EXHIBIT 10.1
PREFERRED STOCK PURCHASE AGREEMENT
This Preferred Stock Purchase Agreement ("Agreement") is entered into
this 4th of May, 2005, by and among U.S. TELESIS HOLDINGS, INC., a Delaware
corporation (hereinafter referred to as "Buyer") and XXX XXXXXXXX, XXXXXXX
XXXXXX, XXXXXX X. XXXX, XXX XXXXXX AND XXXXXX COMMUNICATIONS, INC. (hereinafter
each referred to as a "Seller" and collectively referred to as the "Sellers"),
being all of the preferred shareholders of CATCHER, INC., a Delaware
corporation, (hereinafter referred to as the "Company").
WHEREAS, Sellers are the owners of record and beneficially of the
number of shares set forth on the attached EXHIBIT A of the issued and
outstanding series A preferred stock of the Company, representing one hundred
percent (100%) of the issued and outstanding shares of series A preferred stock
of the Company (each a "Preferred Share" and collectively, the "Preferred
Shares");
WHEREAS, simultaneously herewith Buyer and holders of shares of common
stock of the Company (the "Common Stock") enters into a stock purchase agreement
(the "Common Stock Purchase Agreement"), whereby Buyer purchases from those
stockholders all issued and outstanding shares of common stock so that Buyer
will become sole stockholder of the Company; and
WHEREAS, Sellers desire to sell all of the Preferred Shares to Buyer,
and Buyer desires to purchase the Preferred Shares from Sellers, upon the terms
and conditions set forth herein.
NOW THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
I.
SALE AND PURCHASE OF THE SHARES
1.1 SALE AND PURCHASE. Subject to the terms and conditions hereof, at
the Closing (as defined in paragraph 1.2 below), Seller agrees to sell, assign,
transfer and convey to Buyer, and Buyer agrees to purchase from each Seller, the
Preferred Shares set forth opposite such Seller's name in EXHIBIT A attached
hereto. At the Closing, upon payment of the Purchase Price (as defined in
paragraph 1.3 below) the Company is instructed to amend its stock transfer
records to reflect the transfer of the Preferred Shares from Seller to Buyer.
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1.2 CLOSING. The purchase shall be consummated at a closing ("Closing")
to take place at 11:00 o'clock a.m., at the offices of Buyer on May 4, 2005
("Closing Date") or at such other time or location as the parties hereto agree.
1.3 PURCHASE PRICE. The purchase price ("Purchase Price") shall be
1.7361 shares of Buyer's Series "A" preferred stock for each issued and
outstanding Preferred Share for an aggregate purchase price of 733,778 shares of
Buyer's Series A preferred stock ("Buyer's Preferred Shares") for all of the
Preferred Shares, such Buyer's Preferred Shares to be allocated to Sellers as
set forth in Exhibit A. The Purchase Price shall be paid at Closing, by issuance
and delivery of Buyer's Preferred Shares to Sellers against receipt of a
certificate from an officer of the Company confirming that the Company has
transferred on its stock ledger ownership of the Preferred Shares from Seller to
Buyer (the "Officer's Certificate").
1.4 OTHER AGREEMENTS. At the Closing, Buyer and each Seller shall
execute and deliver the Registration Rights Agreement in substantially the form
attached hereto as Exhibit "B".
1.5 BASIC AGREEMENTS AND TRANSACTIONS DEFINED. This Agreement and other
agreements listed in paragraph 1.4, are sometimes referred to as the "Basic
Agreements". The transactions contemplated by the Basic Agreements and the
Common Stock Purchase Agreements are sometimes referred to as the
"Transactions".
II.
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to Buyer as follows:
(a) ORGANIZATION. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of
the State of Delaware. The Company has all requisite corporate power
and authority to own, lease and operate its properties and to carry on
its business. The Company is duly qualified and in good standing as a
foreign corporation in each jurisdiction where its ownership of
property or operation of its business requires qualification, except
where the failure to be qualified would not have a material adverse
effect on the Company.
(b) CAPITAL STRUCTURE. The authorized capital stock of the
Company consists of One million (1,000,000) shares of common stock,
$.001 par value and Five Hundred Thousand (500,000) shares of preferred
stock, $.001 par value. At Closing, 349,093.5 shares of common stock,
and 422,656 Preferred Shares, will be issued and outstanding. All
outstanding shares of capital stock of the Company were, when issued,
duly authorized, validly issued, fully paid and nonassessable and not
subject to preemptive rights. There are
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no bonds, debentures, notes or other indebtedness of the Company having
the right to vote on any matters on which stockholders of the Company
may vote. Except as set forth in SCHEDULE 2.1 (B), as of the date of
this Agreement, there are no outstanding options, warrants, calls,
rights, commitments, agreements, arrangements or undertakings of any
kind to which the Company is a party or by which is bound or obligated
the Company to issue, deliver or sell, or cause to be issued, delivered
or sold, additional shares of capital stock or other voting securities
of the Company.
(c) AUTHORITY. The Company has full power and lawful authority
to execute and deliver the Basic Agreements to which it is a party and
to perform its obligations thereunder. The Basic Agreements to which
the Company is party constitute (or shall, upon execution, constitute)
valid and legally binding obligations upon the Company, enforceable in
accordance with their terms subject to applicable bankruptcy,
insolvency, reorganization, moratorium, and similar laws of general
applicability relating to or affecting creditors' rights and to general
principles of equity. Neither the execution and delivery of the Basic
Agreements by the Company, nor the consummation and performance of the
Transactions contemplated thereby, conflicts with, requires the
consent, waiver or approval of, results in a breach of or default
under, or gives to others any interest or right of termination,
cancellation or acceleration in or with respect to, any material
agreement by which the Company is a party or by which the Company or
any of its material properties or assets are bound or affected.
