Exhibit 10.2
STOCK EXCHANGE AGREEMENT
Dated as of June 16, 1999
by and between
World Callnet, Inc.
and
[Callnet Plc Management Shareholder and Optionholder]
STOCK EXCHANGE AGREEMENT
THIS STOCK EXCHANGE AGREEMENT (the "Agreement"), dated as of June __,
1999, is entered into by and between World Callnet, Inc., a Delaware corporation
("Buyer") and the Stockholder whose name is listed on the signature page hereto
(the "Seller"). The Buyer and the Seller are collectively referred to herein as
the "Parties."
A. The Seller owns ____ shares (the "Callnet Shares") of the capital
stock (the "Callnet Stock") of Callnet, Plc (the "Target") and an option to
purchase Callnet Stock (the "Callnet Option"), both as set forth in Exhibit A.
B. This Agreement contemplates a transaction (the "Acquisition") in
which the Buyer will exchange with the Seller, and the Seller will exchange with
the Buyer, the Callnet Shares in return for the issuance of certain shares of
the common stock, par value $0.001 per share (the "WCN Common Stock"), of the
Buyer. In connection with the Acquisition, Buyer will seek to enter into similar
agreements with the other shareholders of Target with the objective of Buyer
acquiring all or substantially all of the Callnet Stock based on a similar
purchase price.
C. Buyer will also seek to acquire the Callnet Option and all or
substantially all of the other options to acquire Callnet Stock pursuant to
option exchange agreements (an "Option Exchange Agreement") based on a similar
exchange ratio.
Now, therefore, in consideration of the premises and the mutual
covenants and agreements herein made, and in consideration of the
representations, warranties, and covenants herein contained, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Special Definitions.
"Government Entity" means any federal, state, municipal, domestic or
foreign court, tribunal, administrative agency, department, commission, board,
bureau or other governmental authority or instrumentality.
"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"Person" means an individual, a partnership, a corporation, an
association, a limited liability company, a joint stock company, a trust, a
joint venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, restriction (whether on voting, sale, transfer or disposition or
otherwise) or other security interest, whether imposed by agreement,
understanding, law or otherwise.
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2. Purchase and Sale of the Callnet Shares; Irrevocable Proxy.
(a) Basic Transaction. Subject to the terms and conditions set forth in
this Agreement, the Seller hereby irrevocably sells, assigns, transfers and
delivers to the Buyer good and valid title to all of the Callnet Shares, free
and clear of all Security Interests (other than restrictions imposed under
applicable securities laws).
(b) Purchase Price. Subject to the terms and conditions set forth in
this Agreement, and in consideration of the sale, assignment, transfer and
delivery of the Shares, the Buyer will issue __________ shares (the "WCN
Shares") of the WCN Common Stock (the "Purchase Price") in exchange for the
Callnet Shares. Subject to the terms and conditions set forth in this Agreement,
each Callnet Share owned and held of record by the Seller is hereby exchanged
for forty (40) shares of WCN Common Stock.
(c) Conditions Precedent. The Buyer's obligation to purchase the
Callnet Shares from the Seller is subject to and conditioned upon the
fulfillment on or prior to the Closing (as hereafter defined) of the following
conditions, which may be waived in whole or in part by the Buyer: (i) the
receipt of a fairness opinion from its investment banker, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Company, Inc., that states that the Acquisition is fair from a financial point
of view to the Buyer and (ii) the acquisition by the Buyer of all or at least
eighty percent (80%) of the Callnet Stock.
(d) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Buyer commencing at
2:00 p.m., local time on the first business day following the satisfaction or
waiver of all conditions to the obligations of the Buyer to consummate the
transactions contemplated hereby or such other date as the Buyer and the Seller
may mutually determine (the "Closing Date").
