EXHIBIT 10.02
TERMINATION AGREEMENT
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This Termination Agreement (the "Termination Agreement") is made and
entered into this 11th day of September, 1996 by and among PortaCom Wireless,
Inc., a British Columbia corporation ("PWI"), Asian American Telecommunications
Corporation, a Cayman Islands corporation ("AAT") and Xxx X. Xxxxxxx, as Agent
of and on behalf of the holders of shares in the capital of AAT who are parties
to the Acquisition Agreement (as defined below) (the "AAT Shareholders").
RECITAL
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WHEREAS, the parties have concluded that it is in their mutual best
interests and the best interests of their respective shareholders to terminate
on the terms provided herein that certain Acquisition Agreement and Plan of
Reorganization dated April 29, 1996, as amended by the First and Second
Amendments dated May 20, 1996 and July 18, 1996, respectively, by and among PWI,
AAT and the AAT Shareholders ("the Acquisition Agreement").
Now, therefore, the parties hereto agree as follows:
AGREEMENT
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1. Termination. The Acquisition Agreement and all rights and
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obligations arising thereunder are hereby terminated, released and shall be of
no further force and effect.
2. Consideration. As consideration for this termination and the
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release set forth below, AAT shall, subject to the conditions provided below,
issue to PWI two million (2,000,000) shares in the capital of AAT (the "Shares")
and warrants to acquire four million (4,000,000) shares
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in the capital of AAT exercisable for a period of three years from the date
hereof at an exercise price of four dollars ($4.00) per share (the "Warrants")
in the form of the Warrant attached hereto as Exhibit A. The Shares and the
Warrants shall be issued to PWI upon execution of this Termination Agreement;
provided, that, the Shares shall not be delivered to PWI upon issuance but shall
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instead be pledged by PWI to AAT as collateral security for PWI's
indemnification obligations pursuant to Section 3 below, to be held on the terms
described below. Additionally, AAT shall pay to PWI One Million Dollars
($1,000,000.00) cash upon execution of this Termination Agreement. The Shares
and Warrants issued to PWI upon execution of this Termination Agreement and
shares issued upon exercise of any of the Warrants shall be restricted and shall
bear the restrictive legend contained in Exhibit A hereto. The Shares, the
Warrants and any shares issuable upon exercise of the Warrants shall be entitled
to such demand or piggyback registration rights as may be provided to any AAT
shareholders from time to time.
3. Indemnification. PWI hereby agrees to indemnify and hold
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harmless AAT and its successors and assigns and any affiliate, officer,
director, shareholder or agent of AAT and its successors and assigns and their
affiliates, officers, directors, shareholders and agents (the "Indemnified
Parties") against any claims, accounts, damages, losses, expenses, liabilities,
actions, causes of action, demands, suits and proceedings of any nature
whatsoever, known or unknown, that may be awarded, assessed or incurred as a
result of any litigation, claims or threats of litigation that arise from or in
any way relate to the (i) Acquisition Agreement, (ii) this Termination
Agreement, (iii) actions of any party or any affiliate, officer, director,
shareholder or agent of any party to the Acquisition Agreement or this
Termination Agreement, or (iv) that arise from the relationship between AAT and
PWI, including without limitation, reasonable attorneys fees and costs of
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settlement of any such asserted claim or litigation. PWI hereby appoints AAT as
its true and lawful attorney in fact and agent to enter into on behalf of or to
vote with respect to and in the name of PWI any agreement or amendment to any
agreement by and among AAT and any corporation whereby AAT enters into a
business combination agreement or other similar agreement that provides for
another corporation to acquire all or a majority of the shares of AAT and assume
the obligations of AAT under its outstanding warrants, provided that such
agreement to be executed on behalf of PWI provides for the exchange of the
Shares and the Warrants for securities of another corporation on the same basis
as all other AAT Shareholders and warrant holders. This Section 3 shall survive
any termination of this Termination Agreement.
4. Third Party Beneficiaries. The Indemnified Parties shall be and
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are express third party beneficiaries of the Termination Agreement and shall be
entitled to enforce in their own names all rights granted to them hereunder.
5. Release and Settlement. All parties hereto hereby forever
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release and discharge all other parties and any affiliate, officer, director,
shareholder or agent of any party to the Acquisition Agreement from any claims,
accounts, liabilities, losses, damages, actions, causes of action, demands,
suits and proceedings of any nature whatsoever, known or unknown, arising from
or related in any manner to (i) the Acquisition Agreement, (ii) this Termination
Agreement, (iii) the actions of any party or any affiliate, officer, director,
shareholder or agent of any party to the Acquisition Agreement or this
Termination Agreement or (iv) the relationship between AAT and PWI.
6. Disposition of Pledged Shares. PWI hereby pledges, assigns,
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transfers and delivers unto AAT and grants a first priority lien and security
interest to AAT in (i) the Shares and
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(ii) all proceeds of the Shares, all securities entitlements and all other
securities or other property at any time and from time to time receivable or
otherwise distributed in respect of or in exchange for any or all of the Shares
referred to in clause (i) of this Section 6 (the "Collateral"), as collateral
security for the prompt and complete payment of the indemnification obligations
described in Section 3 above. PWI shall be entitled to exercise any and all
voting and/or consensual rights and powers accruing to the owner of the
Collateral or any part thereof for any purpose not inconsistent with the terms
hereof. Any dividends or distributions of any kind whatsoever received or
receivable by PWI, whether resulting from a subdivision, combination, or
reclassification of the outstanding capital shares of AAT or received in
exchange for the Collateral or any part thereof or as a result of any merger,
consolidation, acquisition, or other exchange of assets involving or related to
the Collateral, or otherwise, shall be and become part of the Collateral pledged
hereunder and shall immediately be delivered to AAT to be held subject to the
terms of this Termination Agreement. PWI hereby appoints AAT or its successor
and assigns as its true and lawful attorney in fact and agent and hereby grants
such agent the right and power to sell or otherwise dispose of with all rights
as a secured party under the Delaware Uniform Commercial Code (the "Delaware-
UCC") in any commercially reasonable manner permitted under the Delaware-UCC the
Collateral to the extent such sale or other disposition is necessary to satisfy
an Indemnified Party's right to indemnification hereunder. The determination as
to the validity of any claim for indemnification shall be made by the agent
appointed under this Section in said agent's sole discretion. In addition to the
delivery of Stock Powers pursuant to Section 8 hereof, PWI agrees, upon the
request of AAT, to promptly execute and deliver to AAT any and all additional
documents, notices, or other written instruments which AAT deems in its sole
discretion to be necessary to maintain or obtain a first priority perfected
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security interest in the Collateral including, but not limited to,
financing statements, instructions to issuers of the Collateral, brokers or
other financial intermediaries, or agreements between AAT, PWI, and any broker
or financial intermediary involved in a transfer of the Collateral.
7. Delivery of Pledged Shares. The Collateral shall be delivered to
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PWI by January 1, 1999 and shall thereupon be released from the terms of the
security interest provided herein; provided, however, that if any asserted claim
or litigation for which any Indemnified Party is entitled to indemnification
hereunder has not been finally resolved and terminated on such date, then the
Collateral shall not be released from the terms of the security interest
provided herein and shall not be delivered until all such litigation has been
finally resolved and all statutes of limitations relevant to any claim asserted
or threatened have expired.
8. Stock Power. Upon execution of this Termination Agreement and
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upon further request of AAT or any successor corporation, PWI shall provide such
stock powers or assignments executed in blank that pertain to the Collateral as
are requested. Such stock powers or assignments may be utilized in conjunction
with any disposition of the Collateral pursuant to Section 6.
9. Board Approvals. The Boards of Directors of AAT and PWI have
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approved this Termination Agreement and authorized its execution by their
respective officers.
10. Assignment. This Termination Agreement shall inure to the
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benefit of the successors and assigns of the parties hereto.
11. Transfers. PWI may not transfer, sell, assign or otherwise
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dispose of any of the Collateral while it is subject to the terms of this
Termination Agreement. Any attempted transfer,
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sale, assignment or other disposition shall be invalid and unenforceable and
shall not be recognized by AAT or its successors and assigns.
12. Governing Law. This Termination Agreement shall be governed by
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the laws of the State of Delaware, without regard to conflict of law principles.
IN WITNESS WHEREOF, this Termination Agreement has been entered into as of
the date first written above.
Asian American Telecommunication Shareholders of Asian American
Corporation, Telecommunications Corporation
a Cayman Islands corporation
By: * By: *
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Xxx X. Xxxxxxx, President and Xxx X. Xxxxxxx, Agent
Chief Executive Officer
* By: Xxxxxxx Xxxxxxx, Attorney in Fact
PortaCom Wireless, Inc.,
a British Columbia Corporation
By:
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Xxxxxxx X. XxxXxxxxx, President
