EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered
into as of the 16th day of May, 2000, by and among Netvoice Technologies
Corporation, a Nevada corporation ("Parent"), Netvoice Technologies, Inc.,
a Nevada corporation ("Purchaser"), Synetric, Inc., a Texas corporation
(the "Company"), each of the persons listed on the signature pages hereto
(persons listed as Shareholders shall be collectively referred to herein as
"Shareholders" and the Shareholders who are also officers and directors of
the Company as indicated on the signature pages shall be referred to as
"Executive Shareholders").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Shareholders desire to sell and convey to Purchaser all of
the outstanding shares of capital stock of the Company and Purchaser
desires to purchase all of the outstanding capital stock of the Company
from Shareholders.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements, and upon the terms and conditions
hereinafter set forth, the parties do hereby agree as follows:
ARTICLE I.
PURCHASE AND SALE
-----------------
1.1 PURCHASE OF STOCK. Subject to the terms and conditions of this
Agreement, at the Closing (as defined below), each Shareholder shall sell
to Purchaser and Purchaser shall purchase from Shareholders, all of the
issued and outstanding shares of common stock, $1.00 par value per share,
of the Company (the "Shares") owned by each such Shareholder.
1.2 CONSIDERATION. The total consideration for the Shares shall be
286,458 shares of voting common stock, $.001 par value per share ("Netvoice
Stock") of Parent (the "Total Consideration"). At the Closing, Purchaser
shall deliver to Shareholders an aggregate total of 253,229 shares of
Netvoice Stock (including fractional shares). The number of shares of
Netvoice Stock shall be allocated to the Shareholders as set forth on
SCHEDULE 1.2.
1.3 ESCROW. The parties hereto agree that an aggregate total of
33,229 shares of Netvoice Stock issued pursuant to Section 1.2 as the Total
Consideration shall be deposited into escrow in accordance with Section 5.4
hereof (the "Escrow Shares") to be held for a period of one (1) year
following the Closing.
-5-
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND SHAREHOLDERS
-------------------------------
The Company and the Executive Shareholders jointly and severally
represent and warrant to Purchaser as follows:
2.1 EXISTENCE AND GOOD STANDING. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
state of Texas with all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted. The Company does not have any subsidiaries. The Company is
duly qualified or licensed as a foreign corporation and in good standing in
each jurisdiction in which the character or location of the property owned,
leased or operated by it or the nature of the business conducted by it
makes such qualification necessary. Set forth on SCHEDULE 2.1 is a list of
the jurisdictions in which the Company is qualified or licensed to do
business as a foreign corporation.
2.2 CAPITAL STOCK OF THE COMPANY. The Company's authorized capital
stock consists of 1,000,000 shares of common stock, $1.00 par value per
share, of which 3,540 shares are issued and outstanding and 600 shares are
reserved for issuance upon exercise of outstanding options. All of the
Shares have been duly authorized, validly issued and are fully paid and
nonassessable and no holder thereof is entitled to any preemptive rights.
None of the Shares was issued in violation of any preemptive or
preferential right. Except as listed on SCHEDULE 2.2, there are no
outstanding conversion or exchange rights, subscriptions, options, warrants
or other arrangements or commitments obligating the Company to issue any
shares of capital stock or other securities and all such options and other
rights will be exercised in full or terminated prior to Closing.
2.3 AUTHORIZATION OF THE COMPANY AND SHAREHOLDERS. The Company has
full corporate power, capacity and authority to execute this Agreement and
all other agreements and documents contemplated hereby to which it is
party. The execution and delivery of this Agreement and such other
agreements and documents by the Company, to the extent a party thereto, and
the consummation by the Company of the transactions contemplated hereby
have been duly authorized by the Company and no other corporate action on
the part of the Company is necessary to authorize the transactions
contemplated hereby. This Agreement has been duly executed and delivered
by the Company and constitutes the valid and binding obligation of the
Company, enforceable in accordance with its terms, except that (i)
enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally, and (ii)
the remedies of specific performance and injunctive relief are subject to
certain equitable defenses and to the discretion of the court before which
any proceedings may be brought.
2.4 Financial Statements.
--------------------
(a) The Company has previously furnished to Purchaser the
compiled balance sheet of the Company at December 31, 1999 and 1998 and the
related statements of income for the fiscal years then ended, and the
unaudited balance sheet of the Company at March 31, 2000 (the "Recent
Balance Sheet") and the related statement of income for the three (3)
months then ended (collectively, the "Financial Statements"), copies of
which are attached hereto as SCHEDULE 2.4A. The Financial Statements
present fairly the financial position and results of operations of the
-6-
Company as of the indicated dates and for the indicated periods and have
been prepared in accordance with the federal income tax method of
accounting consistently applied through the periods included. The Company
shall permit Purchaser's independent accounting firm full access to the
work papers pertaining to the Financial Statements, including those work
papers in the possession of or prepared by the Company's accountant.
(b) Except to the extent (and not in excess of the amounts)
reflected in the Recent Balance Sheet included in the Financial Statements
or as disclosed on SCHEDULE 2.4B or relating to normal trade payables
arising in the ordinary course of business, the Company does not have any
liabilities or obligations of any nature, whether absolute, accrued,
unmatured, contingent or otherwise, or any unsatisfied judgments or any
unusual or extraordinary commitments.
(c) Since December 31, 1999, (i) there has been no material
adverse change, or development involving a prospective material adverse
change, in the assets, liabilities, business, operations, financial
condition or results of operations of the Company and (ii) the Company's
business has been conducted only in the ordinary course consistent with
past practice.
(d) The Company does not have nor at the Closing will the
Company have outstanding any indebtedness for borrowed money or other
interest-bearing debt of any kind.
2.5 NO VIOLATIONS. The execution, delivery and performance of this
Agreement and the other agreements and documents contemplated hereby by the
Company and Shareholders and the consummation of the transactions
contemplated hereby will not (i) violate any provision of the articles of
incorporation or bylaws of the Company, (ii) violate any statute, rule,
regulation, order or decree of any public body or authority by which the
Company or its properties or assets are bound, or (iii) result in a
violation or breach of, or constitute a default under, or result in the
creation of any Lien upon, or create any rights of termination,
cancellation or acceleration in any person with respect to any Material
Contract (as defined below) or any license, franchise or permit of the
Company, or any other agreement, contract, indenture, mortgage or
instrument to which the Company is a party or by which any of its
properties or assets is bound.
2.6 CONSENTS. Except as set forth on SCHEDULE 2.6, no consent,
approval or other authorization of any governmental authority or under any
Material Contract or other material agreement or commitment to which the
Company or any Shareholder is a party or by which its assets are bound is
required as a result of or in connection with the execution or delivery of
this Agreement and the other agreements and documents to be executed by the
Company or the consummation by the Company of the transactions contemplated
hereby.
-7-
2.7 TAX MATTERS. Except as set forth on SCHEDULE 2.7 hereto,
(a) RETURNS AND REPORTS. All Tax (as defined below) returns and
reports required to be filed prior to the date hereof by or on behalf of
the Company are true, correct and complete in all material respects, have
been duly and timely filed in accordance with all applicable laws (subject
to timely filed extensions) and such returns and reports required to be
filed on or before the Closing Date will be duly and timely filed or
extensions of time within which to file such returns will have been
obtained, and the income, activities, operations and transactions of the
Company have been or will be properly included and correctly reflected thereon;
(b) PAYMENT. (i) The Company has paid or, in case of Taxes not
yet due, has made adequate provision on the Financial Statements for the
payment of all Taxes for which the Company is or may become liable for
payment; (ii) all Tax deficiencies assessed against such Company for which
the Company may be directly or indirectly liable as a result of any
examination of Tax returns of the Company have been paid, and (iii) the
Company is not, as of the date hereof, the subject of any audit or other
proceeding in respect of payment of Taxes for which the Company may be
directly or indirectly liable and no such proceeding has been threatened;
(c) EXTENSIONS. No agreements, waivers, or other arrangements
exist providing for an extension of time or statutory periods of
limitations with respect to payment by, or assessment against, the Company
for any Tax for which the Company may be directly or indirectly liable and
no written request for any such agreement, waiver or other arrangement has
been made and is currently outstanding;
(d) PROCEEDINGS. No suits, actions, claims, or proceedings have
been asserted as of the date hereof against the Company in respect of any
Tax for which the Company may be directly or indirectly liable;
(e) SECTION 341(f) ELECTION. Neither the Company nor any of its
predecessors has at any time filed a consent under Section 341(f)(1) of the
Code or agreed under Section 341(f)(3) of the Code to have the provisions
of Section 341(f)(2) of the Code apply to a sale of any of its assets;
(f) CHANGE IN ACCOUNTING METHOD. (i) The Company has not agreed
to make any adjustment by reason of a change in its accounting method that
would affect the taxable income or deductions of the Company for any period
following the Closing Date; (ii) the Company is not required to include
income in any amount under Section 481 of the Internal Revenue Code of
1986, as amended (the "Code") (or any comparable provisions of state, local
or foreign law), by reason of a change in accounting methods or otherwise,
as a result of actions taken prior to the Closing Date; and (iii) the
Company will not be required to include in a taxable period on or after the
Closing Date taxable income attributable to income that economically
accrues in a taxable period ending on or before the Closing Date (as
defined below), including without limitation, as a result of the
installment method of accounting, the completed contract method of
accounting or the case method of accounting;
-8-
(g) TAX LIENS. There are no Tax Liens as of the date hereof
upon any of the assets reflected on the Recent Balance Sheet, except for
statutory Liens for Taxes not yet due or delinquent;
(h) WITHHOLDING. The amounts of Taxes withheld by or on behalf
of the Company with respect to all compensation paid to employees of the
Company for all periods ending on or before the date hereof and the Closing
Date have been (or will be, as the case may be) proper and accurate in all
material respects, and all deposits required with respect to compensation
paid to such employees have been (or will be) made in compliance in all
material respects with the provisions of all applicable Tax laws;
(i) PRIOR AFFILIATED GROUPS. The Company has never been a
member of an affiliated group of corporations, within the meaning of
Section 1504 of the Code;
(j) TAX-EXEMPT USE PROPERTY. None of the assets of the Company
is "tax-exempt use property" within the meaning of Section 168(h) of the Code;
(k) SECURITY FOR TAX-EXEMPT OBLIGATION. None of the assets of
the Company directly or indirectly secures any debt the interest on which
is tax-exempt under Section 103(a) of the Code; and
(l) TAX SHARING OR ALLOCATION AGREEMENTS. The Company is not a
party to or bound by (nor will the Company become a party to or bound by)
any tax indemnity, tax sharing or tax allocation agreement.
For purposes hereof, "Taxes" means any federal, foreign, state,
county, and local income, gross receipts, excise, import, property,
franchise, ad valorem, license, sales, use, withholding, and unemployment
compensation or other employment-related tax, or any other tax, together
with all deficiencies, penalties, additions, interest, assessments, and
other governmental charges with respect thereto.
2.8 ASSETS AND PROPERTIES.
(a) REAL PROPERTY. Except as set forth on SCHEDULE 2.8, the
Company does not own, nor has it previously owned, any real properties nor
does the Company hold any options or have any contractual obligation to
purchase or acquire any interest in real property.
(b) REAL PROPERTY LEASES. Set forth on SCHEDULE 2.8 is a list
of all leases and subleases under which the Company is lessor or lessee or
sublessor or sublessee of any real property, together with all amendments,
supplements, nondisturbance agreements, brokerage and commission agreements
and other agreements pertaining thereto ("Real Property Leases"). Copies
of all Real Property Leases have been delivered to Purchaser. The Company
has not assigned any Real Property Leases. There are no Liens on the
Company's interest in the Real Property Leases, subject only to (i) Liens
for taxes and assessments not yet due and payable and (ii) those matters
set forth on SCHEDULE 2.8. The Real Property Leases listed on SCHEDULE 2.8
are in full force and effect and constitute binding obligations of the
Company and the other parties thereto and (x) there are no defaults
thereunder and (y) no event has occurred which with notice, lapse of time
or both would constitute a default by the Company or by any other party thereto.
-9-
(c) PERSONAL PROPERTY. Except for inventory and supplies
disposed of or consumed, and accounts receivable collected or written off,
and cash utilized, all in the ordinary course of business consistent with
past practice, the Company owns all of its inventory, equipment and other
personal property (both tangible and intangible) reflected on the Recent
Balance Sheet or acquired since March 31, 2000 free and clear of any Lien,
except for statutory Liens for current taxes, assessments or governmental
charges or levies on property not yet due and payable, landlord's Liens or
as set forth on SCHEDULE 2.8. The Liens on such Schedule will be released
at or prior to Closing.
(d) CONDITION OF PROPERTIES. Except as set forth on SCHEDULE
2.8, the leasehold estates which are the subject of the Real Property
Leases and the tangible personal property owned or leased by the Company
are in good operating condition and repair, ordinary wear and tear
excepted; and neither the Company nor any Executive Shareholder has
knowledge of any condition or defect of any leasehold estate that could
materially affect the fair market value, use or operation of any leasehold
estate or otherwise have a material adverse effect on the Company's
business, assets, operations, financial condition, results of operations or
prospects (a "Material Adverse Effect").
(e) COMPLIANCE. To the best knowledge of the Company and the
Executive Shareholders, the continued ownership, operation, use and
occupancy of the leasehold estates the subject of the Real Property Leases
as currently operated, used and occupied will not violate any zoning,
building, health, flood control, fire or other law, ordinance, order or
regulation or any restrictive covenant. To the best knowledge of the
Company and the Executive Shareholders, there are no violations of any
federal, state, county or municipal law, ordinance, order, regulation or
requirement affecting any portion of the leasehold estates the subject of
the Real Property Leases and no written notice of any such violation has
been issued by any governmental authority.
(f) UTILITIES. All utilities (including, without limitation,
water, sewer, electricity, trash removal and telephone service) are
available to the leasehold estates which are the subject of the Real
Property Leases in sufficient quantities to adequately serve the leasehold
estates.
2.9 ENVIRONMENTAL LAWS AND REGULATIONS.
(a)(i) The ownership and operations of the Subject Property (as
defined below) by the Company, and to the best knowledge of the Company and
the Executive Shareholders, the ownership and operations by third parties,
and any use, storage, treatment, disposal, or transportation by the
Company, and to the best knowledge of the Company and Executive
Shareholders, by third parties, of Hazardous Substances (as defined below),
that has occurred in or on the Subject Property prior to the date of this
Agreement have been in compliance with Environmental Requirements (as
defined below); (ii) during the ownership, occupancy and operation of the
Subject Property by the Company, and, to the best knowledge of the Company
and the Executive Shareholders, prior to the Company's ownership, occupancy
or operation, no release, leak, discharge, spill, disposal, or emission of
Hazardous Substances has occurred in, on, or under the Subject Property in
a quantity or manner that violates or requires further investigation or
remediation under Environmental Requirements; (iii) the Company does not
utilize Hazardous Substances as of the date of this Agreement; (iv) there
is no pending or, to the best knowledge of the Company and the Executive
Shareholders, threatened litigation or administrative proceeding or
-10-
investigation (whether civil, criminal or administrative) concerning the
Subject Property involving Hazardous Substances or Environmental
Requirements; (v) to the best knowledge of the Company and the Executive
Shareholders, there is no material quantity of friable ACM (as defined
below) within the Subject Property, and there are no above-ground or
underground storage tank systems ("Tank Systems") located at the Subject
Property; (vi) the Company has never owned, operated, or leased any real
property other than the Subject Property; and (vii) the execution and
delivery of this Agreement and the consummation by the Company of the
transactions contemplated hereby will not affect the validity or require
the transfer of any permits under Environmental Requirements, and will not
require notification, registration, reporting, filing, investigation or
remediation under any Environmental Requirement, including without
limitation, any environmental transfer law.
