Exhibit 10.48
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered into
effective the 22nd day of September 1995, by and between XXXXXXX XXXXXXX, a
resident of the State of New York ("Stockholder") and RSL COMMUNICATIONS, INC.,
a Delaware corporation ("RSL").
WITNESSETH:
WHEREAS, Stockholder owns Seventeen Thousand (17,000) shares of the issued
and outstanding common stock of International Telecommunications Group, Ltd., a
Delaware corporation ("ITG"), par value One Cent ($.01) per share;
WHEREAS, Stockholder desires to sell Two Thousand Three Hundred Sixth Six
(2,366) of his shares in ITG to RSL pursuant to the terms and conditions stated
herein (the "Shares"); and
WHEREAS, RSL desires to purchase the Shares on the terms and conditions
stated herein.
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
SECTION I - PURCHASE AND SALE OF SHARES
1.01 Purchase and Sale. Subject to and on the terms and conditions of this
Agreement, and in reliance on the representations and warranties contained
herein, Stockholder agrees at the Initial Closing (as defined herein) and the
Second Closing (as defined herein) of the
transactions contemplated by this Agreement to sell, transfer, convey, assign
and deliver to RSL all of the Shares, and RSL agrees to purchase from
Stockholder all of the Shares, subject to the right of first refusal of Incom
(UK) Ltd. ("Incom") to Eighty Two (82) shares in ITG (the "Right of First
Refusal Shares") pursuant to the Shareholders' Agreement dated September 1,
1994, as amended, by and between Stockholder, Xxxxxxx X. Xxxxxx, Incom, RSL and
ITG.
1.02 Purchase Price. Subject to adjustment for the Right of First Refusal
Shares as set forth in Section 1.02(b) below, in consideration of the sale,
transfer, conveyance, assignment and delivery of the Shares by Stockholder to
RSL, and in reliance on the representations, warranties and covenants of
Stockholder contained herein, RSL shall pay to Stockholder, at the times
indicated herein, by certified or bank check payable to the order of
Stockholder, Three Hundred Ten Thousand Five Hundred Thirty Seven Dollars and
Fifty Cents ($310,537.50) at the rate of One Hundred Thirty One Dollars and
Twenty Five Cents ($131.25) for each of the Shares (the "Purchase Price"), as
follows:
(a) Two Hundred Ninety Nine Thousand Seven Hundred Seventy Five
Dollars ($299,775.00) on the Initial Closing Date (as defined herein); and
(b) Ten Thousand Seven Hundred Sixty Two Dollars and Fifty Cents
($10,762.50) on the Second Closing Date (as defined herein).
1.03 Closings and Closing Dates. The closing of the purchase and sale of
the Shares other than the Right of First Refusal Shares (the "Initial Closing")
shall occur on September 22, 1995. The date on which the Initial Closing occurs
is herein referred to as the "Initial Closing Date". The closing of the purchase
and sale of the Right of First Refusal Shares (the "Second Closing") shall
occur on the day following the date on which Incom's rights of first refusal
expire, provided that Incom declines to exercise such rights of first refusal
with respect to the Right of First Refusal Shares. The date on which the Second
Closing occurs is herein referred to as the "Second Closing Date". The Initial
Closing and the Second Closing shall be held at the offices of ITG at EAB Plaza,
Xxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000-0000 at 10:00 A.M. Eastern
Time on the Initial Closing Date and the Second Closing Date, respectively.
1.04 Closing Obligations.
(a) Stockholders Obligations. At the Initial Closing, Stockholder
shall deliver to RSL a stock certificate or certificates representing the Shares
other than the Right of First Refusal Shares, duly endorsed or accompanied by
appropriate stock powers executed by Stockholder, free and clear of any liens or
other encumbrances whatsoever, other than restrictions imposed by federal and
state laws generally with respect to unregistered securities. At the Second
Closing, Stockholder shall deliver to RSL a stock certificate or certificates
representing the Right of First Refusal Shares, duly endorsed or accompanied by
appropriate stock powers executed by Stockholder, free and clear of any liens or
other encumbrances whatsoever, other than restrictions imposed by federal and
state laws generally with respect to unregistered securities.
(b) RSL's Obligations. At the Initial Closing, RSL shall deliver to
Stockholder a certified or bank check payable to the order of Stockholder in the
amount of the Purchase Price payable on the Initial Closing Date and (ii) a
promissory note substantially in the form attached hereto and incorporated
herein as Exhibit A (the "Purchase Money Promissory Note").
SECTION 2 -- REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER
Stockholder represents and warrants to RSL, as of the date hereof
and as of the Initial Closing Date with respect to the Shares other than the
Right of First Refusal Shares, and as of the Second Closing Date with respect to
the Right of First Refusal Shares, as follows:
2.01 Authority. Stockholder has adequate power and authority to
enter into and to perform his obligations under this Agreement and to consummate
the transaction contemplated hereby.
2.02 Binding Obligation. This Agreement constitutes the valid,
binding and enforceable obligation of Stockholder, except to the extent that
such enforcement may be limited by bankruptcy, insolvency and other laws now or
hereafter in effect relating to the enforcement of creditors' rights generally,
and except to the extent that equitable principles may limit the right to obtain
specific performance or other equitable remedies.
2.03 No Conflicts. The entry into and performance by Stockholder of
this Agreement will not: (i) violate any judgment, order, law or regulation
applicable to Stockholder; or (ii) result in any breach of, constitute a default
under or result in the creation of any lien, charge, security interest or other
encumbrance on the Shares pursuant to any indenture, mortgage, deed of trust,
bank loan or credit agreement or other instrument to which the Stockholder is a
party. The parties acknowledge that all consents and/or waivers to the
transaction contemplated herein as required by the ITG Shareholder's Agreement
dated September 1, 1994, as amended, have been obtained except for Incom's
waiver of its rights of first refusal for which the Right of First Refusal
Shares have been reserved in the event that Incom elects to purchase its
proportionate share of the Shares.
2.04 Consents. No consent, approval, authorization of, or
designation, declaration or filing with, any governmental authority or other
third party is required on the part of Stockholder in connection with
Stockholder's execution, delivery and performance of this Agreement. The parties
acknowledge that all consents and/or waivers to the transaction contemplated
herein as required by the ITG Shareholder's Agreement dated September 1, 1994,
as amended, have been obtained except for Incom's waiver of its rights of first
refusal for which the Right of First Refusal Shares have been reserved in the
event that Incom elects to purchase its proportionate share of the Shares.