(e) Irrevocable Proxy. This Agreement also constitutes the Seller's
irrevocable proxy in favor of the Buyer to vote all of the Callnet Shares in
favor of the merger (the "Merger") of Target with and into the Buyer, or a
wholly-owned subsidiary of the Buyer, on the same terms as the Acquisition in
the event that the Buyer and the Target agree to pursue the Merger instead of
the Buyer purchasing all or substantially all of the Callnet Stock and options
to acquire Callnet Stock directly from the Callnet shareholders and Callnet
optionholders. This irrevocable proxy is acknowledged and deemed to be coupled
with an interest and shall be irrevocable until the earlier of three months from
the date hereof or the Buyer acquiring the Callnet Shares.
(f) Deliveries. At the Closing, or as soon as practical thereafter, (i)
the Seller will deliver to the Buyer a certificate representing the Callnet
Shares, endorsed in blank or accompanied by duly executed assignment documents,
and (ii) the Buyer will deliver to the Seller a certificate representing the
whole number of shares of WCN Common Stock into which Seller's Callnet Shares
shall have been exchanged as set forth herein.
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3. Representations and Warranties.
(a) Representations and Warranties of the Seller. The Seller represents
and warrants to the Buyer that the statements contained in this Section 3(a) are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section
3(a)).
(i) Authorization of Transaction. The Seller has full power,
capacity and authority to execute and deliver this Agreement and to
perform his obligations hereunder. This Agreement constitutes the valid
and legally binding obligation of the Seller, enforceable in accordance
with its terms and conditions. The Seller need not give any notice to,
make any filing with, or obtain any authorization, consent, or approval
of any Government Entity or any Person.
(ii) Callnet Shares and Options. The Seller holds of record
and owns beneficially the Callnet Shares, free and clear of any
restrictions on transfer (other than any restrictions under the
Securities Act), Security Interests, options, warrants, purchase
rights, contracts, commitments, equities, claims, and demands. Seller
is not a party to any option, warrant, purchase right, or other
contract or commitment that could require the Seller to sell, transfer,
or otherwise dispose of any of the Callnet Shares (other than this
Agreement) except for the Callnet Option as set forth on Exhibit A.
Seller is not a party to any voting trust, proxy, or other agreement or
understanding with respect to the voting of any of the Callnet Shares,
except as provided in this Agreement. There are no actions, suits or
proceedings pending or threatened involving the ownership by the Seller
of the Callnet Shares or the Seller's Callnet Option.
(iii) Investment Representations. The Seller certifies that he
is not a U.S. person, as defined in Rule 902 of the Securities Act of
1933, as amended (the "Securities Act"), and is not acquiring the WCN
Shares for the account or benefit of any U.S. person or he is a U.S.
person who purchased securities in a transaction that did not require
registration under the Securities Act. Seller agrees to resell the WCN
Shares only in accordance with the provisions of Regulation S, pursuant
to registration under the Securities Act, or pursuant to an available
exemption from registration; and agrees not to engage in hedging
transactions with regard to such securities unless in compliance with
the Securities Act. The Seller further acknowledges that he has been
informed that the WCN Shares issued or to be issued pursuant to Section
2(b) will bear a restrictive legend (as set forth in Section 3(a)(iv))
preventing transfer except in accordance with the Securities Act and
applicable state securities laws and that stop transfer instructions
will be given to the transfer agent for the shares of WCN Common Stock
issued or to be issued pursuant to Section 2(b).
(iv) Common Stock Certificates. The WCN Shares issued pursuant
to this Agreement shall bear a legend substantially in the following
form: THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
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ANY STATE SECURITIES ACT AND CANNOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S,
PURSUANT TO REGISTRATION UNDER THE ACT, OR PURSUANT TO AN AVAILABLE
EXEMPTION. ALSO SUCH SHARES ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED BY THE SECURITIES AND EXCHANGE
COMMISSION UNDER THE ACT AND MAY BE SUBJECT TO THE LIMITATIONS AND
REPORTING REQUIREMENTS OF SAID RULE UPON RESALE OR OTHER DISPOSITION
THEREOF. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE
CONDUCTED.
