claim for the account of the Indemnifying Parties.
6.4 Exclusive Remedy for Breach. Following the Closing, except for
actions for statutory or common law fraud or intentional misrepresentation
arising out of or relating to this Agreement, the indemnities provided for in
this Article VI are the parties' sole and exclusive remedies for all
inaccuracies of representations and warranties or breaches of covenants and
agreements in this Agreement, and to the extent that any Indemnitee incurs or
sustains any EMG Damages or Seller Damages in connection with or related to this
Agreement or the transactions contemplated hereby for which it may assert any
other right to indemnification, contribution or recovery, such Indemnitee hereby
waives, releases and agrees not to assert such right.
6.5 Indemnification of Kravas.
(a) The consideration issuable to the holders of the Webmodal
Common Stock and Webmodal Preferred Stock under Section 1.7 of this
Agreement in connection with the Merger was the result of arms'-length
negotiations among the parties to this Agreement. If, notwithstanding
the foregoing, any tax authority asserts that Kravas should be deemed
to receive consideration in excess of the consideration he actually
received pursuant to Section 1.7 of this Agreement, EGM shall, subject
to the terms and conditions of this Section 6.5, indemnify Kravas, on
an after-tax basis, from and against any federal, state, and local
taxes, interest and penalties and any expenses (including reasonable
attorney's and accountant's fees and expenses) incurred by Kravas
resulting from the deemed receipt of such additional consideration and
any deemed transfer of such additional consideration to the other
holders of any Webmodal stock.
(b) In the event that any tax authority asserts that Kravas
should be deemed to have received consideration in excess of the
consideration he actually receives pursuant to Section 1.7 hereof,
Kravas shall within 10 business days notify EGM in writing of such
matter. Such written notice shall contain factual information (to the
extent known) describing any asserted tax liability in reasonable
detail and shall be accompanied by copies of any notice or other
documents received from any tax authority with respect to such matter.
If Kravas has knowledge of an asserted tax liability with respect to a
matter for which he is to be indemnified under this Section 6.5 and he
fails to provide EGM notice of such asserted tax liability within the
time period set forth above, then (i) if EGM is precluded from
contesting the asserted tax liability in any forum as a result of the
failure to give prompt notice, EGM shall have no obligation to
indemnify Kravas pursuant to this Section 6.5, and (ii) if EGM is not
30
precluded from contesting the asserted tax liability in any forum, but
such failure to provide prompt notice results in a monetary detriment
to EGM, then any amount which EGM is otherwise required to pay Kravas
pursuant to this Section 6.5 shall be reduced by the amount of such
detriment.
(c) In connection with any audits, disputes, administrative,
judicial or other proceedings arising from an assertion that Kravas
should be deemed to have received consideration in excess of the
consideration he actually received pursuant to Section 1.7 hereof, EGM
shall be entitled to fully participate, at its own cost and expense,
solely in that portion of the proceedings relating to its
indemnification obligations under this Section 6.5. For purposes of
this Section 6.5, the term "participate" shall include (i)
participation in all conferences, meetings or other proceedings with
any tax authority, (ii) participation in all appearances before any
court or tribunal, and (iii) with respect to the matters described in
the preceding clauses (i) and (ii), participation in the submission and
determination of the content of all documentation, protests, memoranda
of fact and law, briefs, and the conduct of oral arguments and
presentations.
(d) Kravas shall not agree to settle any tax liability or
compromise any claim with respect to taxes, which settlement or
compromise would affect EGM's indemnification obligation under this
Section 6.5 without the consent of EGM, which consent shall not be
unreasonably withheld or delayed.
(e) Kravas and EGM will fully cooperate with each other and
with each other's agents, including accounting firms and legal counsel,
in connection with tax matters relating to EGM's indemnification
obligations under this Section 6.5. Kravas shall retain all tax
returns, schedules and work papers, and all material records and other
documents relating to EGM's indemnification obligations under this
Section 6.5.
(f) EGM's obligations under this Section 6.5 shall continue
until all applicable statutes of limitations, including waivers and
extensions, have expired with respect Kravas' 2001 individual tax
return.
ARTICLE VII
MISCELLANEOUS
7.1 Termination. This Agreement may be terminated and the Merger and
the other transactions contemplated herein may be abandoned at any time prior to
the Effective Time, whether prior to or after approval by the stockholders of
Webmodal:
(a) by mutual consent of EGM and Webmodal;
(b) by either EGM or Webmodal if the Merger has not been
effected on or before March 30, 2001; provided, however, that the right
to terminate this Agreement under this Section 7.1(b) shall not be
available to Webmodal if the failure of the Merger to occur on or
before such date has been caused by or has resulted from a failure by
Webmodal or Kravas to fulfill any of their respective obligations under
this Agreement, and the right to terminate this Agreement under this
Section 7.1(b) shall not be available to EGM if the failure of the
Merger to occur on or before such date has been caused by or has
31
resulted from a failure by EGM or Sub to fulfill any of their
respective obligations under this Agreement;
(c) by either EGM or Webmodal if a final, unappealable order
of a judicial or administrative authority of competent jurisdiction to
restrain, enjoin or otherwise prevent a consummation of this Agreement
or the transactions contemplated in connection herewith shall have been
entered;
(d) by EGM if (i) since the date of this Agreement there has
been a material adverse change in the results of operations, financial
condition or business of Webmodal or a Webmodal MAE (but taking into
account Webmodal's current cash "burn rate" and any additional
indebtedness incurred therefor in accordance with Section 3.1(e)
hereof), or (ii) there has been a breach of any representation or
warranty or covenant set forth in this Agreement by Webmodal which
breach has not been cured within 30 days following receipt by Webmodal
of notice of such breach; or
(e) by Webmodal if there has been a breach of any
representation or warranty or covenant set forth in this Agreement by
EGM which breach has not been cured within 30 days following receipt by
EGM of notice of such breach.
7.2 Waiver and Amendment. Any provision of this Agreement may be waived
at any time by the party that is, or whose stockholders are, entitled to the
benefits thereof. This Agreement may not be amended or supplemented at any time,
except by an instrument in writing signed on behalf of each party hereto,
provided that after this Agreement has been approved and adopted by the
stockholders of Webmodal, this Agreement may be amended only as may be permitted
by applicable provisions of the DGCL. The waiver by any party hereto of any
condition or of a breach of another provision of this Agreement shall not
operate or be construed as a waiver of any other condition or subsequent breach.
The waiver by any party hereto of any of the conditions precedent to its
obligations under this Agreement shall not preclude it from seeking redress for
breach of this Agreement other than with respect to the condition so waived.
7.3 Nonsurvival of Representations, Warranties and Agreements. None of
the representations, warranties, covenants or agreements in this Agreement shall
survive the Effective Time, except for the representations and warranties made
by Kravas jointly and severally with Webmodal in Section 2.2 (which shall not
survive as made by Webmodal but shall survive as made by Kravas), which
representations and warranties shall survive for a period of one year after the
Effective Time, and the terms of Article I, Sections 4.5 through 4.12
(inclusive), Article VI and Article VII.
7.4 Public Statements. Webmodal, Kravas, Stonepath and EGM agree to
consult with each other prior to issuing any press release or otherwise making
any public statement with respect to the transactions contemplated hereby, and,
except as required by applicable law or stock exchange rules, none of them shall
issue any such press release or make any such public statement without the
consent of the others (which consent shall not be unreasonably withheld or
delayed).
32
7.5 Assignment. This Agreement shall inure to the benefit of and will
be binding upon the parties hereto and their respective legal representatives,
successors and permitted assigns. Except as set forth in this Agreement, this
Agreement shall not be assignable by the parties hereto.
7.6 Notices. All notices, requests, demands, claims and other
communications which are required to be or may be given under this Agreement
shall be in writing and shall be deemed to have been duly given if (i) delivered
in person or by courier, (ii) sent by confirmed telecopy or facsimile
transmission, or (iii) mailed, certified first class mail, postage prepaid,
return receipt requested, to the parties hereto at the following addresses:
if to Webmodal or Kravas: Webmodal, Inc.
000 Xxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxxx
Fax: (000) 000-0000
with a copy to: Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx
Fax: (000) 000-0000
if to Stonepath: Stonepath Group, Inc.
Xxx Xxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Fax: (000) 000-0000
if to EGM or Sub: Enron Global Markets, LLC
P. O. Box 1188
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxx Xxxx
Fax: (000) 000-0000
with a copy to: Gardere Xxxxx Xxxxxx LLP
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxxxx Xxxx Xxxxx
Fax: (000) 000-0000
or to such other address as any party shall have furnished to the other by
notice given in accordance with this Section 7.6. Such notices shall be
effective, (i) if delivered in person or by courier, upon actual receipt by the
intended recipient, (ii) if sent by telecopy or facsimile transmission, on the
33
date indicated by the confirmation, or (iii) if mailed, upon the earlier of five
days after deposit in the mail and the date of delivery as shown by the return
receipt therefor.
7.7 Governing Law. This Agreement shall be governed by and in
accordance with the laws of Texas, except that the provisions of the Delaware
General Corporation Law shall govern those aspects of the Merger as are required
thereunder to be governed thereby.
7.8 Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provision, covenants and
restrictions of this Agreement shall continue in full force and effect and shall
in no way be affected, impaired or invalidated.
7.9 Counterparts. This Agreement may be executed in counterparts, each
of which shall be an original, but all of which together shall constitute one
and the same agreement.
7.10 Headings. The Section headings herein are for convenience only and
shall not affect the construction hereof.
7.11 Entire Agreement; Third Party Beneficiaries. This Agreement
constitutes the entire agreement and supersedes all other prior agreements and
understandings, both oral and written, among the parties or any of them, with
respect to the subject matter hereof and neither this nor any document delivered
in connection with this Agreement confers upon any person not a party hereto any
rights or remedies hereunder.
7.12 Schedules. Notwithstanding anything to the contrary contained in
this Agreement or in any of the Schedules attached hereto, any information
disclosed pursuant to any Schedule shall be deemed to be disclosed in all
Schedules for all purposes of this Agreement.
7.13 Disclosure. EGM and Sub acknowledge that they have conducted a due
diligence investigation of Webmodal and have had sufficient opportunity to make
whatever investigation and ask whatever questions of Webmodal and Kravas as they
have deemed necessary and advisable for the purposes of determining whether or
not to enter into this Agreement. EGM and Sub acknowledge that Webmodal and
Kravas have made no representations or warranties regarding Webmodal or its
business other than those expressly included in this Agreement and that Webmodal
and Kravas have made no representations or warranties regarding any matters not
contained in this Agreement, including any projections, cost estimates or other
information that may have been provided to EGM and Sub during their due
diligence investigation of Webmodal.
7.14 Expenses. Whether or not the Merger is consummated, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expense.
7.15 Binding Arbitration. In the event of any dispute, difference or
question arising out of relating to the transactions contemplated by this
Agreement ("Dispute") between any of the parties hereto ("Disputing Parties")
which cannot be otherwise resolved by the Disputing Parties themselves, the
Dispute will be settled by arbitration by an arbitrator mutually acceptable to
the Disputing Parties in an arbitration proceeding conducted in Houston, Texas
34
in accordance with the rules existing at the date hereof of the American
Arbitration Association. If the Disputing Parties hereto cannot agree on an
arbitrator within ten (10) days of the initiation of the arbitration proceeding,
an arbitrator shall be selected for the Disputing Parties by the American
Arbitration Association. The Disputing Parties shall use their best efforts to
have the arbitral proceeding concluded and a judgment rendered by the arbitrator
within forty (40) business days of the initiation of the arbitration proceeding.
The decision of such arbitrator shall be final and judgment upon the award
rendered by the arbitration may be entered in any court having jurisdiction
thereof, and the costs (including, without limitation, reasonable fees and
expenses of counsel and experts for the Disputing Parties) of such arbitration
(including the cost to enforce or preserve the rights awarded in the
arbitration) shall be borne by the Disputing Party whom the decision of the
arbitrator is against. If the decision of the arbitrator is not clearly against
one of the Disputing Parties, or the decisions of the arbitrator is against more
than one Disputing Party on one or more issues, costs of such arbitration shall
be borne equally by the Disputing Parties. Notwithstanding anything herein to
the contrary, the arbitration provisions of this Section 7.15 shall not apply to
any claim by any party for equitable relief. Further, the provisions of this
Section 7.15 shall not be construed to limit the right or obligation of the
indemnified party pursuant to Article VI above to participate or assume the
defense of a claim or to entitle the indemnified party to re-litigate in an
arbitration proceeding any issues previously determined in a court proceeding.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
THE NEXT PAGE IS THE SIGNATURE PAGE.]
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed as of the date first above written.
WEBMODAL, INC.
By:
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Xxxxxxxxxxx X. Xxxxxx, President
STONEPATH GROUP, INC.
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
XXXXXXXXXXX X. XXXXXX
ENRON GLOBAL MARKETS, LLC
By:
----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
WEBMODAL ACQUISITION CORP.
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
36