(b) The Company has provided Purchaser with the reports set
forth on SCHEDULE 2.9, which Schedule sets forth all reports in the
possession of or available to the Company or Shareholders with respect to
the compliance status or liability of the Company, its operation and the
Subject Properties under Environmental Requirements.
(c) DEFINITIONS. The following terms shall have the following
meanings:
"ENVIRONMENTAL REQUIREMENTS" means all laws, statutes, rules,
regulations, ordinances, guidance documents, judgments, decrees,
orders, agreements and other restrictions and requirements (whether
now or hereafter in effect) of any governmental authority, including,
without limitation, federal, state, and local authorities, relating to
the regulation of, imposing standards of conduct or liability
regarding, or protection of, human health and safety (including,
without limitation, employee health and safety), natural resources,
conservation, the environment, or the storage, treatment, disposal,
transportation, handling, or other management of industrial or solid
waste, hazardous waste, hazardous or toxic substances or chemicals, or
pollutants.
"HAZARDOUS SUBSTANCE" means (i) any "hazardous substance" as
defined in Section 101(14) of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended from
time to time (42 U.S.C. Section 9601 et seq.) ("CERCLA") or any
regulations promulgated thereunder; (ii) petroleum and petroleum by-
products; (iii) asbestos or asbestos-containing material ("ACM"); or
(iv) any additional substances or materials which at any time are
classified or considered to be pollutants, hazardous or toxic under
Environmental Requirements.
"SUBJECT PROPERTY" means all property subject to the Real
Property Leases and all property now or formerly owned, operated or
leased by the Company or any current or former subsidiary of the Company.
2.10 MATERIAL CONTRACTS.
(a) Set forth on SCHEDULE 2.10 is a list of all contracts,
arrangements and commitments (whether oral or written) to which the Company
is a party or by which the Company's assets or business are bound
(collectively, the "Material Contracts") which relate to (i) the sale,
lease or other disposition by the Company of all or any part of its
business or assets (otherwise than in the ordinary course of business),
(ii) the purchase or lease by the Company of any amount of
-11-
assets (otherwise than in the ordinary course of business), (iii) the
supply by the Company of any customer's requirements for any item or the
purchase by the Company of its requirements for any item or of a vendor's
output of any item, in each case in which the aggregate annual payments to
the Company by such customers or by the Company to such vendor, as
applicable, exceed $5,000 and has a term in excess of one year from the
date hereof, (iv) lending or advancing funds by the Company, (v) borrowing
of funds or guarantying the borrowing of funds by any other person, whether
under an indenture, note, loan agreement or otherwise, (vi) any transaction
or matter with any Affiliate (as defined below) of the Company, (vii)
noncompetition or employment, (viii) licenses and grants to or from the
Company relating to any intangible property listed on SCHEDULE 2.14, (ix)
the acquisition by the Company of any operating business or the capital
stock of any person since January 1, 1999, or (x) any other matter which
involves payments by or to the Company in excess of $5,000 in the aggregate
and has a term in excess of one year from the date hereof, or any contract,
arrangement or commitment which includes a termination provision upon a
change of control (as defined therein) or similar event. For purposes of
this Agreement, (I) "Affiliate" shall mean (x) any person or entity
directly or indirectly controlling, controlled by or under common control
with another person or entity, (y) any director, officer, partner or
employee of a person or entity, or (z) any father, mother, brother, sister
or descendant of a person; a person or entity shall be deemed to control
another person or entity if such person or entity possesses, directly or
indirectly, the power to direct or cause the direction of the management
and policies of such other person or entity, whether through ownership of
voting securities, by contract, or otherwise.
(b) Except as set forth on SCHEDULE 2.10, each Material Contract
is in full force and effect on the date hereof and the Company is not in
default under any Material Contract, nor has the Company given or received
notice of any default under any Material Contract, and, to the knowledge of
the Company and the Executive Shareholders, no other party to any Material
Contract is in default thereunder, nor has any event occurred which with
the passage of time could have a Material Adverse Effect.
2.11 LITIGATION AND RELATED MATTERS. Set forth on SCHEDULE 2.11 is a
list of (a) all actions, suits, proceedings, investigations or grievances
pending against the Company or, to the knowledge of the Company and the
Executive Shareholders, threatened against the Company, its business or any
property or rights of the Company, at law or in equity, before or by any
court or any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign
(collectively, "Agencies") and (b) all worker's compensation claims
outstanding against the Company. None of the actions, suits, proceedings,
investigations or claims listed on SCHEDULE 2.11 either (i) would have any
Material Adverse Effect or (ii) affects or would, if adversely determined,
affect the right or ability of Purchaser to carry on the business of the
Company substantially as now conducted or the ability of the Company to
enter into this Agreement or any other agreement contemplated hereby to
consummate the transactions contemplated hereby or thereby and except as
set forth on SCHEDULE 2.11 each of the matters set forth on SCHEDULE 2.11
is fully covered by insurance. The Company is not subject to any
continuing court or Agency order, writ, injunction or decree applicable
specifically to its business, operations, assets or employees, nor in
default with respect to any order, writ, injunction or decree of any court
or Agency with respect to its assets, business, operations or employees.
-12-
2.12 PRODUCT LIABILITY AND WARRANTY PROCEEDINGS. No product liability
or warranty actions, suits or proceedings arising from the manufacture or
sale of goods by the Company have been asserted against the Company.
2.13 COMPLIANCE WITH LAWS. The Company (a) is in compliance with all
applicable laws, regulations (including federal, state and local
procurement regulations), orders, judgments and decrees (other than
Environmental Requirements, which are covered by Section 2.9) except in
such circumstances where non-compliance would not have a Material Adverse
Effect, and (b) possesses all necessary licenses, franchises, permits and
governmental authorizations to conduct its business in the manner in which
and in the jurisdictions and places where such business is now conducted.
Set forth on SCHEDULE 2.13 is a list of all material licenses, franchises,
permits and governmental authorizations and all applications pending before
any agency or authority for the issuance of any licenses, franchises,
permits or governmental authorizations or the renewal thereof.
2.14 INTELLECTUAL PROPERTY. SCHEDULE 2.14 lists the domestic and
foreign patents, patent applications, patent licenses, software licenses,
trade names, trademarks, service marks, trademark registrations and
applications, service ▇▇▇▇ registrations and applications, and copyright
registrations and applications owned by the Company or used in the
operation of its business (collectively, the "Intellectual Property"),
which Schedule indicates (i) the term and exclusivity of its rights with
respect to the Intellectual Property and (ii) whether each item of
Intellectual Property is owned or licensed by the Company, and if licensed,
the licensor and any key provisions thereof. Unless otherwise indicated on
SCHEDULE 2.14, the Company has the right to use and license the
Intellectual Property, and the consummation of the transactions
contemplated hereby will not result in the loss or material impairment of
any rights of the Company in the Intellectual Property. Each item
constituting part of the Intellectual Property has been, to the extent
indicated on SCHEDULE 2.14, registered with, filed in or issued by, as the
case may be, the United States Patent and Trademark Office or such other
government entity, domestic or foreign, as is indicated on SCHEDULE 2.14;
all such registrations, filings and issuances, if any, remain in full force
and effect; and all fees and other charges with respect thereto are
current. Except as stated on SCHEDULE 2.14, there are no pending
proceedings or adverse claims made or, to the knowledge of the Company and
Shareholders, threatened against the Company, with respect to the
Intellectual Property; there has been no litigation commenced or threatened
in writing within the past five (5) years with respect to the Intellectual
Property or the rights of the Company therein; and neither the Company nor
any Shareholder has knowledge that (i) the Intellectual Property or the use
thereof by the Company conflicts with any patents, patent applications,
patent licenses, trade names, trademarks, service marks, trademark or
service ▇▇▇▇ registrations or applications or copyright registrations or
applications of others ("Third Party Intellectual Property"), or (ii) such
Third Party Intellectual Property or its use by others or any other conduct
of a third party conflicts with or infringes upon the Intellectual Property
or its use by the Company.
-13-
2.15 EMPLOYEE BENEFIT PLANS.
(a) Except as set forth on SCHEDULE 2.15, neither the Company
nor any person (as defined in Section 3(9) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") that is or has been a
member of any group of persons described in Section 414(b), (c), (m) or (o)
of the Code, including the Company ("ERISA Affiliate"), maintains or
contributes to, nor have they maintained or contributed to, any "employee
pension benefit plans" as defined in Section 3(2) of ERISA, "welfare
benefit plans" as defined in Section 3(1) of ERISA, or stock bonus, stock
option, restricted stock, stock appreciation right, stock purchase, bonus,
incentive, deferred compensation, severance, or vacation plans, or any
other employee benefit plan, program, policy or arrangement maintained or
contributed to by the Company or any of its ERISA Affiliates or to which
the Company or any of its ERISA Affiliates, contributes or is obligated to
make payments thereunder or otherwise may have any liability (collectively,
the "Employee Benefit Plans").
(b) Except as set forth on SCHEDULE 2.15, neither the Company
nor any of its ERISA Affiliates has any liability (including any contingent
liability under Section 4204 of ERISA) with respect to any multiemployer
plan defined as such in Section 3(37) of ERISA to which contributions are
or have been made by neither the Company or any of its ERISA Affiliates or
as to which the Company or any of its ERISA Affiliates may have liability
and that is covered by Title IV of ERISA ("Multiemployer Plan") covering
employees (or former employees) employed in the United States. Neither the
Company nor any ERISA Affiliate has incurred any liability or taken any
action that could reasonably be expected to cause it to incur any liability
(i) on account of a partial or complete withdrawal (within the meaning of
Section 4205 and 4203 of ERISA, respectively) with respect to any
Multiemployer Plan or (ii) on account of unpaid contributions to any such
Multiemployer Plan.
(c) All contributions to, and payments from, the Employee
Benefit Plans which are required to have been made by the Company, or any
of its ERISA Affiliates with respect to any period ending on or before the
Closing Date, in accordance with the Employee Benefit Plans, have been
timely made.
(d) Except as disclosed on SCHEDULE 2.15 hereof, neither the
Company nor any of its ERISA Affiliates maintain or contribute to, nor have
they ever maintained or contributed to, any pension plan subject to Title
IV of ERISA or Sections 412 of the Code or 302 of ERISA.
(e) The Employee Benefit Plans intended to qualify under Section
401 of the Code have been determined by the Internal Revenue Service to be
so qualified and, to the knowledge of the Company and the Executive
Shareholders, no event has occurred and no condition exists with respect to
the form or operation of such Employee Benefit Plans which would cause the
loss of such qualification or exemption or the imposition of any material
liability, penalty or tax under ERISA or the Code.
(f) There are (i) to the knowledge of the Company and the
Executive Shareholders, no investigations pending by any governmental
entity involving the Employee Benefit Plans or, to the knowledge of the
Company and the Executive Shareholders, any Multiemployer Plan, and (ii) no
pending or, to the knowledge of the Company and the Executive
-14-
Shareholders, threatened claims, other than routine claims for benefits),
suits or proceedings against any Employee Benefit Plan, against the assets
of any of the trusts under any Employee Benefit Plan or against any
fiduciary of any Employee Benefit Plan with respect to the operation of
such plan or asserting any rights or claims to benefits under any Employee
Benefit Plan or against the assets of any trust under such plan, except for
those which would not, individually or in the aggregate, give rise to any
liability which could have a Material Adverse Effect, nor, to the knowledge
of the Company and the Executive Shareholders, are there any facts which
would give rise to any liability except for those which would not,
individually or in the aggregate, either impair the Company's ability to
consummate the transactions contemplated hereby or perform its obligations
hereunder or have a Material Adverse Effect in the event of any such
investigation, claim, suit or proceeding.
(g) Neither the Company nor any employee thereof, nor any
trustee, administrator, other fiduciary or any other "party in interest" or
"disqualified person" with respect to the Employee Benefit Plan, has
engaged in a "prohibited transaction" (as such term is defined in Section
4975 of the Code or Section 406 of ERISA) which could result in a tax or
penalty on the Company under Section 4975 of the Code or Section 502(i) of
ERISA ("Prohibited Transaction"), except any such event which would not,
individually or in the aggregate, either impair the Company's ability to
consummate the transactions contemplated hereby or have a Material Adverse
Effect.
(h) Neither the Company nor any employee thereof has engaged in
any Prohibited Transaction with respect to any Multiemployer Plan, except
any such event which would not, individually or in the aggregate, either
impair the Company's ability to consummate the transactions contemplated
hereby or perform its obligations hereunder or have a Material Adverse Effect.
(i) Neither the Company nor any ERISA Affiliate has incurred any
liability under Title IV of ERISA which is currently outstanding.
(j) Except as disclosed on SCHEDULE 2.15 hereof, neither the
Company, nor any of its ERISA Affiliates has any liability (including any
contingent liability under Section 4204 of ERISA) with respect to any
Multiemployer Plan covering employees (or former employees) employed in the
United States. Neither the Company nor any ERISA Affiliate has incurred
any liability or taken any action that could reasonably be expected to
cause it to incur any liability (i) on account of a partial or complete
withdrawal (within the meaning of Section 4205 and 4203 of ERISA,
respectively) with respect to any Multiemployer Plan or (ii) on account of
unpaid contributions to any such Multiemployer Plan. SCHEDULE 2.15 lists,
for each Multiemployer Plan, the Company's best estimate, based upon the
information supplied to it by each Multiemployer Plan, of the amount of
withdrawal liability that would be incurred if the Company and its ERISA
Affiliates were to make a complete withdrawal from each such plan as of the
dates specified on SCHEDULE 2.15.
(k) Except as disclosed on SCHEDULE 2.15 hereof, with respect to
each of the Employee Benefit Plans, true, correct and complete copies of
the following documents have been delivered to Purchaser: (i) the plan
document and any related trust agreement, including amendments thereto,
(ii) any current summary plan descriptions and other material
communications to participants relating to the Employee Benefit Plans,
(iii) the most recent Forms 5500, if
-15-
applicable, and (iv) any correspondence with the Internal Revenue Service,
the Pension Benefit Guaranty Corporation, the Department of Labor or any
other Agency.
(l) Except as disclosed on SCHEDULE 2.15 hereof, none of the
"welfare benefit plans" as defined in Section 3(1) of ERISA maintained by
the Company provide for continuing benefits or coverage for any participant
or any beneficiary of a participant following termination of employment,
except as may be required under COBRA, or except at the expense of the
participant or the participant's beneficiary. The Company which maintains
a "group health plan" within the meaning of Section 5000(b)(1) of the Code
has complied with the notice and continuation requirements of Section 4980B
of the Code, COBRA, Part 6 of Subtitle B of Title I of ERISA and the
regulations thereunder except where the failure to comply would not,
individually or in the aggregate, either impair the Company's ability to
consummate the transactions contemplated hereby or perform its obligations
hereunder or have a Material Adverse Effect.
(m) No liability under any Employee Benefit Plan or Welfare Plan
has been funded nor has any such obligation been satisfied with the
purchase of a contract from an insurance company as to which the Company
has received notice that such insurance company is in rehabilitation or a
comparable proceeding.
(n) Except as disclosed on SCHEDULE 2.15 hereof, the
consummation of the transactions contemplated by this Agreement will not
result in an increase in the amount of compensation or benefits or
accelerate the vesting or timing of payment of any benefits or compensation
payable to or in respect of any employee of the Company. The Company is
not obligated to make any payment or transfer, accelerate any payment or
transfer, or otherwise provide any benefit that would constitute an "excess
parachute payment" under Section 280G of the Code.
2.16 EMPLOYEES; EMPLOYEE RELATIONS.
(a) SCHEDULE 2.16 sets forth (i) the name and current annual
salary (or rate of pay) and other compensation (including, without
limitation, normal bonus, profit-sharing and other compensation) now
payable by the Company to each employee, independent contractor or
consultant, (ii) any increase to become effective after the date of this
Agreement in the total compensation or rate of total compensation payable
by the Company to each such person, (iii) any increase to become payable
after the date of this Agreement by the Company to employees other than
those specified in clause (i), (iv) all presently outstanding loans and
advances (other than routine travel advances to be repaid or formally
accounted for within sixty (60) days) made by the Company to, or made to
the Company by, any director, officer or employee, (v) all other
transactions between the Company and any director, officer or employee
since January 1, 1999, resulting in aggregate payments to such person in
excess of $10,000 during such period, and (vi) all accrued but unpaid
vacation pay owing to any officer or employee which is not disclosed on the
Financial Statements.
(b) Except as disclosed on SCHEDULE 2.16, the Company is not a
party to, nor bound by, the terms of any collective bargaining agreement,
and the Company has not experienced any material labor difficulties during
the last five years. There are no labor disputes existing, or to the best
knowledge of the Company and the Executive Shareholders, threatened
involving, by way of example, strikes, work stoppages, slowdowns,
picketing, or any other interference with work or
-16-
production, or any other concerted action by employees. No grievance or
other legal action arising out of any collective bargaining agreement or
relationship exists, or to the best knowledge of the Company and the
Executive Shareholders, is threatened. No charges or proceedings before
the National Labor Relations Board, or similar agency, exist, or to the
best knowledge of the Company and the Executive Shareholders, are threatened.
(c) The Company's relationship with its employees is good and
neither the Company nor any of the Executive Shareholders has knowledge of
any facts which would indicate that the Company's employees will not remain
with the Company on a basis similar to their present terms of employment
following the Closing. Except as disclosed on SCHEDULE 2.16, the Company
is not a party to any employment contract with any individual or employee,
either express or implied, oral or written. No legal proceedings, charges,
complaints, or similar actions exist under any federal, state or local laws
affecting the employment relationship including, but not limited to: (i)
anti-discrimination statutes such as Title VII of the Civil Rights Act of
1964, as amended (or similar state or local laws prohibiting discrimination
because of race, sex, religion, national origin, age and the like); (ii)
the Fair Labor Standards Act or other federal, state or local laws
regulating hours of work, wages, overtime and other working conditions;
(iii) requirements imposed by federal, state or local governmental
contracts such as those imposed by Executive Order 11246; (iv) state laws
with respect to tortious employment conduct, such as slander, false light,
invasion of privacy, negligent hiring or retention, intentional infliction
of emotional distress, assault and battery, or loss of consortium; or (v)
the Occupational Safety and Health Act, as amended, as well as any similar
state laws, or other regulations respecting safety in the workplace; and to
the best knowledge of the Company and the Executive Shareholders, no
proceedings, charges, or complaints are threatened under any such laws or
regulations and, to the best knowledge of the Company and the Executive
Shareholders, no facts or circumstances exist which would give rise to any
such proceedings, charges, complaints, or claims. The Company is not
subject to any settlement or consent decree with any present or former
employee, employee representative or any government or Agency relating to
claims of discrimination or other claims in respect to employment practices
and policies; no government or Agency has issued a judgment, order, decree
or finding with respect to the labor and employment practices (including
practices relating to discrimination) of the Company.
(d) The Company has not incurred any liability or obligation
under the Worker Adjustment and Retraining Notification Act ("WARN") or
similar state laws. The Company has not laid off more than ten percent
(10%) of its employees at any single site of employment during the ninety
(90) day period ending February 29, 2000. SCHEDULE 2.16 lists (i) all
employees of the Company who have experienced a reduction in hours of work
of more than fifty percent (50%) during any month during the ninety (90)
days prior to the date hereof. The Company will update SCHEDULE 2.16 to
include any such termination, layoffs and reductions in hours from the date
hereof through the Closing.
2.17 INSURANCE. SCHEDULE 2.17 contains a list of the policies and
contracts (including insurer, named insured, type of coverage, limits of
insurance, required deductibles or co-payments, annual premiums and
expiration date) for fire, casualty, liability and other forms of insurance
maintained by, or for the benefit of, the Company. All such policies are
in full force and effect and are adequate for the business in which the
Company is presently engaged. The Company has not received any notice of
cancellation or non-renewal or of significant premium increases with
respect to any such policy. Except as disclosed on SCHEDULE 2.17, no
pending claims made by or on behalf
-17-
of the Company under such policies have been denied or are being defended
against third parties under a reservation of rights by an insurer of the
Company. All premiums due prior to the date hereof for periods prior to
the date hereof with respect to such policies have been timely paid, and
all premiums due before the Closing Date for periods between the date
hereof and the Closing Date will be timely paid.
2.18 ACCOUNTS RECEIVABLE. The accounts receivable set forth in the
Recent Balance Sheet and those accounts receivable accruing through the
Closing Date represent valid and bona fide sales to third parties incurred
in the ordinary course of business, collectible in accordance with their
terms, subject to no defenses, set-offs or counterclaims, except to the
extent of any reserves for doubtful accounts not in excess of the amount of
the reserves for doubtful accounts reflected in the Recent Balance Sheet of
the Company.
2.19 INVENTORIES. The inventories reflected in the Recent Balance
Sheet and inventories acquired since March 31, 2000 consist of items of a
quality and quantity which are useable or saleable in the ordinary course
of business of the Company, and inventories of below standard quality or
not useable in the business of the Company have been written down in value
in accordance with good business practices to estimated net realizable
market values or adequate reserves have been provided therefor in amounts
not in excess of the reserves reflected in the Recent Balance Sheet. All
of the inventories have been maintained at adequate levels for the business
of the Company in normal course consistent with past practice and taking
into account normal seasonality, no change has occurred in such inventories
which affects or will affect their useability or salability, no writedown
of the value of such inventories has occurred or is required under GAAP,
and no additional amounts have been reserved with respect to such
inventories. Except as described on SCHEDULE 2.19, no inventory is held by
the Company pursuant to consignment, sale or return, sale on approval or
similar arrangements.
2.20 BUSINESS RELATIONS. SCHEDULE 2.20 sets forth a complete and
accurate list of (i) all customers that accounted for 5% or more of the
Company's sales for the twelve (12) months ended December 31, 1999 and the
three (3) months ended March 31, 2000 and (ii) all material suppliers of
the Company, indicating the contractual arrangements for continued supply
from such suppliers. To the knowledge of the Company and the Executive
Shareholders, no customer or supplier identified on SCHEDULE 2.20 intends
or has threatened to cease to do business with the Company following the
consummation of the transactions contemplated hereby; however, Cisco
Systems, Inc. ("Cisco") has the option to terminate the US Systems
Integrator Agreement between Cisco and the Company upon providing twenty
(20) days notice. To the knowledge of the Company and the Executive
Shareholders, Cisco has not notified the Company of its intention to or
given any indication of a desire to terminate the US Systems Integrator
Agreement, and the Company and the Executive Shareholders do not expect
that Cisco will terminate such agreement prior to the expiration date of
such agreement. Since January 1, 1999, the Company has not experienced any
difficulties in obtaining any inventory items necessary to the operation of
its business which has had an adverse effect on the business, operations or
financial condition of the Company and, to the knowledge of the Company and
the Executive Shareholders, no such shortage of supply of inventory items
is threatened or pending. The Company is not required to provide any
bonding or other financial security arrangements in any material amount in
connection with any transactions with any of its customers or suppliers.
-18-
2.21 OFFICERS AND DIRECTORS. Set forth on SCHEDULE 2.21 is a list of
the current officers and directors of the Company.
2.22 BANK ACCOUNTS AND POWERS OF ATTORNEY. SCHEDULE 2.22 sets forth
each bank, savings institution and other financial institution with which
the Company has an account or safe deposit box and the names of all persons
authorized to draw thereon or to have access thereto. Each person holding
a power of attorney or similar grant of authority on behalf of the Company
is identified on SCHEDULE 2.22. Except as disclosed on such Schedule, the
Company has not given any revocable or irrevocable powers of attorney to
any person, firm, corporation or organization relating to its business for
any purpose whatsoever.
2.23 BROKERAGE, FINANCIAL ADVISOR OR FINDER FEES. No agent, advisor,
broker, person or firm acting on behalf of the Company or the Shareholders
is, or will be, entitled to any commission or broker's, advisor's or
finder's fees from any of the parties hereto, or from any of their
respective Affiliates in connection with any of the transactions
contemplated hereby.
2.24 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth on
SCHEDULE 2.24 or as otherwise contemplated by this Agreement, since January
1, 2000, there has not been (a) any damage, destruction or casualty loss to
the physical properties of the Company (whether or not covered by
insurance) that could have a Material Adverse Effect, (b) any material
adverse change in the business, operations, financial condition or results
of operations or prospects of the Company, (c) any entry into any
transaction, commitment or agreement (including, without limitation, any
borrowing) material to the Company, except transactions, commitments or
agreements in the ordinary course of business consistent with past
practice, (d) any increase which is material in the compensation payable or
to become payable by the Company to its directors, officers, employee or
agents or any increase in the rate or terms of any bonus, pension or other
employee benefit plan, payment or arrangement made to, for or with any such
directors, officers, employees or agents, (e) any sale, transfer or other
disposition of, or the creation of any Lien upon, any part of the Company's
assets, tangible or intangible, except for sales of inventory and use of
supplies and collections of accounts receivables in the ordinary course of
business consistent with past practice, or any cancellation or forgiveness
of any debts or claims by a Company, (f) any change in the relations of the
Company with or loss of its respective customers or suppliers, of any loss
of business or increase in the cost of inventory items or change in the
terms offered to customers, which could reasonably be expected to have a
Material Adverse Effect, (g) any cancellation of forgiveness of any debts
or claims by the Company in excess of $5,000 individually or in the
aggregate, (h) any capital expenditure (including any capital leases) or
commitment therefor by the Company in excess of $2,000 individually or in
the aggregate, (i) any acceleration, termination, modification or
cancellation of any agreement, contract, lease or license to which the
Company is a party or by which it is bound, (j) any delay or postponement
of payment of accounts payable and other liabilities outside the ordinary
course of business, or (k) any other occurrence, event, incident, action,
failure to act or transaction outside the ordinary course of business
involving the Company that could have a Material Adverse Effect.
2.25 NO ILLEGAL PAYMENTS, ETC. Neither the Company, nor any of its
directors, officers, employees or agents, nor any of the Shareholders has
(a) directly or indirectly given or agreed to give any illegal gift,
contribution, payment or similar benefit to any supplier, customer,
governmental official or employee or other person who was, is or may be in
a position to help or
-19-
hinder the Company (or assist in connection with any actual or proposed
transaction) or made or agreed to make any illegal contribution, or
reimbursed any illegal political gift or contribution made by any other
person, to any candidate for federal, state, local or foreign public office
(i) which might subject the Company to any damage or penalty in any civil,
criminal or governmental litigation or proceeding or (ii) the non-
continuation of which has had or might have, individually or in the
aggregate, a Material Adverse Effect or (b) established or maintained any
unrecorded fund or asset or made any false entries on any books or records
for any purpose.
2.26 ACCURACY OF INFORMATION. Any information furnished to Purchaser
by the Company or Shareholders prior to, at or after the date of this
Agreement, in the Schedules hereto, or otherwise, is or when furnished will
be true, correct and complete in all material respects. Such information
states, or when furnished will state, all material facts required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which the statements are made, not misleading.
2.27 AVAILABILITY OF DOCUMENTS. The Company has made available for
inspection by Purchaser and its representatives true, correct, and complete
copies of the articles of incorporation, bylaws and other organizational
documents of the Company, all written agreements, arrangements,
commitments, and documents referred to in the Schedules attached hereto,
and the corporate minute books of the Company. Such corporate minute books
contain the minutes of all of the meetings of shareholders, members, board
of directors, and any committees of the Company that have been held
preceding the date hereof and all written consents to action executed in
lieu thereof.
ARTICLE IIA.
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS
----------------------------------------------
Each Shareholder represents and warrants as to himself or herself as
follows:
2.1A OWNERSHIP. Each Stockholder owns of record and beneficially and
has good and marketable title to the number of Shares set forth on
SCHEDULE 2.1A, free and clear of any and all liens, mortgages, pledges,
security interests, charges, claims, options or other encumbrances
("Liens") of any character whatsoever. Each Shareholder has the right to
vote his or her Shares on any matters as to which any shares of common
stock of the Company are entitled to be voted under the laws of the State
of Texas and the Company's articles of incorporation and bylaws, free of
any right of any person. Upon delivery of the Shares by a Shareholder to
Purchaser, Purchaser will receive good and marketable title thereto, free
and clear of all Liens.
2.2A AUTHORIZATION. This Agreement has been duly executed and
delivered by each Shareholder and, upon execution of the other documents
contemplated hereby, such other documents will have been duly executed and
delivered and constitutes (or will constitute) the valid and binding
obligation of such Shareholder, enforceable in accordance with their
respective terms, except that (i) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, and (ii) the remedies of specific
performance and injunctive relief are subject to certain equitable defenses
and to the discretion of the court before which any proceedings may be brought.
-20-
2.3A INVESTMENT INTENT.
(a) Each of the Shareholders represents and warrants to
Purchaser that he is acquiring the Netvoice Stock under this Agreement for
his or her own account, with the intention of holding the interest for
investment purposes only and without any intention of participating
directly or indirectly in any redistribution or resale of any portion of
the interest in violation of the Securities Act of 1933 (the "Securities
Act"), as amended or any applicable law.
(b) Each of the Shareholders acknowledges that the Netvoice
Stock has not been registered under the Securities Act and may not be
offered, sold, or otherwise transferred, pledged or hypothecated unless
registered under the Securities Act or unless sold pursuant to Rule 144 (or
a successor rule) under the Securities Act.
2.4A ACCESS TO INFORMATION. Shareholders have been furnished copies of
all financial and other information pertaining to Parent requested by them
and have had an opportunity to discuss Parent's business and financial
condition, properties, operations and prospects with the Parent's
management, including all documents filed by Parent with the Securities and
Exchange Commission ("SEC") under the Securities Act and the Securities
Exchange Act of 1934, and made public pursuant thereto. Each of the
Shareholders has also had an opportunity to ask questions of officers of
Parent, which questions were answered to his or her satisfaction. The
Shareholders understand that such discussions were intended to describe
certain aspects of Parent's business and financial condition, properties,
operations and prospects, but were not a thorough or exhaustive description.
2.5A KNOWLEDGE, SKILL AND EXPERIENCE. Shareholders understand that the
purchase of the Netvoice Stock involves substantial risks. Each of the
Shareholders has such knowledge, skill and experience in business,
financial and investment matters so that he is capable of evaluating the
merits and risks of an investment in the Netvoice Stock. To the extent
necessary, the Shareholders have retained, at their own expense, and relied
upon, appropriate professional advice regarding the investment, tax and
legal merits and consequences of this Agreement and owning the Netvoice Stock.
2.6A STOCK TRANSFER RESTRICTIONS. The Shareholders agree (i) that
they will not sell, assign, pledge, give, transfer or otherwise dispose of
the Netvoice Stock or any interest therein, or make any offer or attempt to
do any of the foregoing, except pursuant to a registration of the Netvoice
Stock under the Securities Act and all applicable state securities laws or
in a transaction which is exempt from the registration provisions of the
Securities Act and all applicable state securities laws and (ii) that
Parent and any transfer agent for the Netvoice Stock shall not be required
to give effect to any purported transfer of any of the Netvoice Stock
except upon compliance with the foregoing provisions.
-21-
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
-------------------------------------------
Purchaser represents and warrants to the Company and Shareholders as
follows:
3.1 ORGANIZATION AND AUTHORIZATION. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the
state of Nevada with all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted. Purchaser has full corporate power, capacity and authority to
execute and deliver this Agreement and all other agreements and documents
contemplated hereby. The execution and delivery of this Agreement and such
other agreements and documents by Purchaser and the consummation by
Purchaser of the transactions contemplated hereby have been duly authorized
by Purchaser and no other corporate action on the part of Purchaser is
necessary to authorize the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Purchaser and constitutes
the valid and binding obligation of Purchaser, enforceable in accordance
with its terms except that (i) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, and (ii) the remedies of specific
performance and injunctive relief are subject to certain equitable defenses
and to the discretion of the court before which any proceedings may be brought.
3.2 NO VIOLATIONS. The execution and delivery of this Agreement and
the other agreements and documents contemplated hereby by Purchaser and the
consummation of the transactions contemplated hereby will not (a) violate
any provision of the certificate of incorporation or bylaws of Purchaser,
(b) violate any statute, rule, regulation, order or decree of any public
body or authority by which Purchaser or its properties or assets are bound,
or (c) result in a violation or breach of, or constitute a default under or
result in the creation of any encumbrance upon, or create any rights of
termination, cancellation or acceleration in any person with respect to any
agreement, contract, indenture, mortgage or instrument to which Purchaser
is a party or any of its properties or assets is bound.
3.3 CONSENTS. Except as set forth on SCHEDULE 3.3, no consent,
approval or other authorization of any governmental authority or third
party is required as a result of or in connection with the execution and
delivery of this Agreement and the other agreements and documents to be
executed by Purchaser or the consummation by Purchaser of the transactions
contemplated hereby.
3.4 BROKERAGE, FINANCIAL ADVISOR OR FINDER FEES. Purchaser shall be
solely responsible for any commission or broker's, advisor's or finder's
fees with respect to any person or firm acting on behalf of Purchaser in
connection with the transactions contemplated hereby.
3.5 ISSUANCE OF NETVOICE STOCK. The issuance of the Netvoice Stock
has been duly authorized by Parent and no other corporate action on the
part of Parent is necessary to authorize the issuance of the Netvoice
Stock. Upon delivery, the Netvoice Stock will have been validly issued,
fully paid and nonassessable and the Shareholders shall receive good and
marketable title thereto, free and clear of all Liens of any character
whatsoever.
3.6 NATURE OF INVESTMENT. Purchaser acknowledges that the Shares that
it is purchasing are characterized as "restricted securities" under the
Securities Act inasmuch as they
-22-
are being acquired from the Company in a transaction not involving a public
offering and that under such laws and applicable regulations such
securities may not be resold without registration under the Securities Act
and applicable state securities laws, except in certain limited
circumstances. In this connection, Purchaser represents that it is
familiar with Rule 144 under the Securities Act, as presently in effect,
and understands the resale limitations imposed thereby and by the
Securities Act.
ARTICLE IV.
COVENANTS OF THE PARTIES
------------------------
4.1 APPROVALS AND CONSENTS. The Company and the Executive
Shareholders shall use their best efforts (i) to cause all conditions to
the obligations of Purchaser under this Agreement over which they are able
to exercise influence or control to be satisfied prior to the Closing Date
and (ii) to obtain promptly and to comply with all requisite statutory,
regulatory or court approvals, third party releases and consents, and other
requirements necessary for the valid and legal consummation of the
transactions contemplated hereby.
4.2 SETTLEMENT OF ACCOUNTS. Prior to Closing, all accounts and other
obligations between the Company and any Affiliate thereof shall be
satisfied and settled in full.
4.3 INVESTIGATIONS. The Company shall provide Purchaser and its
representatives and agents such access to the books and records of the
Company and furnish to Purchaser such financial and operating data and
other information with respect to the businesses and property of the
Company as they may reasonably request from time to time, and permit
Purchaser and its representatives and agents to make such inspections of
the Company's real and personal properties as they may reasonably request.
4.4 ENVIRONMENTAL INSPECTION. The Company shall provide Purchaser
access to all records in the Company's possession concerning all Hazardous
Substances, used, stored, generated, treated, or disposed of by the
Company, all environmental or safety studies conducted by or on behalf of
the Company, and all reports, correspondence, or filings to governmental
agencies with jurisdiction over Environmental Requirements concerning the
compliance of the Subject Property or the operation of the Subject Property
with Environmental Requirements, all policies and procedures manuals or
written guidelines utilized by the Company to comply with Environmental
Requirements, and any other information reasonably requested by Purchaser
pertaining to environmental, health, and safety issues (the "Environmental
Information"). The Company agrees that Purchaser shall have the right to
inspect the Environmental Information and the Subject Property, including
the performance of an environmental site assessment and audit.
4.5 RECORDS PERTAINING TO THE COMPANY.
(a) At the Closing, Shareholders shall deliver or cause to be
delivered to Purchaser any records in the possession of Shareholders and
applicable to the Company, except to the extent necessary for their
continuing employment.
-23-
(b) Purchaser shall, for a period of five (5) years (except in
the case of any sales invoices, which shall be for three (3) years) after
the Closing Date, neither dispose of nor destroy any of the business
records or files of the Company without first offering to turn over
possession copies thereof to Shareholders, at Shareholders' expense, by
written notice to Shareholders at least thirty (30) days prior to the
proposed date of such disposition or destruction.
(c) Purchaser shall allow Shareholders access to all business
records and files of the Company during normal working hours at the
principal place of business of the Company, or at any location where such
records are stored, and Shareholders shall have the right, at their own
expense, to make copies of any such records and files.
(d) From and after the Closing Date, Purchaser shall make
available to Shareholders upon written request, (i) personnel of the
Company to assist Shareholders in locating and obtaining records and files
maintained by Purchaser or the Company and (ii) any of the personnel of the
Company whose assistance or participation is reasonably required by
Shareholders in anticipation of, or preparation for, any existing or future
third party actions, Tax or other matters in which Shareholders or any of
their past, present or future Affiliates is involved and which relate to
the business of the Company.
4.6 PUBLIC ANNOUNCEMENTS. Without the prior written consent of the
other parties hereto, prior to Closing no party shall make any press
release or public announcement with respect to the transactions
contemplated by this Agreement. Shareholders shall not make any press
release or public announcement with respect to the transactions
contemplated by this Agreement subsequent to Closing without the prior
written consent of Purchaser.
ARTICLE V.
CLOSING
-------
5.1 CLOSING. Unless this Agreement is first terminated as provided
in Section 6.1 hereof, and subject to the satisfaction or waiver of all
conditions to the consummation of the transactions contemplated hereby, the
closing of the transactions contemplated hereby (the "Closing") shall take
place at such location as is agreed to by all parties hereto, on such date
as Purchaser and Shareholders may agree upon in writing (the "Closing
Date"), but if no date is agreed upon, the Closing shall occur on the date
specified in Section 6.1(a)(iv). The Closing shall not be deemed to have
been completed until each of the steps set forth in this Article V has been
completed or has been waived by Purchaser with respect to Section 5.2
hereof or by Shareholders with respect to Section 5.3 hereof.
5.2 CONDITIONS TO PURCHASER'S OBLIGATIONS. The obligation of
Purchaser to effect the Closing shall be subject, at its option, to the
satisfaction of each of the following conditions at or prior to the Closing:
(a) REPRESENTATIONS, WARRANTIES AND COMPLIANCE WITH COVENANTS.
Each representation and warranty of the Company and Shareholders contained
in this Agreement and in any Schedule shall be true and correct when made,
and shall be true and correct in all material respects on and as of the
Closing Date with the same effect as though such representation and
-24-
warranty had been made on and as of the Closing Date. Each of the
covenants and agreements herein on the part of the Company and Shareholders
to be complied with or performed on or before the Closing Date shall have
been complied with and performed. Purchaser shall have received a
certificate, dated the Closing Date, of each Shareholder to the foregoing
effect.
(b) ABSENCE OF LITIGATION. No inquiry, action, suit, or
proceeding shall have been asserted, threatened, or instituted (i) in which
it is sought to restrain or prohibit the carrying out of the transactions
contemplated by this Agreement or to challenge the validity of such
transactions or any part thereof, or (ii) which could reasonably be
expected to have, if adversely determined, a Material Adverse Effect.
(c) CONSENTS AND APPROVALS. All material authorizations,
consents, approvals, waivers and releases, if any, necessary for
Shareholders to consummate the transactions contemplated hereby shall have
been obtained (including, without limitation, those consents and approvals
set forth on SCHEDULES 2.6 hereto) and copies thereof shall be delivered to
Purchaser.
(d) SATISFACTION WITH DUE DILIGENCE. Purchaser shall be
satisfied with the results of its continuing business, legal, environmental
and accounting due diligence review of the Company and its assets,
properties and operations.
(e) CERTIFICATES. The Company shall have delivered to Purchaser
(i) certificates of the appropriate governmental authorities, dated as of
a date not more than ten (10) days prior to the Closing Date, attesting to
the existence and good standing of the Company in the state of
incorporation and of each jurisdiction where it is qualified or licensed as
a foreign corporation; (ii) a copy, certified by the secretary of state of
incorporation as of a date not more than ten (10) days prior to the Closing
Date, of the articles of incorporation and all amendments thereto of the
Company; (iii) a copy certified by the Secretary of the Company, dated the
Closing Date, of the bylaws of the Company; and (iv) a certificate, dated
the Closing Date, of the Secretary of the Company, relating to the
incumbency and corporate proceedings in connection with the consummation of
the transactions contemplated hereby.
(f) OPINION OF COUNSEL. Purchaser shall have received an
opinion of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C., counsel to the Company and
Shareholders dated the Closing Date and in form and substance satisfactory
to Purchaser.
(g) NO MATERIAL ADVERSE CHANGE. There shall not have been any
material adverse change since December 31, 1999 that has not been disclosed
to Purchaser pursuant to this Agreement in respect of the financial
condition, results of operations, business, assets or prospects of the
Company and the Company shall not have suffered any loss (whether or not
insured) by reason of physical damage caused by fire, earthquake, flood,
wind, accident or other calamity which could reasonably be expected to have
a Material Adverse Effect.
(h) NO TRANSFERS TO AFFILIATES. Except as otherwise expressly
contemplated by this Agreement, the Company shall not have distributed or
transferred any of their assets or properties, or made any payments, to or
for the benefit of any of its Affiliates.
(i) EMPLOYMENT AGREEMENTS. Each of ▇▇▇▇ C' ▇▇ ▇▇▇▇, ▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇ Workings (collectively, the "Executives")
shall have executed and delivered to
-25-
Purchaser an employment agreement in the form and substance of EXHIBIT A
attached hereto (collectively, the "Employment Agreements"), which shall be
two year agreements.
(j) ESCROW AGREEMENT. Shareholders shall have executed and
delivered to Purchaser an escrow agreement in the form and substance of
EXHIBIT B attached hereto (the "Escrow Agreement").
(k) STOCK CERTIFICATES. Each Shareholder shall have tendered a
certificate or certificates representing the Shares, duly endorsed in blank
or accompanied by appropriate stock powers, in proper form for transfer,
with all transfer taxes paid.
(l) NO INDEBTEDNESS. The Company shall not have any
indebtedness for borrowed money or other interest bearing debt obligations
outstanding.
5.3 CONDITIONS TO OBLIGATIONS OF SHAREHOLDERS. The obligation
of Shareholders to effect the Closing shall be subject, at their option, to
the satisfaction of each of the following conditions at or prior to the
Closing:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE
WITH COVENANTS. Each representation and warranty of Purchaser contained in
this Agreement and in any Schedule shall be true and correct when made, and
shall be true and correct in all respects on and as of the Closing Date
with the same effect as though such representation and warranty had been
made on and as of the Closing Date. Each of the covenants and agreements
herein on the part of Purchaser to be complied with or performed on or
before the Closing Date shall have been fully complied with and performed.
Shareholders shall have received a certificate, dated the Closing Date, of
Purchaser to the foregoing effect.
(b) ABSENCE OF LITIGATION. No inquiry, action, suit or
proceeding shall have been asserted, threatened, or instituted in which it
is sought to restrain or prohibit the carrying out of the transactions
contemplated by this Agreement or to challenge the validity of such
transactions or any part thereof.
(c) CONSENTS AND APPROVALS. All material authorizations,
consents, approvals, waivers and releases, if any, necessary for Purchaser
to consummate the transactions contemplated hereby shall have been
obtained.
(d) CERTIFICATES. Purchaser shall have delivered to
Shareholders (i) a certificate of the appropriate governmental authority,
dated as of a date not more than ten (10) days prior to the Closing Date,
attesting to the existence and good standing of Purchaser in the state of
its incorporation; and (ii) a certificate, dated the Closing Date, of the
Secretary of Purchaser relating to the incumbency and corporate proceedings
in connection with the consummation of the transactions contemplated
hereby.
(e) EMPLOYMENT AGREEMENTS. Purchaser shall have executed and
delivered to the Executives the Employment Agreements.
(f) ESCROW AGREEMENT. Purchaser shall have executed and
delivered to Shareholders the Escrow Agreement.
-26-
5.4 PAYMENT INTO ESCROW. At the Closing, Parent shall deliver to (i)
the Shareholders the certificates representing the Netvoice Stock (less the
Escrow Shares) and (ii) such entity mutually agreed upon by the parties
(the "Escrow Agent") the certificates representing the Escrow Shares to be
held in accordance with the terms of the Escrow Agreement.
5.5 ISSUANCE OF OPTIONS. At the Closing, Parent will issue to each
of the persons listed on SCHEDULE 5.5 options to acquire the number of
shares of Netvoice Stock listed on such Schedule next to such person's
name. The option exercise price will be the average price of the Netvoice
Stock for the twenty (20) day period prior to but not including the Closing
Date. Such options will otherwise be subject to the terms and conditions
set forth in Parent's stock option agreements evidencing the grant of such
options.
ARTICLE VI.
TERMINATION PRIOR TO CLOSING
----------------------------
6.1 TERMINATION.
(a) This Agreement may be terminated and abandoned at any time
prior to the Closing:
(i) By the written mutual consent of Purchaser and
Shareholders;
(ii) By Purchaser on the Closing Date if any of the
conditions set forth in Section 5.2 shall not have been fulfilled on
or prior to the Closing Date;
(iii) By Shareholders on the Closing Date if any of the
conditions set forth in Section 5.3 shall not have been fulfilled on
or prior to the Closing Date; and
(iv) By either Purchaser or Shareholders if the Closing
shall not have occurred on or before ninety (90) days following the
date of this Agreement.
(b) Any termination pursuant to this Section 6.1 shall not
affect the obligations of the parties under Section 10.14 and shall be
without prejudice to the terminating party's rights and remedies under this
Agreement by reason of any violation of this Agreement occurring prior to
such termination.
ARTICLE VII.
NONCOMPETITION
--------------
7.1 ACKNOWLEDGEMENT. The Company and Shareholders acknowledge that
this Agreement is necessary to protect the goodwill associated with the
purchase of the Shares by Purchaser.
7.2 CONFIDENTIAL INFORMATION. Shareholders acknowledge that through
their longstanding relationship with the Company that they have
confidential and proprietary
-27-
information (the "Confidential Information") concerning the business of the
Company. Shareholders further acknowledge that this Confidential
Information, which is not publicly known and which gives Purchaser the
opportunity to obtain a competitive advantage, if shared with third
parties, could be detrimental to Purchaser and could place Purchaser at a
competitive disadvantage. The Company and each of the Shareholders agree
that it or he will not at any time directly or indirectly disclose any
Confidential Information relating to Purchaser, any affiliate or customer
of Purchaser, or any corporation, partnership or other entity owned or
controlled, directly or indirectly, by any of the foregoing, or in which
any of the foregoing has a beneficial interest, including, but not limited
to, proprietary technology, operating procedures, financial statements or
other financial information, trade secrets, know-how, market studies and
forecasts, competitive analyses, pricing policies, the substance of
agreements with customers and others, marketing or similar arrangements,
servicing and training programs and arrangements, customer lists and any
other documents embodying such confidential information.
7.3 NONCOMPETITION. Each Shareholder acknowledges that as a result
of his or her ownership of, relationship with and/or involvement in the
Company, he or she possesses Confidential Information concerning the
operation of the Company and possesses the experience and capabilities to
own, manage, operate, control or participate in the ownership, management,
operation or control of, a business that, or a business organization a part
of which, engages in activities relating to the engineering, design and/or
installation of voice over internet protocol, business communications
systems and related support services specifically related to the customer
premise equipment arena (the "Business"). The Company and each Shareholders
covenants and agrees that it, he or she will not anywhere worldwide, at any
time during the period of two (2) years from the date hereof, directly or
indirectly, as an owner, agent, principal, director, officer, partner or
shareholder, or as an employee of any person, firm, or corporation engage
in any or all of the following activities:
(a) Enter into or engage in the Business or any other business
directly or indirectly competitive with Purchaser and the Company;
(b) Enter into or engage in any discussion or negotiations, or
assist in such actions to encourage employees or agents of Purchaser
or the Company to disassociate their relationship with Purchaser or
the Company in order to engage in any business that competes directly
or indirectly with Purchaser or the Company; or
(c) Knowingly interfere with, disrupt or attempt to disrupt the
relationship, contractual or otherwise, between Purchaser and any
franchise, customer, supplier, lessor, lessee or employee of Purchaser
or the Company.
Notwithstanding the foregoing, Shareholders may (i) own up to 1% of
the securities in a corporation so engaged in a business that competes with
Purchaser and the Company provided that such securities are listed on a
national securities exchange or reported on The Nasdaq National Market and
(ii) own an equity interest in and serving as directors of Talk IP, Inc.,
but not be involved in the business of such entity, other than the sole
function of pursuing and negotiating a sale of such entity.
-28-
7.4 REMEDIES. Each of the Shareholders recognizes that a breach of
any of the provisions of this Article VII would result in serious harm to
Purchaser for which monetary damages might not be an adequate remedy and
that the amount of such damages may be difficult to determine. Therefore,
if any Shareholder breaches any provision of this Article VII, then
Purchaser shall be entitled to specific performance or other injunctive
relief in addition to any other available legal or equitable remedies.
Purchaser may recover by appropriate action the amount of the actual damage
caused to Purchaser by any failure, refusal or neglect of each Shareholder
to perform its, his or her agreements herein contained, together with any
and all costs incurred by such party, including reasonable attorneys' fees,
in seeking such relief. The remedies provided in this Section 7.4 shall be
deemed cumulative and the exercise of one shall not preclude the exercise
of any other remedy at law or in equity for the same event or any other
event.
7.5 REFORMATION. It is the express intention of the parties hereto
to comply with all laws that may be applicable to this Article VII. Should
any restriction contained in this Article VII be found to exceed in time,
scope or space the restriction permitted by law, it is expressly agreed
that the covenant not to compete contained in this Article VII may be
reformed or modified by the final judgment of a court of competent
jurisdiction to reflect a lawful and enforceable duration or scope. If any
one or more of the provisions contained in this Article VII shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement, but this Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
herein.
ARTICLE VIII.
INDEMNIFICATION
---------------
8.1 PURCHASER'S LOSSES.
(a) Shareholders jointly and severally agree to indemnify and hold
harmless Purchaser and the Company and their respective directors,
officers, employees, representatives, agents, and attorneys ("Purchaser
Indemnified Parties") from, against and in respect of any and all
Purchaser's Losses (as defined below) suffered, sustained, incurred or
required to be paid by any of them by reason of (i) any representation or
warranty made by the Company or Shareholders in or pursuant to this
Agreement being untrue or incorrect in any material respect; (ii) any
failure by the Company or Shareholders (but with respect to the Company
only, prior to the consummation of the Closing), to observe or perform
their covenants and agreements set forth in this Agreement or any other
agreement or document executed by them in connection with the transactions
contemplated hereby; (iii) any failure to file annual returns with the
Internal Revenue Service or the U.S. Department of Labor for periods ending
on or prior to the Closing Date with respect to the Employee Benefit Plan,
including any applicable penalties and interest, including, but not limited
to, those amounts described under Section 502(c)(2) of ERISA or Section
6652(e) of the Code; or (iv) any matter listed on SCHEDULE 2.11; except
that Shareholders shall not be responsible for indemnification hereunder to
the extent (and proportionate to the extent) that the Purchaser's Loss
results from a Purchaser Indemnified Party's own gross negligence or
willful misconduct.
-29-
(b) "Purchaser's Losses" shall mean all damages (including,
without limitation, amounts paid in settlement with the consent of
Shareholders which consent may not be unreasonably withheld), losses,
obligations, liabilities, liens, deficiencies, costs (including, without
limitation, reasonable attorneys' fees), Taxes, penalties, fines, interest,
monetary sanctions and expenses incurred by Purchaser Indemnified Parties,
including, without limitation, reasonable attorneys' fees and costs
incurred to comply with injunctions and other court and agency orders, and
other costs and expenses incident to any suit, action, investigation, claim
or proceeding or to establish or enforce Purchaser Indemnified Party's
right to indemnification hereunder.
8.2 SHAREHOLDERS' LOSSES.
(a) Purchaser agrees to indemnify and hold harmless Shareholders
and their representatives, agents and attorneys ("Shareholder Indemnified
Parties") from, against, for and in respect of any all Shareholders' Losses
(as defined below) suffered, sustained, incurred or required to be paid by
a Shareholder by reason of (i) any representation or warranty made by
Purchaser in or pursuant to this Agreement being untrue or incorrect in any
respect; (ii) any failure by Purchaser to observe or perform its covenants
and agreements set forth in this Agreement or any other agreement or
document executed by it in connection with the transactions contemplated
hereby; or (iii) any act or omission by the Company subsequent to the
consummation of the Closing; except that Purchaser shall not be responsible
for indemnification hereunder to the extent (and proportionate to the
extent) that the Shareholders' Loss results from a Shareholder Indemnified
Party's own gross negligence or willful misconduct.
(b) "Shareholders' Losses" shall mean all damages (including,
without limitation, amounts paid in settlement with Purchaser's consent,
which consent may not be unreasonably withheld), losses, obligations,
liabilities, claims, deficiencies, costs (including, without limitation,
reasonable attorneys' fees) Taxes, penalties, fines, interest, monetary
sanctions and expenses incurred by Shareholder Indemnified Parties,
including, without limitation, reasonable attorneys' fees and costs
incurred to comply with injunctions and other court and agency orders, and
other costs and expenses incident to any suit, action, investigation, claim
or proceeding or to establish or enforce a Shareholder Indemnified Party's
right to indemnification hereunder.
8.3 NOTICE OF LOSS. Except to the extent set forth in the next
sentence, a party will not have any liability under the indemnity
provisions of this Agreement with respect to a particular matter unless a
written notice setting forth in reasonable detail the breach or other
matter which is asserted has been given to the Indemnifying Party (as
defined below) and, in addition, if such matter arises out of a suit,
action, investigation, proceeding or claim, such notice is given promptly,
but in any event within thirty (30) days after the Indemnified Party (as
defined below) is given notice of the claim or the commencement of the
suit, action, investigation or proceeding. Notwithstanding the preceding
sentence, failure of the Indemnified Party to give notice hereunder shall
not release the Indemnifying Party from its obligations under this Article
VII, except to the extent the Indemnifying Party is actually prejudiced by
such failure to give notice. With respect to Purchaser's Losses,
Shareholders, jointly and severally, shall be the Indemnifying Party and
Purchaser, the Company and their respective directors, officers, employees,
representatives, agents and attorneys shall be the Indemnified Parties.
With respect to Shareholders' Losses, Purchaser shall be the Indemnifying
Party and Shareholder and their respective representatives, agents and
attorneys shall be the Indemnified Party.
-30-
8.4 RIGHT TO DEFEND. Upon receipt of notice of any suit, action,
investigation, claim or proceeding for which indemnification might be
claimed by an Indemnified Party, the Indemnifying Party shall be entitled
to defend, contest or otherwise protect against any such suit, action,
investigation, claim or proceeding at its own cost and expense, and the
Indemnified Party must cooperate in any such defense or other action. The
Indemnified Party shall have the right, but not the obligation, to
participate at its own expense in defense thereof by counsel of its own
choosing, but the Indemnifying Party shall be entitled to control the
defense unless the Indemnified Party has relieved the Indemnifying Party
from liability with respect to the particular matter or the Indemnifying
Party fails to assume defense of the matter. In the event the Indemnifying
Party shall fail to defend, contest or otherwise protect in a timely manner
against any such suit, action, investigation, claim or proceeding, the
Indemnified Party shall have the right, but not the obligation, thereafter
to defend, contest or otherwise protect against the same and make any
compromise or settlement thereof and recover the entire cost thereof from
the Indemnifying Party including, without limitation, reasonable attorneys'
fees, disbursements and all amounts paid as a result of such suit, action,
investigation, claim or proceeding or the compromise or settlement thereof;
provided, however, that the Indemnified Party must send a written notice to
the Indemnifying Party of any such proposed settlement or compromise, which
settlement or compromise the Indemnifying Party may reject, in its
reasonable judgment, within thirty (30) days of receipt of such notice.
Failure to reject such notice within such thirty (30) day period shall be
deemed an acceptance of such settlement or compromise. The Indemnified
Party shall have the right to effect a settlement or compromise over the
objection of the Indemnifying Party; provided, that if (i) the Indemnifying
Party is contesting such clam in good faith or (ii) the Indemnifying Party
has assumed the defense from the Indemnified Party, the Indemnified Party
waives any right to indemnity therefor. If the Indemnifying Party
undertakes the defense of such matters, the Indemnified Party shall not, so
long as the Indemnifying Party does not abandon the defense thereof, be
entitled to recover from the Indemnifying Party any legal or other expenses
subsequently incurred by the Indemnified Party in connection with the
defense thereof other than the reasonable costs of investigation undertaken
by the Indemnified Party with the prior written consent of the Indemnifying
Party.
8.5 COOPERATION. Purchaser, the Company, Shareholders, and each of
their Affiliates, successors and assigns shall cooperate with each other in
the defense of any suit, action, investigation, proceeding or claim by a
third party and, during normal business hours, shall afford each other
access to their books and records and employees relating to such suit,
action, investigation, proceeding or claim and shall furnish each other all
such further information that they have the right and power to furnish as
may reasonably be necessary to defend such suit, action, investigation,
proceeding or claim, including, without limitation, reports, studies,
correspondence and other documentation relating to Environmental Protection
Agency, Occupational Safety and Health Administration, and Equal Employment
Opportunity Commission matters.
8.6 SATISFACTION OF CLAIMS FROM ESCROW. Purchaser shall recover
amounts owing pursuant to Section 8.1 for Purchaser's Losses from the
Escrow Shares in accordance with the Escrow Agreement until such time as
the Escrow Shares have all been distributed from the escrow.
-31-
ARTICLE IX.
REGISTRATION RIGHTS
-------------------
9.1 Registration.
(a) If at any time Parent shall propose to file a registration
statement (a "Registration Statement") for the purpose of a primary or
secondary offering for itself or any securityholder of Parent under the
Securities Act on Form ▇-▇, ▇-▇ or S-3 or any equivalent general form,
Parent shall as promptly as practicable, but in no event later than thirty
(30) days prior to the proposed filing date, give notice of such intention
to Shareholders and upon the written request of Shareholders within fifteen
(15) days after receipt of any such notice, Parent will use its best
efforts to include in such Registration Statement the shares of Netvoice
Stock issued to Shareholders pursuant to this Agreement and specified in
such request to be so registered, but not to exceed an aggregate of 20% of
the number of shares so issued to the Shareholders (the "Registrable Shares").
(b) If the managing underwriter or underwriters of such offering
determines that the total dollar amount which they and any other persons
intend to include in such offering is reasonably likely to materially and
adversely affect the success or offering price of such offering, then the
number of Registrable Shares to be offered for the account of Shareholders
shall be reduced (i) prior to any reductions by Parent and members of
Purchaser's management or any other holder of shares of Netvoice Stock with
senior registration rights that requested to be included in the
Registration Statement that has registration rights and (ii) PRO RATA with
shares being offered by other holders of Netvoice Stock who receive shares
pursuant to acquisitions by Parent and remain actively involved in
Purchaser's business following such acquisition.
9.2 COSTS AND EXPENSES OF REGISTRATION. Parent shall bear the entire
cost and expense of any registration made pursuant to this ARTICLE IX,
including, without limitation, all registration and filing fees, printing
expenses, the fees and expenses of Parent's counsel and its independent
accountants, and all other out-of-pocket expenses of Parent incident to the
preparation, printing and filing under the Securities Act of the
Registration Statement and all amendments and supplements thereto, the cost
of furnishing copies of each preliminary prospectus, each final prospectus
and each amendment or supplement thereto to underwriters, brokers and
dealers and other purchasers of the securities so registered, and the costs
and expenses incurred in connection with the qualification of the
securities so registered under "blue sky" or other state securities laws
other than underwriter's discounts with respect to the Registrable Shares.
9.3 INDEMNITY BY SHAREHOLDERS. To the extent that any Shareholder
includes any Netvoice Stock in a registration pursuant to SECTION 9.1
hereof, such Shareholder agrees to furnish to Parent such information
concerning him or her as may be requested by Parent and which is necessary
in connection with any registration or qualification of the Registrable
Shares and to indemnify Parent against all claims, losses, damages,
liabilities and expenses resulting from (i) the utilization of any such
information furnished in writing to Parent for use therein and used in
accordance with such writing; and (ii) claims, losses, damages,
liabilities and expenses resulting from transactions involving offers or
sales occurring during a period in which Parent shall have notified such
Shareholder to refrain from making offers or sales due to misstatement or
omissions; provided, however, that the liability of each Shareholder
hereunder shall be limited
-32-
to the proportion of any such claims, losses, damages, liabilities or
expenses which are equal to the proportion that the public offering price
of the shares sold by such Shareholder under such registration statement
bears to the total public offering price of all securities sold thereunder,
but not in any event to exceed the proceeds received by such Shareholder
from the sale of Netvoice Stock covered by such Registration Statement.
9.4 INDEMNITY BY PARENT. Upon a registration of any Netvoice Stock
under the Securities Act pursuant to Section 9.1 pursuant to which any
Shareholder participates, Parent will indemnify and hold harmless such
Shareholder against any losses, damages or liabilities to which such
Shareholder may become subject under the Securities Act or otherwise,
insofar as such losses, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement of any
material fact contained in the Registration Statement, any preliminary
prospectus or final prospectus contained therein, or any amendment or
supplement thereof, or arise out of or are based upon the omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each such
Shareholder for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, damage, liability
or action; provided, however, that Parent will not be liable in any such
case if and to the extent that any such loss, damage or liability arises
out of or is based upon an untrue statement or omission so made in
conformity with information furnished by any such Shareholder in writing
specifically for use in such Registration Statement or prospectus.
9.5 RULE 144. Parent shall take such action as Shareholders may
reasonably request, all to the extent required from time to time to enable
Shareholders to sell shares of Netvoice Stock without registration under
the Securities Act pursuant to and in accordance with (x) Rule 144 under
the Securities Act, as such Rule may be amended from time to time, or (y)
any similar rule or regulation hereafter adopted by the Securities and
Exchange Commission.
ARTICLE X.
MISCELLANEOUS
-------------
10.1 ENTIRE AGREEMENT. This Agreement (including the exhibits and
schedules hereto) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, between the parties
hereto with respect to the subject matter hereof, and no party shall be
liable or bound to the other in any manner by any representations or
warranties not set forth herein.
-33-
10.2 LEGEND. The certificates representing the Netvoice Stock to be
issued hereunder shall bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE WERE NOT ISSUED IN A
TRANSACTION REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS. THE
SHARES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY
NOT BE SOLD OR TRANSFERRED UNLESS SUCH SALE OR TRANSFER IS COVERED BY
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS OR, IN THE OPINION OF COUNSEL TO THE
ISSUER, IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND SUCH LAWS.
10.3 SUCCESSORS AND ASSIGNS. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns. Neither this
Agreement nor any rights, interests, or obligations hereunder may be
assigned by any party hereto without the prior written consent of all other
parties hereto; provided, however, that Purchaser may assign its rights to
a successor of all or a portion of its business without the consent of the
Shareholders.
10.4 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an
original and all of which shall constitute the same instrument.
10.5 HEADINGS. The headings of the articles and sections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction hereof.
10.6 USE OF CERTAIN TERMS. As used in this Agreement, the words
"herein," "hereof" and "hereunder" and other words of similar import refer
to this Agreement as a whole and not to any particular article, section,
paragraph, or other subdivision.
10.7 MODIFICATION AND WAIVER. Any of the terms or conditions of this
Agreement may be waived in writing at any time by the party which is
entitled to the benefits thereof, and this Agreement may be modified or
amended by a written instrument executed by all parties hereto. No
supplement, modification, or amendment of this Agreement shall be binding
unless executed in writing by all of the parties hereto. No waiver of any
of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provision hereof (whether or not similar) nor shall
such waiver constitute a continuing waiver.
10.8 SCHEDULES, ETC. All exhibits and schedules annexed hereto are
expressly made a part of this Agreement as though fully set forth herein,
and all references to this Agreement herein or in any such exhibits or
schedules shall refer to and include all such exhibits and schedules.
-34-
10.9 NOTICES. Any notice, request, instruction, document or other
communication to be given hereunder by any party hereto to any other party
hereto shall be in writing and validly given if (i) delivered personally,
(ii) sent by telecopy and registered or certified mail, postage prepaid,
(iii) delivered by overnight express, or (iv) sent by registered or
certified mail, postage prepaid, as follows:
If to Purchaser, to:
Netvoice Technologies, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Best, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Ltd.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇ Liddell & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
If to the Company:
Synetric, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ C' ▇▇ ▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
If to Shareholders:
To the address below the signature on the signature pages hereto
-35-
With a copy in each case to:
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address for a party as shall be specified by like notice.
Any notice which is delivered personally, or sent by telecopy or overnight
express in the manner provided herein shall be deemed to have been duly
given to the party to whom it is directed upon actual receipt by such
party. Any notice which is addressed and mailed in the manner herein
provided shall be conclusively presumed to have been given to the party to
whom it is addressed at the close of business, local time of the recipient,
on the third day after the day it is so placed in the mail.
10.10 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED, ENFORCED,
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF TEXAS (WITHOUT REGARD TO
ITS CHOICE OF LAW PRINCIPLES).
10.11 SURVIVAL OF COVENANTS, AGREEMENTS, REPRESENTATIONS AND
WARRANTIES. All representations, warranties, covenants and agreements made
hereunder or pursuant hereto or in connection with the transactions
contemplated hereby shall survive the Closing and shall continue in full
force and effect thereafter.
10.12 RESPONSIBILITY FOR TAXES. Each party shall be responsible
for any Taxes that such party may incur pursuant to the transactions
contemplated hereby; provided, that Shareholders shall be responsible for
all sales, use, transfer and related Taxes with respect to the sale of the
Shares.
10.13 INVALID PROVISIONS. If any provision of this Agreement is
held to be illegal, invalid, or unenforceable under present or future laws,
such provision shall be fully severable, this Agreement shall be construed
and enforced as if such illegal, invalid, or unenforceable provision had
never comprised a part of this Agreement, and the remaining provisions of
this Agreement shall remain in full force and effect and shall not be
affected by the illegal, invalid, or unenforceable provision or by its
severance from this Agreement.
10.14 EXPENSES. Shareholders shall pay all costs and expenses
incurred by the Company and Shareholders, and Purchaser shall pay all of
its own costs and expenses incurred by it, in each case in connection with
the transactions contemplated hereby.
10.15 KNOWLEDGE OF A PARTY. For purposes hereof, to the
"knowledge" or the "best knowledge" of a party shall mean to such person's
knowledge after due inquiry.
10.16 THIRD PARTY BENEFICIARIES. Except as otherwise specifically
provided in ARTICLE VII, no individual or firm, corporation, partnership,
or other entity shall be a third-party beneficiary of the representations,
warranties, covenants, and agreements made by any party hereto.
-36-
10.17 NUMBER AND GENDER OF WORDS. Whenever the singular number is
used, the same shall include the plural where appropriate, and words of any
gender shall include each other gender where appropriate.
10.18 FURTHER ASSURANCES. From time to time after the Closing, at
the request of any other party but at the expense of the requesting party,
Purchaser or Shareholders, as the case may be, will execute and deliver any
such other instruments of conveyance, assignment and transfer, and take
such other action as the other party may reasonably request in order to
consummate the transactions contemplated hereby.
[the next page is the signature page]
-37-
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
PARENT:
NETVOICE TECHNOLOGIES CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------------------
Title: Chief Executive Officer and Chairman of the Board
-------------------------------------------------
PURCHASER:
NETVOICE TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------------------
Title: Chief Executive Officer and Chairman of the Board
-------------------------------------------------
THE COMPANY:
SYNETRIC, INC.
By: /s/ ▇▇▇▇ C'▇▇ ▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇ C' ▇▇ ▇▇▇▇
-------------------------------------------------
Title: President
-------------------------------------------------
SHAREHOLDERS:
/s/ ▇▇▇▇ C' ▇▇ ▇▇▇▇
--------------------------------------------------------
▇▇▇▇ C' ▇▇ ▇▇▇▇*
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇*
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
-38-
/s/ ▇▇▇▇▇ ▇▇▇▇
--------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
--------------------------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
* indicates such person is an Executive Shareholder for purposes of this
Agreement
-39-
EXHIBIT A
EMPLOYMENT AGREEMENT
This Agreement, entered in to this ____ day of May, 2000, is by and
between Netvoice Technologies, Inc., a Nevada corporation (hereinafter
referred to as the "Company"), and ____________ (hereinafter referred to as
"Employee") under the following terms and conditions:
RECITALS
WHEREAS, the Company and Employee desire to set forth the terms and
conditions on which (i) the Company shall employ Employee, (ii) Employee
shall render services to the Company, Subsidiary (as defined below) or the
Parent (as defined below), and (iii) the Company shall compensate Employee
for such services to the Company; and
WHEREAS, in connection with the employment of Employee by the Company,
the Company desires to reasonably restrict Employee's rights to compete
with the business of the Company.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
1. EMPLOYMENT
The Company hereby employs Employee and Employee hereby accepts
employment with the Company upon the terms and conditions hereinafter set
forth.
2. TERM
The term of this Agreement (the "Term") shall be for a period of
two (2) years commencing on the May ___, 2000 (the "Effective Date") unless
extended upon the agreement of the parties hereto. The Term shall be
subject to prior termination as provided in Section 6 hereof.
3. DUTIES AND RESPONSIBILITIES
3.1 Employee shall, during the Term of this Agreement, devote
his full attention and expend his best efforts, energies and skills, on a
full-time basis, to the business of the Company, any corporation controlled
by the Company (each a "Subsidiary"), and NetVoice Technologies
Corporation, the parent of the Company (hereinafter the "Parent").
3.2 During the Term of this Agreement, Employee shall serve as the
President of Synetric, Inc., a Subsidiary, or in such other capacity as
determined by the Board of Directors (the "Board") of the Company. In the
performance of all of his responsibilities hereunder, Employee shall be
subject to all of the Company's reasonable policies, rules, and regulations
applicable to its employees of comparable status and shall report directly
to, and shall be subject to, the direction and control of the Board of the
Company and shall perform such duties as shall
-41-
be assigned to him. In performing such duties, Employee will be subject to
and abide by, and will use his best efforts to cause other employees of the
Company to be subject to and abide by, all policies and procedures
developed by the Board.
4. COMPENSATION
4.1 For all services rendered by Employee under this Agreement,
the Company shall pay Employee an annual base salary of (i) $______ during
the sixty (60) days following the Effective Date, and (ii) $_______
thereafter, payable in accordance with the Company's existing payroll
schedule.
4.2 All compensation shall be subject to customary withholding
tax and other employment taxes as are required with respect to compensation
paid by a corporation to an employee.
5. ADDITIONAL EMPLOYEE COVENANTS
5.1 Employee recognizes and acknowledges that certain
information, including, but not limited to, information pertaining to the
financial condition of the Company, the Subsidiaries, and the Parent, their
systems, methods of doing business, agreements with customers or suppliers,
or other aspects of the business of such entities or which are sufficiently
secret to derive economic value from not being disclosed (collectively,
hereinafter referred to as "Confidential Information") may be made
available or otherwise come into the possession of Employee by reason of
his employment with the Company. Accordingly, Employee agrees that he will
not (either during or after the term of his employment with the Company)
disclose any Confidential Information to any person, firm, corporation,
association, or other entity for any reason or purpose whatsoever or make
use to his personal advantage or to the advantage of any third party, of
any Confidential Information, without the prior written consent of the
Board. Employee shall, upon termination of employment, return to the
Company all documents which reflect Confidential Information (including
copies thereof). Notwithstanding anything heretofore stated in this
subsection 5.1, Employee's obligations under this subsection 5.1 shall not,
after termination of Employee's employment with the Company, apply to
information which has become generally available to the public without any
action or omission of Employee (except that any Confidential Information
which is disclosed to any third party by an employee or representative of
the Company who is authorized to make such disclosure shall be deemed to
remain confidential and protectable under this subsection 5.1). Company
agrees that Employee shall have no obligation to Company with respect to
any information which: (a) was already in the public domain; (b)
subsequently became known to the general public through no fault, cause or
omission, either directly or indirectly, on the part of the Employee; (c)
was lawfully obtained from a thir party entitled to provide such
information; or (d) was independently developed by Employee outside of the
scope of services provided hereunder.
5.2 All files, records, memoranda, and other documents regarding
former, existing, or prospective customers of the Company or relating in
any manner whatsoever to Confidential Information or the business of the
Company (collectively, hereinafter referred to as "Records"), whether
prepared by Employee or otherwise coming into his possession, shall be the
exclusive property of the Company. All Records shall be immediately placed
in the physical
-42-
possession of the Company upon the termination of Employee's employment
with the Company, or at any other time specified by the Board. The
retention and use by the Employee of duplicates in any form of Records
after termination of Employee's employment with the Company is prohibited.
Notwithstanding the foregoing, Employee and his attorneys and/or
accountants shall have reasonable access to the Records.
5.3 Employee hereby recognizes and acknowledges that irreparable
injury or damage could result to the Company in the event of a breach or
threatened breach by Employee of any of the terms or provisions of this
Section 5, and Employee therefor agrees that the Company shall be entitled
to an injunction restraining Employee from engaging in any activity
constituting such breach or threatened breach. Nothing contained herein
shall be construed as prohibiting the Company from pursuing any other
remedies available to the Company at law or in equity for such breach or
threatened breach, including, but not limited to, the recovery of damages
from Employee and, if Employee is an employee of the Company, the
termination of his employment with the Company in accordance with the terms
of this Agreement.
6. TERMINATION
6.1 The Company may terminate the Employee's employment under
this Agreement at any time for cause. "Cause" shall exist for such
termination if Employee (i) is adjudicated guilty of illegal activities of
consequence by a court of competent jurisdiction; (ii) commits any act of
fraud or intentional misrepresentation; (iii) has, in the reasonable
judgment of the Board, engaged in serious misconduct, which conduct has, or
would if generally known, materially adversely affect the good will or
reputation of the Company and which conduct the Employee has not cured or
altered to the satisfaction of the Board within ten (10) days following
written notice by the Board to the Employee (stating with particularity the
nature of) such conduct; (iv) materially breaches any of the provisions of
this Agreement and which breach the Employee has not cured or altered to
the satisfaction of the Board within ten (10) days following written notice
by the Board to the Employee stating with particularity the nature of the
breach; or (v) has made any material misrepresentation to the Company.
6.2 If the Company terminates the Employee's employment under
this Agreement pursuant to the provisions of subsection 6.1 hereof, the
Employee shall not be entitled to receive any compensation set forth in
Section 4 above following the date of such termination.
6.3 If Employee's employment with the Company is terminated
within the first year of employment due to the death or permanent
disability of Employee or for any reason other than pursuant to the
provisions of subsection 6.1 above, the Employee shall continue to receive
compensation for one (1) month from the date of such termination (such
payments by the Company to be
-43-
diminished, however, by the extent to which the Employee receives
compensation during such one (1) month period from a third party employer)
in an amount equal to the monthly compensation paid Employee for the month
prior to such termination. If Employee's employment with the Company is
terminated within the second year of employment due to the death or
permanent disability of Employee or for any reason other than pursuant to
the provisions of subsection 6.1 above, the Employee shall continue to
receive compensation for three (3) months from the date of such termination
(such payments by the Company to be diminished, however, by the extent to
which the Employee receives compensation during such three (3) month period
from a third party employer) in an amount equal to the monthly compensation
paid Employee for the month prior to such termination. Thereafter, the
Employee shall not be entitled to receive any compensation following the
date of termination.
6.4 In the event of termination of employment with the Company,
Employee agrees to deliver promptly to the Company all equipment,
notebooks, documents, memoranda, reports, files, samples, books,
correspondence, lists, Records or other written or graphic records, and the
like, relating to the Company's business, which are or have been in his
possession or under his control.
7. EXPENSES
7.1 Employee shall be entitled to reimbursement of all
reasonable expenses actually incurred in the course of his employment.
Employee shall submit such expenses on the Company's standardized expense
report form provided by the Company and shall attach thereto receipts for
all expenditures. Automobile expenses shall be reimbursed at the maximum
mileage rate allowed by the Internal Revenue Service.
7.2 The Company shall reimburse Employee within fifteen (15)
days after submission by Employee of his expense report.
8. THE COMPANY'S AUTHORITY
Employee agrees to observe and comply with the reasonable rules
and regulations of the Company as adopted by the Board either orally or in
writing respecting performance of his duties and to carry out and perform
all reasonable orders, directions, and policies stated by the Board, to him
from time to time, either orally or in writing.
9. PAID VACATION; SICK LEAVE; INSURANCE
9.1 After three (3) months of employment with the Company,
Employee shall be entitled to receive two (2) weeks of paid vacation during
each year of the initial two-year term of this Agreement. The Company and
Employee shall negotiate in good faith the amount of paid vacation during
any extension of this Agreement.
9.2 Employee shall be entitled to reasonable periods of paid
sick leave during the Term in accordance with the Company's policy
regarding such sick leave.
9.3 After thirty (30) days from the Effective Date, Employee
shall be entitled to participate in any group medical insurance plan of the
Company, at the Company's expense, as may be provided by the Company from
time to time to its employees of comparable status, subject to, and to the
extent that, Employee is eligible under such benefit plans in accordance
with their respective terms. Such insurance coverage by the Company shall
be provided to and for Employee only and shall not be provided to or for
Employee's spouse or dependents, except that Employee's spouse or
dependents may participate at Employee's cost.
-44-
10. NONCOMPETITION
10.1 During the Term and for a period of one-year thereafter,
Employee shall not, directly or indirectly, whether as an employee,
director, owner, 5% or greater shareholder, consultant, or partner (limited
or general) engage in, or have any interest in, any business that competes
with the business of the Company ("Netvoice Business") or with respect to
activities relating to the engineering, design and/or installation of voice
over internet protocol business communications systems and related support
services specifically related to the customer premise equipment arena.
Notwithstanding the foregoing, (i) the restrictions set forth in the
preceding sentence as they apply to the Netvoice Business shall not apply
post-Term if Employee is terminated without cause (as defined in subsection
6.1) (including termination as a result of expiration of this Agreement)
unless the Company elects to continue to pay (but which it shall not be
obligated to do) the compensation specified in Section 4 during such post-
Term period (the "Severance"), in which case the restriction shall continue
as long as the Company pays the Severance as provided herein (subject to
the one-year limitation) and (ii) Employee may own an equity interest in
and serve as a director of Talk IP, Inc., but not be involved in the
business of such entity, other than the sole function of pursuing and
negotiating a sale of such entity. The Company may, in its sole
discretion, give Employee written approval(s) to personally engage in any
activity or render any services referred to in this Section 10 if the
Company first secures written assurances (satisfactory to the Company and
its counsel) from Employee, or any prospective employer(s) of Employee,
that the integrity of the Company's Confidential Information will not in
any way be jeopardized by such activities, provided that the burden of so
establishing the foregoing to the satisfaction of the Company and its
counsel shall be upon Employee.
10.2 Employee expressly recognizes and acknowledges that the
Company has expended substantial resources, energies and efforts in
connection with the aforesaid trade secrets, proprietary information, and
customer and supplier relationships, that the protection and
confidentiality thereof are critical to the growth, development and success
of the Company and that compliance with the restrictive covenants contained
in this Agreement is necessary to protect the business and goodwill of the
Company. Employee further recognizes that the Company will suffer
substantial, irreparable and continuing injuries, damages and costs
attendant thereto in the event of a breach of this Agreement. The
existence of any claim or cause of action of Employee against the Company,
whether predicated under this Agreement or otherwise, shall not constitute
a defense to the enforcement hereof by the Company. Further recognizing
that money damages may not provide adequate relief, Employee agrees that,
in the event that he breaches the provisions of this Article 10, the
Company shall be entitled to a preliminary or permanent injunction in order
to prevent the continuation of such harm. Nothing in this Agreement shall
be construed to prohibit the Company from also pursuing any other remedy,
the parties having agreed that all remedies are cumulative.
10.3 Employee hereby assigns and agrees to assign to the Company,
its Subsidiaries, Parent or affiliates, as appropriate, its successors
assigns or nominees, his entire right, title and interest in any
developments, designs, patents, inventions and improvements, trade secrets,
trademarks, copyrightable subject matter or proprietary information which
Employee made or conceived, or may make or conceive, either solely or
jointly with others, while actually engaged in providing services to the
Company or with the use of the time,
-45-
material or facilities of the Company, or resulting from any task assigned
to him or work performed by him or on behalf of the Company. It is further
agreed that, without charge to the Company, but at its expense, Employee
will execute and deliver all such further documents as may be necessary,
including original applications and applications for renewal, extension or
reissue of patents, trademark registrations or copyright registrations, in
any or all countries, to vest title thereto in the Company, its
Subsidiaries, Parent or affiliates, as appropriate, its successors assigns
or nominees. Either during or after the Term, Employee will not disclose
to anyone outside of the Company, nor use in other than the Company's
business, except with the prior written permission of an officer of the
Company, any developments, designs, inventions and improvements, trade
secrets, works of authorship, proprietary information or proprietary things
developed by Employee while actually engaged in providing services to the
Company.
11. WORKING FACILITIES. The Company shall furnish the Employee with
support staff, supplies, equipment and such other facilities and services
suitable to Employee's position and adequate for the performance his duties.
12. MISCELLANEOUS
12.1 The Company may, from time to time, apply for and take out,
in its own name and at its own expense, life, health, accident, disability
or other insurance covering Employee in any sum or sums that it may deem
necessary to protect its interests, and Employee agrees to aid and
cooperate in all reasonable respects with the Company in procuring any and
all such insurance, including without limitation, submitting to the usual
and customary medical examinations, and by filling out, executing and
delivering such applications and other instruments in writing as may be
reasonably required by an insurance company or companies to which an
application or applications for such insurance may be made by or for the
Company. In order to induce the Company to enter into this Agreement,
Employee represents and warrants to the Company that to the best of his
knowledge Employee is insurable at standard (non-rated) premiums.
12.2 This Agreement is a personal contract, and the rights and
interests of Employee hereunder may not be sold, transferred, assigned,
pledged or hypothecated except as otherwise expressly permitted by the
provisions of this Agreement. Employee shall not under any circumstances
have any option or right to require payment hereunder otherwise than in
accordance with the terms hereof. Except as otherwise expressly provided
herein, Employee shall not have any power of anticipation, alienation, or
assignment of payments contemplated hereunder, and all rights and benefits
of Employee shall be for the sole personal benefit of Employee, and no
other person shall acquire any right, title or interest hereunder by reason
of any sale, assignment, transfer, claim or judgment or bankruptcy
proceedings against Employee; provided, however, that in the event of
Employee's death, Employee's estate, legal representative or beneficiaries
(as the case may be) shall have the right to receive all of the benefit
that accrued to Employee pursuant to, and in accordance with, the terms of
this Agreement.
The Company shall have the right to assign this Agreement to any
successor of substantially all of its business or assets, and any such
successor shall be bound by all of the provisions hereof.
-46-
12.3 GOVERNING LAW AND CONSTRUCTION. This Agreement shall be
governed by the laws of the State of Texas. The waiver by any party hereto
of the breach of any provisions of this Agreement shall not operate or be
construed as a waiver of any subsequent breach by any party. This
instrument contains the entire agreement of the parties concerning
employment and may not be changed except by written agreement duly executed
by both parties. This contract shall inure to the benefit of and be
binding upon the parties, their successors, heirs, and personal
representatives. This contract shall not be assignable.
-47-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date above written.
THE COMPANY:
Netvoice Technologies, Inc.
By
------------------------------------
Its
------------------------------------
EMPLOYEE:
---------------------------------------
-48-
EXHIBIT B
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Agreement") made and entered into as of
the 19th day of May, 2000, by and among Netvoice Technologies, Inc., a
Nevada corporation ("Netvoice"), and the persons listed on the signature
pages hereto ("Shareholders"), and U.S. Trust Company of Texas, N.A., as
escrow agent (the "Agent").
W I T N E S S E T H :
WHEREAS, pursuant to the Stock Purchase Agreement dated as of May 16,
2000 (the "Purchase Agreement"), by and among Netvoice Technologies
Corporation, Netvoice, Synetric, Inc., a Texas corporation (the "Company"),
and the Shareholders, Netvoice has agreed to purchase all of the shares of
common stock of the Company owned by each of the Shareholders; and
WHEREAS, the Purchase Agreement provides, as a condition to the
closing of the transactions thereunder, that the parties execute and
deliver this Agreement whereby a certain portion of the consideration to be
payable to Shareholders would be placed in escrow for a period of time.
The purpose for the Agreement is to provide Netvoice recourse in the event
the parties discover the Company has additional obligations that would
affect the purchase price to be paid under the Purchase Agreement.
NOW, THEREFORE, for and in consideration of the mutual
representations, warranties, covenants and agreements, and upon the terms,
and subject to the conditions hereinafter set forth, the parties hereto do
agree as follows:
1. DEFINITIONS. Unless otherwise defined herein, capitalized terms
used herein shall have the meaning ascribed to them in the Purchase Agreement.
2. APPOINTMENT OF AGENT. Netvoice and Shareholders hereby appoint
Agent as escrow agent in accordance with the terms and conditions set forth
herein, and the Agent hereby accepts such appointment.
3. DEPOSIT OF SHARES OF NETVOICE COMMON STOCK.
(a) On the Closing Date, Netvoice shall, in accordance with
SECTION 1.3 of the Purchase Agreement, deposit with the Agent certificates
evidencing in the aggregate 33,229 shares of Netvoice Stock as identified
on SCHEDULE I hereto ("Escrowed Shares"), to be held in accordance with
SECTION 4 below.
(b) All dividends, interest and other income from time to time
earned thereon with respect to the Escrowed Shares shall be held in escrow
pursuant to the terms of this Agreement and shall be considered part of the
Escrowed Shares as defined herein.
-50-
(c) Until such time, if ever, as the Agent shall have delivered
the Escrowed Shares to Netvoice pursuant to SECTION 4 of this Agreement,
Shareholders shall have the right to vote the Escrowed Shares.
4. DISPOSITION OF ESCROWED AMOUNT.
(a) If the Agent shall receive a written notice from Netvoice
("Claim Notice") at any time from the date of this Agreement through the
date that is one (1) year following the Closing Date certifying (i) that
Netvoice has suffered Purchaser's Losses, and, as a result, Netvoice is
entitled to payment hereunder pursuant to SECTION 8.6 of the Purchase
Agreement, (ii) the total amount that Netvoice is entitled to be paid from
the Escrowed Shares (a "Claim") with respect to such Purchaser's Losses,
and (iii) that Netvoice has delivered a copy of such Claim Notice to
Shareholders with respect to such Claim, then in such event the Agent shall
promptly (and in any event within ten (10) days following receipt of such
Claim Notice from Netvoice) deliver a copy of such Claim Notice to
Shareholders. If the Agent does not, within twenty (20) days after its
delivery of the Claim Notice, receive a written objection from Shareholders
with respect to such Claim, the Agent shall promptly deliver to Netvoice
such amount of the Escrowed Shares equal to the amount that Netvoice shall
have specified as its Claim, with the Escrowed Shares to be valued at the
price determined by dividing the amount of the Purchaser's Loss by the
average price of the Netvoice Stock for the twenty (20) trading day period
prior to the date the Purchaser's Loss is satisfied in full. If the Agent
shall receive a written objection from Shareholders within such twenty (20)
day period, a conflict shall be deemed to have arisen and the Agent shall
within five (5) days of the Agent's receipt of the written objection from
Shareholders, deliver written notice of such objection to the parties
hereunder, and the Agent shall be entitled to refrain from taking any
action until the Agent shall be directed otherwise in accordance with
SECTION 4(b) below.
(b) If a conflict shall have arisen as described in SECTION 4(a)
above, upon receipt by the Agent during the term of this Agreement of (i)
joint written instructions signed by Netvoice and Shareholders directing
payment of all or a portion of the Escrowed Shares, or (ii) a nonappealable
final judgment or order of a court of competent jurisdiction directing the
payment of an amount of the Escrowed Shares held hereunder, the Agent shall
promptly deliver to the person or persons specified, out of the escrow
created hereunder and in the manner specified in the instructions, judgment
or order, with the amount of Escrowed Shares to be valued at the price
calculated as set forth in SECTION 4(a) above, the amount or amounts of
Escrowed Shares specified in such instructions, judgment or order, and the
Agent shall thereupon be relieved and discharged from any responsibility or
obligation with respect to such amount or amounts of the Escrowed Shares
delivered in accordance with this Agreement.
(c) Unless otherwise notified by an instruction signed by
Netvoice and each of the Shareholders, in the event the escrow created
hereunder is not sooner terminated pursuant to the provisions of SECTION
4(e) below or extended pursuant to the provisions of this SECTION 4(c), the
escrow period and the escrow created hereunder shall terminate on the
business day next following the first anniversary of the Closing Date (the
"Escrow Period"). Upon such termination, the Agent shall release and
deliver to Shareholders the Escrowed Shares remaining in escrow; PROVIDED,
HOWEVER, if Netvoice has in good faith filed a Claim with the Agent and
Shareholders prior to such termination, which Claim has not been resolved
in accordance with
-51-
SECTION 4(a) or (b) above by the date of termination of the Escrow Period,
the Agent shall release and pay to Shareholders only the amount of Escrowed
Shares remaining in escrow in excess of the aggregate amount of the
outstanding and unresolved Claim(s) of Netvoice with the amount based upon
the price of such Escrowed Shares calculated as set forth in SECTION 4(a)
above. Thereafter, upon resolving all remaining Claims in accordance with
this SECTION 4, including any distributions to Netvoice (which may be after
the period provided herein, in which case the applicable Escrow Period
shall be extended to such time in which all Claims are resolved), the Agent
shall release and pay to Shareholders all of the Escrowed Shares held in
escrow hereunder and close the escrow, whereupon the escrow created
hereunder shall be terminated.
(d) Unless otherwise notified in a joint instruction signed by
Netvoice and Shareholders, in the event the Agent disburses to Netvoice all
of the Escrowed Shares held in escrow in accordance with the terms of this
SECTION 4 prior to the end of the Escrow Period set forth in SECTION 4(c)
above the escrow created hereunder shall immediately terminate and the
Agent shall close the escrow and give notice thereof to Netvoice and
Shareholders.
(e) Notwithstanding the provisions of SECTION 4(c) above, at the
conclusion of the Escrow Period, if any Claim has not been resolved in
accordance with the terms hereof, the Agent shall have the right, in its
sole discretion, to deposit with the registry of any State or Federal court
located in the City of Dallas, State of Texas, the remaining Escrowed
Shares in escrow that equals the aggregate amount of the outstanding and
unresolved Claims. In such a case, the Agent shall implead Netvoice and
Shareholders in any such action filed with the court.
(f) In the event that Shareholders elect to satisfy or settle an
outstanding Claim or Claims, or pay costs of defense in respect thereof, by
making a cash payment to Netvoice, Shareholders may do so by providing
written notice of such election to Netvoice, along with the cash payment.
Upon receipt of such written notice and cash payment from Shareholders,
Netvoice shall, as soon as practicable, forward such written notice to the
Agent, who shall, within ten (10) of receipt of such written notice,
release the Escrowed Shares to Shareholders in an amount equal to the cash
payment made in respect of such Claim(s) or other payment and based upon
the price calculated as set forth in SECTION 4(a) above, with such Escrowed
Shares to be held by Shareholders subject to the terms of the Purchase
Agreement.
(g) To the extent the Escrowed Shares are used to satisfy or
settle a Claim, the Escrowed Shares will be taken proportionately from each
Shareholder based on his or her percentage of the total number of Escrowed
Shares initially deposited hereunder.
-52-
5. DUTIES AND OBLIGATIONS.
(a) The Agent shall have no duties or responsibilities other
than those expressly set forth herein. The Agent shall have no duty to
enforce any obligation of any person to make any payment or delivery, or to
direct or cause any payment or delivery to be made, or to enforce any
obligation of any persons to perform any other act. The Agent shall be
under no liability to Netvoice or Shareholders or to anyone else by reason
of any failure on the part of any party hereto or any maker, guarantor,
endorser or other signatory of any document or any other person to perform
such person's obligations under any such document.
(b) Except in the event of Agent's gross negligence or willful
misconduct, the Agent shall not be liable to Netvoice and Shareholders or
to anyone else for any action taken or omitted by it, or any action
suffered by it to be taken or omitted, in good faith and in the exercise of
its own best judgment. The Agent may rely conclusively and shall be
protected in acting upon any order, notice, demand, certificate, opinion or
advice of counsel (including counsel chosen by the Agent), statement,
instrument, report or other paper or document (not only as to its due
execution and the validity and effectiveness of its provisions, but also as
to the truth and acceptability of any information therein contained) that
is believed by the Agent to be genuine and to be signed or presented by the
proper person or persons.
(c) The Agent shall not be responsible for the sufficiency or
accuracy of the form of, or the execution, validity, value or genuineness
of, any document or property received, held or delivered by it hereunder,
or of any signature or endorsement thereon, or for any lack of endorsement
thereon, or for any description therein, nor shall the Agent be responsible
or liable to Netvoice or Shareholders or to anyone else in any respect on
account of the identity, authority, or rights of the persons executing or
delivering or purporting to execute or deliver any document or property or
this Agreement. The Agent shall not be liable to Netvoice or Shareholders
or to anyone else for any loss that may be incurred by reason of any
investment of any monies it holds hereunder.
-53-
(d) To the extent that the Agent becomes liable for the payment
of taxes, including withholding taxes, in respect of income derived from
the investment of funds held hereunder or any payment made hereunder, the
Agent may pay such taxes. The Agent may withhold from any payment of
monies held by it hereunder such amount as the Agent estimates to be
sufficient to provide for the payment of such taxes not yet paid, and shall
use the sum withheld for that purpose. The Agent shall be indemnified and
held harmless against any liability for taxes and for any penalties or
interest in respect of taxes on such investment income or payments in the
manner provided in SECTION 5(e) below.
(e) The Agent shall be indemnified and held harmless jointly and
severally by Netvoice and Shareholders from and against any and all
expenses, including reasonable attorneys' fees and disbursements, or losses
suffered by the Agent in connection with any action, suit or other
proceeding involving any claim, or in connection with any claim or demand,
which in any way, directly or indirectly, arises out of or relates to this
Agreement, the services of the Agent hereunder, the monies or other
property held by it hereunder or any income earned from investment of such
monies, other than arising as a result of the Agent's gross negligence or
willful misconduct.
6. COMPENSATION AND REIMBURSEMENT OF AGENT. The Agent shall be
entitled to compensation from Netvoice and Shareholders as provided on
EXHIBIT A attached hereto, and to reimbursement from Netvoice and
Shareholders for all reasonable expenses paid or incurred by it in the
administration of its duties hereunder, including but not limited to all
reasonable attorneys' and agents' fees and disbursements and all taxes or
other governmental charges. Netvoice and Shareholders shall each pay fifty
percent (50%) of such compensation and expenses.
7. FURTHER ASSURANCES. From time to time on and after the date
hereof, Netvoice and Shareholders shall deliver or cause to be delivered to
the Agent such further documents and instruments and shall do and cause to
be done such further acts as the Agent shall reasonably request to carry
out more effectively the provisions and purposes of this Agreement, to
evidence compliance herewith or to assure itself that it is protected in
acting hereunder.
8. TERMINATION OF AGREEMENT AND RESIGNATION OF AGENT.
(a) This Agreement shall terminate on the final disposition of
the property held in escrow hereunder, provided that the rights of the
Agent and the obligations of Netvoice and Shareholders under SECTIONS 5, 6
and 10 of this Agreement shall survive the termination hereof. The
termination of the escrow created hereunder shall occur solely pursuant to
the terms hereunder. Such termination shall not be directly or indirectly
within the control of the Shareholders, nor shall the return of the
Escrowed Shares be triggered by the payment of additional tax or reduction
in tax resulting from an Internal Revenue Service audit of the Company, the
Shareholders, or any persons related to the Company or the Shareholders
within the meaning of Section 267(c)(4) of the Internal Revenue Code of
1986, as amended.
(b) The Agent may resign at any time and be discharged from its
duties as escrow agent hereunder by giving Netvoice and Shareholders at
least forty-five (45) days' written notice thereof. As soon as practicable
after its resignation, the Agent shall turn over to a successor
-54-
escrow agent appointed by Netvoice and Shareholders all monies and property
held hereunder upon presentation of the document appointing the new escrow
agent and its acceptance thereof. If no new escrow agent is so appointed
within the forty-five (45) day period following such notice of resignation,
the Agent may deposit the aforesaid monies and property with the registry
of any State or Federal court located in the City of Dallas, State of Texas.
9. ARBITRATION. Any unresolved dispute or controversy arising under
or in connection with this Agreement shall be settled exclusively by
arbitration, conducted before a panel of three (3) arbitrators in Dallas,
Texas, in accordance with the rules of the American Arbitration Association
then in effect; PROVIDED, HOWEVER, that such panel shall have no authority
to resolve any dispute or controversy arising under the Purchase Agreement,
including any Claim. The arbitrators shall not have the authority to add
to, detract from, or modify any provision hereof nor to award punitive
damages to any injured party. A decision by a majority of the arbitration
panel shall be final and binding. Judgment may be entered on the
arbitrators' award in any court having jurisdiction. The costs and
expenses of any arbitration proceeding shall be borne by the party or
parties not prevailing in such proceeding as determined by the arbitrators.
10. CONSENT TO SERVICE OF PROCESS. Netvoice and Shareholders hereby
irrevocably consent to the jurisdiction of the courts of the State of Texas
and of any Federal court located in such State in connection with any
action, suit or other proceeding arising out of or relating to this
Agreement or any action taken or omitted hereunder, and each such party
waives personal service of any summons, complaint or other process and
agrees that the service thereof may be made by certified or registered mail
directed to such person at such person's address for purposes of notices
hereunder. In the event that the person so served fails to appear or
answer within the time prescribed by law, that person shall be deemed in
default and judgment may be entered by the Agent against that person for
the amount or other relief as demanded in any summon, complaint or other
proceeds so served.
11. NOTICES. Any notice, request, instruction, document or other
communication to be given hereunder by any party hereto to any other party
hereto shall be in writing and validly given if (i) delivered personally,
(ii) sent by facsimile with electronic confirmation of receipt and followed
up by mail (as contemplated in clause (iv) below), (iii) delivered by
overnight express, or (iv) sent by registered or certified mail, postage
prepaid, as follows:
(i) If to Netvoice:
Netvoice Technologies, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
-55-
with copies to:
Best, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Ltd.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇ Liddell & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to Shareholders:
To the address listed below each Shareholder's name on the
signature pages hereto
with a copy to:
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address for a party as shall be specified by like notice.
Any notice that is delivered personally, or sent by telecopy or overnight
express in the manner provided herein shall be deemed to have been duly
given to the party to whom it is directed upon receipt by such party. Any
notice that is addressed and mailed in the manner herein provided shall be
conclusively presumed to have been given to the party to whom it is
addressed at the close of business, local time of the recipient, on the
fifth day after the day it is so placed in the mail.
12. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and supersedes all prior agreements and understandings, both
written and oral, between the parties hereto with respect to the subject
matter hereof, and no party shall be liable or bound to the other in any
manner by any representations or warranties not set forth herein.
13. SUCCESSORS AND ASSIGNS. This Agreement and the rights and
obligations hereunder may not be assigned, except that each of Netvoice and
Shareholders may assign this Agreement and its rights and obligations
hereunder only to a successor to such party's entire business. This
Agreement and the rights and obligations hereunder of the Agent may be
assigned by the Agent only to a successor to its entire business. This
Agreement shall be binding upon and inure to the benefit of each party's
respective successors, heirs and permitted assigns. No other person shall
acquire or have any rights under or by virtue of this Agreement.
-56-
This Agreement is intended to be for the sole benefit of the parties
hereto, and (subject to the provisions of this SECTION 13) their respective
successors, heirs and assigns, and none of the provisions of this Agreement
are intended to be, not shall they be construed to be, for the benefit of
any third person.
14. RULES OF CONSTRUCTION. This Agreement shall be construed without
regard to any presumption or other rule requiring construction against the
party causing such instrument to be drafted. The terms "hereby", "hereof",
"hereunder" and any similar terms, as used in this Agreement, refer to this
Agreement in its entirety and not only to the particular portion of this
Agreement where the term is used. The word "person" shall mean any natural
person, partnership, corporation, government and any other form of business
or legal entity. All words or terms used in this Agreement, regardless of
the number or gender in which they are used, shall be deemed to include any
other number and any other gender as the context may require.
15. HEADINGS. The headings of the sections of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of
this Agreement or to affect the construction hereof.
16. MODIFICATION AND WAIVER. Any of the terms or conditions of this
Agreement may be waived in writing at any time by the party which is
entitled to the benefits thereof, and this Agreement may be modified or
amended by a written instrument executed by all parties hereto. No
supplement, modification, or amendment of this Agreement shall be binding
unless executed in writing by all parties. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver
of any other provision hereof (whether or not similar) nor shall such
waiver constitute a continuing waiver.
17. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED, ENFORCED, AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF TEXAS (WITHOUT REGARD TO ITS
CHOICE OF LAW PRINCIPLES).
18. INVALID PROVISIONS. If any provision of this Agreement is held
to be illegal, invalid, or unenforceable under present or future laws, such
provision shall be fully severable, this Agreement shall be construed and
enforced as if such illegal, invalid, or unenforceable provision had never
comprised a part of this Agreement, and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected
by the illegal, invalid, or unenforceable provision or by its severance
from this Agreement.
19. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an
original and all of which shall constitute the same instrument.
-57-
IN WITNESS WHEREOF, the parties hereto have duly caused this Agreement
to be executed as of the day and year first above written.
NETVOICE TECHNOLOGIES, INC.
By: ____________________________________
Name: __________________________________
Title: _________________________________
________________________________________
▇▇▇▇ C' ▇▇ ▇▇▇▇
Address: _______________________________
________________________________________
________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇
Address: _______________________________
________________________________________
________________________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇
Address: _______________________________
________________________________________
________________________________________
▇▇▇▇▇ ▇▇▇▇
Address: _______________________________
________________________________________
________________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Address: _______________________________
________________________________________
________________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇
Address: _______________________________
________________________________________
-58-
________________________________________
▇▇▇▇▇ ▇▇▇▇▇
Address: _______________________________
________________________________________
________________________________________
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Address: _______________________________
________________________________________
U.S. Trust Company of Texas, N.A., Escrow Agent, hereby acknowledges
receipt of the subject matter of the escrow as described in the foregoing
Escrow Agreement and hereby accepts the subject matter as Escrow Agent
thereunder, subject to the terms and conditions therein set out.
U.S. TRUST COMPANY OF TEXAS, N.A.
By: ____________________________________
Name: __________________________________
Title: _________________________________
-59-
RECEIPT UPON TERMINATION OF ESCROW
The undersigned hereby acknowledge receipt from __________, Escrow
Agent under the foregoing Escrow Agreement, of the subject matter of the
escrow as described in such Agreement. The undersigned acknowledge a
faithful and proper performance by said Escrow Agent of its duties under
said Escrow Agreement, and in consideration of such delivery hereby release
and discharge said Escrow Agent from all further responsibility or
liability as under said Agreement.
Executed this _____ day of _________________, _____.
___________________________________
-60-
EXHIBIT "A"
-----------
COMPENSATION OF ESCROW AGENT
A lump sum fee of $2,500.00
-61-
SCHEDULE I
CERTIFICATE NO. HOLDER NUMBER OF SHARES
--------------- ------ ----------------
▇▇▇▇ C' ▇▇ ▇▇▇▇ 9,406
▇▇▇▇ ▇▇▇▇▇▇ 9,367
▇▇▇▇▇ ▇▇▇▇ 5,350
▇▇▇▇▇ ▇▇▇▇▇▇▇ 6,244
▇▇▇ Grizenhout 798
▇▇▇▇▇▇▇ ▇▇▇▇▇ 469
▇▇▇▇▇ ▇▇▇▇▇ 469
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 1,126
-62-