(v) Investment Purpose. The Seller represents and warrants
that he is acquiring WCN Shares solely for his own account, for
investment purposes, and not with a view to or for resale in connection
with any distribution or public offering thereof, within the meaning of
any applicable securities laws and regulations. The Seller understands
that the WCN Shares have not been registered under the Securities Act
or any applicable securities laws of any state by reason of specific
exemptions under the provisions thereof that depend in part upon the
investment intent of the Seller.
(vi) Sophistication. The Seller by reason of his own business
and financial experience or that of those persons retained by him, who
are unaffiliated with and not compensated by the Buyer or its officers,
to advise him with respect to this investment. The Seller has such
knowledge, sophistication and experience in business and financial
matters in general and with respect to investments of a nature similar
to an investment in the Buyer so as to be capable of evaluating the
merits and risks of, and making an informed business decision with
regard to, the acquisition of the WCN Shares, and has the capacity to
protect his own interests.
(vii) Access to SEC Reports. The Seller acknowledges that he
(a) has received all the information he has deemed necessary to make an
informed investment decision with respect to an acquisition of the WCN
Shares; (b) understands that the Buyer is subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and has had the opportunity to review all publicly
available filings (the "SEC Reports") made by the Buyer with the
Securities and Exchange Commission pursuant to either the Securities
Act or the Exchange Act; (c) has had the unrestricted opportunity to
make such investigation as it has desired pertaining to the Buyer and
the acquisition of an interest therein and to verify the information
that is, and has been, available to him; and (d) has had the
opportunity to ask questions to the Buyer, and representatives of the
Buyer concerning the Buyer.
(viii) Confidentiality. The Seller acknowledges that Exhibit
B, the Disclosure Document, includes certain non-public information
about the Buyer, and the Seller agrees to hold in confidence all, and
not to use or to disclose to others any, non-public information
included therein; provided, however, the foregoing shall not restrict
4
necessary disclosures in compliance with requirements of any law,
governmental order or regulation. In addition, the Seller shall not
purchase (except pursuant to this Agreement) or sell any securities of
the Company until after such non-public information has been publicly
disseminated.
(b) Representations and Warranties of the Buyer. The Buyer represents
and warrants to the Seller that the statements contained in this Section 3(b)
are correct and complete as of the date of this Agreement and will be correct
and complete as of the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement throughout this
Section 3(b)).
(i) Organization of the Buyer. The Buyer is a corporation duly
incorporated, validly existing, and in good standing under the laws of
the jurisdiction of its incorporation.
(ii) Authorization of Transaction. The Buyer has full
corporate power and authority to execute and deliver this Agreement and
to perform its obligations hereunder. This Agreement constitutes the
valid and legally binding obligation of the Buyer, enforceable in
accordance with its terms and conditions. The Buyer need not give any
notice to, make any filing with, or obtain any authorization, consent,
or approval of any Governmental Entity or any Person in order to
consummate the transactions contemplated by this Agreement.
(iii) WCN Common Stock. The WCN Shares issued and delivered on
the Closing Date, when issued and delivered pursuant hereto, will be
duly authorized, validly issued, fully paid and nonassessable, and none
of such WCN Shares have been issued in violation of the preemptive
rights of any Person.
(iv) Transfer of WCN Common Stock. The Buyer will not register
any transfer of the WCN Common Stock not made in accordance with the
provisions of Regulation S, pursuant to registration under the
Securities Act, or pursuant to an available exemption from
registration; provided, however, that if the securities are in bearer
form or foreign law prevents the Buyer from refusing to register
securities transfers, other reasonable procedures will be implemented
to prevent any transfer of the securities not made in accordance with
the provisions of Regulation S.
(v) Disclosure Document. Attached as Exhibit B, which is
incorporated herein by reference and made a part hereof, is a
Disclosure Document that supplements the SEC Reports.
