STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is entered into as of
April 25, 2001, by and among WorldPort Holdings, Inc. ("Purchaser"), a Delaware
corporation and wholly-owned subsidiary of WorldPort Communications, Inc.
("WorldPort"), and Hostmark World, LP, a Delaware limited partnership
("Seller"). Certain terms shall have the meanings ascribed to them in Section
7.1.
RECITALS
WHEREAS, Seller is the registered and beneficial owner of all of the
issued shares and other outstanding ownership interests in each of the
Corporations (as defined below);
WHEREAS, the Corporations are engaged in the business of owning and
operating web-hosting facilities and developing, marketing and selling
web-hosting and related services (the "Business"); and
WHEREAS, Purchaser desires to acquire, and Seller desires to sell, all
of the issued shares and other outstanding ownership interests in the
Corporations, on the terms and subject to the conditions set forth in this
Agreement.
TERMS OF AGREEMENT
In consideration of the representations, warranties, covenants and
agreements contained herein, the parties hereto agree as follows:
ARTICLE I
THE TRANSACTION
1.1 The Stock Purchase. Subject to the terms and conditions of this
Agreement, effective as of 8:01 A.M., London time, on the Closing Date (as
defined below), Seller hereby shall sell, convey, assign and transfer to
Purchaser all of the issued and outstanding capital stock and other ownership
interests, if any, in each of the Corporations (the "Stock") free and clear of
all Liens (as defined below) and Restrictions (as defined below).
1.2 Consideration. In consideration for the sale and transfer of the
Stock, the Purchaser shall deliver to Seller:
(a) within three NASDAQ Trading Days of the Closing Date,
4,100,000 shares of WorldPort Common Stock ("Initial Stock"); and
(b) within three NASDAQ Trading Days after the first
anniversary of the Closing Date, 1,000,000 shares of WorldPort Common
Stock, (the "Deferred
Stock" and together with the Initial Stock, the "Purchaser Stock"). If
at any time prior to the physical delivery of the Deferred Stock,
WorldPort changes the number of shares of WorldPort Common Stock
issued and outstanding without consideration, as a result of a stock
split, reverse stock split, stock dividend, recapitalization or other
similar transaction, the number of shares of Deferred Stock to be
issued shall be appropriately adjusted.
ARTICLE II
THE CLOSING AND TRANSFER OF STOCK
2.1 Closing. On April 26, 2001 or such other date as agreed upon by
Seller and Purchaser (the "Closing Date") in order to effectuate the
transactions contemplated by this Agreement (the "Closing") the parties are
taking the following actions described in this Article II.
2.2 Deliveries by Purchaser. At the Closing, Purchaser shall deliver
(or cause to be delivered) to Seller and, in the case of Section 2.2(a)(ii) to
Rothschild, the following:
(a) a copy of the direction to WorldPort's transfer agent to
issue (i) 3,717,500 shares of the Initial Stock to Seller or Seller's
designee and (ii) upon WorldPort's receipt from Rothschild of the
Registration Rights Agreement, executed by Rothschild, 382,500 shares
of the Initial Stock to Shield Trust Limited, as nominee of Rothschild,
executed by an authorized officer of WorldPort;
(b) the Registration Rights Agreement in the form of Exhibit A
hereto (the "Registration Rights Agreement"), executed by WorldPort;
(c) the Indemnification Agreement in the form of Exhibit B
hereto (the "Indemnification Agreement"), executed by WorldPort;
(d) a Shareholders' Agreement in the form of Exhibit C hereto
(the "Shareholders Agreement") executed by WorldPort and The Heico
Companies, LLC;
(e) a Share Assignment Agreement reflecting the transfer of
the interests in HGmbH and value attributable thereto (the "HGmbH Share
Assignment Agreement");
(f) a Payables Assignment Agreement reflecting the transfer of
intercompany payables of HGmbH from Seller to Purchaser (the "HGmbH
Payables Assignment Agreement");
(g) instruments of transfer to the extent required in
appropriate jurisdictions ("Instruments of Transfer");
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(h) an Affiliates Agreement in the form of Exhibit D hereto
(the "Affiliates Agreement"), executed by Purchaser; and
(i) such other instruments, notices or documents as may be
necessary or reasonably requested by Seller to carry out the
transactions contemplated hereby.
2.3 Deliveries by Seller. At the Closing, Seller shall deliver (or
cause to be delivered) the following:
(a) certificates, where applicable, representing all of the
Stock, in such form and accompanied by such stock powers, transfer
documents or other instruments as shall be reasonably required by
Purchaser to transfer all right, title and interest in and to the
Stock, free and clear of all Liens and Restrictions and, to the extent
requested by Purchaser or Seller, evidence of the resignation or
removal of directors, managing directors and officers and bank account
signatories of the Corporations and the election or appointment of
Purchaser's designees to such positions, as of the Closing;
(b) the Consents referred to in Schedule 4.4;
(c) the Registration Rights Agreement, executed by Seller and
Rothschild;
(d) the Indemnification Agreement, executed by Hostmark World,
LP, Hostmark World Holdings, LLC, Xxxxx Group, Inc., and Xxxxxx X.
Xxxxx;
(e) the Shareholders Agreement, executed by Seller and Xxxxxx
X. Xxxxx;
(f) the HGmbH Share Assignment Agreement, executed by Seller;
(g) the Payables Assignment Agreement, executed by Seller;
(h) the Instruments of Transfer;
(i) the statutory registration and other corporate books and
documents of the Corporations;
(j) the Affiliates Agreement, executed by all parties other
than Purchaser; and
(k) such other instruments, notices or documents as may be
necessary or reasonably requested by Purchaser to carry out the
transactions contemplated by this Agreement.
2.4 Allocation of Purchase Price.
(a) Purchaser acknowledges that each of the Corporations is
classified as an entity disregarded from its owner for United States
federal tax purposes under Treasury Regulation Section 301.7701-3, and
Purchaser shall not take any action or permit its Affiliates, officers,
directors, employees or agents, or those of
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the Corporations, to take any action inconsistent with that treatment
for any period prior to the day following the Closing Date. Within 90
days after the Closing, Purchaser will provide to Seller a proposed
allocation of purchase price (which purchase price, for this purpose,
will include all assumed liabilities) (the "Asset Acquisition
Statement"). Within 15 days after the receipt of such Asset
Acquisition Statement, Seller will propose to Purchaser in writing any
changes to such Asset Acquisition Statement (and in the event no such
changes are proposed in writing to Purchaser within such time period,
the Seller will be deemed to have agreed to, and accepted, the Asset
Acquisition Statement). Purchaser and Seller will endeavor in good
faith to resolve any differences with respect to the Asset Acquisition
Statement within 15 days after the Purchaser's receipt of written
notice of changes from Seller.
(b) Subject to the provisions of the following sentence of
this paragraph (b), the purchase price (together with any assumed
liabilities) will be allocated in accordance with the Asset Acquisition
Statement provided by Purchaser to Seller pursuant to paragraph (a)
above and Purchaser and Seller shall, subject to the requirements of
any applicable tax law or election, file all Tax Returns and reports
consistent with the allocation provided in the Asset Acquisition
Statement, if such statement is agreed upon. If Seller withholds its
consent to the allocation reflected in the Asset Acquisitions
Statement, and Purchaser and Seller have acted in good faith to resolve
any differences with respect to items on the Asset Acquisition
Statement and thereafter are unable resolve any differences that, in
the aggregate, are material in relation to the purchase price, then
Seller and Purchaser shall not be bound by the Asset Acquisition
Statement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As a material inducement to Seller to enter into the
Agreement, Purchaser hereby represents and warrants to Seller, as set forth
below:
3.1 Organization and Good Standing; Authority. Each of WorldPort and
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of its state of organization. Purchaser has full corporate right,
power and authority, without the consent of any other person, to execute and
deliver this Agreement and the agreements contemplated hereby and to consummate
the transactions contemplated hereby and thereby. Purchaser is duly licensed or
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction where the ownership, lease or operation of its assets and
properties or the conduct of its business requires such license or
qualification, except where the failure to be so licensed or qualified or in
good standing, as the case may be, would not have a Material Adverse Effect. All
corporate acts or proceedings (including action by stockholders) required to be
taken by Purchaser to authorize the execution, delivery and performance of this
Agreement, the agreements contemplated hereby and all transactions contemplated
hereby and thereby have been duly and properly taken.
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3.2 Validity. This Agreement has been, and the agreements and other
documents to be delivered at Closing will be, duly executed and delivered by
Purchaser (and WorldPort if WorldPort is a party thereto) and will constitute
lawful, valid and legally binding obligations of Purchaser (and WorldPort if
WorldPort is a party thereto), enforceable in accordance with their respective
terms, except as the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and general equitable principles regardless of
whether such enforceability is considered in a proceeding at law or in equity.
3.3 Violations and Approvals. The execution, delivery and performance
of this Agreement, the agreements contemplated hereby and the consummation of
the transactions contemplated hereby and thereby, including, without limitation,
the issuance and delivery of the Purchaser Stock will not (immediately, with
notice, the passage of time or both) result in the creation of any Lien, or the
acceleration of any indebtedness or other obligation of WorldPort or Purchaser
and are not prohibited by, do not violate or conflict with any provision of, and
do not and will not (immediately, with notice, the passage of time or both)
result in a default under or a breach of (i) the charter or bylaws of WorldPort
or Purchaser, (ii) any contract, agreement, permit, license or other instrument
to which WorldPort or Purchaser is a party or by which it is bound, (iii) any
order, writ, injunction, decree or judgment of any court or governmental agency
applicable to WorldPort or Purchaser, or (iv) any law, statute, ordinance, rule
or regulation, decree, writ, injunction, judgment or order of any Governmental
Authority or of any arbitration award which is binding upon, enforceable against
or applicable to WorldPort or Purchaser, except for such creations,
terminations, violations, conflicts, breaches, defaults, charges or encumbrances
which, individually or in the aggregate, will not have a material adverse effect
on WorldPort's or Purchaser's ability to consummate the transactions
contemplated hereby.
3.4 Regulatory Filings; Accuracy of Information. Since December 31,
2000, WorldPort has filed with the SEC all statements and reports required to be
filed by it pursuant to the Exchange Act. WorldPort's Annual Report on Form 10-K
for the year ended December 31, 2000, in the form (including exhibits (whether
filed therewith or incorporated by reference therein) and any amendments
thereto) filed with the SEC (the "WorldPort Report"), as of its date, did not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. Other than the WorldPort Report,
WorldPort has not filed any other definitive reports or statements with the SEC
since March 29, 2001.
3.5 Absence of Certain Changes. Except as disclosed in the WorldPort
Report filed with the SEC prior to the date hereof, since December 31, 2000,
there has not been (i) any Material Adverse Change with respect to WorldPort;
(ii) any declaration, setting aside or payment of any dividend or other
distribution with respect to the capital stock of WorldPort; or (iii) any
material change by WorldPort in accounting principles, practices or methods.
3.6 Capital Stock. The issuance and delivery by WorldPort of the
Purchaser Stock has been duly and validly authorized by all necessary corporate
action on the part of WorldPort. The shares of Purchaser Stock to be issued and
delivered under this Agreement will be validly issued, fully paid and
non-assessable, free and clear of all Liens and Restrictions. The Deferred Stock
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has been duly and validly reserved for issuance from the authorized and unissued
shares of WorldPort Common Stock by action of the WorldPort Board of Directors.
3.7 Brokers. Neither WorldPort nor Purchaser has incurred any
obligation for any finder's or broker's or agent's fees or commissions or
similar compensation in connection with the transactions contemplated hereby.
3.8 Consents. No consent, authorization, approval, permit or license
of, or filing with, any Governmental Authority, except as set forth herein, any
lender or any other person or entity is required to authorize, or is required in
connection with the delivery of the Purchaser Stock.
3.9 Litigation. Except as disclosed in the Annual Report, there are no
legal actions or administrative proceedings or investigations pending, or, to
the best knowledge of WorldPort or Purchaser, threatened which seek to enjoin
the consummation of the transactions contemplated hereby.
3.10 Acquisition Intent. (i) Purchaser is acquiring the Stock solely
for its own account, for investment purposes only and with no current intention
or plan to distribute, sell or otherwise dispose of any of such Stock in
connection with any distribution; (ii) Purchaser is not a party to any agreement
or other arrangement for the disposition of the Stock; (iii) Purchaser is an
"accredited investor" as defined in Securities Act Rule 501(a); and (iv)
Purchaser, together with WorldPort, (A) is able to bear the economic risk of any
investment in the Stock acquired pursuant to this Agreement, (B) can afford to
sustain a total loss of that investment, and (C) has such knowledge and
experience in financial and business matters that Purchaser is capable of
evaluating the merits and risks of the proposed investment in the Stock.
3.11 Reliance on Representatives. Each of WorldPort and Purchaser is
relying solely on its own representatives (including its own legal counsel, tax
advisors and accountants) as to legal, tax and related matters concerning the
transaction contemplated by this Agreement and, except as those matters set
forth in Section 4.13, is in no way relying on Seller or Seller' representatives
(including Seller's legal counsel and accountants) as to such legal, tax, and
related matters.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
As a material inducement to the Purchaser to enter into this Agreement,
Seller represents and warrants to the Purchaser, as set forth below (for
purposes of this Article IV and Article V hereof, "Corporations" will be deemed
to include Hostmark UK Limited):
4.1 Organization and Qualification. Seller is a limited partnership and
each of the Corporations is a company, duly organized, validly existing and in
good standing (where applicable) under the laws of the jurisdiction of its
organization and has all requisite corporate or partnership (as applicable)
power and authority to own, lease and operate its assets and properties and to
carry on its business as currently conducted and to execute and deliver this
Agreement and the agreements contemplated hereby and to consummate the
transactions contemplated hereby
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and thereby. Seller and each of the Corporations is duly licensed or qualified
to do business and is in good standing as a foreign corporation or partnership
(as applicable) in each jurisdiction where the ownership, lease or operation of
its assets and properties or the conduct of its business requires such license
or qualification, except where the failure to be so licensed or qualified or in
good standing, as the case may be, would not have a Material Adverse Effect.
Seller has made available to Purchaser accurate and complete copies of the
charter, if any, and other organizational documents of each of the Corporations
and the certificate of limited partnership and partnership agreement of Seller.
4.2 Capitalization; Title.
(a) The entire authorized, issued and outstanding capital stock or
other ownership interests in each of the Corporations, and the record (or, as
the case may be, legal title holder) and beneficial owner or owners thereof, are
set forth in Schedule 4.2(a). All of the Stock of HWL and HAB is duly
authorized, validly issued, fully paid and nonassessable. The shares of HGmbH
are duly authorized, validly issued, fully paid and nonassessable. The Stock
represents all of the outstanding ownership interests in the Corporations.
Except as set forth on Schedule 4.2(a), the Stock is owned by Seller free and
clear of any Liens or Restrictions.
(b) Other than pursuant to this Agreement or as set forth in Schedule
4.2(b), there is no preemptive right, subscription right, option, warrant, call,
proxy, voting trust, voting agreement, right, contract, agreement, commitment,
understanding or arrangement with respect to the issuance, sale, delivery or
transfer of any of the Stock, including any right of conversion or exchange
under any security or other instrument.
(c) Upon transfer of the Stock to Purchaser in accordance with the
terms of Article II hereof, Purchaser will receive good title to the Stock free
and clear of all Liens and Restrictions.
4.3 Corporate Authorization. Seller has full partnership power and
authority to enter into, execute and deliver this Agreement and each other
agreement to be executed or delivered by Seller at or as of the Closing
("Seller's Closing Documents") and to perform its obligations hereunder and
thereunder. The execution, delivery and performance by Seller of this Agreement
and the Seller's Closing Documents have been duly and validly authorized by all
necessary partner action.
4.4 Consents and Approvals. Except as set forth in Schedule 4.4, no
consent, approval, waiver, or authorization is required to be obtained by Seller
or any of the Corporations from, and no notice or filing is required to be given
by Seller or any of the Corporations to (i) any Governmental Authority or (ii)
any other third party in connection with the execution, delivery or performance
by Seller of this Agreement or any of the Seller's Closing Documents, other than
where the failure to obtain such consent, approval, waiver or authorization, or
to give or make such notice or filing, would not, individually, or in the
aggregate, have a Material Adverse Effect on any of the Corporations.
4.5 Non-Contravention. Except as set forth in Schedule 4.5, the
execution, delivery and performance by Seller of this Agreement and the Seller's
Closing Documents and the
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consummation of the transactions contemplated hereby and thereby, do not (a)
violate any provision of the certificate of limited partnership, partnership
agreement or other organizational documents of Seller or any of the
Corporations; (b) subject to obtaining the consents set forth on Schedule 4.4,
conflict with, or result in the breach of, or constitute a default under, or
result in the termination, cancellation or acceleration (whether after the
filing of notice or the lapse of time or both) of any right or obligation of
Seller (relating to the Business) or any of the Corporations under, or in a loss
of any benefit to which Seller (relating to the Business) or any Corporation is
entitled under, or to a penalty or payment by Seller or any Corporation under,
any material contract, agreement or obligation; (c) violate, or result in a
breach of or constitute a default under any law or regulation to which Seller or
any of the Corporations is subject; or (d) result in the creation of any Lien or
Restriction on any of the Stock or any asset of a Corporation.
4.6 Binding Effect. This Agreement constitutes and, when executed and
delivered at the Closing, each of the Seller's Closing Documents will
constitute, a lawful, valid and legally binding obligation of Seller,
enforceable in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
of general applicability relating to or affecting the enforcement of creditors'
rights generally and general equity principles regardless of whether such
enforceability is considered in a proceeding at law or in equity.
4.7 Investments. Schedule 4.7 sets forth the name and jurisdiction of
organization of each entity in which any of the Corporations directly or
indirectly owns any shares of any capital stock or other equity interest of
another person and the amount and nature of the Corporation's interest. All of
such stock and equity interests have been validly issued, are fully paid and
nonassessable and are free from Liens and Restrictions. Except for the entities
listed in Schedule 4.7, the Corporations do not directly or indirectly own any
capital stock or other equity interest in any other person.
4.8 Financial Statements; No Undisclosed Liabilities; Absence of
Certain Changes.
(a) Attached hereto in Schedule 4.8(a) are copies of the unaudited
balance sheets of each of the Corporations at December 31, 2000 and at March 31,
2001 (the "Interim Balance Sheets") and the unaudited statements of earnings
from operations of each of the Corporations for the twelve month periods ended
December 31, 2000 and for the three month period ended March 31, 2001 (all such
balance sheets and statements of earnings, the "Financial Statements"). Each of
the Financial Statements is complete in all material respects, is substantially
consistent with the books and records of the respective Corporation and fairly
presents, in all material respects, the financial condition as of the respective
dates thereof, or the combined results of operations for the respective period
then ended, as the case may be of the Corporation to which it relates.
(b) Except as set forth in Schedule 4.8(b), there are no liabilities of
any Corporation of the type required to be reflected on a balance sheet prepared
in accordance with GAAP other than (1) liabilities provided for in the Interim
Balance Sheets with respect thereto included in the Financial Statements and the
footnotes thereto, if any; (2) liabilities incurred in the ordinary course of
the business since March 31, 2001; (3) liabilities specifically disclosed as
such on any schedule hereto, and (4) continuing obligations to perform under the
Contracts. As of the
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Closing Date, all intercompany payables of any of the Corporations will have
been either (i) contributed to such Corporation and there will be no liabilities
or obligations of any Corporation or the Business to Seller or any Affiliate of
Seller, other than under this Agreement and under employment agreements with
officers and directors of the Corporations listed on Schedule 4.14(c) or (ii)
assigned to Purchaser, in which case such amounts will remain outstanding.
(c) Except as set forth in Schedule 4.8(c) or otherwise disclosed in
this Agreement, since March 31, 2001, (i) the Corporations have conducted the
Business in the ordinary course and (ii) other than in the ordinary course of
the Business, no Corporation has: (1) sold, leased, assigned, pledged,
hypothecated or otherwise transferred any individual asset; (2) terminated
(other than in accordance with its terms) or amended in a manner materially
adverse to the Business any Contract; (3) suffered any material damage,
destruction or other casualty loss (whether or not covered by insurance); (4)
incurred or assumed, or agreed to incur or assume, any liability (whether or not
currently due and payable) ; (5) increased the rate or terms of compensation or
benefits for any employee; (6) declared, committed to or made any loan, advance,
dividend, distribution or other payment or transfer of assets to Seller or any
Affiliate thereof; or (7) entered into an agreement to do any of the foregoing.
None of the Corporations has made any regulatory or public filing regarding the
transactions contemplated by this Agreement without the prior consent of
Purchaser.
4.9 Receivables. The trade debt or receivables, employee advances and
VAT debtor receivables and other receivables reflected on the Interim Balance
Sheets have arisen from bona fide, arms length transactions in the ordinary
course of the Business. All trade debt or receivables, employee advances and VAT
debt or receivables and other receivables of the Corporations as of the Closing
will have arisen from bona fide, arms length transactions in the ordinary course
of the business and will be collectible in the ordinary course of the Business
net of applicable reserves as set forth on the Interim Balance Sheets and in
Schedule 4.9.
4.10 Prepayments. The prepayments reflected on the Interim Balance
Sheet represent actual cash sums paid by the Corporations for goods or services
not received as of March 31, 2001.
4.11 No Material Adverse Effect. Except as set forth in Schedule 4.11,
since March 31, 2001, there has been no event or change that has had or is
reasonably likely to have a Material Adverse Effect with respect to the
Corporations.
4.12 Litigation.
(a) Schedule 4.12(a) sets forth, a complete and accurate list of each
civil, criminal or administrative action, suit, claim, hearing, arbitration,
proceeding or investigation pending or, to the knowledge of Seller, threatened,
against (1) any of the Corporations or (2) Seller or, to the knowledge of
Seller, any Affiliate of Seller, and related to the Business.
(b) Except as set forth in Schedule 4.12(b), there is no order, writ,
judgment, award, injunction or decree of any Governmental Authority of competent
jurisdiction against or affecting the Business.
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4.13 Taxes. Except as set forth in Schedule 4.13:
(a) All Tax Returns required to be filed by or on behalf of any of the
Corporations have been timely filed and all such Tax Returns are true and
complete and all material Taxes due and owing by the Corporations have been
paid. Each of the Corporations has withheld and paid over all Taxes required to
have been withheld and paid over in connection with amounts paid or owing to any
employee, creditor, independent contractor, shareholder or other third party.
(b) None of the assets of any of the Corporations is subject to a lien
for Taxes, except for Taxes that are not yet due.
(c) No audit examination, deficiency assessment, refund litigation or
other administrative or court proceeding with respect to any Tax Returns or
Taxes of any Corporation, is pending or to the knowledge of Seller, threatened.
There are no unpaid Tax deficiency assessments or adjustments concerning any Tax
Return or Tax liability of any of the Corporations.
(d) With respect to the Corporations, there are no outstanding
agreements or waivers to extend the period of limitations for the assessment or
collection of any Tax and no power of attorney relating to Tax matters is
currently in force.
(e) None of the Corporations is a party to a Tax sharing or allocation
agreement or is otherwise liable for the Taxes of another person or entity.
4.14 Employee Benefits.
(a) Schedule 4.14(a) lists each current or former plan maintained with
respect to Employees to which a Corporation has an obligation to make
contributions with respect to employees or former employees of the Business, or
for which a Corporation has any liability for Employees or former employees of
the Business, other than plans not maintained by a Corporation to which a
Corporation is required to contribute by applicable law ("Benefit Plans").
Seller has made available to Purchaser accurate and complete copies of the
Benefit Plans and the most recent actuarial and financial reports related
thereto.
