AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement"), entered
into this 14th day of May 1999, is by, between, and among Visual Telephone
International, Inc., a publicly held Delaware corporation (hereinafter "VTPI"),
Communications Research, Inc. ("CRI"), a New Jersey corporation and wholly owned
subsidiary of VTPI, and International Voice Technologies, Corp., a
privately-held Delaware corporation (hereinafter "IVT").
RECITALS:
WHEREAS, IVT wishes to merge with and into VTPI pursuant to an
agreement of merger (hereinafter the "Merger" or the "Merger Transaction")
whereby the separate corporate existence of IVT shall cease, and the sole
shareholder of IVT shall receive common stock of VTPI; and
WHEREAS, the parties hereto intend to qualify such transaction as a
tax-free exchange pursuant to Section 368(a)(1)(A) of the Internal Revenue Code
of 1986, as amended; and
WHEREAS, in connection with the Merger Transaction, VTPI wishes to
spin-off the ownership of CRI to the shareholders of VTPI and permit CRI to
continue its existence separate from VTPI;
NOW, THEREFORE, based upon the stated premises, which are incorporated
herein by reference, and for and in consideration of the mutual covenants and
agreements set forth herein, the mutual benefits to the parties to be derived
herefrom, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto approve and adopt this
Agreement and Plan of Reorganization and mutually covenant and agree with each
other as follows:
1. Merger Transaction and Spin-off
1.1 Agreement and Plan of Merger. The parties hereto agree to
execute and deliver at the closing of this Agreement as set forth in subsection
9.1 hereof (hereinafter the "Closing") the Agreement and Plan of Merger attached
hereto as Exhibit "A" (the "Merger Agreement"), incorporated herein by this
reference. As a result of the Merger, VTPI shall issue to the sole shareholder
of IVT 10,000,000 Class A common shares of the VTPI and 400,000 shares of Class
B common shares of VTPI.
1.2 Shares to be Sold. In connection with the Merger Transaction,
VTPI shall deliver at Closing a Stock Sale Agreement, in the form attached
hereto as Exhibit "B", incorporated herein by this reference, to sell 300,000
shares of Class B common stock of VTPI by the holders thereof to the sole
shareholder of IVT and to cancel 2,000,000 shares of Class A common stock of
VTPI (1,000,000 from Xxxx Xxxxxxxxx and 1,000,000 from Xxxx Xxxxxxx) owned by
such parties. Upon execution of the Stock Sale Agreement, all Class B common
stock of VTPI shall be transferred to Xxxxxx Xxxxxxx. As a result of this
action, Xxxx Xxxxxxxxx and Xxxx Xxxxxxx shall each own 2,000,000 shares of Class
A common stock of VTPI.
1.3 Spin-Off of CRI. On or before the Closing, VTPI shall
authorize the pro rata distribution of all of the stock of CRI to the
shareholders of the Class A common stock of VTPI on the date of the Closing,
excluding the shares to be issued to the sole shareholder of IVT in the Merger
Transaction. The shares of common stock of CRI shall be distributed to such
shareholders of VTPI at the rate of one share of CRI for each four shares of
Class A common stock of VTPI owned at the date of Closing. No fractional shares
of CRI common stock shall be distributed by VTPI; rather, each fraction of a
share shall be rounded up to a whole share. CRI shall forward split the
outstanding shares of common stock of CRI to provide sufficient shares for such
distribution. The distribution of the shares of CRI shall be accomplished as
soon as practicable following the Closing. Following the Closing, and prior to
the spin-off of the CRI shares, VTPI shall not interfere, directly or
indirectly, in the management or operations of CRI. Immediately following
Closing VTPI shall authorize the change of domicile of CRI to the State of
Nevada.
1.4 Transfer of VTPI Assets to CRI. At the Closing, VTPI shall
transfer all cash on hand and the assets set forth in Exhibit "C-1" attached
hereto and incorporated herein, to CRI. The only assets remaining in VTPI as of
Closing shall be those set forth in Exhibit "C-2" attached hereto and
incorporated herein.
1.5 CRI Marketing and Manufacturing Agreement. At Closing IVT and
CRI shall execute and deliver a Marketing and Manufacturing Agreement in the
form attached hereto as Exhibit "D" attached hereto and incorporated herein.
1.6 Beagelman Consulting Agreement. At Closing VTPI shall enter
into an consulting agreement with Xxxx Xxxxxxxxx, in the form set forth in
Exhibit "E" attached hereto and incorporated herein.
1.7 VTPI Litigation. VTPI is currently engaged in a lawsuit
against Xxxxxxx X'Xxxxx Xxxxxxx and Xxxxxxx Venture Group, filed in the United
States District Court, District of New Jersey (Civil Action No. 97-2969). CRI
shall assume all responsibility for continuance of prosecution of this case to
the fullest extent possible. If a judgement is obtained by CRI against
defendant, Xxxxxxx Xxxxxxx, et al., or any proceeds are received in such case
from defendant, all proceeds shall be solely assigned under this Agreement to
CRI, less the attorneys' fees and costs of the action.
1.8 Forgiveness of Debt. Any and all obligations of CRI to VTPI or
IVT through and including the date of this Agreement, including, but not limited
to, intercompany loans from VTPI to CRI, are hereby forgiven by IVT. CRI shall
remain liable for the debt to Xxxx Xxxxxxx for loans to CRI in the original
principal amount of $200,000, less payments made by VTPI (approximately
$50,500), plus interest. Except as set forth in this Agreement, any and all
agreements, contracts, arrangements, or other relationships between CRI and IVT
are hereby terminated.
1.9 Sublease of Office Space. VTPI shall and hereby does sublease
to CRI that portion of the office space located at 00 Xxxxxx Xxxxxx, Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx, as set forth in Schedule 1.9 attached hereto and
incorporated herein. Said sublease shall be subject to compliance by the parties
with Section 11 of the master lease by and between VTPI and Mejor Angora, L.L.C.
dated August 27, 1996. The parties hereto shall cooperate in obtaining all
necessary approvals of the landlord to implement the sublease, and CRI shall
undertake to assume and abide by the terms and conditions of the master lease,
provided that VTPI shall remain directly and primarily liable for the
performance of the terms and conditions of the master lease. Said sublease shall
continue for the unexpired term of the master lease or until terminated. The
current monthly rent for the space is $4,340. Fast-Pak Trading shall pay $500
per month. CRI shall pay $500 for the rear storage space set forth in the letter
agreement dated March 14, 1997, between Mejor Angora, L.L.C. and VTPI, and shall
have the option to cancel the use of said space at any time. The remaining
monthly rent of $3,340 shall be split as follows: IVT shall pay one-half
($1,670) and CRI shall pay the other half ($1670). CRI shall pay to VTPI the
monthly rent on or before the first day of each month commencing the first day
of the month following Closing. Said monthly rent shall be increased in
proportion to any increases of the monthly rent as set forth in the master
lease, including any increases in real estate taxes. CRI shall pay its
proportionate share of utilities services and repairs as set forth in Section 6
of the master lease. At Closing CRI and VTPI shall enter into a sublease
agreement mutually acceptable to both parties.
1.10 Finder's Fee. IVT shall be solely responsible for the payment
of a finder's fee to Xxxx Investment Group, Inc. 2. Representations and
Warranties of IVT. IVT represents and warrants to VTPI as set forth below. These
representations and warranties are made as an
2
inducement for VTPI to enter into this Agreement and, but for the making of such
representations and warranties and their accuracy, VTPI would not be a party
hereto.
2.1 Organization and Authority. IVT is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware with full power and authority to enter into and perform the
transactions contemplated by this Agreement. Except as set forth in Schedule
2.1, attached hereto and incorporated herein, IVT does not presently own or
control, directly or indirectly, any interest in any other corporation,
association, or other business entity, nor is IVT a participant in any joint
venture, partnership, or similar arrangement.
2.2 Capitalization. As of the date of the Closing, IVT will have a
total of no more than nine (9) shares of common stock issued and outstanding.
All of the shares will have been duly authorized and validly issued and will be
fully paid and nonassessable. There are no options, warrants, conversion
privileges, or other rights presently outstanding for the purchase of any
authorized but unissued stock of IVT.
2.3 Performance of This Agreement. The execution and performance
of this Agreement and the transfer of stock contemplated hereby have been
authorized by the board of directors of IVT.
2.4 Financials. True copies of the financial statements of IVT
consisting of the balance sheets as of the fiscal years ended December 31, 1998
and 1997, and the statement of income and expenses and cash flow for the year
ended December 31, 1998, have been delivered by IVT to VTPI. The financial
statements have been examined and certified by Xxxxxxxx & Company, Certified
Public Accountants. Said financial statements are true and correct in all
material respects and present an accurate and complete disclosure of the
financial condition of IVT as of December 31, 1998, and the earnings for the
periods covered, in accordance with generally accepted accounting principles
applied on a consistent basis.
2.5 Liabilities. There are no material liabilities of IVT, whether
accrued, absolute, contingent or otherwise, which arose or relate to any
transaction of IVT, its agents or servants occurring prior to December 31, 1998,
which are not disclosed by or reflected in said financial statements. As of the
date hereof, there are no known circumstances, conditions, happenings, events or
arrangements, contractual or otherwise, which may hereafter give rise to
liabilities, except in the normal course of business of IVT.
2.6 Absence of Certain Changes or Events. Except as set forth in
this Agreement, since December 31, 1998, there has not been (i) any material
adverse change in the business, operations, properties, level of inventory,
assets, or condition of IVT, or (ii) any damage, destruction, or loss to IVT
(whether or not covered by insurance) materially and adversely affecting the
business, operations, properties, assets, or conditions of IVT.
2.7 Patents, Trademarks, Copyrights, Etc. IVT has sufficient title
and ownership of all patents, trademarks, copyrights, service marks, trade
names, trade secrets, information, proprietary rights and processes necessary
for its business as now conducted and as proposed to be conducted. There are no
outstanding options, licenses, or agreements of any kind relating to the
foregoing, nor is IVT bound by or a party to any options, licenses, or
agreements of any kind with respect to the patents, trademarks, copyrights,
service marks, trade names, trade secrets, licenses, information, proprietary
rights and processes of any other person or entity. IVT has not received any
communications alleging that IVT has violated or, by conducting its business as
proposed, would violate any of the patents, trademarks, copyrights, service
marks, trade names, or trade secrets or other proprietary rights of any other
person or entity. None of IVT's employees is obligated under any contract
(including licenses, covenants, or commitments or any nature) or other
agreement, or subject to any judgement, decree or order of any court or
administrative agency, that would interfere with the use of his or her best
efforts to promote the interest of IVT or that would conflict with IVT's
business proposed to be conducted.
3
2.8 Compliance with Other Instruments. IVT is not in violation or
default of any material provision of any instrument, mortgage, deed of trust,
loan, contract, commitment, judgement, decree, order, or obligation to which it
is a party or by which it or any of its properties or assets are bound which
would materially adversely affect the condition (financial or otherwise),
business, property, assets, or liabilities of IVT.
2.9 Litigation. There are no legal, administrative or other
proceedings, investigations or inquiries, product liability or other claims,
judgments, injunctions or restrictions, either threatened, pending, or
outstanding against or involving IVT or its subsidiaries, if any, or their
assets, properties, or business, nor does IVT or its subsidiaries know, or have
reasonable grounds to know, of any basis for any such proceedings,
investigations or inquiries, product liability or other claims, judgments,
injunctions or restrictions. In addition, there are no material proceedings
existing, pending or reasonably contemplated to which any officer, director, or
affiliate of IVT or as to which any of its shareholders is a party adverse to
IVT or any of its subsidiaries or has a material interest adverse to IVT or any
of its subsidiaries.
2.10 Taxes. All federal, state, foreign, county and local income,
profits, franchise, occupation, property, sales, use, gross receipts and other
taxes (including any interest or penalties relating thereto) and assessments
which are due and payable have been duly reported, fully paid and discharged as
reported by IVT, and there are no unpaid taxes which are, or could become a lien
on the properties and assets of IVT, except as provided for in the financial
statements of IVT, or have been incurred in the normal course of business of IVT
since that date. All tax returns of any kind required to be filed have been
filed and the taxes paid or accrued.
2.11 Hazardous Materials. No hazardous material has been released,
placed, stored, generated, used, manufactured, treated, deposited, spilled,
discharged, released, or disposed of on or under any real property currently or
previously owned or leased by IVT or any of its subsidiaries. 2.12 Accuracy of
All Statements Made by IVT. No representation or warranty by IVT in this
Agreement, nor any statement, certificate, schedule, or exhibit hereto furnished
or to be furnished by or on behalf of IVT pursuant to this Agreement, nor any
document or certificate delivered to VTPI by IVT pursuant to this Agreement or
in connection with actions contemplated hereby, contains or shall contain any
untrue statement of material fact or omits or shall omit a material fact
necessary to make the statements contained therein not misleading.
3. Representations and Warranties of VTPI. VTPI represents and warrants
to IVT as set forth below. These representations and warranties are made as an
inducement for IVT to enter into this Agreement and, but for the making of such
representations and warranties and their accuracy, IVT would not be parties
hereto.
3.1 Organization and Good Standing. VTPI is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware with full power and authority to enter into and perform the
transactions contemplated by this Agreement. Except as set forth in Schedule
3.1, attached hereto and incorporated herein, VTPI does not presently own or
control, directly or indirectly, any interest in any other corporation,
association, or other business entity, nor is VTPI a participant in any joint
venture, partnership, or similar arrangement.
3.2 Capitalization. The authorized capital stock of VTPI consists
of 75,000,000 shares of Class A common stock, of which 38,932,364 shares are
outstanding, and 700,000 shares of Class B common stock, of which 300,000 shares
are outstanding. All of the outstanding shares have been duly authorized and
validly issued and are fully paid and nonassessable. Except as
4
set forth in Schedule 3.2, attached hereto and incorporated herein, and except
for VTPI's obligations hereunder with respect to the shares to be issued
pursuant to subsection 1.1 hereof, there are no options, warrants, conversion
privileges, or other rights presently outstanding for the purchase of any
authorized but unissued stock of VTPI.
3.3 Performance of This Agreement. The execution and performance
of this Agreement and the issuance of stock contemplated hereby have been
authorized by the board of directors of VTPI.
3.4 Financials. True copies of the consolidated financial
statements of VTPI consisting of the balance sheets as of the fiscal years ended
December 31, 1998 and 1997, and statements of income, cash flow and changes in
stockholder's equity for the fiscal years ended December 31, 1998 and 1997, have
been delivered by VTPI to IVT. The financial statements have been examined and
certified by XXXXXX, BIERWOLF & XXXXXXXX, Certified Public Accountants. Said
financial statements are true and correct in all material respects and present
an accurate and complete disclosure of the financial condition of VTPI as of
December 31, 1998, and the earnings for the periods covered, in accordance with
generally accepted accounting principles applied on a consistent basis.
3.5 Liabilities. There are no material liabilities of VTPI,
whether accrued, absolute, contingent or otherwise, which arose or relate to any
transaction of VTPI, its agents or servants which are not disclosed by or
reflected in said financial statements. As of the date hereof, there are no
known circumstances, conditions, happenings, events or arrangements, contractual
or otherwise, which may hereafter give rise to liabilities, except in the normal
course of business of VTPI.
3.6 Absence of Certain Changes or Events. Except as set forth in
this Agreement, since December 31, 1998, there has not been (i) any material
adverse change in the business, operations, properties, level of inventory,
assets, or condition of VTPI, or (ii) any damage, destruction, or loss to VTPI
(whether or not covered by insurance) materially and adversely affecting the
business, operations, properties, assets, or conditions of VTPI.
3.7 Compliance with Other Instruments. VTPI is not in violation or
default of any material provision (which has not otherwise been waived by the
obligee) of any instrument, mortgage, deed of trust, loan, contract, commitment,
judgement, decree, order, or obligation to which it is a party or by which it or
any of its properties or assets are bound which would materially adversely
affect the condition (financial or otherwise), business, property, assets, or
liabilities of VTPI.
3.8 Litigation. Except as set forth in subsection 1.7 hereof,
there are no legal, administrative or other proceedings, investigations or
inquiries, product liability or other claims, judgments, injunctions or
restrictions, either threatened, pending, or outstanding against or involving
VTPI or its subsidiaries, if any, or their assets, properties, or business, nor
does VTPI or its subsidiaries know, or have reasonable grounds to know, of any
basis for any such proceedings, investigations or inquiries, product liability
or other claims, judgments, injunctions or restrictions. In addition, there are
no material proceedings existing, pending or reasonably contemplated to which
any officer, director, or affiliate of VTPI is a party adverse to VTPI or any of
its subsidiaries or has a material interest adverse to VTPI or any of its
subsidiaries.
3.9 Taxes. All federal, state, foreign, county and local income,
profits, franchise, occupation, property, sales, use, gross receipts and other
taxes (including any interest or penalties relating thereto) and assessments
which are due and payable have been duly reported, fully paid and discharged as
reported by VTPI, and there are no unpaid taxes which are, or could become a
lien on the properties and assets of VTPI, except as provided for in the
financial statements of VTPI, or have been incurred in the normal course of
business of VTPI since that date. All tax returns of any kind required to be
filed have been filed and the taxes paid or accrued.
5
3.10 Hazardous Materials. No hazardous material has been released,
placed, stored, generated, used, manufactured, treated, deposited, spilled,
discharged, released, or disposed of on or under any real property currently or
previously owned or leased by VTPI or any of its subsidiaries.
3.11 Legality of Shares to be Issued. The shares of common stock
of VTPI to be issued by VTPI pursuant to this Agreement, when so issued and
delivered, will have been duly and validly authorized and issued by VTPI and
will be fully paid and nonassessable.
3.12 Accuracy of All Statements Made by VTPI. No representation or
warranty by VTPI in this Agreement, nor any statement, certificate, schedule, or
exhibit hereto furnished or to be furnished by VTPI pursuant to this Agreement,
nor any document or certificate delivered to IVT pursuant to this Agreement or
in connection with actions contemplated hereby, contains or shall contain any
untrue statement of material fact or omits to state or shall omit to state a
material fact necessary to make the statements contained therein not misleading.
4. Representations and Warranties of CRI. CRI represents and warrants
to IVT as set forth below. These representations and warranties are made as an
inducement for IVT to enter into this Agreement and, but for the making of such
representations and warranties and their accuracy, IVT would not be parties
hereto.
4.1 Organization and Good Standing. CRI is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New Jersey with full power and authority to enter into and perform the
transactions contemplated by this Agreement. CRI does not presently own or
control, directly or indirectly, any interest in any other corporation,
association, or other business entity, nor is CRI a participant in any joint
venture, partnership, or similar arrangement.
4.2 Capitalization. Prior to the distribution of shares of common stock of CRI
pursuant to subsection 1.3 hereof, the authorized capital stock of CRI shall be
increased to 40,000,000 shares of Class A common stock, of which
approximately
9,733,091 shares shall be issued and outstanding, and held by VTPI for
distribution to the shareholders of VTPI pursuant to subsection 1.3 above. CRI
shall also have 400,000 shares of Class B common stock, of which 200,000 shares
shall be outstanding.
4.3 Performance of This Agreement. The execution and performance
of this Agreement and the issuance of stock contemplated hereby have been
authorized by the board of directors of CRI.
4.4 Liabilities. There are no material liabilities of CRI, whether
accrued, absolute, contingent or otherwise, which arose or relate to any
transaction of CRI, its agents or servants which are not disclosed by or
reflected in the consolidated financial statements of VTPI furnished herewith.
As of the date hereof, there are no known circumstances, conditions, happenings,
events or arrangements, contractual or otherwise, which may hereafter give rise
to liabilities, except in the normal course of business of CRI.
4.5 Absence of Certain Changes or Events. Except as set forth in
this Agreement, since December 31, 1998, there has not been (i) any material
adverse change in the business, operations, properties, level of inventory,
assets, or condition of CRI, or (ii) any damage, destruction, or loss to CRI
(whether or not covered by insurance) materially and adversely affecting the
business, operations, properties, assets, or conditions of CRI.
4.6 Compliance with Other Instruments. CRI is not in violation or
default of any material provision of any instrument, mortgage, deed of trust,
loan, contract, commitment, judgement, decree, order, or obligation to which it
is a party or by which it or any of its properties or assets are bound which
would materially adversely affect the condition (financial or otherwise),
business, property, assets, or liabilities of CRI.
6
4.7 Litigation. There are no legal, administrative or other
proceedings, investigations or inquiries, product liability or other claims,
judgments, injunctions or restrictions, either threatened, pending, or
outstanding against or involving VTPI or its subsidiaries, if any, or their
assets, properties, or business, nor does VTPI or its subsidiaries know, or have
reasonable grounds to know, of any basis for any such proceedings,
investigations or inquiries, product liability or other claims, judgments,
injunctions or restrictions. In addition, there are no material proceedings
existing, pending or reasonably contemplated to which any officer, director, or
affiliate of VTPI is a party adverse to VTPI or any of its subsidiaries or has a
material interest adverse to VTPI or any of its subsidiaries.
4.8 Taxes. All federal, state, foreign, county and local income,
profits, franchise, occupation, property, sales, use, gross receipts and other
taxes (including any interest or penalties relating thereto) and assessments
which are due and payable have been duly reported, fully paid and discharged as
reported by CRI, and there are no unpaid taxes which are, or could become a lien
on the properties and assets of CRI, except as provided for in the consolidated
financial statements of VTPI, or have been incurred in the normal course of
business of CRI since that date. All tax returns of any kind required to be
filed have been filed and the taxes paid or accrued.
4.9 Hazardous Materials. No hazardous material has been released,
placed, stored, generated, used, manufactured, treated, deposited, spilled,
discharged, released, or disposed of on or under any real property currently or
previously owned or leased by CRI or any of its subsidiaries.
4.10 Accuracy of All Statements Made by CRI. No representation or
warranty by CRI in this Agreement, nor any statement, certificate, schedule, or
exhibit hereto furnished or to be furnished by CRI pursuant to this Agreement,
nor any document or certificate delivered to IVT pursuant to this Agreement or
in connection with actions contemplated hereby, contains or shall contain any
untrue statement of material fact or omits to state or shall omit to state a
material fact necessary to make the statements contained therein not misleading.
5. Covenants of the Parties.
5.1 Corporate Records.
a. Simultaneous with the execution of this Agreement by IVT,
if not previously furnished, such entity shall deliver to VTPI copies of the
certificate of incorporation, as amended, and the current bylaws of IVT, and
copies of the resolutions duly adopted by the board of directors of IVT
approving this Agreement and the transactions herein contemplated.
b. Simultaneous with the execution of this Agreement by VTPI,
if not previously furnished, such entity shall deliver to IVT copies of VTPI
certificate of incorporation, as amended, and the current bylaws of VTPI, and
copies of the resolutions duly adopted by the board of directors of VTPI
approving this Agreement and the transactions herein contemplated.
5.2 Access to Information.
a. Through the Closing Date VTPI and its authorized
representatives shall have full access during normal business hours to all
properties, books, records, contracts, and documents of IVT, and IVT shall
furnish or cause to be furnished to VTPI and its authorized representatives all
information with respect to its affairs and business as VTPI may reasonably
request. VTPI shall hold, and shall cause its representatives to hold
confidential, all such information and documents, other than information that
(i) is in the public domain at the time of its disclosure to VTPI; (ii) becomes
part of the public domain after disclosure through no fault of VTPI; (iii) is
known to VTPI or any of its officers or directors prior to disclosure; or (iv)
is disclosed in accordance with the written consent of IVT. In the event this
Agreement is terminated prior to Closing, VTPI shall, upon the written request
of IVT, promptly return all copies of all documentation and information provided
by IVT hereunder.
7
b. Through the Closing Date IVT and its authorized
representatives shall have full access during normal business hours to all
properties, books, records, contracts, and documents of VTPI and CRI, and VTPI
and CRI shall furnish or cause to be furnished to IVT and its authorized
representatives all information with respect to its affairs and business IVT may
reasonably request. IVT shall hold, and shall cause its representatives to hold
confidential, all such information and documents, other than information that
(i) is in the public domain at the time of its disclosure to IVT; (ii) becomes
part of the public domain after disclosure through no fault of IVT; (iii) is
known to IVT or any of its officers or directors prior to disclosure; or (iv) is
disclosed in accordance with the written consent of VTPI or CRI, as applicable.
In the event this Agreement is terminated prior to Closing, IVT shall, upon the
written request of VTPI or CRI, as applicable, promptly return all copies of all
documentation and information provided by VTPI or CRI hereunder.
5.3 Actions Prior to Closing. From and after the date of this
Agreement and until the Closing Date:
a. VTPI, CRI, and IVT shall each carry on its business
diligently and substantially in the same manner as heretofore, and neither party
shall make or institute any unusual or novel methods of purchase, sale,
management, accounting or operation.
b. Neither VTPI, CRI, nor IVT shall enter into any contract or
commitment, or engage in any transaction not in the usual and ordinary course of
business and consistent with its business practices.
c. Neither VTPI, CRI, nor IVT shall amend its articles of
incorporation or bylaws or make any changes in authorized or issued capital
stock, except as provided in this Agreement.
d. VTPI, CRI, and IVT shall each use its best efforts (without
making any commitments on behalf of the company) to preserve its business
organization intact.
e. Neither VTPI, CRI, nor IVT shall do any act or omit to do
any act, or permit any act or omission to act, which will cause a material
breach of any material contract, commitment, or obligation of such party.
f. VTPI, CRI, and IVT shall each duly comply with all
applicable laws as may be required for the valid and effective issuance or
transfer of stock contemplated by this Agreement.
g. Neither VTPI, CRI, nor IVT shall sell or dispose of any
property or assets, except products sold in the ordinary course of business.
h. VTPI, CRI, and IVT shall each promptly notify the other of
any lawsuits, claims, proceedings, or investigations that may be threatened,
brought, asserted, or commenced against it, its officers or directors involving
in any way the business, properties, or assets of such party.
5.4 Shareholders' Approval. VTPI and IVT shall promptly submit
this Agreement and the transactions contemplated hereby for the approval of
their respective stockholders either by majority written consent or at a meeting
of stockholders. Subject to the fiduciary duties of the boards of directors of
VTPI and IVT under applicable law, shall use their best efforts to obtain
stockholder approval and adoption of this Agreement and the transactions
contemplated hereby. In connection with such written action by, or meeting of,
stockholders, VTPI and IVT shall prepare a proxy or information statement, if
required, to be furnished to the shareholders of each entity setting forth
information about this Agreement and the transactions contemplated hereby. Each
entity shall promptly furnish to the other all information, and take such other
actions, as may reasonably be requested in connection with any action to be
taken by the party in connection with the immediately preceding sentence. Each
8
entity shall have the right to review and provide comments to the proxy or
information statement of the other prior to mailing to its shareholders.
5.5 No Covenant as to Tax or Accounting Consequences. It is
expressly understood and agreed that neither VTPI, CRI, nor their officers or
agents has made any warranty or agreement, expressed or implied, as to the tax
or accounting consequences of the transactions contemplated by this Agreement or
the tax or accounting consequences of any action pursuant to or growing out of
this Agreement.
5.6 Publicity. The parties agree that no publicity, release, or
other public announcement concerning this Agreement or the transactions
contemplated by this Agreement shall be issued by any party hereto without the
advance approval of both the form and substance of the same by the other parties
and their counsel, which approval, in the case of any publicity, release, or
other public announcement required by applicable law, shall not be unreasonably
withheld or delayed.
5.7 Expenses. Except as otherwise expressly provided herein, each
party to this Agreement shall bear its own respective expenses incurred in
connection with the negotiation and preparation of this Agreement, in the
consummation of the transactions contemplated hereby, and in connection with all
duties and obligations required to be performed by each of them under this
Agreement.
5.8 Name Change. On or before the Closing, VTPI shall authorize an
amendment to the certificate of incorporation to change the name of the company
to "xXxxxx.xxx, Inc."
5.9 Further Actions. Each of the parties hereto shall take all
such further action, and execute and deliver such further documents, as may be
necessary to carry out the transactions contemplated by this Agreement.
6. Conditions Precedent to VTPI and CRI's Obligations. Each and every
obligation of VTPI and CRI to be performed on the Closing Date shall be subject
to the satisfaction prior thereto of the following conditions:
6.1 Truth of Representations and Warranties. The representations
and warranties made by IVT in this Agreement or given on its behalf hereunder
shall be substantially accurate in all material respects on and as of the
Closing Date with the same effect as though such representations and warranties
had been made or given on and as of the Closing Date.
6.2 Performance of Obligations and Covenants. IVT shall have
performed and complied with all obligations and covenants required by this
Agreement to be performed or complied with by them prior to or at the Closing.
6.3 Officer's Certificate. VTPI and CRI shall have been furnished
with a certificate (dated as of the Closing Date and in form and substance
reasonably satisfactory to VTPI and CRI), executed by an executive officer of
IVT, certifying to the fulfillment of the conditions specified in subsections
6.1 and 6.2 hereof.
6.4 No Litigation or Proceedings. There shall be no litigation or
any proceeding by or before any governmental agency or instrumentality pending
or threatened against any party hereto that seeks to restrain or enjoin or
otherwise questions the legality or validity of the transactions contemplated by
this Agreement or which seeks substantial damages in respect thereof.
6.5 No Material Adverse Change. As of the Closing Date there shall
not have occurred any material adverse change, financially or otherwise, which
materially impairs the ability of IVT to conduct its business or the earning
power thereof on the same basis as in the past.
9
6.6 Shareholders' Approval. The sole holder of the outstanding
common stock of IVT shall have voted for authorization and approval of this
Agreement and the transactions contemplated hereby.
7. Conditions Precedent to Obligations of IVT. Each and every
obligation of IVT to be performed on the Closing Date shall be subject to the
satisfaction prior thereto of the following conditions:
7.1 Truth of Representations and Warranties. The representations
and warranties made by VTPI and CRI in this Agreement or given on its behalf
hereunder shall be substantially accurate in all material respects on and as of
the Closing Date with the same effect as though such representations and
warranties had been made or given on and as of the Closing Date.
7.2 Performance of Obligations and Covenants. VTPI and CRI shall
have performed and complied with all obligations and covenants required by this
Agreement to be performed or complied with by it prior to or at the Closing.
7.3 Officer's Certificate. IVT shall have been furnished with a
certificate (dated as of the Closing Date and in form and substance reasonably
satisfactory to IVT), executed by an executive officer of VTPI and CRI,
certifying to the fulfillment of the conditions specified in subsections 7.1 and
7.2 hereof.
7.4 No Litigation or Proceedings. There shall be no litigation or
any proceeding by or before any governmental agency or instrumentality pending
or threatened against any party hereto that seeks to restrain or enjoin or
otherwise questions the legality or validity of the transactions contemplated by
this Agreement or which seeks substantial damages in respect thereof.
7.5 No Material Adverse Change. As of the Closing Date there shall
not have occurred any material adverse change, financially or otherwise, which
materially impairs the ability of either VTPI or CRI to conduct its business.
7.6 Shareholders' Approval. The holders of not less than a
majority of the outstanding common stock of VTPI shall have voted for
authorization and approval of this Agreement and the transactions contemplated
hereby.
8. Securities Law Provisions. At Closing IVT shall deliver a letter of
non-distributive intent executed by each of the shareholder of IVT in form
acceptable to counsel for VTPI.
9. Change of Management. Upon and as a condition of Closing this
Agreement:
9.1 In connection with the Merger, Xxxx X. Xxxxxxx shall resign as
an officer and a director of VTPI, Xxxx X. Xxxxxxxxx shall remain as a director,
and the number of directors shall be increased to three persons. Prior to
Closing VTPI will present to its shareholders for approval the election of Xxxxx
Xxxxxxx and Xxxxxx X. Xxxxxxx as additional directors of VTPI effective
immediately following the Closing of this Agreement. Prior to Closing IVT will
furnish material information of Xxxxx Xxxxxxx, and Xxxxxx X. Xxxxxxx as nominees
to be elected by the shareholders of VTPI. VTPI reserves the right to refuse to
cause the nomination of any or all such persons as directors of VTPI if, after
review of the foregoing information concerning said persons, it is the opinion
of VTPI that the election of such persons would not be in the best interests of
VTPI.
9.2 IVT reserves the right to terminate this Agreement if nominees
selected by it are not elected or appointed as set forth above.
10
10. Closing.
10.1 Time and Place. The Closing of this transaction shall take
place at the offices of VTPI, 00 Xxxxxx Xxxxxx, Xxxxx Xxxxxxxxxx, XX 00000, at
11:00 am, May ______, 1999, or at such other time and place as the parties
hereto shall agree upon. Such date is referred to in this Agreement as the
"Closing Date."
10.2 Documents To Be Delivered by IVT. At the Closing IVT shall
deliver to VTPI and CRI, as applicable, the following documents:
a. The Merger Agreement duly executed.
b. A duly executed copy of the Marketing and Manufacturing
Agreement set forth in subsection 1.5 hereof.
c. The letter of non-distributive intent from the shareholder
of IVT as required by Section 8 hereof.
d. The certificate required pursuant to subsection 6.3 hereof.
e. Such other documents of transfer, certificates of
authority, and other documents as VTPI or CRI may reasonably request.
f. The opinion of counsel for IVT in substantially the form
attached hereto as Exhibit "F."
10.3 Documents To Be Delivered by VTPI. At the Closing VTPI and
CRI, as applicable, shall deliver to IVT the following documents:
a. The merger agreement duly executed.
b. Certificates for the number of shares of Class A and Class
B common stock of VTPI as determined in sub-section 1.1 hereof to be distributed
upon the effective date of the merger agreement.
c. A duly executed copy of Stock Sale Agreement pursuant to
subsection 1.2 hereof.
d. A duly executed copy of the consulting agreement of Xx.
Xxxxxxxxx pursuant to subsection 1.6 hereof.
e. The certificate required pursuant to subsection 7.3 hereof.
f. Such other documents of transfer, certificates of
authority, and other documents as IVT may reasonably request.
g. The opinion of counsel for VTPI in substantially the form
attached hereto as Exhibit "G."
11. Termination. This Agreement may be terminated by VTPI or IVT
by notice to the other if, (i) at any time prior to the Closing Date any event
shall have occurred or any state of facts shall exist that renders any of the
conditions to its or their obligations to consummate the transactions
11
contemplated by this Agreement incapable of fulfillment, or (ii) on June 15,
1999, if the Closing shall not have occurred. Following termination of this
Agreement no party shall have liability to another party relating to such
termination, other than any liability resulting from the breach of this
Agreement by a party prior to the date of termination.
12. Miscellaneous.
12.1 Notices. All communications provided for herein shall be in
writing and shall be deemed to be given or made when served personally or when
deposited in the United States mail, certified return receipt requested,
addressed as follows, or at such other address as shall be designated by any
party hereto in written notice to the other party hereto delivered pursuant to
this subsection:
VTPI and CRI: 00 Xxxxxx Xxxxxx
Xxxxx Xxxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxxx, President
Copy to: Xxxxxx X. Xxxxx
Attorney at Law
00 Xxxx 000 Xxxxx
Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
Copy to: Xxxxxxx X. Xxxxxxxx
XXXXXXXX & SIEGELBAUM
0 Xxxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
IVT: 0000 Xxxxx 00
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx, President
Copy to: Xxxxxxxx Xxxxx
XXXXX & XXXXXX, PC
0 Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
12.2 Default. Should any party to this Agreement default in any of
the covenants, conditions, or promises contained herein, the defaulting party
shall pay all costs and expenses, including a reasonable attorney's fee, which
may arise or accrue from enforcing this Agreement, or in pursuing any remedy
provided hereunder.
12.3 Assignment. This Agreement may not be assigned in whole or in
part by the parties hereto without the prior written consent of the other party
or parties, which consent shall not be unreasonably withheld.
12.4 Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto, their heirs, executors,
administrators, successors and assigns.
12.5 Partial Invalidity. If any term, covenant, condition, or
provision of this Agreement or the application thereof to any person or
circumstance shall to any extent be invalid or unenforceable, the remainder of
this Agreement or application of such term or provision to persons or
circumstances other than those as to which it is held to be invalid or
unenforceable shall not be affected thereby and each term, covenant, condition,
or provision of this Agreement shall be valid and shall be enforceable to the
fullest extent permitted by law.
12
12.6 Entire Agreement. This Agreement constitutes the entire
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all negotiations, representations, prior discussions,
letters of intent, and preliminary agreements between the parties hereto
relating to the subject matter of this Agreement.
12.7 Interpretation of Agreement. This Agreement shall be
interpreted and construed as if equally drafted by all parties hereto. 12.8
Survival of Covenants, Etc. All covenants, representations, and warranties made
herein to any party, or in any statement or document delivered to any party
hereto, shall survive the making of this Agreement and shall remain in full
force and effect until the obligations of such party hereunder have been fully
satisfied.
12.9 Further Action. The parties hereto agree to execute and
deliver such additional documents and to take such other and further action as
may be required to carry out fully the transactions contemplated herein.
12.10 Amendment. This Agreement or any provision hereof may not be
changed, waived, terminated, or discharged except by means of a written
supplemental instrument signed by the party or parties against whom enforcement
of the change, waiver, termination, or discharge is sought.
12.11 Full Knowledge. By their signatures, the parties acknowledge
that they have carefully read and fully understand the terms and conditions of
this Agreement, that each party has had the benefit of counsel, or has been
advised to obtain counsel, and that each party has freely agreed to be bound by
the terms and conditions of this Agreement.
12.12 Headings. The descriptive headings of the various sections
or parts of this Agreement are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
12.13 Counterparts. This Agreement may be executed in two or more
partially or fully executed counterparts, each of which shall be deemed an
original and shall bind the signatory, but all of which together shall
constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto executed the foregoing Agreement
and Plan of Reorganization as of the day and year first above written.
VTPI: Visual Telephone International, Inc.
By: /s/ Xxxx X. Xxxxxxxxx
---------------------------------
Xxxx X. Xxxxxxxxx, President
CRI: Communications Research, Inc.
By: /s/ Xxxx X. Xxxxxxx
---------------------------------
Xxxx X. Xxxxxxx, President
13
IVT:
International Voice Technologies, Corp.
By /s/: Xxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxx, President
14
EXHIBIT "A"
AGREEMENT AND PLAN OF MERGER
OF
INTERNATIONAL VOICE TECHNOLOGIES, CORP.
(A Delaware Corporation)
INTO
VISUAL TELEPHONE INTERNATIONAL, INC.
(A Delaware Corporation)
This Agreement and Plan of Merger (hereinafter called "Merger
Agreement") dated this 14th day of May 1999, by and between International Voice
Technologies, Corp., a corporation organized and existing under the laws of the
State of Delaware (hereinafter sometimes referred to as "IVT") and Visual
Telephone International, Inc., a corporation organized and existing under the
laws of the State of Delaware (hereinafter sometimes referred to as "VTPI").
These two parties are herein sometimes referred to collectively as the "merging
corporations," witnesseth:
WHEREAS, IVT wishes to merge into VTPI; and
WHEREAS, Section 251 of the General Corporation Law of the State of
Delaware authorizes the merger of IVT and VTPI;
NOW, THEREFORE, the merging corporations have agreed, and do hereby
agree, each with the other in consideration of the premises and the mutual
agreements, provisions, covenants and grants herein contained and in accordance
with the laws of the State of Delaware, that IVT and VTPI be merged into a
single corporation and that VTPI shall be the continuing and surviving
corporation and do hereby agree upon and prescribe that the terms and conditions
of the merger hereby agreed upon and the mode of carrying the same into effect
and the manner of converting the presently outstanding shares of each of the
merging corporations into the shares of VTPI are and shall be hereinafter set
forth:
Article I
---------
Manner of Conversion of Shares
The manner and basis of converting the shares of IVT into shares of
VTPI are as follows: at the effective time of the merger, each nine (9) shares
of common stock of IVT shall thereupon be converted into ten million
(10,000,000) shares of Class A common stock of VTPI and four hundred thousand
(400,000) shares of Class B common stock of VTPI. Each holder of outstanding
common stock of IVT upon surrender to VTPI of one or more certificates for such
shares for cancellation shall be entitled to receive one or more certificates
for the number of shares of common stock of VTPI represented by the certificates
of IVT so surrendered for cancellation by such holder. Until so surrendered,
each such certificate representing outstanding shares of common stock of IVT
shall represent the ownership of Class A and Class B common shares of VTPI in
the above ratio for all corporate and legal purposes.
Article II
----------
Effective Time
The effective time of the merger shall be upon the filing of the Merger
Agreement (or a certificate in lieu thereof) in accordance with Section 103 of
the General Corporation Law of the State of Delaware. Prior to said date, this
Merger Agreement shall (1) have been submitted to and approved by the board of
directors of each of the merging corporations; (2) have been approved by the
stockholders of each of the merging corporations in accordance with law.
1
Article III
-----------
Effect of Merger
When the merger shall have been effected:
.0.1 The merging corporations shall be a single corporation, and the
separate existence of IVT shall cease.
.0.2 VTPI shall thereupon and thereafter possess all the rights,
privileges, immunities and franchises of a public as well as of a private nature
of each of the merging corporations and all property, real, personal and mixed,
and all debts due on whatever account, including subscriptions to shares and all
other choses in action, and all and every other interest of and belonging to or
due to each of the merging corporations shall be taken and deemed to be
transferred to and vested in VTPI without further act or deed, and the title to
any real estate or any interest therein vested in either of the merging
corporations shall not revert or be in any way impaired by reason of the merger.
.0.3 VTPI shall thenceforth be responsible and liable for all the
liabilities and obligations of each of the merging corporations and any claim
existing or action or proceeding pending by or against either of the merging
corporations may be prosecuted to judgment as if such merger had not taken
place, or VTPI may be substituted in its place. Neither the rights of creditors
nor any liens upon the property of either of the merging corporations shall be
impaired by reason of the merger.
.0.4 After the effective time of the merger, the earned surplus of VTPI
shall equal the aggregate of the earned surpluses of the merging corporations
immediately prior to the effective time of the merger. The earned surplus
determined as above provided shall continue to be available for payment of
dividends by VTPI.
.0.5 The certificate of incorporation of VTPI as in effect on the date
of the merger, except as provided for in this Merger Agreement, shall continue
in full force and effect as the certificate of incorporation of the corporation
surviving this merger.
.0.6 The bylaws of VTPI as they shall exist on the effective date of
this Merger Agreement shall be and remain the bylaws of the surviving
corporation until the same shall be altered, amended or repealed as therein
provided.
Article IV
----------
Amendment of Certificate of Incorporation
Article I of the Certificate of Incorporation of VTPI shall be amended
to read as follows: "The name of the corporation is xXxxxx.xxx, Inc."
Article V
---------
Termination
If, at any time prior to the effective date hereof, events or circumstances
occur which in the opinion of a majority of the board of directors of either
constituent corporation renders it inadvisable to consummate the merger, this
Merger Agreement shall not become effective even though previously adopted by
the shareholders of the corporation as herein before provided. The filing of the
merger documents shall conclusively establish that no action to terminate this
plan has been taken by the board of directors of either corporation.
2
Article VI
----------
Amendment
The boards of directors of the constituent corporations may amend this
Merger Agreement at any time prior to the filing of the Merger Agreement (or a
certificate in lieu thereof) with the State of Delaware provided that an
amendment made subsequent to the adoption of the Merger Agreement by the
stockholders of any constituent corporation shall not (1) alter or change the
amount of any kind of shares, securities, cash, property and/or rights to be
received in exchange for or on conversion of all or any of the shares of any
class or series thereof of such constituent corporation, except to correct
manifest error as may be permitted by law; (2) alter or change any term of the
Certificate of Incorporation of the surviving corporation to be effected by the
merger; or (3) alter or change any of the other terms and conditions of the
Merger Agreement if such alteration or change would adversely affect the holders
of any class or series thereof of such constituent corporation.
IN WITNESS WHEREOF, Visual Telephone International, Inc., a Delaware
corporation, has caused this Agreement and Plan of Merger to be signed by its
president and its secretary in accordance with the requirements of the General
Corporation Law of the State of Delaware and IVT, a Delaware corporation, has
caused this Agreement and Plan of Merger to be signed by its president and its
secretary in accordance with the requirements of the General Corporation Law of
the State of Delaware, all as of the day and year first above written.
Visual Telephone International, Inc.
Attest:
By /s/ Xxxx X. Xxxxxxxxx
---------------------------------
Xxxx X. Xxxxxxx, Secretary Xxxx X. Xxxxxxxxx, President
International Voice Technologies, Corp.
Attest:
By /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxx, Secretary Xxxxxx X. Xxxxxxx, President
3
EXHIBIT "B"
STOCK SALE AGREEMENT
This Agreement, entered into this ______ day of May 1999, is by and
between Xxxx X. Xxxxxxxxx and Xxxx X. Xxxxxxx (collectively the "Sellers") and
Xxxxxx X. Xxxxxxx (the "Buyer").
RECITALS:
WHEREAS, Sellers are the legal and beneficial owners of the following
stock certificates representing 150,000 shares each of Class B common stock (the
"Shares") of common stock of Visual Telephone International, Inc., a Delaware
corporation (the "Issuer"): Certificates numbered
--------------------------------------------------;
WHEREAS, Buyer is desirous to purchase, and the Sellers are willing to
sell, the Shares in connection with an Agreement and Plan of Reorganization
Agreement dated May 14, 1999, by, between, and among the Issuer, Communications
Research, Inc., a New Jersey corporation, and International Voice Technologies,
Corp., a Delaware corporation, which document is incorporated herein; and
NOW, THEREFORE, in consideration of the mutual terms and conditions
hereof, the parties hereto agree as follows:
a. For ten dollars, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by the Sellers, each of
the Sellers hereby bargains, sells, assigns, conveys and transfers to Buyer all
right, title, and interest in and to the Shares.
b. The Sellers, severally and not jointly, hereby represent and warrant
to the Buyer as follows:
i. Each of the Sellers is the record and beneficial owner and
holder of number of the Shares set forth in his name and which in the aggregate
equal 300,000 Class B common shares of the Issuer, and such Shares are owned
free and clear of all liens, encumbrances, charges and assessments of every
nature and subject to no restrictions with respect to transferability.
ii. Each of the Sellers has full power and authority to
dispose, assign, and transfer the Shares in accordance with the terms hereof.
iii. Except for this Agreement, there are no outstanding
options, contracts, calls, commitments, agreements or demands of any character
relating to the Shares.
1
IN WITNESS WHEREOF, the undersigned have executed this Agreement the
day and year first above written.
SELLERS:
----------------------------------
Xxxx X. Xxxxxxxxx
----------------------------------
Xxxx X. Xxxxxxx
BUYER:
----------------------------------
Xxxxxx X. Xxxxxxx
2
EXHIBIT "C-1"
Assets of VTPI to be Transferred to CRI
The following assets of VTPI shall be transferred to CRI pursuant to
subsection 1.4 of the Reorganization Agreement:
1. Any and all marketing rights to any products manufactured by
CRI.
2. Any and all rights to the following trademarks or names:
"Tomorrow's Vision Today" "Plug and Conference" "Visual-EZ"
"Visual-EZII" "Point, Click, Hello!"
3. Those items of inventory set forth on the attached list,
incorporated herein.
4. Any other assets not included in Exhibit "C-2." For purposes
of this Exhibit, "assets" means all right, title, and interest
in and to all (a) tangible personal property (such as
inventories of raw materials, supplies, packaging goods, and
finished goods, equipment, manufactured and purchased parts,
machinery, goods in process, furniture, automobiles, trucks,
tractors, trailers, tools, jigs, and dies, if any), (b)
agreements, contracts, indentures, mortgages, instruments,
Security Interests, guaranties, other similar arrangements,
and rights thereunder, (c) franchises, approvals, permits,
licenses, orders, registrations, certificates, variances,
exemptions, and similar rights obtained from governments and
governmental agencies (the "Permits"), (d) Intellectual
Property (as defined below), goodwill associated therewith,
licenses and sublicenses granted and obtained with respect
thereto, and rights thereunder, remedies against infringements
thereof, and rights to protection of interests therein under
the laws of all jurisdictions, (e) real property, fixtures,
improvements, and fittings thereon, leaseholds and
subleaseholds therein, and easements, rights-of-way, ant other
appurtenants thereto (such appurtenant rights in and to public
streets), (f) leases, subleases, and rights thereunder, (g)
prepayments, prepaid expenses, and deferred items, claims,
deposits, refunds, causes of action, chooses in action, rights
of recovery, rights of set off, and rights of recoupment
(including any such item relating to the payment of taxes),
(h) accounts, notes, and other receivables, (i) securities
(such as the capital stock in any subsidiary), (j) books,
records, ledgers, files, documents, correspondence, lists,
plats, architectural plans, drawings, and specifications,
creative materials, advertising and promotional materials,
studies, reports, and other printed or written materials, and
(k) cash; provided, however, that the assets shall not include
(i) the items set forth in Exhibit "C-2" attached hereto (the
"Excluded Assets"), (ii) the corporate charter, qualifications
to conduct business as a foreign corporation, arrangements
with registered agents relating to foreign qualifications,
taxpayer, and other identification numbers, seals, minute
books, stock transfer books, blank stock certificates, and
other documents relating to the organization, maintenance, and
existence of VTPI as a corporation, and (iii) any of the
rights of VTPI under this Agreement.
For purposes of this Exhibit "Intellectual Property" means (a) all
trade secrets and confidential business information (including customer and
supplier lists, ideas, research and development, know-how, formulas,
compositions, manufacturing and production processes and techniques, technical
data, designs, drawings, specifications, pricing and cost information, and
business and marketing plans and proposals), (b) all trademarks, service marks,
trade dress, logos, trade names, and corporate names, together with all
translations, adaptations, derivations, and combinations thereof and including
all goodwill associated therewith, and all applications, registrations, and
renewals in connection therewith, (c) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
1
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (d) all copyrightable works, all copyrights, and all
applications, registrations, and renewals in connection therewith, (e) all mask
works and all applications, registrations, and renewals in connection therewith,
(f) all computer software (including data, source codes, and related
documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium).
2
EXHIBIT "C-1"
SCHEDULE OF ASSETS RETAINED BY CRI
Assets to be Retained by CRI
ITEM DESCRIPTION PURCHASED QTY UNIT VALUE EXTENDED
OFFICE FURNITURE AND EQUIPMENT
HP Deskjet 870C SE printer Sept. 97 1 $375.00 $375.00
Six foot folding tables May-93 5 $42.00 $210.00
Office chairs (10) @ $50.00 May-93 10 $50.00 $500.00
Air conditioners - GE Model ACD14AAX1 Jun-93 2 $480.00 $960.00
Fax - Brother Intellifax 900 Oct-93 1 $536.00 $536.00
Sharp Carousel II Microwave CRC 1 $130.00 $130.00
4 drawer file cabinets (10) @$15.00 Jul-93 10 $15.00 $150.00
Hand truck CRC 1 $100.00 $100.00
Alarm System - ADEM Co. Oct-93 1 $450.00 $450.00
Work bench May-93 1 $190.00 $190.00
Xerox 2510 'E' size printer Jun-93 1 $1,000.00 $1,000.00
Zeos 486 PC Jun-93 1 $300.00 $300.00
Zeos 17" monitor Jun-93 1 $600.00 $600.00
AT&T Globalyst Notebook Computr Aug-95 1 $1,400.00 $1,400.00
Xerox Copy Machine 1 $3,000.00 $3,000.00
Zip Drive and disk packs Sep-93 1 $260.00 $260.00
33.8 Modems Sep-93 2 $98.00 $196.00
Book case (3 shelves 48"x36"x12" Feb-93 1 $100.00 $100.00
Acer AcerView 11VGA monitor May-93 1 $235.00 $235.00
1 Lot engineering 1 $200.00 $200.00
Black Conf. chairs 1
Executive Desk with returns 5 $380.00 $2,400.00
Blue swivel chairs 10 $50.00 $500.00
Two drawer executive lateral files 7 $100.00 $700.00
Partitions (WTC-NY) - 5' x 48" (1); $2,126.07 $2,126.07
WTC-NY Conf. Table & Demo Tables $500.00 $500.00
OFFICE FURNITURE AND EQUIPMENT $17,118.07 $ 17,118.07
TEST AND SHOP EQUIPMENT
HPPlotter Jan-99 1 $3,447.11 $3,447.11
Electra Home ECP2100 Video Projector 1 $2,000.00 $2,000.00
1 CNLIR Crestron Remote Control Reader 1 $100.00 $100.00
Micro Test 350 cable tester Jun-93 1 $3,095.00 $3,095.00
Siecor Fiber Optic Power Meter Set Jul-93 1 $1,500.00 $1,500.00
Compact SLT Compact Portable Jul-93 1 $500.00 $500.00
Xxxxxxx VOM with case Jan-93 1 $245.00 $245.00
Triplet 301 - FET meter w/case CRC 1 $490.00 $490.00
Sadilco field strength meter CRC 1 $600.00 $600.00
HP 333A distortion analyzer CRC 1 $300.00 $300.00
BK Model 3001 audio test generator Jan-93 1 $135.00 $135.00
Milwaukee heat gun #8977 (2) May-93 2 $55.00 $110.00
GMP 15305 modular plug pressing kit May-93 1 $450.00 $450.00
3M fiber optic hot melt connector kit May-93 1 $635.00 $635.00
4' ladders Jun-93 1 $60.00 $60.00
6' ladders Jun-93 4 $85.00 $340.00
8' ladders Jun-93 2 $110.00 $220.00
20' extension ladder (aluminum) 1 $120.00 $120.00
White Instruments Model 140 - 1/3 CRC 1 $800.00 $800.00
Xxxxx box with adapter kit Jun-93 1 $120.00 $120.00
Makita 6095D cordless 3/8" drill Jan-93 1 $250.00 $250.00
Xxxxx cable marker machine system Jul-93 1 $455.00 $455.00
Green Xxx xxxxx cart Jun-93 1 $290.00 $290.00
Ethernet coaxial crimper - AMP FCT-104 May-93 2 $77.00 $154.00
Sadelco PortaBridge II - return loss CRC 1 $135.00 $135.00
1 Lot miscellaneous hand tools 1 $400.00 $400.00
Siecor FBC-001 fiber xxxxxxx and hand Jun-93 1 $260.00 $260.00
Tektronix TAS-465 Dual Channel 1 $1,670.00 $1,670.00
Wavetek Sweep Generator Feb-94 1 $500.00 $500.00
Protech Drill Press Mar-94 1 $120.00 $120.00
Xxxxxx Communications Technician Tool Sep-94 1 $385.00 $385.00
Makita 3/8" Hammer Drill Sep-94 1 $135.00 $135.00
HP 8590A Spectrum Analyzer Feb-94 1 $3,000.00 $3,000.00
Motorola Radio P50 Sep-94 1 $245.00 $245.00
Motorola Radio SP 10 Sep-94 4 $310.00 $1,240.00
Motorola Recharger Sep-94 5 $33.00 $165.00
Bosch Hammer Drill Sep-94 1 $790.00 $1,390.00
Video Display Projector House Oct-94 1 $760.00 $760.00
TEST AND SHOP EQUIPMENT $23,374.00 $ 23,374.00
NEW PRODUCTS INVENTORY
500 aluminum connectors/splices Nov-92 1 lot $200.00 $200.00
XLR and audio connectors Apr-93 1 lot $60.00 $60.00
1 K' 8241 75ohm coax Nov-92 0.5 $94.00 $47.00
1 K' GEP Co. 18/2 stranded cable Apr-93 0.5 $78.00 $39.00
25 male 25 pin D to modular adapter Jun-93 15 $4.05 $60.75
5 female 25 pin D to modular adapter Jun-93 5 $4.05 $20.25
BT-9000 Sep-96 1 $2,039.00 $2,039.00
SynOptics 3333 Retimeing Modules 3 LCH 3 $1,850.00 $5,550.00
56 Kb CSU (2) NEH-NMC @ 550.00 NEH 2 $550.00 $1,100.00
Synoptics Bridge 56 Kb TIB Interface NEH 2 $100.00 $200.00
RG6 cable Feb.-99 500' $67.50 $67.50
USED INVENTORY AND DEMO SYSTEMS
Elmo Graphic Stand EF-500 Sep-95 1 $2,430.00 $2,430.00
Shure ST-4300 audio processor Sep-95 1 $1,678.43 $1,678.43
Falco Data Terminal CRC 1 $50.00 $50.00
Xxxxxx T-1 LAN Bridge (Pr.) OLH 1 $2,995.00 $2,995.00
HP PC Feb.-99 1 $953.97 $953.97
Videum AV 2.0 Feb.-99 1 $199.00 $199.00
SIIG USB Dualport PC Feb.-99 1 $39.99 $39.99
Xxxx Comp Home/port Feb.-99 1 $29.99 $29.99
Crea V. Blast Webcami Feb.-99 1 $99.99 $99.99
Haup WINTV DBX Feb.-99 1 $99.99 $99.99
Lexmark Laser printer 1 $600.00 $600.00
AT&T Merlin Telephone system with phones 1 $8,300.00 $8,300.00
Display booth and 4 directors chairs Mar-98 1 $8,000.00 $8,000.00
Work benches 1997 2 $2,400.00 $2,400.00
Crown PCC-160 Microphones 1/12/94 1 $250.00 $250.00
View Sonic Monitors 7 $345.00 $2,415.00
Acecat Tablet 1 $99.00 $99.00
Hitachi Cameras Nov.-97 9 $160.00 $1,440.00
NT-1 interface boxes Sep-96 8 $175.00 $1,400.00
Zydacron card Z202 (in stock) 1 $412.50 $412.50
Zydacron card Z206 (in stock) 2 $1,121.00 $2,242.00
Zydacron card Z220 (in stock) 2 $2,177.00 $4,354.00
Zydacron card Z240 (in stock) 2 $1,881.00 $3,762.00
Zydacron card Z350 (1 in Vis. 100 3 $1,036.00 $3,108.00
Visual 1000-2B (computer only) 1 $1,380.00 $1,380.00
Visual 1000-6B (computer only) 1 $1,466.00 $1,466.00
1100EZ1 - HMA-New Jersey 1 $3,500.00 $3,500.00
1100EZ1 - HMA - Virginia 1 $3,500.00 $3,500.00
1100EZ1 - Intelligent Marketing 1 $3,500.00 $3,500.00
1100EZ1 - Xxxxxx & Associates 1 $3,500.00 $3,500.00
10002B - large demo room 1 $4,380.00 $4,380.00
1100EZ1 - small demo room 1 $3,500.00 $3,500.00
1100EZII -small demo room 1 $3,500.00 $3,500.00
INVENTORY FOR SALE $84,968.36 $84,968.36
GRAND TOTAL $125,460.43
INVENTORY AND SCHEDULE OF VALUES
COMMUNICATIONS RESEARCH, INC.
Closing May 14, 1999
EXHIBIT "C-2"
Assets of VTPI to be Retained
ITEM DESCRIPTION PURCHASED QTY UNIT VALUE EXTENDED
OFFICE FURNITURE AND EQUIPMENT
Partitions - 8' x 36" (10) Custom partitions May-93 10 $450.00 $4,500.00
Partitions - 8' x 12" (2) Custom Partitions May-93 2 $375.00 $750.00
High Back chair Aug-96 7 $199.00 $1,393.00
Reception desk Aug-93 1 $400.00 $400.00
Office chairs with swivel base and casters (2) Jun-93 2 $75.00 $150.00
Micro Experts Office PC Systems Oct-96 3 $1,232.00 $3,696.00
Mitubishi 35" Mon. (From Vis Tel Totowa) 1 $5,680.00 $4,800.00
VCN Furnishing and equipment LOT 1 $16,000.00 $16,000.00
Exec Desk set 1
Xxxx knock down desks 5
Black Conf. chairs 1
Board Room table (xxxx - in lobby) 1
Five draw lateral files 1
Three draw lateral Files 3
Boat Shaped Demo table 1
Swivel Chairs 3
Mutah XP-500 8 pen 'E' size plotter with stand Jun-93 1 $6,600.00 $6,600.00
HP desk jet 500C printer 1 $475.00 $475.00
Apple Laserwriter II NT 1 $3,100.00 $3,100.00
FURNITURE AND EQUIPMENT $41,864.00 $41,864.00
TEST AND SHOP EQUIPMENT
27" Xxxxxxx TV 1 $475.00 $475.00
Shelves Built in Storage shelves lot $3,800.00 $3,800.00
Peanut Dispenser 1997 1 $214.00 $214.00
VGA Monitors (VTNJ) 3 $413.00 $1,239.00
TEST AND SHOP EQUIPMENT $5,728.00 $5,728.00
NEW PRODUCTS INVENTORY
Hitachi Cameras Nov-97 1 $160.00 $160.00
BT-7100 Sep-96 1 $5,000.00 $5,000.00
BT-7000 Sep-96 1 $6,900.00 $6,900.00
Vistacom development System Software 1 $3,000.00 $3,000.00
Vistacom Cards Lot 1 $19,155.00 $19,155.00
Promptus Cards Lot 1 $5,742.00 $5,742.00
Visual 1100 (computer only) 1 $3,500.00 $3,500.00
USED INVENTORY AND DEMO SYSTEMS
View Sonic Monitors 3 $345.00 $1,035.00
Acecat Tablet 1 $99.00 $99.00
Crown PCC-160 Microphones (at EPS-Ft. Monmouth) 1/12/94 1 $250.00 $250.00
Presenta Monitor No. M29 2 $1,440.00 $2,880.00
Bretford Cart (EPS Ft. Monmouth) 1 $445.00 $445.00
Xxxxxx PTZ VCCI (EPS- Ft. Monmouth) 1 $1,875.00 $1,875.00
Xxxxx XX-72A (29" monitor) (Ft. Monmouth demo) Nov.-98 1 $1,899.00 $1,899.00
Closed V.C. cart -Custom Formica 1 $800.00 $800.00
Full height Rollabout Prototype 1 $7,500.00 $7,500.00
Tylink SMS400 1 $2,889.50 $2,889.50
CTS color SVGA VCN 1 $370.00 $370.00
1100 EZII - On Demo to Edenborough Schools 1 $4,500.00 $4,500.00
1000A - EPS - Ft. Monmouth 1 $6,380.00 $6,380.00
1000A - EPS - Ft. Monmouth 1 $5,380.00 $5,380.00
1100EZII - Xxxxxx @ Ft. Monmouth 1 $4,500.00 $4,500.00
1100EZII - Xxxxxx - Ft. Monmouth 1 $4,500.00 $4,500.00
INVENTORY FOR SALE $90,159.50 $90,159.50
GRAND TOTAL $137,751.50
INVENTORY AND SCHEDULE OF VALUES
VISUAL TELEPHONE INTERNATIONAL, INC.
Closing May 14, 1999
EXHIBIT "D"
MARKETING AND MANUFACTURING AGREEMENT
This Agreement, entered into this _____ day of May 1999, is by and
between International Voice Technologies, Corp., a Delaware corporation
(hereinafter "IVT"), and Communications Research, Inc., a New Jersey corporation
("CRI).
RECITALS:
WHEREAS, IVT and CRI have entered into an Agreement and Plan of
Reorganization dated May 14, 1999, (the "Reorganization Agreement") with Visual
Telephone International, Inc., a Delaware corporation (hereinafter "VTPI"),
wherein IVT will merge into and assume control of VTPI and the parties have
agreed to spin-off the ownership of CRI to the shareholders of VTPI such that
VTPI shall no longer have any ownership interest in CRI; and
WHEREAS, IVT and CRI desire to establish a business relationship
following the closing of the Reorganization Agreement as set forth herein; NOW,
THEREFORE, in consideration of the mutual terms and conditions set forth herein,
the parties hereto agree as follows:
x. Xxxxx of Marketing Rights.
i. CRI hereby grants to IVT the non-exclusive world-wide rights to
market and service the Visual-EZII series of products manufactured by CRI,
provided that IVT shall have exclusive marketing and service rights of such CRI
products, as well as all IVT products, to EPS and Fort Monmouth (CECOM). IVT
shall use every reasonable effort to sell such products at the suggested price
published by CRI, but in no event shall IVT discount such products in excess of
30% of the latest published price. CRI shall retain exclusive marketing and
support rights of its products to Lockheed-Xxxxxx, EDS, US Army Armor Center,
Fort Xxxx, instructional Media, US Army Fort Huschuca, USIA, and all existing
and future CRI clients; provided, however, that IVT may sell its own products to
these customers.
ii. Should CRI be unable, for any reason, to manufacture the
Visual-EZII product line, then IVT or its successors shall have the
non-exclusive right to manufacture said line by purchasing proprietary rights,
license of software, and intellectual knowledge, and by paying a royalty to CRI
or its successors and assigns of ten percent (10%) on any products sold by IVT
or its successors.
iii. IVT hereby grants to CRI the non-exclusive world-wide rights to
market and service any products offered by IVT, provided that IVT shall retain
exclusive marketing and support rights of its products to its current and future
clients.
iv. The term of these licenses shall commence as of the date of this
Agreement and shall continue for a period of ten years. v. For all CRI products
sold by IVT, or IVT products sold by CRI, the parties shall split equally the
gross revenues of such sales after payments for hardware, software, components,
fabrication/assembly/test labor, commissions (not to exceed 7%, unless otherwise
agreed by the parties), packing and shipping and documentation/manual. IVT shall
invoice and collect separately for shipping, travel expenses, a carrying fee not
to exceed 5%, installation, site support, and integration support.
vi. All deposits paid by customers of the selling company shall be
paid to such selling company. Such funds shall be used first to purchase the
necessary hardware.
vii. IVT shall provide projections quarterly of the number of CRI
units expected to be shipped in the subsequent quarter in order for CRI to
better maintain parts and finished goods inventories. CRI shall advise IVT of
the proposed shipping dates upon order acknowledgment confirmation. CRI shall
invoice IVT upon shipment of products. CRI shall be responsible for installation
and programming of, and training on, the CRI products. IVT shall invoice its
customers immediately and shall make every effort to collect invoices within
thirty days following invoicing. IVT shall pay CRI immediately upon payment by
the customer (not to exceed ninety days, unless there exists technical problems
which CRI must resolve). Any lease transactions shall be entered into under
terms mutually agreed by the parties.
viii. CRI shall retain (or be granted by IVT as successor to VTPI)
all product rights, manufacturing, research, development, and technical support
and operations functions of the Visual-EZII system.
ix. CRI shall manage and maintain the existing VTPI representative
network, including distribution, dealers, and resellers of the Visual products.
b. Miscellaneous.
i. Notices. All communications provided for herein shall be in
writing and shall be deemed to be given or made when served personally or when
deposited in the United States mail, certified return receipt requested,
addressed as follows, or at such other address as shall be designated by any
party hereto in written notice to the other party hereto delivered pursuant to
this subsection:
CRI: 00 Xxxxxx Xxxxxx
Xxxxx Xxxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx, President
2
IVT: 0000 Xxxxx 00
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx, President
ii. Default. Should any party to this Agreement default in any of
the covenants, conditions, or promises contained herein, the defaulting party
shall pay all costs and expenses, including a reasonable attorney's fee, which
may arise or accrue from enforcing this Agreement, or in pursuing any remedy
provided hereunder.
iii. Assignment. This Agreement may not be assigned in whole or in
part by the parties hereto without the prior written consent of the other party
or parties, which consent shall not be unreasonably withheld.
iv. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto, their heirs, executors,
administrators, successors and assigns.
v. Partial Invalidity. If any term, covenant, condition, or
provision of this Agreement or the application thereof to any person or
circumstance shall to any extent be invalid or unenforceable, the remainder of
this Agreement or application of such term or provision to persons or
circumstances other than those as to which it is held to be invalid or
unenforceable shall not be affected thereby and each term, covenant, condition,
or provision of this Agreement shall be valid and shall be enforceable to the
fullest extent permitted by law.
vi. Entire Agreement. This Agreement constitutes the entire
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all negotiations, representations, prior discussions,
letters of intent, and preliminary agreements between the parties hereto
relating to the subject matter of this Agreement.
vii. Interpretation of Agreement. This Agreement shall be
interpreted and construed as if equally drafted by all parties hereto.
viii. Survival of Covenants, Etc. All covenants, representations,
and warranties made herein to any party, or in any statement or document
delivered to any party hereto, shall survive the making of this Agreement and
shall remain in full force and effect until the obligations of such party
hereunder have been fully satisfied.
ix. Further Action. The parties hereto agree to execute and deliver
such additional documents and to take such other and further action as may be
required to carry out fully the transactions contemplated herein.
3
x. Amendment. This Agreement or any provision hereof may not be
changed, waived, terminated, or discharged except by means of a written
supplemental instrument signed by the party or parties against whom enforcement
of the change, waiver, termination, or discharge is sought.
xi. Full Knowledge. By their signatures, the parties acknowledge
that they have carefully read and fully understand the terms and conditions of
this Agreement, that each party has had the benefit of counsel, or has been
advised to obtain counsel, and that each party has freely agreed to be bound by
the terms and conditions of this Agreement.
xii. Headings. The descriptive headings of the various sections or
parts of this Agreement are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
xiii. Counterparts. This Agreement may be executed in two or more
partially or fully executed counterparts, each of which shall be deemed an
original and shall bind the signatory, but all of which together shall
constitute but one and the same instrument. IN WITNESS WHEREOF, the parties
hereto executed the foregoing Agreement as of the day and year first above
written. IVT: International Voice Technologies, Corp.
By /S/ Xxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxx, President CRI:
Communications Research, Inc.
By /s/ Xxxx X. Xxxxxxx
-------------------------------------
Xxxx X. Xxxxxxx, President
4
EXHIBIT "E"
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement"), entered into this ___ day
of May 1999, is by and between xXxxxx.xxx, Inc. (f/k/a Visual Telephone
International, Inc.), a Delaware corporation (hereinafter referred to as the
"Company") and Xxxx X. Xxxxxxxxx (hereinafter referred to as "Consultant") under
the following terms and conditions:
RECITALS:
WHEREAS, the Company and Consultant desire to set forth the terms and
conditions on which (i) the Company shall employ Consultant, (ii) Consultant
shall render services to the Company, and (iii) the Company shall compensate
Consultant for such services to the Company;
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
1. EMPLOYMENT
The Company hereby employs Consultant and Consultant hereby accepts
employment with the Company upon the terms and conditions hereinafter set forth.
2. TERM
2.1 The term of this Agreement (the "Term") shall be for a period
commencing on the Effective Date (as defined in subsection 2.3 below) of this
Agreement through five years from the Effective Date, subject, however, to prior
termination as provided herein below, in Section 6.
2.2 For purposes of extending the term of the relationship between
the Company and Consultant, the parties agree to enter into good faith
negotiations within sixty (60) days prior to the termination of this Agreement.
In the event that the parties are unable to reach an agreement at such time as
this Agreement terminates, this Agreement shall be automatically terminated five
years from the Effective Date.
2.3 The effective date of this Agreement shall be the Closing Date
(as defined therein) of the Agreement and Plan of Reorganization dated May 14,
1999, by, between, and among the Company, Communications Research, Inc., a New
Jersey corporation, and International Voice Technologies, Corp., a Delaware
corporation.
3. COMPENSATION
3.1 As consideration for entering into this Agreement, the
Consultant shall receive 50,000 shares of common stock of Intermedia Net, Inc.
received by the Company in a Settlement Agreement dated March 5, 1999.
3.2 For all services rendered by Consultant under this Agreement,
the Company shall pay Consultant during the term hereof a consulting fee at the
rate of $2,000 per week, payable in accordance with the Company's existing
payroll schedule; provided, however, that such fee shall be paid only from up to
10% of any equity or debt funds raised by the Company after the Effective Date.
Notwithstanding the above, in no event shall the Consultant receive consulting
fees in excess of $8,600 per month. If such funds are not available for payment
of the consulting fee when due, such amount shall be accrued and paid by the
Company as soon as such equity or debt funds are received by the Company. If any
accrued consulting fees are outstanding at the termination of this Agreement,
the Company shall have no further obligation to pay the Consultant such accrued
fees.
3.3 All compensation shall be subject to customary withholding tax
and other employment taxes as are required with respect to compensation paid by
a corporation to an employee.
4. DUTIES AND RESPONSIBILITIES
4.1 Consultant shall, during the Term of this Agreement, devote
reasonable attention and expend reasonable efforts, energies, and skills, on a
part-time basis, to the business of the Company.
4.2 The duties and responsibilities of the Consultant shall be to
advise the Company and consult with management in general and specifically to
perform the following activities:
(a) Coordinating investor and public relations,
including working with investment bankers in
connection with public or private equity or
debt funding ventures;
(b) Facilitating the preparation and filing of a
Form 10 or Form 10-SB registration statement
with the Securities and Exchange Commission
(the "SEC"), and the subsequent preparation
and filing of periodic reports with the SEC;
(c) Seeking and evaluating potential business or
product line acquisitions;
(d) Seeking potential sources of debt or equity
financing for the Company's business
activities or growth;
(e) Monitoring, and reporting to management of
the Company on a monthly basis of, the
activities of each of the subsidiaries, if
any, of the Company; and
(f) Such other activities as shall be mutually
agreed upon by the parties.
2
4.3 In order to facilitate the duties and responsibilities set forth
above, the Consultant shall interface, communicate, and work with such
attorneys, accountants, brokers, officers and directors of the Company, and
other persons reasonably necessary to fulfill his duties and responsibilities.
Unless otherwise acting in a capacity as an officer of the Company, Consultant
shall have no authority to bind the Company in any contract, agreement, or other
obligation. The Company shall assist the Consultant in the reasonable completion
of his duties and responsibilities, and shall provide the resources necessary to
reasonably facilitate such activities.
4.4 During the Term of this Agreement, Consultant may act as an
officer, director, employee, or consultant, or hold an ownership interest in,
Communications Research, Inc. In addition, Consultant may devote time and
efforts to, or hold ownership interests in, other business ventures, so long as
such business ventures do not compete directly with the products or services
offered by the Company.
4.5 During the Term of this Agreement, Consultant agrees to serve as
the Chief Financial Officer of the Company if appointed by the Board of
Directors (hereinafter the "Board"). In the performance of all of his
responsibilities hereunder, Consultant shall be subject to all of the Company's
policies, rules, and regulations applicable to its employees of comparable
status and shall report directly to, and shall be subject to, the direction and
control of the Officers and/or Directors of the Company and shall perform such
duties as mutually agreed upon.
5. ADDITIONAL CONSULTANT COVENANTS
5.1 Confidential Information. Consultant recognizes and acknowledges
that certain information, including, but not limited to, information pertaining
to the financial condition of the Company, its systems, methods of doing
business, agreements with customers or suppliers, or other aspects of the
business of the Company or which are sufficiently secret to derive economic
value from not being disclosed (hereinafter "Confidential Information") may be
made available or otherwise come into the possession of Consultant by reason of
his employment with the Company. Accordingly, Consultant agrees that he will not
(either during or after the term of his employment with the Company) disclose
any Confidential Information to any person, firm, corporation, association, or
other entity for any reason or purpose whatsoever or make use to his personal
advantage or to the advantage of any third party, of any Confidential
Information, without the prior written consent of the Board. Consultant shall,
upon termination of employment, return to the Company all documents which
reflect Confidential Information (including copies thereof). Notwithstanding
anything heretofore stated in this subsection 5.1, Consultant's obligations
under this subsection 5.1 shall not, after termination of Consultant's
employment with the Company, apply to information which has become generally
available to the public without any action or omission of Consultant (except
that any Confidential Information which is disclosed to any third party by an
Consultant or representative of the Company who is authorized to make such
disclosure shall be deemed to remain confidential and protectable under this
subsection 5.1).
3
5.2 Records. All files, records, memoranda, and other documents
regarding former, existing, or prospective customers of the Company or relating
in any manner whatsoever to Confidential Information or the business of the
Company (collectively ""Records"), whether prepared by Consultant or otherwise
coming into his possession, shall be the exclusive property of the Company. All
Records shall be immediately placed in the physical possession of the Company
upon the termination of Consultant's employment with the Company, or at any
other time specified by the Board. The retention and use by the Consultant of
duplicates in any form of Records after termination of Consultant's employment
with the Company is prohibited.