4. Miscellaneous.
(a) Survival of Representations and Warranties and Covenants. The
representations, warranties and covenants of the Parties contained in this
Agreement shall survive the Closing.
(b) Press Releases and Public Announcements. The Seller shall not issue
any press release or make any public announcement relating to the subject matter
of this Agreement prior to the Closing without the prior written approval of
Buyer.
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(c) Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement among the parties and supersedes any
prior understandings, agreements, or representations by or among the parties,
written or oral, to the extent they related in any way to the subject matter
hereof.
(d) Succession and Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the Parties and their
respective successors and permitted assigns. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any Party
without the prior written consent of the other, except that Buyer may assign
this Agreement to an affiliate of Buyer. Nothing contained herein, express or
implied, is intended to confer on any person other than the Parties or their
respective successors and permitted assigns, any rights, remedies, obligations
or liabilities under or by reason of this Agreement.
(e) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Seller. No waiver by any party of any default, misrepresentation,
or breach of warranty or covenant hereunder, whether intentional or not, shall
be deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
(h) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(i) Specific Performance. Each of the Parties acknowledges and agrees
that in the event of any breach of this Agreement, the non-breaching party would
be irreparably harmed and could not be made whole by monetary damages. It is
accordingly agreed that the Parties will waive the defense in any action for
specific performance, that a remedy at law would be adequate and that the
Parties, in addition to any other remedy to which they may be entitled at law or
in equity, shall be entitled to compel specific performance of this Agreement in
any action instituted in any court thereof having jurisdiction of such action.
(j) Post-Closing. In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of this Agreement,
each of the Parties will take such further action (including, without
limitation, the execution and delivery of such further instruments and documents
including without limitation, an Option Exchange Agreement) as any other Party
reasonably may request, all at the sole cost and expense of the requesting
Party.
[Remainder of page intentionally left blank; signature page follows]
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
SELLER:
------------------------------------
[Type Name of Seller]
BUYER:
WORLD CALLNET, INC.
By:
--------------------------------
Name:
------------------------------
Title:
------------------------------
7
Exhibit A
▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ 39,480 ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Affarsinvest AB 131,560 ▇▇▇ ▇▇▇, ▇-▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ Goodyer 3,600 ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇, ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ 1,000 ▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇,▇▇▇ ▇▇▇▇▇▇
Crayford Asociates Ltd 100,000 Falcon House, 23 - 25 Bucks Road, ▇▇▇▇▇▇▇, Isle of
Man IMI 3DA
Dancastle Holdings Ltd 165,800 ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
EPH PLC 360,000 ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Gillian ▇▇▇ ▇▇▇▇▇▇▇▇▇ 144,720 Homelea, Amherst, St ▇▇▇▇▇▇ Port, Guernsey, CI
▇▇▇▇▇▇ ▇▇▇▇ Butt 98,680 Beaumont Cottage, ▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Mossar 122,640 Mosslyn, Le ▇▇▇▇▇, Forest, Guernsey, CI
Ieuan ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 90,200 ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇
▇▇▇▇ ▇▇▇▇▇▇ 131,560 ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇, ▇▇
Kazan Corporation 82,240 Edificio Vallarino, Calle 52 ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇,
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ 150,720 ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇ 36,080 Chateau Perigord, Appt 275, ▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 3,600 ▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇, ▇▇▇, ▇▇
Mats ▇▇▇▇▇▇▇▇ 131,560 ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇-▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ 1,000 ▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇
Mirror Investments 42,480 ▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇
Moat Financial Services 82,240 Providencials, Turks & ▇▇▇▇▇ Island,
British West Indies
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ 138,160 Evening Shade, Woodlands Park, St Saviours,
Guernsey, CI
▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ 92,160 ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇
Riktmarket AB 131,560 ▇▇▇ ▇▇▇, ▇-▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
W ▇▇▇▇▇▇▇ ▇▇▇▇▇ 39,480 ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇
▇▇▇▇▇ ▇ ▇▇▇ 39,480 ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇, ▇▇