EXHIBIT 10.16
SHARE EXCHANGE AGREEMENT
THIS AGREEMENT is made and entered into this day of December, by
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and between the undersigned Sellers (hereinafter collectively referred to as
"Sellers"), the undersigned persons, and GLOBALTEL RESOURCES, INC. (hereinafter
referred to as "Purchaser"), who agree to the following, including the Recitals.
RECITALS
A. Sellers directly or indirectly own 1,080,000 shares of the voting common
stock of GFP GROUP, INC., a Washington corporation (the "Stock"), which are
all the issued and outstanding shares of the capital stock of GFP GROUP,
INC. (the "Company"). The Company is the sole shareholder of Ratsten
International Telecommunications, Inc. ("Ratsten").
B. Purchaser desires to purchase, and the Sellers desire to sell, all of the
Stock, subject to the terms and conditions of this Agreement.
AGREEMENT
1. SALE AND PURCHASE OF STOCK.
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Sellers agree to sell, and Purchaser agrees to buy, the Stock.
2. STOCK EXCHANGE.
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Purchaser shall purchase the Stock by exchanging one (1) share of
Purchaser's voting common stock for each share of Sellers' Stock.
3. CLOSING.
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"Closing" shall occur at a time convenient to the parties, provided
that all conditions to Closing set forth in this Agreement will have been
satisfied, and further provided that Closing will occur not later than December
29, 1995, unless the parties agree in writing to an extension of that date.
Closing will take place at the offices of Xxxxxxxxx Xxxxxxx & Xxxxxxx, 3200
Columbia Seafirst Center, Seattle, Washington, or at such other time and place
as is mutually agreeable to Purchaser and Sellers. Closing shall be effective
as of 12:01 a.m., December 29, 1995 (the "Effective Date"). At Closing,
Purchaser shall be entitled to take possession of all assets of the Company.
Sellers covenant to take all action reasonably necessary to put Purchaser in
such position at the time of Closing, including without limiting the same:
(a) Endorsing and delivering to Purchaser certificates or assignments
separate from certificates, in form acceptable to Purchaser, representing the
Stock. of the Company;
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(b) Delivery of the corporate minute books and stock record books of
the Company and Ratsten, financial records, and such other books, papers arid
records of the Company and Ratsten as relate to its assets and operations;
(c) A general release of all claims which the Sellers and Xxxxxx X.
Xxxxxxxx, German Xxxxxxxxx, and Xxxxx Xxxxxxxxx may have through the Closing
Date against the Company and Ratsten, except those obligations set forth in
those agreements described on Exhibit A attached hereto and incorporated herein
by this reference.
At Closing, Purchaser shall deliver to the Sellers stock certificates
representing the proper shares of Purchaser's common stock that are due under
the terms of paragraph 2 hereof.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLERS.
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Sellers hereby represent and warrant to Purchaser and covenant and
agree as follows:
(a) Organization of Company; Documents. The Company, is a corporation
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duly organized, validly existing and in good standing under the laws of the
State of Washington. The Company has full power and lawful authority to own, or
to hold under lease, all of its assets. True copies of the Articles of
Incorporation, Bylaws, minutes of all directors' and shareholders' meetings, and
consent resolutions of the directors and shareholders of the Company, as
amended, have been provided to Purchaser.
(b) Organization of Ratsten; Documents. Ratsten is a corporation duly
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organized, validly existing and in good standing under the laws of the State of
California. Ratsten has full power and lawful authority to own, or to hold
under lease, all of its assets. True copies of the Articles of Incorporation,
Bylaws, minutes of all directors' and shareholders' meetings, and consent
resolutions of the directors and shareholders of Ratsten, as amended, have been
provided to Purchaser.
(c) Authorization of Agreement. This Agreement constitutes a valid
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obligation, legally binding upon Sellers in accordance with its terms. The
execution and delivery of this Agreement and the consummation of the transaction
do not and will not result in any breach of, or default under, or require the
consent of any third party under, any agreement, license or instrument,
undertaking, or obligation of Sellers, the Company, or Ratsten, or under any
judgment, order, or decree to which they are subject. Neither the execution of
this Agreement nor the consummation of the transactions provided for hereunder
requires the consent or approval of governmental authority having jurisdiction
over the business of the Company or Ratsten, or of any party to party to any
agreement with the Company or Ratsten, or with any Seller, as a condition to the
continuance of the Company's or Ratsten's conduct of its business after the
Closing or with that party.
(d) Stock Ownership. The Company's entire authorized and issued or to
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be issued capital stock consists of 1,250,007 shares of common stock. There
are not now, and will not be at the Closing date, any outstanding subscriptions,
options, rights, warrants,
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convertible shares, debts or other agreements or commitments obligating the
Company to issue any other shares of its capital stock, except as may be set
forth on EXHIBIT A, and including 62,500 shares to be issued to Purchaser.
Except as may be set forth on EXHIBIT A, now and at Closing, the lawful,
beneficial and record owners of each share of the Stock are and will be:
Xxxxx Street Family L.P......................... 270,000 shares
North Willow Family L.P......................... 270,000 shares
Sirius International Telecommunications......... 500,000 shares
a California General Partnership
[or German Xxxxxxxxx and Xxxxx Xxxxxxxxx, individually as former general
partners]
Xxxxx Xxxx...................................... 25,000 shares
Xxxxxx Xxxxxx................................... 15,000 shares
Sellers own the Stock free and clear of all restrictions, liens, Security
interests, hypothecations, pledges and encumbrances of every kind and nature
whatsoever. Sellers have and will have full legal power and authority to
transfer and to deliver to Purchaser the Stock such that Purchaser will be the
absolute owner of the Stock, free and clear. There are no restrictions in the
Articles of Incorporation, Bylaws or other corporate documents against the free
transferability of the Stock, except for (1) shareholder agreements, agreements
to sign shareholder agreements for the Company's shares, or (2) shareholder
preemptive rights given to Ratsten's shareholders in Section 6.7 of Ratsten's
Bylaws. The Company does not own any capital stock of any other corporation or
any interest in any partnership or joint venture other than Ratsten.
The Company owns the stock of Ratsten free and clear of all restrictions,
liens, security interests, hypothecations, pledges and encumbrances of every
kind and nature whatsoever. GFP Group, Inc. has and will have full legal power
and authority to transfer and to deliver the Company's shares in Ratsten so that
the transferee will be the absolute owner of the Ratsten shares, free and clear.
There are no restrictions in the Articles of Incorporation, Bylaws, or other
corporate documents against the free transferability of the. stock. Ratsten
does not own any capital stock of any other corporation or interest in any
partnership or joint venture.
(e) Financial Information. Sellers certify that they have provided
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Purchaser with such unaudited balance sheets, income statements, corporate
records and documents material to the operation of the Company's business and
the business of Ratsten (hereinafter collectively referred to as the "Financial
Information") as necessary to accurately show the Company's and Ratsten's
financial condition. All of the Financial Information is true and accurate, has
been taken from the Company's books of account, was prepared in accordance with
generally accepted accounting principles applied on a consistent basis, and to
the best of Seller's knowledge does not omit any information which would make
the Financial Information materially misleading.
(f) Liabilities. All Company and Ratsten liabilities arise under the
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agreements shown on EXHIBIT A. Neither the Company nor Ratsten has yet filed
tax returns.
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(g) Title to Assets. The Company and Ratsten have good and marketable
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title to all of the assets disclosed in the Financial Information, free and
clear of all mortgages, liens, pledges, security interests, charges and
leasehold interests, except for general liens for property taxes and
encumbrances disclosed in the Financial Information.
(h) Compliance with Law. The Company and Ratsten and the business which
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they operate now comply and will, as of the Closing date, comply in all material
respects with all applicable federal and state law, and all rules, regulations
and orders of local governing authorities. Neither Sellers, the Company, nor
Ratsten have received any notice with which they have not complied from any
governmental authority or agency or from any insurance or inspection body
stating that the Company, Ratsten, or their business, or any of their
properties, facilities or the assets, fail or may fail to comply with any
applicable law, ordinance, regulation, building or zoning law, or requirements
of any public authority or body, including but not limited to environmental laws
and regulations.
The conduct of the Company's and Ratsten's business is not dependent on any
governmental or private license, permit, or other authorization that has not
been obtained and furnished to Purchaser, and the consummation of the
transaction contemplated by this Agreement will not terminate or adversely
affect any such license, permit, or authorization.
The Company (GFP Group, Inc.) and its Ratsten subsidiary will be relying on
Purchaser's existing FCC 214 license to operate the MFS and GM-AX switches as
contemplated by the parties.
(i) Litigation and Claims. There is no pending or threatened suit, action
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or litigation, administrative, arbitration or other proceeding or governmental
investigation or inquiry to which the Company, Ratsten, or their assets, the
business of the Company, or Ratsten, or Sellers are a party or subject. Neither
the Company nor Ratsten nor the Sellers are in default with respect to any
decree, order, judgment, or injunction of any court or governmental or quasi-
governmental board, agency, or instrumentality. The. Company and Ratsten have
complied with and at Closing will be in compliance in all material respects with
all laws, regulations, and orders applicable to its business and property. No
stockholder, officer, or employee of the Company has any claim of any nature
against the Company, or Ratsten, except as described on EXHIBIT A.
(j) Employees. The Company and Xxxxx X. Xxxxxx, Xxxxxx X. Xxxxxxxx, German
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Xxxxxxxxx and Xxxxx Xxxxxxxxx are not now and at Closing will not be in default
of their obligations under the employment agreements, and those agreements shall
be freely assignable to and enforceable by Purchaser for its own account at
Closing, or enforceable by the Company if no such assignment is made. Those
agreements will not be amended, modified, or terminated in any respect prior to
the Closing Date except with the prior written consent of Purchaser. After
Closing, the Purchaser shall fulfill all of the Company's obligations under the
employment agreements as required by Section 6.(d) below.
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There are no other employees of the Company or Ratsten. The Company and
Ratsten have no other obligation, contractual or otherwise, to their employees,
except for compensation required by the agreements shown on EXHIBIT A. Neither
Sellers, the Company, nor Ratsten have taken any actions with respect to any
employee which would give rise to any claims of discrimination on the basis of
age, sex, race, disability or any other status protected by federal or local
law, any violation of the Fair Labor Standards Act, or any other state or
federal law related to the rights of employees.
(k) Assets in Good Operating Condition. To Sellers' knowledge all of the
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operating assets of the Company, and Ratsten are in good operating condition and
repair. Through the Effective Date, the Company shall maintain adequate
insurance with respect to all risks normally insured against by it in the past
or by companies similarly situated.
(l) Scitor ITS License Agreement. A true copy of the agreement dated April
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28, 1995 between Scitor International Telecommunications Services, Inc.
("Scitor") and Ratsten International Telecommunications, Inc. d/b/a/ Netstar
International Telecommunications, Inc., a wholly owned subsidiary of the Company
(the "Scitor Agreement") is attached as EXHIBIT X. Xxxxxxx expressly warrant and
represent to Purchaser that under the Scitor Agreement, the Company and Ratsten
have, and after Closing will continue to have, the right to purchase, lease,
install, operate, and maintain IT Group MFS-400 and GMAX switches to provide fax
and various data services to third parties, as defined in the Scitor Agreement,
and that the prohibition against resale of the "Service" in paragraph 2.1
thereof only prohibits the Company and Ratsten from reselling its wholesale
rights to use the Service in specific "Locations" (as defined in the Scitor
Agreement) to third parties.
To the best of Sellers' knowledge, the Scitor Agreement is now and at
Closing will be in full force and effect and enforceable by Ratsten in
accordance with its terms. To the best of Sellers' knowledge, Scitor is not now
in default of its obligations to Ratsten under the Scitor Agreement.
Ratsten is required between December 14, 1995 and December 31, 1995, to pay
Scitor ITS an additional estimated $32,000 in relation to the GMAX nodes leased
in Mexico City, Hong Kong, and Los Angeles, and for related installation,
maintenance, and leased line port charges. Purchaser agrees to advance to or
through the Company funds prior to Closing to make these payments to maintain
the Scitor contract.
The Company and Ratsten are not now and at Closing will not be in default
of any of its obligations under the Scitor Agreement other than to make the
$32,000 in payments required between December 14, 1995 and December 31, 1995.
There is not now and at Closing will not be any basis in fact or at law for
amendment, modification, or termination of the Scitor Agreement by any party,
other than voluntary amendments or termination resulting from expiration of the
term stated in the Scitor Agreement. The execution of this Agreement and the
consummation of the transactions contemplated by this Agreement will not
terminate, invalidate, amend, or otherwise affect the Scitor Agreement in any
respect, and the Scitor Agreement will remain in full force and effect following
Closing. Purchaser acknowledges that the Company is negotiating amendments and
supplements
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to the Scitor Agreement which may, among other changes (1) substitute the
Company for Ratsten International Telecommunications, Inc. d/b/a Netstar
International Telecommunications, Inc. as the Customer, (2) provide that
financing for MFS-400 switches will be provided by third parties, and that
Scitor may no longer be providing financing for additional GM-AX switches as
such financing will also be provided by third parties, (3) add an additional 41
cities for initial MFS/GMAX switch roll-out; and (4) change the base agreement
term from five years to ten years prior to "tail" add-on of five years.
(m) Conduct Pending Closing. The Company's and Ratsten's business will be
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conducted in the ordinary course from the date of this Agreement to Closing.
(n) Environmental Liability. Neither the Company, Ratsten, nor Sellers have
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caused or permitted the Company Ratsten to generate, manufacture, store, handle,
dispose, transfer, produce, or process "hazardous substances" or other dangerous
or toxic substances, except in compliance with all federal, state or local
regulations. To the best of Sellers' knowledge, there is no presence of, nor
has there been any release of, any "hazardous substances" in the Company's or
Ratsten's premises or off-site of the premises which might affect said premises.
Sellers have no knowledge or reason to know of any prior ownership or use of the
Company's or Ratsten's premises which would indicate that "hazardous substances"
may have been generated, manufactured, transported, stored, handled, released or
disposed of upon the Company's or Ratsten's premises or off-site of the
Company's or Ratsten's premises which might affect said premises, except in full
compliance with all federal, state and local law. For purposes hereof,
"hazardous substances" shall have the meaning specified in RCW 70.105D and the
Model Toxics Control Act.
(o) Investigation and Access. During the period from the date hereof to
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Closing, Sellers shall cause Purchaser and its agents to have free access to the
Company's and Ratsten's premises, offices, records, files, books of account,
copies of tax returns and retirement plan returns of the Company and Ratsten.
Sellers shall cause the Company's. and Ratsten's personnel to aid and assist
Purchaser in reviewing the operations and records of the Company and Ratsten.
(p) Contracts. Except for the Scitor Agreement and the agreements described
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in EXHIBIT A, the Company and Ratsten are not parties to any other agreements,
contracts, undertakings, or leases of real or personal property. Those
agreements described in EXHIBIT A are now and at Closing will be in full force
and effect, and none of the parties to those agreements are now in default of
their obligations under that agreement. None of the parties hereto has waived
any rights under those agreements, and none of the parties hereto shall be in
default thereof at Closing.
(q) Restrictions on Purchaser's Stock. Sellers acknowledge and agree that
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the shares of Purchaser's common stock to be conveyed to them under this
Agreement ("Shares") have not been registered under the federal Securities Act
of 1933, as amended, or under the Washington State Securities Act or under any
other applicable securities acts (the "Acts"), and that Sellers must therefore
hold the Shares indefinitely unless they are
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subsequently registered under the Acts or an exemption from such registration is
available. Sellers agree that Purchaser is under no obligation to register the
Shares or to take any other action which would make an exemption from
registration available; and Purchaser is under no obligation to cause or permit
the Shares to be transferred in the absence of such registration or an opinion
satisfactory to Purchaser's counsel that an exemption is available. Sellers
acknowledge and agree that the Shares will also be subject to a shareholders'
agreement or bylaw restrictions which will impose further restrictions upon the
transferability of the Shares. The certificates representing the Shares will
have a legend similar to the following placed on them:
This stock has not been registered under the Securities Act of 1933, as
amended, or any state securities law. It may not be sold or otherwise
transferred unless registered under applicable federal or state securities
laws or the Company issuing the stock is furnished with an opinion of
counsel acceptable to it that an exemption from registration is available.
This stock is also subject to certain restrictions set forth in a
shareholders' agreement or the bylaws of GlobalTel Resources, Inc., and may
not be sold or transferred except in compliance therewith.
After Closing, transfer of shares in Purchaser shall be restricted by a
provision in Purchaser's Bylaws or Articles of Incorporation consistent with the
provisions set forth on EXHIBIT C. The Bylaws or Articles shall provide that the
restriction may not be changed except by vote of the holders of at least two-
thirds of the issued and outstanding shares of the Purchaser.
(r) Broker. The Purchaser is entitled at closing to 62,500 shares of the
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Company as a finder's fee for the Company's acquisition of Ratsten. The Sellers
have not employed any other broker, finder, or agent, nor otherwise become in
any way obligated for any broker's, finder's or agent's, or similar fee with
respect to the transaction contemplated by this Agreement.
(s) Absence of Certain Events, Circumstances, Etc. Since September 1,
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1995, the Company and Ratsten have not (1) incurred any obligation or liability,
whether absolute or contingent, except obligations and liabilities incurred in
the ordinary course of the Company's or Ratsten's business; (2) discharged or
satisfied any lien or encumbrances or paid any obligation or liability whether
absolute or contingent, other than current liabilities having become due and
payable since that date in the ordinary course of the Company's or Ratsten's
business and obligations and liabilities under contracts referred to in the
exhibits annexed hereto; (3) made or agreed to make any wage, salary, or
employee benefit increases for full-time employees (4) sold or transferred any
of its tangible or intangible assets or canceled any debts or claims, except, in
each case, in the ordinary course of business; (5) sold, assigned, or
transferred any trademark or trade name; (6) suffered any losses that would have
a materially adverse effect on the business or financial condition of the
Company or waived any rights of substantial value; (i) suffered any loss,
damage, or destruction to any of its properties due to fire or other casualty
whether or not insured, which loss, damage, or destruction materially and
adversely affects its business, properties or operations; (8) issued or sold or
agreed to issue
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or sell any shares of its capital stock or any other securities or reclassified
or agreed to reclassify its capital stock except as shown on EXHIBIT A; (9)
mortgaged, pledged, or subjected to lien, charge or other encumbrance any of its
tangible or intangible assets, except the lien of current real and personal
property taxes not yet due and payable or purchase money or similar liens
incurred in the ordinary course of business; (10) made or agreed to make capital
expenditures, except as shown on the financial statements plus additional
corporate expenditures not to exceed $5,000; (11) declared or paid a dividend or
transferred property or loaned any money or agreed to loan money to any of its
directors or officers; (12) amended its Articles of Incorporation or Bylaws;
(13) conducted its business otherwise than in its ordinary and usual manner; or
(14) become aware of any event, transaction, or circumstance which does or could
materially adversely affect is condition (financial or otherwise), assets,
liabilities, earnings, business, or operations.
(+) Disclosure. This Agreement does not contain any untrue statement of
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any material fact or omits to state any material fact required to be stated in
order to make the statements contained in this Agreement not misleading. To the
best knowledge of Sellers, there is no fact which materially adversely affects,
or in the future may (so far as Sellers can now reasonably foresee) materially
adversely affect, the business or prospects or condition (financial or
otherwise) of the Company or Ratsten or any of their properties or assets, which
fact has not been disclosed in writing to Purchaser prior to the effective date
of this Agreement.
Xxxx X. Xxxx and Xxxx Xxx have fully participated in many of the meetings
with Scitor ITS and are fully aware of the Scitor ITS relationship with the
Company and its Ratsten subsidiary.
All representations and warranties of Sellers contained in this Agreement
shall be true as of the date of Closing. All of the above representations,
warranties, and covenants survive the Closing of this transaction for the
benefit of Purchaser.
5. INDEMNIFICATION BY SELLERS.
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Sellers, their successors and assigns, jointly and severally, shall
indemnify, defend and hold Purchaser harmless from any and all losses, claims,
damages or liabilities suffered by Purchaser as a result of:
(a) The failure of any representation or warranty of Sellers contained in
this Agreement to be true and accurate when made on and as of Closing;
(b) The failure of Sellers to comply with any obligations, agreements or
covenants contained in this Agreement;
(c) The conduct of the business of the Company and Ratsten prior to the
Effective Date; and
(d) Any accounts payable, liabilities, debts, taxes, leases or other
obligations arising with respect to any period prior to the Effective Date or
with respect to the
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Equipment which are not disclosed in the Financial Information or otherwise
disclosed in this Agreement.
Sellers, their successors and assigns, shall reimburse Purchaser for any
legal or other expense reasonably incurred by Purchaser in connection with any
loss, claim, damage or liability indemnified hereby. This indemnification shall
benefit and inure to the successors and assigns of Purchaser, including the
Company, and shall survive the Closing. In the event Purchaser, its successors
or assigns, believes it is entitled to indemnification hereunder, it shall give
Sellers written notice of the basis for the claim for indemnification. If
Sellers have not discharged or satisfied the claim raised by Purchaser within
thirty (30) days from Purchaser's mailing of such notice, then Purchaser may
proceed to collect the amount of the claim through any manner it chooses.
6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER.
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Purchaser hereby represents and warrants to Sellers, and covenants and
agrees as follows:
(a) Organization of Purchaser. Purchaser is a corporation duly organized,
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validly existing and in good standing under the laws of the State of Washington.
Purchaser has full power and lawful authority to purchase the Stock.
(b) Authorization of Agreement. This Agreement constitutes a valid 1
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obligation, legally binding upon Purchaser in accordance with its terms, and the
execution and delivery of this Agreement and the consummation of this
transaction (1) are permissible under the Purchaser's Articles of Incorporation
and Bylaws; (2) have been or will have been validly authorized by the directors
and shareholders of Purchaser by Closing; (3) does not and will not result in
any breach of or default under any agreement, license or other obligation of
Purchaser; and (4) will not violate any law, rule or regulation of any agency or
governmental body.
(c) Purchaser's Stock. Purchaser certifies that it owns sufficient numbers
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of common shares of its stock to exchange with Sellers for their shares of the
Company's Stock on a one-for-one basis. Purchaser owns this stock free and
clear of all restrictions, liens, security interests, hypothecations, pledges
and encumbrances of every kind and nature whatsoever. Purchaser has and will
have full legal power and authority to transfer and deliver to Sellers the stock
such that Sellers will be the absolute owner of the stock, free and clear.
There are no restrictions in the Articles of Incorporation, Bylaws or other
corporate documents against the free transferability of Purchaser's stock.
(d) Assumption of Rights and Performance of Liabilities. After Closing,
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Purchaser shall have the rights and shall perform, or cause the Company to
perform, the obligations of Purchaser set forth in the documents described in
EXHIBIT A attached hereto, including but not limited to, the following:
(1) The obligations of the Company under each of the employment or
management agreements with the following individuals as listed on the EXHIBIT A:
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German Xxxxxxxxx, Xxxxx Xxxxxxxxx, Xxxxxx X. Xxxxxxxx, and Xxxxx X. Xxxxxx.
Where these employment agreements call for the employees to be officers of the
Company, the Purchaser agrees that they shall have the same office in the
Purchaser with the same salary and benefits paid by the Purchaser. To the
extent that the employment agreements require the issuance of shares to the
employees, Purchaser agrees to issue shares to the employee in lieu of shares in
the Company on a one-for-one basis.
(2) The Purchaser agrees to perform all obligations of the Company to
Xxxxxxxxx and Xxxxxxxxx as set forth in the Acquisition and Management Agreement
for GFP Group, Inc., Xxxxx Xxxxxxxxx and German Xxxxxxxxx signed on October 10,
1995, a copy of which is attached hereto as EXHIBIT D ("Acquisition and
Management Agreement"). Where the agreement calls for Xxxxxxxxx and Xxxxxxxxx
to be officers of the Company, the Purchaser agrees that each shall have the
same office in the Purchaser with the same salary and benefits paid by the
Purchaser. To the extent that the agreement requires the issuance of shares to
the employees, Purchaser agrees to issue shares to Xxxxxxxxx and Xxxxxxxxx in
lieu of shares in the Company on a one-for-one basis. The Purchaser agrees that
Xxxxxxxxx and Xxxxxxxxx shall be vice presidents of Purchaser of equal rank, and
with the same pay packages, benefits, and stock ownership as Xxxx Xxxx and Xxxx
Xxx at Closing, except as noted in Section 6.(d)(9).
(3) As required by the Acquisition and Management Agreement described
in Section 6.(d)(2) above, Purchaser shall at Closing have a seven-member Board
of Directors. Xxxxxxxxx and Xxxxxxxxx shall have the right to serve as director
in alternate years and to nominate one additional director. For 1995, Xxxxx
Xxxxxxxxx shall be the director. During 1996, German Xxxxxxxxx shall be the
director. The alternate director to be nominated by Xxxxxxxxx and Xxxxxxxxx for
the first year shall be Xxxxxx Xxxxxx. Purchaser reserved the right to require
a different alternate director to be nominated by Xxxxxxxxx and Xxxxxxxxx in the
event that Purchaser deems it in the best interest of Purchaser's business.
(4) Purchaser shall issue 1,250,007 shares to the group of
individuals. comprised of the former shareholders in GFP Group, Purchaser, and
those individuals who provided bridge financing to the Company as shown on
EXHIBIT A. Purchaser agrees that, as of Closing, there shall be only one class
of stock in Purchaser which shall be voting common. Purchaser shall issue
shares in Purchaser to the holders of the bridge loans as shown on Exhibit A
even if no corresponding shares in the Company have been issued to the bridge
loan holders. The issuance of the shares in Purchaser shall be in full
satisfaction of the obligation of the Company to issue shares in the Company to
the bridge loan holders. Purchaser may issue the shares to the bridge loan
holders after closing.
(5) Purchaser shall loan Xxxxxxxxx $35,500 and Xxxxxxxxx $14,500 to
repay personal loans, upon presentation of documents evidencing such loans and
the outstanding balance of each, as required by the Acquisition and Management
Agreement.
(6) Purchaser shall pay up to $30,000 to repay persons who advanced
funds to Xxxxxxxxx and Xxxxxxxxx for Ratsten operations as shown on EXHIBIT D to
the Acquisition and Management Agreement.
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(7) Purchaser shall make cash payments to GFP Group or any lender to
GFP Group sufficient to repay working capital provided to and by GFP as part of
its acquisition and operation of Ratsten. Purchaser shall also pay all of GFP's
and Ratsten's costs and expenses in negotiating and obtaining GFP's acquisition
of the Ratsten contract and the acquisition of the GFP Group, Inc.'s shares by
Purchaser.
(8) Purchaser agrees that as of Closing, all existing shareholder
agreements, voting trusts, stock options, or similar agreements among Purchaser
and its current shareholders shall be terminated and of no further force and
effect. Instead, Purchaser's Bylaws shall be amended as of closing as set forth
on Exhibit C to restrict transfer of shares in Purchaser. The restriction may
not be changed without the affirmative vote of the holders of at least two-
thirds of the issued and outstanding shares in Purchaser.
(9) Purchaser agrees at Closing to escrow 184,000 shares of the shares
reserved for the Purchaser's ISOP until confirmation of the ownership by Xxxx
Xxxx'x family and by Xxxx Xxx'x family of all or a portion of the 184,000 shares
of Purchaser held in Chin's or Lew's name alone. Upon confirmation of the
number of shares actually held by Xxxx Xxxx and Xxxx Xxx individually,
sufficient numbers of the shares held in escrow pursuant to this section shall
be made available to Xxxxx Xxxxxxxxx and German Xxxxxxxxx so that each may
purchase through Purchaser's ISOP a number of additional shares of Purchaser so
that Krentzman, Burtscher, Chin and Lew have an equal number of shares in
Purchaser.
(e) Financial Information. Purchaser certifies that Purchaser has provided
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Sellers with such balance sheets, income statements, corporate records and
documents material to the operation of the Purchaser's business (hereinafter
collectively referred to as the "Financial Information") as necessary to
accurately show the Purchaser's financial condition. All of the Financial
Information is true and accurate, has been taken from the Purchaser's books of
account, was prepared in accordance with generally accepted accounting
principles applied on a consistent basis, and to the best of Purchaser's
knowledge does not omit any information which would make the Financial
Information. materially misleading.
(f) Liabilities. The Financial Information, when delivered to Sellers
-----------
accurately discloses, reserves against, or accrues all liabilities of the
Purchaser, including but not limited to accounts payable, taxes, debts,
obligations, leases, employment related obligations, fringe benefits, employment
taxes and contributions to industrial or unemployment insurance funds, or any
other indebtedness or leasehold interest of any nature associated with the
assets, the Purchaser, or the business of the Purchaser. The amounts set forth
as liabilities for taxes on the Purchaser's financial statements will be
sufficient for the payment of all federal, state, county, local or foreign taxes
of the Purchaser which are or may become payable by the Purchaser. Any other
liabilities of the Purchaser not set forth in the Financial Information are set
forth on EXHIBIT E attached hereto. The Purchaser has filed all federal, state,
county, local and foreign income, excise, corporate license or franchise,
property, sales or retail occupation taxes and other tax returns required to be
filed by it, and such returns are true and correct.
11
(g) Title to Assets. The Purchaser has good and marketable title to all of
---------------
the assets disclosed in the Financial Information, free and clear of all
mortgages, liens, pledges, security interests, charges and leasehold interests,
except for general liens for property taxes and encumbrances disclosed in the
Financial Information.
(h) Compliance With Law. The Purchaser and the business which the
-------------------
Purchaser operates now comply and will, as of the Closing date, comply in all
material respects with all applicable federal and state law, and all rules,
regulations and orders of local governing authorities. Neither Purchaser nor
the Purchaser have received any notice with which they have not complied from
any governmental authority or agency or from any insurance or inspection body
stating that the Purchaser or its business, or any of its properties, facilities
or the assets, fail or may fail to comply with any applicable law, ordinance,
regulation, building or zoning law, or requirements of any public authority or
body, including but not limited to environmental laws and regulations. The
conduct of the Purchaser's business is not dependent on any governmental or
private license, permit, or other authorization that has not been obtained and
furnished to Purchaser, and the consummation of the transaction contemplated by
this Agreement will not terminate or adversely affect any such license, permit,
or authorization.
(i) Litigation and Claims. There is no pending or threatened suit, action
---------------------
or litigation, administrative, arbitration or other proceeding or governmental
investigation or inquiry to which the Purchaser or its assets, the business of
the Purchaser or Purchaser are a party or subject. Neither the Purchaser nor
the Purchaser are in default with respect to any decree, order, judgment, or
injunction of any court or governmental or quasi-governmental board, agency, or
instrumentality. The Purchaser has complied with and at Closing will be in
compliance in all material respects with all laws, regulations, and orders
applicable to its business and property. No stockholder, officer, or employee
of the Purchaser has any claim of any nature against the Purchaser.
(j) Employees. The Purchaser has disclosed and provided Sellers with
---------
copies of the written employment contracts entered into by Purchaser with Xxxx
Xxxx and Xxxx Xxx, which as of the date of this Agreement are the only written
employment contracts Purchaser has entered into with any of its employees.
Purchaser and the other parties to the employment agreements are not now and at
Closing will not be in default of their obligations under the employment
agreements. Those agreements shall be amended as necessary for Purchaser to
comply with its obligations under this agreement, including as necessary to give
Xxxxxxxxx, Burtscher, Erickson, and Xxxxxx the required positions, shares and
compensation with and from Purchaser. Except as required by the previous
sentence, those agreements will not be amended, modified, or terminated in any
respect prior to the Closing Date except with the prior written consent of
Purchaser.
All other employees of the Purchaser are at-will employees. The Purchaser
has no other obligation, contractual or otherwise, to its employees, except for
compensation due in the ordinary course of business. Neither Purchaser nor its
officers, directors, or shareholders have taken any actions with respect to any
employee which would give rise to any claims of discrimination on the basis of
age, sex, race, disability or any other status protected by federal or local
law, any violation of the Fair Labor Standards Act, or any
12
other state or federal law related to the rights of employees. Purchaser has
represented to Sellers that all employees are at-will employees and, therefore,
as part of the indemnification contained herein, Purchaser shall be liable to
Sellers and the Company for any claims by any employee that he or she may not be
terminated by Purchaser because of any actions by the Purchaser prior to
Closing.
(k) Assets in Good Operating Condition. To Purchaser's knowledge all of
----------------------------------
the operating assets of the Purchaser are in good operating condition and
repair. Through the Effective Date, the Purchaser shall maintain adequate
insurance with respect to all risks normally insured against by it in the past
or by companies similarly situated.
(l) Scitor ITS License Agreement. A true copy of the agreement dated April
----------------------------
28, 1995 between Scitor International Telecommunications Services, Inc.
("Scitor") and Ratsten International Telecommunications, Inc. d/b/a/ Netstar
International Telecommunications, Inc., a wholly owned subsidiary of the Company
(the "Scitor Agreement") is attached as EXHIBIT B. Purchaser shall fulfill all
of Ratsten's and the Company's obligations under the Scitor Agreement.
(m) Conduct Pending Closing. The Purchaser's business will be conducted in
-----------------------
the ordinary course from the date of this Agreement to Closing.
(n) Environmental Liability. Purchaser has not generated, manufactured,
-----------------------
stored, handled, disposed, transferred, produced, or processed "hazardous
substances" or other dangerous or toxic substances, except in compliance with
all federal, state or local regulations. To the best of Purchaser's knowledge,
there is no presence of, nor has there been any release of, any "hazardous
substances" in the Purchaser's premises or off-site of the premises which might
affect said premises. Purchaser have no knowledge or reason to know of any
prior ownership or use of the Purchaser's premises which would indicate that
"hazardous substances" may have been generated, manufactured, transported,
stored, handled, released or disposed of upon the Purchaser's premises or off-
site of the Purchaser's premises which might affect said premises, except in
full compliance with all. federal, state and local law. For purposes hereof,
"hazardous substances" shall have the meaning specified in RCW 70.105D and the
Model Toxics Control Act.
(o) Investigation and Access. During the period from the date hereof to
------------------------
Closing, Purchaser shall cause Sellers and its agents to have free access to the
Purchaser is premises, off-ices, records, files, books of account, copies of tax
returns and retirement plan returns of the Purchaser. Purchaser shall cause the
Purchaser's personnel to aid and assist Sellers in reviewing the operations and
records of the Purchaser.
(p) Contracts. Except for the agreements described in EXHIBIT E, the
---------
Purchaser is not a party to any other agreements, contracts, undertakings, or
leases of real or personal property. Those agreements described in EXHIBIT E
are now and at Closing will be in full force and effect, and none of the parties
to those agreements are now in default of their obligations under that
agreement. None of the parties hereto has waived any rights under those
agreements, and none of the parties hereto shall be in default thereof at
Closing.
13
(q) No Broker. The Purchaser has not employed any broker, finder, or
---------
agent, nor otherwise become in any way obligated for any broker's, finder's or
agent's, or similar fee with respect to the transaction contemplated by this
Agreement.
(r) Absence of Certain Events, Circumstances, Etc. Except as disclosed to
---------------------------------------------
Sellers in writing prior to Closing, since January 1, 1995, the Purchaser has
not (1) incurred any obligation or liability, whether absolute or contingent,
except obligations and liabilities incurred in the ordinary course of the
Purchaser's business; (2) discharged or satisfied any lien or encumbrances or
paid any obligation or liability whether absolute or contingent, other than
current liabilities having become due and payable since that date in the
ordinary course of the Purchaser's business and obligations and liabilities
under contracts referred to in the exhibits annexed hereto; (3) made or agreed
to make any wage, salary, or employee benefit increases for full-time employees
(4) sold or transferred any of its tangible or intangible assets or canceled any
debts or claims, except, in each case, in the ordinary course of business; (5)
sold, assigned, or transferred any trademark or trade name; (6) suffered any
losses that would have a materially adverse effect on the business or financial
condition of the Purchaser or waived any rights of substantial value; (7)
suffered any loss, damage, or destruction to any of its properties due to fire
or other casualty whether or not insured, which loss, damage, or destruction
materially and adversely affects its business, properties or operations; (8)
issued or sold or agreed to issue or sell any shares of its capital stock or any
other securities or reclassified or agreed to reclassify its capital stock; (9)
mortgaged, pledged, or subjected to lien, charge or other encumbrance any of its
tangible or intangible assets, except the lien of current real and personal
property taxes not yet due and payable or purchase money or similar liens
incurred in the ordinary course of business; (10) made or agreed to make capital
expenditures in excess of $25,000; (11) declared or paid a dividend or
transferred property or loaned any money or agreed to loan money to any of its
directors or officers; (12) amended its Articles of Incorporation or Bylaws;
(13) conducted its business otherwise than in its ordinary and usual manner; or
(14) become aware of any event, transaction, or circumstance which does or could
materially adversely affect its condition (financial or otherwise), assets,
liabilities, earnings, business, or operations.
(s) Disclosure. This Agreement does not contain any untrue statement of
----------
any material fact or omits to state any material fact required to be stated in
order to make the statements contained in this Agreement not misleading. To the
best knowledge of Purchaser, there is no fact which materially adversely
affects, or in the future may (so far as Purchaser can now reasonably foresee)
materially adversely affect, the business or prospects or condition (financial
or otherwise) of the Purchaser or any of its properties or assets, which fact
has not been disclosed in writing to Purchaser prior to the effective date of
this Agreement.
All representations and warranties of Purchaser contained in this Agreement
shall be true as of the date of Closing. All of the above representations,
warranties, and covenants survive the Closing of this transaction for the
benefit of Purchaser.
(t) Compliance with Funder Requests. Purchaser acknowledges that the
-------------------------------
Company, through Xxxxxx and Xxxxxxxx, is arranging financing for Ratsten's
obligations
14
under the Scita/Scitor Agreement, as may be amended and supplemented, in the
approximate amount of $50 million to $100 million U.S. Dollars through Quoin
Financial Corporation or other lenders/investors (collectively the "Lender").
Purchaser agrees to take all steps required by the Lender to obtain the funding,
including, but not limited to: (1) changing the size or the composition of
Purchaser's or the Company's board of directors to include directors desired by
the Lender; (2) making such personnel changes as Lender desires in the Company
or Purchaser subject to rights under existing employment agreements (3)
permitting the Lender to acquire an equity interest in the Company or Purchaser;
and (4) to execute all documents which the Purchaser's board after the share
exchange deems necessary for the Lender and/or investor financing.
(u) Addition of Xxxx Xxx. Purchaser and Purchaser's Directors shall, upon
--------------------
recommendation of Xxxxxx Xxxxxxxx and Xxxxx X. Xxxxxx, make Xxxx Xxx Vice
President of Network Services for Purchaser at a salary of $150,000 per year,
plus benefits of similar rank officers, contingent upon receipt of financing
from Quoin Financial Corporation or other institutional lender.
7. INDEMNIFICATION BY PURCHASER.
----------------------------
Purchaser, its successors and assigns, shall indemnify, defend and hold
Sellers harmless from any and all losses, claims, damages or liabilities
suffered or incurred by Sellers as a result of:
(a) The failure of any representation or warranty of Purchaser contained in
this Agreement to be true and accurate when made on and as of the date of
Closing;
(b) The failure of Purchaser to comply with any obligations, agreements or
covenants contained in this Agreement;
(c) The conduct of the Company's business; and
(d) Any accounts payable, liabilities, debts, taxes, leases or other
obligations of the Company except for those exceeding $ 1,000 arising with
respect to any period prior to Closing and which were not disclosed by Sellers
or the Company prior to Closing.
Purchaser, its successor or assigns, shall reimburse Sellers for any legal
or other expense reasonably incurred by them in connection with any loss, claim,
damage or liability indemnified hereby. This indemnification obligation will
survive the Closing.
8. CONDITIONS TO PURCHASER'S OBLIGATIONS.
-------------------------------------
The obligations of Purchaser under this Agreement are subject to
satisfaction of each of the following conditions, unless waived in writing by
Purchaser, at or prior to Closing:
(a) Representations True; Compliance with Covenants. The representations
-----------------------------------------------
and warranties of Sellers contained in this Agreement shall be true in all
15
material respects on and as of Closing with the same force and effect as though
made on and as of said date. Sellers shall have performed and complied in all
material respects with all covenants contained herein required to be performed
or complied with by Sellers at or prior to Closing.
(b) No Litigation. There shall not be pending or threatened any claim,
-------------
suit, action, proceeding, investigation or inquiry by any person, governmental
body or authority or other entity seeking to restrain or prohibit this
transaction, to obtain damages in connection with this Agreement, or any claim
of any nature filed or commenced against the Company.
(c) No Material Adverse Change. There shall have been no material adverse
--------------------------
change in the Company or Ratsten, the business of the Company or the assets
since the date of the last financial statement presented to Purchaser.
(d) Additional Documents. Sellers shall have delivered or caused to be
--------------------
delivered to Purchaser all instruments and copies of instruments required to
complete the Closing.
(e) Approval of Directors and Shareholders. The Directors and Shareholders
--------------------------------------
of Purchaser have ratified, confirmed, and approved the execution of this
Agreement and the execution of the other documents and consummation of the
transactions which are provided for herein or which are required to consummate
the transactions contemplated herein.
9. CONDITIONS TO SELLERS' OBLIGATIONS.
----------------------------------
The obligations of Sellers under this Agreement are subject to satisfaction
of each of the following conditions, unless waived in writing by Sellers, at or
prior to Closing:
(a) Representations True; Compliance with Covenants. The representations
-----------------------------------------------
and warranties of Purchaser contained in this Agreement shall be true in' all
material respects on and as of Closing with the same force and effect as though
made on and as of said date. Purchaser shall have performed and complied in all
material respects with all covenants contained herein required to be performed
or complied with by Purchaser at or prior to Closing.
(b) No Litigation. There shall not be pending or threatened any claim,
-------------
suit, action, proceeding, investigation or inquiry by any person, governmental
body or authority or other entity seeking to restrain or prohibit this
transaction, or to obtain damages in connection with this Agreement, nor any
claim of any nature filed or commenced against the Purchaser.
(c) No Material Adverse Change. There shall have been no material adverse
--------------------------
change in the Purchaser, the business of the Purchaser or the assets of
Purchaser since the date of the last Purchaser's financial statement presented
to Sellers.
16
(d) Additional Documents. Purchaser shall have delivered or caused to be
--------------------
delivered to Sellers all instruments and copies of instruments required to
complete the Closing.
(e) Approval of Directors and Shareholders. The Directors and Shareholders
--------------------------------------
of Purchaser have ratified, confirmed, and approved the execution of this
Agreement and the execution of the other documents and consummation of the
transactions which are provided for herein or which are required to consummate
the transactions contemplated herein.
10. TERMINATION AND REMEDIES.
------------------------
(a) Termination. This Agreement may be terminated at any time prior to
-----------
Closing by mutual consent of all the parties hereto or unilaterally by Sellers
and Purchaser if (1) any party has defaulted in a material respect in the
performance of any covenant hereunder, (2) any representation or warranty made
by any other party is untrue in any material respect, or (3) a condition
precedent to the terminating party's obligation to close has not been satisfied
by the Closing Date. Termination shall be effective on the date mutually agreed
by the parties, or on the date of termination notice if terminated unilaterally.
(b) Remedies. If a Seller refuses to close as provided herein, Purchaser,
--------
in addition to any other remedies it may have, may enforce this Agreement by
specific performance.
11. MISCELLANEOUS
-------------
(a) Notice. All notices and other communications required to be given by
------
the parties shall be in writing and sent to the respective parties at the
following addresses:
SELLERS: Xxxxx Kreatzman
------------------------
0000 Xxxxx Xxxxxx
------------------------
Xxxxx Xxxxxx, XX 00000
------------------------
WITH COPY TO: Xxxx X. Xxxxxxxx, Esq.
Edwards, Sieh, Hathaway, Xxxxx & Xxxxxxxxxx, X.X.
000 - 0xx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
PURCHASER: GlobalTel Resources, Inc.
0000 Xxxxxxxx Xxx. X., Xxxxx 000
Xxxxxxx, XX 00000
WITH COPY TO: Xxxxxx Xxxxxxx, Esq.
000 - 0xx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
17
(b) Washington Law. This Agreement shall be construed in accordance with
--------------
the laws of the State of Washington.
(c) Expenses. In any action brought to enforce this Agreement, or to seek
--------
damages for breach thereof, the prevailing party shall be entitled to recover a
reasonable attorney's fee (including a reasonable attorney's fee on any appeal
thereof) and reasonable costs of litigation in addition to any other award or
decree granted or given by the court.
(c) Entire Agreement. This Agreement, together with the exhibits attached
----------------
hereto, supersedes all prior agreements of the parties, constitutes the entire
agreement and understanding between the parties and may only be modified or
amended by a subsequent written agreement executed by both parties.
(e) Assignment. No Seller, or Purchaser, may assign his or its rights or
----------
delegate his or its obligations hereunder without the prior written consent of
the other party hereto, such consent not to be unreasonably withheld. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns.
(f) No Waiver. No failure on the part of either party to exercise and no
---------
delay in exercising any rights hereunder shall operate as a waiver thereof; nor
shall any waiver or acceptance of a partial, single or delayed performance of
any term or condition of this Agreement operate as a continuing waiver or a
waiver of any subsequent breach thereof.
(g) Severability. If any provision of this Agreement is held to be illegal,
------------
invalid or unenforceable, such provision shall be fully severable and this
Agreement shall be continued and enforced if such illegal, invalid or
unenforceable provision were never a part hereof; and in lieu of such provision,
there shall be added automatically as part of this Agreement a provision as
similar in terms to such illegal, invalid or unenforceable provision as may be
possible to make such provision legal, valid and enforceable.
(h) Arbitration of Disputes. Any disputes arising under this Agreement that
-----------------------
remains unresolved three months after it arose shall be determined by
arbitration in Seattle, Washington before a single arbitrator of the Judicial
Arbitration and Mediation Service, unless otherwise agreed by the parties to the
dispute. If the parties cannot agree on the arbitrator, then either party may
apply to have the arbitrator appointed by the King County Superior Court
Presiding Judge. The then existing Washington and King County Civil Rules shall
apply to such arbitration. Any party may invoke arbitration by mailing a
written demand to the other parties, stating the matter in controversy. The
decision of the arbitrator shall be binding on the parties and may be entered as
a judgment in any court of competent Jurisdiction. The substantially prevailing
party in any such dispute shall be entitled to an award of that party's actual
attorney fees and costs relating to the dispute. The actual amount charged the
party shall be presumed reasonable, which presumption may be rebutted by a
specific showing of duplication, waste, or charges for collateral or unnecessary
matters. Arbitration pursuant to this section is a condition precedent to any
legal or equitable action.
18
(i) Authority and Spousal Consent. Each signatory on behalf of a
-----------------------------
corporation or partnership warrants that he or she has authority to bind that
entity to this Agreement. Each married signatory shall obtain the written
consent of the signatory's spouse to this Agreement.
DATED as of the date set forth above.
SELLERS:
XXXXX STREET FAMILY L.P. NORTH WILLOW FAMILY L.P.
By: LSLP, Inc., General Partner By: /s/ NORTH WILLOW CORPORATION
------------------------------
General Partner
By: /s/ XXXXX X. XXXXXX by By: /s/ XXXXXX X. XXXXXXXX
XXXXXX X. XXXXXXXX ATTORNEY ------------------------------
IN FACT XXXXXX X. XXXXXXXX
-------------------------- Its PRESIDENT
---------
XXXXX X. XXXXXX
/s/ XXXXX X. XXXXXXXXX
------------------------------- -----------------------------------
Xxxxx Xxxxxxxxx Spouse
/s/ GERMAN XXXXXXXXX /s/
------------------------------- -----------------------------------
German Xxxxxxxxx Spouse
/s/ XXXXX XXXX /s/
------------------------------- -----------------------------------
Xxxxx Xxxx Spouse
/s/ XXXXXX XXXXXX /s/ XXXXX X. XXXXXX
------------------------------- -----------------------------------
Xxxxxx Xxxxxx Spouse
19
THE FOLLOWING PERSONS, AS TO
THEIR INDIVIDUAL UNDERTAKINGS
SET FORTH IN THIS AGREEMENT:
/s/ XXXXXX X. XXXXXXXX
----------------------------------- -----------------------------------
Xxxxxx X. Xxxxxxxx, a Single Person Spouse
/s/ GERMAN XXXXXXXXX /s/
----------------------------------- -----------------------------------
German Xxxxxxxxx Spouse
/s/ XXXXX XXXXXXXXX
----------------------------------- -----------------------------------
Xxxxx Xxxxxxxxx Spouse
/s/ XXXXX X. XXXXXX by XXXXXX X.
XXXXXXXX HIS ATTORNEY IN FACT
-----------------------------------
Xxxxx X. Xxxxxx
PURCHASER:
GLOBALTEL RESOURCES, INC., A
Washington Corporation
By: /s/ XXXXXX XXX
-------------------------
Its: VICE PRESIDENT
-------------------------
20
EXHIBIT A
CONTINUING OBLIGATIONS OF GFP GROUP, INC.
1. The obligations between the Company's wholly owned subsidiary,
Ratsten, and Scitor ITS under the Scitor Agreement. These obligations include,
but are not limited to, installing switches in 1996 with a list price of
$46,000,000 and during the period from 1997 through 2000, an additional
$300,000,000 to $400,000,000 in switches must be installed. In addition, between
December 14, 1995 and December 31, 1995, an estimated $32,000 must also be paid
as set forth in Section 4(k) of the parties' agreement. A copy of the current
roll-out list is attached.
2. Acquisition and Management Agreement for GFP Group, Inc., Xxxxx
Xxxxxxxxx and German Xxxxxxxxx signed on October 10, 1995.
3. Employment Agreement between GFP Group, Inc. and Xxxxxx X. Xxxxxxxx of
September 23, 1995, as amended December 15, 1995, copy attached.
4. Employment Agreement between GFP Group, Inc. and Xxxxx X. Xxxxxx of
September 23, 1995, as amended December 15, 1995, copy attached.
5. Employment Agreement between German Xxxxxxxxx and GFP Group, Inc.
dated October 20, 1995, copy attached .
6. Employment Agreement between Xxxxx Xxxxxxxxx and GFP Group, Inc. dated
October 20, 1995, copy attached.
7. Obligations under the bridge loans from the following individuals to
Ratsten International Telecommunications, Inc. or GFP Group, Inc, including the
issuance of the shares shown to be converted at Closing to shares in Purchaser
on a one-to-one basis:
NO. OF STOCK
AMOUNT OPTION OPTION
NOTE HOLDER LOANED DUE DATE SHARES COMPANY
--------------------------------------------------------------------------------
Xxxxxxx Xxxxxxxxxx $50,000 01/17/96 20,284 GFP
Xxxxxxx Xxxxxx III $20,000 02/10/96 8,114 GFP
Xxxxxxx Xxxxxxxxxx
Xxxxx Xxxxxx $70,000 01/31/95 28,398 GFP
Wing Li $50,000 12/31/95 20,284 GFP
Xxxxxx Xxxxxxxx $25,000 01/10/96 10,142 GFP
$14,000 3/__/96 5,680
Xxxxxx Xxxxxxxx $16,000 01/31/96 6,491 GFP
Xxxxxx Xxxxxxxxxx $20,000 01/31/96 8,114 GFP
--------------------------------------------------------------------------------
A-1
8. Any outstanding amounts to Xxxxxxxx Xxxxxxxx under a consulting
contract under which he is being paid on a per hour basis.
9. Any outstanding amounts to Xxxx Xxx under a consulting contract under
which he is being paid on a per hour basis.
10. Any amounts due Xxxxxx Xxxxxxxxxx for professional accounting
services.
11. Logo design contract with Xxx Xxxxxxxx in the approximate amount of
$4,000 to $5,000, of which $900 has been paid.
12. Unpaid salaries, expenses, and balances for Xxxxxxxxx, Burtscher,
Palmer, and Xxxxxxxx for periods after December 16, 1995 on their employment
agreements, plus $5,000 each to Xxxxxxxxx and Xxxxxxxxx for deferred signing
bonus under the Acquisition and Management Agreement.
13. Legal fees to Xxxxx Xxxxxx, counsel for Xxxxxxxxx. Of the $7,000
amount due, approximately $3,000 has been paid.
14. Continuing legal services for Xxxx X. Xxxxxxxx, and other attorneys at
Edwards, Sieh, Hathaway, Smith, & Xxxxxxxxxx, X.X. Nine thousand dollars has
been paid and additional fees in connection with this transaction are being
accrued.
15. Approximately $5,000 for Ratsten obligations as shown on the Ratsten
October 31, 1995 financial statements.
16. Sublease from Purchaser of space at 0000 Xxxxxxxx, Xxxxxxx,
Xxxxxxxxxx.
A-2
EMPLOYMENT AGREEMENT BETWEEN GFP GROUP, INC. AND XXXXXX X. XXXXXXXX OF SEP. 23,
1995
This Employment Agreement between GFP Group, Inc. ("GFP") and Xxxxxx X. Xxxxxxxx
("Employee") is dated and entered into as of the 23rd day of Sep., 1995, and
amended on Dec. 15, 1995.
1. EMPLOYMENT. Subject to the terms and conditions of this Employment
Agreement, GFP and Employee agree to contract for all of Xxxxxxxx'x time and
efforts as an employee of GFP, performing such duties, tasks and
responsibilities and exercise such powers as may be requested of Employee by the
Company's Board of Directors.
2. SCOPE AND DUTIES. Employee will serve as a Chairman, President and Chief
Executive Officer in the operation of GFP with respect to development, quality
control, sale and operations of various products (fax, E-mail, voice messaging,
Internet, EFTS, video, VPN, etc.), customers and vendors entailed in developing
the business of GFP, as directed by the Board of Directors.
3. TERMS. Subject to this Agreement, the term of this Employment Agreement
shall begin Sep. 23, 1995 and continue on a rolling three year term, renewing
daily. The parties acknowledge the Corporation's intention to be acquired by
GlobalTel Resources, Inc. ("GlobalTel" or "GTR") in a manner that will require
that GlobalTel assume the Corporation's obligations pursuant to this Agreement,
in which case GlobalTel will automatically assume GFP Group's rights and
obligations and the term of this Agreement shall continue without requiring any
action by either party, or GlobalTel. The Employee shall automatically become
Chairman, President and CEO of GlobalTel as a condition of any acquisition of
GFP by GlobalTel.
4. COMPENSATION. For all services rendered by the Employee under this
Agreement, the Corporation shall compensate the Employee as determined by the
Board of Directors.
a. Monthly Salary. The Employee shall initially be compensated at a
--------------------
salary level of $5,000/month following the attainment of working capital in
excess of $200,000 (retroactive to inception) to increase to $10,000/month upon
any acquisition of GFP by GlobalTel. Thereafter, the employee shall receive
$30,000/month upon GFP's and/or GlobalTel's achievement of significant funding
to adequately capitalize the business. Annual performance reviews shall
establish merit raises in salary in relation to performance as measured against
annual objectives and other responsibilities assigned the Employee.
Notwithstanding the impact of such annual performance evaluation merit-raises,
the Employee's compensation shall be not less than $40,000/month at the
beginning of the second year of employment and not less than $50,000/month at
the beginning of the third year of employment, establishing new base salary
levels to which any merit raises shall be added, provided that continued
employment has been satisfactory as determined by the Board.
b. Bonus. The Employee shall participate in a key management incentive
-----------
performance-based bonus plan approved by the Company's Board of Directors,
providing an opportunity to achieve up to 100% of base salary in bonus, based
upon the Company's review of Employee's contribution to its business, operations
and financial success on an annual basis (paid each January, following calendar
year-end, starting with calendar 1996).
c. Employee Benefits. The Employee shall participate in the normal
-----------------------
employee benefits provided the Senior Management Group, including health and
dental group plans (employee contributory plan through preferred providers),
group life insurance, group disability insurance, key man life insurance in an
amount of not less than $3,000,000 (with $1,000,000 paid to the Employee's
estate/beneficiaries), 401-k and such other benefits as may be provided by GFP
and/or GTR in its normal course of business.
1
d. Expense Account. The Employee shall participate in a bi-weekly
---------------------
accounting of reimbursable expenses, and shall in addition be provided with two
corporate credit cards for business use (travel, entertainment and incidental
business expenses only) by Dec. 31, 1995.
e. Stock Program. The Employee shall be provided with his current equity
-------------------
holdings in the new GFP Group, Inc., which upon sale of the Company to a third
party ("New Co.", presumably GTR) shall equal not less than 270,000 shares of
the New Co. (up to 10,000,000 shares authorized, up to 5,000,000 shares issued).
f. ISOP Participation. The Employee shall be provided with participation
------------------------
in the Company's ISOP program (to be developed at GFP, and assumed by GTR upon
any sale or acquisition by GTR) to be developed prior to Jan. 31, 1995. The
level of participation in the ISOP shall be consistent with the senior level of
the position, to be determined annually by the Compensation Committee of the
Company. Notwithstanding such level to be determined by the Compensation
Committee, the Employee shall receive the right to acquire not less than 150,000
shares of GTR, to be deemed fully vested as of the merger in terms of ability to
exercise such ISOP shares. The cost per share shall be $1.10/share for exercise
of such initial ISOP options, whether in GFP or GTR.
g. Stock Option Grants for Performance in Certain Affiliates. In addition
--------------------------------------------------------------
to the ISOP provisions specified in "f" above, the Employee shall have a right
to additional ISOP equity ownership as determined by the Board in relation to
performance in establishing the Company's ownership in various joint ventures,
strategic alliances or affiliates contributing to the Company's successful roll-
out, where the Employee had a direct or indirect role in introducing,
negotiating or structuring such joint venture, strategic alliance or affiliate
operation parties, even should any such successful partnering arrangements
culminate substantially after the merger of the combined entities (sic.-
GFP/GTR). At the time of this agreement's execution, a significant potential
such joint venture, strategic alliance or affiliate operation known by the
Employee relates to certain relationships introduced on behalf of GFP in Japan.
h. Corporate Car. The Employee shall have the right to have the Company
-------------------
make car lease/purchase payments for business use up to $850/month, such right
starting 1/1/96.
i. Corporate Cellular Phone. The Employee shall have the right to a
------------------------------
corporate cellular phone (or combination car/mobile phone) paid at the Company's
expense, including equipment purchase, start-up and monthly fees and air time
costs.
j. Corporate Office at Home. The Employee shall have the right to be
------------------------------
reimbursed for the expense of maintaining a corporate office at home for after-
hours work on behalf of the company, including payment for the home office
telephone, fax, computer/printer (including purchase of an appropriate portable
computer) and on-line services, as well as monthly rent of $1,000/month.
k. Vacations. The Employee shall be entitled each calendar year to a
---------------
vacation consisting of four weeks, which may be increased by the Board of
Directors, during which time the Employee's salary and benefits shall be paid in
full. The Employee may carry over no more than two-weeks to the next calendar
year (for a total of six weeks). The Employee shall take the vacation as such
time or times as shall be appropriate for the Corporation. The Corporation
shall pay the Employee for any vacation days lost.
5. BOARD OF DIRECTORS REPRESENTATION. For the term of employment, the
Employee shall have the right to serve as Chairman of the Company's Board of
Directors (to eventually be at least seven Directors), and shall have the right
to suggest to the Board other outside Directors for the Company to consider as
candidates for its Board. This right to Board representation shall survive any
initial sale of the Company to GTR, with the right extending to New Co.'s Board.
2
6. OWNERSHIP OF WORKS CREATED BY EMPLOYEE. The Employee acknowledges that the
Corporation shall have exclusive ownership of all inventions, technology and
know-how that the Employee creates or modifies during the term of this Agreement
and any subsequent agreement. The Corporation shall have the exclusive
copyright rights in such works and related materials and shall be considered the
author and owner of any such copyrightable work created by the Employee during
the term of this Agreement, as authorship is defined in the Copyright Act, 17
U.S.C. (S) 102. All such work shall be considered "work made for hire" under 17
U.S.C. 201(b). To the extent that any such work does not qualify as a "work
made for Hire" under applicable law, the Employee hereby irrevocably and
exclusively assigns to the Corporation, its successors and assigns all right,
title and interest in and to such work, including the right to copyright,
patent, trade secret, and other proprietary rights protection. To the extent
that any of the Employee's rights in such a work are not, or may not be, subject
to assignment or transfer, or the Employee may have a right of avoidance as to
any such assignment or transfer, the Employee hereby irrevocably and
unconditionally waives enforcement of all such rights, including moral rights.
The Employee acknowledges that the transfer, assignment and waiver of the
foregoing rights and interests are complete and effective as of the date of this
Agreement in consideration of the Corporation's employment of the Employee and
execution of this Agreement and without regard to the time or circumstances
under which the Agreement may be terminated. The Employee agrees to execute any
assignments or other documents and take such other actions as may be necessary
or desirable to assure or verify that ownership of the rights addressed in this
section resides exclusively with the Corporation.
7. TERMINATION. This Agreement may be terminated by either party upon 30 days
written notice, if for cause, and upon 180 days advance written notice, if
without cause. The term "cause" means any material breach of the Employee's
duty of loyalty to the Corporation; material failure to perform his Corporate
duties for a period of 30 days on a consistent basis after written notice of
such failure, regardless of the cause; any failure to carry out a lawful order
of the Board, or for any fact of documented material corporate misconduct,
fraud, or criminal malfeasance.
Termination of this Agreement for cause shall automatically terminate for
cause all other agreements between the Corporation or its subsidiary and the
Employee. In the event of "for-cause" termination, the employee would forfeit
any right to additional stock grants or ISOP awards not yet vested or exercised,
or the payment of salary or benefits beyond the effective contract three year
date, together with any continuing Board representation.
The Company shall retain the right to terminate the Employee without cause,
so long as the Company honors the balance of the compensation (cash, benefits,
stock or other compensation elements specified in the Employee's contract) under
the full term of this Agreement as provided for under this agreement. The scope
and enforceability of this section shall be determined in accordance with
Washington law.
In the event that the Corporation establishes the Employee's breach or
threatened breach of this section's provisions, the Corporation shall be
entitled to any injunction restraining the Employee from disclosing any
Proprietary Trade Secrets or Customer Confidences and/or restraining the
Employee from rendering any services to any person, firm, corporation,
association or other entity to whom any Proprietary Trade Secret or Customer
Confidence, in whole or in part, either has been disclosed or is threatened to
be disclosed.
Nothing contained in this section shall be construed as prohibiting the
Corporation from pursuing any other remedies available to the Corporation for
breach or threatened breach of this provision, including the recovery of damages
from the Employee, as well as reasonable attorneys fees and costs.
3
8. CHANGE OF CONTROL EVENT. Should the Company (or its successor GTR) undergo
a change of control event, including acquisition of a 50% or larger controlling
interest, sale of the Company (excluding an initial acquisition of GFP by GTR)
or its principal assets, the Employee shall, as an obligation of the acquirer,
have the right to receive an additional three years cash compensation and
continuation of benefits beyond the stated contract period (including a bonus
which represents the sum of the prior two years bonus, or an equivalent amount
if less than two years of employment in service has been gained).
9. DISPUTES/ARBITRATION. Any controversy or claim arising out of or relating
to this Agreement, or a breach hereof, shall be settled by binding arbitration
under the Judicial Arbitration Management Services ("JAMS") conducted in
accordance with the then existing Washington Civil Court rules and judgment upon
the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. The losing or substantially non-prevailing party shall
pay the JAMS arbitration and private counsel attorney fees and reasonable costs
to the winning or substantially prevailing party in the event of such
arbitration.
10. ASSIGNMENT. This Agreement shall not be transferred or assigned whether
voluntarily or by operation of law without the written consent of the other
party, with the exception of an acquisition of the Company or its principal
assets by GTR under any sale/purchase agreement, wherein the assignment of the
contractual obligations to GTR becomes automatic.
11. WAIVER. No waiver of any of the provisions hereof shall be valid unless in
writing, signed by the party against whom such claim or waiver is sought be
enforced, nor shall failure to enforce any right hereunder constitute a
continuing waiver of the same or a waiver of any other right hereunder.
12. NON-COMPETITION. Employee agrees not to compete with the Company (or its
successor, following its acquisition by GTR) for a period of two years from the
date of termination in the same or similar business, including the attempt to
develop other telecom business from SCITOR/SITA, should the employee be
terminated for cause.
Such non-competition covenant shall include a restriction on the Employee
as of the termination date preventing the Employee from: soliciting business
from any customer of the Company of a similar type; or soliciting business from
any customer of management-level employees of the Company to leave the
Corporation's employment or hire any management employee of the Company. Should
the employee be terminated not for cause or leave employment voluntarily, this
non-competition covenant shall survive for twelve months from the date of
termination, with the ability of the Employee to conduct any business with
customers of the Company based upon a written request approved in writing by the
Board of Directors detailing how the business arrangement does not conflict with
the Company's business. The Company shall be entitled to an injunction
restraining the Employee from any action which represents a breach or threatened
breach of this provision. Nothing in this section shall be construed as
prohibiting the Corporation from pursuing any other available remedies for the
breach or threatened breach, including the recovery of damages from the
Employee, as well as reasonable attorneys fees and costs.
13. AMENDMENT. No modification of any of the provisions hereof shall be
binding upon either Employee or Company, unless in writing, signed by the party
against whom such modification is sought to be enforced. Amendments upon merger
with GTR shall not be binding unless agreed to in writing by the Employee.
14. APPLICABLE LAW. This agreement shall be governed by the laws of the State
of Washington.
4
15. NOTICE. Any notice required or desired to be given under this Agreement
shall be sufficient if in writing and sent by certified mail, return receipt
requested, to the Employee's residence or to the principal office of the
Corporation, as the case may be.
16. COMPLETE AGREEMENT. The parties understand and agree that this Agreement
fully sets forth their entire agreement concerning terms and conditions of the
employment agreement between them.
IN WITNESS WHEREOF, the parties have agreed to the content of this
Agreement, and have executed and entered into this Agreement on the date set
forth above.
EMPLOYEE: /s/ Xxxxxx X. Xxxxxxxx
----------------------
Xxxxxx X. Xxxxxxxx
GFP GROUP, INC. By /s/
---------------------
Its /s/ EVP
---------------------
Witnessed: /s/ Xxxxxxx Xxxxxxxxxx
----------------------
Xxxxxxx Xxxxxxxxxx
EMPLOYMENT AGREEMENT BETWEEN GFP GROUP, INC. AND XXXXX X. XXXXXX OF SEP. 23,
1995
This Employment Agreement between GFP Group, Inc. ("GFP") and Xxxxx X. Xxxxxx
("Employee") is dated and entered into as of the 23rd day of Sep., 1995 and
amended on Dec. 15, 1995.
1. EMPLOYMENT. Subject to the terms and conditions of this Employment Agreement,
GFP and Employee agree to contract for all of Xxxxxx'x time and efforts as an
employee of GFP, performing such duties, tasks and responsibilities and exercise
such powers as may be requested of Employee by the Company's Chairman/CEO,
except that Employee shall have up to six months to conclude his normal business
activities in process at the time of this Agreement (National Xpress and
Heartsmart).
2. SCOPE AND DUTIES. Employee will serve as a "Executive Vice President," with
special emphasis upon Strategic Planning/Relationships, Corporate Finance and
Acquisitions in the operation of GFP with respect to development, quality
control, sale and operations of various products (fax, E-mail, voice messaging,
Internet, EFTS, video, VPN, etc.), customers and vendors entailed in developing
the business of GFP, as directed by the CEO.
3. TERM. Subject to this Agreement, the term of this Employment Agreement shall
begin Sep. 23, 1995 and continue on a rolling three year terms, renewing daily.
The parties acknowledge the Corporation's intention to be acquired by GlobalTel
Resources, Inc. ("GlobalTel" or "GTR") in a manner that will require that
GlobalTel assume the Corporation's obligations pursuant to this Agreement, in
which case GlobalTel will automatically assume GFP Group's rights and
obligations and the term of this Agreement shall continue without requiring any
action by either party, or GlobalTel. The Employee shall automatically become
EVP of GlobalTel with the same scope of duties as a condition of any acquisition
of GFP by GlobalTel.
4. COMPENSATION. For all services rendered by the Employee under this Agreement,
the Corporation shall compensate the Employee as determined by the Board of
Directors.
a. Monthly Salary. The Employee shall initially be compensated at a
--------------
salary level of $5,000/month following the attainment of working capital in
excess of $200,000 (retroactive to inception), to increase to $7,500/month upon
any acquisition of GFP by GlobalTel. Thereafter, the employee shall receive
$25,000/month upon GFP's and/or GlobalTel's achievement of significant funding
to adequately capitalize the business. Annual performance reviews shall
establish merit raises in salary in relation to performance as measured against
annual objectives and other responsibilities assigned the Employee.
Notwithstanding the impact of such annual performance evaluation merit-raises,
the Employee's compensation shall be not less than $35,000/month at the
beginning of the second year of employment and not less than $45,000/month at
the beginning of the third year of employment, establishing new base salary
levels to which any merit raises shall be added, provided that continued
employment has been satisfactory as determined by the CEO.
b. Bonus. The Employee shall participate in a key management
-----
incentive performance-based bonus plan approved by the Company's Board of
Directors, providing an opportunity to achieve up to 100% of base salary in
bonus, based upon the Company's review of Employee's contribution to its
business, operations and financial success on an annual basis (paid each
January, following calendar year-end, starting with calendar 1996). Assuming
successful institutional funding of the Company (either GFP and/or GTR, once it
has acquired GFP).
1
c. Employee Benefits. The Employee shall participate in the normal
-----------------
employee benefits provided by the Senior Management Group, including health and
dental group plans (employee contributory plan through preferred providers),
group life insurance, group disability insurance, key man life insurance in an
amount of not less than $2,000,000 (with $750,000 paid to the Employee's
estate/beneficiaries), 401-K and such other benefits as may be provided by GFP
and/or GTR in its normal course of business.
d. Expense Account. The Employee shall participate in a bi-weekly
---------------
accounting of reimbursable expenses, and shall in addition be provided with two
corporate credit cards for business use (travel, entertainment and incidental
business expenses only) by Dec. 31, 1995.
e. Stock Program. The Employee shall be provided with his current
-------------
equity holdings in the new GFP Group, Inc., which upon sale of the Company to a
third party ("New Co.," presumable GTR) shall equal not less than 270,000 shares
of the New Co. (up to 10,000,000 shares authorized, up to 5,000,000 shares
issued).
f. ISOP participation. The Employee shall be provided with
------------------
participation in the Company's ISOP program (to be developed at GFP, and assumed
by GTR upon any sale or acquisition by GTR) to be developed prior to Jan. 31,
1995. The level of participation in the ISOP shall be consistent with the
senior level of the position, to be determined annually by the Compensation
Committee of the Company. Notwithstanding such level to be determined by the
Compensation Committee, the Employee shall receive the right to acquire not less
than 150,000 shares of GTR, to be deemed fully vested as of the merger in terms
of ability to exercise such ISOP shares. The cost per share shall be
$1.10/share for exercise of initial ISOP options, whether in GFP or GTR.
g. Stock Option Grants for Performance in Certain Affiliates. In
---------------------------------------------------------
addition to the ISOP provisions specified in 'f' above, the Employee shall have
a right to additional ISOP equity ownership as determined by the Board in
relation to performance in establishing the Company's ownership in various joint
ventures, strategic alliances or affiliates contributing to the Company's
successful roll-out, where the Employee had a direct or indirect role in
introducing or bringing to the table or structuring such joint venture, even
should any such successful partnering arrangements culminate substantially after
the merger of the combined entities (sic.-GFP/GTR). At the time of this
agreement's execution, a significant potential such joint venture, strategic
alliance or affiliate operation known by the Employee relates to certain
relationships promulgated on behalf of GFP in Japan.
h. Corporate car. The Employee shall have the right to have the
-------------
Company make car lease/purchase payments for business use up to $850/month, such
right starting 1/1/96.
i. Corporate cellular phone. The Employee shall have the right to a
------------------------
corporate cellular phone (or combination car/mobile phone) paid at the Company's
expense, including equipment purchase, start-up and monthly fees and air time
costs.
j. Corporate Office at home. The Employee shall have the right to be
------------------------
reimbursed for the expense of maintaining a corporate office at home for after-
hours work on behalf of the company, including payment for the home office
telephone, fax, computer/printer (including purchase of an appropriate portable
computer) and on-line service, as well as monthly rent of $1,000/month.
k. Vacations. The Employee shall be entitled each calendar year to a
---------
vacation consisting of four weeks, which may be increased by the Board of
Directors, during which time the Employee's salary and benefits shall be paid in
full. The Employee may carry over no more than two weeks to the next calendar
year (for a total of six weeks). The Employee shall take the vacation at such
time or times as shall be appropriate for the Corporation. The Corporation
shall pay the Employee for any vacation days lost.
2
5. BOARD OF DIRECTORS REPRESENTATION. For the term of employment, the Employee
shall have the right to serve as a Director on the Company's Board of Directors
(to eventually be at least seven Directors). This right to Board representation
shall survive any initial sale of the Company to GTR, with the right extending
to GTR's Board.
6. OWNERSHIP OF WORKS CREATED BY EMPLOYEE. The Employee acknowledges that the
Corporation shall have exclusive ownership of all inventions, technology and
know-how that the Employee creates or modifies during the term of this Agreement
and any subsequent agreement. The Corporation shall have the exclusive copyright
rights in such works and related materials and shall be considered the author
and owner of any such copyrightable work created by the Employee during the term
of this Agreement, as authorship is defined in the Copyright Act, 17 U.S.C. (S)
102. All such work shall be considered "work made for hire" under 17 U.S.C. (S)
201(b). To the extent that any such work does not qualify as a "work made for
Hire" under applicable law, the Employee hereby irrevocably and unconditionally
waives enforcement of all such rights, including moral rights. The Employee
acknowledges that the transfer, assignment and waiver of the foregoing rights
and interests are complete and effective as of the date of this Agreement in
consideration of the Corporation's employment of the Employee and execution of
this Agreement and without regard to the time or circumstances under which the
Agreement may be terminated. The Employee agrees to execute any assignments or
other documents and take such other actions as may be necessary or desirable to
assure or verify that ownership of the rights addressed in this section resides
exclusively with the Corporation.
7. TERMINATION. This Agreement may be terminated by either party upon 30 days
written notice, if for cause, and upon 180 days advance written notice, if
without cause. The term "cause" means any material breach of the Employee's duty
of loyalty to the Corporation; material failure to perform his corporate duties
for a period of 30 days on a consistent basis after written notice of such
failure, regardless of the cause; any failure to carry out a lawful order of the
CEO, or for any fact of documented material corporate misconduct, fraud, or
criminal malfeasance. Termination of this Agreement for cause shall
automatically terminate for cause all other agreements between the Corporation
or its subsidiary and the Employee. In the event of "for-cause" termination, the
employee would forfeit any right to additional stock grants or ISOP stock awards
not yet vested or exercised, or the payment of salary or benefits beyond the
effective contract three year date, together with any continuing Board
representation.
The Company shall retain the right to terminate the Employee without
cause, so long as the Company honors the balance of the compensation (cash,
benefits, stock or other compensation elements specified in the Employee's
contract) under the full term of this Agreement as provided for under this
agreement. The scope and enforceability of this section shall be determined in
accordance with Washington law.
In the event that the Corporation establishes the Employee's breach or
threatened breach of this section's provisions, the Corporation shall be
entitled to an injunction restraining the Employee for disclosing any
Proprietary Trade Secrets or Customer Confidences and/or restraining the
Employee from rendering any services to any person, firm, corporation,
association or other entity to whom any Proprietary Trade Secret or Customer
Confidence, in whole or in part, either has been disclosed or is threatened to
be disclosed.
3
Nothing contained in this section shall be construed as prohibiting
the Corporation from pursuing any other remedies available to the Corporation
for breach or threatened breach of this provision, including the recovery of
damages from the Employee, as well as reasonable attorneys fees and costs.
8. CHANGE OF CONTROL EVENT. Should the Company (or its successor GTR) undergo a
change of control event, including acquisition of a 50% or larger controlling
interest, sale of the Company (excluding an initial acquisition by GTR) or its
principal assets, the Employee shall, as an obligation of the acquirer, have the
right to receive an additional three years cash compensation and benefits beyond
the stated contract period (including a bonus which represents the sum of the
prior two years bonus, or an equivalent amount if less than two years of
employment in service has been gained).
9. DISPUTES/ARBITRATION. Any controversy or claim arising out of or relating to
this Agreement, or a breach hereof, shall be settled by binding arbitration
under the Judicial Arbitration Management Service ("JAMS") conducted in
accordance with the then existing Washington Civil Court rules and judgment upon
the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. The losing or substantially non-prevailing party shall pay
the JAMS arbitration and private counsel attorney fees and reasonable costs to
the winning or substantially prevailing party in the event of such arbitration.
10. ASSIGNMENT. This Agreement shall not be transferred or assigned whether
voluntarily or by operation of law without the written consent of the other
party, with the exception of an acquisition of the Company or its principal
assets by GTR under any sale/purchase agreement, wherein the assignment of the
contractual obligations to GTR becomes automatic.
11. WAIVER. No waiver of any of the provisions hereof shall be valid unless in
writing, signed by the party against whom such claim or waiver is sought to be
enforced, nor shall failure to enforce any right hereunder constitute a
continuing waiver of the same or a waiver of any other right hereunder.
12. NON-COMPETITION. Employee agrees not to compete with the Company (or its
successor, following its acquisition by GTR) for a period of two years from the
date of termination in the same or similar business, including the attempt to
develop other telecom business from SCITOR/SITA, should the employee be
terminated for cause. Such non-competition covenant shall include a restriction
on the Employee as of the termination date preventing the Employee from:
soliciting business from any customer of the Company of a similar type; or
soliciting, recruiting or attempting to induce any management-level employees of
the Company to leave the Corporation's employment or hire any management
employee of the Company.
Should the employee be terminated not for cause or leave employment
voluntarily, this non-competition covenant shall survive for twelve months from
the date of termination, with the ability of the Employee to conduct any
business with customers of the Company based upon a written request approved in
writing by the Board of Directors detailing how the business arrangement does
not conflict with the Company's business.
The Company shall be entitled to an injunction restraining the
Employee from any action which represents a breach or a threatened breach of
this provision. Nothing in this section shall be construed as prohibiting the
Corporation from pursuing any other available remedies for the breach or
threatened breach, including the recovery of damages from the Employee, as well
as reasonable attorneys fees and costs.
4
13. AMENDMENT. No modification of any of the provisions hereof shall be binding
upon either Employee or Company, unless in writing, signed by the party against
whom such modification is sought to be enforced. Amendments upon merger with GTR
shall not be binding unless agreed to in writing by the Employee.
14. APPLICABLE LAW. This agreement shall be governed by the laws of the State of
Washington.
15. NOTICE. Any notice required or desired to be given under this Agreement
shall be sufficient if in writing and sent by certified mail, return receipt
requested, to the Employee's residence or to the principal office of the
Corporation, as the case may be.
16. COMPLETE AGREEMENT. The parties understand and agree that this Agreement
fully sets forth their entire agreement concerning terms and conditions of the
employment agreement between them.
IN WITNESS WHEREOF, the parties have agreed to the content of this
Agreement, and have executed and entered into this Agreement on the date set
forth above.
EMPLOYEE: /s/ Xxxxx X. Xxxxxx
-----------------------
Xxxxx X. Xxxxxx
GFP GROUP, INC. by /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Xxxxxx X. Xxxxxxxx
Its /s/ CEO
-----------------------
Witnessed: /s/ Xxxxxxx Xxxxxxxxxx
-----------------------
Xxxxxxx Xxxxxxxxxx
EMPLOYMENT AGREEMENT
Effective as of the 10th day of October, 1995, GERMAN XXXXXXXXX
(the "Employee") and GFP GROUP, INC., a Washington corporation (the
"Corporation"), in consideration of the mutual covenants and conditions
contained in this Agreement, agree as follows:
1. Employment. The Corporation hereby employs the Employee and the
----------
Employee hereby accepts employment upon the terms and conditions set forth in
this Agreement.
2. Term. The term of this Agreement shall begin on the effective
----
date set forth above and shall continue on a rolling three year term, renewing
daily. The parties acknowledge the Corporation's intention to be acquired by
GlobalTel Resources, Inc. ("GlobalTel") in a manner that will require that
GlobalTel assume the Corporation's obligations pursuant to this Agreement, in
which case GlobalTel will automatically assume GFP Group's rights and
obligations and the term of this Agreement shall continue without requiring any
action by either party, or GlobalTel.
3. Compensation. For all services rendered by the Employee. under
------------
this Agreement, the Corporation shall compensate the Employee as determined by
the Board of Directors. The Employee shall receive a one-time payment of
$10,000, half on execution of this Agreement and half on completion of
GlobalTel's Acquisition of GFP Group. Starting compensation of $5,000 per
month. Compensation still be increased to $10,000 per month on the earlier of
March 1, 1996 or receipt of significant institutional funding for operations.
Compensation shall be increased to a minimum of $12,500 per month at the
beginning of the second year of employment and to $15,000 per month at the
beginning of the third year of employment. The Corporation and the Employee
contemplate significant increases in salary and benefits if target goals for
corporate financing and expansion are met. Employee shall receive increases in
compensation equal to any increases in the compensation of the Corporation's
other comparable officers, currently Xxxxxx Xxx and Xxxx Xxxx. Compensation may
also be increased in the discretion of the Board of Directors and additional
bonuses may be paid to the Employee at the discretion of the Board of Directors.
4. Duties. The Corporation employs the Employee as Vice President to
------
perform work in connection with marketing, sales, network operations or such
other projects or products that are being undertaken by the Corporation, as
directed by the President of the Corporation. The Employee shall also continue
duties as an officer of the Corporation's GFP Group subsidiary, including
administration of the SITA/SCITOR Agreement. The employee shall report directly
to the Chief Executive Officer of the Corporation. Any duties of the Employee
as a director or an officer of the Corporation shall be without further
compensation.
5. Extent of Service. The Employee shall devote his or her time,
-----------------
attention and energies to the Corporation's business on a full time basis,
unless a different basis is
1
provided in an addendum to this Agreement, and shall not become involved in any
other business activity that would in any way detract from, limit, or impair the
Employee's performance of his work for the Corporation or may adversely impact
the Corporation's business interests, whether or not such outside business
activity is pursued for gain, profit, or other pecuniary advantage. The Employee
must request written consent of the Corporation's Board of Directors to engage
in any such outside business activity which writing shall specify the outside
business activity in detail, and shall be attached to this Agreement. As to any
request for consent, the Board of Directors shall not unreasonably withhold
consent, taking into account the nature of the outside business activity, its
relationship to the Corporation's business, the relative time that the Employee
would be required to devote to the Corporation's business and to the outside
business activity, and whether the effect on the Employee's work performance
would have an adverse impact on the Corporation's business. The Corporation has
no obligation to consent to an outside business activity that, in its sole
opinion, could adversely impact conduct of the Corporation's business. The
Corporation may condition consent upon a reasonable compensation adjustment
reflecting the impact on the Corporation. The Corporation acknowledges that the
Employee operated a consulting business prior to becoming an employee and agrees
that the Employee may continue to service existing customers described in
Exhibit A for a transition period of six months. The Employee represents that
time devoted to such consulting work shall not prevent him from working full
time for the Corporation and that such work shall not be in competition with any
service or product of the Corporation. The Employee may invest the Employee's
assets without restriction so long as the investment does not require the
Employee to devote his or her services to operation of the companies in which
the investments are made and so long as the subject of the investment is not
inconsistent with the Corporation's business interests.
6. Ownership Of Works Created By Employee. The Employee acknowledges
--------------------------------------
that the Corporation shall have exclusive ownership of all inventions,
technology, and know-how that the Employee creates or modifies during the term
of this Agreement and any precious agreement. The Corporation shall have the
exclusive copyright rights in such works and related materials and shall be
considered the author and owner of any such copyrightable work created by the
Employee during the term of this Agreement, as authorship is defined in the
Copyright Act, 17 U.S.C. (S) 102. All such work shall be considered "work made
for hire" under 17 U.S.C. (S) 201(b). To the extent that any such work does not
qualify as a "work made for hire" under applicable law, the Employee hereby
irrevocably and exclusively assigns to the Corporation, its successors and
assigns all right, title and interest in and to such work, including the right
to copyright, patent, trade secret, and other proprietary rights protection. To
the e extent that any of the Employee's rights in such work are not, or may not
be, subject to assignment or transfer, or the Employee may have a right of
avoidance as to any such assignment or transfer, the Employee hereby irrevocably
and unconditionally waives enforcement of all such rights, including moral
rights. The Employee acknowledges that the transfer, assignment, and waiver of
the foregoing rights and interests are complete and effective as of the date of
this Agreement in consideration of the Corporation's employment of the Employee
and execution of this Agreement and without regard to the time or circumstances
under which the Agreement may be terminated. The Employee agrees to execute any
assignments or other documents and take such other actions as may be necessary
or desirable to assure
2
or verify that ownership of the rights addressed in this section resides
exclusively with the Corporation.
7. Ownership Of Unrelated Works. The Corporation's ownership of
-----------------------------
works created by the Employee during the term of this Agreement shall not apply
to Unrelated Works, which is defined as a work that is not created through the
use of any of the Corporation's equipment, supplies, facilities, or trade secret
information, which was developed entirely on the Employee's own time and which
does not relate directly to the Corporation's business or the Corporation's
actual or demonstrably anticipated research or development at the time the
software is created and does not result from any work performed by the Employee
for the Corporation. The Employee's development of Unrelated Works shall not
limit the Corporation's business or prohibit the Corporation from developing
similar or related works. Should all or part of the Employee's Unrelated Work
be incorporated into the Corporation's inventions or other works, the
Corporation shall have a royalty-free license to copy, use, and sell such. works
without restriction, unless the Employee and the Corporation have executed a
written agreement providing otherwise in advance of such incorporation, or the
Employee establishes that the Corporation wrongfully obtained the Unrelated
Works through no fault of the Employee.
8. Fringe Benefits. The relationship between the Corporation and the
----------------
Employee is that of an employer and employee. The parties acknowledge that the
nature of the Employee's work requires substantial technological expertise and
the consistent exercise of substantial discretion and judgment. The Employee is
a professional, salaried, full-time employee who shall be entitled to
participate in the Senior Management Benefit Package "Senior Management Benefit
Package" means the retirement, ISOP, bonus expense allowance, profit sharing,
vacation, and similar plans adopted by the Corporate for the President and Vice-
Presidents having the same full-time status and length of service as the
Employee. The Corporation anticipates having the package in place within six
months after execution of this Agreement.
9. Income From Services; Accounting And Disclosure Of Income And.
--------------------------------------------------------------
Unrelated Software. Income generated by the Employee from the creation,
------------------
maintenance, or modification, use, license, sale, or any other transfer of
Unrelated Works, and from outside business activities permitted by this
Agreement shall belong to the Employee. While employed by the Corporation and
for three years thereafter, the Employee agrees upon request of the Corporation
to render a true account of all transactions concerning Unrelated Works and/or
outside business activities should the Corporation receive information
reasonably suggesting that the such Works or outside business activity violates
the terms of this Agreement. The Corporation shall require that those employees
and agents of the Corporation having access to this Information shall keep
confidential all information disclosed pursuant to this section and the
Corporation shall limit access to such information to the members of the Board
of Directors and the management-level employee conducting the accounts.
10. Working Facilities. The Corporation will furnish the Employee
------------------
with working space, hardware, technical and secretarial assistance, and other
facilities and services suitable to the Employee's position and adequate for the
performance of the
3
Employee's duties. Any automobile allowance or payment of relocation expenses
shall be as provided in the Senior Management Benefit Package. The Employee
shall work at the Corporation's Seattle, Washington office. The Corporation
shall pay reasonable travel and lodging expenses that the Employee incurs
commuting from San Antonio, Texas to Seattle, Washington, until the Employee is
able to relocate to Seattle, Washington, not to exceed 180 days from the
effective date of this Agreement.
11. Expenses. The Corporation shall pay for or reimburse the
--------
Employee for travel, lodging, and all reasonable and necessary expenses for the
promotion of the business of the Corporation, including expenses for
entertainment, dues, and other expenses that the Employee reasonably and
necessarily incurs in the performance of the duties for the Corporation covered
by this Agreement.
12. Vacations. The Employee shall be entitled each calendar year to
---------
a vacation consisting of two two-week periods, which may be increased by the
Corporation's business and subject to any policies adopted prospectively by the
Board of Directors, during which time the Employee's salary shall be paid in
full. The Employee may carry over no more than one two-week period to the next
calendar year (for a total of six weeks). The Employee shall take the vacation
at such time or times as shall be approved by the Corporation. Vacation time
may not be accrued from year to year without the advance written consent of the
Corporation, but the Corporation shall pay the Employee for any vacation days
lost.
13. Leave Of Absence. Leaves of absence with full payment of salary
----------------
may be granted to the Employee for attendance at professional conventions,
seminars, and other professional or business activities approved by the
Corporation. All expenses reasonably and necessarily incurred by the employee
in these activities shall be paid for or reimbursed by the Corporation. The
Corporation may from time to time approve leaves of absence with full or partial
payment, of salary and other expenses for other reasons in its sole discretion.
14. Termination. This Agreement may be terminated by either party
-----------
upon 3O days written notice, if for cause, and upon 60 days advance written
notice, if without cause. The term "cause" means any material breach of the
employee's duty of loyalty to the Corporation; material failure to perform his
corporate duties for a period of 30 days on a consistent basis after written
notice of such failure, regardless of the cause; any act of criminal fraud,
whether or not involving the Corporation; or any material breach of the terms of
this Agreement, the Acquisition and Management Agreement, Shareholder Agreement,
or any other written agreement between the Employee and the Corporation or its
subsidiary, GFP Group, Inc. Termination of this Agreement for cause shall
automatically terminate for cause all other agreements between the Corporation
or its subsidiary and the Employee. In the case of termination for cause,
unless the Employee contests the grounds stated in the notice and demands
arbitration, all rights of the Employee under such agreements and all rights
under this Agreement, including salary, benefits, and Board representation shall
automatically be extinguished as of the terminate date stated in the notice and
the Employee's stock, including vested options, shall be redeemed by the
Corporation at 75 per cent of the value calculated pursuant to
4
the method stated in the shareholder agreement, so long as the Corporation's
stock is not then publicly traded, in which case there shall be no redemption.
If the Employee demands arbitration of the termination grounds, the parties will
immediately proceed to arbitration and all compensation, benefits, and stock
voting rights of the Employee shall be suspended pending the decision of the
arbitrator, which shall take place within six months from the commencement of
arbitration unless delay is caused by the Employee. If the Corporation
terminates this Agreement without cause, the Corporation shall be obligated to
continue to provide the Employee with the full salary and compensation benefits
required by this Agreement until the expiration of the rolling three-year term.
Unless the Corporation's stock is then publicly traded, the Corporation shall
redeem the Employee's stock, including vested options, at market value
determined by the method stated in the Shareholder Agreement. All stock
acquisition rights shall cease as of the termination date stated in the written
notice of termination, whether the stock is publicly traded or not. Unless
otherwise agreed, the redemption amount shall be paid as follows: in 12 equal
monthly installments if the amount is less than $500,000; in 24 equal monthly
installments if the redemption amount is between $500,000 and $1,000,000; and in
equal quarterly installments over a five-year period if the redemption amount is
$1,000,000 or more. Each installment shall include interest on the declining
balance at 6% per annum, compounded monthly.
15. Conflict of Interest. Except as provided in Section 5 above, the
--------------------
Employee warrants and represents that: (1) the Employee has no conflict of
interest in performing the duties for which the Corporation is hiring the
Employee; (2) that the Employee is not under any legal disability regarding
these duties and is not prohibited by any employment agreement or covenant not
to compete from performing these duties; (3) that the work the Employee is
performing and will perform for the Corporation does not to the knowledge of the
Employee, breach any contract,. or infringe upon any existing patent or
copyright or contain any proprietary information or trade secrets of any former
employer or other person or entity.
16. Proprietary Information. The Employee acknowledges that the list
-----------------------
of the Corporation's contracts, suppliers, customers, material information on
the business of those customers, and the Corporation's telecommunication
technology, work in progress, know-how, techniques, and current and anticipated
research and development activities, as well as the related printed and tangible
materials, as these may exist from time to time, constitute Proprietary Trade
Secrets of the Corporation that are valuable, special and unique assets of the
Corporation's business and which the Corporation takes reasonable steps to
safeguard from disclosure to persons that do not owe a duty of confidentiality
to the Corporation. The Employee also acknowledges that conducting the
Employee's duties for Corporation's business may require that the Employee come
into contact with information belonging to the Corporation's customers which
information is disclosed to the Employee pursuant to the Corporation's agreement
to keep the information confidential ("Customer Confidences"). The employee
will not, during or after the term of employment, disclose any Proprietary Trade
Secrets or Customer Confidences, directly or indirectly, in whole or in part, to
any person, firm, corporation, association, or other entity for any reason or
purpose whatsoever. Nor shall the Employee include any know-how, or techniques
that constitute Proprietary Trade Secrets of the Corporation or Customer
5
Confidences in any invention or work unless it is owned by the Corporation.
Information shall cease being Proprietary Trade Secrets or Customer Confidences
if the Corporation or the Customer has permitted the information to enter the
public domain without any involvement of the Employee. The scope and
enforceability of this section shall be determined in accordance with Washington
law. In the event that the Corporation establishes the Employee's breach or
threatened breach of this section's provisions, the Corporation shall be
entitled to an injunction restraining the Employee from disclosing any
Proprietary Trade Secrets or Customer Confidences and/or restraining the
Employee from rendering any services to any person, firm, corporation,
association or other entity to whom any Proprietary Trade Secret or Customer
Confidence, in whole or in part, either has been disclosed or is threatened to
be disclosed. Nothing contained in this section shall be construed as
prohibiting the Corporation from pursuing any other remedies available to the
Corporation for breach or threatened breach of this provision, including the
recovery of damages from the Employee, as well as reasonable attorneys fees and
costs.
17. Restrictive Covenant. During the term of this Agreement and for
--------------------
a period of 12 months after termination or expiration of this Agreement, the
Employee will not (a) directly or indirectly, own, manage, operate, control, be
employed by, participate in, or be connected in any manner with any business
that derives income from providing the same or similar services or products as
those of the Corporation, or is in competition with any business that the
Corporation is conducting or demonstrably anticipated conducting as of the
Employee's termination date; (b) solicit business or perform work for any
customer of the Corporation, which work is similar to the type of work performed
by the Corporation for its customers, regardless of whether the Employee would
be performing the work on his or her own behalf or on behalf of some other
business; (c) solicit, recruit, or attempt to induce any employee to leave the
Corporation's employment or hire any employee whose employment with the
Corporation was terminated less than six months before the date of hire. If, at
any time during the term of this Agreement, the Employee's outside business
activity or Unrelated Work business conflicts with or competes with the
Corporation's then existing business, the Employee agrees either to merge the
competing or conflicting part of the outside business into the Corporation for
its fair market value on mutually agreed terms, permit the Corporation to
acquire the competing or conflicting portion of the employee's business for its
fair market value on mutually agreed terms, or terminate employment with the
Corporation. After termination of this Agreement for any reason, the Employee-
may request written consent from the Corporation's Board of Directors to permit
the Employee to become associated with a competitor prior to expiration of the
12-month period stated above. The Board of Directors shall not unreasonably
withhold consent and shall base any denial of consent upon its determination
that the former Employee's requested business activity would significantly
impair the Corporation's operations, market position, proposals in progress, or
relationship with existing customer(s). In the event that the Corporation
establishes the Employee's actual or threatened breach of this section's
provisions, the Corporation shall be entitled to an injunction restraining the
Employee from the action or threatened action. Nothing in this section shall be
construed as prohibiting the Corporation from pursuing any other available
remedies for the breach or threatened breach, including the recovery of damages
from the Employee, as well as reasonable attorneys fees and costs.
6
18. Arbitration. Any controversy or claim arising out of, or
-----------
relating to, the meaning or enforceability of any provision of this Agreement,
the terms of employment, the work performed by the Employee, or ownership of any
product or right created during or after the terms of this Agreement, shall be
settled by binding arbitration before a single arbitrator of the Judicial
Arbitration and Mediation Service in the city of Seattle, Washington, or as
agreed-upon by the parties or selected by the King County Presiding Judge. The
arbitration shall be conducted in accordance with the then existing Washington
Civil Court Rules and judgment upon the award shall be rendered within six
months of commencement of arbitration, if practicable, and shall be final and
enforceable in any court of competent jurisdiction.
19. Attorneys Fees. In the event of any dispute arising out of this
--------------
Agreement or the employment relationship, the substantially prevailing party in
such dispute shall be entitled, in addition to any other relief, to an award of
attorneys fees and actual costs, including expert fees and arbitration fees.
The award shall include fees and costs incurred before any proceeding or
arbitration is commenced. If a proceeding is commenced and neither party wholly
prevails, the party receiving substantially greater relief shall be considered
the prevailing party as to all fees and costs relating to the dispute. The
actual attorneys fees and costs incurred by the substantially prevailing- party
shall be presumptively reasonable, which presumption is rebuttable.
20. Notices. Any notice required or desired to be given under this
-------
Agreement shall be sufficient if in writing and sent by certified mail, return
receipt requested, to the Employee's residence or to the principal office of the
Corporation, as the case may be.
21. Waiver of Breach. The waiver by either the Corporation or the
----------------
Employee of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach by either the Corporation or the
Employee.
22. Assignment. Sale or Merger. The Employee acknowledges that the
--------------------------
services to be rendered by him or her are unique and personal. Accordingly, the
Employee may not assign any of his or her rights or delegate any of his or her
duties or obligations under this Agreement. The rights and obligations of the
Corporation under this Agreement shall inure to the benefit of, and shall be
binding upon, the successors and assigns of the Corporation. The parties
contemplate and intend that this Agreement shall be assumed without material
change by GlobalTel as part of its acquisition of GFP Group and that it will be
fully enforceable by GlobalTel and the Employee without the need of any
additional agreement. In the event of a sale or merger of the Corporation to
any other entity, the successor to the Corporation shall assume the
Corporation's obligations pursuant to this Agreement. In the event that a sale,
merger or corporate restructure results in a 50 percent or greater change of
ownership or control of the Corporation's affairs, except as a result of the
GlobalTel acquisition, the Employee may terminate this Agreement and require
that the Corporation redeem the Employees stock pursuant to the formula and
method of valuation stated in the Shareholder Agreement, and pay the other
amounts as provided in paragraph 14 above.
7
23. Entire Agreement. This Agreement and any addenda attached to
----------------
this Agreement and signed by the parties contain the entire agreement of the
parties. There are no other agreements, oral or written. This Agreement may be
changed only by a written agreement signed by the party against whom enforcement
is sought. In the event of a conflicts the terms of more recently executed
documents supersede those of earlier documents.
24. Severability. The provisions of Section 5 "Extent of Service,"
------------
Section 6 "Ownership of Works Created by Employee," Section 9 "Income from
Services; Accounting and Disclosure of Income and Unrelated Software," Section
15 "Conflict of Interest," Section 16 "Proprietary Information," Section 17
"Restrictive Covenant," and any addendum that concerns the subject matter of any
of those provisions, state obligations of the parties that are independent of
each other, severable, and separately enforceable. To the extent that any
portion of a provision is deemed unenforceable, the balance of that provision
shall be fully enforced. The unenforceability of any provision shall have no
effect on the enforceability of any other provision of this Agreement.
25. Applicable Law. This Agreement shall be construed in accordance
--------------
with the laws of the State of Washington.
Dated: 10/10/95 /s/ German Xxxxxxxxx
---------- --------------------------------------------
EMPLOYEE
CORPORATION
Dated: 10 October 1995 By /s/ Xxxxxx X. Xxxxxxxx
--------------- ------------------------------------------
Its Chairman
------------------------------------------
8
EMPLOYMENT AGREEMENT
Effective as of the ___ day of _______________, 19__, XXXXX XXXXXXXXX
(the "Employee") and GFP GROUP, INC., a Washington corporation (the
"Corporation"), in consideration of the mutual covenants and conditions
contained in this Agreement, agree as follows:
1. Employment. The Corporation hereby employs the Employee and the
----------
Employee hereby accepts employment upon the terms and conditions set forth in
this Agreement.
2. Term. The term of this Agreement shall begin on the effective
----
date set forth above and shall continue on a rolling three year term, renewing
daily. The parties acknowledge the Corporation's intention to be acquired by
GlobalTel Resources, Inc. ("GlobalTel") in a manner that will require that
GlobalTel assume the Corporation's obligations pursuant to this Agreement, in
which case GlobalTel will automatically assume GFP Group's rights and
obligations and the term of this Agreement shall continue without requiring any
action by either party, or GlobalTel.
3. Compensation. For all services rendered by the Employee under this
------------
Agreement, the Corporation shall compensate the Employee as determined by the
Board of Directors. The Employee shall receive a one-time payment of $10,000,
half on execution of this Agreement and half on completion of GlobalTel's
Acquisition of GFP Group. Starting compensation of $5,000 per month.
Compensation shall be increased to $10,000 per month on the earlier of -March 1,
1996 or receipt of significant institutional funding for operations.
Compensation shall be increased to a minimum of $12,500 per month at the
beginning of the second year of employment and to $15,000 per month at the
beginning of the third year of employment. The Corporation and the Employee
contemplate significant increases in salary and benefits if target goals for
corporate financing and expansion are met. Employee shall receive increases in
compensation equal to any increases in the compensation of the Corporation's
other comparable officers, currently Xxxxxx Xxx and Xxxx Xxxx. Compensation may
also be increased in the discretion of the Board of Directors and additional
bonuses may be paid to the Employee at the discretion of the Board of Directors.
4. Duties. The Corporation employs the Employee as Vice President to
------
perform work in connection with marketing, sales, network operations or such
other projects or products that are being undertaken by the Corporation, as
directed by the President of the Corporation. The Employee shall also continue
duties as an officer of the Corporation's GFP Group subsidiary, including
administration of the SITA/SCITOR Agreement. The employee shall report directly
to the Chief Executive Officer of the
1
Corporation. Any duties of the Employee as a director or an officer of the
Corporation shall be without further compensation.
5. Extent Of Service. The Employee shall devote his or her time,
-----------------
attention and energies to the Corporation's business on a full time basis,
unless a different basis is provided in an addendum to this Agreement, and shall
not become involved in any other business activity that would in any way detract
from, limit, or impair the Employee's performance of his work for the
Corporation or may adversely impact the Corporation's business interests,
whether or not such outside business activity is pursued for gain, profit, or
other pecuniary advantage. The Employee must request written consent of the
Corporation's Board of Directors to engage in any such outside business activity
which writing shall specify the outside business activity in detail, and shall
be attached to this Agreement. As to any request for consent, the Board of
Directors shall not unreasonably withhold consent, taking into account the
nature of the outside business activity, its relationship to the Corporation's
business, the relative time that the Employee would be required to devote to the
Corporation's business and to the outside business activity, and whether the
effect on the Employee's work performance would have an adverse impact on the
Corporation's business. The Corporation has no obligation to consent to an
outside business activity that, in its sole opinion, could adversely impact
conduct of the Corporation's business. The Corporation may condition consent
upon a reasonable compensation adjustment reflecting the impact on the
Corporation. The Corporation acknowledges that the Employee operated a
consulting business prior to becoming an employee and agrees that the Employee
may continue to service existing customers described in Exhibit A for a
transition period of six months. The Employee represents that time devoted to
such consulting work shall not prevent him from working full time for the
Corporation and that such work shall not be in competition with any service or
product of the Corporation. The Employee may invest the Employee's assets
without restriction so long as the investment does not require the Employee to
devote his or her services to operation of the companies in which the
investments are made and so long as the subject of the investment is not
inconsistent with the Corporation's business interests.
6. Ownership of Works Created By Employee. The Employee acknowledges
--------------------------------------
that the Corporation shall have exclusive ownership of all inventions,
technology, and know-how that the Employee creates or modifies during the term
of this Agreement and any previous agreement. The Corporation shall have the
exclusive copyright rights in such, works and related materials and shall be
considered the author and owner of any such copyrightable work created by the
Employee during the term of this Agreement, as authorship is defined in the
Copyright Act, 17 U.S.C. (S) 102. All such work shall be considered "work made
for hire" under 17 U.S.C. (S) 201(b). To the extent that any such work does not
qualify as a "work made for hire" under applicable law, the Employee hereby
irrevocably and exclusively assigns to the Corporation, its successors and
assigns all right, title, and interest in and to such work, including the right
to copyright, patent, trade secret, and other proprietary rights protection. To
the extent that any of the
2
Employee's rights in such a work are not, or may not be, subject to assignment
or transfer, or the Employee may have a right of avoidance as to any such
assignment or transfer, the Employee hereby irrevocably and unconditionally
waives enforcement of all such rights, including moral rights. The Employee
acknowledges that the transfer, assignment, and waiver of the foregoing rights
and interests are complete and effective as of the date of this Agreement in
consideration of the Corporation's employment of the Employee and execution of
this Agreement and without regard to the time or circumstances under which the
Agreement may be terminated. The Employee agrees to execute any assignments or
other documents and take such other actions as may be necessary or desirable to
assure or verify that ownership of the rights addressed in this section resides
exclusively with the Corporation.
7. Ownership Of Unrelated Works. The Corporation's ownership of
----------------------------
works created by the Employee during the term of this Agreement shall not apply
to Unrelated Works, which is defined as a work that is not created through the
use of any of the Corporation's equipment, supplies, facilities, or trade secret
information, which was developed entirely on the Employee's own time and which
does not relate directly to the Corporation's business or the Corporation's
actual or demonstrably anticipated research or development at the time the
software is created and does not result from any work performed by the Employee
for the Corporation. The Employee's development of Unrelated Works shall not
limit the Corporation's business or prohibit the Corporation from developing
similar or related works. Should all or part of the Employee's Unrelated Work
be incorporated into the Corporation's inventions or other works, the
Corporation shall have a royalty-free license to copy, use, and sell such works
without restriction, unless the Employee and the Corporation have executed a
written agreement providing otherwise in advance of such incorporation, or the
Employee establishes that the Corporation wrongfully obtained the Unrelated
Works through no fault of the Employee.
8. Fringe Benefits. The relationship between the Corporation and the
---------------
Employee is that of an employer and employee. The parties acknowledge that the
nature of the Employee's work requires substantial technological expertise and
the consistent exercise of substantial discretion and judgment. The Employee is
a professional, salaried, full-time employee who shall be entitled to
participate in the Senior Management Benefit Package. "Senior Management
Benefit Package" means the retirement, ISOP, bonus, expense allowance, profit
sharing, vacation, and similar plans adopted by the Corporation for the
President and Vice-Presidents having the same full-time status and length of
service as the Employee. The Corporation anticipates having the package in
place within six months after execution of this Agreement.
9. Income From Services; Accounting And Disclosure Of Income And
-------------------------------------------------------------
Unrelated Software. Income generated by the Employee from the creation,
------------------
maintenance, or modification, use, license, sale, or any other transfer of
Unrelated Works, and from outside business activities permitted by this
Agreement shall belong to the Employee.
3
While employed by the Corporation and for three years thereafter, the Employee
agrees upon request of the Corporation to render a true account of all
information and transactions concerning Unrelated Works and/or outside business
activities should the Corporation receive information reasonably suggesting that
the such Works or outside business activity violates the terms of this
Agreement. The Corporation shall require that those employees and agents of the
Corporation having access to this information shall keep confidential all
information disclosed pursuant to this section and the Corporation shall limit
access to such information to the members of the Board of Directors and the
management-level employee conducting the accounting.
10. Working Facilities. The Corporation will furnish the Employee
------------------
with working space, hardware, technical and secretarial assistance, and other
facilities and services suitable to Employee's position and adequate for the
performance of the Employee's duties. Any automobile allowance or payment of
relocation expenses shall be as provided in the Senior Management Benefit
Package. The Corporation shall provide the Employee with an office in Los
Angeles, California, near the SCITOR switch facility. The Employee shall have a
full time administrative assistant in the Los Angeles office.
11. Expenses. The Corporation shall pay for or reimburse the
--------
Employee for travel, lodging, and all reasonable and necessary expenses for the
promotion of the business of the Corporation, including expenses for
entertainment, dues, and other expenses that the Employee reasonably and
necessarily incurs in the performance of the duties for the Corporation covered
by this Agreement.
12. Vacations. The Employee shall be entitled each calendar year to
---------
a vacation consisting of two two-week periods, which may be increased by the
Corporation's business and subject to any policies adopted prospectively by the
Board of Directors, during which time the Employee's salary shall be paid in
full. The Employee may carry over no more than one two-week period to the next
calendar year (for a total of six weeks). The Employee shall take the vacation
at such time or times as shall be approved by the Corporation. Vacation time
may not be accrued from year to year without the advance written consent of the
Corporation, but the Corporation shall pay the Employee for any vacation days
lost.
13. Leave Of Absence. Leaves of absence with full payment of salary
----------------
may be granted to the Employee for attendance at professional conventions,
seminars, and other professional or business activities approved by the
Corporation. All expenses reasonably and necessarily incurred by the employee
in these activities shall be paid for or reimbursed by the Corporation. The
Corporation may from time to time approve leaves of absence with full or partial
payment of salary and other expenses for other reasons in its sole discretion.
4
14. Termination. This Agreement may be terminated by either party
-----------
upon 30 days written notice, if for cause, and upon 60 days advance written
notice, if without' cause. The term "cause" means any material breach of the
employee's duty of loyalty to the Corporation; material failure to perform his
corporate duties for a period of 30 days on a consistent basis after written
notice of such failure, regardless of the cause; any act of criminal fraud,
whether or not involving the Corporation; or any material breach of the terms of
this Agreement, the Acquisition and Management Agreement, Shareholder Agreement,
or any other written agreement between the Employee and the Corporation or its
subsidiary, GFP Group, Inc. Termination of this Agreement for cause shall
automatically terminate for cause all other agreements between the Corporation
or its subsidiary and the Employee. In the case of termination for cause,
unless the Employee contests the grounds stated in the notice and demands
arbitration, all rights of the Employee under such agreements and all rights
under this Agreement, including salary, benefits, and Board representation shall
automatically be extinguished as of the termination date stated in the notice
and the Employee's stock, including vested options, shall be redeemed by the
Corporation at 75 per cent of the value calculated pursuant to the method stated
in the shareholder agreement, so long as the Corporation's stock is not then
publicly traded, in which case there shall be no redemption. If the Employee
demands arbitration of the termination grounds, the parties will immediately
proceed to arbitration and all compensation, benefits, and stock voting rights
of the Employee shall be suspended pending the decision of the arbitrator, which
shall take place within six months from the commencement of arbitration unless
delay is caused by the Employee. If the Corporation terminates this Agreement
without cause, the Corporation shall be obligated to continue to provide the
Employee with the full salary and compensation benefits required by this
Agreement until the expiration of the rolling three-year term. Unless the
Corporation's stock is then publicly traded, the Corporation shall redeem the
Employee's stock, including vested options, at market value determined by the
method stated in the Shareholder Agreement. All stock acquisition rights shall
cease as of the termination date stated in the written notice of termination,
whether the stock is publicly traded or not. Unless otherwise agreed, the
redemption amount shall be paid as follows: in 12 equal monthly installments if
the amount is less than $500,000; in 24 equal monthly installments if the
redemption amount is between $500,000 and $1,000,000 and in equal quarterly
installments over a five-year period if the redemption amount is $1,000,000 or
more. Each installment shall include interest on the declining balance at 6%
per annum, compounded monthly.
15. Conflict Of Interest. Except as provided in Section 5, above,
--------------------
the Employee warrants and represents that: (1) the Employee has no conflict of
interest in performing the duties for which the Corporation is hiring the
Employee; (2) that the Employee is not under any legal disability regarding
these duties and is not prohibited by any employment agreement or covenant not
to compete from performing these duties; (3) that the work the Employee is
performing and will perform for the Corporation does not to the knowledge of the
Employee, breach any contract or infringe upon any existing patent or copyright
or
5
contain any proprietary information or trade secrets of any former employer or
other person or entity.
16. Proprietary Information. The Employee acknowledges that the list
-----------------------
of Corporation's contracts, suppliers, customers, material information on the
business of those customers, and the Corporation's telecommunication technology,
work in progress,' know-how, techniques, and current and anticipated research
and development activities, as well as the related printed and tangible
materials, as these may exist from time to time, constitute Proprietary Trade
Secrets of the Corporation that are valuable, special and unique assets of the
Corporation's business and which the Corporation takes reasonable steps to
safeguard from disclosure to persons that do not owe a duty of confidentiality
to the Corporation. The Employee also acknowledges that conducting the
Employee's duties for Corporation's business may require that the Employee come
into contact with information belonging to the Corporation's customers which
information is disclosed to the Employee pursuant to the Corporation's agreement
to keep the information confidential ("Customer Confidences"). The employee
will not, during or after the term of employment, disclose any Proprietary Trade
Secrets or Customer Confidences, directly or indirectly, in whole or in part, to
any person, firm, corporation, association, or other entity for any reason or
purpose whatsoever. Nor shall the Employee include any know-how, or techniques
that constitute Proprietary Trade Secrets of the Corporation or Customer
Confidences, in any invention or work unless it is owned by the Corporation.
Information shall cease being Proprietary Trade Secrets or Customer Confidences
if the Corporation or the Customer has permitted the information to enter the
public domain without any involvement of the Employee. The scope and
enforceability of this section shall be determined in accordance with Washington
law. In the event that the Corporation establishes the Employee's breach or
threatened breach of this section's provisions, the Corporation shall be
entitled to an injunction restraining the Employee from disclosing any
Proprietary Trade Secrets or Customer Confidences and/or restraining the
Employee from rendering any services to any person, firm, corporation,
association or other entity to whom any Proprietary Trade Secret or Customer
Confidence, in whole or in part, either has been disclosed or is threatened to
be disclosed. Nothing contained in this section shall be construed as
prohibiting the Corporation from pursuing any other remedies available to the
Corporation for breach or threatened breach of this provision, including the
recovery of damages from the Employee, as well as reasonable attorneys fees and
costs.
17. Restrictive Covenant. During the term of this Agreement and for
--------------------
a period of 12 months after termination or expiration of this Agreement, the
Employee will not (a) directly or indirectly, own, manage, operate, control, be
employed by, participate in, or be connected in any manner with any business
that derives income from providing the same or similar services or products as
those of the Corporation, or is in competition with any business that the
Corporation is conducting or demonstrably anticipates conducting as of the
Employee's termination date; (b) solicit business or perform work for any
6
customer of the Corporation, which work is similar to the type of work performed
by the Corporation for it-s customers, regardless of whether the Employee would
be performing the work on his or her own behalf or on behalf of some other
business; (c) solicit, recruit, or attempt to induce any employee to leave the
Corporation's employment or hire any employee whose employment with the
Corporation was terminated less than six months before the date of hire. If, at
any time during the term of this Agreement, the Employee's outside business
activity or Unrelated Work business conflicts with or competes with the
Corporation's then existing business, the Employee agrees either to merge the
competing or conflicting part of the outside business into the Corporation for
its fair market value on mutually agreed terms, permit the Corporation to
acquire the competing or conflicting portion of the employee's business for its
fair market value on mutually agreed terms, or terminate employment with the
Corporation. After termination of this Agreement for any reason, the Employee
may request written consent from the Corporation's Board of Directors to permit
the Employee to become associated with a competitor prior to expiration of the
12-month period stated above. The Board of Directors shall not unreasonably
withhold consent and shall base any denial of consent upon its determination
that the former Employee's requested business activity would significantly
impair the Corporation's operations, market position, proposals in progress, or
relationship with existing customer(s). In the event that the Corporation
establishes the Employee's actual or threatened breach of this section's
provisions, the Corporation shall be entitled to an injunction restraining the
Employee from the action or threatened action. Nothing in this section shall be
construed as prohibiting the Corporation from pursuing any other available
remedies for the breach or threatened breach, including the recovery of damages
from the Employee, as well as reasonable attorneys fees and costs.
18. Arbitration. Any controversy or claim arising out of, or
-----------
relating to, the meaning or enforceability of any provision of this Agreement,
the terms of employment, the work performed by the Employee, or ownership of any
product or right created during or after the terms of this Agreement, shall be
settled by binding arbitration before a single arbitrator of the Judicial
Arbitration and Mediation Service in the city of Seattle, Washington, or as
agreed-upon by the parties or selected by the King County Presiding Judge. The
arbitration shall be conducted in accordance with the then existing Washington
Civil Court Rules and judgment upon the award shall be rendered within six
months of commencement of arbitration, if practicable, and shall be final and
enforceable in any court of competent jurisdiction.
19. Attorneys Fees. In the event of any dispute arising out of this
--------------
Agreement or the employment relationship, the substantially prevailing party in
such dispute shall be entitled, in addition to any other relief, to an award of
attorneys fees and actual costs, including expert fees and arbitration fees.
The award shall include fees and costs incurred before any proceeding or
arbitration is commenced. If a proceeding is commenced and neither party wholly
prevails, the party receiving substantially greater relief shall be considered
the prevailing party as to all fees and costs relating to the
7
dispute. The actual attorneys fees and costs incurred by the substantially
prevailing party shall be presumptively reasonable, which presumption is
rebuttable.
20. Notices. Any notice required or desired to be given under this
-------
Agreement shall be sufficient if in writing and sent by certified mail, return
receipt requested, to the Employee's residence or to the principal office of the
Corporation, as the case may be.
21. Waiver Of Breach. The waiver by either the Corporation or the
----------------
Employee of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach by either the Corporation or the
Employee.
22. Assignment, Sale or Merger. The Employee acknowledges that the
--------------------------
services to be rendered by him or her are unique and personal. Accordingly, the
Employee may not assign any of his or her rights or delegate any of his or her
duties or obligations under this Agreement. The rights and obligations of the
Corporation under this Agreement shall inure to the benefit of, and shall be
binding upon, the successors and assigns of the Corporation. The parties
contemplate and intend that this Agreement shall be assumed without material
change by GlobalTel as part of its acquisition of GFP Group and that it will be
fully enforceable by GlobalTel and the Employee without the need of any
additional agreement. In the event of a sale or merger of the Corporation to
any other entity, the successor to the Corporation shall assume the
Corporation's obligations pursuant to this Agreement. In the event that a sale,
merger or corporate restructure results in a 50 percent or greater change of
ownership or control of the Corporation's affairs, except as a result of the
GlobalTel acquisition, the Employee may terminate this Agreement and require
that the Corporation redeem the Employees stock pursuant to the formula and
method of valuation stated in the Shareholder Agreement, and pay the other
amounts as provided in paragraph 14, above.
23. Entire Agreement. This Agreement and any addenda attached to
----------------
this Agreement and signed by the parties contain the entire agreement of the
parties. There are no other agreements, oral or written. This Agreement may be
changed only by a written agreement signed by the party against whom enforcement
is sought. In the event of a conflict, the terms of more recently executed
documents supersede those of earlier documents.
24. Severability. The provisions of Section 5 "Extent of Service,"
------------
Section 6 "Ownership of Works Created by Employee," Section 9 "Income from
Services; Accounting and Disclosure of Income and Unrelated Software," Section
15 "Conflict of Interest," Section 16 "Proprietary Information," Section 17
"Restrictive Covenant,' and any addendum that concerns the subject matter of any
of those provisions, state obligations of the parties that are independent of
each other, severable, and separately enforceable. To the extent that any
portion of a provision is deemed unenforceable, the
8
balance of that provision shall be fully enforced. The unenforceability of any
provision shall have no effect on the enforceability of any other provision of
this Agreement.
25. Applicable Law. This Agreement shall be construed in accordance
--------------
with the laws of the State of Washington.
Dated: ------------------------
EMPLOYEE
CORPORATION
By----------------------
Its---------------------
9
EXHIBIT B
Scitor International Telecommunications Services, INC.
A SITA Group Company
Agreement for managed Scitor ITS
data network services
See Exhibit 10.l2
EXHIBIT C
SECTION 4.5 - RESTRICTIONS ON SHARE TRANSFERS. Notwithstanding Section
---------------------------------------------
4.4, the shares of the corporation are restricted shares and may not be sold,
resold, assigned, pledged, gifted, or otherwise transferred (collectively
"transferred") except in full compliance with federal and state securities laws,
which may require registration of such stock or an exemption from registration.
Shares thus may not be transferred by a shareholder unless that shareholder has
first obtained written assurance from the corporation's attorney, at the expense
of the shareholder, that such sale would not violate any federal or state law or
regulation. After receiving such an assurance, the transferring shareholder may
then freely transfer shares in a transaction in which no consideration is given
or received for those shares, including without limitation transfers by bequest,
by gift, in trust for estate planning purposes, and similar transfers.
After receiving such an assurance in the case of a sale of the shares,
if the proposed purchaser is not an existing shareholder, the selling
shareholder shall deliver to the corporation and the other shareholders an offer
in writing to sell all of those shares, at the price to be paid by the proposed
purchaser, to the corporation and the other shareholders, in that order. The
offer shall state the name of the prospective purchaser and shall include a copy
of the corporation's counsel's opinion that no federal or state law or
regulation would be violated by such sale to the other shareholders. The
corporation shall have ten (10) days after receipt of the offer within which to
accept or reject the offer, which may be accepted or rejected only as to all the
shares offered.
If the corporation rejects the offer, it shall immediately so notify
the other shareholders in writing. The other shareholders of the corporation
shall each have the right to purchase the same proportion of those offered
shares as their beneficially-owned shares bear to the beneficial ownership of
all issued and outstanding shares of the corporation, excluding those
beneficially owned by the selling shareholder. The other shareholders shall
have thirty (30) days after receipt of notice of the corporation's rejection of
the selling shareholder's offer to accept or reject the offer, as to all of the
shares offered, by a written notice delivered to the other shareholders
including the selling shareholder. If an individual shareholder rejects the
offer, the remaining shareholders may, within ten (10) days after receipt of
that notice, accept the offer as to that shareholder's proportionate share, in
the same proportion as their beneficial share ownership bears to the aggregate
beneficial ownerships of all shareholders electing to purchase that share.
Unless otherwise agreed, the purchase price to be paid for shares
purchased as provided for above shall be paid within ten (10) days after
delivery of the purchaser's acceptance of the offer to sell.
All stock certificates of the corporation will bear legends stating
the foregoing restrictions.
SECTION 7.4 - AMENDMENTS. The Bylaws may be amended, altered or repealed,
------------------------
at any regular or special meeting of the Board, by a vote of the majority of the
whole Board, provided that a written statement of the proposed action shall have
been delivered personally or by facsimile transmission or mailed to all
directors with the notice of the meeting. Section 4. 5 of the Bylaws may be
amended by the shareholders of the corporation only by the affirmative vote of
the holders of two-thirds (2/3) of the issued and outstanding shares of the
corporation.
EXHIBIT D
ACQUISITION AND MANAGEMENT AGREEMENT
A. PARTIES.
-------
The parties to this Agreement are RATSTEN INTERNATIONAL TELECOMMUNICATIONS,
INC., ("Ratsten"), a California corporation, GFP GROUP, INC., ("GFP Group"), a
Washington corporation, GERMAN XXXXXXXXX, XXXXX XXXXXXXXX, and SIRIUS
INTERNATIONAL TELECOMMUNICATIONS, a California partnership composed of Xxxxxxxxx
and Xxxxxxxxx.
B. PURPOSE OF THIS AGREEMENT.
-------------------------
The purpose of this Agreement is to provide for GFP Group's acquisition of
Ratsten, and to state GFP Group's commitment to provide certain working capital
necessary to meet the GFP Group's obligations to SCITOR International
Telecommunications Services, Inc., a SITA Group Company, pursuant to a contract
between SCITOR and Ratsten, d/b/a Netstar Telecommunications Services, Inc.,
("SITA/SCITOR Agreement"), a copy of which is attached to this Agreement as
Exhibit A. A statement of the working capital requirements of the SITA/SCITOR
Agreement is attached to this agreement as Exhibit B. Finally, this Agreement
sets forth the terms by which GFP Group shall negotiate the acquisition of GFP
Group (after its acquisition of Ratsten) by GlobalTel Resources, Inc., a
Washington corporation.
C. GFP GROUP'S PURCHASE OF SELECTNET SHARES.
----------------------------------------
Selectnet Telemanagement, Inc. owns 14,948 shares of common stock in
Ratsten. GFP Group shall purchase all Selectnet shares by cash payment of
$100,000 to the Selectnet Telemanagement, Inc. The purchase of the Selectnet
shares shall be completed within 30 days after the effective date of this
Agreement.
D. WORKING CAPITAL FOR SITA/SCITOR CONTRACT.
----------------------------------------
GFP Group shall provide interim working capital to fulfill the requirements
of the SITA/SCITOR Agreement pending acquisition by GlobalTel. Xxxxxxxxx and
Xxxxxxxxx shall prepare a detailed list of expenditures needed to sustain the
contract, which expenditures shall be listed in Exhibit B and approved by GFP
Group. GFP Group shall provide a loan in the amount, stated in Exhibit B, not
to exceed $100,000 by December 1, 1995 and $50,000 per month, thereafter until
the acquisition by GlobalTel is completed. The loaned funds shall also provide
for necessary travel, including travel to, Mexico, Russia, and the Ukraine, to
establish various joint venture and license agreements for the facsimile service
on the SITA network.
1
E. CONTRIBUTION OF SIRIUS STOCK IN RATSTEN TO GFP GROUP STOCK FOR GFP GROUP
------------------------------------------------------------------------
STOCK AND OTHER CONSIDERATION.
-----------------------------
Xxxxxxxxx and Xxxxxxxxx represent that they own all interest in a
partnership known as Sirius Telecommunications. The principal asset of Sirius
is 14,948 shares of common stock in Ratsten. Xxxxxxxxx and Xxxxxxxxx shall
cause Sirius to transfer all of these shares to GFP Group. In consideration of
such transfer, GFP Group shall issue 250,000 of shares of common stock to
Xxxxxxxxx and 250,000 shares of common stock to Xxxxxxxxx and obtain agreement
from GlobalTel to exchange such shares for the same number of shares of
GlobalTel common stock and to issue 75,000 additional shares of GlobalTel common
stock to each at the beginning of the second and third years of employment with
GlobalTel and provide Xxxxxxxxx and Xxxxxxxxx with the compensation package
provided in this Agreement.
F. TERMS FOR ACQUISITION OF GFP GROUP BY GLOBALTEL.
-----------------------------------------------
GFP Group shall immediately commence negotiations with GlobalTel for
GlobalTel's acquisition of GFP Group after GFP Group successfully acquires
Ratsten and Ratsten's interest in the SITA/SCITOR contract. Acquisition of GFP
Group by GlobalTel shall be accomplished by GlobalTel's acquisition of all
shares of GFP Group and GlobalTel's issuance to GFP Group of 1,250,000 shares,
including the 500,000 shares initially issued to Xxxxxxxxx and Xxxxxxxxx
collectively.
G. OBLIGATIONS IN CONNECTION WITH GLOBALTEL ACQUISITION.
----------------------------------------------------
1. GENERAL OBLIGATIONS AND CONDITIONS. GFP Group shall structure the
----------------------------------
acquisition of GFP Group by GlobalTel so that Xxxxxxxxx and Xxxxxxxxx receive
the stock interest, compensation package and operational duties generally
described in this Agreement. The primary reason for GlobalTel's interest in
acquiring GFP Group after GFP Group acquires Ratsten is to the benefit of the
SITA/SCITOR contract and the services of Xxxxxxxxx and Xxxxxxxxx. The parties
to this Agreement acknowledge that the terms and conditions of the final
acquisition of GFP Group by GlobalTel have yet to be determined. The parties,
further acknowledge that additional agreements among them, such as a Shareholder
Agreement and agreements with funding sources, will need to be prepared and
executed. Nonetheless, the parties agree that any acquisition by GlobalTel must
meet the minimal requirements stated in this Agreement and that any material
deviation from these requirements must be agreed upon in writing by the party
adversely affected. The parties also agree that it is GFP Group's
responsibility to conduct negotiations with GlobalTel and to obtain GlobalTel's
agreement to structure the acquisition of GFP Group to meet the requirements of
this Agreement.
2. BENEFITS TO XXXXXXXXX AND XXXXXXXXX. As part of the acquisition by
-----------------------------------
GlobalTel, Xxxxxxxxx and Xxxxxxxxx shall each personally receive the following:
a. SHARES IN GLOBALTEL. GlobalTel shall restructure its stock so
-------------------
that there is only a single class of voting common stock. GlobalTel shall issue
250,000 shares of GlobalTel voting common stock and enter into a binding
obligation to issue additional
2
stock to each of Xxxxxxxxx and Xxxxxxxxx at the first anniversary and second
anniversary of employment with GlobalTel. Issuance of these shares shall be
sufficient to cause Xxxxxxxxx and Xxxxxxxxx to achieve stock parity with Xxxx
Xxxx and Xxxxxx Xxx. Stock parity includes all stock that represents an equity
interest in GlobalTel, or convertible to an equity interest, but does not
include debt instruments. The Corporation shall make financing available on
renewable terms to Xxxxxxxxx and Xxxxxxxxx to purchase any instruments or rights
possessed by Chin or Lew that are convertible to equity. Stock parity may be
achieved either by direct issuance of stock to Xxxxxxxxx and Xxxxxxxxx or
pursuant to the terms of an ISOP, or by any other means that accomplishes stock
parity. GFP Group agrees to increase its capitalization by 40,000 shares and to
issue 25,000 shares to Xxxxx Xxxx and 15,000 shares to Xxxxxx Xxxxxx or a
nominee identified by October 31, 1995, with the parties to this Agreement
retaining the proxy rights to vote these shares until the acquisition by
GlobalTel is complete, at which time these shares shall be exchanged for a like
number of GlobalTel shares. Issuance of these shares is subject to, and
conditioned on, the shareholders: (a) executing appropriate investment letters
required by applicable securities laws and meeting the legal requirements for
investing in GFP Group or GlobalTel; (b) executing the appropriate shareholder
agreement restricting resale of such shares, voting, redemption and similar
matters; and (c) acknowledging in writing that issuance of these shares
satisfies the obligations of Xxxxxxxxx and Xxxxxxxxx to each of them. The
parties shall select a means that will have the least overall adverse tax impact
upon the parties as a whole. The parties shall execute a shareholder agreement
by no later than October 28, 1995 that provides in part that these stock
acquisition rights terminate, and all issued shares redeemed by the Corporation
pursuant to the valuation methods detailed in the shareholder agreement, upon
termination of employment by the employee or by GlobalTel, material breach of
the employment agreements, material failure to perform operational duties to
GlobalTel for any reason, or termination by SCITOR of the SITA/SCITOR contract,
for any reason, within 135 days from the effective date of this Agreement.
b. DUTIES, COMPENSATION AND EMPLOYMENT AGREEMENTS. Xxxxxxxxx and
----------------------------------------------
Xxxxxxxxx shall each become officers of GlobalTel and, to the extent necessary
or. desirable under the SITA/SCITOR contract, officers of GFP Group. Xxxxxxxxx
and Xxxxxxxxx shall have operational responsibilities for managing the
relationship with SCITOR and supervising compliance with the SITA/SCITOR
contract and GlobalTel's growth in relation to such services, under the
direction of Xxxxxx X. Xxxxxxxx, who shall become GlobalTel's President and
Chief Executive Officer. Xxxxxxxxx and Xxxxxxxxx shall also alternate one of
them serving as a member of the seven-person Board of Directors of GlobalTel
each calendar year and shall have the right to nominate one outside Board
member, subject to approval of the Board as to qualifications. Xxxxxxxxx shall
serve on the Board during the initial 1995 term and Xxxxxxxxx shall serve on the
Board during 1996. Xxxxxxxxx and Xxxxxxxxx shall each receive notice of, and
have the right to attend, meetings of the Board of Directors whether or not he
is a member of the Board at the time the meeting is held. Xxxxxxxxx and
Xxxxxxxxx hereby nominate Xxxxxx Xxxxxx as the first outside director, which
nomination is acceptable to GFP Group. Each shall execute an employment
agreement in substantially the form attached to this Agreement as Exhibit C-1
and C-2. The duration of the obligations stated in this section and the term of
the employment agreements shall be a rolling three years. Xxxxxxxxx
3
and Xxxxxxxxx shall each, be officers of the Corporation of equal rank with Xxxx
Xxxx and Xxxxxx Xxx, who are currently vice-presidents. Their initial monthly
compensation shall equal the monthly compensation provided to Xx. Xxxx and Xx.
Xxx. Xxxxxxxxx and Xxxxxxxxx shall receive the same regular retirement, health,
stock, and expense benefits ("Senior Management Benefit Package), that GlobalTel
provides to Xxxx Xxxx and Xxxxxx Xxx during, the term of the employment
agreement. This parity arrangement shall not apply to merit bonuses tied to
performance of the corporation which will be available.
c. LOANS FOR PRIOR RATSTEN AND PERSONAL EXPENSES. Xxxxxxxxx and
---------------------------------------------
Xxxxxxxxx have each borrowed funds to pay for Ratsten operating expenses and to
pay for living expenses during Ratsten's startup phase. After the GlobalTel
acquisition has been completed and at such time as GlobalTel receives
significant institutional financing, GlobalTel shall loan Xxxxxxxxx $14,500 and
shall loan Xxxxxxxxx $31,500, to repay personal loans, upon presentation of
documents evidencing such loans and the outstanding balance of each. GlobalTel
shall have the option of making payments directly to the creditors. These loans
shall be evidenced by a note in the usual form, shall be at 6 percent per annum
interest, compounded monthly and shall be repaid by deductions from net merit or
operating bonuses payable to Xxxxxxxxx or Xxxxxxxxx during, the first three
years of employment. Each loan shall be fully repaid before any portion of a
bonus is paid the employee borrowing the funds. The loans shall not, however,
be payable from or chargeable against merit or operating bonuses earned after
the third anniversary of this Agreement. Termination of employment at GlobalTel
for cause shall cause the entire loan balance to become due and payable in four
equal quarterly installments. In addition to and at the same time as these
loans, GlobalTel shall pay up to an aggregate of $30,000 to repay person who
have advanced funds to Xxxxxxxxx and Xxxxxxxxx for Ratsten operations. The
identities of these persons and amount that each advanced for Ratsten operations
is stated in Exhibit D to be prepared by Xxxxxxxxx and Xxxxxxxxx and approved by
GFP Group. Payments shall be made directly to the persons identified in Exhibit
D upon execution of a release acknowledging that the amount paid fully satisfies
the repayment obligation of Ratsten and Xxxxxxxxx or Xxxxxxxxx.
3. REIMBURSEMENT OF ACQUISITION EXPENSES AND WORKING CAPITAL CONTRIBUTED
---------------------------------------------------------------------
BY GFP GROUP. As part of the acquisition of GFP Group, in addition to transfer
------------
of stock, GlobalTel shall make cash payments to GFP Group or to any lender to
GFP Group sufficient to repay working capital provided by GFP Group as part of
its acquisition of Ratsten and sufficient cash to reimburse GFP Group, or pay
for, GFP Group's expenses in acquiring Ratsten and in negotiating and obtaining
GFP Group's acquisition by GlobalTel.
H. WARRANTIES.
----------
1. WARRANTIES CONCERNING SITA/SCITOR AGREEMENT. Krentzman, Burtscher,
-------------------------------------------
and Ratsten each warrant that Ratsten obtained the SITA/SCITOR Agreement under
the name Netstar International Telecommunications, Inc., a corporation to be
formed, and that such corporation was subsequently formed under the name Ratsten
International Telecommunications, Inc. Ratsten, Xxxxxxxxx and Xxxxxxxxx warrant
that no other party has an interest of any nature in the SITA/SCITOR Agreement
and that the
4
SITA/SCITOR Agreement does not prevent, prohibit, or place conditions upon the
transactions contemplated by this Agreement or that, if so, any necessary
consent from SCITOR has been obtained or will be obtained within 45 days after
the effective date of this Agreement.
2. WARRANTY CONCERNING SIRIUS. Xxxxxxxxx and Xxxxxxxxx warrant that they
--------------------------
are the sole partners of Sirius International Telecommunications, a partnership,
and that no other party has any interest in, or rights to, any asset of Sirius
International Communications.
3. WARRANTY AS TO OWNERSHIP OF RATSTEN INTERNATIONAL TELECOMMUNICATIONS,
---------------------------------------------------------------------
INC. Xxxxxxxxx and Xxxxxxxxx warrant that Sirius International
---
Telecommunications and Selectnet Telemanagement, Inc. are the sole shareholders
of Ratsten International Telecommunications, Inc. and that Selectnet's sole
interest in and to the assets of Ratsten is by virtue of its 14,948 shares of
stock.
4. WARRANTIES AS TO BOOKS OF ACCOUNT. Xxxxxxxxx and Xxxxxxxxx warrant
---------------------------------
that they have provided GFP Group with a full accounting of Ratsten's assets and
obligations and, to the best of their ability, set forth the interim
requirements for carrying out Ratsten's obligations under the SITA/SCITOR
contract, which obligations are stated in Exhibit B to this Agreement.
I. GENERAL PROVISIONS.
------------------
1. EXCLUSIVE DEALING. The parties to this Agreement shall not, directly
-----------------
or indirectly, through any representative or otherwise, solicit or entertain
offers from, negotiate with, or in manner encourage, discuss, accept, or
consider proposals relating to the SITA/SCITOR contract, the acquisition of GFP
Group or Ratsten or any of its assets, with any person, group, or entity that is
not a party to this Agreement, except GlobalTel, during the term of this
Agreement.
2. NONDISCLOSURE. Except as required by law, no party shall make any
-------------
public comment, statement, or communication with respect to the transactions
contemplated by this Agreement, nor shall a party permit an agent to disclose
the existence of this Agreement or discussions concerning this Agreement without
the prior Written consent of the other parties to this Agreement. This
obligation shall survive termination of this Agreement for any reason.
3. CONFIDENTIALITY. No party shall disclose or use any confidential
---------------
information furnished by a party to this Agreement in contemplation of this
Agreement. This confidentiality obligation shall extend to the representatives
of the parties, their agents, and assign. Confidential information includes any
information that is valuable and unique to the supplying party, is not generally
known outside of the supplying party's organization, and is either stamped
"confidential" or the party has taken other reasonable precautions to keep
confidential. Confidential information does not include information that the
disclosing party can demonstrate is generally available to the public, other
than as a result of improper disclosure, or was obtained by the receiving party
from a third
5
party who owed no duty of confidentiality to the disclosing party. If this
Agreement is terminated for any reason, the parties shall promptly return all
confidential information to the supplying parties. The confidentiality
obligation shall survive termination of this Agreement for a period of two
years.
4. COSTS. Except as provided by this Agreement and exhibits, each party
-----
shall be responsible for and bear all of that party's expenses incurred in
connection with this Agreement and the actions contemplated by this Agreement.
5. AUTHORITY. Each signator on behalf of a corporation or partnership
---------
warrants that he has authority to bind that entity to this Agreement. Each
married signator shall obtain the written consent of the signator's spouse to
this Agreement.
6. CONSENTS AND REGULATORY APPROVAL. Each party shall cooperate to
--------------------------------
obtain the consent of any third party or regulatory agency that is necessary to
complete the transactions contemplated by this Agreement.
7. COMPLIANCE WITH LAWS. Each party shall comply with all state and
--------------------
federal securities laws and regulations in connection with any of the
transactions contemplated by this Agreement. To the extent that any such laws
or regulations require that the transactions contemplated by this Agreement be
accomplished in a different manner or modified, this Agreement shall be amended
to comply with such laws or regulations and such amendment shall not be deemed
an event that permits any party to terminate this Agreement.
8. TERM AND TERMINATION. The parties shall have 45 days from the date of
--------------------
this Agreement to accomplish the acquisition of Ratsten by GFP Group, and 90
days from the date that the Ratsten/GFP Group acquisition is complete to
complete the acquisition of GFP Group by GlobalTel. The term may be extended by
mutual written agreement of the parties. This Agreement may be terminated by
any of the following
a. TERMINATING EVENTS.
(1) Mutual written consent of the parties;
(2) As to a party, by material breach by the party after written
notice stating nature of the breach and a 30-day opportunity to
cure;
(3) Failure by GFP Group to provide the interim funding contemplated
by this Agreement;
(4) Failure of Xxxxxxxxx or Xxxxxxxxx to obtain SCITOR's consent to
assignment of the SITA/SCITOR Agreement to GFP Group or any
approval that May be required to assure GFP Group that
transactions contemplated by this Agreement do not violate the
SITA/SCITOR contract;
6
(5) Notice from GlobalTel that GlobalTel does not intend to acquire
Ratsten or GFP Group after GFP Group acquires Ratsten.
b. OBLIGATIONS ON TERMINATION. The parties shall have the following
obligations on termination:
(1) In the event that this Agreement is terminated by GFP Group
because of Xxxxxxxxx'x and Xxxxxxxxx'x failure to obtain the
benefit of the SITA/SCITOR contract for GFP Group and GlobalTel,
Xxxxxxxxx and Xxxxxxxxx agree to reimburse GFP Group for all
funds devoted by GFP Group to maintenance of the SITA/SCITOR
Agreement and all expenses incurred by GFP Group in connection
with the transactions contemplated by this Agreement, unless
otherwise agreed in writing. Such amounts shall be determined by
application of GAAP and shall be repaid over a three-year period
at 6 percent per annum interest, compounded monthly, and shall be
evidenced by a note. The full repayment obligation shall be an
independent, joint and several obligation of Xxxxxxxxx and of
Xxxxxxxxx. The expenses to be repaid shall not include attorneys
fees incurred in preparation or negotiation of this Agreement or
amounts paid to purchase shares in Ratsten from Selectnet.
(2) If the Agreement terminates because GFP Group fails to provide
sufficient interim funding in excess of that required by this
Agreement, if the benefit of the SITA/SCITOR contract is not
available through no fault of Xxxxxxxxx or Xxxxxxxxx, or for any
reason other than a material beach of this Agreement, Xxxxxxxxx
and Xxxxxxxxx shall return all stock to GFP Group and GFP Group
shall return Xxxxxxxxx'x and Xxxxxxxxx'x Ratsten stock and the
parties shall have no further obligation to each other, except
the nondisclosure and confidentiality obligations which survive
termination of the Agreement.
(3) If GlobalTel decides not to acquire GFP Group, Xxxxxx and
Xxxxxxxx shall arrange for alternative financing for the
operations contemplated by this Agreement within 120 days from
the date that GFP Group receives notice of GlobalTel's decision.
This Agreement shall continue in force during the 120 day time
period and thereafter if suitable financing is achieved. If
suitable financing is not located within that time, Xxxxxxxxx
and Xxxxxxxxx shall have the right to repurchase the Selectnet
shares for a cash payment of $100,000.
9. GOVERNING LAW. This Agreement shall be construed, interpreted, and
-------------
governed by the laws of the State of Washington.
10. ARBITRATION OF DISPUTES. Any controversy or claim arising out of,
-----------------------
or relating to, the meaning or enforceability of any provision of this Agreement
shall be
7
settled by binding arbitration before a single arbitrator of the Judicial
Arbitration and Mediation Service in the city of Seattle, Washington, or any
other arbitrator that is agreed upon by the parties or selected by the King
County Presiding Judge. The arbitration shall be conducted in accordance with
the then existing Washington Civil Court Rules and judgment upon the award shall
be final and enforced in any court of competent jurisdiction.
11. ATTORNEYS FEES. In the event of any dispute arising out of this
--------------
Agreement or the employment relationship, the substantially prevailing party in
such dispute shall be entitled, in addition to any other relief, to an award of
attorneys fees and actual costs, including expert fees and arbitration fees. The
award shall include fees and costs incurred before any proceeding or arbitration
is commenced. If a proceeding is commenced and neither party wholly prevails,
the party receiving substantially greater relief shall be considered the
prevailing party as to all fees and costs relating to the dispute. The actual
attorneys fees and costs incurred by the substantially prevailing party shall be
presumptively reasonable, which presumption is rebuttable.
12. ENTIRE AGREEMENT. The terms and provisions of this Agreement constitute
----------------
the entire agreement between the parties and supersede all previous
communications, negotiations, proposals, representations, conditions, or
agreements, either oral or written. In the event of any, conflict between the
provisions of this Agreement and the Proposal, this Agreement shall control.
This Agreement may not be enlarged, modified or altered except in writing signed
by the duly authorized officer or representative of each party. To the extent
that this Agreement contemplates that other agreements are necessary to carry
out the transactions required by this Agreement, such further agreements shall
be consistent with the terms of this agreement and with the requirements for
those transactions stated in this Agreement.
13. EXECUTION OF SHAREHOLDER AGREEMENT AND OTHER DOCUMENTS. The parties
------------------------------------------------------
shall execute such further agreements, documents, and consents, as are
reasonable and necessary to carry out the undertakings contemplated by this
Agreement. The parties shall also execute a shareholder agreement that will
prohibit the transfer of shares except upon approval of the corporation and
compliance with applicable law, will prohibit disposition of shares in event of
divorce, death or bankruptcy, and will provide for redemption of shares, upon
termination of employment at a fair and reasonable market value, if termination
is without cause, pursuant to a valuation formula stated in the agreement, and
will state terms for permitting continuation as shareholders if GlobalTel shares
become publicly traded.
14. EFFECTIVE DATE. This Agreement is effective and binding, as of the
--------------
date executed by the last party to execute it.
15. COUNTERPARTS. This Agreement may be signed in counterparts, each of
------------
which shall be as effective as an original.
IN WITNESS WHEREOF, each party has executed this Agreement in
duplicate, as of the dates stated below:
8
GFP GROUP, INC. RATSTEN INTERNATIONAL
TELECOMMUNICATIONS, INC.
By /s/ Xxxxxx X. Xxxxxxxx By /s/ German Xxxxxxxxx
---------------------- --------------------
XXXXXX X. XXXXXXXX, CHP. GERMAN XXXXXXXXX, President
Dated 10 October 1995 Dated 10/10/95
--------------- --------
/s/ German Xxxxxxxxx /s/ Xxxxx Xxxxxxxxx
------------------------------ -----------------------------
GERMAN XXXXXXXXX, Individually XXXXX XXXXXXXXX, Individually
Dated 10/10/95 Dated 10/10/95
-------- --------
-------------------------------- ------------------------------
Spouse Spouse
Name ___________________________ Name _________________________
Dated __________________________ Dated ________________________
SIRIUS INTERNATIONAL
TELECOMMUNICATIONS, a California
Partnership
/s/ German Xxxxxxxxx
-------------------------
GERMAN XXXXXXXXX, Partner
Dated 10/10/95
--------
/s/ Xxxxx Xxxxxxxxx
------------------------
XXXXX XXXXXXXXX, Partner
Dated 10/10/95
--------
9
AMENDMENT TO ACQUISITION & MANAGEMENT AGREEMENT
FOR
GFP GROUP, INC., XXXXX XXXXXXXXX & GERMAN XXXXXXXXX
GFP Group, Inc. ("GFP Group"), Xxxxx Xxxxxxxxx ("Xxxxxxxxx"), and
German Xxxxxxxxx ("Xxxxxxxxx") are parties to the Acquisition and Management
Agreement for GFP Group, Inc., Xxxxx Xxxxxxxxx, and German Xxxxxxxxx, signed
October 10, 1995 ("A&M Agreement"). The following amendments are necessary to
conform the A&M Agreement to the intent of the parties at the time the A&M
Agreement was signed. As the parties intended, these amendments give Xxxxxxxxx
and Xxxxxxxxx the bargained for shares they expected in the exchange.
The parties agree that the A&M Agreement is amended as follows:
1. Xxxxxxxxx and Xxxxxxxxx at no cost to either shall each receive
150,000 additional shares of GlobalTel Resources, Inc. ("GlobalTel") common
stock at such time as GlobalTel receives significant funding, or other
significant developments in GlobalTel's operations and plans such that the Board
of Directors of GlobalTel deems it appropriate to issue the shares, distribution
not to be unreasonably withheld (the "date of significant funding"). The
issuance of the 150,000 shares each shall satisfy the obligation in Section E of
the A&M Agreement to issue 75,000 additional shares of GlobalTel common stock
each to Xxxxxxxxx and Xxxxxxxxx beginning in the second and third years of
employment with GlobalTel.
2. Xxxxxxxxx and Xxxxxxxxx shall, at the closing of the share
exchange under which GlobalTel is acquiring Xxxxxxxxx and Xxxxxxxxx'x GFP shares
(the "closing"), receive sufficient GlobalTel shares to give Xxxxxxxxx and
Xxxxxxxxx the share parity with Xxxx Xxxx and Xxxxxx Xxx required by Section
G.2(a) of the A&M Agreement. Xxxxxxxxx and Xxxxxxxxx each agree to pay $1.10
per share for these parity shares, payable without interest at the earlier of
(i) the date of significant funding (as stated in paragraph 1 above) or (ii) the
date upon which they individually receive a raise in salary under their
employment agreement.
3. Except for those shares being paid for as set forth in section 2
above, all shares issued pursuant to the A&M Agreement, including as amended by
this Amendment, are part of the exchange unrelated to any compensation due
Xxxxxxxxx and Xxxxxxxxx under their employment agreements.
1
EFFECTIVE this day 10th day of October 1995.
GFP GROUP, INC., a Washington
Corporation
By /s/ Xxxxxx X. Xxxxxxxx
---------------------------- --------------------------------
Xxxxxx X. Xxxxxxxx, President German Xxxxxxxxx
Dated December 29, 1995
------------------------------- -------------------------------
Spouse
-------------------------------
Xxxxx Xxxxxxxxx, a Single Person
2
EXHIBIT E
1. Carrier Agreements with MCI and Hi-Rim.
2. Month-to-month lease of headquarters building.
3. Lease agreement for office copier.
4. Stock Purchase Agreement, Promissory Note, Purchase Money Security
Agreement and Pledge of Shares Agreement, all with Okunuki, Nakamura, Wong,
HBICC, Inc. and Sato, or their agents, and Agreement and Release of Claims with
Xxx Xxxx, all dated October 19, 1995.