5.3 Remedies. Consultant hereby recognizes and acknowledges that
irreparable injury or damage shall result to the Company in the event of a
breach or threatened breach by Consultant of any of the terms or provisions of
this Section 5, and Consultant therefor agrees that the Company shall be
entitled to an injunction restraining Consultant from engaging in any activity
constituting such breach or threatened breach. Nothing contained herein shall be
construed as prohibiting the Company from pursuing any other remedies available
to the Company at law or in equity for such breach or threatened breach,
including, but not limited to, the recovery of damages from Consultant and, if
Consultant is an Consultant of the Company, the termination of his employment
with the Company in accordance with the terms of this Agreement.
6. TERMINATION
6.1 The Company may terminate the Consultant's services under this
Agreement at any time for cause. "Cause" shall exist for such termination if
Consultant (i) is adjudicated or pleads guilty of illegal activities of
consequence by a court of competent jurisdiction or through a plea of nolo
contendere; (ii) commits any act of fraud or intentional misrepresentation;
(iii) has, in the reasonable judgment of the Board, engaged in serious
misconduct, which conduct has, or would if generally known, materially adversely
affect the good will or reputation of the Company and which conduct the
Consultant has not cured or altered to the satisfaction of the Board within ten
(10) days following notice by the Board to the Consultant regarding such
conduct; (iv) breaches any of the provisions of this Agreement and which breach
the Consultant has not cured or altered to the satisfaction of the Board within
ten (10) days following notice by the Board to the Consultant regarding such
breach; or (v) has made any material misrepresentation to the Company.
Additionally, the Company may terminate the Consultant's services under this
Agreement should the Company fail to raise funds in excess of $500,000 through
the issuance of debt or equity due to the direct or indirect referral and/or
assistance of the Consultant in any twelve (12) month period; provided that any
funds so raised in excess of $500,000 during any twelve (12) month period shall
be credited to future twelve (12) month periods. For example, if the Company
should raise $2,500,000 through the assistance of the Consultant within the next
year, and no further funds are raised thereafter, the Company could not
terminate this Agreement.
6.2 If the Company terminates the Consultant's employment under this
Agreement pursuant to the provisions of subsection 6.1 hereof, the Consultant
shall not be entitled to receive any compensation following the date of such
termination.
4
6.3 If the Consultant's employment with the Company is terminated
due to the death or permanent disability of Consultant or for any reason other
than pursuant to the provisions of subsection 6.1 above, the Consultant shall
continue to receive compensation for the duration of this Agreement as set forth
in subsection 3.2 above.
6.4 Consultant's Duties on Termination. In the event of termination
of employment with the Company, Consultant agrees to deliver promptly to the
Company all equipment, notebooks, documents, memoranda, reports, files, samples,
books, correspondence, lists, or other written or graphic records, and the like,
relating to the Company's business, which are or have been in his possession or
under his control.
7. EXPENSES
7.1 Consultant shall be entitled to reimbursement of all reasonable
expenses actually incurred in the course of his employment. Consultant shall
submit such expenses on the Company's standardized expense report form, provided
by the Company, and shall attach thereto receipts for all expenditures.
Automobile expenses shall be reimbursed at the maximum mileage rate allowed by
the Internal Revenue Service.
7.2 The Company shall reimburse Consultant within fifteen (15) days
after submission by Consultant of his expense report.
8. INSURANCE
The Company shall provide Consultant, at the Company's expense,
participation in group medical and health insurance plans of the Company as may
be provided by the Company from time to time to Company employees, subject to,
and to the extent that, the Consultant is eligible under such benefit plans in
accordance with their respective terms. The amount of such coverage payable by
the Company shall not exceed an amount equal to $500 per month.
5
9. MISCELLANEOUS
9.1 This Agreement is a personal contract, and the rights and
interests of the Consultant hereunder may not be sold, transferred, assigned,
pledged or hypothecated except as otherwise expressly permitted by the
provisions of this Agreement. The Consultant shall not under any circumstances
have any option or right to require payment hereunder otherwise than in
accordance with the terms hereof. Except as otherwise expressly provided herein,
the Consultant shall not have any power of anticipation, alienation, or
assignment of payments contemplated hereunder, and all rights and benefits of
the Consultant shall be for the sole personal benefit of the Consultant, and no
other person shall acquire any right, title or interest hereunder by reason of
any sale, assignment, transfer, claim or judgment or bankruptcy proceedings
against the Consultant; provided, however, that in the event of the Consultant's
death, the Consultant's estate, legal representative or beneficiaries (as the
case may be) shall have the right to receive all of the benefit that accrued to
the Consultant pursuant to, and in accordance with, the terms of this Agreement.
9.2 Notices. All communications provided for herein shall be in
writing and shall be deemed to be given or made when served personally or when
deposited in the United States mail, certified return receipt requested,
addressed as follows, or at such other address as shall be designated by any
party hereto in written notice to the other party hereto delivered pursuant to
this subsection:
Company: 0000 Xxxxxxx 00
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx, President
Consultant: 00 Xxxxxxxxx Xxxxx
Xxxxx, XX 00000
9.3 Default. Should any party to this Agreement default in any of
the covenants, conditions, or promises contained herein, the defaulting party
shall pay all costs and expenses, including a reasonable attorney's fee, which
may arise or accrue from enforcing this Agreement, or in pursuing any remedy
provided hereunder.
9.4 Partial Invalidity. If any term, covenant, condition, or
provision of this Agreement or the application thereof to any person or
circumstance shall to any extent be invalid or unenforceable, the remainder of
this Agreement or application of such term or provision to persons or
circumstances other than those as to which it is held to be invalid or
unenforceable shall not be affected thereby and each term, covenant, condition,
or provision of this Agreement shall be valid and shall be enforceable to the
fullest extent permitted by law.
9.5 Entire Agreement. This Agreement constitutes the entire
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all negotiations, representations, prior discussions,
letters of intent, and preliminary agreements between the parties hereto
relating to the subject matter of this Agreement.
9.6 Interpretation of Agreement. This Agreement shall be interpreted
and construed as if equally drafted by all parties hereto.
9.7 Survival of Covenants, Etc. All covenants, representations, and
warranties made herein to any party, or in any statement or document delivered
to any party hereto, shall survive the making of this Agreement and shall remain
in full force and effect until the obligations of such party hereunder have been
fully satisfied.
9.8 Further Action. The parties hereto agree to execute and deliver
such additional documents and to take such other and further action as may be
required to carry out fully the transactions contemplated herein.
6
9.9 Amendment. This Agreement or any provision hereof may not be
changed, waived, terminated, or discharged except by means of a written
supplemental instrument signed by the party or parties against whom enforcement
of the change, waiver, termination, or discharge is sought.
9.10 Full Knowledge. By their signatures, the parties acknowledge
that they have carefully read and fully understand the terms and conditions of
this Agreement, that each party has had the benefit of counsel, or has been
advised to obtain counsel, and that each party has freely agreed to be bound by
the terms and conditions of this Agreement.
9.11 Headings. The descriptive headings of the various sections or
parts of this Agreement are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
9.12 Counterparts. This Agreement may be executed in two or more
partially or fully executed counterparts, each of which shall be deemed an
original and shall bind the signatory, but all of which together shall
constitute but one and the same instrument.
10. CORPORATE APPROVALS
The Company represents and warrants that the execution of this
Agreement by its corporate officer named below has been duly authorized by the
Board, is not in conflict with any Bylaw or other agreement and will be a
binding obligation of the Company, enforceable in accordance with its terms.
7
IN WITNESS WHEREOF, the parties hereto have executed this Consulting
Agreement as of the date above written.
THE COMPANY: xXxxxx.xxx, Inc.
(f/k/a Visual Telephone International, Inc.)
By /s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxxx, President
CONSULTANT:
----------------------------------------
Xxxx X. Xxxxxxxxx
8
SCHEDULE 1.9
Sublease of Office space by CRI
Shipping/Receiving Reception Lobby Conference RM.
CRI Common Common
--------------------------------------------------
------------------ Small
Conf. Rm
CRI
Common Office
------------- Area IVT
----------------
Office
Fact Pak
Shop Area
CRI ------------- Office
CRI
Office
IVT ----------------
-------------
Hallway
Common Office
CRI
--------------
Womans
Toilet -----------------
Common
Common
-------------- Area CAD Room
Men's CRI
Toilet
Common
-------------- -----------------
SCHEDULE 2.1
Company's owned by International Voice Technology
NONE
SCHEDULE 3.1
Company's owned by Visual Telephone International
VTPI has one wholly owned subsidiary, namely Communications Research,
Inc.
SCHEDULE 3.2
Outstanding VTPI Stock Options
1. Dakota Group
------------
1. 100,000 shares @ $0.31 per share
1. 100,000 shares @ $1.00 per share
1. 200,000 shares @ $2.00 per share
1. Expiration date for above: January 1, 2001
2. Xxxxx Xxxxxx
------------
1. July 13, 1998
1. 12 month option for 50,000 shares @ $.10
3. Alexander, Wescott & Co., Inc.
------------------------------
1. July 14, 1998
1. 195,185 shares three years @ $.1035 per share for I.B. services
1. rendered
4(a). The following based on revenue produced
---------------------------------------
1. Engineering and Professional Services, Inc. (EPS)
1. November 25, 1998
Rev. Produced Period Months No. Shares Price Share
250,000 12 100,000 .08
1st 500,000 18 100,000 .20
2nd 500,000 18 100,000 .35
3rd 500,000 24 100,000 .50
4th 500,000 24 100,000 .65
This commitment good for 24 months.
4(b). Xxxxxx X. Xxxxxxxx
November 27, 1998
Rev. Produced Period Months No. Shares Price Share
500,000 18 100,000 .20
2nd 500,000 18 100,000 .35
3rd 500,000 24 100,000 .50
4th 500,000 24 100,000 .65
This commitment good for 24 months.
Page 1 of 2
4(c). Xxxxx Xxxxxx
July 13, 1998
Rev. Produced Period Months No. Shares Price Share
1,000,000 36 50,000 .25
2nd 1,000,000 36 50,000 .50
3rd 1,000,000 36 50,000 .75
4th 1,000,000 36 50,000 1.00
This commitment good for 24 months.
5. Corporate Capital Management, LLC
December 22, 1998
9,000 shares 5 years @ $.10 per share for I.B. services rendered
6. H. Xxxxx Xxxxxxx, Xx., Esq.
December 22, 1998
1,000 shares 5 years @$.10 per share for I.B. services rendered
7. Israel Securities Center Corp.(ISC)
Issued December 15, 1997
75,866 shares @ $.12
Expires December 15, 1999
8. Corporate Capital Management, LLC
Issued January 5, 1999 (five years)
9,000 shares @ $.12
9. H. Xxxxx Xxxxxxx, Xx., Esq.
Issued January 5, 1999 (five years)
1,000 shares @ $.12
10. Corporate Capital Management, LLC
Issued January 21, 1999 (five years)
10,000 warrants @ $.107
11. Corporate Capital Management, LLC
Issued February 5, 1999 (five years)
10,000 warrants @ $.13
12. Corporate Capital Management, LLC
Issued March 17, 1999 (five years)
15,000 warrants @ $.079
13. Corporate Capital Management, LLC
Issued April 6, 1999 (five years)
15,000 warrants @ $.053
Page 2 of 2
