CONFORMED COPY
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PURCHASE AGREEMENT
BY AND AMONG
SFMT-CHINA, INC.,
AMTEC HEBEI TELECOM HOLDINGS, LTD.
AND
AMTEC, INC.
DATED AS OF AUGUST 26, 1998
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TABLE OF CONTENTS
ARTICLE I. CERTAIN DEFINED TERMS........................................1
ARTICLE II. PURCHASE AND SALE...........................................1
SECTION 2.1. Purchase and Sale.................................1
SECTION 2.2. Closing...........................................1
SECTION 2.3. Closing Deliveries by Seller......................2
SECTION 2.4. Closing Deliveries by Purchaser and AmTec.........2
SECTION 2.5. Registration Rights...............................2
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF SELLER...................2
SECTION 3.1. Organization of V-Tech............................2
SECTION 3.2. Organization, Authority and Qualification of
Seller............................................2
SECTION 3.3. Capitalization; Ownership of the Interests........3
SECTION 3.4. No Conflict.......................................4
SECTION 3.5. Governmental Consents and Approvals...............4
SECTION 3.6. Undisclosed Liabilities...........................5
SECTION 3.7. No Litigation.....................................5
SECTION 3.8. Events Subsequent to June 30, 1998................5
SECTION 3.9. Guaranties........................................6
SECTION 3.10. Investment Purpose; Experience....................6
SECTION 3.11. Brokers...........................................7
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF PURCHASER.................7
SECTION 4.1. Organization and Authority of Purchaser...........7
SECTION 4.2. Organization and Authority of AmTec...............7
SECTION 4.3. Capitalization of AmTec...........................7
SECTION 4.4. No Conflict.......................................8
SECTION 4.5. Governmental Consents and Approvals...............9
SECTION 4.6. No Litigation.....................................9
SECTION 4.7. Investment Purpose................................9
SECTION 4.8. Condition of Conveyed Interests...................9
SECTION 4.9. Knowledge and Expertise...........................9
SECTION 4.10. Additional Capital Investment.....................9
SECTION 4.11. No Reliance.......................................9
SECTION 4.12. Brokers..........................................10
ARTICLE V. ADDITIONAL AGREEMENTS.......................................10
SECTION 5.1. Conduct of Business Prior to Closing.............10
SECTION 5.2. Access to Information............................10
SECTION 5.3. Intercompany Debt................................11
SECTION 5.4. China Employees..................................11
SECTION 5.5. Consulting Services..............................11
SECTION 5.6. Assignment of Claims.............................11
SECTION 5.7. EQUANT Equipment Lease...........................12
SECTION 5.8. Stockholder Rights...............................12
SECTION 5.9. Restrictions on Transfer.........................12
SECTION 5.10. AmTec's Board of Directors.......................13
SECTION 5.11. Right of Inspection..............................13
SECTION 5.12. Regulatory and Other Authorizations; Notices
and Consents; Releases...........................13
SECTION 5.13. Schedule Supplements.............................14
SECTION 5.14. Further Action...................................14
ARTICLE VI. TAX MATTERS................................................14
SECTION 6.1. Indemnity........................................14
ARTICLE VII. CONDITIONS TO CLOSING.....................................14
SECTION 7.1. Conditions to Obligations of Seller..............14
SECTION 7.2. Conditions to Obligations of Purchaser...........16
ARTICLE VIII. INDEMNIFICATION..........................................17
SECTION 8.1. Survival of Representations and Warranties.......17
SECTION 8.2. Indemnification by Seller........................17
SECTION 8.3. Indemnification by Purchaser.....................17
SECTION 8.4. General Indemnification Procedures...............18
SECTION 8.5. Limits on Indemnification........................19
SECTION 8.6. Tax Matters......................................20
ARTICLE IX. TERMINATION................................................20
SECTION 9.1. Termination......................................20
SECTION 9.2. Effect of Termination............................20
ARTICLE X. GENERAL PROVISIONS..........................................21
SECTION 10.1. Expenses.........................................21
SECTION 10.2. Notices..........................................21
SECTION 10.3. Public Announcements.............................21
SECTION 10.4. Headings.........................................21
SECTION 10.5. Severability.....................................22
SECTION 10.6. Entire Agreement.................................22
SECTION 10.7. Assignment.......................................22
SECTION 10.8. No Third Party Beneficiaries.....................22
SECTION 10.9. Amendment........................................22
SECTION 10.10. Governing Law....................................22
SECTION 10.11. Counterparts.....................................22
SECTION 10.12. Specific Performance.............................22
PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of August 26, 1998, by and among
SFMT-CHINA, INC., a Delaware corporation ("Seller"), AMTEC HEBEI TELECOM
HOLDINGS, LTD., a British Virgin Islands corporation ("Purchaser") and
AMTEC, INC., a Delaware corporation, ("AmTec")
W I T N E S S E T H:
WHEREAS, Seller owns 75% of the interests in Shanghai V-Tech
Telecommunications & Engineering Limited Liability Company, a Sino Foreign
equity joint venture limited liability company ("V-Tech") and holds certain
debt and contract rights relating to V-Tech ("Other Interests");
WHEREAS, Purchaser wishes to buy and Seller wishes to sell its 75%
of the limited liability company interest in V-Tech and the Other Interests
(hereinafter, the "Conveyed Interests") for the consideration set forth
herein; and
WHEREAS, as further inducement for Seller to enter into this
Agreement, AmTec wishes to be obligated to perform certain actions as
agreed to herein;
NOW, THEREFORE, in consideration of the premises, the mutual
agreements and covenants hereinafter set forth and other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged,
the parties hereby agree as follows:
ARTICLE I.
CERTAIN DEFINED TERMS
As used in this Agreement, unless otherwise defined herein,
capitalized terms shall have the meanings set forth on Schedule A annexed
hereto.
ARTICLE II.
PURCHASE AND SALE
SECTION 2.1. Purchase and Sale. Subject to the terms and conditions
of this Agreement, Seller agrees to sell, transfer and deliver the Conveyed
Interests to Purchaser for a total purchase price of U.S.$8,000,000 (the
"Purchase Price") to be paid by the issuance and delivery in the name of
Seller or in the name of an Affiliate of Seller, as designated by Seller,
5,925,357 shares of the common stock, $.001 par value, of AmTec (the
"Issued Stock").
SECTION 2.2. Closing. Subject to the terms and conditions of this
Agreement, the sale and purchase of the Conveyed Interests contemplated by
this Agreement shall take place at a closing (the "Closing") to be held at
the offices of Seller at 0000 Xxxxxxxx Xxxxx, Xxxxx Xxxxx, 00xx Xxxxx
XxXxxx, Xxxxxxxx, within 5 business days of the receipt of all necessary
governmental approvals, or at such other place or at such other time or on
such other date as Seller and Purchaser may mutually agree upon in writing
(the day on which the Closing takes place being the "Closing Date").
SECTION 2.3. Closing Deliveries by Seller. At the Closing,
Seller shall deliver or cause to be delivered to Purchaser:
(a) an Assignment of Interests, assigning the Conveyed Interests
to Purchaser; and
(b) the certificates and other documents required to be delivered
pursuant to Section 7.2.
SECTION 2.4. Closing Deliveries by Purchaser and AmTec. At the
Closing, Purchaser and AmTec shall deliver to Seller:
(a) the Issued Stock in the name of Seller or its designate; and
(b) the certificates and other documents required to be delivered
pursuant to Section 7.1.
SECTION 2.5. Registration Rights. Concurrent with the Closing, the
parties covenant and agree that AmTec and Seller shall enter into a
Registration Agreement in substantially the form attached to this Agreement
as Exhibit A (hereinafter, the "Registration Agreement").
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Purchaser and AmTec to enter into this
Agreement, Seller hereby represents and warrants to Purchaser and AmTec as
follows:
SECTION 3.1. Organization of V-Tech. V-Tech is a Sino Foreign
equity joint venture limited liability company duly organized, validly
existing and in good standing under the laws of its jurisdiction of
formation or organization, has all requisite power and authority, and has
been duly authorized by all necessary approvals and orders, to own and
operate its assets and properties to the extent owned and operated and to
carry on its business as it has been and is currently conducted.
SECTION 3.2. Organization, Authority and Qualification of Seller.
Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all requisite
power and authority to enter into this Agreement, to carry out its
obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by Seller, the
performance by Seller of its obligations hereunder and the consummation by
Seller of the transactions contemplated hereby have been duly authorized by
all requisite action on the part of Seller. This Agreement has been duly
executed and delivered by Seller, and (assuming due authorization,
execution and delivery by Purchaser and AmTec) this Agreement constitutes a
legal, valid and binding obligation of Seller enforceable against Seller in
accordance with its terms.
SECTION 3.3. Capitalization; Ownership of the Interests.
(a) The Conveyed Interests are as set forth in Schedule 3.3(a),
and such interests are validly issued, fully paid and nonassessable. None
of the Conveyed Interests was issued in violation of any preemptive rights.
There are no options, warrants, convertible securities or other rights,
agreements, arrangements or commitments of any character relating to the
Conveyed Interests or obligating Seller or, to Seller's Knowledge, V-Tech
to issue or sell any interest in V-Tech. Except as set forth in the
Operative Documents (as defined below), to Seller's Knowledge there are no
outstanding contractual obligations of V-Tech to repurchase, redeem or
otherwise acquire any interests or to provide funds to, or make any
investment (in the form of a loan, capital contribution or otherwise) in,
any other Person. The Conveyed Interests are owned of record and
beneficially solely by Seller free and clear of all Encumbrances.
(b) Compliance. Neither Seller nor, to Seller's Knowledge, V-Tech
is in material violation of, is under investigation with respect to any
material violation of, or has been given notice or been charged with any
material violation of, any law, statute, order, rule, regulation, ordinance
or judgment (including, without limitation, any applicable environmental
law, ordinance or regulation) of any Governmental Authority. To Seller's
Knowledge, V-Tech has all permits, licenses, franchises and other
governmental authorizations, consents and approvals necessary to conduct
its businesses as presently conducted in all material respects. Neither
Seller nor, to Seller's Knowledge, V-Tech is in material breach or
violation of or in material default in the performance or observance of any
term or provision of, and no event has occurred which, with lapse of time
or action by a third party, could result in a material default under, (i)
their respective articles of incorporation, certification of formation or
bylaws or (ii) any material contract, commitment, agreement, indenture,
mortgage, loan agreement, note, lease, bond, license, approval or other
instrument to which each is a party or by which either is bound or to which
any of their respective property is subject.
