AGREEMENT
This Agreement, made as of this 30th day of November, 1999 by and between
Computer Business Sciences, Inc. ("CBS"), a New York corporation having its
principal address at 00-00 Xxx Xxxxxxx Xxxx, Xxx Xxxxxxx, XX 00000
And
Nissko Telecom L.P., a New York Limited Partnership having its principal
address at 00-00 Xxx Xxxxxxx Xxxx, Xxx Xxxxxxx, Xxx Xxxx, 00000 ("Nissko").
And
Nissko Telecom, Ltd., a New York Corporation having its principal address
at 00-00 Xxx Xxxxxxx Xxxx, Xxx Xxxxxxx, Xxx Xxxx 00000 ("Ltd").
Xxxxxx Xxxxx, an individual residing at 000 Xxxxxx Xxxxxx, Xxx Xxxxxxx,
Xxx Xxxx 00000 ("Koren").
And
Xxxxxxx Xxxxxx, an individual residing at 00 Xxxxxx Xxxxx, Xxxxxx Xxxxx,
Xxx Xxxx 00000 ("Livian").
And
Xxxxxxx Xxxxxxxxx, an individual residing at 000-00 00xx Xxxxx, Xxxxxxxx,
Xxx Xxxx 00000 ("Nissanian").
And
Xxxxxx Xxxxxxx, Esq., an individual residing at 0 Xxxxx Xxxx, Xxxxxxx, Xxx
Xxxx 00000 ("Rimberg")
And
Nissko Telecom Associates, 00-00 Xxx Xxxxxxx Xxxx, Xxx Xxxxxxx, Xxx Xxxx
00000 ("Associates")
WHEREAS, Associates, Nissko, Ltd., Koren, Livian, Nissanian and Rimberg
(Koren, Livian, Nissanian and Rimberg are hereinafter, collectively and
individually, the "Nissko Group") entered into an agreement dated March 25, 1995
with CBS creating Associates, a Joint Venture ("Joint Venture"), for the purpose
of engaging in the business of providing computer telephony services to all
countries, to and from the United States" (collectively "Countries") and being
designated as a Master Agent to those countries.
WHEREAS, the Nissko Group is desirous of divesting itself of its rights in
the Joint Venture and all participation in providing telephony services to the
Countries.
WHEREAS, the Nissko Group is desirous of selling all of their rights in
the Joint Venture and all participation in providing telephony services to the
Countries.
WHEREAS, based on discussions held among CBS, Nissko, Ltd.,
Associates and the Nissko Group, CBS wishes to purchase 100% of Nissko's, Ltd.'s
and the Nissko Group's interest in the Joint Venture which is a Master Agent to
provide long distance telephone service, internet service, data and any and all
other telephony service (the "Telephony Business") to the Countries, any and all
customer lists in the possession of Associates, Nissko, Ltd. and the Nissko
Group, any and all licenses obtained by Associates, Nissko, Ltd. and the Nissko
Group, any and all interest Nissko, Ltd. and the Nissko Group have in Talkie
Globe(R) and other equipment related to such service, etc. (the "Telephony
Assets"), any and all liabilities of Associates, Nissko, Ltd. and the Nissko
Group relating to taxes which any individual may become liable and telephone
bills related to services provided, , and to secure from Nissko, Ltd. and the
Nissko Group their cooperation and assistance in purchasing the related rights
and equipment from their Master Agent joint venture partners (Schedule "A").
NOW, THEREFORE, in consideration of the mutual obligations and promises
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
A. Purchase.
1. CBS hereby agrees to purchase 100% of Nissko's, Ltd.'s and the
Nissko Group's interest in the Joint Venture which is a Master Agent
to provide long distance telephone service, internet service, data
and any and all other telephony service (the "Telephony Business")
to the Countries, any and all customer lists in the possession of
Associates, Nissko, Ltd. and the Nissko Group, any and all licenses
obtained by Associates, Nissko, Ltd. and the Nissko Group, any and
all interest Nissko, Ltd. and the Nissko Group have in Talkie
Globe(R) and other equipment related to such service, etc. (the
"Telephony Assets"), any and all liabilities of Associates, Nissko,
Ltd. and the Nissko Group relating to taxes which any individual may
become liable and telephone bills related to services provided, and
to secure from Nissko, Ltd. and the Nissko Group their cooperation
and assistance in purchasing the related rights and equipment from
their Master Agent joint venture partners.
