EXHIBIT 10.1
PURCHASE AND SALE AGREEMENT
PURCHASE AND SALE AGREEMENT, dated as of October 5, 2000,
by and among XXXXXX XX a corporation organized under the laws of Switzerland
(the "Company"), the stockholders of the Company listed on Schedule I attached
hereto (each a "Seller", and collectively, the "Sellers"), and INTERNET
HOLDINGS, INC., a corporation organized under the laws of the State of Utah (the
"Purchaser").
W I T N E S S E T H:
WHEREAS, the Sellers own, of record and beneficially, an
aggregate of 20,000 shares (collectively, the "Shares") of the capital stock
(the "Capital Stock"), of the Company, constituting all of the issued and
outstanding shares of Capital Stock of the Company;
WHEREAS, the Purchaser desires to purchase from the Sellers,
and the Sellers desire to sell to the Purchaser, all of the Shares, on the terms
and subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.01 DEFINITIONS. Unless otherwise defined herein, all capitalized
terms used herein shall have the meanings assigned to them below:
"Affiliate" of any particular Person means any other Person controlling,
controlled by or under common control with such particular Person, where
"control" means the possession, directly or indirectly, of the power to direct
the management and policies of a Person, whether through the ownership of voting
securities, contract or otherwise.
"Agreement" means this Agreement, as the same may be amended, supplemented
or modified in accordance with the terms hereof.
"Authorizations" means any authorization, approval, order, license, permit,
waiver, variance, franchise, grant or consent of, declaration to, or filing or
registration with, any court or governmental authority, and any consent of any
other party.
"Closing" has the meaning set forth in Section 2.03.
"Closing Date" has the meaning set forth in Section 2.03.
"Financial Statements" has the meaning set forth in Section 4.07(a).
"GAAP" means United States generally accepted accounting principles.
"Governmental Authority" means any Federal, state, local, foreign, regional
or other governmental, administrative, judicial or regulatory authority or
instrumentality.
"Indebtedness" means at a particular time, without duplication, (i) any
indebtedness for borrowed money or issued in substitution for or exchange of
indebtedness for borrowed money, (ii) any indebtedness evidenced by any note,
bond, debenture or other debt security, (iii) any indebtedness for the deferred
purchase price of property or services with respect to which a Person is liable,
contingently or otherwise, as obligor or otherwise (other than trade payables
and other current liabilities incurred in the ordinary course of business which
are not more than three months past due), (iv) any commitment by which a Person
assures a creditor against loss (including, without limitation, contingent
reimbursement obligations with respect to letters of credit), (v) any
indebtedness guaranteed in any manner by a Person (including, without
limitation, guarantees in the form of an agreement to repurchase or reimburse),
(vi) any obligations under capitalized leases with respect to which a Person is
liable, contingently or otherwise, as obligor, guarantor or otherwise, or with
respect to which obligations a Person assures a creditor against loss, (vii) any
indebtedness secured by a Lien on a Person's assets and (viii) any unsatisfied
obligation for "withdrawal liability" to any benefit plan.
"Lien" means any lien, pledge, mortgage, deed of trust, security interest,
claim, lease, assessment, charge, option, right of first refusal, easement,
servitude, transfer restriction under any shareholder or similar agreement,
encumbrance or any other restriction or limitation of any kind or nature
whatsoever.
"Losses" has the meaning set forth in Section 9.01.
"Material Agreements" has the meaning set forth in Section 4.10(a).
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Portfolio Companies" means, collectively, the companies listed on Schedule
II attached hereto, in each of which the Company is the owner of the shares
thereof specified on Schedule II.
"Tax" or "Taxes" means any (A) federal, state, local or foreign income,
gross receipt, franchise, estimated, alternative minimum, add-on-minimum,
property, sales, use, transfer, registration, value added, excise, natural
resources, severance, stamp, occupation, premium, windfall profit,
environmental, disability, payroll, license, employment or other withholding, or
other taxes, levies, imports, duties, license and registration fees, charges,
assessments or withholdings of any kind whatsoever, including any interest,
penalties or additions to tax or additional amounts in respect of the foregoing;
and (B) liability for the payment of any amounts of the type described in clause
(A) as a result of any express or implied obligation to indemnify or otherwise
assume or succeed to the liability of any other Person.
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"Tax Returns" means returns, declarations, reports, claims for refund,
information returns or other documents (including any related or supporting
schedules, statements or information) filed or required to be filed in
connection with the determination, assessment or collection of Taxes of any
party or the administration of any laws, regulations or administrative
requirements relating to any Taxes.
"United States Dollar" and "$" means the lawful currency of the United
States of America.
SECTION 1.02 TERMS GENERALLY. The definitions set forth herein apply
equally to both the singular and the plural forms thereof. All references to
Articles, Sections, Exhibits and Schedules will be deemed references to the
Articles, Sections, Exhibits and Schedules to this Agreement, in each case
unless the context shall otherwise require. Except as otherwise expressly
provided in this Agreement, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, and all currency amounts are in United
States Dollars unless otherwise indicated.
ARTICLE II.
PURCHASE AND SALE
SECTION 2.01 PURCHASE OF SHARES. Subject to the terms and conditions of
this Agreement and in reliance upon the representations, warranties and
agreements set forth herein, on the Closing Date, the Sellers shall sell,
convey, assign, transfer and deliver to the Purchaser, and the Purchaser shall,
purchase from the Sellers, an aggregate of 20,000 Shares, each of the Sellers to
sell, convey, assign, transfer and deliver to the Purchaser the Shares set forth
after such Seller's name in Schedule I.
SECTION 2.02 PURCHASE PRICE. As consideration for the sale, conveyance,
assignment, transfer and delivery to the Purchaser of the Shares pursuant to
this Agreement, the Purchaser shall deliver to the Sellers aggregate
consideration consisting of an aggregate of 2,550,000 shares (the "IH Shares")
of the Common Stock, par value US$0.001 per share, of the Purchaser. The IH
Shares shall be allocated among the Sellers in proportion to their respective
ownership of the Shares as set forth on Schedule I attached hereto.
SECTION 2.03 CLOSING. At the Closing, the Sellers shall deliver to the
Purchaser the Shares, and all certificates evidencing such Shares, to be sold to
the Purchaser pursuant to this Agreement, in each case duly endorsed in blank or
accompanied by duly executed instruments of transfer in blank, if applicable,
together with all necessary documentary or stock transfer stamps affixed and
accompanied by such other assignments, certificates of authority, consents to
transfer instruments and evidence of title to such Shares as may be reasonably
requested by counsel to the Purchaser in order that all right, title and
interest in and to the Shares pass to the Purchaser from the Sellers.
SECTION 2.04 CLOSING. The consummation of the purchase and sale of the
Interests pursuant to this Agreement (the "Closing") shall take place at the
offices of the
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Purchaser, 00 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxx X0X 0XX, Xxxxxx Xxxxxxx, or such
other place as the Sellers and the Purchaser may agree, on or before October 17,
2000, at such time or on such other date as the Sellers and the Purchaser may
agree (the "Closing Date").
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each of the Sellers, jointly and severally, hereby represents and warrants
to the Purchaser, as follows:
SECTION 3.01 THE SELLERS.
(a) If such Seller is an individual, such Seller is legally
competent and has full power and authority to execute and deliver this
Agreement and to perform its respective obligations hereunder and to
consummate the transactions contemplated hereby.
(b) If such Seller is a corporation or other legal entity,
such Seller has full power and authority to execute and deliver this
Agreement and to perform its respective obligations hereunder and to
consummate the transactions contemplated hereby. Each such Seller has
taken all necessary corporate or other action to duly and validly
authorize the execution, delivery and performance of this Agreement by
such Seller and the consummation by such Seller of the transactions
contemplated hereby.
SECTION 3.02 BINDING OBLIGATION. This Agreement has been duly executed and
delivered by each Seller and (and assuming the execution and delivery of this
Agreement by the Purchaser) constitutes, and each of the other agreements,
instruments, documents and certificates contemplated hereby when executed and
delivered for value, will constitute, the legal, valid and binding obligation of
each Seller, enforceable against such Seller in accordance with their respective
terms, except to the extent that (i) enforcement may be limited by or subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or limiting creditor's rights generally and (ii) the remedy of
specific performance and injunctive and other forms of equitable relief are
subject to certain equitable defenses and to the discretion of the court or
other similar entity before which any proceeding therefor may be brought.
SECTION 3.03 APPROVALS. Except as set forth on Schedule 3.03, no
authorizations, approvals, consents of, and no filings or registrations with,
any Governmental Authority are necessary for the execution, delivery or
performance of this Agreement by any of the Sellers or the Company.
SECTION 3.04 NO CONFLICTS. Neither the execution nor delivery of this
Agreement nor the consummation of the transactions contemplated hereby, nor the
compliance by the Sellers with the terms and provisions hereof will (a) conflict
with or result in a breach of, or require any consent or vote of any Person
under, the respective certificates of incorporation or by-laws, if any, of the
Sellers or any note, mortgage, indenture, contract, collective bargaining
agreement or any other agreement to which any Seller is a party or by which any
Seller or any of
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their respective properties is subject, (b) violate any applicable law,
regulation, order, writ, injunction or decree of any Governmental Authority, or
(c) constitute or result in a breach or violation of or a default under, or
result in the imposition of any Lien, charge or encumbrance on any of the assets
of the Company or any Seller, including the Shares owned by each Seller.
SECTION 3.05 LITIGATION. There is no action, proceeding or investigation to
which the Company or any Seller is a party or to which the Company or any Seller
or any of their respective properties may be subject by or before any court or
any arbitral, governmental or regulatory authority or agency, pending or to the
knowledge of any Seller threatened, which, if adversely determined, could have
individually or in the aggregate a material adverse effect on the ability of the
Sellers to execute, deliver and perform this Agreement or the condition,
financial or otherwise, of the Company.
SECTION 3.06 PRIVATE SALE OF IH SHARES. Each Seller acknowledges and agrees
that the IH Shares have not been registered under the United States Securities
Act of 1933, as amended, and accordingly, the IH Shares are "restricted
securities" and may not be resold except pursuant to the United States
Securities Act of 1933, as amended, and the rules and regulations thereunder.
Each Seller is acquiring the IH Shares to be issued to it for its own account
and not with a view to the distribution thereof.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE SELLERS REGARDING THE COMPANY
Each of the Sellers, jointly and severally, hereby represents and warrants
to the Purchaser, as follows:
SECTION 4.01 ORGANIZATION. The Company (a) is a corporation, duly
organized, validly existing and in good standing under the laws of Switzerland,
(b) has all requisite power, and all material governmental licenses,
authorizations, consents and approvals, necessary to own its assets and carry on
its business as currently being conducted, and (c) is qualified to do business
in all foreign jurisdictions in which the nature of the business conducted by it
and the properties owned or operated by it make such qualification necessary and
where the failure to so qualify could, individually or in the aggregate, have a
material adverse effect on the business or condition, financial or otherwise, of
the Company.
SECTION 4.02 CAPITALIZATION OF THE COMPANY. The Company has authorized an
aggregate of 20,000 shares of its Capital Stock. The Sellers constitute all of
the stockholders of the Company. Each Seller has good and marketable title to
its Shares, and each Seller owns its Shares free and clear of all Liens. Neither
the Company nor any Seller has granted to any Person any option or right to
acquire any shares of capital stock or any security convertible into or
exchangeable for and giving a right to purchase any shares of the Common Stock
of the Company.
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SECTION 4.03 APPROVALS. Neither the execution nor delivery of this
Agreement nor the consummation of the transactions contemplated hereby requires
the consent of any Person.
SECTION 4.04 NO CONFLICTS. Neither the execution nor delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
conflict with or result in a breach of, or require any consent or vote of any
Person under, any note, mortgage, indenture, contract, collective bargaining
agreement or any other agreement to which the Company is a party or by which the
Company or any of its properties is subject, (b) violate any applicable law,
regulation, order, writ, injunction or decree of any Governmental Authority, or
(c) constitute or result in a breach or violation of or a default under, or
result in the imposition of any Lien, charge or encumbrance on any of the assets
of the Company or the Shares owned by any Seller.
SECTION 4.05 LITIGATION. There is no claim, dispute, action, suit,
proceeding or investigation pending or, to the best knowledge of the Sellers,
threatened, against or affecting the Company or the Company's business or any of
the Company's officers, at law or in equity or admiralty before any court,
tribunal or other governmental authority, board, agency, commission or
instrumentality which, if adversely determined, would, singly or in the
aggregate, have a material adverse effect on the Company or the ability of the
Sellers to perform their obligations under this Agreement or which would
challenge the validity or propriety of the transactions contemplated hereby.
There is no outstanding judgment, order, writ, ruling, injunction, stipulation
or decree of any court, arbitrator other governmental authority, board, agency,
commission or instrumentality, against or materially affecting the Company or
the Company's business. The Company has not violated and is not in default with
respect to, any judgment, order, writ, ruling, injunction, stipulation or decree
applicable to it. Neither the Company nor any of its officers or members has
received any written or verbal inquiry from any governmental authority, board,
agency, commission or instrumentality concerning the possible violation of any
law, rule or regulation or any matter.
SECTION 4.06 SUBSIDIARIES AND JOINT VENTURES; PORTFOLIO COMPANIES.
(a) The Company does not have any subsidiaries nor does it own, directly or
indirectly, any capital stock or equity interest in any corporation,
partnership, joint venture, limited liability company or other entity.
(b) The Company owns its investments in the Portfolio Companies, free and
clear of all Liens. Neither the Company nor any Seller has granted to any
Person any option or right to acquire any shares of capital stock or any
security convertible into or exchangeable for and giving a right to
purchase any shares of any of the Portfolio Companies.
SECTION 4.07 FINANCIAL STATEMENTS.
(a) The Sellers have furnished to the Purchaser (i) the Company's financial
statements for the fiscal year ended December 31, 1999, including the notes
thereto, as audited by KPMG, and (ii) the Company's unaudited consolidated
and consolidating
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financial statements for the six-month period ended June 30, 2000
(collectively, the "Financial Statements").
(b) The Financial Statements have been prepared in accordance with
accounting principles generally accepted in Switzerland, applied on a basis
consistent throughout all periods presented; such statements are correct
and complete in all material respects, are reconcilable to the books and
records of the Company, and present fairly the financial position of the
Company as of the dates, and the results of operations, cash flows and
changes in financial position of the Company for the periods, indicated,
except in the case of such interim financial statements, for the omission
of footnotes and for year-end review adjustments which are not expected to
be, singly or in the aggregate, material in amount. The books of account
and other financial records of the Company have been maintained in
accordance with good business practices.
(c) The Company's assets consist only of its investments in the Portfolio
Companies.
(d) The Company has no material liabilities or obligations, whether secured
or unsecured, accrued, determined, absolute or contingent, asserted or
unasserted or otherwise, which are required to be reflected or reserved in
a balance sheet or the notes thereto in accordance with the accounting
principles consistently applied by the Company, but which are not reflected
in the Financial Statements.
SECTION 4.08 EMPLOYEE MATTERS.
(a) Schedule 4.08 sets forth the name of each director, officer, and key
employees of the Company. The Company has provided the Purchaser with true and
complete copies of all employment agreements or consulting agreements with each
such director, officer or key employee.
(b) The Company has not violated in any material respect any law or
regulation governing employers and the conditions of employees' employment,
including those regulating wages, hours, discrimination, civil rights and
employment of foreign nationals.
(c) The Company does not have any employee benefit plans.
SECTION 4.09 TAXES. Except as indicated in Schedule 4.09, the Company has
filed all Tax Returns which were required to be filed prior to the date hereof
(after giving effect to all extensions of filing deadlines obtained) in respect
of all Taxes and has paid all Taxes which have become due pursuant to such Tax
Returns or pursuant to any assessment which has become payable, or, to the
extent its liability for any Taxes has not been fully discharged, the same have
been properly reflected as a liability on the Company's books and records and
adequate reserves therefor have been established. All such Tax Returns have been
properly prepared and are complete. Except as indicated in Schedule 4.09, no
extension for the filing of any such Tax Return is currently in effect. No Tax
Return or Tax Return liability of the Company is presently under audit or, to
the best knowledge of the Sellers, proposed to be audited. Except as indicated
in Schedule 4.09, the Company has not given or been requested to give waivers of
any statute of
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limitations relating to the payment of any Taxes. There are no claims pending
or, to the best knowledge of the Sellers, threatened, against the Company for
past due Taxes. All payments for withholding Taxes, unemployment insurance and
other amounts required to be paid for periods prior to the date hereof to any
Governmental Authority in respect of the Company's employment obligations, have
been paid or shall be paid prior to Closing. Such amounts have been duly
provided for on the books and records of the Company and in the Financial
Statements. No claim has been made by a taxing authority in a jurisdiction where
the Company does not file a Tax Return that the Company is or may be subject to
Taxes assessed by such jurisdiction.
SECTION 4.10 MATERIAL AGREEMENTS; NO DEFAULTS.
(a) Schedule 4.10 sets forth a complete and correct list of all
instruments, agreements, indentures, mortgages, guarantees, notes,
commitments, accommodations, letters of credit or other arrangements or
understandings, whether oral or written, to which the Company is a party or
pursuant to which the Company is obligated (the "Material Agreements"). The
Material Agreements constitute all of the contracts, agreements,
understandings and arrangements required for the operation of the Company's
business as currently conducted or which have a material effect thereon.
Copies of all such Material Agreements, or if oral, written summaries
thereof, have previously been delivered to the Purchaser, and such copies
and summaries are complete and correct as of the date hereof.
(b) Each of the Material Agreements was entered into in the ordinary
course of the Company's business, is in full force and effect on the date
hereof and is valid, binding and enforceable in accordance with its terms.
Except as disclosed in Schedule 4.10, neither the Company nor, to the
Sellers' best knowledge, any other person or entity is in breach of, or in
default under, any Material Agreement, and no event or action has occurred,
is pending or is threatened, which, after the giving of notice, passage of
time or otherwise, would constitute or result in such a breach or default by
the Company or, to the best knowledge of the Sellers, any other person or
entity party to a Material Agreement. The Company has not received any
notice of default under any Material Agreement, which default has not been
cured to the satisfaction of, or duly waived by, the party claiming such
default on or before the date hereof.
(c) Except as set forth in Schedule 4.10, none of the Sellers has taken
or omitted to take any action which has resulted in, or will result in, the
Company being or becoming a party to or bound by, any agreement, arrangement
or understanding to which the Company will remain obligated or bound
following the Closing, relating to the acquisition by the Company of any
entity or all or substantially all of the assets of any Person.
SECTION 4.11 PERSONAL PROPERTY. The Company does not own any tangible
personal property or assets.
SECTION 4.12 REAL PROPERTY. The Company owns no real property. The Company
is not a party to any leases of real property.
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SECTION 4.13 PERMITS AND LICENSES. The Company has all Authorizations which
are reasonably necessary to conduct the Company's business and to own its
assets. The Company has not received any notice or claim pertaining to the
failure to obtain any material Authorization, the failure of which to obtain
would materially and adversely affect the Company's business, and the Sellers do
not know of any basis for such claim.
SECTION 4.14 COMPLIANCE WITH LAW. The Company is not conducting its
business or affairs in material violation of any applicable law, ordinance,
rule, regulation, court or administrative order, decree or process. The Company
has not received any notice of violation or claimed violation of any law,
ordinance, rule, regulation, order, decree, process or requirement.
SECTION 4.15 ORDINARY COURSE. Since December 31, 1999, the Company has
conducted its business, maintained its assets and kept its books of account,
records and files, substantially in the same manner as previously conducted,
maintained or kept and solely in the ordinary course. Since December 31, 1999,
the Company has not incurred any material liabilities, sold or otherwise
transferred any material assets, waived or cancelled any material rights or
incurred any material commitments except in the ordinary course of business.
SECTION 4.16 NO ADVERSE CHANGES. Except as otherwise contemplated hereby,
since December 31, 1999, there has not been any material adverse change in the
Company's business, the prospects, financial or other condition thereof, or
assets or liabilities, as reflected in the Financial Statements.
SECTION 4.17 MISCELLANEOUS. The representations and warranties made by the
Sellers in this Agreement and the statements made by or on behalf of the Sellers
in any certificate, document, exhibit or schedule furnished in connection with
the transactions contemplated hereby, do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make such
representations or warranties or other such statements not false or misleading.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to each of the Sellers that:
SECTION 5.01 DUE INCORPORATION. The Purchaser is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Utah. The Purchaser has full corporate power and authority to own, lease and
operate its properties and to carry on its business in the places and in the
manner currently conducted or proposed to be conducted.
SECTION 5.02 DUE AUTHORIZATION; VALID OBLIGATION. The Purchaser has all
requisite corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The Purchaser has taken
all corporate action
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necessary to authorize it to execute and deliver this Agreement and to
consummate the transactions contemplated hereby, and this Agreement constitutes
the valid and binding obligation of the Purchaser enforceable in accordance with
its terms.
SECTION 5.03 NO CONFLICTS. The execution and delivery by the Purchaser of
this Agreement and the other Transaction Documents to which it is a party, and
the consummation of the transactions contemplated hereby and thereby do not and
shall not (a) contravene the Articles of Incorporation or By-Laws of the
Purchaser, or (b) with or without the giving of notice or the passage of time,
violate, conflict with, or result in a breach of, or a default or loss of rights
under, any covenant, agreement, mortgage, indenture, lease or instrument to
which the Purchaser is a party or by which the Purchaser or any of its assets
are bound or any judgment, order, decree, law, rule or regulation to which the
Purchaser or any of its are subject.
SECTION 5.04 AUTHORIZATIONS. Any authorization from any court or
Governmental Authority or any other person or entity which is not a party to
this Agreement which is required in connection with the execution, delivery and
performance of the Transaction Documents by the Purchaser has been obtained or
shall be obtained prior to or as of the Closing Date. There is no pending or, to
the knowledge of the Purchaser threatened, claim, action, suit, investigation or
proceeding against the Purchaser before any court, arbitrator or Governmental
Authority which, if determined adversely to the Purchaser, would have a material
adverse effect on the ability of the Purchaser to perform its obligations under
the Transaction Documents to which it is a party.
SECTION 5.05 MISCELLANEOUS. The representations and warranties made by the
Purchaser in this Agreement and the statements made by or on their behalf in any
certificate, document or exhibit furnished in connection with the transactions
contemplated hereby do not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make such representations
or warranties or other such statement.
ARTICLE VI.
CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER
The obligations of the Purchaser under this Agreement are subject to the
satisfaction, on or prior to the Closing Date, of the following conditions, any
of which may be waived in whole or in part by the Purchaser, in its sole
discretion:
SECTION 6.01 DUE PERFORMANCE; ACCURACY OF REPRESENTATIONS AND WARRANTIES.
(a) The Sellers shall have fully performed and complied in all material
respects with all agreements and conditions required by this Agreement to
be performed or complied with by them on or prior to the Closing Date;
(b) All representations and warranties of the Sellers set forth in this
Agreement shall be true and correct in all material respects, on and as of
the Closing Date, as though made on and as of the Closing Date; and
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(c) Each Seller shall deliver a certificate certifying that the statements
in paragraphs (a) and (b) are true and correct on and as of the Closing Date.
SECTION 6.02 CLOSING DATE BALANCE SHEET. The Sellers shall have delivered
to the Purchaser (a) the Financial Statements, and (b) a reconciliation of the
Financial Statements to GAAP.
SECTION 6.03 TRANSFER OF SHARES. The Sellers shall deliver to the Purchaser
the Shares, and all certificates evidencing such Shares, to be sold to the
Purchaser pursuant to this Agreement, in each case duly endorsed in blank or
accompanied by duly executed instruments of transfer in blank, if applicable,
together with all necessary documentary or stock transfer stamps affixed and
accompanied by such other assignments, certificates of authority, consents to
transfer instruments and evidence of title to such Shares as may be reasonably
requested by counsel to the Purchaser in order that all right, title and
interest in and to the Shares pass to the Purchaser from the Sellers.
SECTION 6.04 PORTFOLIO COMPANIES. The Sellers shall cause to be delivered
to the Purchaser any and all certificates or other evidences of ownership of the
Company's investment in the Portfolio Companies, in each case showing that the
Company is the record and beneficial owner of such investments in the Portfolio
Companies.
SECTION 6.05 CORPORATE DOCUMENTS. The Sellers shall have delivered or
caused to be delivered to the Purchaser:
(a) a copy of the Company's Articles and Memorandum of Association, as
amended through the Closing Date, certified by the secretary of the Company;
(b) certificates of the Secretary or Assistant Secretary, or such other
authorized officer, of the Company including (i) duly enacted resolutions
of the Company's board of directors or other governing body, as
appropriate, in form and substance satisfactory to the Purchaser approving
this Agreement and the transactions contemplated hereby and authorizing
officers of the Company to execute and deliver instruments required to be
delivered hereunder as a condition precedent to the Closing, and (ii)
specimen signatures of the officers of the Company authorized to sign such
instruments;
(c) certificate of the Secretary or such other authorized officer, of each
Seller (other than a Seller who is an individual) including (i) duly
enacted resolutions of such Seller's board of directors approving this
Agreement and the transactions contemplated hereby and authorizing officers
of such Seller to execute and deliver instruments required to be delivered
hereunder as a condition precedent to the Closing, (ii) the By-Laws of such
Seller, and (iii) specimen signatures of the officers of such Seller
authorized to sign such instruments.
SECTION 6.06 NO CLAIMS. No claim, action, suit, investigation or proceeding
shall be pending or threatened against any of the parties hereto or any of their
respective Affiliates which, if adversely determined, would (a) prevent or
hinder consummation of the transactions contemplated by this Agreement or any of
the agreements attached hereto as
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Exhibits, or (b) materially and adversely affect the Company's investment in the
Portfolio Companies.
SECTION 6.07 CONSENTS AND GOVERNMENTAL APPROVALS. The Purchaser shall have
received all Authorizations, if any, of all relevant Governmental Authorities
required in connection with the consummation of the transactions contemplated
hereby or to preserve the Company's business and the Company's rights under any
material agreements, without the imposition of any materially burdensome
expense, conditions or restrictions, and all of which shall be in full force and
effect on the Closing Date.
SECTION 6.08 SATISFACTION OF COUNSEL. All actions, proceedings,
instruments, documents and other relevant legal matters in connection with the
transactions contemplated by this Agreement or any of the agreements attached
hereto as Exhibits, shall be reasonably satisfactory in all respects to counsel
for the Purchaser.
ARTICLE VII.
CONDITIONS TO OBLIGATIONS OF THE SELLERS
The obligations of the Sellers under this Agreement are subject to the
satisfaction, on or prior to the Closing Date, of the following conditions, any
of which may be waived in whole or in part by all of the Sellers in their sole
discretion:
SECTION 7.01 DUE PERFORMANCE. The Purchaser shall have fully performed and
complied in all material respects with all of their respective agreements and
conditions required by this Agreement to be performed or complied with by it on
or prior to the Closing Date.
SECTION 7.02 ACCURACY OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties of the Purchaser set forth in this Agreement
shall be true and correct in all material respects, on and as of the Closing
Date as though made on and as of the Closing Date.
SECTION 7.03 CONSIDERATION. The Sellers shall have received the IH Shares
registered in such names and in such amounts as are set forth on Schedule I
attached hereto.
SECTION 7.04 CORPORATE DOCUMENTS. The Purchaser shall have delivered or
caused to be delivered to the Sellers:
(a) a copy of the Purchaser's Articles of Incorporation, as amended through
the Closing Date, and in each case certified by the respective Secretary of
the Purchaser; and
(b) certificates of the Secretary or Assistant Secretary, or such other
authorized officer, of the Purchaser including (i) duly enacted resolutions
of the Company's board of directors approving this Agreement and the
transactions contemplated hereby and authorizing the officers of the
Purchaser to execute and deliver instruments required to be delivered
hereunder as a condition precedent to the Closing,
-12-
and (ii) specimen signatures of the officers of the Purchaser authorized to
sign such instruments.
SECTION 7.05 NO CLAIMS. No claim, action, suit, investigation or proceeding
shall be pending or threatened against any of the parties hereto or any of their
respective Affiliates which, if adversely determined, would prevent or hinder
consummation of the transactions contemplated by this Agreement or any of the
agreements attached hereto as Exhibits.
SECTION 7.06 CONSENTS AND GOVERNMENTAL APPROVALS. The Sellers shall have
received all material consents and waivers of third parties, and all
authorizations of all relevant Governmental Authorities, required in connection
with the consummation of the transactions contemplated hereby, all of which
shall be in full force and effect on the Closing Date.
SECTION 7.07 SATISFACTION OF COUNSEL. All actions, proceedings,
instruments, documents and other relevant legal matters in connection with the
transactions contemplated by this Agreement or any of the agreements attached
hereto as Exhibits, shall be reasonably satisfactory in all respects to counsel
for the Sellers.
ARTICLE VIII.
CONDUCT OF BUSINESS OF THE COMPANY PRIOR TO THE CLOSING DATE
SECTION 8.01 FURTHER INVESTIGATION. Between the date of this Agreement and
the Closing Date, the Sellers shall, and the Sellers shall cause the Company to,
give to the Purchaser and their representatives full access during normal
business hours to all of the Company's premises, files, books and records and
cause its officers to furnish such financial and operating data and other
information with respect to the Company's business and properties as the
Purchaser shall from time to time request; PROVIDED, HOWEVER, that any such
investigation shall be conducted in such manner as not to interfere unreasonably
with the operation of the Company's business. During such investigation, the
Purchaser and its representatives, shall have the right to make copies of, or
excerpts from, such files, books and records as they may deem advisable. If this
Agreement is not consummated, the Purchaser and their representatives shall
return to the Company all copies made by or furnished to them of materials
belonging to the Company. At all times prior to the Closing and, if this
Agreement is not consummated, thereafter, and the Purchaser shall, and shall
cause its officers, directors, employees, agents and representatives to, keep
secret and not divulge to any third party or otherwise use for their own benefit
(other than in connection with the transactions contemplated by this Agreement)
any confidential or proprietary information of the Company to which the
Purchaser obtains access pursuant to this Section 8.01; PROVIDED, HOWEVER, that
such obligation shall not apply to any information to the extent that (i) it is
or becomes part of public or industry knowledge or literature as a result of
causes other than the acts or omissions of the Purchaser or its officers,
directors, employees, agents or representatives, (ii) can be demonstrated to
have been known to the Purchaser prior to its receipt from the Company or a
Seller, or (iii) is received by the Purchaser in good faith from a third party.
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SECTION 8.02 PRESERVE BUSINESS. Between the date of this Agreement and the
Closing Date, the Sellers shall use their best efforts to cause the Company to
preserve substantially intact the Company's business organization, keep
available the services of the Company's present officers and employees involved
in the Company's business and preserve the Company's present relationships with
persons having significant business relations therewith and shall conduct the
Company's business only in the ordinary course, except as otherwise contemplated
hereby or disclosed in the Schedules attached to this Agreement. Without
limiting the generality of the foregoing, the Sellers shall not without the
prior written consent of the Purchaser, except as specifically required by this
Agreement, permit the Company to (i) issue or commit to issue any securities or
interests convertible into or exchangeable for securities of the Company, (ii)
grant or commit to grant any options, warrants or other rights to subscribe for
or purchase or otherwise acquire any securities of the Company, (iii) declare,
set aside, or pay any dividend or make any distribution with respect to its
outstanding equity securities, (iv) directly or indirectly redeem, purchase or
otherwise acquire or commit to acquire any capital stock or other ownership
interest of any person, (v) effect a split or reclassification of its capital
stock, (vi) amend its Memorandum and Articles of Association or other governing
instrument, (vii) borrow or agree to borrow any funds, except in the ordinary
course of business, (viii) waive or commit to waive any rights of substantial
value, (ix) sell, exchange, or otherwise dispose of, or cause or suffer the
sale, exchange or other disposition of any significant part of its assets,
except in the ordinary course of business, (x) mortgage, pledge or subject (or
suffer to be subjected) any of its assets to any Lien, (xi) create any
receivable (including, without limitation, accounts receivable, notes, advances
and receivables due from Affiliates) except in BONA FIDE transactions in the
ordinary course of business, (xii) acquire (by purchase of assets or stock,
merger, consolidation or otherwise) or sell, transfer or otherwise dispose of,
any assets in excess of an aggregate amount of US$50,000, or cancel any debts or
claims in excess of such aggregate amount, except in the ordinary course of
business, (xiii) sell, assign, license or transfer any right, title or interest
in or to any Intellectual Property, (xiv) make any material change in the
accounting methods or practices currently employed by the Company, or (xv)
manage the Company's working capital other than in the ordinary course.
SECTION 8.03 PRESERVE ACCURACY OF REPRESENTATIONS AND WARRANTIES OF THE
SELLERS. Between the date of this Agreement and the Closing Date, the Sellers
shall refrain from taking, and shall cause the Company to refrain from taking,
without the prior written consent of the Purchaser, any action which would
render any of the representations or warranties made by the Sellers in this
Agreement set forth in this agreement materially inaccurate as of the Closing
Date. The Sellers shall notify the Purchaser promptly of the occurrence of any
matter, event or change in circumstances after the date hereof that would have
been required to be disclosed in the Schedules to this Agreement if it had
occurred prior to the date hereof, but such notification shall not affect any of
the Purchaser's rights under this Agreement.
SECTION 8.04 CONSENTS AND WAIVERS. The parties hereto shall cooperate with
each other and use best efforts to obtain all consents and waivers to the
transactions contemplated hereby required under all agreements, mortgages,
indentures, contracts, licenses, franchises, permits, leases or other
instruments, the withholding of which consents or waivers could have a material
adverse effect on the condition, business or assets of the Company.
-14-
ARTICLE IX.
INDEMNIFICATION
SECTION 9.01 OBLIGATIONS OF THE SELLERS. Each of the Sellers, jointly and
severally, agrees to defend, indemnify and hold harmless the Purchaser (which
for the purposes of this Section 9.01 shall include the Purchaser's respective
affiliates, directors, officers, employees, agents, advisors and
representatives) from and against, and to reimburse the Purchaser with respect
to, all liabilities, losses, costs and expenses, including, without limitation,
reasonable attorneys' fees and disbursements ("Losses"), asserted against or
incurred by the Purchaser by reason of, arising out of, or in connection with:
(a) any breach of any representation, warranty, covenant or agreement
contained in this Agreement made by the Sellers or in any document or
certificate delivered by the Sellers to the Purchaser pursuant to the
provisions of this Agreement;
(b) any claim, demand, action, suit, proceeding or investigation involving
the Company arising at any time and not disclosed in the Schedules to this
Agreement relating to a state of facts, action or omission to act arising
on or prior to the Closing Date or the allegation by any third party of the
existence of any state of facts which, if existing, would constitute a
breach of any representation or warranty referred to in clause (a) of this
Section 9.01; and
(c) any Taxes incurred by the Company on or prior to the Closing Date or
which otherwise relate to taxable years or periods of the Company ended or
ending on or prior to the Closing Date or which arise as a result of or in
connection with the transactions contemplated hereby (including, without
limitation, any federal, state, local or foreign documentary, transfer or
other Taxes which are required to be paid in connection with the sale,
transfer, exchange, conveyance, assignment and delivery of the Interests to
the Purchaser hereunder).
SECTION 9.02 INDEMNIFICATION PROCEDURE.
(a) In the case of a claim pursuant to Section 9.01, the Purchaser shall
give notice to the Sellers as promptly as practicable of (i) the allegation
by it of any breach or failure referred to in Section 9.01(a), setting
forth to the extent known the amount of indemnification claimed, (ii) the
allegation by any third party of the existence of any matter or state of
facts referred to in Section 9.01(b), or (iii) the incurrence of any Taxes
referred to in Section 10.01(c); PROVIDED that the rights of the Purchaser
shall not be affected by any delay in providing such notice except to the
extent that the Sellers are actually prejudiced thereby.
(b) Upon receipt of notice pursuant to Section 9.02(a), the indemnifying
party shall have 10 days in which to dispute the claim asserted by sending
written notice thereof to the indemnified party (a "Dispute Notice"). The
indemnifying party shall not be entitled to dispute a claim based on a
final judgment or order of a court of competent jurisdiction. If no Dispute
Notice is received prior to the expiration of the 10-day period,
-15-
the indemnified party shall be entitled to receive full payment of the
amount of the claim. If a Dispute Notice is received prior to the
expiration of the 10-day period, the parties shall negotiate in good faith
to resolve the dispute. If the parties are unable to resolve the dispute
within 30 days of the receipt of the Dispute Notice, the dispute shall be
submitted to arbitration. Such arbitration shall be conducted according to
the applicable rules of the American Arbitration Association and shall take
place in New York, New York before a single arbitrator, who shall be
designated by the Purchaser and the Sellers or, if they are unable to agree
within 10 days after the dispute is submitted to arbitration, by the
American Arbitration Association. The decision of the arbitrator shall be
final and binding upon the parties hereto.
SECTION 9.03 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations and warranties and statements made by the Sellers in this
Agreement or in any document or certificate delivered pursuant hereto shall
survive the Closing Date and for a period of one year from the Closing Date, and
in each case shall be unaffected by any investigation made by or on behalf of
any party hereto, by knowledge obtained as a result thereof or otherwise or by
any notice of breach of, or failure to perform under, this Agreement which is
not effectively waived in accordance herewith.
ARTICLE X.
MISCELLANEOUS
SECTION 10.01 EXPENSES. Each of the parties hereto shall bear and pay all
costs, expenses and fees incurred by it on its behalf incident to the
preparation, execution and delivery of this Agreement, any agreements
contemplated hereby, including those attached as Exhibits and Schedules hereto,
and the performance of such party's obligations hereunder or thereunder, whether
or not the transactions contemplated by this Agreement are consummated,
including, without limitation, any broker's or finder's fees, costs incident to
the transfer of any securities and the fees and disbursements of attorneys,
accountants and consultants (including investment banking advisors) employed by
such party,
SECTION 10.02 FURTHER ASSURANCES. From time to time after the date of this
Agreement, each of the parties hereto, at the request of the other, and without
further consideration, shall execute and deliver such further documents or
instruments and shall take such other actions as the requesting party may
reasonably request in order to effect complete consummation of the transactions
contemplated by this Agreement.
SECTION 10.03 NOTICES. All communications, notices, requests, consents or
demands given or required under this Agreement shall be in writing and shall be
deemed to have been duly given when delivered to, sent by facsimile with
acknowledged receipt or recognized courier service with acknowledged receipt, or
five (5) days after being mailed by prepaid registered or certified mail
addressed to, the party for whom intended, as follows, or to such other address
as may be furnished by such party by notice in the manner provided herein:
(a) If to the Sellers:
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Xx. Xxxxxxxxx Xxxx
0 Xxxxxxx Xxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
and
Xxxxxxx Xxxx
Xxxxxxxxx Xx. 00
00000 Xxxxxxx
Xxxxxxx
(b) If to the Purchaser:
Internet Holdings, Inc.
00 Xxxxxx Xxxxxx
Xxxxxx X0X 0XX
Xxxxxx Xxxxxxx
with a copy to:
Salans Xxxxxxxxx Xxxxxxxxx Xxxxxxx & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000 or (000) 000-0000
SECTION 10.04 ENTIRE AGREEMENT. This Agreement, together with the Schedules
and Exhibits hereto, and the instruments and agreements to be executed pursuant
to this Agreement, sets forth the entire understanding of the parties hereto
with respect to its subject matter, merges and supersedes all prior and
contemporaneous understandings with respect to its subject matter and may not be
waived or modified, in whole or in part, except by a writing signed by each of
the parties hereto. No waiver of any provision of this Agreement in any instance
shall be deemed to be a waiver of the same or any other provision in any other
instance. Failure of any party to enforce any provision of this Agreement shall
not be construed as a waiver of its rights under such provision.
SECTION 10.05 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon,
enforceable against and inure to the benefit of, the parties hereto and their
respective heirs, administrators, executors, personal representatives,
successors and assigns, and nothing herein is intended to confer any right,
remedy or benefit upon any other person. This Agreement may not be assigned by
any party hereto except with the prior written consent of all the other parties,
which consent shall not be unreasonably withheld.
SECTION 10.06 GOVERNING LAW. This Agreement shall in all respects be
governed by and construed in accordance with the laws of England and Wales.
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SECTION 10.07 COUNTERPARTS. 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.
SECTION 10.08 CONSTRUCTION. Headings contained in this Agreement are for
convenience only and shall not be used in the interpretation of this Agreement.
References herein to Articles, Sections, Schedules and Exhibits are to the
articles, sections, schedules and exhibits, respectively, of this Agreement. The
Schedules and all Exhibits to this Agreement are hereby incorporated herein by
reference and made a part of this Agreement. As used herein, the singular
includes the plural, and the masculine, feminine and neuter gender each includes
the others where the context so indicates.
SECTION 10.09 SEVERABILITY. If any provision of this Agreement is held to
be invalid or unenforceable by a court of competent jurisdiction, this Agreement
shall be interpreted and enforceable as if such provision were severed or
limited, but only to the extent necessary to render such provision and this
Agreement enforceable.
SECTION 10.10 SPECIFIC PERFORMANCE. The Sellers acknowledge that money
damages would not be a sufficient remedy for any breach by the Sellers of this
Agreement and agrees that the Purchaser shall be entitled to specific
performance and injunctive relief as remedies for any such breach.
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IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement
as of the date first set forth above.
Company: XXXXXX XX
By /s/ XXXXXX XXXXXXX
----------------------------
Name: Xxxxxx Xxxxxxx
Title: Director
Sellers:
/s/ XX. XXXXXXXXX XXXX
------------------------------
Xx. Xxxxxxxxx Xxxx
XXXXXXX XXXX
By /s/ XXXXXXX XXXX
---------------------------
Name:
Title:
Purchaser: INTERNET HOLDINGS, INC.
By /s/ XXXXXX XXXXXXX-XXXXXX
----------------------------
Name: Xxxxxx Xxxxxxx-Xxxxxx
Title: President and Chief
Executive Officer
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SCHEDULE I
SELLERS
Xx. Xxxxxxxxx Xxxx 13,334 shares
Xxxxxxx Xxxx 6,666 shares
-20-
SCHEDULE II
PORTFOLIO COMPANIES
Name Number of Shares
---- -----------------
TopTier Software 311,132
Schweizerische Gesellschaft
fur Aktienhandel und Research AG ("SGA") 13,500
Newtron 666
Neomedia Inc. 105,000
Firetalk 95,239
Open Mind Systems AG 44
Xxxxxx.xxx 68,419
Metrotainment AG 50,000
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SCHEDULE 3.03
NONE
SCHEDULE 4.08
DIRECTORS:
----------
PRESIDENT: Xxxxxx Xxxxxxx
MEMBER: Xxxx Xxxxxxx
MEMBER: Xxxx Xxxxxxxx
EMPLOYMENT CONTRACTS:
---------------------
AS PROVIDED--XXXXXX XXXXXXX
SCHEDULE 4.09
NONE
SCHEDULE 4.10
NONE
