Exhibit 10.2
SICAV TWO SECURITIES PURCHASE
AGREEMENT
THIS STOCK PURCHASE AND SUBSCRIPTION AGREEMENT (this "Agreement") is made and
entered into as of December 1, 2005, between Y-Tel International Inc., Inc, a
corporation organized and existing under the laws of Delaware (the "Company"),
and Mercatus & Partners, LP (the "Purchaser").
WHEREAS, PURCHASER desires to subscribe for and purchase Shares of the
Company; and
WHEREAS, Company desires for Purchaser to subscribe for and to purchase
Shares of the Company.
NOW, THEREFORE, subject to the terms and conditions set forth in this
Agreement, for good, valuable and binding consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound hereby, now agree as follows:
ARTICLE I
INTRODUCTION AND DEFINITIONS
This Agreement is entered into by the parties for purchase of equity
shares of the Company by the Purchaser for placement into a European bank SICAV
fund. This is not an immediate funding, and the Company recognizes the Purchaser
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shall have up to thirty (30) days, as set forth in this Agreement to tender the
Purchase Price to the company through the intermediary Custodial Bank and
intermediary Purchaser, once the valuation and repurchase of the shares is made
in accordance with the terms of this Agreement. The Company shall have the right
to contact the Custodial Bank administrator for Purchaser account verification
and for confirmation of the share status, location and control at each step of
the process. Purchaser shall have up to thirty (30) days from the date of
delivery of the Shares to the Custodial Bank to pay the Purchase Price. The
particular expected time line and transaction sequence is set forth in schedule
A to the agreement.
Certain Definitions. As used in this Agreement, and unless the context
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requires a different meaning, the following terms have the meanings indicated:
"Affiliate" means, with respect to any Person, any Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlled by" and "under common control
with") shall mean the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities or by contract or otherwise.
"Agreement" shall have the meaning set forth in the introductory
paragraph of this Agreement.
10.2-1
"Attorney-in-fact" means the agent of the bank account holder, Banca
MB, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esquire. The attorney-in-fact, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, has full
oversight authority of the Purchaser and the receiving bank to verify share
deposit, valuation process and share transaction status.
"Business Day" means any day except Saturday, Sunday, any day which
shall be a legal holiday or a day on which banking institutions in the State of
New York are authorized or required by law or other government actions to close.
"Change of Control" means the acquisition, directly or indirectly, by
any Person of ownership of, or the power to direct the exercise of voting power
with respect to, a majority of the issued and outstanding voting shares of the
Company.
"Closing" shall have the meaning set forth in this document.
"Closing Date" shall be the date this Agreement is executed by both
parties.
"Common Stock" shall have the meaning in the recital.
"Company" shall have the meaning set forth in the introductory
paragraph.
"Custodial Bank" means the bank that will receive and retain the Shares
of the Company on behalf of the parties, until payment is received and the
purchase is complete in accordance with Schedule A. In this case, the Custodial
Bank is ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇, (BBH), New York City, New York. The account
holder is Banca MB as the intermediary fund receiving bank.
"Default" means any event or condition which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Disclosure Documents" means the Company's reports filed under the
Exchange Act with the SEC.
"Event of Default" shall have the meaning set forth in the document.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Execution Date" means the date of this Agreement first written above.
"Indemnified Party" shall have the meaning set forth in the document.
"Indemnifying Party" shall have the meaning set forth in the document.
"NASD" means the National Association of Securities Dealers, Inc.
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"Nasdaq" shall mean the Nasdaq Stock Market, Inc.(R)
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"OTCBB" shall mean the NASD over-the counter Bulletin Board(R).
10.2-2
"Per Share Market Value" of the Common Stock means on any particular
date (a) the last sale price of shares of Common Stock on such date or, if no
such sale takes place on such date, the last sale price on the most recent prior
date, in each case as officially reported on the principal national securities
exchange on which the Common Stock is then listed or admitted to trading.
"Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
"Placement Agent" shall have the meaning set forth in Section 3.1(k).
"Purchase Price" shall have the meaning set forth in this document.
"Purchaser" shall have the meaning set forth in the introductory
paragraph.
"Reporting Issuer" means a company that is subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act.
"Required Approvals" shall have the meaning set forth in Section
3.1(f).
"Securities" means the Common Stock and stock of any other class into
which such shares may hereafter have been reclassified or changed.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" shall have the meaning set forth herein.
"Subsidiaries" shall have the meaning set forth herein.
"Trading Day" means (a) a day on which the Common Stock is quoted on
Nasdaq, the OTCBB or the principal stock exchange on which the Common Stock has
been listed, or (b) if the Common Stock is not quoted on Nasdaq, the OTCBB or
any stock exchange.
"Transaction Documents" means this Agreement and all exhibits and
schedules hereto and all other documents, instruments and writings required
pursuant to this Agreement.