2.05 Ownership of Shares. The Shares are owned legally and
beneficially by Stockholder, free and clear of any liens, charges, pledges,
claims, security interests or other rights of third parties. Stockholder has
good and marketable title to the Shares and has the absolute right, power and
capacity to sell, assign and transfer the Shares to RSL free and clear of any
liens, encumbrances, security interests or other restrictions (other than
restrictions imposed generally by state and federal securities laws with respect
to unregistered securities).
SECTION 3 -- REPRESENTATIONS AND WARRANTIES OF RSL
RSL represents and warrants to Stockholder, as of the date hereof
and as each of the Initial Closing Date and the Second Closing Date, as follows:
3.01 Organization and Authority. RSL is a corporation duly
organized, validly existing and in good standing under the laws of the British
Virgin Islands with adequate power and authority to enter into and to perform
its obligations under this Agreement and to consummate the transaction
contemplated hereby.
3.02 Binding Obligation. This Agreement constitutes the valid,
binding and enforceable obligation of RSL, except to the extent that such
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
and other laws now or hereafter in effect relating to the enforcement of
creditors' rights generally, and except to the extent that equitable principles
may limit the right to obtain specific performance or other equitable remedies.
3.03 No Conflicts. The entry into and performance by RSL of this
Agreement will not: (i) violate any judgment, order, law or regulation
applicable to RSL or any provision of RSL's Restated Certificate of
Incorporation or By-Laws; or (ii) result in any breach of, constitute a default
under or result in the creation of any lien, charge, security interest or other
encumbrance on the Shares pursuant to any indenture, mortgage, deed of trust,
bank loan or credit agreement or other instrument to which RSL is a party.
3.04 Consents. No consent, approval, authorization of, or
designation, declaration or filing with, any governmental authority or other
third party is required on the part of RSL in connection with RSL's execution,
delivery and performance of this Agreement.
3.05 Purpose of Purchase. RSL understands that the Shares are being
sold by Stockholder without registration under the Securities Act of 1933, as
amended (the "Securities Act") or any applicable state securities laws. RSL is
entering into this Agreement with the intent to
purchase the Shares solely for investment, and RSL does not have any intent to
resell or otherwise distribute or dispose of any of the Shares, and will not
take any action after the Initial Closing or the Second Closing which would
result in a public offering of the Shares or any other distribution of the
Shares in violation of any securities laws or regulations then applicable.
SECTION 4 -- CONDITIONS PRECEDENT TO OBLIGATIONS OF RSL
The obligation of RSL to consummate the transaction contemplated by
this Agreement is subject to the satisfaction at or prior to the Initial Closing
or the Second Closing (as the case may be) of each of the following conditions
(any of which may be waived by RSL):
4.01 Representations and Warranties of Stockholder. All
representations and warranties of Stockholder shall be true and correct in all
materials respects on the Initial Closing Date and the Second Closing Date as if
then made.
4.02 Deliveries by Stockholder.
(a) At the Initial Closing, Stockholder shall have delivered
to RSL stock certificates representing the Shares other than the Right of First
Refusal Shares, duly endorsed or accompanied by appropriate stock powers
executed by Stockholder in form and substance satisfactory to RSL to convey to
RSL good and marketable title to the Shares other than the Right of First
Refusal Shares, free and clear of all liens, claims and encumbrances.
(b) At the Second Closing, Stockholder shall have delivered to
RSL stock certificates representing the Right of First Refusal Shares, duly
endorsed or accompanied by appropriate stock powers executed by Stockholder in
form and substance satisfactory to RSL to
convey to RSL good and marketable title to the Right of First Refusal Shares,
free and clear of all liens, claims and encumbrances.
(c) Stockholder shall have executed and delivered an agreement
substantially in the form attached hereto and incorporated herein as Exhibit B
(the "Ancillary Shareholders' Agreement").
4.03 No Proceedings. No investigation, action or proceeding by or
before any court or other governmental body shall have been commenced or
threatened, and no inquiry shall have been received that in the opinion of RSL
may reasonably lead to an action or proceeding to restrain or otherwise
challenge the transaction contemplated hereby.
SECTION 5 -- CONDITIONS PRECEDENT TO STOCKHOLDER'S OBLIGATIONS
The obligation of Stockholder to consummate the transaction contemplated
by this Agreement is subject to the satisfaction at or prior to the Initial
Closing Date or the Second Closing Date (as the case may be) of each of the
following conditions (any of which may be waived by Stockholder):
5.01 Representations and Warranties of RSL. All representations and
warranties of RSL set forth herein shall be true and correct in all material
respects on the Initial Closing Date and the Second Closing Date as if then
made.
5.02 Deliveries by RSL.
(a) Stockholder shall have received the portion of the
Purchase Price payable on the Initial Closing Date in accordance with the
provisions of Section 1.02(a) hereof.
(b) RSL shall have executed and delivered the Ancillary
Shareholders' Agreement and an Amendment to Stock Purchase Agreement
substantially in the form attached hereto and incorporated herein as Exhibit C
(the "Amendment to Stock Purchase Agreement").
(c) RSL shall have executed and delivered to Stockholder the
Purchase Money Promissory Note.
5.03 No Proceedings. No investigation, action or proceeding by or
before any court or other governmental body shall have been commenced or
threatened, and no inquiry shall have been received that in the opinion of
Stockholder may reasonably lead to an action or proceeding to restrain or
otherwise challenge the transaction contemplated hereby.
5.04 Other Actions.
(a) ITG shall have executed and delivered the Ancillary
Shareholders' Agreement and the Amendment to Stock Purchase Agreement.
(b) ITG shall have amended its Certificate of Incorporation by
filing with the Delaware Secretary of State the Certificate of Amendment
substantially in the form attached hereto and incorporated herein as Exhibit D.
SECTION 6 -- CLOSING AND POST-CLOSING COVENANTS
6.01 Survival of Representations and Warranties. The representations
and warranties of the parties contained in this Agreement shall survive the
Initial Closing and the Second Closing until the first anniversary of the later
of the Initial Closing Date or the Second Closing Date.
6.02 Indemnification.
(a) Indemnification Obligation of Stockholder. Stockholder
agrees to indemnify and hold harmless RSL, its directors, officers and employees
from and against any and all losses, claims, damages, liabilities, costs,
expenses (including reasonable attorney's fees and all costs and expenses of
enforcing such right of indemnification against Stockholder) and penalties, if
any, arising out of or based on or with respect to the breach of any
representation or warranty made by Stockholder herein.
(b) Indemnification Obligation of RSL. RSL agrees to indemnify
and hold harmless Stockholder from and against any and all losses, claims,
damages, liabilities, costs, expenses (including reasonable attorney's fees and
all costs and expenses of enforcing such right of indemnification against RSL)
and penalties, if any, arising out of or based on or with respect to the breach
of any representation or warranty made by RSL herein.
(c) Survival of Indemnity Obligations. The indemnities
contained in this Section 6 shall survive until the first anniversary of the
later of the Initial Closing Date or the Second Closing Date.
SECTION 7 -- MISCELLANEOUS
7.01 Assignment. Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by either party without the prior written
consent of the other party. Subject to the foregoing, this Agreement shall be
binding on and inure to the benefit of the
parties hereto and their respective successors and assigns and no other person
shall have any right, benefit or obligation hereunder.
7.02 Applicable Law. This Agreement and the legal relations between
the parties hereto shall be governed by and construed in accordance with the
laws of the State of Delaware without regard to whether Delaware would be the
governing law under that state's principles regarding choice of law.
7.03 Captions. The section and other headings contained in this
Agreement are for reference purposes only and shall not affect the meaning,
interpretation or construction of this Agreement.
7.04 Waivers and Amendments. Either Stockholder or RSL may by
written notice to the other (i) waive any inaccuracies in the representations or
warranties of the other contained in this Agreement; and (ii) waive performance
of any of the obligations of the other. This Agreement may be amended, modified
or supplemented only by a written instrument executed by the parties hereto.
7.05 Entire Agreement. This Agreement embodies the entire agreement
and understanding of the parties hereto with respect to the subject matter
hereof, and there are no promises, representations, warranties, covenants or
undertakings of either party to the other with respect to such subject matter
other than those expressly set forth or referred to herein. This Agreement
supersedes all prior discussions, agreements, writings, and undertakings between
the parties with respect to such subject matter.
7.06 Notices. All notices that are required or may be given under
this Agreement shall be in writing and shall be deemed to have been duly given
when delivered personally or transmitted by telex or telecopier, receipt
acknowledged, or in the case of documented overnight delivery service or
registered or certified mail, return receipt requested, postage prepaid, on the
date shown on the receipt therefor:
If to Stockholder:
Xxxxxxx Xxxxxxx
00 Xxxxx Xxxxx Xxxx
Xxxx Xxxxxxxxxx, Xxx Xxxx 00000
with a copy to:
Xxxxxxxx, Xxxxx & Xxxxxxxx, P.L.C.
0000 Xxxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxx, Esq.
If to RSL:
RSL Communications, Inc.
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
with a copy to:
Rosenman & Colin
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
or to such other addresses as either such party shall specify by notice in
accordance herewith to the other.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
STOCKHOLDER:
/s/ Xxxxxxx Xxxxxxx
-------------------
Xxxxxxx Xxxxxxx
RSL:
RSL COMMUNICATIONS, INC.
By: /s/ Xxxxxx Xxxxxx
---------------------
Title: President
EXHIBIT A
PURCHASE MONEY PROMISSORY NOTE
$ 10,762.50 September __, 1995
FOR VALUE RECEIVED, the undersigned, RSL COMMUNICATIONS, INC., a
British Virgin Islands corporation (the "Maker"), promises to pay to the order
of XXXXXXX XXXXXXX (the "Holder") at 00 Xxxxx Xxxxx Xxxx, Xxxx Xxxxxxxxxx, Xxx
Xxxx 00000, or at such other place as the Holder may from time to time designate
in writing, the principal sum of Ten Thousand Seven Hundred Sixty Two Dollars
and Fifty Cents ($10,762.50). This Note shall not bear any interest.
As used in this Note, the term "Note" shall mean this note.
The principal sum of this Note shall be due and payable on the day
following the date of expiration of the rights of first refusal of Incom (UK)
Ltd. ("Incom") with respect to the Right of First Refusal Shares (as defined in
the Stock Purchase Agreement of even date herewith between the Holder and Maker
(the "Purchase Agreement")), provided that Incom declines to exercise such
rights of first refusal with respect to the Right of First Refusal Shares. In
the event that Incom elects to exercise such rights of first refusal, this Note
shall be null and void.
All payments received hereon shall be applied: first, to the payment
of late charges, if any, and the balance thereof credited to the principal. The
principal of this Note shall be payable in immediately available funds in lawful
money of the United States that is legal tender for public and private debts at
the time of payment. Any payment by other than immediately available funds that
Holder, at his option, elects to accept shall be subject to collection.
If default be made in the payment of any installment due under this
Note, and Maker shall fail to cure the same within five (5) calendar days after
receipt of written notice thereof, then the entire principal balance hereof
shall at once become due and payable at the option of the Holder of this Note,
provided that failure of the Holder of this Note to exercise this option to
accelerate shall not constitute a waiver of the right to exercise the same in
the event of any subsequent default.
The Maker shall incur a late charge of four percent (4%) of any
payment due under this Note not received within fifteen (15) days of its due
date.
The Maker hereof (i) waives presentment, demand, protest and notice
of presentment, notice of protest and notice of any kind respecting this Note;
(ii)
agrees that the Holder hereof, at any time or times, without notice to Maker or
without Maker's consent, may grant extensions of time, without limit as to the
number or the aggregate period of such extensions, for the payment of any
principal and no such extension shall result in any release, discharge,
modification, change of or effect on the liability of Maker under this Note;
(iii) agrees that no release of any security for the payment of this Note shall
release, discharge, modify, change or affect the liability of Maker under this
Note; (iv) to the extent not prohibited by law, waives the benefit of any law or
rule of law intended for Maker's advantage or protection as an obligor hereunder
or providing for Maker's release or discharge from liability hereon, in whole or
in part, on account of any facts or circumstances other than full and complete
payment of all amounts due hereunder; and (v) agrees that this Note shall be
binding on Maker and Maker's successors and assigns; provided, however, that
this Note shall not be assignable by Maker nor assumable by any party without
the Holder's prior written consent.
MAKER HEREBY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING INSTITUTED BY OR AGAINST MAKER WHICH PERTAINS DIRECTLY OR INDIRECTLY
TO THIS NOTE, THE PURCHASE AGREEMENT OR WHICH ARISES OUT OF OR IS ANY WAY
CONNECTED TO THE RELATIONSHIP BETWEEN MAKER AND HOLDER HEREUNDER.
Maker hereby waives all claims, defenses or setoffs with respect to
the negotiation of this Note or the Purchase Agreement. Maker represents,
warrants and agrees that Holder has made no representations or commitments, oral
or written, or undertaken any obligations other than as expressly set forth in
this Note and the Purchase Agreement.
Maker hereby represents and warrants that the indebtedness evidenced
by this Note is being obtained for the purpose of acquiring and carrying on a
business or commercial enterprise and all proceeds of such indebtedness will be
used solely in connection with such business or commercial enterprise.
The undersigned hereby consents and submits to the jurisdiction of
the courts of the State of New York, and expressly waives any right to challenge
the venue and jurisdiction of any New York court.
Maker hereof promises to pay all costs of collection, including
reasonable attorneys' fees, in the event the Holder incurs any costs in
recovering any sum due under this Note, whether or not suit is filed hereon.
In the event any one or more of the provisions contained in this
Note shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall, at the option of
the Holder hereof, not affect any other provision of this Note, but this Note
shall be construed
as if such invalid, illegal or unenforceable provision had never been contained
herein.
All notices that are required or may be given under this Note shall
be in writing and shall be deemed to have been duly given when delivered
personally or transmitted by telecopier, receipt acknowledged, or in the case of
documented overnight delivery service or registered or certified mail, return
receipt requested, postage prepaid, on the date shown on the receipt therefor:
If to Maker:
RSL Communications, Inc.
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
with a copy to:
Rosenman & Colin
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
If to Holder:
Xxxxxxx Xxxxxxx
00 Xxxxx Xxxxx Xxxx
Xxxx Xxxxxxxxxx, Xxx Xxxx 00000
with a copy to:
Xxxxxxxx, Xxxxx & Xxxxxxxx, P.L.C.
0000 Xxxxx 00xx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxx, Esq.
or to such other addresses as either such party shall specify by notice in
accordance herewith to the other.
This Note may not be changed orally but only by an agreement in
writing and signed by the parties against whom enforcement of any waiver,
change, modification or discharge is sought.
This Note shall be interpreted in accordance with the laws of the
State of New York.
IN WITNESS WHEREOF, Maker has duly executed and delivered this Note
on the day and year first above written.
MAKER:
ATTEST: RSL COMMUNICATIONS, INC.
___________________________ By: _________________________
Title: ______________________
EXHIBIT B
ANCILLARY SHAREHOLDERS' AGREEMENT
THIS ANCILLARY SHAREHOLDERS' AGREEMENT (this "Agreement"), dated September
__, 1995, is made by and among XXXXXXX X. XXXXXX ("Xxxxxx"), residing at 000
Xxxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxx Xxxx 00000, XXXXXXX XXXXXXX ("Rebetti"),
residing at 00 Xxxxx Xxxxx Xxxx, Xxxx Xxxxxxxxxx, Xxx Xxxx 00000, RSL
COMMUNICATIONS, INC. ("RSL"), a British Virgin Islands corporation with offices
at 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000 (individually a
"Shareholder" and collectively the "Shareholders") and INTERNATIONAL
TELECOMMUNICATIONS GROUP, LTD. ("ITG"), a Delaware corporation with offices at
00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
W I T N E S S E T H:
WHEREAS, ITG, the Shareholders and Incom (UK) Ltd. ("Incom") entered into
a shareholders' agreement, dated the first day of September, 1994 (the
"Shareholders' Agreement"), as amended by the Amendment to Shareholders'
Agreement dated as of March 10, 1995 (the "First Amendment"), both attached
hereto as Exhibit A with respect to, among other things, the transfer or other
disposition of the authorized and outstanding stock of ITG owned by the
Shareholders and Incom;
WHEREAS, ITG and the Shareholders desire that ITG issue and sell to RSL,
up to Forty Six Thousand Eight Hundred Ninety Five (46,895) shares of its common
stock for One Hundred Thirty One Dollars and Twenty Five Cents ($131.25) per
share; and
WHEREAS, the parties hereto wish to supplement certain aspects of the
relationship between and among them.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
1. Defined Terms. Terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Shareholders' Agreement. The defined term
"Restated Certificate" shall mean the Amended and Restated Certificate of
Incorporation of ITG, dated as of March 9, 1995, as amended by the Certificate
of Amendment dated September __, 1995.
2. Sale and Purchase of ITG Common Stock by RSL. Each of the parties
hereto acknowledge and agree that ITG shall authorize, issue and sell to RSL up
to Forty Six Thousand Eight Hundred Ninety Five (46,895) shares of ITG common
stock for the purchase price of One Hundred Thirty One Dollars and Twenty Five
Cents ($131.25) per share paid by RSL to ITG by wire transfer of immediately
available funds. The parties acknowledge that RSL has paid to ITG Six Million
Dollars ($6,000,000) prior to the execution of this Agreement in consideration
for ITG's issuance to RSL of Forty Five Thousand Seven Hundred Fourteen (45,714)
shares of ITG's common stock. The balance of RSL's payment due to ITG, if any,
and the corresponding issuance of up to an additional One Thousand One Hundred
Eighty One (1,181) shares of ITG common stock to RSL, shall be governed by the
provisions of Paragraph 4 below. Pursuant to the second paragraph of Article IX
of the Shareholders' Agreement, entitled "Pre-Emptive Rights," RSL, as holder of
a majority in Ownership Interest of all non-employee shareholders of ITG, hereby
consents to the waiver of any pre-emptive
rights of the shareholders of ITG with respect to ITG's issuance to RSL of up to
Forty Six Thousand Eight Hundred Ninety Five (46,895) shares of its common
stock.
3. Sale by Xxxxxx and Rebetti of ITG Common Stock to RSL. Each of the
parties hereto acknowledge and agree that RSL shall purchase, and Xxxxxx and
Xxxxxxx shall sell, up to Fourteen Thousand Seven Hundred Seventy Seven (14,777)
and up to Two Thousand Three Hundred Sixty Six (2,366), respectively, shares of
common stock in ITG for the purchase price of One Hundred Thirty One Dollars and
Twenty Five Cents ($131.25) per share pursuant to the terms and conditions of
the respective stock purchase agreements between RSL and Xxxxxx and Rebetti.
Pursuant to Section I of the Shareholders' Agreement entitled "Restrictions on
Disposition of Authorized and Outstanding Shares," Xxxxxx waives any rights to
notice or rights of first refusal to purchase Two Thousand Three Hundred Sixty
Six (2,366) shares of Rebetti's common stock being offered for sale to RSL, and
Rebetti waives any rights to notice or rights of first refusal to purchase
Fourteen Thousand Seven Hundred Seventy Seven (14,777) shares of Xxxxxx'x common
stock being offered for sale to RSL.
4. Reservation of Shares of Common Stock. If Incom exercises any of its
rights of first refusal pursuant to Section I of the Shareholders' Agreement
entitled "Restrictions on Disposition of Authorized and Outstanding Shares" with
respect to the sales to RSL by Xxxxxx and Rebetti discussed in Paragraph 3
above, the parties acknowledge and agree that ITG shall authorize, issue and
sell to RSL, for the purchase price of One Hundred Thirty One Dollars and Twenty
Five Cents ($131.25) per share, (i) One Thousand Seventeen (1,017) shares of ITG
common stock if Incom exercises its rights of first refusal with respect only to
the sale by Xxxxxx to RSL, (ii) One Hundred Sixty Three (163) shares of ITG
common stock if Incom exercises its rights of first refusal with respect only to
the sale by Rebetti to RSL, and (iii) One Thousand One Hundred Eighty One
(1,181) shares of ITG common stock if Incom exercises its rights of first
refusal with respect to both sales by Xxxxxx and Xxxxxxx to RSL. Any amount due
by RSL under the terms of the preceding sentence shall be paid by RSL to ITG by
wire transfer of immediately available funds on the day following the date that
ITG provides RSL with written notice of the fact that Incom exercised its rights
of first refusal. If Incom declines to exercise its rights of first refusal in
connection with the sales to RSL by Xxxxxx and/or Rebetti, the terms of the
respective stock purchase agreements between RSL and Xxxxxx and Xxxxxxx shall
govern, pursuant to which (y) Xxxxxx shall sell Five Hundred Nine (509) shares
of ITG common stock to RSL if Incom declines to exercise its rights of first
refusal with respect to the sale of ITG common stock by Xxxxxx to RSL and (z)
Rebetti shall sell Eighty Two (82) shares of ITG common stock to RSL if Incom
declines to exercise its rights of first refusal with respect to the sale of ITG
common stock by Rebetti to RSL.
5. Procuring Loans to ITG. RSL agrees to use its best efforts to obtain
for ITG a loan of Eight Million Dollars ($8,000,000) on commercially reasonable
terms to enable ITG to invest in the Mexican deal known as "Geocomm", or any
other acquisitions of additional telecommunications businesses.
6. Initial Public Offering. RSL agrees to use its best efforts to cause,
within twenty four (24) months from the execution of this Agreement, ITG's
shares to be offered for sale on a national securities exchange or to be
designated as national market system securities on an interdealer quotation
system by the National Association of Securities Dealers, Inc., it being
understood that RSL's efforts are required to be expended only to obtain a firm
commitment underwriting by an investment banker of national reputation to
produce aggregate net proceeds to ITG of at least Fifty Million Dollars
($50,000,000).
7. Composition and Voting of the Board of Directors Committees.
Notwithstanding Section X of the Shareholders' Agreement as amended by Paragraph
3 of the First Amendment, the parties hereto agree that they shall vote their
ITG shares regarding the composition and voting of the Board of Directors as
follows:
a. Board of Directors. Pursuant to a letter to Xxxxxx sent by Xxx
Lior, the Managing Director of Incom, dated June 16, 1995 (the "Incom
Letter"), Incom relinquished its rights to elect two (2) members to the
Board of Directors of ITG and provided that such positions on the Board of
Directors be eliminated unless the majority of the Board of Directors
decided otherwise. The Board of Directors has not decided otherwise and,
therefore, the two (2) Board member positions entitled to be elected by
Incom were eliminated. With such elimination of Board member positions,
and pursuant to the Shareholders' Agreement as amended by the First
Amendment, the Board of Directors is presently to be comprised of nine (9)
members, six entitled to be elected by Xxxxxx ("Xxxxxx Directors") and
three (3) entitled to be elected by RSL (the "RSL Directors"). The parties
hereto agree that (i) of the Xxxxxx Directors, Xxxxxx shall elect any one
(1) nominee designated by RSL and (ii) the sixth (6th) member position of
the Board that Xxxxxx is entitled to elect shall remain vacant unless and
until there exists a deadlock between the Directors on any issue other
than those issues requiring the consent of at least one RSL Director
pursuant to Paragraph (b) below. In the event of any such deadlock, the
Board meeting shall adjourn temporarily, and the Chairman of the Board
immediately shall call a special meeting of the shareholders of ITG or
present a written consent to be signed by all the Shareholders. At such
special meeting of shareholders or pursuant to such written consent,
Xxxxxx shall be permitted to nominate and appoint the sixth (6th) Board
member (the "Additional Member") that Xxxxxx is entitled to appoint
pursuant to the Shareholders' Agreement as amended by the First Amendment,
and the Shareholders shall take all actions to effect the election of such
Additional Member at such special meeting or pursuant to such written
consent. Once the Additional Member of the Board is elected, and for
purposes of the issue with respect to which such deadlock occurred, all
nine (9) Board member positions shall be filled: five (5) Xxxxxx Directors
(including the Xxxxxx elected nominee of RSL), three (3) RSL Directors and
the Additional Member. Such nine (9) member Board shall reconvene the
adjourned meeting as promptly as possible and consider and vote on the
issue with respect to which a deadlock occurred. Thereafter, the
Additional Member shall promptly resign and the Board shall consist of
five (5) Xxxxxx Directors (including the Xxxxxx elected nominee of RSL)
and three (3) RSL Directors, and one Xxxxxx Director vacancy shall exist
until such time as another deadlock (if any) occurs.
b. Voting by the Board of Directors. None of the following matters
shall be decided without the affirmative vote of at least one (1) RSL
Director or the Xxxxxx elected nominee of RSL: (i) compensation of Xxxxxx,
including any amendments to the Employment Agreement dated October 25,
1994 and as amended and restated on March 10, 1995 and as further amended
on September 22 1995 by and between ITG and Xxxxxx and any options or
other "perks" for Xxxxxx or Xxxxxxx Xxxxxxx or "perks" in excess of Ten
Thousand Dollars ($10,000) per year or options for other ITG officers;
(ii) any amendment to ITG's Restated Certificate or its By-Laws or the
adoption of any Certificate of Designation of any series of preferred
stock; and (iii) any action by the Board of Directors required in
connection with (a) the matters requiring the consent of 33 1/3% of the
shares of the Series A Convertible Preferred Stock of ITG, pursuant to
- 3 -
the Restated Certificate or (b) the voting of ITG owned stock in International
Telecommunications Corporation ("ITC") in any ITC matters analogous to (A) the
matters requiring the consent of 33 1/3% of the holders of the shares of the
Series A Convertible Preferred Stock of ITG pursuant to ITG's Restated
Certificate or (B) the matters requiring the affirmative vote of at least one
(1) RSL Director.
c. Termination. The provisions of subsection (b) of this Section 7 shall
terminate automatically when the holders of the Series A Convertible Preferred
Stock hold less than ten percent (10%) of ITG's fully diluted equity, or when
all of the Series A Convertible Preferred Stock is either converted or redeemed,
whichever event occurs first; provided, however, that if the holders of Series A
Convertible Preferred Stock own less than ten percent (10%), but not less than
five percent (5%), of the then outstanding fully diluted equity of ITG, then the
holders of the Series A Convertible Preferred Stock shall have the right to
attend and comment at all meetings of the Board of Directors of ITG and shall be
given the same notice as is required by the By-Laws to be given to the directors
of ITG (and shall be sent any written consents at the same time that such
consents are sent to the directors of ITG for signature), but shall not have any
right to vote at such meetings.
d. Remaining Corporate Governance Issues in Shareholders' Agreement. Each
of the parties hereto agrees that it or he will not seek to implement, and
hereby waives any rights such party may otherwise have to enforce, any
provisions in Section X of the Shareholders' Agreement, as amended by Paragraph
3 of the First Amendment, concerning shifts in the composition of the Board of
Directors upon the occurrence of certain events. Furthermore, the parties
acknowledge that pursuant to the Incom Letter, Incom relinquished its rights to
elect one (1) member to each of the committees described in Paragraph 3 of the
First Amendment and provided that such positions be eliminated unless the
majority of the Board of Directors decided otherwise. The Board of Directors has
not decided otherwise, and the parties agree that they shall not form, or cause
to be formed, either of the committees discussed in such paragraph.
8. Tag-Along Rights.
a. The parties agree that, with respect to rights granted by RSL to
Rebetti and Xxxxxx in Paragraph 5 of the First Amendment, the second sentence of
Paragraph 5 of the First Amendment is replaced by the following:
"RSL agrees that it will not sell or transfer its shares of ITG or any
other securities of ITG that may now or hereafter be held or owned by it
to a third party unless RSL first notifies Xxxxxx and Rebetti in writing
(the "Notice") of its intention to sell its ITG shares, as well as the
proposed sale price per share. Xxxxxx and Xxxxxxx shall each have the
right, within ten (10) days of the receipt of the Notice, to elect to
require the third party to purchase from them at such sale price per share
specified in the Notice the same proportion of ITG shares held by each of
them as the proportion of ITG shares owned by RSL that are proposed to be
sold to
- 4 -
the third party. The closing of such sale shall occur at the same time as
the closing of RSL's shares of ITG."
Any tag-along rights granted by RSL to Incom pursuant to the second
sentence of Paragraph 5 of the First Amendment shall remain in full force
and effect.
b. RSL further agrees that in the event substantially all of its
assets are purchased by a third party and such assets purchased include
RSL's shares of ITG, RSL will ensure that such third party offers to
purchase shares of ITG then held by Xxxxxx and/or Rebetti at the "Purchase
Price per Share" (defined in (c) below). Such Purchase Price per Share
shall be payable by the third party in the same form of consideration as
is paid to RSL. The closing of such sale shall occur at the same time as
the closing of the purchase of substantially all the assets of RSL.
c. The purchase price per share of ITG stock shall be based on an
appraisal, made by a qualified independent appraiser mutually selected by
holders of the Series A Convertible Preferred Stock and Xxxxxx, of all of
the assets sold by RSL to determine the relative value of the ITG shares
included within such assets, it being understood that such value will
constitute a fraction of the total purchase price paid to RSL. In the
event such parties are unable to mutually agree on an appraiser, each such
party shall select one (1) appraiser, and the two (2) appraisers so
selected shall appoint a third appraiser whose appraisal shall govern the
determination of the Purchase Price per Share. The appraised value of ITG
shall be divided by the total number of shares of ITG stock then
outstanding to determine the per share purchase price of the shares of ITG
stock to be purchased by the third party (the "Purchase Price per
Share")."
9. Noncompetition. RSL agrees that it will treat Paragraph 6 of the First
Amendment as if it were amended by deleting the following phrase from the second
to last sentence in Section XII of the Shareholders' Agreement as added by the
First Amendment:
", unless having presented such investment to the Board of Directors of
ITG for its consideration, the Board of Directors has rejected such direct
equity investment"
10. Employment Matters. Within ninety (90) days from the date of this
Agreement, the parties agree that they shall cause ITG to retain the services of
a qualified consultant or other professional to advise ITG on restructuring the
company's existing bonus plans and arrangements relating to senior management.
In addition, within ninety (90) days from the date of this Agreement, the
parties agree that they shall cause ITG to make an offer in good faith to
Rebetti of a written employment agreement to include terms and conditions that
are appropriate for an executive of comparable stature in telecommunications
companies similarly situated to ITG, including but not limited to an employment
term of between three (3) to five (5) years and total compensation package of
One Hundred Twenty Five Thousand Dollars ($125,00O) annually.
11. Effect on the Shareholders' Agreement. Except as supplemented and
modified by this Agreement, all of the terms and conditions of the Shareholders'
Agreement shall remain in full force and
- 5 -
effect. The parties understand and agree that the rights of Incom pursuant to
the Shareholders' Agreement, as amended, have not been modified or affected by
this Agreement.
12. Captions. The sections and other headings contained in this Agreement
are for reference purposes only and shall not affect the meaning, interpretation
or construction of this Agreement.
13. Counterparts; Severability. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. To the extent any
provision or part of a provision of this Agreement is held invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provision or part thereof.
14. Successors and Assigns. This Agreement shall be binding on and inure
to the benefit of the parties hereto and their respective legal representatives,
heirs, successors and assigns.
15. Applicable Law. This Agreement and the legal relations between the
parties hereto shall be governed by and construed in accordance with the laws of
the State of New York without regard to whether New York would be the governing
law under that state's principles regarding choice of law.
- 6 -
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
________________________________________
Xxxxxxx X. Xxxxxx
________________________________________
Xxxxxxx Xxxxxxx
RSL COMMUNICATIONS, INC.
By: ____________________________________
Name:
Title:
INTERNATIONAL TELECOMMUNICATIONS GROUP, LTD.
By: ____________________________________
Name:
Title:
EXHIBIT C
AMENDMENT TO STOCK PURCHASE AGREEMENT
THIS AMENDMENT TO STOCK PURCHASE AGREEMENT (this "Amendment") is made on
September __, 1995 by and among INTERNATIONAL TELECOMMUNICATIONS GROUP, LTD.
("ITG"), INTERNATIONAL TELECOMMUNICATIONS CORPORATION ("ITC"), each a Delaware
corporation with offices at 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and RSL
COMMUNICATIONS, INC. ("RSL"), a British Virgin Islands corporation with offices
at 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000.
WITNESSETH:
WHEREAS, pursuant to the Stock Purchase Agreement dated as of March 10,
1995 by and among the parties hereto (the "Purchase Agreement"), the parties
agreed to, among other things, the purchase by RSL of ITG's Series A Convertible
Preferred Stock for Three Million Dollars ($3,000,000), subject to increase, to
a maximum of Four Million Seven Hundred Fifty Thousand Dollars ($4,750,000); and
WHEREAS, RSL has paid the initial Three Million Dollars ($3,000,000) in
full and the parties desire to complete the transactions contemplated in the
Purchase Agreement with respect to the payment of the additional One Million
Seven Hundred Fifty Thousand Dollars ($1,750,000).
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Amendment and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
1. Additional Agreements. The Purchase Agreement is amended by deleting
Section 9.11 in its entirety and substituting the following in lieu thereof:
"Section 9.11 Additional Agreements. The parties hereto further agree as
follows:
(a) Within ten (10) calendar days from the date that the Company and
the Subsidiary each deliver to the Investor a certificate of its
respective President certifying that the Company and the Subsidiary
have complied with its respective obligations set forth in
subsections (b) and (c) below, the Investor shall pay to the Company
the additional amount of One Million Seven Hundred Fifty Thousand
Dollars ($1,750,000) as payment in full for the Convertible
Preferred Stock. The parties understand and agree that the sole
condition precedent to the payment of such funds, which the Investor
shall deliver by wire transfer of immediately available funds to the
Company, is the satisfaction by the Company and the Subsidiary of
the filing requirements (i.e., no consent, approval, authorization
or grant of any governmental authority is required) set forth in
subsections (b) and (c) below.
(b) The Company and/or the Subsidiary shall file the following items
with the appropriate authorities:
(i) Two (2) service xxxx registration applications pursuant to
Section 7.10 of the Agreement of "International
Telecommunications Corporation" (together with ITC's logo) and
"INTELCO", but only if such service marks are registrable in
the opinion of counsel to the Company;
(ii) All tax returns described in the first sentence of
Section 7.11 of the Agreement and Schedule 3.20 hereof;
(iii) A tariff transmittal as described in Section 7.20 of the
Agreement, except that such tariff transmittal shall not be
required to be filed within ten (10) days after Closing or be
approved by the Executive Finance Committee; and
(c) The Company shall provide its audited financial statements for
the 1994 calendar year to an insurer for purposes of securing
directors' and officers' liability insurance (provided that such
insurance has not been provided previously by an insurance
company)."
2. Effect on the Purchase Agreement. Except as specifically amended or
modified herein, all of the terms and conditions of the Purchase Agreement shall
remain in full force and effect.
3. Captions. The sections and other headings contained in this Amendment
are for reference purposes only and shall not affect the meaning, interpretation
or construction of this Amendment.
4. Counterparts; Severability. This Amendment may be executed in multiple
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. To the extent any
provision or part of a provision of this Amendment is held invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provision or part thereof.
5. Successors and Assigns. This Amendment shall be binding on and inure to
the benefit of the parties hereto and their respective legal representatives,
successors and assigns and no other person shall have any right, benefit or
obligation hereunder.
IN WITNESS WHEREOF, the parties have executed and delivered this
Amendment as of the date first above written.
INTERNATIONAL TELECOMMUNICATIONS GROUP, LTD.
By: ____________________________________
Name:
Title:
INTERNATIONAL TELECOMMUNICATIONS CORPORATION
By: ____________________________________
Name:
Title:
RSL COMMUNICATIONS, INC.
By: ____________________________________
Name:
Title:
EXHIBIT D
INTERNATIONAL TELECOMMUNICATIONS GROUP, LTD.
CERTIFICATE OF AMENDMENT
TO THE CERTIFICATE OF INCORPORATION
International Telecommunications Group, Ltd., a Delaware corporation
having its registered office in the State of Delaware c/o The Company
Corporation, Three Xxxxxxxxx Centre, 000 X. Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000, New Castle County (hereinafter called the "Corporation"), hereby
certifies to the Delaware Secretary of State that:
FIRST: The Certificate of Incorporation of the Corporation is hereby
amended by deleting paragraph 3 of Article FOURTH in its entirety and
substituting the following therefor:
"3. Redemption. On April 30 in each of the years 1998 and 1999, the
Corporation shall redeem fifty percent (50%) of the initial number of
shares of Preferred Stock (or such lesser number then outstanding) at a
price equal to the Initial Conversion Price per share plus any accrued but
unpaid dividends; provided, however, that such redemption shall only be
required to be made on each such date to the extent of the Corporation's
cash flow from operations, as established by the Corporation's audited
financial statements as of December 31 of the year prior to the year in
which each such redemption payment must be made; and provided, further,
that the remainder of any redemption amounts otherwise required to be made
on April 30, 1998 and 1999 shall be payable on April 30, 2000. "Cash flow
from operations" for this purpose shall exclude, for any fiscal period,
extraordinary items reflected in the Corporation's income statement and
capital contributions reflected in the Corporation's balance sheet, and
shall include all of the Corporation's debt service payments of principal
and interest. If holders of the Preferred Stock wish to avoid such
mandatory redemption, they shall convert into Common Stock before such
dates."
SECOND: The Certificate of Incorporation of the Corporation is hereby
further amended by deleting paragraph 8 of Article FOURTH in its entirety and
substituting the following provision in lieu thereof:
"8. Special Voting Required. The following actions may be taken by the
Corporation only with the consent of 33-1/3% of the shares of Preferred
Stock, voting separately as a class: (1) altering, changing or amending
any terms of the Preferred Stock, including the powers, privileges,
preferences or rights of the Preferred Stock; (2) authorizing, issuing,
assuming or guaranteeing any debt in excess of an aggregate of Two Hundred
Fifty Thousand Dollars ($250,000) at one time outstanding (except that
such consent shall not be required for any debt issued in connection with
the purchase of securities from Xxxxxxx X. Xxxxxx ("Xxxxxx") (or his
successors) pursuant to Sections VII.E.2, VII.E.3 or VII.E.4 (or any
successor provisions thereto) of the amended and restated Employment
Agreement dated March 10, 1995, as further amended September __, 1995, by
and between the Corporation and Xxxxxx (the "Employment Agreement")), or
authorizing or issuing new shares of equity securities, or authorizing any
shares of Preferred Stock or other stock with rights senior to those of
the Preferred Stock; provided, however, that if the Corporation's shares
are not offered for sale on a national securities exchange or are not
designated as national market system securities on an interdealer
quotation system by the National Association of Securities Dealers, Inc.
on or before September __, 1997, the affirmative vote of at least one (1)
Preferred Stock Director shall not be required for any decision required
by the Board of Directors in connection with the Corporation's shares
being offered for sale on a national securities exchange or being
designated as national market system securities on an interdealer
quotation system by the National Association of Securities Dealers, Inc.
if such public offering is pursuant to a firm commitment underwriting by
an investment banker of national reputation to produce aggregate net
proceeds to the Corporation of at least Fifty Million Dollars
($50,000,000); (3) merging with or acquiring another entity or its
substantial assets, or selling substantially all of the assets of the
Corporation; (4) engaging in any business other than the
telecommunications business; (5) increasing or decreasing the authorized
number of directors constituting the Board of Directors; (6) the
termination or substitution of members of the Corporation's Board of
Directors to be selected by the holders of Preferred Stock; (7)
repurchasing or redeeming any securities (except that such consent shall
not be required for any purchase of securities from Xxxxxx or his
successors pursuant to Sections VII.E.2, VII.E.3 or VII.E.4 (or any
successor provisions thereto) of the Employment Agreement or the required
redemptions of Preferred Stock); (8) the authorization of any of the
Corporation's assets for personal use (excluding use of the company car,
as provided in the Employment Agreement), and of any transactions between
the Corporation or its subsidiaries and any officers of the Corporation;
provided, however, the term "transaction" for purposes of this subsection
(8) shall mean transactions between the Corporation, Xxxxxx and/or Xxxxxxx
X. Xxxxxxx ("Xxxxxxx"), in which Xxxxxx and/or Rebetti receive a personal
benefit; and (9) approval of the budget for each fiscal year."
THIRD: The Certificate of Incorporation of the Corporation is hereby
further amended by adding the following provision as paragraph 10 of Article
FOURTH:
"10. Stockholder Voting Requirements. Notwithstanding any other provision
of this Certificate of Incorporation or the By-Laws of the Corporation, a
favorable vote of the holders of at least Fifty One and Three Tenths
Percent (51.30%) of the outstanding shares of the Corporation's common
stock shall be required to approve, adopt or authorize (1) the
authorization or issuance of any shares of equity securities and (2) any
matter presented for a vote of the holders of the Corporation's stock,
including but not limited to, any amendment of this Certificate of
Incorporation."
- 2 -
FOURTH: The Certificate of Incorporation of the Corporation is hereby
further amended by adding the following provision as Section 8 of Article
SEVENTH:
"8. Executive Dividend Committee: The Board of Directors shall appoint an
Executive Dividend Committee comprised of all of the Corporation's
directors elected by the holders of Preferred Stock. The Executive
Dividend Committee shall decide all matters by affirmative vote of the
majority of its members. The Board of Directors vests the sole authority
to declare and issue cash dividends to the Executive Dividend Committee;
provided, however, that no cash dividend may be declared by the Executive
Dividend Committee unless the following conditions are satisfied: (a) each
share of Common Stock and Preferred Stock shall be entitled to the same
cash dividend; and (b) the total aggregate amount of money to be
distributed as cash dividends in any one year shall not exceed sixty two
percent (62%) of the Corporation's net cash flow, as established by the
Corporation's audited financial statements as of December 31 of the year
prior to the year in which the Executive Dividend Committee declares such
cash dividends. "Net cash flow" for this purpose shall mean, for any one
year, the net change in the Corporation's sources and uses of funds as
decreased by the Corporation's debt proceeds, insurance proceeds and
contributions to capital."
FIFTH: Section 9 of Article FOURTH is hereby amended by extending the
application of such section to Section 8 of Article SEVENTH (in addition to
Section 8 of Article FOURTH).
SIXTH: The foregoing amendment has been effected in the manner and by the
vote required by the Corporation's Certificate of Incorporation and Section 242
of the General Corporate Law of the State of Delaware. The amendment was set
forth in a resolution adopted and declared advisable by the Board of Directors.
In accordance with the provisions of Section 228 of the General Corporate Law of
the State of Delaware, the stockholders holding a majority of the outstanding
shares of the Corporation entitled to vote thereon have given their written
consent to the amendment and written notice of such consent has been given as
provided in such section.
SEVENTH: Except as amended hereby, the Corporation's Certificate of
Incorporation shall remain in full force and effect.
The President acknowledges this Certificate of Amendment to be the
corporate act and deed of the Corporation and states that the facts set forth in
this Certificate of Amendment are true, and that this statement is made under
the penalties of perjury.
- 3 -
IN WITNESS WHEREOF, International Telecommunications Group, Ltd. has
caused this Certificate of Amendment to be signed in its name and on its behalf
by its President, a duly authorized officer of the Corporation, and attested by
its Assistant Secretary effective the ___ day of September, 1995.
INTERNATIONAL TELECOMMUNICATIONS
GROUP, LTD.
By: ________________________
Xxxxxxx X. Xxxxxx
President
ATTEST:
_________________________________
Xxxx Xxxxxxx
Assistant Secretary