2. The Purchase Price for the Transaction shall be paid with 670,000
duly authorized and validly issued shares of the common stock of CBS
("Purchase Shares"), which are being delivered to the Nissko Group
members simultaneously with the execution of this Agreement. Rimberg
will receive 8% of the Purchase Shares; the other members of the
Nissko Group will divide the remainder equally; provided, however,
that it is acknowledged that Livian has represented the interests of
both himself and his brother, Xxxxxxx Xxxxxx ("Xxxxxxx") in Ltd.,
and, accordingly 25% of the shares allocated to Livian shall be
issued to Xxxxxxx who shall be deemed a member of the Nissko Group
for all purposes hereunder.
3. CBS plans to take action to cause its common stock to be publicly
traded in the United States within the next 18 months (the "Event").
However, no assurance can be given that the Event will occur. In
furtherance hereof, each Investor will enter into an Investment
Letter in the form attached hereto as Exhibit A. Upon the occurrence
of the Event, all Purchase Shares holders shall have such rights of
registration that shall be no less than the rights of registration
granted to any other holder of unregistered shares of CBS, which
shall be subject to the same restrictions and requirements of the
underwriter of the initial public offering of shares of CBS.
4. CBS is depositing 588,000 restricted shares of common stock of
Fidelity Holdings Inc., all of which are duly authorized and validly
issued to CBS, together with stock powers, duly executed in blank in
escrow ("Escrow Shares 1") with Rimberg & Associates. P.C. (the
"Escrow Agent"), simultaneous with the execution of this Agreement.
In the event that
(i) the Event does not occur within eighteen (18) months of
the date hereof, the Escrow Agent, within 10 days thereof,
shall issue to the Nissko Group, in the proportions set forth
below such number of Escrow Shares 1 as shall be valued at
$2,500,000 if sold to a purchaser or financier of restricted
securities (i.e., valued at the average closing price for the
30 trading days prior to the 18th month anniversary of this
Agreement, discounted at 35%, in the event such shares are
restricted) on the 18 month anniversary of this Agreement, and
such Escrow Shares 1 shall become Purchase Shares and the
remaining Escrow Shares 1 shall remain in escrow until the 24
month anniversary of this Agreement as provided below; or
(ii) if the Event has occurred prior to the 18 month
anniversary of this Agreement and (A) the net proceeds of the
sale of the Purchase Shares received by the Nissko Group
members if and when sold during any period prior to the 24
month anniversary of this Agreement do not equal at least each
member's proportionate share of a total of $2,500,000, or, (B)
if such Purchase Shares have not been sold by the 24 month
anniversary of this Agreement, and the value of such shares as
measured at the average closing price for the thirty (30)
trading days prior to the 24 month anniversary (discounted at
35 %, in the event such shares are restricted, to take into
account that they are restricted securities), does not equal
at least $2,500,000,
then the Escrow Shares 1 shall become Purchase Shares to cover any
shortfall in value to the extent that members of the Nissko Group
would receive on the 24 month anniversary of this Agreement (or if
the Purchase Shares were sold prior to the 24 month anniversary of
this Agreement, have actually received) their proportionate share of
a total value of $2,500,000 upon the sale of the Purchase Shares,
valued as provided above, to a purchaser or financer of restricted
securities (i.e., discounted at 35 %, in the event such shares are
restricted). On the 24 month anniversary of the Agreement the Escrow
Agent shall immediately release such number of the Escrow Shares 1
to accomplish the foregoing to the members of the Nissko Group in
the same proportions set forth in Paragraph A(1) hereof regarding
the CBS shares, i.e., Rimberg will receive 8% of the Purchase
Shares; the other members of the Nissko Group will divide the
remainder equally, except that 25% of the shares allocated to Livian
shall be issued to Xxxxxxx.
In the event that at any time prior to the 24 month anniversary of
this Agreement, CBS secures a bona fide third party purchaser of any
Purchase Shares for a cash purchase price of $2,500,000, or such
amount proportional to a share of the Purchase Shares, and any
member of the Nissko Group rejects such offer, then no additional
Escrow 1 Shares are to be issued to such member on the 24 month
anniversary of the Agreement.
All issuances, dividends, stock splits, conversions or other
consideration with respect to the shares under this section
occurring after January 10, 2000 shall become a part of "Escrow
Shares 1."
5. An additional 200,000 restricted shares of common stock of
Fidelity Holdings, Inc. will be validly issued and placed in escrow,
together with stock powers validly executed in blank ("Escrow Shares
2") with Rimberg & Associates P.C., simultaneous with the execution
of this Agreement. In the event that the Event does not occur within
eighteen (18) months of the date hereof, then the Escrow Agent shall
release from escrow and deliver to the Nissko Group, and the Nissko
Group shall have the right to receive, in addition to the Purchase
Shares (including any "Escrow Shares 1" under Section 3, above), the
"Escrow Shares 2." Rimberg will receive 8% of the "Escrow Shares 2;"
the other members of the Nissko Group will divide the remainder
equally, except that 25% of the shares allocated to Livian shall be
issued to Xxxxxxx.
All issuances, dividends, stock splits, conversions or other
consideration with respect to the shares under this section
occurring after the date hereof shall become a part of "Escrow
Shares 2."
6. To cover personal guarantees of Nissko Jewelry of MCI, Sprint or
any other creditor with respect to liabilities of CBS or related to
the purchased liabilities, as described above, CBS is hereby
depositing 200,000 duly authorized and validly issued to CBS
restricted shares of Fidelity Holdings Inc. common stock (the
"Guarantee Shares") in escrow with Rimberg & Associates. P.C.,
simultaneous with the execution of this Agreement, together with
stock powers, validly issued in blank. In the event any member of
the Nissko Group or Nissko Jewelry is required to pay to MCI or
Sprint or any other creditor with respect to liabilities of CBS or
related to the purchased liabilities, as described above, such
member shall notify Business,CBS, in writing, of such obligation.
CBS shall have the right to defend against the payment demand to its
full extent; provided that CBS posts any required bond or makes any
payment required to proceed with any appeal. Where CBS has exhausted
all avenues and payment is still outstanding, then the Escrow Agent
shall release such shares from escrow and cause such shares, as
promptly as possible, to be sold, with the proceeds thereof to be
utilized towards the payment of any such obligations.
All issuances, dividends, stock splits, conversions or other
consideration with respect to the shares under this section
occurring after January 10, 2000 shall
become a part of these personal guarantee shares.
7. The parties acknowledge and agree that the Escrow Agent shall
have no discretion concerning the release of the Escrow Shares 1,
the Escrow Shares 2 and the Guarantee Shares and that no party shall
have any right to object to the release of any of such shares from
escrow at the times and upon the occurrences specified in Paragraph
A(3) through (6), above, and any such rights are hereby deemed
waived and of no further force or effect. At such times that any
shares held in escrow are to be released in accordance with this
Agreement, the Escrow Agent shall send a written notice, by first
class, certified mail, return receipt requested, the parties at the
addresses specified in this Agreement (or such other address as a
party may specify to the Escrow Agent in writing), with a copy of
such notice to Xxxxx & Xxxxxx, LLP, 1350 Avenue of the Xxxxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or such other address
specified by such party in writing to the Escrow Agent) of its
intention to release such shares to the designated parties within
ten (10) days of such notice. Unless the Escrow Agent is enjoined by
a New York Court of competent jurisdiction (i.e., the federal
district court or New York Supreme Court) from releasing such
shares, the Escrow Agent shall have no discretion but to release
such shares to such parties.
B. Authorization of Agreement, Etc.
1. This Agreement has been or will be duly executed and delivered by
each member of the Nissko Group and the execution, delivery and
performance by each member of the Nissko Group of this Agreement has
been duly authorized by all requisite corporate or partnership
action by each member of the Nissko Group, as applicable; and each
constitutes, or will constitute, the legal, valid and binding
obligation of each member of the Nissko Group, enforceable in
accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, usury or other similar
laws affecting the enforcement of creditors' rights generally. The
execution, delivery and performance of this Agreement and the
issuance, sale and delivery of the Securities will not (i) violate
any provision of law or statute or any order of any court or other
agency of government binding on any member of the Nissko Group; or
(ii) to the best of the Nissko Group's knowledge, conflict with or
result in any breach of any of the terms, conditions or provisions
of, or constitute (with due notice or lapse of time or both) a
default under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or assets
of any member of the Nissko Group under their respective
organizational documents, to the extent applicable, or any
indenture, mortgage, lease agreement or other agreement or
instrument to which any member of the Nissko Group is a party or by
which it or any of its property is bound or affected.
2. The execution and delivery of this Agreement by CBS and the
performance by CBS of its obligations hereunder have been duly and
validly authorized by all requisite corporate action. The
obligations of CBS hereunder and valid and binding and enforceable
against CBS in accordance with their respective terms. CBS
represents and warrants that the Purchase Shares, the Escrow Shares
1, the
Escrow Shares 2 and the Guarantee Shares are duly and validly issued
and non-assessable, and are free and clear and any liens, claims,
encumbrances or rights of third parties whatsoever, except as
required under the Securities Laws, including, but not limited to,
Rule 144 of the Securities Act of 1933. During the term hereof, any
dividends, whether in cash or in kind, including without limitation,
stock dividends, or stock splits or other consideration issued in
connection with any of the Escrow Shares 1, the Escrow Shares 2 and
the Guarantee Shares shall be delivered by CBS or Fidelity, as the
case may, to the Escrow Agent and shall be deemed part of such
shares and subject to the escrow provisions contained hereunder.
C. Title to Properties; Encumbrances. Except for claims by Major Fleet and
Leasing, to the best of their knowledge, the Nissko Group and/or Associates has
good, valid and marketable title to all of the Telephony Assets free and clear
of all encumbrances, liens, claims, charges or other restrictions of whatever
kind or character , except for liens for current taxes, assessments or
governmental charges or levies on property not yet due and delinquent
D. Non-Defaults; Non-Contravention. To the best of their knowledge, none
of the Nissko Group is in default in the performance or observance of any
obligation (i) under its respective organizational documents, as applicable, or
any indenture, mortgage, contract, purchase order or other agreement or
instrument to which a member of the Nissko Group is a party or by which it or
any of its property is bound or affected; or (ii) with respect to any order,
writ, injunction or decree of any court of any federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign and there exists no condition, event or act
which constitutes, nor which after notice, the lapse of time or both, would
constitute, a default under any of the foregoing. Notwithstanding the foregoing,
the parties make no representations regarding MCI or Sprint.
E. Discharge and Release. Except for their obligations hereunder or any
obligations related to the Telephony Business or the liabilities assumed by CBS
hereunder, upon execution of this Agreement any obligations between the parties
from the Agreement between Fidelity, Computer Business Sciences and the Nissko
Group dated March 25, 1995 are hereby discharged and any escrows being held
pursuant to the March 25, 1995 Agreement shall be immediately released. In
addition, the Nissko Group agrees to execute a general release in favor of
Fidelity and CBS with respect to such matters (Exhibit "B").
F. Binding Upon Successors. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns as provided herein.
G. Choice of Laws. This Agreement shall be construed in accordance with
the laws of the state of New York and county of New York and any action
hereunder shall be commenced in the courts of the State of New York County of
New York.
H. Non-Compete. The Nissko Group agrees that for five years following the
execution of this Agreement it shall not compete, be involved or be working in
the Telephony Business in the Countries.
I. Additional Documents. The parties agree to execute and deliver any
additional
documents, which may be reasonably required to accomplish any of the purposes
set forth in this Agreement.
J. Integrated Agreement. This Agreement constitutes the entire Agreement
between the parties. This Agreement supersedes any prior agreement or
understanding between the parties and no modifications or revisions thereof
shall be of any force or effect unless the same are in writing and executed by
the parties hereto. The Nissko Group, Nissko and Ltd. acknowledge that it is
entering into this Agreement as a result of its own independent investigation
and not as a result of any promises, declarations and/or representations, oral
or written, of CBS, Fidelity Holdings, Inc., its agents, officers or employees
or any other entity, not contained in this Agreement.
K. Ambiguity. This contract is to be deemed to have been prepared jointly
by the parties hereto, and any uncertainty and ambiguity existing herein shall
not be interpreted against either party but according to the application of
rules of interpretation of contracts if such an uncertainty or ambiguity exists.
REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK
L. Applicable Law. The parties agree that this Agreement shall be governed
by and interpreted pursuant to the Laws of the State of New York.
M. Third Party Beneficiary. No provision of this Agreement is intended to
be for the benefit of or enforceable by any third party.
N. Counterparts; Facsimile. This Agreement, and any amendments hereto may
be executed in counterparts all of which taken together shall constitute one
agreement. A facsimile copy or copies may serve as original.
O. Separability of Provisions. Any provision of this Agreement, which
shall be determined to be invalid, Shall be ineffective, but such invalidity
shall not affect the remaining provisions hereof. The titles to the paragraphs
hereof are for convenience only and have no substantive effect.
IN WITNESS THEREOF, the parties hereto, intending to be legally bound, the
parties have signed this agreement as of the day and year written above.
Computer Business Sciences, Inc.
______________________________________
By: Xxxxx Xxxxx, President
______________________________________
By: Xxxxxx Xxxxx
______________________________________
By: Xxxxxxx Xxxxxx
______________________________________
By: Avi Nissanian
______________________________________
By: Xxxxxx Xxxxxxx
Nissko Telecom Associates
______________________________________
By: Nissko Telecom L.P.
Nissko Telecom Ltd.
______________________________________
By: Avi Nissanian, President
AGREED TO WITH RESPECT TO
PARAGRAPH B(2) ONLY:
______________________________________
Xxxxx Xxxxx
______________________________________
Xxxxx Xxxxxx
Fidelity Holdings, Inc.
By:___________________________________