"U.S." means the United States of America.
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ARTICLE II
The PURCHASER hereby irrevocably subscribes for and agrees to purchase
and accept the Shares of the Common Stock of the COMPANY. The purchase price to
be paid by the Purchaser shall be $0.459 per share for 1,350,000 Shares.
This agreement is binding under the conditions and timing set forth
herein.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations, Warranties and Agreements of the Company. The
Company hereby makes the following representations and warranties to
the Purchaser, all of which shall survive the Closing:
(i) Organization and Qualification. The Company is a corporation,
duly incorporated, validly existing and in good standing under the laws
of the State of Delaware, with the requisite corporate power and
authority to own and use its properties and assets and to carry on its
business as currently conducted. The Company has no subsidiaries other
than as set forth on Schedule 3.1(a) attached hereto (collectively, the
"Subsidiaries"). Each of the Subsidiaries is a corporation, duly
incorporated, validly existing and in good standing under the laws of
the jurisdiction of its incorporation, with the full corporate power
and authority to own and use its properties and assets and to carry on
its business as currently conducted. Each of the Company and the
Subsidiaries is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good
standing, as the case may be, would not, individually or in the
aggregate, have a material adverse effect on the results of operations,
assets, prospects, or financial condition of the Company and the
Subsidiaries, taken as a whole (a "Material Adverse Effect").
(ii) Authorization, Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the
transactions contemplated hereby and by each other Transaction Document
and to otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of this Agreement and each of the other
Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby has been duly authorized
by all necessary action on the part of the Company. Each of this
Agreement and each of the other Transaction Documents has been or will
be duly executed by the Company and when delivered in accordance with
the terms hereof or thereof will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the
enforcement of, creditors' rights and remedies or by other equitable
principles of general application.
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(iii) Capitalization. The authorized, issued and outstanding
capital stock of the Company is set forth on Schedule 3.1(c). No shares
of Common Stock are entitled to preemptive or similar rights, nor is
any holder of the Common Stock entitled to preemptive or similar rights
arising out of any agreement or understanding with the Company by
virtue of this Agreement. Except as disclosed in Schedule 3.1(c), there
are no outstanding options, warrants, script, rights to subscribe to,
registration rights, calls or commitments of any character whatsoever
relating to securities, rights or obligations convertible into or
exchangeable for, or giving any person any right to subscribe for or
acquire, any shares of Common Stock, or contracts, commitments,
understandings, or arrangements by which the Company or any Subsidiary
is or may become bound to issue additional shares of Common Stock, or
securities or rights convertible or exchangeable into shares of Common
Stock. Neither the Company nor any Subsidiary is in violation of any of
the provisions of its Certificate of Incorporation, bylaws or other
charter documents.
(iv) Issuance of Securities. The Shares have been duly and validly
authorized for issuance, offer and sale pursuant to this Agreement and,
when issued and delivered as provided hereunder against payment in
accordance with the terms hereof, shall be valid and binding
obligations of the Company enforceable in accordance with their
respective terms.
(v) No Conflicts. The execution, delivery and performance of this
Agreement and the other Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated hereby and
thereby do not and will not (i) conflict with or violate any provision
of its Certificate of Incorporation or bylaws (each as amended through
the date hereof) or (ii) be subject to obtaining any consents except
those referred to in Section 3.1(f), conflict with, or constitute a
default (or an event which with notice or lapse of time or both would
become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which the Company is a party, or (iii) result in a
violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to
which the Company or its Subsidiaries is subject (including, but not
limited to, those of other countries and the federal and state
securities laws and regulations), or by which any property or asset of
the Company or its Subsidiaries is bound or affected, except in the
case of clause (ii), such conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations as would not,
individually or in the aggregate, have a Material Adverse Effect. The
business of the Company and its Subsidiaries is not being conducted in
violation of any law, ordinance or regulation of any governmental
authority.
(vi) Consents and Approvals. Except as specifically set forth in
Schedule 3.1(f), neither the Company nor any Subsidiary is required to
obtain any consent, waiver, authorization or order of, or make any
filing or registration with, any court or other federal, state, local
or other governmental authority or other Person in connection with the
execution, delivery and performance by the Company of this Agreement
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and each of the other Transaction Documents (together with the
consents, waivers, authorizations, orders, notices and filings referred
to in Schedule 3.1(f), the "Required Approvals").
(vii) Litigation; Proceedings. Except as specifically disclosed in
Schedule 3.1(g), there is no action, suit, notice of violation,
proceeding or investigation pending or, to the best knowledge of the
Company, threatened against or affecting the Company or any of its
Subsidiaries or any of their respective properties before or by any
court, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) which (i) relates to or
challenges the legality, validity or enforceability of any of the
Transaction Documents, the Shares or the Underlying Shares, (ii) could,
individually or in the aggregate, have a Material Adverse Effect or
(iii) could, individually or in the aggregate, materially impair the
ability of the Company to perform fully on a timely basis its
obligations under the Transaction Documents.
(viii) No Default or Violation. Except as set forth in Schedule
3.1(h) hereto, neither the Company nor any Subsidiary (i) is in default
under or in violation of any indenture, loan or credit agreement or any
other agreement or instrument to which it is a party or by which it or
any of its properties is bound, except such conflicts or defaults as do
not have a Material Adverse Effect, (ii) is in violation of any order
of any court, arbitrator or governmental body, except for such
violations as do not have a Material Adverse Effect, or (iii) is in
violation of any statute, rule or regulation of any governmental
authority which could (individually or in the aggregate) (iv) adversely
affect the legality, validity or enforceability of this Agreement, (v
have a Material Adverse Effect or (vi) adversely impair the Company's
ability or obligation to perform fully on a timely basis its
obligations under this Agreement.
(ix) Disclosure Documents. The Disclosure Documents are accurate
in all material respects and do not contain any untrue statement of
material fact or omit to state any material fact necessary in order to
make the statements made therein, in light of the circumstances under
which they were made, not misleading.
(x) Non-Registered Offering. Neither the Company nor any Person
acting on its behalf has taken or will take any action (including,
without limitation, any offering of any securities of the Company under
circumstances which would require the integration of such offering with
the offering of the Securities under the Securities Act) which might
subject the offering, issuance or sale of the Securities to the
registration requirements of Section 5 of the Securities Act.
(xi) Placement Agent. The Company accepts and agrees that Artemis
Capital ("Artemis") is acting for the Purchaser and does not regard any
person other than the Purchaser as its customer in relation to this
Agreement, and that it has not made any recommendation to the Company,
in relation to this Agreement and is not advising the Company with
regard to the suitability or merits of the transaction. The Placement
Agent shall be the Company contact for all information relating to the
status of funding, location of Shares, settlement of the payment of the
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Purchase Price and any other information requests of the Company.
Notwithstanding the above, in the event the Purchase Price is not paid
as required herein, Company may directly contact the Attorney-in-Fact
to provide Company notice of demand for the return of the Shares.
The Purchaser acknowledges and agrees that the Company makes no representation
or warranty with respect to the transactions contemplated hereby other than
those specifically set forth in Section 3.1 hereof.
3.2 Representations and Warranties of the Purchaser. The Purchaser
hereby represents and warrants to the Company as follows:
(i) Organization; Authority. The Purchaser is a corporation, duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation with the requisite power and authority to
enter into and to consummate the transactions contemplated hereby and
by the other Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder. The acquisition of the Shares to
be purchased by the Purchaser hereunder has been duly authorized by all
necessary action on the part of the Purchaser. This Agreement has been
duly executed and delivered by the Purchaser and constitutes the valid
and legally binding obligation of the Purchaser, enforceable against it
in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to, or affecting generally the
enforcement of, creditors rights and remedies or by other general
principles of equity.
(ii) Investment Intent. The Purchaser is acquiring the Shares to
be purchased by it hereunder, for its own account for investment
purposes only and not with a view to or for distributing or reselling
such Shares, or any part thereof or interest therein, without
prejudice, however, to such Purchaser's right, subject to the
provisions of this Agreement, at all times to sell or otherwise dispose
of all or any part of such Shares in compliance with applicable federal
and state securities laws.
(iii) Experience of Purchaser. The Purchaser, either alone or
together with its representatives, has such knowledge, sophistication
and experience in business and financial matters so as to be capable of
evaluating the merits and risks of an investment in the Shares to be
acquired by it hereunder, and has so evaluated the merits and risks of
such investment.
(iv) Ability of Purchaser to Bear Risk of Investment. The
Purchaser is able to bear the economic risk of an investment in the
Securities to be acquired by it hereunder and, at the present time, is
able to afford a complete loss of such investment.
(v) Access to Information. The Purchaser acknowledges that it has
been afforded (i) the opportunity to ask such questions as it has
deemed necessary of, and to receive answers from, representatives of
the Company concerning the terms and conditions of the Securities
offered hereunder and the merits and risks of investing in such
securities; (ii) access to information about the Company and the
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Company's financial condition, results of operations, business,
properties, management and prospects sufficient to enable it to
evaluate its investment in the Securities; and (iii) the opportunity to
obtain such additional information which the Company possesses or can
acquire without unreasonable effort or expense that is necessary to
make an informed investment decision with respect to the investment and
to verify the accuracy and completeness of the information that it has
received about the Company.
(vi) Reliance. The Purchaser understands and acknowledges that (i)
the Shares being offered and sold to it hereunder are being offered and
sold without registration under the Securities Act in a private
placement that is exempt from the registration provisions of the
Securities Act under Section 4(2) of the Securities Act and (ii) the
availability of such exemption depends in part on, and that the Company
will rely upon the accuracy and truthfulness of, the foregoing
representations and such Purchaser hereby consents to such reliance.
(vii) Regulation S. Purchaser understands and acknowledges that
(A) the Shares have not been registered under the Securities Act, are
being sold in reliance upon an exemption from registration afforded by
Regulation S; and that such Shares have not been registered with any
state securities commission or authority; (B) pursuant to the
requirements of Regulation S, the Shares may not be transferred, sold
or otherwise exchanged unless in compliance with the provisions of
Regulation S and/or pursuant to registration under the Securities Act,
or pursuant to an available exemption hereunder; and (C) Purchaser is
under no obligation to register the Shares under the Securities Act or
any state securities law, or to take any action to make any exemption
from any such registration provisions available.
Purchaser is not a U.S. person and is not acquiring the Shares for the
account of any U.S. person; (B) no director or executive officer of Purchaser is
a national or citizen of the United States; and (C) it is not otherwise deemed
to be a "U.S. Person" within the meaning of Regulation S.
Purchaser was not formed specifically for the purpose of acquiring the
Shares purchased pursuant to this Agreement.
Purchaser is purchasing the Shares for its own account and risk and not
for the account or benefit of a U.S. Person as defined in Regulation S and no
other person has any interest in or participation in the Shares or any right,
option, security interest, pledge or other interest in or to the Shares.
Purchaser understands, acknowledges and agrees that it must bear the economic
risk of its investment in the Shares for an indefinite period of time and that
prior to any such offer or sale, the Company may require, as a condition to
effecting a transfer of the Ordinary Shares, an opinion of counsel, acceptable
to you, as to the registration or exemption therefrom under the Securities Act
and any state securities acts, if applicable.
Purchaser will, after the expiration of the Restricted Period, as set
forth under Regulation S Rule 903(b)(3)(iii)(A), offer, sell, pledge or
otherwise transfer the Shares only in accordance with Regulation S, or pursuant
to an available exemption under the Securities Act and, in any case, in
accordance with applicable state securities laws. The transactions contemplated
10.2-8
by this Agreement have neither been pre-arranged with a purchaser who is in the
U.S. or who is a U.S. Person, nor are they part of a plan or scheme to evade the
registration provisions of the United States federal securities laws.
The offer leading to the sale evidenced hereby was made in an "offshore
transaction." For purposes of Regulation S, Purchaser understands that an
"offshore transaction" as defined under Regulation S is any offer or sale not
made to a person in the United States and either (A) at the time the buy order
is originated, the purchaser is outside the United States, or the seller or any
person acting on his behalf reasonably believes that the purchaser is outside
the United States; or (B) for purposes of (1) Rule 903 of Regulation S, the
transaction is executed in, or on or through a physical trading floor of an
established foreign exchange that is located outside the United States or (2)
Rule 904 of Regulation S, the transaction is executed in, on or through the
facilities of a designated offshore securities market, and neither the seller
nor any person acting on its behalf knows that the transaction has been
prearranged with a buyer in the U.S.
Neither we nor any affiliate or any person acting on our behalf, has
made or is aware of any "directed selling efforts" in the United States, which
is defined in Regulation S to be any activity undertaken for the purpose of, or
that could reasonably be expected to have the effect of, conditioning the market
in the United States for any of the Shares being purchased hereby.
Purchaser understands that you are the seller of the Shares which are
the subject of this Agreement, and that, for purpose of Regulation S, a
"distributor" is any underwriter, dealer or other person who participates,
pursuant to a contractual arrangement, in the distribution of securities offered
or sold in reliance on Regulation S and that an "affiliate" is any partner,
officer, director or any person directly or indirectly controlling, controlled
by or under common control with any person in question. Purchaser agrees that we
will not, during the Restricted Period set forth under Rule 903(b)(iii)(A), act
as a distributor, either directly or though any affiliate, nor shall it sell,
transfer, hypothecate or otherwise convey the Shares other than to a non-U.S.
Person.
Purchaser acknowledges that the Shares will bear a legend in
substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN OFFERED AND SOLD IN AN
"OFFSHORE TRANSACTION" IN RELIANCE UPON REGULATION S AS PROMULGATED BY THE
SECURITIES AND EXCHANGE COMMISSION. ACCORDINGLY, THE SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT") AND MAY NOT BE TRANSFERRED OTHER THAN IN ACCORDANCE WITH
REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, THE
AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
The Company acknowledges and agrees that the Purchaser makes no representations
or warranties with respect to the transactions contemplated hereby other than
those specifically set forth in this Section 3.2.
10.2-9
ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
4.1 Manner of Offering. The Securities are being issued pursuant to
section 4(2) of the Securities Act, and Rule 506 of Regulation D and Regulation
S thereunder. The Shares are being issued pursuant to section 4(2) of the
Securities Act and Rule 506 of Regulation D thereunder.
4.2 Notice of Certain Events. The Company shall, on a continuing basis,
(i) advise the Purchaser promptly after obtaining knowledge of, and, if
requested by the Purchaser, confirm such advice in writing, of (A) the issuance
by any state securities commission of any stop order suspending the
qualification or exemption from qualification of the Shares, for offering or
sale in any jurisdiction, or the initiation of any proceeding for such purpose
by any state securities commission or other regulatory authority, or (B) any
event that makes any statement of a material fact made by the Company in Section
3.1 or in the Disclosure Documents untrue or that requires the making of any
additions to or changes in Section 3.1 or in the Disclosure Documents in order
to make the statements therein, in the light of the circumstances under which
they are made, not misleading, (ii) use its best efforts to prevent the issuance
of any stop order or order suspending the qualification or exemption from
qualification of the Securities under any state securities or Blue Sky laws, and
(iii) if at any time any state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption from
qualification of the Securities under any such laws, and use its best efforts to
obtain the withdrawal or lifting of such order at the earliest possible time.
4.3 Blue Sky Laws. The Company shall cooperate with the Purchaser in
connection with the exemption from registration of the Securities under the
securities or Blue Sky laws of such jurisdictions as the Purchasers may request;
provided, however, that neither the Company nor its Subsidiaries shall be
required in connection therewith to qualify as a foreign corporation where they
are not now so qualified. The Company agrees that it will execute all necessary
documents and pay all necessary state filing or notice fees to enable the
Company to sell the Securities to the Purchasers.
4.4 Integration. The Company shall not and shall use its best efforts
to ensure that no Affiliate shall sell, offer for sale or solicit offers to buy
or otherwise negotiate in respect of any security (as defined in Section 2 of
the Securities Act) that would be integrated with the offer or sale of the
Securities in a manner that would require the registration under the Securities
Act of the sale of the Securities to the Purchaser.
4.5 Furnishing of Rule 144(c) Materials. The Company shall, for so long
as any of the Securities remain outstanding and during any period in which the
Company is not subject to Section 13 or 15(d) of the Exchange Act, make
available to any registered holder of the Securities ("Holder" or "Holders") in
connection with any sale thereof and any prospective purchaser of such
Securities from such Person, such information in accordance with Rule 144(c)
promulgated under the Securities Act as is required to sell the Securities under
Rule 144 promulgated under the Securities Act.
4.6 Solicitation Materials. The Company shall not (i) distribute any
offering materials in connection with the offering and sale of the Shares other
than the Disclosure Documents and any amendments and supplements thereto
10.2-10
prepared in compliance herewith or (ii) solicit any offer to buy or sell the
Shares or, if applicable, Underlying Shares by means of any form of general
solicitation or advertising.
4.7 Listing of Common Stock. If the Common Stock is or shall become
listed on the OTCBB or on another exchange, the Company shall (a) use its best
efforts to maintain the listing of its Common Stock on the OTCBB or such other
exchange on which the Common Stock is then listed until two years from the date
hereof, and (b) shall provide to the Purchaser evidence of such listing.
4.8 Indemnification.
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(a) Indemnification
A. The Company shall, notwithstanding
termination of this Agreement and without limitation as to
time, indemnify and hold harmless the Purchaser and its
officers, directors, agents, employees and affiliates, each
Person who controls or the Purchaser (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange
Act) (each such Person, a "Control Person") and the officers,
directors, agents, employees and affiliates of each such
Control Person, to the fullest extent permitted by applicable
law, from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, costs of
preparation and attorneys' fees) and expenses (collectively,
"Losses"), as incurred, arising out of, or relating to, a
breach or breaches of any representation, warranty, covenant
or agreement by the Company under this Agreement or any other
Transaction Document.
B. The Purchaser shall, notwithstanding
termination of this Agreement and without limitation as to
time, indemnify and hold harmless the Company, its officers,
directors, agents and employees, each Control Person and the
officers, directors, agents and employees of each Control
Person, to the fullest extent permitted by application law,
from and against any and all Losses, as incurred, arising out
of, or relating to, a breach or breaches of any
representation, warranty, covenant or agreement by the
Purchaser under this Agreement or the other Transaction
Documents.
(b) Conduct of Indemnification Proceedings. If any
Proceeding shall be brought or asserted against any
Person entitled to indemnity hereunder (an "Indemnified
Party"), such Indemnified Party promptly shall notify
the Person from whom indemnity is sought (the
"Indemnifying Party") in writing, and the Indemnifying
Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and
expenses incurred in connection with defense thereof;
provided, that the failure of any Indemnified Party to
10.2-11
give such notice shall not relieve the Indemnifying
Party of its obligations or liabilities pursuant to
this Agreement, except (and only) to the extent that it
shall be finally determined by a court of competent
jurisdiction (which determination is not subject to
appeal or further review) that such failure shall have
proximately and materially adversely prejudiced the
Indemnifying Party.
An Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed to
pay such fees and expenses; or (2) the Indemnifying Party shall have failed
promptly to assume the defense of such Proceeding and to employ counsel
reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3)
the named parties to any such Proceeding (including any impleaded parties)
include both such Indemnified Party and the Indemnifying Party, and such
Indemnified Party shall have been advised by counsel that a conflict of interest
is likely to exist if the same counsel were to represent such Indemnified Party
and the Indemnifying Party (in which case, if such Indemnified Party notifies
the Indemnifying Party in writing that it elects to employ separate counsel at
the expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense of the claim against the Indemnified Party but will
retain the right to control the overall Proceedings out of which the claim arose
and such counsel employed by the Indemnified Party shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.
All fees and expenses of the Indemnified Party to which the
Indemnified Party is entitled hereunder (including reasonable fees and expenses
to the extent incurred in connection with investigating or preparing to defend
such Proceeding in a manner not inconsistent with this Section) shall be paid to
the Indemnified Party, as incurred, within ten (10) Business Days of written
notice thereof to the Indemnifying Party.
No right of indemnification under this Section shall be
available as to a particular Indemnified Party if there is a non-appealable
final judicial determination that such Losses arise solely out of the negligence
or bad faith of such Indemnified Party in performing the obligations of such
Indemnified Party under this Agreement or a breach by such Indemnified Party of
its obligations under this Agreement.
(c) Contribution. If a claim for indemnification under
this Section is unavailable to an Indemnified Party or
is insufficient to hold such Indemnified Party harmless
for any Losses in respect of which this Section would
apply by its terms (other than by reason of exceptions
provided in this Section), then each Indemnifying
Party, in lieu of indemnifying such Indemnified Party,
10.2-12
shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses in such
proportion as is appropriate to reflect the relative
benefits received by the Indemnifying Party on the one
hand and the Indemnified Party on the other and the
relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions or
omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative
fault of such Indemnifying Party and Indemnified Party
shall be determined by reference to, among other
things, whether there was a judicial determination that
such Losses arise in part out of the negligence or bad
faith of the Indemnified Party in performing the
obligations of such Indemnified Party under this
Agreement or the Indemnified Party's breach of its
obligations under this Agreement. The amount paid or
payable by a party as a result of any Losses shall be
deemed to include any attorneys' or other fees or
expenses incurred by such party in connection with any
Proceeding to the extent such party would have been
indemnified for such fees or expenses if the
indemnification provided for in this Section was
available to such party.
(d) Non-Exclusivity. The indemnity and contribution
agreements contained in this Section are in addition to
any obligation or liability that the Indemnifying
Parties may have to the Indemnified Parties.
ARTICLE V
MISCELLANEOUS
5.1 Fees and Expenses. Except as set forth in this Agreement, each
party shall pay the fees and expenses of its advisers, counsel, accountants and
other experts, if any, and all other expenses incurred by such party incident to
the negotiation, preparation, execution, delivery and performance of this
Agreement. The Company shall pay all stamp and other taxes and duties levied in
connection with the issuance of the Shares (and, upon conversion or exercise
thereof, the Underlying Shares) pursuant hereto. The Purchaser shall pay the
Placement Agent. The Purchaser shall be responsible for any taxes payable by the
Purchaser that may arise as a result of the investment hereunder or the
transactions contemplated by this Agreement or any other Transaction Document.
The Company shall pay all costs, expenses, fees and all taxes incident to and in
connection with: (A) the issuance and delivery of the Securities, (B) the
exemption from registration of the Securities for offer and sale to the
Purchaser under the securities or Blue Sky laws of the applicable jurisdictions,
and (C) the preparation of certificates for the Securities (including, without
limitation, printing and engraving thereof), and (D) all fees and expenses of
counsel and accountants of the Company.
5.2 Entire Agreement. This Agreement, together with all of the Exhibits
and Schedules annexed hereto, and any other Transaction Document contains the
entire understanding of the parties with respect to the subject matter hereof
10.2-13
and supersede all prior agreements and understandings, oral or written, with
respect to such matters. This Agreement shall be deemed to have been drafted and
negotiated by both parties hereto and no presumptions as to interpretation,
construction or enforceability shall be made by or against either party in such
regard.
5.3 Notices. Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be deemed to have been duly
given upon facsimile transmission (with written transmission confirmation
report) at the number designated below (if delivered on a Business Day during
normal business hours where such notice is to be received), or the first
Business Day following such delivery (if delivered other than on a Business Day
during normal business hours where such notice is to be received) whichever
shall first occur. The addresses for such communications shall be:
If to the Company: Y-Tel International, Inc.
OTCBB: YTLI
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Phone: ▇▇▇-▇▇▇-▇▇▇▇
With copies to:
If to the Purchaser: Mercatus & Partners, Limited
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▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇, Director
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
5.4 Amendments; Waivers. No provision of this Agreement may be waived
or amended except in a written instrument signed, in the case of an amendment,
by both the Company and the Purchaser, or, in the case of a waiver, by the party
against whom enforcement of any such waiver is sought. No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
either party to exercise any right hereunder in any manner impair the exercise
of any such right accruing to it thereafter.
5.5 Headings. The headings herein are for convenience only, do not
constitute part of this Agreement and shall not be deemed to limit or affect any
of the provisions hereof.
5.6 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
permitted assigns. The assignment by a party of this Agreement or any rights
hereunder shall not affect the obligations of such party under this Agreement.
5.7 No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
10.2-14
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
5.8 Governing Law; Venue; Service of Process. The parties hereto
acknowledge that the transactions contemplated by this Agreement and the
exhibits hereto bear a reasonable relation to the State of New York. The parties
hereto agree that the internal laws of the State of New York shall govern this
Agreement and the exhibits hereto, including, but not limited to, all issues
related to usury. Any action to enforce the terms of this Agreement or any of
its exhibits, or any other Transaction Document shall be brought exclusively in
the state and/or federal courts situate in the County and State of New York.
Service of process in any action by the Purchaser to enforce the terms of this
Agreement may be made by serving a copy of the summons and complaint, in
addition to any other relevant documents, by commercial overnight courier to the
Company at its principal address set forth in this Agreement.
5.9 Survival. The representations and warranties of the Company and
the Purchaser contained in this agreement shall survive the Closing.
5.10 Counterpart Signatures. This Agreement may be executed in two or
more counterparts, all of which when taken together shall be considered one and
the same agreement and shall become effective when counterparts have been signed
by each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
5.11 Publicity. The Company and the Purchaser shall consult with each
other in issuing any press releases or otherwise making public statements with
respect to the transactions contemplated hereby and neither party shall issue
any such press release or otherwise make any such public statement without the
prior written consent of the other, which consent shall not be unreasonably
withheld or delayed, unless counsel for the disclosing party deems such public
statement to be required by applicable federal and/or state securities laws.
Except as otherwise required by applicable law or regulation, the Company will
not disclose to any third party (excluding its legal counsel, accountants and
representatives) the names of the Purchaser.
5.12 Severability. In case any one or more of the provisions of this
Agreement shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be affected or impaired thereby and the parties will attempt to agree
upon a valid and enforceable provision which shall be a reasonable substitute
therefore, and upon so agreeing, shall incorporate such substitute provision in
this Agreement.
5.13 Limitation of Remedies. With respect to claims by the Company or
any person acting by or through the Company, or by the Purchaser or any person
acting through the Purchaser, for remedies at law or at equity relating to or
arising out of a breach of this Agreement, liability, if any, shall, in no
event, include loss of profits or incidental, indirect, exemplary, punitive,
special or consequential damages of any kind.
10.2-15
5.14 Delivery of Securities. The Company shall deliver the Shares
directly to the Custodial Bank within five days of the execution of this
Agreement in accordance with the directions provided in Schedule A, to BBH for
deposit into the Banca MB account.
5.15 Delivery of Payment. The Purchaser shall, within thirty (30) days
of the delivery of the Shares to the Custodial Bank issue the Payment to the
Company via wire transfer to the directed wire transfer bank and account as
specified below:
Beneficiary Account Name: Y-Tel International, LLC
Beneficiary Account No.: 2080221951
ABA/Transit No.: ▇▇▇▇▇▇▇▇▇
Beneficiary Bank: Hibernia National Bank
If the Purchase Price is not paid within thirty (30) days of the delivery of the
Shares to the Custodial Bank, the Company has the right to demand recall of the
shares after that time, and such Shares shall be transmitted back to the Company
within ten (10) business days from the date of the demand. See Appendix A for
details of timeline from deposit to payment.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first indicated above.
Company:
Y-Tel International, Inc.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: President
Purchaser:
▇▇▇▇ ▇▇▇▇ on behalf of
Purchaser
By: /s/ ▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇
Title: Director
Schedule 1
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Mercatus & Partners, LP
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PH. +39 065 406 470
FX. ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
10.2-16
SCHEDULE A
DELIVERY AND DESCRIPTION OF CONTRACT, SHARE INTAKE, DEPOSIT, VALUATION,
SAFEKEEPING AND MOVEMENT OF SHARES:
Step One: Delivery of Contract, shall be made within two business days of
provision of the closing price and discount contained within the contract to the
company, and execution by the company to the following address:
Mercatus & Partners, LP
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▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Office: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇
Step Two: The Stocks are delivered to BBH in certificate form, to the following
address, in the name of Mercatus & Partners, Limited, as Regulation S shares or
as other validly issued shares under appropriate exemption. Such shares shall be
issued and sent in the following form:
Shareholder for stock certificate: Mercatus & Partners, Limited
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Corporate information (for transfer agent):
Company Number: 04500047 Incorporated on: 31/07/2002
Company Name: MERCATUS & Partners limited
Registered Office: ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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Company Type: Private Limited Company
Country of Origin: United Kingdom
Shares shall be sent to the following address and account into the following
Banca MB account at BBH:
Please find below the instruction for:
Mailing / Delivery Addresses for Physical Securities:
Via Mail: ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & Co.
Attention: Physical Receives Section - Trade Processing Department
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, ▇.▇.▇.
Account Name: Banca MB-Milano
Account Number: ▇▇▇▇▇▇▇
10.2-17
Each share certificate, if it is being issued under Regulation S, must bear a
legend, as per the agreement which is substantially in form as that set below:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN OFFERED AND SOLD IN AN
"OFFSHORE TRANSACTION" IN RELIANCE UPON REGULATION S AS PROMULGATED BY THE
SECURITIES AND EXCHANGE COMMISSION. ACCORDINGLY, THE SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT") AND MAY NOT BE TRANSFERRED OTHER THAN IN ACCORDANCE WITH
REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, THE
AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
Step Three: Banca MB is only the asset manager of Mercatus, and the shares are
deposited into a safekeeping account for Banca MB in BBH. The shares are
deposited into the account where they are verified and deposited for viewing and
verification by the SICAV bank. NOTE: the shares are not allowed, under the
agreement with BBH and Banca MB to in any way be hypothecated or leveraged in
any fashion during this holding period. The restricted, free trading or other
validly issued shares under appropriate exemption stay at BBH in the safekeeping
account during this period, and at all times until the purchase is complete.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, is the Attorney-In-Fact over the BBH account of Banca MB for
this account. Any and all questions regarding the status of shares during this
process may be conducted to your Placement Agent.
Step Four: Is starting during Step Three, and includes the transfer of the stock
to the SICAV through the stock verification process, so that the SICAV bank
receives confirmation of the Shares and portfolio, if any, for valuation, and
due diligence. This period of time is expected to be four (4) to five (5) days
after which the value is assigned and a corresponding amount of SICAV shares are
issued to Mercatus & Partners, Limited, electronically, for their use and
ownership. NOTE: this process will not start until the called for amount of
shares and assets are received as a package for the whole SICAV portfolio from
Mercatus's Banca MB account in BBH.
Step Five: Mercatus will then simultaneously transfer the SICAV shares into the
lending or purchasing banks and the lending banks will issue the purchase price
or credit line to Mercatus. This period is expected to take four (4) to five (5)
days.
Step Six: Mercatus transmits payment through Banca MB/BBH to the Companies
through the Placement Agent's counsel, Holland & Knight ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇.
The Stock Purchase Agreement is to be authorized and executed by the Company.
There are no allowed changes under the agreement for purchase by Mercatus &
Partners, Limited. The document is for the purchase of the restricted shares
only. The document will be locked in and cannot be edited by the Company.
10.2-18
SHARE PURCHASE ADDENDUM
The Y-Tel International, Inc.(YTLI on the OTCBB), having executed the
related stock purchase agreement with the Purchaser Mercatus & Partners, LP (the
"Purchaser") hereby agrees that they have the affirmative duty to act in full
cooperation to assist the Purchaser with the conversion of such shares exchanged
for removal of any and all restrictions or legends, when the appropriate time or
conditions have passed or occurred which time period shall not exceed 12 months
from the date of issue. Such cooperation by the Company will include appropriate
instructions to their securities counsel to provide the appropriate opinion
letter, or allow another designated attorney by the Purchaser to provide such a
letter. The Company shall also issue and instruct all appropriate measures to
the share transfer agent for such legend removal. Such actions shall be required
to occur within ten (10) days of the request by the Purchaser, or their assigns
so as to secure the conversion on or before the above referred 12 month period.
Such shares are identified as 1,350,000 shares of Y-Tel International,
Inc. as to be purchased under the stock purchase agreement.
Stock Certificate Number 1758
IN WITNESS WHEREOF, the undersigned hereby agrees on behalf of the company to be
bound.
Company:
Y-Tel International, Inc
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer
Date: 12/7/05
10.2-19