(b) Schedule 4.14(b) lists each bonus or other incentive compensation,
deferred compensation, salary continuation during any absence from active
employment for disability or other reasons, severance, sick days, stock award,
stock option, stock purchase, tuition assistance, vacation pay or other employee
benefit agreements, policies or arrangements (other than Benefit Plans or
Individual Arrangements or employee benefits required by applicable law), to
which a Corporation is a party or for which any Corporation has any liability
("Employee Arrangements").
(c) Schedule 4.14(c) lists each individual employment, severance,
termination, bonus or other compensation arrangements or agreements with respect
to Employees or former employees of the Business to which any Corporation is a
party or for which any Corporation has any liabilities (the "Individual
Arrangements"). Seller has made available to Purchaser accurate and complete
copies of the Individual Arrangements.
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(d) Except as set forth in Schedule 4.14(d) with respect to each
Benefit Plan, to the extent applicable, (i) such plan has been and is duly
registered where required by, and in good standing under, all applicable Laws
and, to the knowledge of Seller, no events have occurred or conditions exist
that could jeopardize such status; (ii) such plan has been and is in material
compliance and has been maintained in all material respects in accordance with
its terms and applicable Law and the requirements of any applicable collective
bargaining agreement; (iii) all amounts required to be reserved under each book
reserved Benefit Plan have been so reserved in accordance with reasonable
accounting practices prevailing in the country where such Benefit Plan is
established, (iv) the fair market value of the assets of each funded Benefit
Plan that is a defined benefit pension plan (or termination indemnity plan), and
the liability of each insurer for each Benefit Plan that is a defined benefit
pension plan (or termination indemnity plan) and is funded through insurance or
the book reserve established for each Benefit Plan that is a defined benefit
pension plan (or termination indemnity plan) that utilizes book reserves,
together with any accrued contributions, is sufficient to procure or provide for
the liability for accrued benefits with respect to those current and former
employees of the Business and the Corporations that participate in such Benefit
Plan according to the reasonable actuarial or other applicable assumptions and
valuations most recently used to determine employer contributions to, or the
funded status or book reserve of, such Benefit Plans, and (v) all contributions
required to be made to such Benefit Plan have been made.
4.15 Compliance with Laws. Except as set forth in Schedule 4.5,
Schedule 4.15 or Schedule 4.20, (i) the Business has been conducted and is being
conducted in compliance with all Laws and Governmental Authorizations, and (ii)
each Corporation has all material Governmental Authorizations necessary for the
conduct of the Business as currently conducted by it.
4.16 Intellectual Property.
(a) Except as set forth in Schedule 4.16(a), a Corporation, as the case
may be, owns or is licensed or otherwise has the right to use Intellectual
Property used by it.
(b) Schedule 4.16(b) sets forth a true and correct list of all
registered Intellectual Property and of all Intellectual Property licenses. To
the knowledge of Seller, the registration of all of the Intellectual Property
listed in Schedule 4.16(b) is in full force and effect.
(c) Neither the conduct of the Business or any asset of any Corporation
infringes on or otherwise violates any intellectual property rights of any
person and no notice has been received by any Corporation or Seller to the
contrary, except as set forth in Schedule 4.16(c).
(d) Except as set forth in Schedule 4.16(d), there are no actions or
proceedings pending or, to the knowledge of Seller, threatened challenging the
validity, enforceability, use or ownership of any material Intellectual Property
used by any Corporation, and, to the knowledge of Seller, no person is
infringing or otherwise violating any Intellectual Property.
4.17 Labor Matters.
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(a) Except as disclosed in Schedule 4.17(a), no Corporation is a party
to any labor or collective bargaining agreement with respect to employees and no
employees are represented by any labor or equivalent organization.
(b) Except as disclosed in Schedule 4.17(b), there are no organizing
activities (including any demand for recognition or certification proceedings)
pending or, to the knowledge of Seller, threatened to be brought or filed with
any labor relations tribunal or any Governmental Authority involving a
Corporation.
(c) Except as disclosed in Schedule 4.12(a), there are no material
audits, complaints, charges, claims or proceedings against any Corporation
pending, or to the knowledge of Seller, threatened to be brought or filed, with
any Governmental Authority based on or arising out of (1) the employment of or
termination of employment by any Corporation of any employee or (2) the terms
and conditions of employment of any employee of the Business.
(d) Except as disclosed on Schedule 4.17(d), each Corporation is in
compliance with all Laws pertaining to the collection and payment of withholding
and/or payroll Taxes and similar Taxes with respect to all employees and former
employees.
4.18 Contracts.
(a) Schedule 4.18(a) sets forth a list, as of the date hereof, of each
Contract, other than Contracts with vendors involving a payment of less than
$25,000 over a twelve month period. Seller has made available to Purchaser an
accurate and complete copy of each Contract.
(b) Except as set forth in Schedule 4.18(b), each Contract is (i) a
valid and binding agreement of the Corporation party thereto; (ii) to the
knowledge of Seller, a valid and binding agreement of the other party thereto;
and (iii) to the knowledge of Seller, is in full force and effect. Except as
otherwise provided in Schedule 4.18(b), no default and no event has occurred
that, with notice or lapse of time, or both, would constitute a default, has
occurred under any Contract by the Corporation party thereto or, to the
knowledge of Seller, the other party thereto, which default has not been cured
or waived.
(c) Except as set forth in Schedule 4.18(c), since January 1, 2001, no
Corporation has received notice from a customer that it intends to terminate or
materially and adversely alter its relationship with the Business.
4.19 Property.
(a) Each of the Corporations has good title to all of the assets and
properties that are reflected on the Interim Balance Sheet for such Corporation
except for assets and properties sold, consumed or otherwise disposed of in the
ordinary course of the Business since March 31, 2001, and except at set forth on
Schedule 4.19(a) all such assets and properties are owned free and clear of all
Liens.
(b) Schedule 4.19(b) is a true, correct and complete schedule of all
leases, subleases, licenses and other Contracts (collectively, the "Real
Property Leases") under which a
12
Corporation uses or occupies any real property (the land, buildings and other
improvements covered by the Real Property Leases being herein called the "Leased
Real Property"). Seller has heretofore delivered or caused to be available to
Purchaser true, correct and complete copies of all Real Property Leases
(including all material modifications, amendments and supplements). Each Real
Property Lease is valid, binding on the Corporation party thereto, and, to the
knowledge of Seller, is in full force and effect and enforceable against all
other parties thereto. All rent and other sums and charges payable by
Corporation, as applicable, as tenants thereunder are current, and, to the
knowledge of Seller, no default has occurred under any Real Property Lease which
default has not been cured or waived.
(c) All tangible assets owned or leased by a Corporation are,
collectively, in operating condition sufficient for operation of the Business in
the ordinary course. Except as set forth in Schedule 4.19(c), the assets owned
or leased by the Corporations are all of the assets used to conduct the Business
in a manner consistent with past practice.
4.20 Environmental Law.
(a) Schedule 4.20 sets forth a summary of each notice or claim relating
to any litigation, proceeding or investigation pending or initiated, or
threatened, by any Governmental Authority and each order or decree from or
continuing agreement with any Governmental Authority or other person with
respect to environmental matters in respect of the Business or any Corporation.
Except as set forth in Schedule 4.20, the Business has been and is operated in
compliance with all Laws relating to environmental conditions, including soil,
groundwater and air conditions.
(b) Except as set forth in Schedule 4.20, the Corporations have all
material environmental permits necessary for the continued operation of the
Business. Except as set forth in Schedule 4.20, neither Seller nor, any
Corporation has received notice, nor does Seller or any Corporation have
knowledge of any facts that could give rise to any notice, that any Corporation
is a potentially responsible party for corrective or remedial action under any
applicable Law or regulation. Except as set forth in Schedule 4.20, no
Corporation has undertaken any response or remedial actions or clean-up actions
of any kind at the request of any Governmental Authority or other person at any
facility.
(c) Except as set forth in Schedule 4.20, no Corporation has any
liability for the handling or disposal of any substance, or the arrangement for
the disposal of any substance, exposure of any employee or other individual to
any substance or condition, or the ownership or operation of any property or
facility in any manner that will form a basis for any action, suit, proceeding,
hearing, investigation, charge, complaint, claim or demand against a Corporation
relating to environmental matters and giving rise to any liability or obligation
of any Corporation or Purchaser.
(d) To the knowledge of Seller, except as set forth in Schedule 4.20,
all properties owned by a Corporation are free of hazardous substances.
4.21 Finders' Fees. Except for Rothschild, whose fees relating to the
sale of the Stock will be paid pursuant to Section 2.2(a), there is no
investment banker, broker, finder or other
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intermediary that has been retained by or is authorized to act on behalf of
Seller or any of the Corporations that might be entitled to any fee or
commission from Seller or any of the Corporations in connection with the
transactions contemplated by this Agreement.
4.22 Acquisition Intent (i) Seller is acquiring the shares of Purchaser
Stock to be issued pursuant to Section 1.2 solely for its account, for
investment purposes only and with no current intention or plan to distribute,
sell or otherwise dispose of any of those shares in connection with any
distribution, other than transfers to Affiliates in compliance with applicable
securities laws; (ii) Seller is not a party to any agreement or other
arrangement for the disposition of any shares of Purchaser Stock other than this
Agreement; (iii) Seller is an "accredited investor" as defined in Securities Act
Rule 501(a); (iv) Seller (A) is able to bear the economic risk of an investment
in the Purchaser Stock acquired pursuant to this Agreement, (B) can afford to
sustain a total loss of that investment, (C) has such knowledge and experience
in financial and business matters that Seller is capable of evaluating the
merits and risks of the proposed investment in the Purchaser Stock, (D) has had
an adequate opportunity to ask questions and receive answers from the officers
of Purchaser concerning any and all matters relating to the transactions
contemplated hereby.
4.23 Reliance on Representatives. Seller is relying solely on its own
representatives (including its own legal counsel, tax advisor and accountant) as
to legal, tax and related matters concerning the transaction contemplated by
this Agreement and is in no way relying on Purchaser or Purchaser's
representative (including Purchaser's legal counsel and accountant) as to such
legal, tax and related matters.
4.24 Accuracy of Representations. No representation, statement or
information made or furnished by Seller or the Corporations to the Purchaser in
this Agreement and the various Schedules attached hereto, taken as a whole,
contains or shall contain any untrue statement of a material fact or omits or
shall omit any material fact necessary to make the information contained therein
in light of the circumstances under which they were made not misleading as of
the date hereof and as of the Closing Date. Seller and the Corporations have
provided or made available to Purchaser or its representatives or agents true,
accurate and complete copies of all documents listed or described in the various
Schedules attached hereto.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Further Assurances. Following the Closing, each party shall execute
and deliver such additional instruments and other documents and shall take such
further actions as may be reasonably requested by the other party as necessary
or appropriate to effectuate, carry out and comply with all of the terms of this
Agreement and the transactions contemplated hereby.
5.2 Cooperation. Each of the parties agrees to reasonably cooperate
with the other in the preparation and filing of all forms, notifications,
reports and information, if any, required pursuant to any law, rule or
regulation in connection with the transactions contemplated by this Agreement.
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5.3 Consents.
(a) Seller and each of the Corporations shall take, or cause to be
taken, all appropriate actions, and to do, or cause to be done, all things
necessary or proper under applicable laws and regulations to consummate and make
effective the transfer of the Stock to the Purchaser, including, without
limitation, obtaining all consents, approvals, authorizations, qualifications
and orders of any Governmental Authority and parties to Contracts by which it is
bound as are necessary for the transfer of the Stock to the Purchaser.
(b) WorldPort and the Purchaser shall take, or cause to be taken, all
appropriate actions, and to do, or cause to be done, all things necessary or
proper under applicable laws and regulations to consummate and make effective
the transactions contemplated herein, including, without limitation, obtaining
all consents, approvals, authorizations, qualifications and orders of any
Governmental Authority and parties to Contracts by which it is bound, as are
necessary for the consummation of the transactions contemplated hereby.
(c) Each of the parties shall make on a prompt and timely basis all
governmental or regulatory notifications and filings required to be made by him
or it for the consummation of the transactions contemplated hereby.
5.4 Publicity. The parties will consult on the content of any public
announcement of the transactions contemplated by this Agreement to be made
immediately following the Closing. Except as required by applicable law or
regulation, any such public announcement will not include reference to Xxxxxx X.
Xxxxx or Xxxxx Group, Inc. without the prior written consent of Seller.
5.5 Affiliate Transactions. All Contracts or other arrangements between
Seller or its Affiliates and any of the Corporations (with the exception of the
employment agreements listed in Schedule 4.14(c)), whether written or oral, and
whether express or implied, pursuant to which Seller or its Affiliates provide
management, administrative, legal, financial, accounting, data processing,
insurance, technical support, or other services to the any Corporation or the
use of any assets of Seller or its Affiliates, or pursuant to which rights,
privileges or benefits are accorded to the Corporations, all of which are listed
on Schedule 5.5, shall terminate as of the Closing. After the Closing, neither
Purchaser, any Corporation nor any of their Affiliates shall have any rights or
obligations under any similar Contract, or arrangement with Seller or its
Affiliates (with the exception of the employment agreements listed in Schedule
4.14(c).
5.6 Nondisclosure. After the Closing, Seller will not disclose, or use
directly or indirectly, to, or for the benefit of any person or entity other
than Purchaser, any Technical Information, Intellectual Property or other
confidential information, data or materials related to any of the Corporations,
other than such information, data or materials that is generally known to the
public. Seller agrees that any breach of this Section 5.6 will result in
irreparable damage to Purchaser for which Purchaser will have no adequate remedy
at law, and, therefore if such a breach should occur, Seller consents to any
temporary or permanent injunction or decree of specific performance by any court
of competent jurisdiction in favor of Purchaser enjoining any such breach,
without prejudice to any other right or remedy to which Purchaser shall be
entitled.
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5.7 Tax Covenants.
(a) The Purchaser shall prepare or cause to be prepared and file or
cause to be filed all Tax Returns for the Corporations for all periods ending on
or prior to the Closing Date which are filed after the Closing Date. Such Tax
Returns shall be prepared in a manner substantially consistent with past
practice, unless a contrary treatment is required by the applicable law.
Purchaser shall cause a copy of any such Tax Return, together with all relevant
workpapers and other information to the extent such return, workpapers and other
information relate solely to the Corporations, to be made available to Seller
for review and comment no later than twenty (20) business days prior to the due
date for the filing of such Tax Return (taking into account proper extensions).
An exact copy of any such Tax Return shall be provided to Seller no later than
ten (10) business days after such Tax return is filed. Seller shall pay all
Taxes related to the operations of the Corporations for all periods ending on or
prior to the Closing Date to the extent not accrued on the Interim Balance
Sheets, which accruals are set forth on Schedule 5.7. Notwithstanding the
foregoing, Seller shall not be liable for payroll tax obligations of the
Corporations to the extent accrued on the Interim Balance Sheets or, if related
to periods after March 31, 2001, accrued as of the Closing Date as set forth on
Schedule 5.7.
(b) Purchaser shall prepare or cause to be prepared and file or cause
to be filed any Tax Return of the Corporations for periods which begin before
the Closing Date and end after the Closing Date (the "Post Closing Returns").
Purchaser shall cause a copy of any such Post Closing Return, together with all
relevant workpapers and other information to the extent such return, workpapers
and other information relate solely to the Corporations, to be made available to
Seller for review and comment no later than twenty (20) business days prior to
the due date for the filing of such Post Closing Return (taking into account
proper extensions). An exact copy of any such Post Closing Return shall be
provided to Seller no later than ten (10) business days after such Tax return is
filed. For purposes of this section, in the case of any Taxes that are imposed
on a periodic basis and are payable for a taxable period that includes (but does
not end on) the Closing Date, the portion of such Tax which relates to the
portion of such taxable period ending on the Closing Date shall: (x) in the case
of any Taxes other than Taxes based upon or related to income or receipts, be
deemed to be the amount of such Taxes for the entire taxable period multiplied
by a fraction the numerator of which is the number of days in the taxable period
ending on the Closing Date and the denominator of which is the number of days in
the entire taxable period, and (y) in the case of any Taxes based upon or
related to income or receipts be deemed equal to the amount which would be
payable if the relevant taxable period ended on the Closing Date.
(c) The Purchaser, Corporations and Seller shall cooperate, as and to
the extent reasonably required and requested by either party in connection with
the filing of Tax Returns of the Corporations and any audit, litigation or other
proceeding with respect to Taxes.
(d) Survival. This Section 5.7 shall survive until three months after
the expiration of the statute of limitations with respect to the applicable Tax.
(e) Transfer Taxes. Purchaser shall be responsible for the filing of
Tax Returns (including any documentation) with respect to all transfer,
documentation, sales, use, stamp,
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registration, and similar Taxes and the payment of such taxes incurred in
connection with the transfer of the Stock.
(f) Character of Payments. To the extent permitted by applicable law,
the parties agree that any indemnification payments (and/or payments or
adjustments) made with respect to this Agreement shall be treated for all Tax
purposes as an adjustment to the purchase price.
5.8 Insurance. The following will apply regarding insurance policies
maintained prior to the Closing by Seller or its Affiliates for the benefit of
the Corporations:
(a) If the policy is an occurrence-based policy, coverage relating to
occurrences prior to the Closing will continue after the Closing under the terms
of the policy. If the policy is a claims-made policy, coverage will cease upon
the Closing except for claims or circumstances that could give rise to a claim
that are notified to the insurer prior to the Closing, for which coverage shall
continue under the terms of the policy.
(b) Where claims are made under these policies, Seller will cause its
employees to cooperate fully with Purchaser and the Corporations to comply with
the requirements of the insurer and provide such information and assistance as
Purchaser may reasonably request. Any monies received by Seller or its
Affiliates as a result of any such claim shall be paid over to Purchaser or the
Corporations, as the case may be, net of all reasonable costs and expenses of
recovery.
5.9 Release of Lease Guaranties.
(a) The parties acknowledge that one or more of the Guarantors have
entered into each of the Guaranties. WorldPort and Purchaser will use their
reasonable efforts to obtain the release of all of the Guarantors under all of
the Guaranties within 30 days following the Closing Date.
(b) Without limiting the generality of Section 5.9(a), the reasonable
efforts of WorldPort and Purchaser will include without limitation, entering
into substitute guaranties or surety arrangements from WorldPort on
substantially the same terms provided in the Guaranties, if necessary to effect
the release of the Guarantors under the Guaranties. The reasonable efforts of
WorldPort shall also include, if required, WorldPort providing to the landlord
of the Slough property a rent indemnity in an amount equal to eight years' rent
as provided in Section 13.1.4 of the Deed dated 28 September 2000 ("Slough
Deed"), and keeping such rent indemnity in place until November 20, 2008 or such
earlier date as it is no longer required to obtain the release of the Guarantors
thereunder and under the Second Slough Lease. If required in order to obtain
such rent indemnity, WorldPort agrees to deposit funds with a commercial bank
(or provide such other collateral or security required by the bank) in an amount
sufficient for the commercial bank to provide such rent indemnity. The
reasonable efforts of WorldPort shall not require WorldPort to provide a rent
indemnity after November 20, 2008, except that, if required by the landlord in
order to continue the release of the Guarantors under the Guaranties of the
Second Slough Lease, WorldPort will provide the landlord of the Slough property,
during the period November 21, 2008 to November 21, 2015 one or more rent
indemnities from time to time, as described in Section 8.2.4 of the Second
Slough Lease provided that no such rent indemnity need have a term
17
of more than one year and no such rent indemnity need be in an amount greater
than the rent then remaining under the term of the Second Slough Lease. The
reasonable efforts of WorldPort shall also include increasing the deposit under
the lease which is the subject of the Letter of Support (as defined below) by an
amount equal to six months' rent thereunder. Except as specifically provided in
this Section 5.9(b) as to the Slough Deed, the Second Slough Lease and the
Letter of Support, the reasonable efforts of WorldPort shall not be deemed to
include a requirement to provide any rent indemnity, letter of credit, escrow,
cash deposit, or prepayment.
(c) The parties hereto and the Guarantors have entered into an
Indemnification Agreement of even date herewith in the form attached as Exhibit
B. Each of the Guarantors shall have standing to enforce the provisions of this
Section 5.9 as if they were parties to this Agreement.
(d) WorldPort agrees that any beach of this Section 5.9 will result in
irreparable damage to the Seller and Guarantors for which Seller and Guarantors
will not have an adequate remedy at law, and, therefore if such a breach should
occur, WorldPort agrees that Seller or any Guarantor shall be entitled a
temporary or permanent injunction or decree of specific performance by any court
of competent jurisdiction in favor of Seller or any of the Guarantors enjoining
any such breach, without the necessity of proof of actual damages of the need
for posting a bond and without prejudice to any other right or remedy to which
Seller or any of the Guarantors shall be entitled.
ARTICLE VI
INDEMNIFICATION
6.1 Agreement to Indemnify.
(a) Seller agrees to indemnify and hold the Purchaser, its Affiliates
(including after Closing, the Corporations) and their respective shareholders,
members, directors, officers, employees, attorneys and agents ("Purchaser
Indemnifiable Parties") harmless from and against the aggregate of all expenses
(including reasonable professional fees and expenses and court costs), losses,
costs, deficiencies, diminution in value, liabilities and damages (collectively,
"Losses") arising out of or resulting from (i) any breach of a representation or
warranty made by Seller in or pursuant to this Agreement, (ii) any inaccuracy in
any certificate delivered by Seller or the Corporations pursuant to this
Agreement, (iii) any breach of the covenants or agreements made by Seller, the
Corporations in or pursuant to this Agreement, or (iv) any Taxes for any period
ending on or prior to the Closing Date in excess of the accruals set forth in
Schedule 5.7, the amount reserved for payroll Taxes as of the Closing Date.
Notwithstanding the foregoing, no claim for Losses arising other than those from
any breach of representation or warranty, other than Sections 4.2 or 4.19(a)
(the "Excluded Representations") shall be asserted by the Purchaser
Indemnifiable Parties until the aggregate of all such Losses exceeds the sum of
$500,000 (the "Deductible") in which case the party entitled to indemnification
shall be entitled to the full amount of its Losses in excess of the Deductible.
The maximum recovery by the Purchaser Indemnifiable Parties with respect to
Losses arising from a breach of representation or warranty, other than a breach
of an Excluded Representation, shall be the return or withholding of the
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Deferred Stock. The maximum recovery by the Purchaser Indemnifiable Parties with
respect to Losses arising from a breach of an Excluded Representation shall be
all of the Purchaser Stock less any shares of Deferred Stock returned or
withheld pursuant to this Article VI (the "Maximum Shares"), or at Seller's
option, exercised by delivery of within five days of demand, immediately
available funds in the amount of the recovery, up to an amount equal to (i)
Maximum Shares multiplied by (ii) the greater of (x) the average closing price
for WorldPort Common Stock for the five trading days prior to the date of the
demand and (y) $2.126.
(b) The Purchaser agrees to indemnify and hold Seller, its Affiliates
and their respective shareholders, members, directors, officers, employees,
attorneys, and agents harmless from and against all Losses arising out of or
resulting from (i) any breach of a representation or warranty made by the
Purchaser in or pursuant to this Agreement, (ii) any inaccuracy in any
certificate delivered by the Purchaser pursuant to this Agreement, or (iii) any
breach of the covenants or agreements made by the Purchaser in or pursuant to
this Agreement.
6.2 Survival. Each of the representations and warranties made by Seller
and the Purchaser in this Agreement or pursuant hereto shall survive until
October 25, 2002. No claim for the recovery of Losses from any breach of
representation or warranty or indemnification covenant may be asserted after
such representations and warranties or indemnification covenant shall expire;
provided, however, that claims first asserted within the applicable period shall
survive until finally resolved without possibility of appeal. Each
representation, warranty, covenant and agreement of the parties contained in
this Agreement is independent of each other representation, warranty, covenant
and agreement. All covenants and agreements in this Agreement shall survive the
Closing until fully performed.
6.3 Defense of Third Party Claims. With respect to each third party
claim subject to this Article (a "Third Party Claim"), the party seeking
indemnification (the "Indemnified Party") shall give prompt notice to the
indemnifying party (the "Indemnifying Party") of the Third Party Claim, provided
that failure to give such notice promptly shall not relieve or limit the
obligations of the Indemnifying Party except to the extent the Indemnifying
Party is materially prejudiced thereby. If the remedy sought in the Third Party
Claim is solely money damages or if the Indemnified Party otherwise permits,
then the Indemnifying Party, at its sole cost and expense, may, upon notice to
the Indemnified Party within thirty (30) days after the Indemnifying Party
receives notice of the Third Party Claim of its acknowledgement of liability for
the claim and desire to assume the defense thereof, assume the defense of the
Third Party Claim. If it assumes the defense of a Third Party Claim, then the
Indemnifying Party shall select counsel reasonably satisfactory to the
Indemnified Party to conduct the defense. The Indemnifying Party shall not
consent to a settlement of, or the entry of any judgment arising from, any Third
Party Claim, unless (i) the settlement or judgment is solely for money damages
and the Indemnifying Party admits in writing its liability to hold the
Indemnified Party harmless from and against any losses, damages, expenses and
liabilities arising out of such settlement or judgment or (ii) the Indemnified
Party consents thereto, which consent shall not be unreasonably withheld. The
Indemnifying Party shall, to the extent reasonably practicable, provide the
Indemnified Party with thirty (30) days prior notice before it consents to a
settlement of, or the entry of a judgment arising from, any Third Party Claim.
The Indemnified Party shall be entitled to participate in the
19
defense of any Third Party Claim, the defense of which is assumed by the
Indemnifying Party, with its own counsel and at its own expense. With respect to
Third Party Claims in which the remedy sought is not solely money damages and
the Indemnified Party does not permit the Indemnifying Party to assume the
defense, the Indemnifying Party shall, upon notice to the Indemnified Party
within fifteen (15) days after the Indemnifying Party receives notice of the
Third Party Claim, be entitled to participate in the defense with its own
counsel at its own expense. If the Indemnifying Party does not assume the
defense of any Third Party Claim in accordance with the terms of this Section,
then the Indemnifying Party shall be bound by the results obtained by the
Indemnified Party with respect to the Third Party Claim. The parties shall
cooperate in the defense of any Third Party Claim and the relevant records of
each party shall be made available on a timely basis.
6.4 Seller Limitations. Seller agrees not to make any claim for
indemnification against any Corporation or the Purchaser by reason of the fact
that he is or was director, officer, employee or agent of any Corporation or was
serving at the request of a Corporation as partner, trustee, director, officer,
employee, or agent of another entity (whether such claim is for judgments,
damages, penalties, fines, costs, amounts paid in settlement, losses, expenses,
or otherwise and whether such claim is pursuant to any statute, charter
document, bylaw, agreement, or otherwise) with respect to any action, suit,
proceeding, complaint, claim, or demand brought by the Purchaser, the
Corporations against Seller (whether such action, suit, or proceeding,
complaint, claim, or demand is pursuant to this Agreement, applicable law, or
otherwise).
6.5 Payment by Stock. Purchaser may obtain satisfaction of any
indemnification obligation under this Article VI only through the withholding or
cancellation of shares of Deferred Stock, valuing such shares at $2.126 per
share, unless, within five days of demand, Seller satisfies such obligations in
cash.
6.6 Nature of Remedies. The remedies provided in this Article VI shall
be the exclusive remedies of one party against the other with respect any breach
of a representation or warranty made in or pursuant to this Agreement or any
inaccuracy in any certificate delivered pursuant to this Agreement, except that
the provisions of this Section 6.6 shall not preclude any of the parties from
bringing any actions, either in law or in equity, based in fraud.
ARTICLE VII
DEFINITIONS
7.1 Defined Terms. As used herein, the following terms shall have the
following meanings:
"Affiliate" shall have the meaning ascribed to it in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act, as in effect on the date
hereof.
"Contract" means any agreement, contract, lease, note, mortgage,
indenture, loan agreement, franchise agreement, covenant, employment agreement,
license, instrument, purchase
20
and sales order, commitment, undertaking, obligation, whether written or oral,
express or implied.
"Corporations" means Hostmark World Limited, a private limited company
formed under the laws of England and Wales ("HWR"), Hostmark AB, a company
formed under the laws of Sweden ("HAB") and Hostmark GmbH, a company formed
under the laws of Germany ("HGmbH").
"Environmental Laws" means all laws, statutes, decisions, rules,
ordinances, regulations, permit conditions, authorizations, moratoria, orders
and requirements ("Laws") relating to (i) pollution or the protection of the
environment (including air, indoor air or other indoor environmental health or
safety conditions, surface water, ground water, soil, land surface or subsurface
strata), or (ii) disposal, emissions, discharges, spills, releases or threatened
releases of Materials of Environmental Concern, or otherwise relating to the
manufacture, processing, distribution, use, import, export, treatment, storage,
disposal, transport or handling of Materials of Environmental Concern.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Guaranties" shall mean each of the following agreements which provide
for guaranties with respect to obligations of one or more of the Corporations:
(i) a Deed incorporating Licence to Assign, Licence to Change Use and Deed of
Variation dated 28 September 2000, relating to Building 00/00 Xxxxxxxxx Xxxx,
Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxx, Xxxxxxx; (ii) a Lease dated 28 September
2000, relating to Building 00/00 Xxxxxxxxx Xxxx, Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxx, Xxxxxxx ("Second Slough Lease"); (iii) a Guarantee (SW:
Proprieborgen) dated 7 April 2000 relating to a lease agreement entered into on
6 April 0000, xxxxxxx Xxxxxxxxxx XX (now known as Hostmark AB), and KGK
Fastigheter i Lunda AB for the property Xxxxxxx 0, Xxxxxxxxxxxxxx 00, Xxxxxxxxx,
Xxxxxx; and (iv) a Letter of support (Patronatserklarung) relating to a lease
contract concluded on October 5, 2000, between advantag-e Deutschland GmbH (now
known as Hostmark GmbH) and Graphigrund Grundstucksverwaltung GmbH ("Letter of
Support").
"Governmental Authority" means any nation or government, any state,
regional, local or other political subdivision thereof, and any entity or
official exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Guarantors" shall mean each of Xxxxxx X. Xxxxx, Xxxxx Group, Inc. and
Hostmark World Holdings LLC.
"Intellectual Property" means all copyrights, patents, trademarks,
trade names, trade styles, logos, product designations and service marks and all
applications (pending or in process) and registrations therefor and licenses
thereof, including the name "Hostmark" and all derivations and abbreviations
thereof.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including, but not limited to, any conditional sale or
other title retention agreement, any lease in the nature thereof, and the filing
of or agreement to give any financing statement under
21
the Uniform Commercial Code or comparable law or any jurisdiction in connection
with such mortgage, pledge, security interest, encumbrance, lien or charge,
except (i) liens for Taxes, assessments, not yet due and payable; and (ii) (A)
easements, licenses, covenants, rights of way, utility agreements and other
similar restrictions, (B) zoning, building and other similar restrictions on the
use of real property and (C) other encumbrances of a minor nature that do not,
individually or in the aggregate, in any material respect interfere with or
impair the continued use of any asset used by the Corporations in the ordinary
course of the business consistent with past practice.
"Material Adverse Change (or Effect)" means a change (or effect), in
the financial condition, properties, liabilities, obligations, operations, or
business of the Corporations, or WorldPort, as applicable, which change (or
effect), individually or in the aggregate, is materially adverse to the
financial condition, properties, operations, or business of the Corporations, or
WorldPort, as applicable.
"Materials of Environmental Concern" means any and all hazardous
chemicals and materials, and any and all hazardous substances as defined in
CERCLA, hazardous wastes as defined in RCRA, petroleum and petroleum products,
radioactive materials, asbestos, and any and all other hazardous chemicals,
materials, constituents, pollutants or contaminants regulated under any
Environmental Laws.
"NASDAQ Trading Day" means a day The Nasdaq Stock Market is open for
trading irrespective of whether WorldPort Common Stock trades on such day.
"Restrictions" means any restriction on the exercise of any rights
related to the Stock or the Purchaser Stock, as applicable, including without
limitation, proxies, voting agreements, transfer restrictions, agreements to
sell or purchase and similar items, other than restrictions set forth in the
charter, bylaws or equivalent organizational documents of a Corporation or
arising solely by virtue of applicable law.
"Rothschild" means NM Rothschild & Sons Limited.
"SEC" means the United States Securities and Exchange Commission.
"Software" means all electronic data processing systems, information
systems, computer software programs, program specifications, charts, procedures,
source codes, object codes, input data, routines, data bases and report layouts
and formats, record file layouts, diagrams, functional specifications and
narrative descriptions, flow charts and other related material and documentation
and any and all licenses and copies thereof and rights thereto.
"Tax Authority" includes any state, local, foreign or other
governmental authority responsible for the administration of any Taxes.
"Tax Return" means any declaration, estimate, return, report,
information statement, schedule or other document (including any related or
supporting information) with respect to Taxes that is required to be filed with
any Tax Authority.
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"Taxes" means all federal, provincial, territorial, state, municipal,
local, domestic, foreign or other taxes, imposts, rates, levies, assessments and
other charges including, without limitation, ad valorem, capital, capital stock,
customs and import duties, disability, documentary stamp, employment, estimated,
excise, fees, franchise, gains, goods and services, gross income, gross
receipts, income, intangible, inventory, license, mortgage recording, net
income, occupation, payroll, personal property, production, profits, property,
real property, recording, rent, sales, severance, sewer, social security, stamp,
transfer, transfer gains, unemployment, use, value added, water, windfall
profits, and withholding, together with any interest, additions, fines or
penalties with respect thereto or in respect of any failure to comply with any
requirement regarding Tax Returns and any interest in respect of such additions,
fines or penalties and shall include any transferee liability in respect of any
and all of the above.
"Technical Information" means all information in the nature of
know-how, trade secrets, inventions, processes, designs, devices and related
information and documentation (excluding any patents or claims subject to a
pending patent application and excluding any Software) and any and all licenses
and copies thereof and rights thereto.
"WorldPort Common Stock" means the common stock, par value $0.0001 per
share, of WorldPort.
7.2 Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the defined meanings
when used in any certificates, reports or other documents made or delivered
pursuant hereto or thereto, unless the context otherwise requires.
(b) Terms defined in the singular shall have a comparable meaning when
used in the plural, and vice versa.
(c) As used herein, the neuter gender shall also denote the masculine
and feminine, and the masculine gender shall also denote the neuter and
feminine, where the context so permits.
(d) As used herein, "knowledge" of Seller means the knowledge of any of
the persons listed on Schedule 7.2.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be delivered by certified
or registered mail (first class postage pre-paid), guaranteed overnight
delivery, or facsimile transmission if such transmission is confirmed by
delivery by certified or registered mail (first class postage pre-paid) or
guaranteed overnight delivery, to the following addresses and telecopy numbers
(or to such other addresses or telecopy numbers which such party shall designate
in writing to the other party):
(a) if to the Purchaser to:
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WorldPort Communications, Inc.
000 Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Telecopy: (000) 000-0000
with a copy to:
XxXxxxxxx, Will & Xxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, P.C.
Telecopy: (000) 000-0000
(b) if to the Seller:
Hostmark World, LP
c/o Sturm Group, Inc.
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Xxxxxxx Xxxxxx
Telecopy: (000) 000-0000
if to Seller: in each case with copies to:
Holme Xxxxxxx & Xxxx LLP
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxxx, Xx.
Telecopy: (000) 000-0000
8.2 Entire Agreement. This Agreement (including the Exhibits and
Schedules attached hereto) and other documents delivered at the Closing pursuant
hereto or thereto, contain the entire understanding of the parties in respect of
their subject matter and supersede all prior agreements and understandings (oral
or written) between or among the parties with respect to such subject matter.
The Exhibits and Schedules constitute a part hereof as though set forth in full
above.
8.3 Expenses. Except as otherwise provided herein, the parties shall
pay their own fees and expenses, including their own counsel fees, incurred in
connection with this Agreement. All legal fees and expenses of Seller or the
Corporations incurred at or prior to the Closing related to the transactions
contemplated by this Agreement shall be borne by Seller.
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8.4 Amendment; Waiver. This Agreement may not be modified, amended,
supplemented, canceled or discharged, except by written instrument executed by
the Purchaser, and Seller. No failure to exercise, and no delay in exercising,
any right, power or privilege under this Agreement shall operate as a waiver,
nor shall any single or partial exercise of any right, power or privilege
hereunder preclude the exercise of any other right, power or privilege. No
waiver of any breach of any provision shall be deemed to be a waiver of any
preceding or succeeding breach of the same or any other provision, nor shall any
waiver be implied from any course of dealing between the parties. No extension
of time for performance of any obligations or other acts hereunder or under any
other agreement shall be deemed to be an extension of the time for performance
of any other obligations or any other acts.
8.5 Binding Effect; Assignment. The rights and obligations of this
Agreement shall bind and inure to the benefit of the parties and their
respective successors and assigns. Nothing expressed or implied herein or
therein shall be construed to give any other person any legal or equitable
rights hereunder, except as expressly provided in Section 5.9 hereof. Except as
expressly provided herein or therein, the rights and obligations of this
Agreement may not be assigned by any party without the prior written consent of
the other parties hereto.
8.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one and the same instrument.
8.7 Interpretation. When a reference is made in this Agreement to an
article, section, paragraph, clause, schedule or exhibit, such reference shall
be deemed to be to this Agreement unless otherwise indicated. The headings
contained herein and on the Schedules are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement or the
Schedules. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."
8.8 Governing Law; Interpretation. This Agreement shall be construed in
accordance with and governed for all purposes by the internal substantive laws
of the State of Delaware applicable to contracts executed and to be wholly
performed within such State.
8.9 Arm's Length Negotiations; Drafting. Each party herein expressly
represents and warrants to all other parties hereto that before executing this
Agreement, said party has fully informed itself of the terms, contents,
conditions and effects of this Agreement; said party has relied solely and
completely upon its own judgment in executing this Agreement; said party has had
the opportunity to seek and has obtained the advice of counsel before executing
this Agreement; said party has acted voluntarily and of its own free will in
executing this Agreement; said party is not acting under duress, whether
economic or physical, in executing this Agreement; and this Agreement is the
result of arm's length negotiations conducted by and among the parties and their
respective counsel. This Agreement shall be deemed drafted jointly by the
parties and nothing shall be construed against one party or another as the
drafting party.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
PURCHASER: SELLER:
WORLDPORT HOLDINGS, INC. HOSTMARK WORLD, LP
By: /s/ X. Xxxxxxx By: HOSTMARK WORLD GP, LLC
-------------------------
Name:X. XXXXXXX Title: General Partner
Title: Assistant Secretary
By: HOSTMARK WORLD HOLDINGS, LLC
Title: Manager
By: /s/ Xxxxx x'Xxxxxx
----------------------------------
Name: Xxxxx x'Xxxxxx
Title: Chief Executive Officer
The following Schedules to the Stock Purchase Agreement have not been
filed as part of this Form 8-K. The Company agrees to furnish supplementally to
the Commission, upon request, a copy of all omitted schedules.
Schedule Description
-------- -----------
4.2(a) Stock Ownership
4.2(b) Preemptive and other rights
4.4 Required Consents
4.5 Non-Contravention
4.7 Investments
4.8(a) Financial Statements
4.8(b) Certain Liabilities
4.8(c) Interim Conduct
4.9 Receivables
4.11 Material Adverse Effect
4.12 Litigation
4.13 Taxes
4.14 Employee Benefits and Employee Matters
4.15 Compliance with Laws
4.16 Intellectual Property
4.17 Labor Matters
4.18 Material Contracts
4.19 Assets and Property
4.20 Environmental Matters
5.5 Affiliate Transactions
5.7 Certain Accruals