(c) Attached hereto as Schedule 3.3(c) are true and correct copies
of the following (the "Operative Documents"):
(i) Joint Venture Contract dated April 12, 1995 by and
between SSTIC and Seller;
(ii) April 12, 1995 Conditional Loan Discharge Contract
between Seller and Shanghai Science and Technology Investment
Corporation, Ltd. ("SSTIC");
(iii) October 16, 1994 Engineering Services Contract between
V-tech and SVC;
(iv) Articles of Association of V-Tech;
(v) April 12, 1995 Project Cooperation Contract between
V-Tech and SSTIC;
(vi) April 12, 1995 Technical Support and Consulting Services
Contract between V-Tech and SSTIC; and
(vii) April 12, 1995 Delegated Loan Contract among V-Tech,
SSTIC and The Industrial & Commercial Bank of Shanghai Trust &
Investment Corp.
With the exception of loan agreements to be discharged at Closing and the
documents described in Section 5.7 (the "EQUANT Documents"), neither
Seller, nor to Seller's Knowledge, V-Tech is a party to or bound by any
other agreement, contract, commitment or instrument related to V-Tech or
the business of V-Tech, which is material to the operations of V-Tech or to
Seller's investment in V-Tech. With respect to each document attached on
Schedule 3.3(c) (A) the document is legal, valid, binding, enforceable, and
in full force and effect; (B) to Seller's Knowledge, no party is in breach
or default, and no event has occurred which with notice or lapse of time
would constitute a breach or default, or permit termination, modification
or acceleration, under the obligations thereunder; and (C) no party has
effectively repudiated any provision of the document.
SECTION 3.4. No Conflict. The execution and delivery of this
Agreement and the Registration Agreement by Seller and the consummation or
performance of the transactions contemplated thereby do not and will not at
Closing (a) violate, conflict with or result in the breach of any provision
of the Certificate of Incorporation or By-laws (or similar organizational
documents) of Seller, (b) conflict with or violate (or cause an event which
could have a Material Adverse Effect as a result of) any Law or
Governmental Order applicable to Seller, or any of its assets, properties
or businesses, including (without limitation), the businesses of V-Tech,
and typically applicable to a transaction of this nature, or (c) except to
the extent consent is required under the EQUANT Documents, conflict with,
result in any breach of, constitute a default (or event which with the
giving of notice or lapse of time, or both, would become a default) under,
require any consent under, or give to others any rights of termination,
amendment, acceleration, suspension, revocation or cancellation of, or
result in the creation of any Encumbrance on any of the Conveyed Interests
or on any of the assets or properties of Seller or (to Seller's Knowledge)
V-Tech pursuant to any note, bond, mortgage or indenture, stock purchase or
sale agreement, contract, agreement, lease, sublease, license, permit,
franchise or other instrument or arrangement to which Seller or, to
Seller's Knowledge, V-Tech is a party or by which the Conveyed Interests or
any of such assets or properties is bound or affected which could have a
Material Adverse Effect.
SECTION 3.5. Governmental Consents and Approvals. Except as set
forth in Schedule 3.5, the execution, delivery and performance of this
Agreement by Seller do not and will not require any consent, approval,
authorization or other order of, action by, filing with or notification to
any Governmental Authority.
SECTION 3.6. Undisclosed Liabilities. To Seller's Knowledge, V-Tech
has no liability (whether known or unknown, whether asserted or unasserted,
whether absolute or contingent, whether accrued or unaccrued, whether
liquidated or unliquidated, and whether due or to become due ("Liability")
and there is no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand against any of them giving rise to any
Liability), except for (i) Liabilities set forth on the face of V-Tech's
most recent balance sheet (rather than in any notes thereto), (ii)
Liabilities which have arisen after June 30, 1998 in the ordinary course of
business (none of which results from, arises out of, relates to, is in the
nature of, or was caused by any breach of contract, breach of warranty,
tort, infringement, or violation of law), and (iii) Liabilities which are
not material to the business or assets of V-Tech taken as a whole.
SECTION 3.7. No Litigation. Except as set forth on Schedule 3.7,
there are no actions, suits or proceedings pending or threatened against
Seller or (to Seller's Knowledge) V-Tech, at law or in equity before or by
any federal, state, provincial, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign.
SECTION 3.8. Events Subsequent to June 30, 1998. Since June 30,
1998, to Seller's Knowledge, there has been no change in the business,
financial condition, operations, results of operations, properties or
assets of V-Tech which could have a Material Adverse Effect. Without
limiting the generality of the foregoing, since that date, to Seller's
Knowledge:
(i) V-Tech has not sold, leased, transferred, or assigned
any of its assets, tangible or intangible, other than for a fair
consideration in the ordinary course of business;
(ii) V-Tech has not entered into any agreement, contract,
lease, or license (or series of related agreements, contracts,
leases, and licenses) either involving more than $100,000 or
outside the ordinary course of business except for the
transactions contemplated by the EQUANT Agreement (as defined in
Section 5.7);
(iii) no party (including Seller and V-Tech) has
accelerated, terminated, modified, or cancelled any agreement,
contract, lease, or license (or series of related agreements,
contracts, leases, and licenses) involving more than $50,000 to
which a subsidiary of V-Tech is a party or by which it is bound
with the exception of intercompany debt to be cancelled pursuant
to this Agreement;
(iv) V-Tech has not imposed any security interest upon any
of its assets, tangible or intangible;
(v) V-Tech has not made any capital expenditure (or
series of related capital expenditures) either involving more
than $100,000 or outside the ordinary course of business;
(vi) except as set forth in Schedule 3.8(vi), V-Tech has
not made any capital investment in, any loan to, or any
acquisition of the securities or assets of, any other Person (or
series of related capital investments, loans, and acquisitions)
either involving more than $100,000 or outside the ordinary
course of business;
(vii) V-Tech has not issued any note, bond, or other debt
security or created, incurred, assumed, or guaranteed any
indebtedness for borrowed money or capitalized lease obligation
either involving more than $25,000 singly or $100,000 in the
aggregate;
(viii) V-Tech has not cancelled, compromised, waived, or
released any right or claim (or series of related rights and
claims) either involving more than $100,000 or outside the
ordinary course of business;
(ix) there has been no change made or authorized in the
Articles of Association of V-Tech;
(x) V-Tech has not declared, set aside, or paid any
dividend or made any distribution with respect to its capital
stock (whether in cash or in kind) or redeemed, purchased, or
otherwise acquired any of its capital stock;
(xi) V-Tech has not experienced any damage, destruction or
loss (whether or not covered by insurance) to its property;
(xii) V-Tech has not made any loan to, or entered into any
other transaction with, any of its directors, officers, and
employees outside the ordinary course of business; and
(xiii) there has not been any other material occurrence,
event, incident, action, failure to act, or transaction outside
the ordinary course of business involving V-Tech.
SECTION 3.9. Guaranties. To Seller's Knowledge, V-Tech is not a
guarantor or otherwise liable for any Liability or obligation (including
indebtedness) of any other Person except pursuant to the Conditional Loan
Discharge Contract dated April 12, 1995 between SFMT-China, Inc. and SSTIC.
SECTION 3.10. Investment Purpose; Experience. Seller is acquiring
the Issued Stock solely for the purpose of investment and not with a view
to, or for offer or sale in connection with, any distribution thereof, and
Seller has no present arrangement (whether or not legally binding) to sell
at any time any Issued Stock to or through any Person or entity. Seller is
a sophisticated investor (as described in Rule 506(b)(2)(ii) of Regulation
D promulgated under the Securities Act of 1933, as amended, ("Regulation
D")) and an Accredited Investor (as defined in Rule 501 of Regulation D).
Seller is experienced in the evaluation of businesses similar to the
businesses of AmTec, and has such knowledge and experience in financial,
business and other relevant matters as to be competent and fully capable of
examining on its own all the merits, risks and other aspects of receiving
the Issued Stock as contemplated by this Agreement and to make an informed
decision with respect thereto. Seller acknowledges that it has had the
opportunity to review this Agreement and the transactions contemplated by
this Agreement with its own legal counsel and tax advisors.
SECTION 3.11. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Seller. Seller agrees to indemnify and
hold Purchaser harmless for any liability and damage (including reasonable
attorney's fees) suffered as a result of any Person or entity making claims
for fees and commissions based upon arrangements made by Seller or Seller's
parent, Global TeleSystems Group, Inc. (hereinafter, "GTS").
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to Seller to enter into this Agreement, Purchaser
and AmTec hereby represent and warrant to Seller as follows:
SECTION 4.1. Organization and Authority of Purchaser. Purchaser is
a corporation duly organized, validly existing and in good standing under
the laws of the British Virgin Islands and has all necessary corporate
power and authority to enter into this Agreement, to carry out its
obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by Purchaser, the
performance by Purchaser of its obligations hereunder and the consummation
by Purchaser of the transactions contemplated hereby have been duly
authorized by all requisite action on the part of Purchaser. This Agreement
has been duly executed and delivered by Purchaser, and (assuming due
authorization, execution and delivery by Seller) this Agreement constitutes
a legal, valid and binding obligation of Purchaser enforceable against
Purchaser in accordance with its terms.
SECTION 4.2. Organization and Authority of AmTec. AmTec is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all necessary corporate power and
authority to enter into this Agreement (subject to AmTec shareholder
approval), to carry out its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement by AmTec, the performance by AmTec of its obligations hereunder
and the consummation by AmTec of the transactions contemplated hereby have
been duly authorized by all requisite action on the part of AmTec. This
Agreement has been duly executed and delivered by AmTec, and (assuming due
authorization, execution and delivery by Seller) this Agreement constitutes
a legal, valid and binding obligation of AmTec enforceable against AmTec in
accordance with its terms.
SECTION 4.3. Capitalization of AmTec. (a) The authorized capital
stock of AmTec consists of 100,000,000 shares of its common stock, par
value $.001 per share, and 10,000,000 shares of convertible preferred
stock, having a par value of $.001 per share. As of the close of business
on July 31, 1998, there were issued and outstanding 26,074,871 shares of
AmTec common stock and 68 shares of Series E convertible preferred stock.
All of the issued and outstanding shares of the capital stock of AmTec are,
and the Issued Stock (upon issuance in accordance with this Agreement) will
be, validly issued, fully paid, nonassessable and free of preemptive
rights. Except as set forth in AmTec's SEC Reports or as set forth in
Schedule 4.3(a) hereof, as of the date hereof, there are no outstanding
subscriptions, options, calls, contracts, voting trusts, proxies or other
commitments, understandings, restrictions, arrangements, rights or
warrants, including any right of conversion or exchange under any
outstanding security, instrument or other agreement, obligating AmTec or
any AmTec Subsidiary to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of the capital stock of AmTec , or
obligating AmTec to grant, extend or enter into any such agreement or
commitment, other than the agreements contained herein or contemplated
hereby. There are no outstanding stock appreciation rights of AmTec which
were not granted in tandem with a related stock option and no outstanding
limited stock appreciation rights or other rights to redeem for cash
options or warrants of AmTec.
(b) Compliance. Except as disclosed in AmTec's SEC Reports filed
prior to the date hereof, neither Purchaser, AmTec nor any AmTec Subsidiary
is in material violation of, is under investigation with respect to any
material violation of, or has been given notice or been charged with any
material violation of, any law, statute, order, rule, regulation, ordinance
or judgment (including, without limitation, any applicable environmental
law, ordinance or regulation) of any Governmental Authority. Purchaser,
AmTec and each AmTec Subsidiary have all permits, licenses, franchises and
other governmental authorizations, consents and approvals necessary to
conduct their businesses as presently conducted in all material respects.
Neither Purchaser, AmTec nor any AmTec Subsidiary is in material breach or
violation of or in material default in the performance or observance of any
term or provision of, and no event has occurred which, with lapse of time
or action by a third party, could result in a material default under, (i)
its articles of incorporation, certification of formation or bylaws or (ii)
any material contract, commitment, agreement, indenture, mortgage, loan
agreement, note, lease, bond, license, approval or other instrument to
which it is a party or by which it is bound or to which any of its property
is subject.
SECTION 4.4. No Conflict. The execution, delivery and performance
of this Agreement by Purchaser and AmTec and the Registration Agreement by
AmTec do not and will not (a) violate, conflict with or result in the
breach of any provision of the Certificate of Incorporation or By-laws (or
similar organizational documents) of Purchaser or AmTec, (b) conflict with
or violate any Law or Governmental Order applicable to Purchaser or AmTec
or any of their respective assets, properties or businesses, and typically
applicable to a transaction of this nature or (c) conflict with, or result
in any breach of, constitute a default (or event which with the giving of
notice or lapse or time, or both, would become a default) under, require
any consent under, or give to others any rights of termination, amendment,
acceleration, suspension, revocation, or cancellation of, or result in the
creation of any Encumbrance on any of the respective assets or properties
of Purchaser or AmTec pursuant to any note, bond, mortgage or indenture,
stock purchase and sale agreement, contract, agreement, lease, sublease,
license, permit, franchise or other instrument or arrangement to which
Purchaser or AmTec is a party or by which any of such assets or properties
are bound or affected which would have a material adverse effect on the
ability of Purchaser or AmTec to consummate the transactions contemplated
by this Agreement or the Registration Agreement, as the case may be.
SECTION 4.5. Governmental Consents and Approvals. The execution,
delivery and performance of this Agreement by Purchaser and AmTec do not
and will not require any consent, approval, authorization or other order
of, action by, filing with, or notification to, any Governmental Authority.
SECTION 4.6. No Litigation. There are no actions, suits or
proceedings pending or threatened against Buyer or AmTec, at law or in
equity before or by any federal, state, provincial, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign except as disclosed in AmTec's SEC
Reports.
SECTION 4.7. Investment Purpose. Purchaser is acquiring the
Conveyed Interests solely for the purpose of investment and not with a view
to, or for offer or sale in connection with, any distribution thereof.
SECTION 4.8. Condition of Conveyed Interests. Purchaser and AmTec
acknowledge that, prior to execution of this Agreement, (i) each has been
afforded access to and the opportunity to inspect the businesses of Seller
and V-Tech and Seller's and V-Tech's files and records related thereto, and
(ii) each has inspected such businesses, files and records to the extent it
deems necessary or advisable. Purchaser accepts the Conveyed Interests on
an "AS IS" and "WHERE IS" basis subject only to the representations and
warranties made explicitly in this Agreement and the faithful undertakings
agreed to herein including (without limitation) the provisions of Section
5.5 hereof, and not subject to any other assurance, warranty or
representation.
SECTION 4.9. Knowledge and Expertise. AmTec is, and Purchaser is a
subsidiary of, a telecommunications company with operations in The People's
Republic of China. Each is familiar with foreign, federal, state and local
statutes, laws, ordinances, rules and regulations applicable to such
businesses and any associated business, and has the expertise necessary to
independently evaluate the Conveyed Interests, and the condition,
operation, suitability, performance and prospects of such businesses.
SECTION 4.10. Additional Capital Investment. Purchaser and AmTec
understand that Shanghai VSAT Network Systems Co. ("SVC"), a company in
which V-Tech holds a 56% equity equivalent interest, plans to raise
additional investment capital in the near future and such investments may
be dilutive to V-Tech.
SECTION 4.11. No Reliance. Except as to the representations and
warranties of Seller expressly set forth in Article III of this Agreement,
neither Purchaser nor AmTec has relied upon any oral or written statements,
representations, warranties which may have been made by or on behalf of
Seller or upon any written reports, financial data, business plans,
projections, forecasts, or any environmental reports, audits, studies or
assessments, or any other written materials, copies of which may have been
furnished to Purchaser or AmTec as to which Purchaser or AmTec may have
been provided access in connection with the transactions contemplated by
this Agreement. TO THE EXTENT THAT PURCHASER OR AMTEC HAS BEEN FURNISHED
COPIES OF OR BEEN PROVIDED ACCESS TO ANY OF THE FOREGOING, PURCHASER AND
AMTEC ACKNOWLEDGE THAT NEITHER SELLER NOR ANY OF ITS AFFILIATES, OR ANY OF
THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES AND
AGENTS, HAS MADE, AND SELLER HEREBY EXPRESSLY DISCLAIMS, ANY
REPRESENTATIONS OR WARRANTIES AS TO THE ACCURACY OR COMPLETENESS OF SUCH
INFORMATION, DATA OR MATERIALS (WHETHER WRITTEN OR ORAL) WHICH MAY HAVE
BEEN FURNISHED TO PURCHASER OR AMTEC OR ITS REPRESENTATIVES OR AGENTS BY OR
ON BEHALF OF SELLER IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED
HEREBY.
SECTION 4.12. Brokers. No broker, finder or investment banker
(other than CIBC Xxxxxxxxxxx Corp.) is or may be entitled to any brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf
of Purchaser or AmTec. Purchaser agrees to indemnify and hold Seller
harmless for any liability and damage (including reasonable attorney's
fees) suffered as a result of any Person or entity making claims against
Seller for fees and commissions based upon arrangements by Purchaser or
AmTec, including but not limited to claims by CIBC Xxxxxxxxxxx Corp. or
Xxxxx Xxxxxx or Xxxxxx and Company.
ARTICLE V.
ADDITIONAL AGREEMENTS
SECTION 5.1. Conduct of Business Prior to Closing. Seller covenants
and agrees that, between the date hereof and the time of the Closing,
Seller shall not vote its interests in V-Tech, nor permit V-Tech to conduct
the businesses of V-Tech, other than in the ordinary course and consistent
with prior practice without the prior written consent of Purchaser, which
shall not be unreasonably withheld. Seller agrees to promptly notify
Purchaser in the event of a change in SVC's business which could have a
Material Adverse Effect provided Seller has Knowledge, and in the event of
a change which could have a Material Adverse Effect, including (without
limitation) the severance or resignation of any of the Key Employees and/or
officers or directors of V-Tech prior to Closing.
SECTION 5.2. Access to Information. (a) In order to facilitate the
resolution of any claims made against or incurred by Seller prior to the
Closing or for any other reasonable purpose, for a period of seven years
after the Closing, Purchaser shall (i) retain the books and records of
V-Tech relating to periods prior to the Closing in a manner reasonably
consistent with the prior practice of V-Tech, (ii) upon reasonable notice,
afford the officers, employees and authorized agents and representatives of
Seller reasonable access (including the right to make, at Seller's expense,
photocopies), during normal business hours, to such books and records, and
(iii) give Seller reasonable notice of Purchaser's intention to discard or
otherwise destroy such books and records and, upon Seller's request,
transfer such books and records to Seller for safekeeping rather than
discarding or otherwise destroying same.
(b) Upon execution of this Agreement and prior to Closing,
Seller shall cause V-Tech to provide Purchaser and its representatives,
including an independent auditing firm with access to the books and records
of V-Tech to enable Purchaser to conduct an audit of such books and
records.
(c) In order to facilitate the resolution of any claims made
by or against or incurred by Purchaser after the Closing or for any other
reasonable purpose, for a period of seven years following the Closing,
Seller shall (i) retain or cause to be retained its books and records which
relate to V-Tech and its operations for periods prior to the Closing and
which shall not otherwise have been delivered to Purchaser and (ii) upon
reasonable notice, afford the officers, employees and authorized agents and
representatives of Purchaser reasonable access (including the right to make
photocopies, at the expense of Purchaser) during normal business hours, to
such books and records.
SECTION 5.3. Intercompany Debt. Immediately prior to the Closing,
Seller covenants and agrees to cancel any and all intercompany debt,
including accounts payable and accrued expenses, owed by V-Tech or SVC to
Seller and, to the extent canceled, deliver to Purchaser a written release
of such debt dated the Closing Date and/or return to V-Tech its canceled
promissory note evidencing such debt.
SECTION 5.4. China Employees. Seller agrees that it and its
Affiliates shall permit Purchaser and its Affiliates to offer employment to
any of GTS's employees currently engaged with the businesses of V-Tech with
the exception of Xxxxxxx X. Xxxxx ("Xx. Xxxxx"). Purchaser agrees to
provide Seller written advice regarding such employees it intends to hire
concurrent with the execution of this Agreement.
SECTION 5.5. Consulting Services. Seller agrees to provide
consulting services to Purchaser as follows: On an as needed basis GTS will
make Xx. Xxxxx available to Purchaser to provide consulting services to the
extent such services do not interfere or conflict with the responsibilities
and duties of Xx. Xxxxx as a senior executive of GTS or its Affiliates and
are limited to (i) explaining V-Tech's historical performance and (ii)
providing reasonable assistance in the transition of the relationships of
Seller or V-Tech in The People's Republic of China; provided, however, that
(i) Purchaser shall be responsible for the travel, costs and expenses of
Xx. Xxxxx at all times when he is providing such services to Purchaser and
(ii) Purchaser and AmTec, jointly and severally, shall indemnify and hold
GTS and its affiliates harmless from any liability or damage (including
reasonable attorney's fees) resulting from or incurred in connection with
such consulting services.
SECTION 5.6. Assignment of Claims. At Closing, Purchaser or V-Tech
will assign to Seller or GTS any and all rights, choses or causes of action
which V-Tech or Seller has or may have against Gilat Satellite Networks
Ltd., a State of Israel Corporation ("Gilat"), related to or arising out of
Gilat's obligations to V-Tech for goods and services prior to the date
hereof. Purchaser and AmTec will, and will cause their respective
employees, and use their best efforts to cause V-Tech, to cooperate with
Seller with regard to its litigation or settlement of any such claim; to
provide information and assistance in connection with any action taken by
Seller in connection with its or V-Tech's claims against Gilat Satellite
Networks Ltd.; and to take reasonable measures to protect and keep in its
current repair and condition, and return to Seller or its designee, the
equipment supplied by Gilat to V-Tech or Seller, as listed on Schedule 5.6
hereto, and which is the subject of Seller's claims against Gilat The
foregoing undertakings shall be at Seller's sole cost and expense including
the cost of insurance acceptable to Seller in its sole discretion.
SECTION 5.7. EQUANT Equipment Lease. Concurrent with the Closing,
Seller covenants and agrees to cause its affiliate, GTS Equipment, Inc.
("GTS Equipment"), and its parent, GTS, to assign to AmTec or a subsidiary
of AmTec, and AmTec agrees to assume or cause such subsidiary to assume,
all their respective rights and obligations under, pursuant to or in
connection with (i) that certain Equipment Lease Agreement by and between
GTS Equipment and EQUANT U.S., Inc. ("EQUANT") dated July 3, 1998 (the
"EQUANT Agreement"), (ii) any sublease pursuant thereto, and (iii) the
Guarantee dated July 3, 1998 delivered by GTS to EQUANT in connection with
(i) above, in each case subject to any requisite consents to such
assignment, including (but not limited to) the consent of EQUANT.
SECTION 5.8. Stockholder Rights. Seller understands that:
(i) The Issued Stock has not been registered under the
Securities Act or any applicable state securities or "Blue
Sky" laws, and may be required to be held indefinitely,
unless subsequently registered under the Securities Act of
1933 (the "Securities Act") and such applicable Blue Sky
laws, or an exemption from such registration is available.
(ii) other than as set forth in the Registration
Agreement, AmTec is under no obligation to file a
registration statement with the Securities and Exchange
Commission (the "Commission") or any state securities
commission with respect to such Issued Stock; provided,
however, AmTec covenants and agrees to use its best efforts
to complete a public offering of its common stock within the
three years following the Closing in which Seller may tender
the Issued Stock in whole or in part in proportion to the
total holdings requested to be registered and subject to the
discretion of the underwriters.
SECTION 5.9. Restrictions on Transfer. With the exception of any
transfer of the Issued Stock to an Affiliate of Seller which remains its
Affiliate immediately after such transfer, Seller (and its transferee,
successor or assign) agrees that (a) it will not offer, sell or otherwise
dispose of the Issued Stock, unless such offer, sale or other disposition
is effected in accordance with the terms of this Agreement or the
Registration Agreement and such offer, sale or other disposition is (i)
registered under the Securities Act and applicable state securities laws or
is exempt from registration under such laws or (ii) in compliance with an
opinion of counsel to Seller delivered to AmTec hereunder and reasonably
acceptable to AmTec and its counsel to the effect that such offer, sale or
other disposition thereof does not violate the Securities Act or applicable
state securities laws, and (b) the certificate(s) representing such common
stock shall bear a legend in substantially the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS
AND UNTIL REGISTERED UNDER THE SECURITIES ACT OF 1933 AND SUCH
APPLICABLE STATE LAW OR, IN THE OPINION OF COUNSEL REASONABLY
ACCEPTABLE TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR
TRANSFER, DOES NOT VIOLATE THE PROVISIONS THEREOF OR UNLESS SOLD
PURSUANT TO RULE 144 OR RULE 144A OF THE SECURITIES ACT OF 1933.
Upon request of Seller or other person who in accordance with the
provisions of this Section 5.10 becomes a holder of the Issued Stock, AmTec
shall remove the legend set forth above from the certificates evidencing
such Issued Stock or issue to such holder new certificates therefore free
of such legend, if with such request AmTec shall have received an opinion
of counsel that is reasonably acceptable to AmTec and its counsel to the
effect that such Issued Stock, as applicable, is not required by the
Securities Act or other applicable law to continue to bear the legend or a
legend similar thereto.
Notwithstanding the foregoing, Seller covenants and agrees not to
transfer the Issued Stock prior to the third anniversary of the Closing;
provided, however, that Seller may transfer such Issued Stock in whole or
in part (i) after the first anniversary of the Closing and prior to such
third anniversary in a transaction exempt from registration if the
transferee thereof agrees to refrain from any public resale of such Issued
Stock until such third anniversary, (ii) at any time in response to a
tender offer by a third party (not an Affiliate of Seller) for shares of
AmTec's common stock made in accordance with the Securities Exchange Act of
1934, as amended, and the rules and regulations thereof and which would
result in the acquirer in such tender offer obtaining, in the aggregate,
51% or more of AmTec's common stock, or (iii) at any time in a registered
sale effected pursuant to a registration under the Securities Act.
SECTION 5.10. AmTec's Board of Directors. At any time after the
Closing Date, as long as Seller or one of its Affiliates is the holder of
at least 50% of the Issued Stock, upon reasonable notice to AmTec, Seller
shall have the right to nominate one member to AmTec's Board of Directors
and AmTec shall use its best efforts to effect the election to its Board of
Directors of such nominee.
SECTION 5.11. Right of Inspection. AmTec agrees that Seller, as
long as it or one of its Affiliates is the registered owner of the Issued
Stock, shall have the right to the extent provided under the Delaware
General Corporation Law to inspect the books and records of AmTec and to
make copies of such books and records during AmTec's normal business hours.
SECTION 5.12. Regulatory and Other Authorizations; Notices and
Consents; Releases. Seller and Purchaser shall each use their reasonable
efforts to obtain all authorizations, consents, orders and approvals of all
Governmental Authorities and officials that Purchaser determines to be
necessary or appropriate in connection with the transactions contemplated
by this Agreement.
SECTION 5.13. Schedule Supplements. From time to time prior to the
Closing, Seller shall supplement or amend the Schedules hereto with respect
to any matter arising after the date hereof which, if existing or occurring
at or prior to the date hereof, would have been required to be set forth or
described in such Schedules or which is necessary to complete or correct
any information in such Schedules or in any representation or warranty of
the Seller which has been rendered inaccurate thereby.
SECTION 5.14. Further Action. Each of the parties hereto shall use
all reasonable efforts to take, or cause to be taken, all appropriate
action, do or cause to be done all things necessary, proper or advisable
under applicable Law, and execute and deliver such documents and other
papers, as may be required to carry out the provisions of this Agreement
and consummate and make effective the transactions contemplated by this
Agreement.
ARTICLE VI.
TAX MATTERS
SECTION 6.1. Indemnity. (a) To Seller's Knowledge, V-Tech has filed
all tax returns required by law, and Seller agrees to indemnify and hold
harmless Purchaser against the following Taxes and against any loss,
damage, liability or expense, including reasonable fees for attorneys and
other outside consultants, incurred in contesting or otherwise in
connection with any such Taxes: Taxes imposed by the United States or The
People's Republic of China or any state, provincial or local taxing
authority in the United States or The People's Republic of China on Seller
with respect to its share of income or gain of V-Tech relating to taxable
periods ending on or before the Closing Date.
(b) Purchaser agrees to indemnify and hold harmless Seller and
its Affiliates against the Taxes imposed by the United States or The
People's Republic of China or any state or local taxing authority in the
United States or The People's Republic of China with respect to its share
of income or gain of V-Tech relating to taxable periods after the Closing
Date and against any loss, damage, liability or expense, including
reasonable fees for attorneys and other outside consultants, incurred in
contesting or otherwise in connection with any such Taxes.
ARTICLE VII.
CONDITIONS TO CLOSING
SECTION 7.1. Conditions to Obligations of Seller. The obligations
of Seller to consummate the transactions contemplated by this Agreement
shall be subject to the fulfillment, at or prior to the Closing, of each of
the following conditions, any or all of which may be waived in whole or in
part by Seller:
(a) Due Diligence. Seller shall have completed its due diligence
investigation of AmTec and each relevant AmTec Subsidiary to the
satisfaction of Seller and its counsel.
(b) Representations, Warranties and Covenants. The
representations and warranties of Purchaser and AmTec contained in this
Agreement and each considered individually shall have been true and correct
as of the date of this Agreement and shall be true and correct in all
material respects as of the Closing, with the same force and effect as if
made as of the Closing Date, other than such representations and warranties
as are made solely as of another date; the covenants and agreements
contained in this Agreement to be complied with by Purchaser on or before
the Closing shall have been complied with in all material respects; and
Seller shall have received a certificate from Purchaser to such effect
signed by a duly authorized officer thereof.
(c) No Proceeding or Litigation. No action, suit, or proceeding
shall be pending or threatened before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign jurisdiction
or before any arbitrator wherein an unfavorable injunction, judgment,
order, decree, ruling, or charge would (A) prevent consummation of any of
the transactions contemplated by this Agreement, or (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation; provided, however, that the provisions of this Section 7.1(b)
shall not apply if Seller has directly or indirectly solicited or
encouraged any such Action.
(d) Resolutions. Seller shall have received a true and complete
copy, certified by the Secretary or an Assistant Secretary of Purchaser
and, to the extent applicable, AmTec, of the resolutions duly and validly
adopted by the Board of Directors of Purchaser and the Board of Directors
of AmTec, as the case may be, evidencing their respective authorization of
the execution and delivery of this Agreement and the Registration
Agreement, respectively, and the consummation of the transactions
contemplated hereby or thereby.
(e) Consents. Seller shall have obtained and delivered copies to
Purchaser and AmTec, if in writing, all consents required to be obtained by
Seller in connection with the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereunder, including
(without limitation), the consent of the other holder(s) of equity joint
venture limited liability company or similar interests in V-Tech and all
requisite orders, approvals, authorizations and consents of Governmental
Authorities.
(f) Opinion. Seller shall have received an opinion of AmTec's
general counsel, satisfactory in form and substance to Seller, dated as of
the date of Closing, as to the due authority to issue the Issued Stock,
that the Issued Stock is duly and validly issued, and upon closing, will be
fully paid and nonassessable, and that the issuance of the Issued Stock
does not conflict with the charter or by-laws of AmTec or otherwise
conflict with any Law or any contractual restrictions applicable to AmTec.
(g) Registration Agreement. AmTec shall have executed and
delivered the Registration Agreement.
SECTION 7.2. Conditions to Obligations of Purchaser. The
obligations of Purchaser to consummate the transactions contemplated by
this Agreement shall be subject to the fulfillment, at or prior to the
Closing, of each of the following conditions, any or all of which may be
waived in whole or in part by Purchaser:
(a) Representations, Warranties and Covenants. The
representations and warranties of Seller contained in this Agreement shall
have been true and correct as of the date of this Agreement and shall be
true and correct in all material respects as of the Closing, with the same
force and effect as if made as of the Closing, other than such
representations and warranties as are made solely as of another date; the
covenants and agreements contained in this Agreement to be complied with by
Seller on or before the Closing shall have been complied with in all
material respects; and Purchaser shall have received a certificate of
Seller to such effect signed by a duly authorized officer thereof.
(b) No Proceeding or Litigation. No action, suit, or proceeding
shall be pending or threatened before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign jurisdiction
or before any arbitrator wherein an unfavorable injunction, judgment,
order, decree, ruling, or charge would (A) prevent consummation of any of
the transactions contemplated by this Agreement, (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation; provided, however, that the provisions of this Section 7.2(b)
shall not apply if Purchaser has directly or indirectly solicited or
encouraged any such Action.
(c) Audit. The books and records of V-Tech shall be in such
condition to (i) allow Purchaser and the independent accountant of its
choice to audit same in accordance with United States Generally Accepted
Auditing Standards and, (ii) to permit Purchaser and its accountant to
prepare financial statements for its filings under the Securities Exchange
Act of 1934, as amended, in compliance with Regulation S-X.
(d) Shareholder Approval; Exchange Listing. AmTec shall have
obtained requisite approval of its shareholders for the issuance of the
Issued Stock and approval to issue the Issued Stock from the American Stock
Exchange.
(e) Resolutions. Purchaser shall have received a true and
complete copy, certified by the Secretary or an Assistant Secretary of
Seller, of the resolutions duly and validly adopted by the Board of
Directors of Seller evidencing authorization of the execution and delivery
of this Agreement and the consummation of the transactions contemplated
hereby.
(f) Consents. Seller shall have obtained and delivered copies to
Purchaser and AmTec, if in writing, all consents required to be obtained by
it in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereunder, including (without
limitation), the consent of the other holder(s) of equity joint venture
limited liability or similar interests in V-Tech and all requisite orders,
approvals, authorizations and consents of Governmental Authorities.
(g) Opinion. Purchaser and AmTec shall have received an opinion
of Seller's China counsel, acceptable in form and substance to Seller,
Purchaser and AmTec and their respective counsel.
ARTICLE VIII.
INDEMNIFICATION
SECTION 8.1. Survival of Representations and Warranties. The
representations and warranties contained in this Agreement, and all
statements contained in this Agreement, the schedules and any certificate
or other document delivered pursuant to this Agreement, or in connection
with the transactions contemplated by this Agreement (collectively, the
"Acquisition Documents"), shall survive the Closing for a period of two
years. Neither the period of survival nor the liability of Seller with
respect to Seller's representations and warranties made explicitly herein
shall be reduced by any investigation made at any time by or on behalf of
Purchaser whether before or after the execution of this Agreement or the
Closing. If written notice of a claim has been given prior to the
expiration of the applicable representations and warranties by either
party, then the relevant representations and warranties shall survive as to
such claim, until such claim has been finally resolved.
SECTION 8.2. Indemnification by Seller. Seller shall indemnify and
hold harmless Purchaser and its Affiliates and their respective
representatives for any and all Liabilities, losses, damages, claims, costs
and expenses, interest, awards, judgments and penalties (including, without
limitation, attorneys' and consultants' fees and expenses) actually
incurred by them (including, without limitation, any Action brought or
otherwise initiated by any of them (hereinafter a "Loss"), arising out of
or resulting from:
(i) the breach of any representation or warranty made by
Seller contained in the Acquisition Documents;
(ii) the breach of any covenant or agreement by Seller
contained in the Acquisition Documents; or
(iii) the rights, choses or causes of action against Gilat (and
any counterclaims by Gilat) assigned to Seller pursuant to
Section 5.9 hereof.
The sole remedy for Purchaser and its Affiliates (including but not limited
to AmTec) and their respective representatives against Seller or its
Affiliates for any liability arising out of this Agreement or the
transactions contemplated hereby shall be as set forth in Section 8.5 of
this Agreement.
SECTION 8.3. Indemnification by Purchaser. Purchaser and AmTec,
jointly and severally, shall indemnify and hold harmless Seller and its
Affiliates and their respective representatives against any and all Losses
actually incurred by any of them arising out of or resulting from (a) the
breach of any representation or warranty made by Purchaser or AmTec in the
Acquisition Documents, (b) the breach by Purchaser or AmTec of any of its
covenants or agreements in the Acquisition Documents (c) the breach by
AmTec (after Closing) of agreements with or made in connection with EQUANT
listed on Schedule 8.3 hereto subject to their assignment at Closing or (d)
if and to the extent such Losses directly or proximately result from
Purchaser's ownership of the Conveyed Interests and operation of V-Tech
after Closing.
SECTION 8.4. General Indemnification Procedures. If Purchaser or
any of its Affiliates or their respective representatives shall seek
indemnification pursuant to Section 8.2 hereof or Seller or any of its
Affiliates or their respective representatives shall seek indemnification
pursuant to Section 8.3 hereof, such party seeking indemnification (the
"Indemnified Party") shall give prompt notice to the party from whom such
indemnification is sought (the "Indemnifying Party"), stating all facts and
circumstances known to the Indemnified Party relating to the claim for
which indemnification is sought, the amount of the Loss, if known, and
method of computation thereof, and containing a reference to the provisions
of this Agreement in respect of which such right of indemnification is
claimed or arises. The obligations and liabilities of the Indemnifying
Party under this Article VIII with respect to Losses arising from claims of
any third party which are subject to the indemnification provided for in
this Article VIII ("Third Party Claims") shall be governed by and
contingent upon the following additional terms and conditions: if an
Indemnified Party shall receive notice of any Third Party Claim, the
Indemnified Party shall give the Indemnifying Party notice of such Third
Party Claim as soon as practicable but in no event later than ten days of
the receipt by the Indemnified Party of such notice; provided, however,
that the failure to provide such notice shall not release the Indemnifying
Party from any of his or its obligations under this Article VIII except to
the extent the Indemnifying Party is materially prejudiced by such failure,
and shall not relieve the Indemnifying Party from any other obligation or
liability that he or it may have to any Indemnified Party otherwise than
under this Article VIII. If the Indemnifying Party acknowledges in writing
his or its obligation to indemnify the Indemnified Party hereunder against
any Losses that may result from such Third Party Claim, then the
Indemnifying Party shall be entitled to assume and control the defense of
such Third Party Claim at his or its expense and through counsel reasonably
satisfactory to the Indemnified Party if he or it gives notice of his or
its intention to do so to the Indemnified Party within ten days of the
receipt of such notice from the Indemnified Party; provided, however, that
if there exists or is reasonably likely to exist a conflict of interest
that would make it inappropriate in the judgment of the Indemnified Party
for the same counsel to represent both the Indemnified Party and the
Indemnifying Party, the Indemnified Party shall be entitled to retain his
or its own counsel, in each jurisdiction for which the Indemnified Party
determines counsel is required, at the expense of the Indemnifying Party.
Notwithstanding the foregoing, if any Indemnified Party determines in good
faith that there is a reasonable probability that an action may materially
and adversely affect him or it or his or its Affiliates, other than as a
result of monetary damages, such Indemnified Party may, by written notice
to the Indemnifying Party, assume the exclusive right to defend, compromise
or settle such action, but the Indemnifying Party shall not be bound by or
required to indemnify the Indemnified Party for any loss or damage incurred
in connection with any determination of an action so defended or any
compromise or settlement thereof effected by the Indemnified Party without
the Indemnifying Party's prior written consent. In the event the
Indemnifying Party exercises the right to undertake a defense against a
Third Party Claim as provided herein, the Indemnified Party shall make
available to the Indemnifying Party, at the Indemnifying Party's expense,
all witnesses, pertinent records, materials and information in the
Indemnified Party's possession or under the Indemnified Party. Similarly,
in the event the Indemnified Party is, directly or indirectly, conducting
the defense against any Third Party Claim, the Indemnifying Party shall
cooperate with the Indemnified Party in such defense and make available to
the Indemnified Party, at the Indemnifying Party's expense, all such
witnesses, records, materials and information in the Indemnifying Party's
possession or under the Indemnifying Party's control relating thereto as is
reasonably required by the Indemnified Party. No Third Party Claim may be
settled by the Indemnifying Party in a manner which does not involve the
complete release of the Indemnified Party without the written consent of
the Indemnified Party. The Indemnified Party will have no liability with
respect to any compromise or settlement of such claims effected without its
consent. If notice is given to an Indemnifying Party of the commencement of
any proceeding and the Indemnifying Party does not, within ten days after
the Indemnified Party's notice is given, give notice to the Indemnified
Party of its election to assume the defense of such proceeding, the
Indemnified Party shall have the right to defend such proceeding. However,
if the Indemnifying Party subsequently notifies the Indemnified Party of
its intent to assume the defense of such proceeding, the Indemnified Party
shall permit the assumption of the defense by the Indemnifying Party. In no
event will the Indemnifying Party be bound by any determination made in
such proceeding or any compromise or settlement effected by the Indemnified
Party, without the written consent of the Indemnifying Party.
SECTION 8.5. Limits on Indemnification. Notwithstanding anything to
the contrary contained in this Agreement, the indemnification set forth in
this Article VIII shall not cover any claim until the cumulative amount of
all indemnifiable Losses incurred, suffered or paid by the Indemnified
Party, or the damages claimed against the Indemnified Party in actions for
which the Indemnifying Party is responsible for defending hereunder,
exceeds $50,000 in the aggregate, whereupon the Indemnified Party shall be
entitled to indemnification under this Agreement for the full amount of all
such indemnifiable Losses and any additional indemnifiable Losses
thereafter, subject to the limitation set forth in the following sentence
of this Section 8.5. The sole recourse of Purchaser and its Affiliates
(including, without limitation, AmTec) and their respective
representatives, for their respective indemnifiable Losses shall be
Seller's relinquishment and redelivery of shares of the Issued Stock free
and clear of all encumbrances (valued on the basis of the average low and
high prices during the most recently completed week prior to the Final
Determination of the amount of indemnifiable Losses but in no event less
than $1.35 per share) in a number equal, based on their value, to the
amount of the indemnifiable Losses claimed. In the event Seller shall have
sold all or a portion of the Issued Stock prior to the Final Determination
of the amount of indemnifiable Losses, Seller's liability in the aggregate
shall be limited to (i) the relinquishment and redelivery of shares of the
Issued Stock still beneficially owned by Seller, as provided in the
preceding sentence of this Section 8.5, plus (ii) an amount in cash equal
to the aggregate proceeds received by Seller upon disposition of the
portion of the Issued Stock no longer beneficially held by Seller, provided
that Seller shall have the option, in its sole discretion, to purchase
stock of AmTec in the public market and use such stock to satisfy its
obligations under this Article VIII on the same basis as if such stock was
still owned prior to the Final Determination of the amount of indemnifiable
Losses. In the event that Seller receives assets other than cash upon the
disposition of Issued Stock, for purposes of determining the amount of
proceeds for purposes of this Section 8.5, the assets shall be valued at
their fair market value, as determined by a third party acceptable to both
Purchaser and Seller on the date of their receipt by Seller.
SECTION 8.6. Tax Matters. Anything in this Article VIII to the
contrary notwithstanding, the rights and obligations of the parties with
respect to indemnification for any and all Tax matters shall be governed by
Article VI.
ARTICLE IX.
TERMINATION
SECTION 9.1. Termination. Any party may terminate this agreement
at any time prior to the Closing by written notice to the other parties:
(a) by Purchaser and AmTec, in their discretion, if, between the
date hereof and the time scheduled for the Closing an event or condition
occurs, or fails to occur, that has resulted in or that may reasonably be
expected to result in a Material Adverse Effect;
(b) by either Purchaser and AmTec or Seller in the event that any
Governmental Authority shall have issued an order, decree or ruling or
taken any action restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement and such order, decree, ruling
or other action shall have become final and nonappealable;
(c) by either Purchaser and AmTec, on the one hand, or Seller, on
the other hand, if a material breach of any provision of this Agreement has
been committed by the other party or parties and such breach has not been
waived; or
(d) (i) by Purchaser and AmTec if any of the conditions in
Section 7.2 has not been satisfied as of the Closing or if satisfaction of
such a condition is or becomes impossible (other than through the failure
of Purchaser and AmTec to comply with its obligations under this Agreement)
and Purchaser and AmTec have not waived such condition on or before
Closing; or (ii) by Seller, if any of the conditions in Section 7.1 has not
been satisfied as of the Closing or if satisfaction of such a condition is
or becomes impossible (other than through the failure of Seller to comply
with its obligations under this Agreement) and Seller has not waived such
condition on or before Closing.
SECTION 9.2. Effect of Termination. In the event of termination of
this Agreement as provided in Section 9.1, this Agreement shall forthwith
become void and there shall be no liability on the part of either party
hereto except (a) as set forth in Section 10.1 and (b) that nothing herein
shall relieve either party from liability for any breach of this Agreement
occurring prior to its termination.
ARTICLE X.
GENERAL PROVISIONS
SECTION 10.1. Expenses. Except as otherwise specified in this
Agreement, all costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and accountants, incurred in
connection with this Agreement and the transactions contemplated hereby
shall be paid by the party incurring such costs and expenses, whether or
not the Closing shall have occurred.
SECTION 10.2. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon receipt or
refusal upon presentation) by delivery in person, by courier service, by
cable, by telecopy, by telegram, by telex or by registered or certified
mail (postage prepaid, return receipt requested) to the respective parties
at the following addresses (or at such other address for a party as shall
be specified in a notice given in accordance with this Section 10.2):
(a) if to Seller:
c/o Global TeleSystems Group, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxx, 00xx Xxxxx
XxXxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxx, General Counsel
(b) If to Purchaser or AmTec:
AmTec, Inc.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X'Xxxxx, General Counsel
SECTION 10.3. Public Announcements. No party to this Agreement
shall make, or cause to be made, any press release or public announcement
in respect of this Agreement or the transactions contemplated hereby or
otherwise communicate with any news media without prior review and prior
written consent by and coordination with the other parties, and the parties
shall cooperate as to the timing and contents of any such press release or
public announcement, subject to their respective disclosure obligations
under applicable securities laws and regulations and applicable Nasdaq or
American Stock Exchange requirements.
SECTION 10.4. Headings. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement.
SECTION 10.5. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by or under
any Law or public policy, all other terms and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic
or legal substance of the transactions contemplated hereby is not affected
in any manner materially adverse to any party. Upon such determination that
any term or other provisions is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions
contemplated hereby are consummated as originally contemplated to the
greatest extent possible.
SECTION 10.6. Entire Agreement. This Agreement constitutes the
entire agreement of the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and undertakings, both written
and oral, between Seller, Purchaser and AmTec with respect to the subject
matter hereof.
SECTION 10.7. Assignment. This Agreement may not be assigned by
operation of law or otherwise without the express written consent of
Seller, Purchaser and AmTec (which consent may be granted or withheld in
the sole discretion of Seller or Purchaser).
SECTION 10.8. No Third Party Beneficiaries. Except for the
provisions of Article VIII relating to Indemnified Parties, this Agreement
shall be binding upon and inure solely to the benefit of the parties hereto
and their permitted assigns, and nothing herein, express or implied, is
intended to or shall confer upon any other Person any legal or equitable
right, benefit or remedy of any nature whatsoever under or by reason of
this Agreement.
SECTION 10.9. Amendment. This Agreement may not be amended or
modified except by an instrument in writing signed by, or on behalf of,
Seller, Purchaser and AmTec.
SECTION 10.10. Governing Law. This Agreement shall be governed by
and construed in accordance with, the laws of the State of New York,
applicable to contracts executed in and to be performed entirely within
that state. Any claim or dispute arising out of or relating to this
Agreement which is not settled by the parties within sixty days after
notice thereof is first given by any party to the others shall be finally
settled under the Commercial Rules of the American Arbitration Association
(the "AAA"). The arbitration shall be conducted in the City of XxXxxx,
Virginia by a panel of three arbitrators, selected by the AAA. Any
arbitration hereunder shall be governed by the United States Arbitration
Act, 9 U.S.C. ss.1-16, and judgment upon the award rendered by the
arbitrator may be entered by any court having jurisdiction thereof.
SECTION 10.11. Counterparts. This Agreement may be executed in one
or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original
but all of which taken together shall constitute one and the same
agreement.
SECTION 10.12. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement
was not performed in accordance with the terms hereof and that the parties
shall be entitled to specific performance of the terms hereof, in addition
to any other remedy at law or equity.
[Remainder of this page is intentionally blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the date first written above by their respective
officers thereunto duly authorized.
SFMT-CHINA INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
AMTEC, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-----------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Chairman, Chief Executive
Officer and President
AMTEC HEBEI TELECOM HOLDINGS, LTD.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
--------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Chairman
SCHEDULE A
CERTAIN DEFINED TERMS
"Action" means any claim, action, suit, arbitration, inquiry,
proceeding or investigation by or before any Governmental Authority.
"Affiliate" means, with respect to any specified Person, any other
Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person, except that (i) Chatterjee Fund Management and (ii) Open Society
Institute shall not be deemed to be Affiliates of Seller or GTS.
"AmTec Subsidiary" means any and all corporations, partnerships,
joint ventures, associations and other entities controlled by AmTec
directly or indirectly.
"Assignment of Interest" shall mean the document or interest
transferring and assigning the Conveyed Interests to Purchaser.
"Code" means the Internal Revenue Code of 1986, as amended.
"Control" (including the terms "controlled by" and "under common
control with"), with respect to the relationship between or among two or
more Persons, means the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the affairs or
management of a Person, whether through the ownership of voting securities,
as trustee or executor, by contract or otherwise.
"Encumbrance" means any security interest, pledge, mortgage, lien,
charge, encumbrance, adverse claim, preferential arrangement or restriction
of any kind.
"Final Determination" shall mean the date of the order or
determination in which the relevant court or arbitrator fixes the amount of
damages in the relevant case.
"Governmental Authority" means any United States federal, state or
local or any foreign government, governmental, regulatory or administrative
authority, agency or commission or any court, tribunal, or judicial or
arbitral body.
"Government Order" means any order, writ, judgment, injunction,
decree, stipulation, determination or award entered by or with any
Governmental Authority.
"Key Employees" shall mean Xx. Xxxxx, Xxxxxx Xxxx, Xxx Xxx, Xxxxx
Xxxxx and Xxxx Xxxx.
"Knowledge" shall mean the actual awareness of a fact or other
matter that an individual who is serving, or who has served, as a director,
officer or Key Employee of Seller has or at any time had.
"Law" means any federal, state, local or foreign statute, law,
ordinance, regulation, rule, code, order, other requirement or rule of law.
"Liabilities" means any and all indebtedness, liabilities and
obligations, whether accrued or fixed, absolute or contingent, matured or
unmatured or determined or determinable, including, without limitation,
those arising under any Law, Action or Governmental Order and those arising
under any contract, agreement, arrangement, commitment or undertaking.
"Material Adverse Effect" means any circumstance, change in, or
effect on the businesses of V-Tech that, individually or in the aggregate
(a) is, or reasonably could be, materially adverse to the business,
operations, assets or Liabilities, employee relationships, customer or
supplier relationships, prospects, results of operations or the condition
(financial or otherwise) of V-Tech, taken as a whole, or (b) could
materially adversely affect the ability of Purchaser, to operate or conduct
such businesses in the manner in which it is currently operated or
conducted by Seller and its Affiliates.
"Person" means any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity, as well as
any syndicate or group that would be deemed to be a person under Section
13(d)(3) of the Securities Exchange Act of 1934, as amended.
"SEC Reports" means each report, schedule, registration statement
and definitive proxy statement filed by AmTec with the Securities and
Exchange Commission since March 31, 1995 (as such documents have since the
time of their filing been amended).
"Tax" or "Taxes" means any and all taxes, fees, levies, duties,
tariffs, imposts, and other charges of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any government or taxing authority, including,
without limitation: taxes or other charges on or with respect to income,
franchises, windfall or other profits, gross receipts, property, sales,
use, capital stock, payroll, employment, social security, workers'
compensation, unemployment compensation, or net worth; taxes or other
charges in the nature of excise, withholding, ad valorem, stamp, transfer,
value added, or gains taxes; license, registration and documentation fees;
and customs duties, tariffs, and similar charges.
Schedule 3.3(a)
CONVEYED INTERESTS
The Conveyed Interests are 75% of the equity of V-Tech based upon
SFMT-China Inc.'s contributions to the Registered Capital of V-Tech in
accordance with the Joint Venture Contract with SSTIC and any and all
rights or obligations of such equity ownership of V-Tech.
Additionally, the Conveyed Interests are the rights and obligations
of SFMT-China, Inc. under the Conditional Loan Discharge Contract dated
April 12, 1995 between SFMT-China, Inc. and SSTIC.
Schedule 3.3(c)
Articles of Association of Shanghai V-Tech Telecommunications & Engineering
Limited Liability Company dated April 12, 1995.
Joint Venture Contract dated April 12, 1995 by and between SSTIC and
SFMT-China, Inc.
Project Cooperation Contract dated April 12, 1995 between V-Tech and SSTIC.
Technical Support and Consulting Services Contract dated April 12, 1995
between V-Tech and SSTIC.
Delegated Loan Contract dated April 12, 1995 among V-Tech, The Industrial &
Commercial Bank of Shanghai Trust & Investment Corp. and SSTIC.
Conditional Loan Discharge Contract dated April 12, 1995 between SFMT-China
and SSTIC.
Engineering Services Contract dated October 16, 1994 between V-Tech and
SVC.
Schedule 3.5
The transfer of the Conveyed Interest is subject to the approval
of the Ministry of Foreign Trade and Economic Cooperation of the People's
Republic of China ("MOFTEC") and the subsequent issuance by MOFTEC of a new
Approval Certificate and the approval of the relevant branch of the State
Administration for Industry and Commerce to change company registration.
Schedule 3.7
Litigation
Shanghai V-Tech Telecommunications Systems Co. Ltd. (PRC) v. Gilat
Satellite Networks Ltd. (Israel), ICC International Court of Arbitration
Case No. 9916CK.
Schedule 3.8(vi)
On or about August 6, 1998 V-Tech made a loan to SVC for working capital in
the amount of approximately 1,000,000 RMB (approximately US$120,000).
Schedule 4.3(a)
As of August 9, 1998, AmTec and United International Holdings, Inc. have
entered into a binding letter of intent (the "Agreement") to combine their
telecommunications business in China. Pursuant to the agreement, AmTec will
purchase 100% of the stock of UIH-Hunan from UIH Asia-Pacific
Communications, Inc. ("UAP") in consideration for shares of AmTec's
preferred stock valued at approximately $12 million and convertible into
approximately 9.6 million shares of AmTec common stock (subject to certain
antidilution provisions to be negotiated). The Agreement also grants to UAP
an option to purchase additional shares of AmTec common stock (up to an
aggregate ownership interest of 25%) at a price of $3.00 per share. The
transaction is expected to close in the third quarter.
Schedule 5.6
Gilat Equipment
EXHIBIT A
Registration Rights Agreement
(See Tab 2)
CONFORMED COPY
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into as of August 26, 1998 by and between AmTec, Inc., a Delaware
corporation (the "Company") and SFMT-China, Inc., a Delaware corporation,
its successors and assigns ("Shareholder").
This Agreement is made pursuant to that certain Purchase Agreement
dated August 26, 1998 (the "Purchase Agreement"), by and among the Company,
Shareholder, and AmTec Hedei Telecom Holdings, Ltd. In order to induce
Shareholder to enter into the Purchase Agreement, the Company has agreed to
provide the registration rights set forth in this Agreement. The execution
and delivery of this Agreement is a condition to the Closing under the
Purchase Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall
have the following meanings:
"Act" shall mean the Securities Act of 1933, as amended.
"Closing Date" shall mean the date of this Agreement.
"Commission" shall mean the Securities and Exchange Commission.
"Common Stock" shall mean the issued and outstanding shares of the
Company's common stock, $.001 par value.
"Holders" shall mean Shareholder and any other person holding
Restricted Securities to whom the rights under this Agreement have been
transferred.
"Issued Stock" shall mean the 5,925,357 shares of the Company's
Common Stock issued in accordance with the Purchase Agreement.
"Person" shall mean an individual, partnership, corporation, trust,
limited liability company, unincorporated organization, or a government or
agency or political subdivision thereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement at the time such Registration Statement is declared effective, as
amended or supplemented by all other amendments thereto, including
post-effective amendments, and all material incorporated by reference into
such Prospectus.
"Registration Statement" shall mean any registration statement of
the Company that covers any of the Restricted Securities pursuant to the
provisions of this Agreement, including the Prospectus included therein,
all amendments thereto (including post-effective amendments) and all
exhibits and material incorporated by reference therein.
"Restricted Securities" shall mean the Issued Stock and any other
securities issued in respect thereof upon any stock split, stock dividend,
recapitalization, merger, consolidation or similar event, upon original
issuance thereof, and at all times subsequent thereto, until (a) the date
on which it has been registered effectively pursuant to the Securities Act
and disposed of in accordance with the Registration Statement relating to
it, (b) the date on which such shares of common stock are distributed to
the public pursuant to Rule 144 (or any similar provisions then in effect)
promulgated by the Commission pursuant to the Securities Act or (c) the
date on which it ceases to be outstanding.
"Underwritten Registration" or "Underwritten Offering" shall mean a
registration in which securities of the Company are sold to an underwriter
for reoffering to the public.
SECTION 2. PIGGYBACK REGISTRATIONS
(a) Notice and Request to Piggyback. Whenever the Company proposes
to register any of its Common Stock under the Act (a "Piggyback
Registration"), the Company will give written notice to all Holders of its
intention to effect such a registration not later than the earlier to occur
of (i) the fifth day following receipt by the Company of notice of exercise
of any demand registration rights or (ii) 45 days prior to the anticipated
filing date. Subject to the provisions of Sections 2(c) and 2(d), the
Company will include in such Piggyback Registration all Restricted
Securities with respect to which the Company has received written requests
for inclusion therein within fifteen (15) business days after the receipt
by the applicable Holder of the Company's notice. The Holders shall be
permitted to withdraw all or any part of the Restricted Securities from a
Piggyback Registration at any time prior to the effective date of such
Piggyback Registration. If a Piggyback Registration is an Underwritten
Offering effected:
(i) under Section 2(c) hereof, all Holders whose securities
are included in the Piggyback Registration shall be obligated to
sell their securities on the same terms and conditions as apply to
the securities being issued and sold by the Company, or
(ii) under Section 2(d) hereof, all Holders whose securities
are included in the Piggyback Registration shall be obligated to
sell their securities on the same terms and conditions as apply to
the securities being sold by the Person or Persons who initiated the
Piggyback Registration under said Section 2(d).
(b) Piggyback Expenses. All expenses incurred in effecting each of
the registrations provided for in this Section 2 including (without
limitation) all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, fees and disbursements of counsel
for the Holders, underwriting expenses (other than underwriting discounts,
selling concessions or commissions), expenses of any audits incident to or
required by any such registration and expenses of complying with the
securities or blue sky laws of any jurisdictions pursuant to Section 3(d)
hereof, shall be borne and paid by the Company.
(c) Priority on Underwritten Primary Registration. If a Piggyback
Registration is an underwritten primary registration on behalf of the
Company, and the managing underwriters advise the Company in writing that
in their opinion the total number of shares of Common Stock requested to be
included in such registration exceeds the number of shares of Common Stock
which can be sold in such offering, the Company will include in such
registration:
(i) first, all shares of Common Stock the Company proposes to
sell, and
(ii) second, the Restricted Securities and such other shares
of Common Stock requested to be included in such registration in
excess of the number of shares of Common Stock the Company proposes
to sell which, in the opinion of such underwriters, can be sold
(allocated pro rata among the holders of such Restricted Securities
and other shares of Common Stock on the basis of the number of
shares of Common Stock requested to be included therein by each such
holder).
(d) Priority of Underwritten Secondary Registration. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders
of Common Stock and the managing underwriters advise the Company in writing
that in their opinion the number of shares of Common Stock requested to be
included in such registration exceeds the number of shares of Common Stock
which can be sold in such offering, the Company will include in such
registration:
(i) first, the Restricted Securities requested to be included
in such registration by the Holders and
(ii) second, up to the full number of such other shares of
Common Stock requested to be included in such registration by the
securityholders initiating such registration propose to sell which,
in the opinion of such underwriters, can be sold in excess of the
Restricted Securities.
(e) Selection of Underwriters. If any Piggyback Registration is an
Underwritten Offering, the Company will have the right to select the
investment banker or investment bankers and manager or managers to
administer the offering, which investment banker or bankers shall be major
nationally recognized investment bankers.
SECTION 3. REGISTRATION PROCEDURES
Whenever the Company is required by the provisions of this Agreement
to use its best efforts to effect the registration of any Restricted
Securities under the Act, the Company will, as expeditiously as possible:
(a) Prepare and file with the Commission a Registration Statement
with respect to such Restricted Securities and use its best efforts to
cause such Registration Statement to become and remain effective (provided
that before filing a Registration Statement or Prospectus or any amendments
or supplements thereto, the Company will furnish to counsel for the Holders
copies of all such documents proposed to be filed, which documents will be
subject to the review of such counsel);
(b) Prepare and file with the Commission such amendments and
supplements to such Registration Statement and the Prospectus used in
connection therewith as may be necessary to keep such Registration
Statement effective and to comply with the provisions of the Act with
respect to the sale or other disposition of Restricted Securities covered
by such Registration Statement in accordance with the intended method or
methods of disposition set forth in such Registration Statement;
(c) Furnish to the Holders such number of copies of such
Registration Statement, each amendment and supplement thereto, the
Prospectus included in the Registration Statement (including each
preliminary Prospectus), and such other documents, as the Holders may
reasonably request in order to facilitate the public sale or other
disposition of the Restricted Securities;
(d) Use every reasonable effort to register or qualify all
Restricted Securities covered by such Registration Statement under such
other securities or blue sky laws of such jurisdictions as the Holders
shall reasonably request, and do any and all other acts and things which
may be necessary under such securities or blue sky laws to enable the
Holders to consummate the public sale or other disposition in such
jurisdiction of the Restricted Securities owned by such Holders covered by
such Registration Statement; provided, however, that the Company shall not
be required to (i) qualify to do business as a foreign corporation in any
jurisdiction wherein it would not otherwise be required to qualify but for
this subparagraph, (ii) subject itself to taxation in any such
jurisdiction, or (iii) consent to general service of process in any such
jurisdiction;
(e) Notify the Holders at any time when a Prospectus relating to the
Restricted Securities covered by such Registration Statement is required to
be delivered under the Act, of the happening of any event as a result of
which the Prospectus included in such Registration Statement contains an
untrue statement of a material fact or omits any fact necessary to make the
statements therein not misleading, and at the request of the Holders,
prepare a supplement or amendment to such Prospectus so that, as thereafter
delivered to the purchasers of the securities covered by such Registration
Statement, such Prospectus will not contain an untrue statement of a
material fact or omit to state any fact necessary to make the statements
therein not misleading;
(f) Cause all such securities covered by such Registration Statement
to be listed on each securities exchange on which securities of the same
class are then listed;
(g) Provide a transfer agent and registrar for such securities not
later than the effective date of such Registration Statement;
(h) Enter into such customary agreements (including an underwriting
agreement in customary form) and take all such other actions as the Holders
may reasonably request in order to expedite or facilitate the disposition
of such securities (including, without limitation, effecting a stock split
or a combination of shares);
(i) Make available for inspection by the Holders, any underwriter
participating in any distribution pursuant to such Registration Statement,
and any attorney, accountant or other agent retained by the Holders or such
underwriter, all financial and other records, pertinent corporate documents
and properties of the Company, and cause the Company's officers, directors
and employees to supply all information reasonably requested by the
Holders, such underwriter, attorney, accountant or agent in connection with
such Registration Statement; and
(j) Obtain a "cold comfort" letter from the Company's independent
public accountants in customary form and covering such matters of the type
customarily covered by cold comfort letters.