(d) NO UNDISCLOSED LIABILITIES. Except as set forth in the
Private Placement Memorandum of the Company dated April 27, 2005 (the
"Private Placement Memo"), the Company is not aware of any material
liabilities for which the Company is liable or will become liable in
the future.
(e) TAXES. The Company has filed all federal, state, local tax
and other returns and reports which were required to be filed with
respect to all taxes, levies, imposts, duties, licenses and
registration fees, charges or withholdings of every nature whatsoever
("Taxes"), and there exists a substantial basis in law and fact for all
positions taken in such reports. No waivers of periods of limitation
are in effect with respect to any taxes arising from and attributable
to the ownership of properties or operations of the business of the
Company.
(f) PROPERTIES. Except as set forth in the Private Placement
Memo, the Company has good and marketable title to all its material
personal property, equipment, processes, patents, copyrights,
trademarks, franchises, licenses and other material properties and
assets (except for items leased or licensed to the Company), in each
case free and clear of all material liens, claims and encumbrances of
every kind and character.
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(g) BOOKS AND RECORDS. The books and records of the Company
are complete and correct in all material respects, have been maintained
in accordance with good business practices and accurately reflect in
all material respects the business, financial condition and results of
operations of the Company.
(h) TRANSACTIONS WITH CERTAIN PERSONS. Except as disclosed in
SCHEDULE 2.1(H) or in the Private Placement Memo, the Company has no
outstanding material agreement, understanding, contract, lease,
commitment, loan or other material arrangement with any officer,
director or shareholder of the Company or any relative of any such
person, or any corporation or other entity in which such person owns a
beneficial interest.
(i) MATERIAL CONTRACTS. Except as set forth in the Private
Placement Memo, the Company has no purchase, sale, commitment, or other
contract, the breach or termination of which would have a materially
adverse effect on the business, financial condition, results of
operations, assets, liabilities, or prospects of the Company.
(j) AUTHORIZATIONS. The Company has no licenses, permits,
approvals and other authorizations from any governmental agencies and
any other entities that are materially necessary for the conduct of its
business..
(k) NO POWERS OF ATTORNEY. The Company has no powers of
attorney or similar authorizations outstanding.
(l) COMPLIANCE WITH LAWS. To the best of the Company's
knowledge, the Company is not in violation of any federal, state, local
or other law, ordinance, rule or regulation applicable to its business,
and has not received any actual or threatened complaint, citation or
notice of violation or investigation from any governmental authority,
in each case where such violation would have a material adverse effect
on the Company.
(m) NO LITIGATION. There are no actions, suits, claims,
complaints or proceedings pending or, to the knowledge of the Company,
threatened against the Company, at law or in equity, or before or by
any governmental department, commission, court, board, bureau, agency
or instrumentality; and, except as set forth in the Private Placement
Memo, there are no facts which would provide a valid basis for any such
action, suit or proceeding, which, if determined adversely to the
Company, would have a material adverse effect on the Company. There are
no orders, judgments or decrees of any governmental authority
outstanding which specifically apply to the Company or any of its
assets.
(n) VALIDITY. All material contracts, agreements, leases and
licenses to which the Company is a party or by which it or any of its
material properties or assets are bound or affected, are valid and in
full force and effect; and no breach or default exists, or upon the
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giving of notice or lapse of time, or both, would exist, on the part of
the Company or to the knowledge of the Company, by any other party
thereto.
(o) NO ADVERSE CHANGES. Since April 30, 2005, there have been
no actual or threatened developments of a nature that is materially
adverse to or involves any materially adverse effect upon the business,
financial condition, results of operations, assets, liabilities, or
prospects of the Company.
(p) FEES. Except as disclosed in SCHEDULE 2.1(P), all
negotiations relating to the Basic Agreements and the Transactions have
been conducted by the Company in such a manner as not to give rise to
any valid claim for any finder's fees, brokerage commission, financial
advisory fee or related expense or other like payment for which the
Company or Buyer are or may be liable.
(q) FULL DISCLOSURE. All representations of the Company
contained in the Basic Agreements are true and correct in all material
respects and do not omit any material fact necessary to make the
statements contained therein not misleading in light of the
circumstances under which they were made. There are no facts known to
the Company which could have a materially adversely affect upon the
business, financial condition, results of operations, assets,
liabilities, or prospects of the Company, which have not been disclosed
to Buyer in the Basic Agreements or are set forth in the Private
Placement Memo.
2.2 REPRESENTATIONS AND WARRANTIES OF SELLERS. Sellers severally and
not jointly represent and warrant to Buyer, with respect to the Preferred Shares
owned by Seller, as follows:
(a) AUTHORITY. Seller has full power and lawful authority to
execute and deliver the Basic Agreements and to consummate and perform
the Transactions contemplated thereby. The Basic Agreements constitute
(or shall, upon execution, constitute) valid and legally binding
obligations upon Seller, enforceable in accordance with their terms
subject to applicable bankruptcy, insolvency, reorganization,
moratorium, and similar Laws of general applicability relating to or
affecting creditors' rights and to general principles of equity.
Neither the execution and delivery of the Basic Agreements by Seller,
nor the consummation and performance of the Transactions contemplated
thereby, conflicts with, requires the consent, waiver or approval of,
results in a breach of, or default under, or gives to others any
interest or right of termination, cancellation or acceleration in or
with respect to, any material agreement by which Seller is a party or
by which a Seller or any of its material properties, or assets are
bound or affected.
(b) TITLE TO THE PREFERRED SHARES. At the Closing, Seller
shall own of record and beneficially the Preferred Shares of the
Company set forth opposite such Seller's name on EXHIBIT A, free and
clear of all liens, encumbrances, pledges, claims, options, charges and
assessments of any nature whatsoever, with full right and lawful
authority to transfer
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the Preferred Shares to Buyer. No person has any preemptive rights or
rights of first refusal with respect to any of the Preferred Shares.
There exists no voting agreement, voting trust, or outstanding proxy
with respect to any of the Preferred Shares. There are no outstanding
rights, options, warrants, calls, commitments, or any other agreements
of any character, whether oral or written, with respect to the
Preferred Shares.
(c) INVESTMENT INTENT. Seller is acquiring the shares of Buyer
for its own account, for investment purposes only, and not with a view
to the sale or distribution of any part thereof, and Seller has no
present intention of selling, granting participation in, or otherwise
distributing the same. Seller understands the specific risks related to
an investment in the shares of Buyer, especially as it relates to the
financial performance of Buyer. Seller has no present or contemplated
agreement, undertaking, arrangement, obligation, indebtedness or
commitment providing for the disposition thereof. Seller will hold the
Preferred Shares in a manner commensurate with a private offering by
Buyer as that term is defined by the Securities and Exchange
Commission.
2.3 REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Seller as follows:
(a) ORGANIZATION. Buyer is a corporation duly incorporated,
validly existing and in good standing under the laws of the state of
Delaware. Buyer has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business. Buyer is
duly qualified and in good standing as a foreign corporation in each
jurisdiction where its ownership of property or operation of its
business requires qualification, except where the failure to be
qualified would not have a material adverse effect on the Company.
(b) AUTHORIZED CAPITALIZATION. The authorized capitalization
of Buyer consists of Fifty Million (50,000,000) shares of .001 par
value Common Stock, of which Twelve Million Eight Hundred Twenty-Five
Thousand (12,825,000) shares will be issued and outstanding prior to
Closing and One Million (1,000,000) shares of .001 par value Preferred
Stock, none of which will be issued and outstanding prior to Closing.
Buyer's Preferred Shares have been duly authorized, validly issued, are
fully paid and nonassessable with no personal liability attaching to
the ownership thereof and were offered, issued, sold and delivered by
Buyer in compliance with all applicable state and federal laws. At
Closing, except as disclosed in SCHEDULE 2.3(B), Buyer will not have
any outstanding rights, options, warrants, calls, commitments,
conversion or any other agreements of any other character, including
without limitation, registration rights agreements, whether oral or
written, obligating it to issue any shares of its capital stock whether
authorized or not. Buyer is not a party to and is not bound by any
agreement, contract, arrangement or understanding, whether oral or
written, giving any person or entity any interest in, or any right to
share, participate in or receive any portion of, Buyer's income,
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profits or assets, or obligating Buyer to distribute any portion of its
income, profits or assets.
(c) NO SUBSIDIARY. As of the date of this Agreement, the
Company does not directly or indirectly own any equity or similar
interest in, or any interest convertible into or exchangeable or
exercisable for, any corporation, partnership, joint venture or other
business association or entity.
(d) AUTHORITY. (1) Buyer has all necessary power and authority
to execute and deliver the Basic Agreements, to perform its obligations
hereunder and thereunder, and, subject to obtaining necessary
stockholder approval (if required by applicable Law) in connection with
the Transactions, to consummate the Transactions. The execution,
delivery and performance by the Buyer of the Basic Agreements, and the
consummation by Buyer of the Transactions have been duly authorized by
all necessary corporate action and no other corporate proceedings on
the part of Buyer are necessary to authorize the Basic Agreements or to
consummate the Transactions (other than, with respect to the
contemplated reverse stock split, the approval and adoption of such by
the affirmative vote of a majority of the voting power of the then
outstanding shares of Common Stock and the filing and recordation of
appropriate documents as required by the Delaware General Corporation
Law). This Agreement has been duly executed and delivered by Buyer and,
assuming the due authorization, execution and delivery by Seller,
constitutes a legal, valid and binding obligation of Buyer enforceable
against Buyer in accordance with its terms subject to subject to
applicable bankruptcy, insolvency, reorganization, moratorium, and
similar Laws of general applicability relating to or affecting
creditors' rights and to general principles of equity.
(2) By unanimous written consent dated May 3, 2005 the Board of Buyer
(i) determined that the Basic Agreements and the Transactions are
advisable and in the best interests of Buyer and Buyer's stockholders,
(ii) approved and adopted the Basic Agreements and the Transactions,
(iii) resolved to recommend approval and adoption of this Agreement and
the amendment of the certificate of incorporation of Buyer by the
Buyer's stockholders in a form attached hereto as Schedule 2.3(d). The
actions taken by the Board constitute approval of the Basic Agreements
and the Transactions.
(e) REQUIRED FILINGS AND CONSENTS. The execution and delivery
of the Basic Agreements by Buyer do not, and the performance of the
Basic Transactions by Buyer will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any
United States federal, state or local or any foreign government or any
court, administrative or regulatory agency or commission or other
governmental authority or agency, domestic or foreign (a "Governmental
Entity"), except (i) for applicable requirements, if any, of the
Securities Exchange Act of 1934 (the "Exchange Act"), state securities
or "blue sky" laws and filing and recordation of appropriate documents
as
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required by the Delaware General Corporation Law and (ii) for filings
contemplated by Section 2.2(d) hereof.
(f) NO CONFLICT. The execution and delivery of the Basic
Agreements by Buyer do not, and the performance of the Basic Agreements
by Buyer and the consummation of the Transactions will not (i) conflict
with or violate Certificate of Incorporation or Bylaws of Buyer, (ii)
subject to Section 2.2 (e), conflict with or violate any United States
federal, state or local or any foreign statute, law, rule, regulation,
ordinance, code, order, judgment, decree or any other requirement or
rule of law (a "Law") applicable to Buyer or by which any property or
asset of Buyer is bound or affected, or (iii) result in a breach of or
constitute a default (or an event which with notice or lapse of time or
both would become a default) under, give to others any right of
termination, amendment, acceleration or cancellation of, result in
triggering any payment or other obligations, or result in the creation
of a lien or other encumbrance on any property or asset of Buyer in any
case that would be material to Buyer pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation or material contract to
which Buyer is a party or by which Buyer or any property or asset of
any of them is bound or affected.
(g) COMPLIANCE. Buyer (i) has been operated at all times in
compliance in all material respects with all Laws applicable to Buyer
or by which any property, business or asset of Buyer is bound or
affected and (ii) is not in default or violation of any notes, bonds,
mortgages, indentures, contracts, agreements, leases, licenses,
permits, franchises, or other instruments or obligations to which Buyer
is a party or by which Buyer or any property or asset of Buyer is bound
or affected other than defaults or violations which individually or in
the aggregate would reasonably be expected to be material to Buyer.
(h) SEC FILINGS. Buyer and, to Buyer's knowledge, each of its
current stockholders has filed all forms, reports, statements and
documents required to be filed with the SEC since May 29, 2003 (the
"SEC REPORTS"), each of which has complied in all material respects
with the applicable requirements of the Securities Act of 1933, as
amended (the "SECURITIES ACT"), and the rules and regulations
promulgated thereunder, and the Exchange Act, and the rules and
regulations promulgated thereunder, each as in effect on the date so
filed. Other than as disclosed in Risk Factor 12 of the Private
Placement Memorandum of the Company dated April 27, 2005, none of the
SEC Reports (including, any financial statements or schedules included
or incorporated by reference therein) contained when filed any untrue
statement of a material fact or omitted to state a material fact
required to be stated or incorporated by reference therein or necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Other than as
disclosed in Risk Factor 12 of the Private Placement Memorandum of the
Company dated April 27, 2005 and except to the extent that information
contained in any SEC Report has been revised or superseded by a later
filed
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SEC Report, none of the SEC Reports contains any untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading. The principal executive officer of the Company
and the principal financial officer of the Company (and each former
principal executive officer of the Company and each former principal
financial officer of the Company, as applicable) has made the
certifications required by Sections 302 and 906 of the Xxxxxxxx-Xxxxx
Act of 2002 (the "XXXXXXXX-XXXXX ACT") and the rules and regulations of
the SEC thereunder with respect to the Company's filings pursuant to
the Exchange Act. For purposes of the preceding sentence, "principal
executive officer" and "principal financial officer" shall have the
meanings given to such terms in the Xxxxxxxx-Xxxxx Act.
(i) BUYER'S FINANCIAL STATEMENTS. All of the financial
statements included in the SEC Reports, in each case, including any
related notes thereto, as filed with the SEC (those filed with the SEC
are collectively referred to as the "BUYER FINANCIAL STATEMENTS"), have
been prepared in accordance with generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto or,
in the case of the unaudited statements, as may be permitted in the
Form 10-QSB of the SEC and subject, in the case of the unaudited
statements, to normal, recurring audit adjustments) and fairly present
the consolidated financial position of Buyer at the respective dates
thereof and the results of its operations and changes in cash flows for
the periods indicated. Except as set forth in Buyer Financial
Statements, Buyer is not aware of any material liabilities for which it
is liable or will become liable in the future.
(j) TAXES. Buyer has timely filed all Tax Returns (as defined
below) required to be filed by it. All such Tax Returns are true,
correct and complete in all material respects. All Taxes (as defined
below) of Buyer which are (i) shown as due on such Tax Returns, (ii)
otherwise due and payable or (iii) claimed or asserted by any taxing
authority to be due, have been paid, except for those Taxes being
contested in good faith and for which adequate reserves have been
established in the financial statements included in the SEC Reports in
accordance with GAAP. There are no liens for any Taxes upon the assets
of Buyer, other than statutory liens for Taxes not yet due and payable
and liens for real estate Taxes contested in good faith. Buyer does not
know of any proposed or threatened Tax claims or assessments which, if
upheld, could individually or in the aggregate have a material adverse
effect on the Buyer or its financial conditions. Buyer has not waived
any statute of limitations in respect of Taxes or agreed to any
extension of time with respect to a Tax assessment or deficiency. Buyer
has withheld and paid over to the relevant taxing authority all Taxes
required to have been withheld and paid in connection with payments to
employees, independent contractors, creditors, stockholders or other
third parties. The unpaid Taxes of Buyer for the current taxable period
(A) did not, as of the most recent Buyer Financial Statements, exceed
the reserve for Tax liability set forth on the face of the balance
sheet in the most recent Buyer Financial Statements and (B) do not
exceed that reserve as adjusted for the passage of time through the
Closing in accordance with the past custom and practice of Buyer in
filing its Tax Returns. For purposes of this Agreement, (a) "Tax (and,
with correlative meaning, "Taxes) means any federal, state, local or
foreign income, gross receipts, property, sales, use, license, excise,
franchise, employment, payroll, premium, withholding, alternative or
added minimum, ad
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valorem, transfer, franchise or excise tax, or any other tax, custom,
duty, governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest or penalty or addition thereto,
whether disputed or not, imposed by any Governmental Entity, and (b)
"Tax Return means any return, report or similar statement required to
be filed with respect to any Tax (including any attached schedules),
including any information return, claim for refund, amended return or
declaration of estimated Tax.
(k) CHANGE OF CONTROL AGREEMENT. Neither the execution and
delivery of the Basic Agreements nor the consummation of the
Transactions (either alone or in conjunction with any other event)
result in, cause the accelerated vesting or delivery of, or increase
the amount or value of, any payment or benefit to any director,
officer, employee or consultant of Buyer. Without limiting the
generality of the foregoing, no amount paid or payable by Buyer in
connection with the Transactions contemplated by this Agreement,
including accelerated vesting of options (either solely as a result
thereof or as a result of such transactions in conjunction with any
other event), will be an "excess parachute payment within the meaning
of Section 280G of the Internal Revenue Code.
(l) INVESTMENT INTENT. Buyer is acquiring the Shares for its
own account, for investment purposes only, and not with a view to the
sale or distribution of any part thereof, and Buyer has no present
intention of selling, granting participation in, or otherwise
distributing the same. Buyer understands the specific risks related to
an investment in the Shares, especially as it relates to the financial
performance of the Company.
(m) MATERIAL CONTRACTS. Buyer has no purchase, sale,
commitment, or other contract, the breach or termination of which would
have a materially adverse effect on the business, financial condition,
results of operations, assets, liabilities, or prospects of Buyer.
(n) NO LITIGATION. There are no actions, suits, claims,
complaints or proceedings pending or threatened against Buyer, at law
or in equity, or before or by any governmental department, commission,
court, board, bureau, agency or instrumentality; and there are no facts
which would provide a valid basis for any such action, suit or
proceeding, which, if determined adversely to the Buyer, would have a
material adverse effect on the Buyer. There are no orders, judgments or
decrees of any governmental authority outstanding which specifically
apply to Buyer or any of its assets.
(o) NO OPERATIONS. Buyer does not currently have any business
operations or material assets. Upon consummation of the Transactions,
Buyer shall not have in excess of $10,000 in debts, obligations or
liabilities of any kind or nature.
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III.
COVENANTS
3.1 COVENANTS OF THE COMPANY. The Company covenants and agrees that
from the date hereof to the Closing, it will perform the following acts:
(a) ORDINARY COURSE OF BUSINESS. The Company will operate its
business only in the ordinary course of business and will use its best
efforts to preserve the Company's business, organization, goodwill and
relationships with persons having business dealings with the Company.
(b) MAINTAIN PROPERTIES. The Company will maintain all of its
properties in good working order, repair and condition (reasonable wear
and use excepted) and will take all steps reasonably necessary to
maintain in full force and effect its patents, trademarks, service
marks, trade names, brand names, copyrights and other intangible
assets.
(c) COMPENSATION. The Company will not (1) enter into or alter
any employment agreements; (2) grant any increase in compensation other
than normal merit increases consistent with the Company's general
prevailing practices to any officer or employee; or (3) enter into or
alter any labor or collective bargaining agreement or any bonus or
other employee fringe benefit.
(d) NO INDEBTEDNESS. The Company will not create, incur,
assume, guarantee or otherwise become liable with respect to any
obligation for borrowed money, indebtedness, capitalized lease or
similar obligation, except in the ordinary course of business
consistent with past practices, where the entire net proceeds thereof
are deposited with and used by and in connection with the business of
the Company.
(e) MAINTAIN BOOKS. The Company will maintain its books,
accounts and records in the usual, regular ordinary and sound business
manner and in accordance with generally accepted accounting principles
applied on a basis consistent with past practices.
(f) NO AMENDMENTS. The Company will not amend its corporate
charter or bylaws (or similar documents) without prior the consent of
Buyer and the Company will maintain its corporate existence, licenses,
permits, powers and rights in full force and effect.
(g) TAXES AND ACCOUNTING MATTERS. The Company will file when
due all federal, state and local tax returns and reports which shall be
accurate and complete, including but not limited to income, franchise,
excise, ad valorem, and other taxes with respect to its business and
properties, and to pay as they become due all taxes or
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assessments, except for taxes for which adequate reserves are
established and which are being contested in good faith by appropriate
proceedings. The Company will not change its accounting methods or
practices or any depreciation, amortization or inventory valuation
policies or practices.
(h) NO DISPOSITION OR ENCUMBRANCE. Except in the ordinary
course of business consistent with past practices, the Company will not
(1) dispose of or encumber any of its properties and assets, (2)
discharge or satisfy any lien or encumbrance or pay any obligation or
liability (fixed or contingent) except for previously scheduled
repayment of debt, (3) cancel or compromise any debt or claim, (4)
transfer or grant any rights under any concessions, leases, licenses,
agreements, patents, inventions, proprietary technology or process,
trademarks, service marks or copyrights, or with respect to any
know-how, or (5) enter into or modify in any material respect or
terminate any existing license, lease, or contract.
(i) NO DIVIDENDS. The Company will not declare, set aside or
pay any dividends or other distributions of any nature whatsoever.
(j) NO BREACH. The Company will not do any act or omit to do
any act which would cause a breach of any of its material contracts,
commitments or obligations.
(k) DUE COMPLIANCE. The Company will comply with all laws,
regulations, rules and ordinances applicable to it and to the conduct
of its business, the violation of which would have a material adverse
effect on the Company.
(l) NO WAIVERS OF RIGHTS. The Company will not amend,
terminate or waive any material right whether or not in the ordinary
course of business.
(m) NO RELATED PARTY TRANSACTIONS. The Company will not make
any loans to, or enter into any transaction, agreement, arrangement or
understanding of any material nature with any of its officers,
directors or employees.
(n) NOTICE OF CHANGE. The Company will promptly advise Buyer
in writing of any material adverse change, or the occurrence of any
event which involves any substantial possibility of a material adverse
change, in its business, financial condition, results of operations,
assets, liabilities or prospects.
(o) CONSENTS. The Company will use its best good faith efforts
to obtain the consent or approval of each person or entity whose
consent or approval is required for the consummation of the
Transactions contemplated hereby and to do all things necessary to
consummate the Transactions contemplated by the Basic Agreements.
-12-
3.2 COVENANTS OF BUYER. Buyer covenants and agrees to perform the
following acts:
(a) NO INDEBTEDNESS. Buyer will not create, incur, assume,
guarantee or otherwise become liable with respect to any obligation for
borrowed money, indebtedness, capitalized lease or similar obligation,
except in the ordinary course of business consistent with past
practices, where the entire net proceeds thereof are deposited with and
used by and in connection with the business of Buyer.
(b) NO AMENDMENTS. Buyer will not amend its corporate charter
or bylaws (or similar documents) without the prior consent of the
Company and Buyer will maintain its corporate existence, licenses,
permits, powers and rights in full force and effect.
(c) NO DIVIDENDS. Buyer will not declare, set aside or pay any
dividends or other distributions of any nature whatsoever.
(d) CONTRACTS. Buyer will not enter into or assume any
contract, agreement, obligation, lease, license, or commitment except
in the ordinary course of business consistent with past practices or as
contemplated by this Agreement.
(e) NO RELATED PARTY TRANSACTIONS. Buyer will not make any
loans to, or enter into any transaction, agreement, arrangement or
understanding of any material nature with any of its officers,
directors or employees.
(f) NO DIVIDENDS. Buyer will not declare, set aside or pay any
dividends or other distributions of any nature whatsoever.
(g) NO BREACH. Buyer will not do any act or omit to do any act
which would cause a breach of any of its material contracts,
commitments or obligations.
(h) DUE COMPLIANCE. Buyer will comply with all laws,
regulations, rules and ordinances applicable to it and to the conduct
of its business, the violation of which would have a material adverse
effect on the Buyer.
(i) NO WAIVERS OF RIGHTS. Buyer will not amend, terminate or
waive any material right whether or not in the ordinary course of
business.
(j) NO SECURITIES ISSUANCES. Buyer will not issue any shares
of any class of capital stock, or enter into any contract, option,
warrant or right calling for the issuance of any such shares of capital
stock, or create or issue any securities convertible into any
securities of the Buyer.
-13-
(k) TAXES AND ACCOUNTING MATTERS. Buyer will file when due all
federal, state and local tax returns and reports which shall be
accurate and complete, including but not limited to income, franchise,
excise, ad valorem, and other taxes with respect to its business and
properties, and to pay as they become due all taxes or assessments,
except for taxes for which adequate reserves are established and which
are being contested in good faith by appropriate proceedings. Buyer
will not change its accounting methods or practices or any
depreciation, amortization or inventory valuation policies or
practices.
(l) NOTICE OF CHANGE. Buyer will promptly advise the Company
in writing of any material adverse change, or the occurrence of any
event which involves any substantial possibility of a material adverse
change, in its business, financial condition, results of operations,
assets, liabilities or prospects.
(m) CONSENTS. Buyer will use its best good faith efforts to
obtain the consent or approval of each person or entity other than a
Governmental Entity whose consent or approval is required for the
consummation of the Transactions contemplated hereby and to do all
things necessary to consummate the Transactions contemplated by the
Basic Agreements.
IV.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF BUYER TO CLOSE
The obligation of Buyer to close the Transactions contemplated hereby
is subject to the fulfillment by the Company and Seller prior to Closing of each
of the following conditions, which may be waived in whole or in part by Buyer:
4.1 COMPLIANCE WITH REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties of the Company and Seller contained in this
Agreement shall have been true and correct when made and shall be true and
correct as of the Closing with the same force and effect as if made at the
Closing. The Company and Seller shall have performed all agreements, covenants
and conditions required to be performed by the Company and Seller prior to the
Closing.
4.2 NO ADVERSE CHANGE. Subsequent to the date hereof and prior to the
Closing, there shall have been no event which has had or may have a material
adverse effect upon the business, financial condition, results of operation,
assets, liabilities or prospects of the Company.
4.3 NO LEGAL PROCEEDINGS. No suit, action or other legal or
administrative proceeding before any court or other governmental agency shall be
pending or threatened seeking to enjoin the consummation of the Transactions
contemplated hereby.
-14-
4.4 DOCUMENTS TO BE DELIVERED BY THE COMPANY AND SELLER. The Company
and Seller shall have delivered the following documents:
(a) An acknowledgment of the Company that it has been
instructed to amend its stock transfer records to reflect a transfer of
the Common Stock (pursuant to payment under the Common Stock Purchase
Agreement) and the Preferred Shares to Buyer following payment under
section 5.6.
(b) A copy of (i) the Articles of Incorporation of the
Company; and (ii) the Bylaws of the Company; and (iii) a certificate
from the Delaware Secretary of State, to the effect that the Company is
in good standing and has paid all franchise taxes;
(c) All agreements referred to in paragraph 1.5 above,
executed by all parties thereto other than Buyer.
(d) All corporate and other records of or applicable to the
Company including but not limited to, current and up-to-date minute
books, stock transfer books and registers, books of accounts, leases
and material contracts.
(e) Employment agreements between the Company and Xxx Xxxxxxxx
and Xxxxxxx Xxxxxx attached hereto as Exhibits "C" and "D".
(f) Such other documents or certificates as shall be
reasonably required by Buyer or its counsel in order to close and
consummate this Agreement.
V.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF THE COMPANY AND SELLER TO CLOSE
The obligation of the Company and Sellers to close the Transactions is
subject to the fulfillment prior to Closing of each of the following conditions,
any of which may be waived in whole or in part by the Company and Seller:
5.1 COMPLIANCE WITH REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties made by Buyer in this Agreement shall have been
true and correct when made and shall be true and correct in all material
respects at the Closing with the same force and effect as if made at the
Closing, and Buyer shall have performed all agreements, covenants and conditions
required to be performed by Buyer prior to the Closing.
-15-
5.2 NO LEGAL PROCEEDINGS. No suit, action or other legal or
administrative proceedings before any court or other governmental agency shall
be pending or threatened seeking to enjoin the consummation of the Transactions
contemplated hereby.
5.3 OTHER AGREEMENTS. All parties other than Seller and the Company
shall have executed and delivered the Basic Agreements.
5.4 DOCUMENTS TO BE DELIVERED BY BUYER. Buyer shall have delivered the
following documents:
(a) A copy, certified by the Secretary of the Buyer, of (i)
the Articles of Incorporation of the Buyer; and (ii) the Bylaws of the
Buyer; (iii) resolutions of the Board authorizing execution and
delivery of this Agreement; and (iv) a certificate from the Delaware
Secretary of State, to the effect that the Buyer is in good standing
and has paid all franchise taxes;
(b) Corporate minutes of Buyer's directors attached hereto as
Exhibit "E" accepting and attaching the resignation of Xxxxx Xxxxx Prag
IV as a director, and appointment of Xxx Xxxxxxxx as a director,
accepting and attaching the resignations of Xxxxxxx Xxxxxxxxx and Xxxxx
Xxxxx Prag IV as officers and appointing Xxxxxxx Xxxxxx as President
and Chief Executive Officer and Xxx Xxxxxxxx as Secretary of Buyer.
(c) A copy, certified by the Secretary of State of the State
of Delaware of the Certificate of Designation in the form attached as
Exhibit "G" authorizing the Preferred Shares.
(d) All corporate and other records of or applicable to the
Buyer including but not limited to, current and up-to-date minute
books, stock transfer books and registers, books of accounts, leases
and material contracts.
(e) The Preferred Shares issued to the Sellers in the
proportions set forth in section 5.6; and
(f) The Common Stock issued to the Sellers (as such term is
defined in the Common Stock Purchase Agreement) identified in Exhibit
"H" in the amounts set forth in Exhibit "H".
5.5 NO ADVERSE CHANGE. Subsequent to the date hereof and prior to the
Closing, there shall have been no event which has had or may have a material
adverse effect upon the business, financial condition, results of operation,
assets, liabilities or prospects of the Company.
-16-
5.6 PAYMENTS. Sellers shall have received from Buyer a total of 773,778
shares of Buyer's preferred stock, issued at the Closing by Buyer pursuant to
all the Basic Agreements in the following proportions:
Xxx Xxxxxxxx 279,042.625
Xxxxxxx Xxxxxx 279,042.625
Xxxxxx Xxxx 66,317.75
Xxx Xxxxxx 54,687.5
Hayden Communications, Inc. 54,687.5
VI.
CONDITION SUBSEQUENT; MODIFICATION, WAIVERS, TERMINATION
AND EXPENSES
6.1 CONDITION SUBSEQUENT. It shall be a condition subsequent to the
Closing that immediately following the Closing, a majority of the stockholders
of Buyer shall deliver a Written Consent executed by a majority of the holders
of Buyer authorizing (a) an amendment and restatement of the Certificate of
Incorporation of Buyer including a change of the name of Buyer to "Catcher
Holdings, Inc.", (b) the Reverse Split (as described in the Private Placement
Memorandum); and (c) the election of Xxx Xxxxxxxx, Xxxxxxx Xxxxxx, Xxxxxx Xxxxx,
and , as the members of the Board of Directors of Buyer.
6.2 MODIFICATION. Buyer, the Company and Seller may amend, modify or
supplement this Agreement in any manner as they may mutually agree in writing.
6.3 WAIVERS. Buyer, the Company and Seller may in writing extend the
time for or waive compliance by the other with any of the covenants or
conditions of the other contained herein.
6.4 TERMINATION AND ABANDONMENT. This Agreement may be terminated and
the purchase of the Preferred Shares may be abandoned before the Closing:
(a) By the mutual consent of Sellers, the Company and Buyer;
(b) By Buyer, if the representations and warranties of the
Company or Seller set forth herein shall not be accurate, or the
conditions precedent set forth in Article IV shall have not have been
satisfied in all material respects; or
(c) By the Company or Seller, if the representations and
warranties of Buyer set forth herein shall not be accurate, or the
conditions precedent set forth in Article V shall not have been
satisfied in all material respects.
-17-
Termination shall be effective on the date of receipt of written notice
specifying the reasons therefor.
VII.
MISCELLANEOUS
7.1 REPRESENTATIONS AND WARRANTIES TO SURVIVE. Unless otherwise
provided, all of the representations and warranties contained in this Agreement
and in any certificate, exhibit or other document delivered pursuant to this
Agreement shall survive the Closing for a period of two (2) years. No
investigation made by any party hereto or their representatives shall constitute
a waiver of any representation or warranty, and no such representation or
warranty shall be merged into the Closing.
7.2 BINDING EFFECT OF THE BASIC AGREEMENTS. The Basic Agreements and
the certificates and other instruments delivered by or on behalf of the parties
pursuant thereto constitute the entire agreement between the parties. The terms
and conditions of the Basic Agreements shall inure to the benefit of and be
binding upon the respective heirs, legal representatives, successor and assigns
of the parties hereto. Nothing in the Basic Agreements, expressed or implied,
confers any rights or remedies upon any party other than the parties hereto and
their respective heirs, legal representatives and assigns.
7.3 APPLICABLE LAW. The Basic Agreements are made pursuant to, and will
be construed under, the laws of the State of Delaware.
7.4 NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and will be deemed to have been duly given when
delivered or mailed, first class postage prepaid:
(a) If to Sellers, to:
Xxx Xxxxxxxx
0000 Xxx Xxxx Xxxx
Xxx Xxxxxx, XX 00000
Xxxxxxx Xxxxxx
00000 Xxxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
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Xxxxxx Xxxx
0000 Xx Xxxxx Xxxx
Xxx Xxx, XX 00000
Hayden Communications, Inc.
0000 Xxxxxx Xxxxx
Xxxxx Xxxxxx Xxxxx, XX 00000
Xxx Xxxxxx
X.X. Xxx 00000
Xxx Xxxxx, XX 00000
(b) If to Buyer, to:
U.S. Telesis Holdings, Inc.
ATTN: Xxxxxxxx Xxxxxxxxx, President
00 Xxxxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
TELEPHONE: (000) 000-0000
FAX: (617)
With copies to:
G. Xxxxx Xxxxxx & Associates, P.C.
ATTN: Xxxxx Xxxxxx
0000 Xxxx 00xx Xxxxx, Xxxxx 000
Xxxxx, Xxxxxxxx 00000
TELEPHONE: (000) 000-0000
FAX: (000) 000-0000
These addresses may be changed from time to time by written notice to
the other parties.
7.5 HEADINGS. The headings contained in this Agreement are for
reference only and will not affect in any way the meaning or interpretation of
this Agreement.
7.6 COUNTERPARTS. This Agreement may be delivered by facsimile and
executed in counterparts, each of which will be deemed an original and all of
which together will constitute one instrument.
-19-
7.7 SEVERABILITY. If any one or more of the provisions of this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
under applicable law this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein. The
remaining provisions of this Agreement shall be given effect to the maximum
extent then permitted by law.
7.8 FORBEARANCE; WAIVER. Failure to pursue any legal or equitable
remedy or right available to a party shall not constitute a waiver of such
right, nor shall any such forbearance, failure or actual waiver imply or
constitute waiver of subsequent default or breach.
7.9 ATTORNEYS' FEES AND EXPENSES. The prevailing party in any legal
proceeding based upon this Agreement shall be entitled to reasonable attorneys'
fees and expenses and court costs.
7.10 EXPENSES. Each party shall pay all fees and expenses incurred by
it incident to this Agreement and in connection with the consummation of all
transactions contemplated by this Agreement. However, should either party choose
to terminate this Agreement under Section 6.3(a), that party initiating the
termination shall be responsible for all legal fees and other expenses incurred
in connection with the preparation of this Agreement.
7.11 EXHIBITS. All of the Exhibits to this Agreement are incorporated
herein in the places referenced in this Agreement as if fully set forth herein.
7.12 INTEGRATION. This Agreement and all documents and instruments
executed pursuant hereto merge and integrate all prior agreements and
representations respecting the Transactions, whether written or oral, and
constitute the sole agreement of the parties in connection therewith. This
Agreement has been negotiated by and submitted to the scrutiny of both Seller
and Buyer and their counsel and shall be given a fair and reasonable
interpretation in accordance with the words hereof, without consideration or
weight being given to its having been drafted by either party hereto or its
counsel.
[Remainder of Page Intentionally Left Blank]
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[Preferred Stock Exchange Agreement]
IN WITNESS WHEREOF, the undersigned parties hereto have duly executed
this Agreement on the date first written above.
"BUYER"
U.S. TELESIS HOLDINGS, INC.
BY:
--------------------------------
XXXXXXXX XXXXXXXXX, PRESIDENT
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"THE COMPANY"
CATCHER, INC.
BY:
---------------------------------
XXX XXXXXXXX, PRESIDENT
"SELLER"
---------------------------------
XXX XXXXXXXX
---------------------------------
XXXXXXX XXXXXX
---------------------------------
XXXXXX XXXX
---------------------------------
XXX XXXXXX
---------------------------------
HAYDEN COMMUNICATIONS, INC.
-22-