SECTION 4. INDEMNIFICATION
(a) In the event of any registration of any of its securities under
the Act pursuant to this Agreement, the Company, to the extent permitted by
law, shall indemnify and hold harmless the Holders, each underwriter (as
defined in the Act), each other Person who participates in the offering of
such securities, and each other Person, if any, who controls (within the
meaning of the Act) a Holder, such underwriter or participating Person,
against any losses, claims, damages or liabilities, joint or several, to
which a Holder, such underwriter, participating Person or controlling
Person may become subject under the Act or any other statute or at common
law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any alleged untrue
statement of any material fact contained in (x) any Registration Statement
(on the effective date thereof) under which such securities were registered
under the Securities Act, (y) any preliminary Prospectus or final
Prospectus contained therein, or (z) any summary Prospectus issued in
connection with any securities being registered, or any amendment or
supplement thereto, or (ii) any alleged omission to state in any such
document a material fact required to be stated therein or necessary to make
the statements therein not misleading, and shall reimburse the Holder or
any such underwriter, participating Person or controlling Person for any
legal or other expenses reasonably incurred by the Holder, such
underwriter, participating Person or controlling Person in connection with
investigating or defending any such loss, damage, liability or action;
provided, however, that the Company shall not be liable to a Holder, or any
such underwriter, participating Person, or controlling Person in any such
case to the extent that any such loss, claim, damage or liability arises
out of or is based upon any alleged untrue statement or alleged omission
made in such Registration Statement, preliminary Prospectus, summary
Prospectus, final Prospectus, or amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the
Company by Shareholder, specifically for use therein.
(b) The Holders shall indemnify and hold harmless the Company, its
directors and officers, each underwriter (as defined in the Act), and each
other Person, if any, who controls (within the meaning of the Act) the
Company or any underwriter, against any losses, claims, damages, or
liabilities, joint or several, to which the Company, any such director or
officer, any such underwriter, or any such Person may become subject under
the Securities Act or any other statute or at common law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any alleged untrue statement of any
material fact contained, on the effective date thereof, in any Registration
Statement under which Restricted Securities are registered under the
Securities Act, any preliminary Prospectus or final Prospectus contained
therein, or any summary Prospectus issued in connection with any such
securities being registered, or any amendment or supplement thereto, or (2)
any alleged omission to state in any such document a material fact required
to be stated therein or necessary to make the statements therein not
misleading, in either case to the extent, but only to the extent, that such
alleged untrue statement or alleged omission was made in such Registration
Statement, preliminary Prospectus, summary Prospectus, final Prospectus,
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by the Holders specifically for use
therein, and then only to the extent that such alleged untrue statements or
alleged omissions by the Holders were not based on the authority of an
expert as to which the Holders had no reasonable ground to believe, and did
not believe, that the statements made based on the authority of such expert
were untrue or that there was an omission to state a material fact;
provided, however, that no right of indemnification shall exist under this
Section 4(b) for any alleged untrue statement or alleged omission which the
Holders timely corrected and remained untrue in or omitted from the
relevant Registration Statement or Prospectus as a result of the Company's
failure to correct same therein. Notwithstanding the foregoing provisions
of this Section 4(b), the Holders shall not be required to pay under such
provisions an amount in excess of the proceeds received by the Holders in
payment for the Restricted Securities sold by the Holders pursuant to the
Registration Statement.
(c) Indemnification similar to that specified in Sections 4(a) and
4(b) shall be given by the Company and the Holders of any Restricted
Securities (with such modifications as shall be appropriate) covered by any
registration or other qualification of securities under any federal or
state securities law or regulation other than the Act with respect to any
such registration or other qualification effected pursuant to this
Agreement.
(d) Any Person which proposes to assert the right to be indemnified
under Sections 4(a), 4(b) or 4(c) shall, promptly after receipt of notice
of commencement of any action, suit or proceeding against such Person in
respect of which a claim is to be made against an indemnifying Person under
such Section 4(b), 4(b) or 4(c) notify each such indemnifying Person of the
commencement of such action, suit or proceeding, enclosing a copy of all
papers served. The indemnifying Person shall be entitled to participate in
and, to the extent such indemnifying Person may wish, to assume the defense
of such action at its own expense, with counsel chosen by it and reasonably
satisfactory to the Person claiming indemnification, and after notice from
the indemnifying Person of its election to assume the defense thereof the
indemnifying Person will be liable to the Person claiming indemnification
only for legal fees and expenses incurred by the Person claiming
indemnification prior to the date upon which such Person received notice
that the indemnifying Person had chosen to assume the defense of such
action (including any costs incurred subsequent to that date relating
solely to organization or clean-up of work performed prior to such date).
The Person claiming indemnification shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but
the fees and expenses of such counsel shall not be at the expense of the
Person against whom indemnification is sought; provided, however, that
notwithstanding the foregoing, in any case when indemnification is sought
against the Company and (i) the Person seeking indemnification has been
advised by counsel to the Company that its defenses may be different from
those of the Company and that such counsel cannot represent both it and the
Company due to a conflict of interest, or (ii) the Company has not
proceeded in a timely manner to effect such defense, then the fees and
expenses of counsel for such Person shall be paid by the Company. In no
event shall a Person against whom indemnification is sought be obligated to
indemnify any Person for any settlement of any claim or action effected
without the indemnifying Person's consent.
(e) The indemnification provided for under this Section 6 will
remain in full force and effect regardless of any investigation made by or
on behalf of the indemnified party or any officer, director or controlling
Person of such indemnified party and will survive the transfer of
Restricted Securities.
(f) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 4
is for any reason held to be unavailable to an indemnified party under
Sections 4(a), 4(b) or 4(c) above in respect to any losses, claims, damages
or liabilities referred to therein, then each applicable indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to
the amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities in such proportion as is appropriate
to reflect the relative fault of the parties in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities. The relative fault of a party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by such party and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party
as a result of the losses, claims, damages and liabilities referred to
above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or
defending any action or claim. Notwithstanding the provisions of this
Section 4, the Holders shall not be required to contribute any amount in
connection with any Registration Statement in excess of the proceeds
received by the Holders pursuant to such Registration Statement.
SECTION 5. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Person may participate in any Underwritten Registration hereunder
unless such Person (i) agrees to sell such Person's securities on the basis
provided in any underwriting arrangements approved by the Persons entitled
hereunder to approve such arrangements and (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements
and other documents reasonably required under the terms of such
underwriting arrangements.
SECTION 6. ASSIGNABILITY OF REGISTRATION RIGHTS
The registration rights set forth in this Agreement shall accrue to
each subsequent Holder of Issued Stock or Restricted Securities who
consents in writing to be bound by the terms and conditions of this
Agreement.
SECTION 7. GRANT OF SUBSEQUENT REGISTRATION RIGHTS
So long as Shareholder has not sold all shares of Issued Stock, the
Company may not grant registration rights to subsequent investors in the
Company unless such rights are not senior to the rights of the Holders or
the grant of such rights is consented to by the Holders.
SECTION 8. SEVERABILITY
Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the
remainder of this Agreement.
SECTION 9. RULE 144
At the written request of Shareholder in compliance with Rule 144
promulgated by the Commission under the Act, the Company shall furnish to
the Holders, within ten days after receipt of such request, a written
statement as to whether or not the Company is in compliance with the filing
requirements of the Commission as set forth in such Rule.
SECTION 10. DESCRIPTIVE HEADINGS
The descriptive headings of this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.
SECTION 11. NOTICES
All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be given or made (and shall be
deemed to have been duly given or made upon receipt or refusal upon
presentation) by delivery in person, by courier service, by cable, by
telecopy, by telegram, by telex or by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be
specified in a notice given in accordance with this Section 11):
(a) if to the Shareholder:
SFMT-China, Inc.
c/o Global TeleSystems Group, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxx, 00xx Xxxxx
XxXxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxx, General Counsel
(b) If to the Company:
AmTec, Inc.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X'Xxxxx, General Counsel
SECTION 12. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, applicable to contracts executed in and
to be performed entirely within that state. Any claim or dispute arising
out of or relating to this Agreement which is not settled by the parties
within sixty days after notice thereof is first given by either party to
the other shall be finally settled under the Commercial Rules of the
American Arbitration Association. The arbitration shall be conducted in the
City of XxXxxx, Virginia.
SECTION 13. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which shall together
constitute one and the same instrument.
SECTION 14. HEADINGS
The headings used herein are solely for the convenience of the
parties and shall not serve to modify or interpret the text of the Sections
at the beginning of which they appear.
[Remainder of this page is intentionally blank.]
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
AMTEC, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
----------------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Chairman, Chief Executive Officer
and President
SFMT-CHINA, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
August 26, 1998
Global TeleSystems Group, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxx, 00xx Xxxxx
XxXxxx, Xxxxxxxx 00000
Re: Purchase and Sale of Interests of SFMT-China in V-Tech
Ladies and Gentlemen:
We refer to that certain Purchase Agreement by and among SFMT-China,
Inc., AmTec Hebei Telecom Holdings, Ltd. and AmTec Inc. dated August 26,
1998 (the "Purchase Agreement"). Capitalized terms used herein but not
otherwise defined shall have the meaning ascribed to them in the Purchase
Agreement.
As further inducement for AmTec and Purchaser to enter into the
Agreement, GTS has agreed to be obligated to take the actions set forth in
this letter (the "Letter Agreement"). Therefor, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties agree as follows:
1. Future Projects- For a period of two years after the Closing,
GTS, and its Affiliates will not pursue any New Communications
Project in China without first offering Purchaser or an Affiliate
of Purchaser (including AmTec) the option to participate in such
project to the extent of 49% of GTS's or its Affiliate's
participation in such project and on terms substantially
equivalent to that of GTS or its Affiliates, subject to any grant
of similar rights which GTS or its Affiliates made prior to the
Closing Date. "New Communications Project" shall mean any joint
venture now existing or organized after the Closing Date for the
primary purpose of investing in or providing financing,
operational consulting, technical and engineering services to any
telecommunications network owner or operator in The People's
Republic of China.
2. GTS agrees to be bound by the terms and provisions of Section 5.5
of the Purchase Agreement regarding certain consulting services
to be provided to Purchaser.
This Letter Agreement shall be governed by and construed in accordance
with the laws of the State of New York and may be executed in counterparts
by the parties hereto, each of which counterparts shall be an original and
all of which taken together shall constitute one and the same Letter
Agreement.
Very truly yours,
AmTec, Inc.
By:_____________________________________
Name: Xxxxxxx X. Xxx
Title: Executive Vice President
AmTec Hebei Telecom Holdings, Ltd.
By:_____________________________________
Name: Xxxxxxx X. Xxx
Title: President
Agreed and accepted this ___
day of August, 1998 by:
Global TeleSystems Group, Inc.
By:___________________________
Name:
Title:
