ACQUISITION AGREEMENT
BY AND AMONG
CHARTER COMMUNICATIONS INTERNATIONAL, INC.
WORLDLINK ACQUISITION CORP.
WORLD LINK COMMUNICATIONS, INC.
and
J. ▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇
Dated as of September 13, 1996
TABLE OF CONTENTS
PAGE
ARTICLE I
THE MERGER. . . . . . . . . . . . . . . . 2
SECTION 1.01. The Merger . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.02. Effective Time . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF WORLDLINK . . . . . . . 2
SECTION 2.01. Organization and Qualification; Subsidiaries . . . . . . 2
SECTION 2.02. Articles of Incorporation and By-Laws. . . . . . . . . . 2
SECTION 2.03. Capitalization . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2.04. Authority. . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.05. No Conflict; Required Filings and Consent. . . . . . . . 3
SECTION 2.06. Permits; Compliance. . . . . . . . . . . . . . . . . . . 4
SECTION 2.07. Financial Statements . . . . . . . . . . . . . . . . . . 4
SECTION 2.08. No Undisclosed Liabilities . . . . . . . . . . . . . . . 4
SECTION 2.09. Absence of Certain Changes or Events . . . . . . . . . . 4
SECTION 2.10. Absence of Litigation. . . . . . . . . . . . . . . . . . 5
SECTION 2.11. Employee Benefit Plans . . . . . . . . . . . . . . . . . 6
SECTION 2.12. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.13. Brokers. . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.14. Worldlink Corporate Action . . . . . . . . . . . . . . . 6
SECTION 2.15. Contract Rights. . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.16. Environmental Laws and Regulations . . . . . . . . . . . 7
SECTION 2.17 Compliance with Securities Laws. . . . . . . . . . . . . 7
SECTION 2.18. No Misleading Statements . . . . . . . . . . . . . . . . 7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ▇.▇▇▇ AND NEWCO. . . . . . 8
SECTION 3.01. Organization and Qualification . . . . . . . . . . . . . 8
SECTION 3.02. Articles of Incorporation and By-Laws. . . . . . . . . . 8
SECTION 3.03. Capitalization . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.04. Authority. . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.05. No Conflict; Required Filings and Consents . . . . . . . 9
SECTION 3.06. Permits; Compliance. . . . . . . . . . . . . . . . . . . 10
SECTION 3.07. Reports; Financial Statements. . . . . . . . . . . . . . 10
SECTION 3.08. Absence of Certain Changes or Events . . . . . . . . . . 11
SECTION 3.09. No Undisclosed Liabilities . . . . . . . . . . . . . . . 12
SECTION 3.10. Absence of Litigation. . . . . . . . . . . . . . . . . . 12
SECTION 3.11. Ownership of Newco; No Prior Activities. . . . . . . . . 12
SECTION 3.12. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.13. Brokers. . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.14. Environmental Laws and Regulations.. . . . . . . . . . . 13
SECTION 3.15. Contract Rights. . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.16. Employee Benefit Plans . . . . . . . . . . . . . . . . . 14
SECTION 3.17. No Misleading Statements . . . . . . . . . . . . . . . . 14
PAGE
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ARTICLE IV
ADDITIONAL AGREEMENTS. . . . . . . . . . . . . 14
SECTION 4.01. Appropriate Action; Consents; Filings. . . . . . . . . . 14
SECTION 4.02. Tax Treatment; Pooling of Interests. . . . . . . . . . . 15
SECTION 4.03. Indemnification. . . . . . . . . . . . . . . . . . . . 15
SECTION 4.04. Directors of ▇.▇▇▇ . . . . . . . . . . . . . . . . . . . 18
SECTION 4.05. Lockup Arrangements. . . . . . . . . . . . . . . . . . . 18
SECTION 4.06. Opinion of Counsel to ▇.▇▇▇. . . . . . . . . . . . . . . 18
ARTICLE V
COVENANTS. . . . . . . . . . . . . . . . 18
SECTION 5.01. Covenants of Worldlink . . . . . . . . . . . . . . . . . 18
SECTION 5.02. Covenants of ▇.▇▇▇ . . . . . . . . . . . . . . . . . . . 20
SECTION 5.03. No Solicitations . . . . . . . . . . . . . . . . . . . . .21
SECTION 5.04. Access to Information. . . . . . . . . . . . . . . . . . 22
SECTION 5.05. Best Efforts . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 5.06. Stockholders Meetings. . . . . . . . . . . . . . . . . . 22
SECTION 5.07. Publicity. . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE VI
SECURITIES MATTERS
SECTION 6.01. Registration Statement . . . . . . . . . . . . . . . . . 23
SECTION 6.02. Listing Application. . . . . . . . . . . . . . . . . . . 24
SECTION 6.03. Agreements by Affiliated Stockholders of Worldlink . . . 24
SECTION 6.04. Indemnification. . . . . . . . . . . . . . . . . . . . . 24
SECTION 6.05. Registration Expenses. . . . . . . . . . . . . . . . . . 26
ARTICLE VII
CONDITIONS TO CLOSING. . . . . . . . . . . . . 26
SECTION 7.01. Conditions to Each Party's Obligation to Effect the
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 7.02. Conditions to Obligations of Worldlink . . . . . . . . . 27
SECTION 7.03. Conditions to Obligations of ▇.▇▇▇ and Newco . . . . . . 27
ARTICLE VIII
CLOSING . . . . . . . . . . . . . . . . 28
ARTICLE IX
DELIVERIES AT CLOSING. . . . . . . . . . . . . 28
SECTION 9.01. Deliveries by Worldlink. . . . . . . . . . . . . . . . . 29
SECTION 9.02. Deliveries by ▇.▇▇▇. . . . . . . . . . . . . . . . . . . 29
ARTICLE X
TERMINATION AND AMENDMENT. . . . . . . . . . . . 30
PAGE
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SECTION 10.01. Termination . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 10.02. Effect of Termination . . . . . . . . . . . . . . . . . 30
SECTION 10.03. Amendment . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 10.04. Extension; Waiver . . . . . . . . . . . . . . . . . . . 30
ARTICLE XI
OTHER POST CLOSING COVENANTS.. . . . . . . . . . . 31
SECTION 11.01. Noncompetition. . . . . . . . . . . . . . . . . . . . . 31
SECTION 11.02. Certain Tax Matters . . . . . . . . . . . . . . . . . . 32
ARTICLE XII
GENERAL PROVISIONS. . . . . . . . . . . . . . 32
SECTION 12.01. Effectiveness of Representations, Warranties and
Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 12.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 12.03. Certain Definitions . . . . . . . . . . . . . . . . . . 34
SECTION 12.04. Headings. . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 12.05. Severability. . . . . . . . . . . . . . . . . . . . . . 35
SECTION 12.06. Entire Agreement. . . . . . . . . . . . . . . . . . . . 35
SECTION 12.07. Assignment. . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 12.08. Parties in Interest . . . . . . . . . . . . . . . . . . 35
SECTION 12.09. Failure or Indulgence Not Waiver; Remedies Cumulative . 35
SECTION 12.10. Governing Law . . . . . . . . . . . . . . . . . . . . . 35
SECTION 12.11. Jurisdiction. . . . . . . . . . . . . . . . . . . . . . 35
SECTION 12.12. Counterparts. . . . . . . . . . . . . . . . . . . . . . 36
ACQUISITION AGREEMENT
AGREEMENT dated as of September 13, 1996 ("AGREEMENT"), among
CHARTER COMMUNICATIONS INTERNATIONAL, INC., a Nevada corporation ("▇.▇▇▇"),
WORLDLINK ACQUISITION CORP., a Georgia corporation ("NEWCO") wholly owned by
▇.▇▇▇, and WORLD LINK COMMUNICATIONS, INC., a Georgia corporation
("WORLDLINK") and ▇▇▇▇▇ ▇▇▇ ("CHO") and J. ▇▇▇▇ ▇▇▇▇, ▇▇. ("NORT") the
principal stockholders of Worldlink.
RECITALS
WHEREAS, upon the terms and subject to the conditions of this
Agreement and in accordance with the Georgia Business Corporation Code
("GEORGIA LAW"), Newco will merge with and into Worldlink (the "MERGER") as a
result of which ▇.▇▇▇ will own all of the issued and outstanding shares of
the common stock, with a new par value of $.01 per share, of Worldlink and
the stockholders of Worldlink will own 1,850,000 shares of the common stock,
$.00001 per share par value ("▇.▇▇▇ STOCK") of ▇.▇▇▇;
WHEREAS, the Board of Directors of Worldlink has determined that
the Merger is fair to, and in the best interests of, Worldlink and its
stockholders and has approved and adopted this Agreement and the transactions
contemplated herein;
WHEREAS, the Board of Directors of ▇.▇▇▇ has determined that the
Merger is in the best interests of ▇.▇▇▇ and its stockholders and has
approved and adopted this Agreement and the transactions contemplated herein;
WHEREAS, the Board of Directors of Newco has determined that the
Merger is in the best interests of Newco and its stockholder and the Board of
Directors of Newco and ▇.▇▇▇, as the sole stockholder of Newco, have approved
and adopted this Agreement and the transactions contemplated herein;
WHEREAS, for Federal income tax purposes, it is intended that the
Merger qualify as a reorganization under the provisions of section 368(a) of
the United States Internal Revenue Code of 1986, as amended (the "CODE") and
that this Agreement and the Annexes hereto shall constitute a "plan of
reorganization" for the purposes of section 368 of the Code;
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth in
this Agreement, the parties hereto agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. THE MERGER. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with Georgia Law,
at the Effective Time (as defined in Section 1.02), Newco and Worldlink shall
effect a merger by executing the Plan and Agreement of Merger (the "PLAN") in
substantially the form attached hereto as ANNEX I, and by executing and
filing Articles of Merger (the "ARTICLES"), substantially in the form
attached hereto as ANNEX II, in the manner provided in Section 14-2-1105 of
the Georgia Business Corporation Code. As a result of the Merger, the
separate corporate existence of Newco shall cease and Worldlink shall
continue as the surviving corporation in the Merger (the "SURVIVING
CORPORATION"). The name of the Surviving Corporation shall be "Worldlink
Communications, Inc." Prior to the Merger, ▇.▇▇▇ shall, pursuant to the
terms of the Subscription Agreement, a copy of which is attached as ANNEX III
hereto (the "SUBSCRIPTION AGREEMENT"), issue and deliver to Newco shares of
▇.▇▇▇ Stock equivalent to the number of shares of ▇.▇▇▇ Stock to be
transferred pursuant to the terms and provisions of the Plan.
SECTION 1.02. EFFECTIVE TIME. As promptly as practicable after
the execution and delivery of this Agreement by each of the parties hereto,
and upon satisfaction of all the conditions to Closing (as hereinafter
defined) the parties hereto shall cause the Merger to be consummated by
filing the Articles with the Secretary of State of the State of Georgia in
such form as required by, and executed in accordance with, the relevant
provisions of Georgia Law (the date and time of such filing being the
"EFFECTIVE TIME").
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF WORLDLINK
Worldlink hereby represents and warrants to ▇.▇▇▇ and Newco, as
follows:
SECTION 2.01. ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
Worldlink is a corporation duly organized, validly existing and in good
standing under the laws of the State of Georgia, has all requisite corporate
power and authority to own, lease and operate its properties and to carry on
its business as it is now being conducted, and is duly qualified and in good
standing to do business in each jurisdiction in which the nature of the
business conducted by it or the ownership or leasing of its properties makes
such qualification necessary. Worldlink has no direct or indirect
Subsidiaries.
SECTION 2.02. ARTICLES OF INCORPORATION AND BY-LAWS. Worldlink
has heretofore furnished to ▇.▇▇▇ complete and correct copies of the
Articles of Incorporation and the By-Laws, in each case as amended or
restated, of Worldlink. Worldlink is not in violation of any of the
provisions of its Articles of Incorporation or By-Laws.
SECTION 2.03. CAPITALIZATION. The authorized capital stock of
Worldlink consists of 100,000 shares of common stock, having no par value
("WORLDLINK COMMON STOCK"). As of the date hereof 1,016 shares of Worldlink
Common Stock are issued and outstanding, all of which are duly authorized,
validly issued, fully paid and nonassessable and not subject to preemptive
rights created by statute, Worldlink's Articles of Incorporation or By-Laws
or any agreement to which Worldlink is a party or bound. There are no bonds,
debentures, notes or other indebtedness issued or outstanding having the
right to vote on any matters on which Worldlink's stockholders may vote.
Except as set forth on SCHEDULE 2.03, there are no options, warrants, calls
or other rights (including registration rights), agreements, arrangements or
commitments presently outstanding obligating Worldlink to issue,
deliver or sell shares of its capital stock or debt securities, or obligating
Worldlink to grant, extend or enter into any such option, warrant, call or
other such right, agreement, arrangement or commitment.
SECTION 2.04. AUTHORITY. Worldlink has all requisite corporate
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated herein.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated herein have been duly authorized by all necessary
corporate action, other than the vote of the stockholders of Worldlink as
herein contemplated, and no corporate proceeding (other than such shareholder
vote) on the part of Worldlink is necessary to authorize this Agreement or to
consummate the transactions contemplated herein. This Agreement has been
duly executed and delivered by Worldlink and, assuming the due authorization,
execution and delivery thereof by ▇.▇▇▇ and Newco, constitutes the legal,
valid and binding obligation of Worldlink enforceable in accordance with its
terms (i) except as limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to or
affecting creditors' rights generally, and without limitation, the effect of
statutory or other laws regarding fraudulent conveyances and preferential
transfers and (ii) subject to the limitations imposed by general rules of
equity (regardless of whether such enforceability is considered at law or in
equity).
SECTION 2.05. NO CONFLICT; REQUIRED FILINGS AND CONSENT.
(a) Except as set forth on SCHEDULE 2.05(A), the execution and
delivery of this Agreement by Worldlink does not, and the performance of
this Agreement by Worldlink will not (i) conflict with or violate the
Articles of Incorporation or By-Laws, in each case as amended or restated,
of Worldlink, (ii) conflict with or violate any federal, state, foreign or
local law, statute, ordinance, rule, regulation, order, judgment or decree
(collectively, "LAWS") in effect as of the date of this Agreement and
applicable to Worldlink or by which the properties thereof are bound or
subject, or (iii) result in any breach of or constitute a default (or an
event that 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, or require payment under, or result in
the creation of an encumbrance on, any of the properties or assets of
Worldlink pursuant to any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or
obligation to which Worldlink is a party or by which Worldlink or its
properties is bound or subject, except for breaches, defaults, events,
rights of termination, amendment, acceleration or cancellation, payment
obligations or liens or encumbrances that would not have a material
adverse effect on the business, properties, assets, condition (financial
or otherwise) operations or prospects of Worldlink ("WORLDLINK MATERIAL
ADVERSE EFFECT").
(b) Except as set forth on SCHEDULE 2.05(B), the execution and
delivery of this Agreement by Worldlink does not, and the performance of
this Agreement by Worldlink will not, require Worldlink to obtain any
consent, approval, authorization or permit of, or to make any filing with
or notification to, any governmental or regulatory authority, domestic or
foreign ("GOVERNMENTAL ENTITIES"), based on laws, rules, regulations and
other requirements of Governmental Entities in effect as of the date of
this Agreement, except for applicable requirements, if any, of (i) federal
or state securities laws and the filing and recordation of appropriate
merger documents as required by Georgia Law and (ii) where the failure to
obtain such consents, approvals, authorizations or permits, or to make
such filings or notifications, would not, either individually or in the
aggregate, prevent Worldlink from performing its obligations under this
Agreement or have an Worldlink Material Adverse Effect.
SECTION 2.06. PERMITS; COMPLIANCE. Except as set forth on
SCHEDULE 2.06, Worldlink is in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances, exemptions,
consents, certificates, approvals and orders necessary to own, lease and
operate
its properties and to carry on its business as it is now being conducted
(collectively, the "WORLDLINK PERMITS"), and there is no action, proceeding
or investigation pending or, to the knowledge of Worldlink, threatened,
regarding suspension or cancellation of any of the Worldlink Permits.
Worldlink is not in conflict with, or in default or violation of (a) any Law
applicable to Worldlink or by which any of the properties of Worldlink is
bound or subject or (b) any of the Worldlink Permits, except for any such
conflicts, defaults or violations which would not have an Worldlink Material
Adverse Effect.
SECTION 2.07. FINANCIAL STATEMENTS. Attached hereto as SCHEDULE
2.07 which is hereby incorporated herein by reference, are (i) the unaudited
financial statements of Worldlink as of April 30, 1996, (the "BALANCE SHEET
DATE") containing the balance sheet of Worldlink and the related statement of
operations, statement of changes in cash flows, and statement of
shareholders' equity at and as of such date, and (ii) the unaudited financial
statements of Worldlink as of June 30, 1993, 1994 and 1995, containing the
balance sheet of Worldlink and the related statement of operations, statement
of shareholders' equity and statement of cash flows, in each case for the
periods then ended (collectively, the "WORLDLINK FINANCIAL STATEMENTS"). The
Worldlink Financial Statements have been prepared in accordance with
generally accepted accounting principles and practices consistently followed
by Worldlink throughout the periods indicated, and fairly present the
financial position of Worldlink as of the dates thereof and the results of
its operations and cash flows for the period indicated.
SECTION 2.08. NO UNDISCLOSED LIABILITIES. Except as set forth on
SCHEDULE 2.08, there are no liabilities of Worldlink of any kind whatsoever,
whether accrued, contingent, absolute, determined, determinable or otherwise,
and there is no existing condition, situation or set of circumstances which
could reasonably be expected to result in such a liability, other than
liabilities fully reflected or reserved against on the Worldlink Financial
Statements and liabilities which, individually or in the aggregate, would not
have an Worldlink Material Adverse Effect.
SECTION 2.09. ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set
forth on SCHEDULE 2.09, with respect to Worldlink, since the Balance Sheet
Date, there has not been, nor with the lapse of time is there expected to be:
(a) any change in its financial condition, assets, liabilities
(contingent or otherwise), income, operations, business or prospects which
would have an Worldlink Material Adverse Effect;
(b) any damage, destruction or loss (whether or not covered by
insurance) to its assets, properties, business or prospects which would
have an Worldlink Material Adverse Effect;
(c) any change or agreement to change its authorized capital or the
ownership of its outstanding securities;
(d) any declaration or payment of, or any agreement to declare or
pay, any dividend or distribution in respect of any of its equity
interests or any direct or indirect redemption, purchase or other
acquisition of any of its equity interests;
(e) any material increase in the compensation payable or to become
payable by it to any of its officers, employees or agents, or any accrual
or arrangement for or payment of any material bonus or other special
compensation of any kind or any severance or termination pay paid to any
of its present or former officers or other key employees;
(f) any (i) sale or transfer, or any agreement, plan or arrangement
to sell or
transfer, any of its assets, properties or rights to any other Person
except in the ordinary course of business and in the aggregate amount of
not more than $25,000, or (ii) cancellation or agreement to cancel any
indebtedness or other obligation of any of its stockholders or any
affiliate thereof to it;
(g) any plan, agreement or arrangement granting any preferential
rights to purchase or acquire any interest in any of its assets,
properties or rights (other than consents to the assignment of contracts)
requiring consent of any party to the transfer and assignment of any such
assets, property or rights;
(h) any purchase or acquisition, or agreement, plan or arrangement
to purchase or acquire, any assets, properties, or rights except in the
ordinary course of business and in the aggregate amount of not more than
$50,000;
(i) any waiver of any of its material rights or claims;
(j) other than in the ordinary course of its business, any amendment
or termination of any material contract, agreement, license, permit or
other right to which it is a party; or
(k) any material transaction by it outside the ordinary course of its
business.
SECTION 2.10. ABSENCE OF LITIGATION. Except as set forth on
SCHEDULE 2.10, there is no claim, action, suit, litigation, proceeding,
arbitration or investigation of any kind, at law or in equity (including
actions or proceedings seeking injunctive relief), pending or, to the
knowledge of Worldlink, threatened against Worldlink or any properties or
rights of Worldlink and Worldlink is not subject to any continuing order of,
consent decree, settlement agreement or other similar written agreement with,
or, to the knowledge of Worldlink, continuing investigation by, any
Governmental Entity, or any judgment, order, writ, injunction, decree or
award of any Governmental Entity or arbitrator, including, without
limitation, cease-and-desist or other orders.
SECTION 2.11. EMPLOYEE BENEFIT PLANS.
(a) Except as set forth on SCHEDULE 2.11(A), Worldlink does not
have, and has not had, any employee benefit plan (including, without
limitation, any "employee benefit plan" as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")),
or any bonus, pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option, phantom
stock, retirement, vacation, severance, disability, death benefit,
hospitalization, insurance or other plan, arrangement or understanding
(whether or not legally binding).
(b) Worldlink is not a party to any collective bargaining agreement.
(c) Worldlink has no obligation for retiree health, medical or life
insurance benefits under any plan or arrangement.
SECTION 2.12. TAXES. Worldlink has filed all federal, state and
local tax returns required by law, or has filed proper extensions, and has
paid all Taxes (as defined in Section 11.03 hereof), assessments and
penalties due and payable. The provisions for Taxes, if any, reflected in
the most recent balance sheet included in the Worldlink Financial Statements
at the Balance Sheet Date are adequate for any and all federal, state, county
and local taxes for the period ending on such Balance Sheet Date and for all
prior periods, whether or not disputed. There are no present disputes as to
Taxes of any nature payable by Worldlink.
SECTION 2.13. BROKERS. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated in this Agreement based upon arrangements
made by or on behalf of Worldlink.
SECTION 2.14. WORLDLINK CORPORATE ACTION. The Board of Directors of
Worldlink (by written consent of the directors in lieu of a meeting) has by the
unanimous vote of all directors (a) determined that the Merger is advisable and
fair and in the best interests of Worldlink and its stockholders, (b) approved
the Merger in accordance with the provisions of Section 14-2-1103(1) of the
Georgia Law, and (c) recommended the approval of this Agreement and the Merger
by the holders of Worldlink Common Stock and directed that the Merger be
submitted for consideration by Worldlink's stockholders.
SECTION 2.15 CONTRACT RIGHTS. Except for this Agreement and the
agreements contemplated herein or as described on SCHEDULE 2.15 or referenced in
any other Schedule hereto, Worldlink is not a party to or bound by any material
contract or agreement, whether written or oral, including, without limitation,
any contract or agreement for employment, consulting or similar services, for
capital expenditures or the acquisition or construction of fixed assets, which
constitutes any note, bond, indenture or other evidence of indebtedness or
guaranty or security for indebtedness of others, for the sale of any asset, or
the grant of any right or option to purchase such asset, or which constitutes a
material lease, or which purports to limit the freedom of Worldlink or any of
its affiliates to compete in any line of business or in any geographic area or
to borrow money or incur indebtedness.
SECTION 2.16. ENVIRONMENTAL LAWS AND REGULATIONS.
(a) Worldlink is in material compliance with all applicable foreign,
federal (including but not limited to the Outer Continental Shelf Lands
Act, the Clean Water Act, the Oil Pollution Act, the Resource Conservation
and Recovery Act, the Clean Air Act, the Comprehensive Environmental
Response Compensation and Liability Act, the Occupational Safety and Health
Act and the Hazardous Materials Transportation Act), state and local laws
and regulations and common law relating to pollution or protection of human
health or the environment (including, without limitation, ambient air,
surface water, ground water, land surface or subsurface strata
(collectively, "ENVIRONMENTAL LAWS"), which compliance includes, but is not
limited to, the possession by Worldlink of all material permits and other
governmental authorizations required under applicable Environmental Laws,
and compliance with the terms and conditions thereof and compliance with
notification, reporting and registration provisions under applicable
Environmental Laws; Worldlink has not received notice of, or, to the
knowledge of Worldlink, it is not the subject of, any action, cause of
action, claim, investigation, demand or notice by any person or entity
alleging liability under or noncompliance with any Environmental Law
("ENVIRONMENTAL CLAIM"); and to the knowledge of Worldlink, there are no
circumstances that are reasonably likely to prevent or interfere with such
material compliance in the future, or to require material expenditures to
maintain such material compliance in the future.
(b) There are no Environmental Claims that are pending or, to the
knowledge of Worldlink, threatened against Worldlink, or, to the knowledge
of Worldlink, against any person or entity whose liability for any
Environmental Claim Worldlink has or may have retained or assumed either
contractually or by operation of law.
(c) To the knowledge of Worldlink, there are no circumstances that
could form the basis for an Environmental Claim against Worldlink, or
against any person or entity whose liability for any Environmental Claim
Worldlink has or may have retained or assumed either contractually or by
operation of law.
SECTION 2.17 COMPLIANCE WITH SECURITIES LAWS. All outstanding
Worldlink Common Stock was issued pursuant to a valid exemption from both
Federal and all applicable state securities laws.
SECTION 2.18 NO MISLEADING STATEMENTS. This Agreement, the
Schedules hereto and all other documents and information furnished by or on
behalf of Worldlink to ▇.▇▇▇, Newco and their representatives pursuant hereto do
not and will not include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements made and to be made not
misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ▇.▇▇▇ AND NEWCO
▇.▇▇▇, with respect to ▇.▇▇▇, Newco and all material operating
Subsidiaries of ▇.▇▇▇, and Newco, hereby jointly and severally represent and
warrant to Worldlink that:
SECTION 3.01. ORGANIZATION AND QUALIFICATION. Each of ▇.▇▇▇ and
Newco is a corporation duly organized, validly existing and in good standing
under the laws of the state under the laws of which it was incorporated and has
all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as it is now being conducted, and is
duly qualified and in good standing to do business in each jurisdiction in which
the nature of the business conducted by it or the ownership or leasing of its
properties makes such qualification necessary. Set forth on SCHEDULE 3.01
hereto is a list of the Subsidiaries of ▇.▇▇▇ as of the date hereof. Each of
the ▇.▇▇▇ Subsidiaries is duly organized and validly existing and in good
standing in its respective jurisdiction of organization and has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as it is now being conducted, and is duly qualified and in
good standing to do business in each jurisdiction in which the nature of the
business conducted by it or the ownership or leasing of its properties makes
such qualification necessary.
SECTION 3.02. ARTICLES OF INCORPORATION AND BY-LAWS. ▇.▇▇▇ has
heretofore furnished to Worldlink a complete and correct copy of the Articles of
Incorporation and the By-Laws, as amended or restated to the date hereof, of
each of ▇.▇▇▇, Newco and the ▇.▇▇▇ Subsidiaries. Neither ▇.▇▇▇, Newco nor any
of the ▇.▇▇▇ Subsidiaries is in violation of any of the provisions of its
Articles of Incorporation or By-Laws.
SECTION 3.03. CAPITALIZATION.
(a) The authorized capital stock of ▇.▇▇▇ consists of 40,000,000
shares of common stock, $.00001 par value ("▇.▇▇▇ COMMON STOCK") and
100,000 shares of preferred stock, $.01 par value ("▇.▇▇▇ PREFERRED
STOCK"). As of the date hereof (and after the issuance of stock pursuant
to the Acquisition Agreement between ▇.▇▇▇ and Overlook Communications
International Corporation dated July 15, 1996) (i) 20,618,233 shares of
▇.▇▇▇ Common Stock are issued and outstanding, all of which are duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights created by statute, ▇.▇▇▇'s Articles of Incorporation or
By-Laws or any agreement to which ▇.▇▇▇ is a party or is bound; and (ii) no
shares of ▇.▇▇▇ Preferred Stock are outstanding. Except as set forth on
SCHEDULE 3.03 hereto, there are no options, warrants, calls or other rights
(including registration rights), agreements, arrangements or commitments
presently outstanding obligating ▇.▇▇▇ to issue, deliver, sell or register
shares of its capital stock or debt securities, or obligating ▇.▇▇▇ to
grant, extend or enter into any such option, warrant, call or other such
right, agreement, arrangement or commitment.
(b) All of the outstanding shares of capital stock of Newco and the
▇.▇▇▇ Subsidiaries are duly authorized, validly issued, fully paid and
nonassessable, and are owned by ▇.▇▇▇ free and clear of any encumbrances.
There are no options, warrants, calls or other rights (including
registration rights), agreements, arrangements or commitments of any
character to which ▇.▇▇▇, Newco or any ▇.▇▇▇ Subsidiary is a party relating
to the issued or unissued capital stock of, or other equity interests in,
Newco or any ▇.▇▇▇ Subsidiary or obligating ▇.▇▇▇, Newco or any ▇.▇▇▇
Subsidiary to grant, issue or sell any shares of the capital stock of Newco
other than as contemplated in this Agreement and that certain subscription
agreement between ▇.▇▇▇ and Newco dated July 18, 1996.
(c) The shares of ▇.▇▇▇ Stock issued to Newco and to be exchanged
pursuant to the Merger as contemplated herein, upon issuance to Newco and
upon exchange for the Worldlink Common Stock in accordance with this
Agreement and the Plan, will be duly authorized, validly issued, fully paid
and nonassessable and will not be subject to preemptive rights created by
statute, ▇.▇▇▇'s Articles of Incorporation or By-Laws or any agreement to
which ▇.▇▇▇ is a party or is bound.
(d) Except as described on SCHEDULE 3.03(D) hereto, ▇.▇▇▇ does not
have any Subsidiaries or own any interest in any enterprise (whether or not
such enterprise is a corporation).
SECTION 3.04. AUTHORITY. Each of ▇.▇▇▇ and Newco has all requisite
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
herein. The execution and delivery of this Agreement and the consummation of
the transactions contemplated herein have been duly authorized by all necessary
corporate action and no other corporate proceeding on the part of ▇.▇▇▇ or Newco
(including, without limitation, any approval by the shareholders of ▇.▇▇▇ of
this Agreement or the transactions contemplated herein) is necessary to
authorize this Agreement or to consummate the transactions contemplated herein.
This Agreement has been duly executed and delivered by ▇.▇▇▇ and Newco and,
assuming the due authorization, execution and delivery hereof by Worldlink,
constitutes the legal, valid and binding obligation of ▇.▇▇▇ and Newco
enforceable in accordance with its terms (i) except as limited by bankruptcy,
insolvency, reorganization, moratorium or other similar law now or hereafter in
effect relating to or affecting creditors' rights generally, and without
limitation, the effect of statutory or other laws regarding fraudulent
conveyances and preferential transfers and (ii) subject to the limitations
imposed by general rules of equity (regardless of whether such enforceability is
considered at law or in equity).
SECTION 3.05. NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by ▇.▇▇▇ and Newco
does not, and the performance of this Agreement by ▇.▇▇▇ and Newco will not
(i) conflict with or violate the charter or By-Laws, as amended or
restated, of ▇.▇▇▇ or Newco, (ii) conflict with or violate any Laws in
effect as of the date of this Agreement applicable to ▇.▇▇▇ or Newco or by
which any of their respective properties are bound, or (iii) result in any
breach of or constitute a default (or an event that 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, or require payment
under, or result in the creation of a lien or encumbrance on, any of the
properties or assets of ▇.▇▇▇ or Newco pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise
or other instrument or obligation to which ▇.▇▇▇ or Newco is a party or by
which ▇.▇▇▇ or Newco or any of their respective properties is bound or
subject except for breaches, defaults, events, rights of termination,
amendment, acceleration or cancellation, payment obligations or liens or
encumbrances that would not have a material adverse effect on the business,
properties, assets,
condition (financial or otherwise) operations or prospects of ▇.▇▇▇ and
its Subsidiaries, taken as a whole, or on the transactions herein
contemplated (herein a "▇.▇▇▇ MATERIAL ADVERSE EFFECT").
(b) The execution and delivery of this Agreement by ▇.▇▇▇ and Newco
and the performance of this Agreement by ▇.▇▇▇ and Newco does not require
▇.▇▇▇ or Newco to obtain any consent, approval, authorization or permit of,
or to make any filing with or notification to, any Governmental Entities,
except (i) for applicable requirements, if any, of the Securities Act of
1933, as amended (the "SECURITIES ACT"), the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT") or the securities laws of any other
jurisdiction (the "BLUE SKY LAWS"), the National Association of Securities
Dealers, Inc. and the filing and recordation of appropriate merger
documents as required by Georgia Law and (ii) where the failure to obtain
such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not, either individually or in the
aggregate, prevent ▇.▇▇▇ from performing its obligations under this
Agreement or have a ▇.▇▇▇ Material Adverse Effect.
SECTION 3.06. PERMITS; COMPLIANCE. Except as set forth on SCHEDULE
3.06, each of ▇.▇▇▇, Newco and the ▇.▇▇▇ Subsidiaries is in possession of all
franchises, grants, authorizations, licenses, permits, easements, variances,
exemptions, consents, certificates, approvals and orders necessary to own, lease
and operate its properties and to carry on its business as it is now being
conducted (collectively, the "▇.▇▇▇ PERMITS"), and there is no action,
proceeding or investigation pending or, to the knowledge of ▇.▇▇▇, threatened,
regarding suspension or cancellation of any of the ▇.▇▇▇ Permits. Neither
▇.▇▇▇, Newco or any ▇.▇▇▇ Subsidiary is in conflict with, or in default or
violation of (a) any Law applicable to ▇.▇▇▇, Newco or any ▇.▇▇▇ Subsidiary or
by which any of their respective properties is bound or subject or (b) any of
the ▇.▇▇▇ Permits, except for any such conflicts, defaults or violations which
would not have a ▇.▇▇▇ Material Adverse Effect. Neither ▇.▇▇▇, Newco or any
▇.▇▇▇ Subsidiary has received from any Governmental Entity any written
notification with respect to possible conflicts, defaults or violations of Laws.
SECTION 3.07. REPORTS; FINANCIAL STATEMENTS.
(a) Except as set forth on SCHEDULE 3.07, ▇.▇▇▇ and its Subsidiaries
have filed (i) all forms, reports, statements and other documents required
to be filed with or pursuant to (A) the Securities and Exchange Commission
("SEC"), including, without limitation (1) all Annual Reports on Form 10-
KSB, (2) all Quarterly Reports on Form 10-QSB, (3) all Current Reports on
Form 8-K, (4) all amendments and supplements to all such reports and
registration statements (collectively, the "▇.▇▇▇ SEC REPORTS"), and
(5) all other reports or registration statements and (B) any applicable
Blue Sky Laws and (ii) all forms, reports, statements and other documents
required to be filed with any other applicable federal or state regulatory
authority (all such forms, reports, statements and other documents in
clauses (i) and (ii) of this Section 3.07(a) being referred to herein,
collectively, as the "▇.▇▇▇ REPORTS"). The ▇.▇▇▇ Reports were prepared in
all material respects in accordance with the requirements of applicable Law
(including, with respect to the ▇.▇▇▇ SEC Reports, the Securities Act and
Exchange Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to such ▇.▇▇▇ SEC Reports) and did not at the time
they were filed contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(b) Each of the financial statements (including, in each case, any
related notes thereto) contained in the ▇.▇▇▇ SEC Reports filed prior to or
on the date of this Agreement (i) have been prepared in accordance with,
and complied as to form with, the published rules and regulations of the
SEC and generally accepted accounting principles applied on a
consistent basis throughout the periods involved (except as otherwise noted
therein) and (ii) fairly present the financial position of ▇.▇▇▇ as of the
respective dates thereof and the results of its operations and cash flows
for the periods indicated.
SECTION 3.08. ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set
forth on SCHEDULE 3.08 and to the extent disclosed in the ▇.▇▇▇ SEC Reports and
▇.▇▇▇ Reports filed prior to or on the date of this Agreement, with respect to
▇.▇▇▇ and its Subsidiaries, there has not been since the date of the last such
Report:
(a) any change in its financial condition, accounting methods,
principles or practices, assets, liabilities (contingent or otherwise),
income, operations, business or prospects which would have a ▇.▇▇▇ Material
Adverse Effect;
(b) any damage, destruction or loss (whether or not covered by
insurance) to its assets, properties, business or prospects which would
have a ▇.▇▇▇ Material Adverse Effect;
(c) any change or agreement to change its authorized capital or
the ownership of its outstanding securities (other than those pursuant to
the "employee benefit plans" as such term is defined for purposes of
Federal securities laws);
(d) any declaration or payment of, or any agreement to declare
or pay, any dividend or distribution in respect of any of its equity
interests or any direct or indirect redemption, purchase or other
acquisition of any of its equity interests;
(e) any material increase in the compensation payable or to
become payable by it to any of its officers, employees or agents, or any
accrual or arrangement for or payment of any material bonus or other
special compensation of any kind or any severance or termination pay paid
to any of its present or former officers or other key employees;
(f) any (i) sale or transfer, or any agreement, plan or
arrangement to sell or transfer, any of its assets, properties or rights to
any other Person except in the ordinary course of business and in the
aggregate amount of not more than $100,000, or (ii) cancellation, or
agreement to cancel, any indebtedness or other obligation of any of its
stockholders or any affiliate thereof to it;
(g) any plan, agreement or arrangement granting any preferential
rights to purchase or acquire any interest in any of its assets, properties
or rights (other than consents to the assignment of contracts) requiring
consent of any party to the transfer and assignment of any such assets,
property or rights;
(h) any purchase or acquisition, or agreement, plan or
arrangement to purchase or acquire, any assets, properties, or rights
except in the ordinary course of business and in the aggregate amount of
not more than $100,000;
(i) any waiver of any of its rights or claims which in the
aggregate would have a ▇.▇▇▇ Material Adverse Effect;
(j) other than in the ordinary course of its business, any
amendment or termination of any material contract, agreement, license,
permit or other right to which it is a party; or
(k) any material transaction by it outside the ordinary course
of its
business.
SECTION 3.09. NO UNDISCLOSED LIABILITIES. Except as set forth on
SCHEDULE 3.09, there are no liabilities of ▇.▇▇▇, Newco or any ▇.▇▇▇ Subsidiary,
of any kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, and there is no existing condition, situation or set
of circumstances which could reasonably be expected to result in such a
liability, other than (a) liabilities fully reflected or reserved against on the
balance sheet contained in ▇.▇▇▇'s 1995 Annual Report on Form 10-KSB or in the
unaudited consolidated balance sheet contained in the Quarterly Report on
Form 10-QSB for the fiscal quarter ended March 31, 1996; (b) liabilities under
this Agreement and fees and expenses related thereto; and (c) liabilities which,
individually or in the aggregate, would not have a ▇.▇▇▇ Material Adverse
Effect.
SECTION 3.10. ABSENCE OF LITIGATION. Except as set forth on SCHEDULE
3.10, there is no claim, action, suit, litigation, proceeding, arbitration or,
to the knowledge of ▇.▇▇▇, investigation of any kind, at law or in equity
(including actions or proceedings seeking injunctive relief), pending or, to the
knowledge of ▇.▇▇▇, threatened in writing against ▇.▇▇▇, Newco or any ▇.▇▇▇
Subsidiary or any properties or rights of ▇.▇▇▇, Newco or any ▇.▇▇▇ Subsidiary
and neither ▇.▇▇▇, Newco nor any ▇.▇▇▇ Subsidiary is subject to any continuing
order of, consent decree, settlement agreement or other similar written
agreement with, or, to the knowledge of ▇.▇▇▇, continuing investigation by, any
Governmental Entity, or any judgment, order, writ, injunction, decree or award
of any Governmental Entity or arbitrator, including, without limitation, cease
and desist or other orders.
SECTION 3.11. OWNERSHIP OF NEWCO; NO PRIOR ACTIVITIES.
(a) Newco was formed solely for the purpose of engaging in the
transactions contemplated in this Agreement and has otherwise conducted no
prior activities.
(b) Except for obligations or liabilities incurred in connection with
its incorporation or organization and the transactions contemplated in this
Agreement and any other agreements or arrangements contemplated in this
Agreement, Newco has not incurred, directly or indirectly, through any
▇.▇▇▇ Subsidiary or affiliate, any obligations or liabilities or engaged in
any business activities of any type or kind whatsoever or entered into any
agreements or arrangements with any person.
SECTION 3.12. TAXES. ▇.▇▇▇ and the ▇.▇▇▇ Subsidiaries have timely
filed all returns or reports required to be filed with any taxing authority with
respect to Taxes for any period ending on or before the Effective Time, taking
into account any extension of time to file granted to or obtained on behalf of
▇.▇▇▇, Newco or the ▇.▇▇▇ Subsidiaries, all Taxes shown to be payable on such
returns or reports that are due prior to the Effective Time have been paid and,
as of the date hereof, no deficiency for any material amount of tax has been
asserted or assessed by a taxing authority against ▇.▇▇▇, Newco or the ▇.▇▇▇
Subsidiaries and all liability for Taxes of ▇.▇▇▇, Newco or the ▇.▇▇▇
Subsidiaries that are or will become due or payable with respect to periods
covered by the financial statements referred to in Section 3.07 hereof have been
paid or adequately reserved for on such financial statements.
SECTION 3.13. BROKERS. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated in this Agreement based upon arrangements
made by or on behalf of ▇.▇▇▇ or Newco.
SECTION 3.14. ENVIRONMENTAL LAWS AND REGULATIONS.
(a) ▇.▇▇▇, Newco and the ▇.▇▇▇ Subsidiaries are in material
compliance with all applicable Environmental Laws, which compliance
includes, but is not limited to, the
possession by ▇.▇▇▇, Newco and the ▇.▇▇▇ Subsidiaries of all material
permits and other governmental authorizations required under applicable
Environmental Laws, and compliance with the terms and conditions thereof
and compliance with notification, reporting and registration provisions
under applicable Environmental Laws; neither ▇.▇▇▇, Newco nor any of the
▇.▇▇▇ Subsidiaries has received notice of, or, to the knowledge of ▇.▇▇▇
or Newco, is the subject of any Environmental Claim; and to the knowledge
of ▇.▇▇▇, there are no circumstances that are reasonably likely to prevent
or interfere with such material compliance in the future, or to require
material expenditures to maintain such material compliance in the future.
(b) There are no Environmental Claims that are pending or, to the
knowledge of ▇.▇▇▇, Newco or the ▇.▇▇▇ Subsidiaries, threatened against
▇.▇▇▇, Newco or the ▇.▇▇▇ Subsidiaries or, to the knowledge of ▇.▇▇▇, Newco
or the ▇.▇▇▇ Subsidiaries, against any person or entity whose liability for
any Environmental Claim ▇.▇▇▇, Newco or the ▇.▇▇▇ Subsidiaries has or may
have retained or assumed either contractually or by operation of law.
(c) To the knowledge of ▇.▇▇▇ or Newco, there are no circumstances
that could form the basis for an Environmental Claim against ▇.▇▇▇, Newco
or the ▇.▇▇▇ Subsidiaries or against any person or entity whose liability
for any Environmental Claim ▇.▇▇▇, Newco or the ▇.▇▇▇ Subsidiaries has or
may have retained or assumed either contractually or by operation of law.
SECTION 3.15. CONTRACT RIGHTS. Except for this Agreement and the
agreements contemplated herein or as described on SCHEDULE 3.15, neither ▇.▇▇▇,
Newco nor any of the ▇.▇▇▇ Subsidiaries is a party to or bound by any contract
or agreement, whether written or oral, including, without limitation, any
material contract or agreement for employment, consulting or similar services,
for capital expenditures or the acquisition or construction of fixed assets,
which constitutes any note, bond, indenture or other evidence of indebtedness or
guaranty or security for indebtedness of others, for the sale of any asset, or
the grant of any right or option to purchase such asset, or which constitutes a
material lease, or which purports to limit the freedom of ▇.▇▇▇ or any of the
▇.▇▇▇ Subsidiaries to compete in any line of business or in any geographic area
or to borrow money or incur indebtedness.
SECTION 3.16. EMPLOYEE BENEFIT PLANS.
(a) Except as described on SCHEDULE 3.16 hereto, neither ▇.▇▇▇, Newco
nor any of the ▇.▇▇▇ Subsidiaries have, nor have had any employee benefit
plan (including, without limitation, any "employee benefit plan," as
defined in Section 3(3) of the ERISA), or any bonus, pension, profit
sharing, deferred compensation, incentive compensation, stock ownership,
stock purchase, stock option, phantom stock, retirement, vacation,
severance, disability, death benefit, hospitalization, insurance or other
plan, arrangement or understanding (whether or not legally binding).
(b) Neither ▇.▇▇▇, Newco nor any of the ▇.▇▇▇ Subsidiaries are
parties to any collective bargaining agreement.
(c) Neither ▇.▇▇▇, Newco nor any of the ▇.▇▇▇ Subsidiaries have any
obligation for retiree health, medical or life insurance benefits under any
plan or arrangement.
SECTION 3.17. NO MISLEADING STATEMENTS. This Agreement, the
schedules hereto and all other documents and information furnished by ▇.▇▇▇,
Newco or their representatives to Worldlink and its representatives pursuant
hereto do not and will not include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements made and to
be made
not misleading.
ARTICLE IV
ADDITIONAL AGREEMENTS
SECTION 4.01. APPROPRIATE ACTION; CONSENTS; FILINGS. Worldlink and
▇.▇▇▇ shall each use its best efforts (i) to take, or cause to be taken, all
appropriate action, and do, or cause to be done, all things necessary, proper or
advisable under applicable Law or otherwise to consummate and make effective the
transactions contemplated in this Agreement, (ii) to obtain from any
Governmental Entities any consents, licenses, permits, waivers, approvals,
authorizations or orders required to be obtained or made by ▇.▇▇▇ or Worldlink
or any of their Subsidiaries in connection with the consummation of the
transactions contemplated herein, including, without limitation, the Merger,
(iii) make all necessary filings, and thereafter make any other required
submissions, with respect to this Agreement and the Merger required under (A)
the Securities Act and the Exchange Act and the rules and regulations thereunder
(in the case of ▇.▇▇▇), and any other applicable federal or state securities
laws and (B) any other applicable Law. Worldlink and ▇.▇▇▇ shall furnish all
information required for any application or other filing to be made pursuant to
the rules and regulations of any applicable Law in connection with the
transactions contemplated in this Agreement.
SECTION 4.02. TAX TREATMENT; POOLING OF INTERESTS. Each of
Worldlink, ▇.▇▇▇ and Newco shall use its best efforts to cause the Merger to
qualify, and will not, hereafter, take any actions either before or after the
Merger which could prevent the Merger from qualifying either (i) as a
reorganization under the provisions of section 368(a) of the Code or (ii) as a
pooling of interests under applicable accounting rules; PROVIDED HOWEVER, that
if, at the Effective Time, the Merger does not qualify as a pooling of
interests, the parties shall be permitted to take actions which would otherwise
be prohibited because such actions could disqualify the Merger from qualifying
as a pooling of interests.
SECTION 4.03. INDEMNIFICATION.
(a) ▇.▇▇▇ covenants and agrees that it will indemnify the
stockholders of Worldlink exchanging Worldlink Common Stock (the "WORLDLINK
STOCKHOLDERS") in connection with the Merger from and against any Loss (as
hereinafter defined) asserted against, resulting to, imposed upon or
incurred or suffered, directly or indirectly, by such Worldlink
Stockholders resulting or arising from any of the following ("WORLDLINK
INDEMNIFIED CLAIMS"):
(i) Any inaccuracy in any of the representations and warranties
made by ▇.▇▇▇ or Newco herein or in any exhibit or schedule
attached hereto or any facts or circumstances constituting
such inaccuracy; and
(ii) Any breach or nonfulfillment by ▇.▇▇▇ or Newco of the
covenants or agreements set forth herein or in any
exhibit or schedule attached hereto or any facts or
circumstances constituting such breach or
nonfulfillment;
provided, however, that the Worldlink Stockholders shall, in the event of a
claim for such indemnification, be entitled to reimbursement for Losses in
connection with such claim only as provided herein.
(b) Each of Worldlink, Nort and Cho covenant and agree that each,
jointly and severally, will indemnify ▇.▇▇▇ from and against any Loss
asserted against, resulting to, imposed upon or incurred or suffered,
directly or indirectly, by ▇.▇▇▇ resulting or arising from any of the
following ("▇.▇▇▇ INDEMNIFIED CLAIMS"):
(i) Any inaccuracy in any of the representations and
warranties made by Worldlink herein or in any exhibit
or schedule attached hereto or any facts or
circumstances constituting such inaccuracy; and
(ii) Any breach or nonfulfillment by Worldlink of the
covenants or agreements set forth herein or in any
exhibit or schedule attached hereto or any facts or
circumstances constituting such breach or
nonfulfillment;
provided, however, that ▇.▇▇▇ shall, in the event of a claim for such
indemnification, be entitled to reimbursement for Losses in connection with
such claim only as provided herein.
(c) As used herein, "LOSS" or "LOSSES" shall mean any damage,
liability or loss (including, without limitation, reasonable attorneys'
fees and court costs and reasonable costs and expenses incident to, and
amounts paid by a party entitled to indemnification hereunder (in each case
an "INDEMNIFIED PARTY") in settlement of, any claim, suit, action or
proceeding) sustained, incurred, paid or required to be paid by any such
Indemnified Party after the date hereof, plus interest thereon at an annual
rate of interest equal to the lesser of (x) prime rate of interest of Texas
Commerce Bank National Association from the date of such Loss to the date
such claim is paid or (y) the highest applicable nonusurious rate of
interest.
(d) The period of indemnity for Losses (the "INDEMNITY PERIOD")
shall begin on the date hereof and end at midnight of the first anniversary
following the Effective Time of the Merger herein contemplated, and, upon
such expiration, no party shall have any further liability in respect of an
Worldlink Indemnified Claim or a ▇.▇▇▇ Indemnified Claim hereunder;
provided, however, that if there is an outstanding notice of claim at the
expiration of the Indemnity Period, the Indemnity Period shall continue
until each such indemnified claim or claim related to such claimed Loss is
resolved. The Indemnity Period shall not continue as a result of the mere
sending of a general notice of a claim unsupported by a reasonable basis
for believing that grounds for indemnification exist; provided that the
party receiving a notice which it believes meets the exception set forth in
the preceding clause shall raise such objection within five business days
of receipt thereof and the party sending such notice shall have five
business days thereafter to amend such notice to identify the reasonable
basis of such claim.
(e) Notwithstanding anything to the contrary contained herein, no
Indemnified Party shall be permitted indemnification for any claim until
the Losses incurred with respect to all claims for such party or parties
exceed, in the aggregate, $100,000, in which event such Indemnified Party
shall be indemnified for the full value of all such Indemnified Claims and
the full value of all subsequent Indemnified Claims for which,
individually, Losses in excess of $10,000 have been incurred or asserted.
(f) Indemnification for an Worldlink Indemnified Claim shall be
solely in the form of the issuance of additional shares of ▇.▇▇▇ Common
Stock to Worldlink Stockholders (their successors, assigns and transferees)
pro rata in accordance with their ownership of ▇.▇▇▇ Stock equal to the
aggregate amount of the Loss associated with such Worldlink Indemnified
Claim through the date of issuance. The value of such ▇.▇▇▇ Common Stock
for the purposes of this Section 4.03 only in determining the number of
shares to be issued to compensate Worldlink Stockholders for such Worldlink
Indemnified Claim shall be the average of the closing bid and asked prices
of the ▇.▇▇▇ Stock for the 10 trading days next preceding the issuance of
such Stock (the "FAIR VALUE").
(g) Indemnification for a ▇.▇▇▇ Indemnified Claim shall be solely in
the form of the delivery to ▇.▇▇▇ of shares of ▇.▇▇▇ Stock to ▇.▇▇▇ (its
successors, assigns and transferees) equal to the aggregate amount of the
Loss associated with such ▇.▇▇▇ Indemnified Claim through the date of
issuance. The value of such ▇.▇▇▇ Common Stock for the purposes of this
Section 4.03 only in determining the number of shares to be delivered to
compensate ▇.▇▇▇ for such ▇.▇▇▇ Indemnified Claim shall be the Fair Value
of such Stock at the time of delivery.
(h) A claim for indemnification hereunder shall be sent to the
appropriate Indemnifying Party by registered or certified mail prior to the
expiration of the Indemnity Period and shall set forth (i) a brief
description of the nature of the potential or actual Loss, and (ii) the
total amount of the Loss anticipated or incurred. Upon receiving notice,
if the party receiving the notice rejects any Loss, such party shall give
written notice of such rejection within thirty days after the date of the
notice of claim. If no such rejection of a notice of a claim shall be so
sent within such 30-day period, the party receiving notice of a claim for
any Loss shall be deemed to acknowledge the validity of such claim for the
full amount thereof. Each party shall endeavor to assert each claim for
indemnification, if any, promptly after it has actual notice of such claim,
even if it has not determined the full amount of Loss associated with such
claim. In the event that the other party shall have made timely rejection
of any such claim, and the parties shall have failed to resolve or
compromise such claim within thirty days from the date the receiving party
shall have mailed notice of such rejection, then such claim shall be
settled by binding arbitration in accordance with Section 4.03(i) hereof.
(i) In the case of a claim for indemnification by Worldlink
Stockholders, such claim shall be settled by binding arbitration in
Houston, ▇▇▇▇▇▇ County, Texas and shall be subject to the Texas General
Arbitration Act in conjunction with the rules of the American Arbitration
Association, in accordance with this Section. In the case of a claim for
indemnification by ▇.▇▇▇, such claim shall be settled by binding
arbitration in Atlanta, ▇▇▇▇ County, Georgia and shall be subject to the
Texas General Arbitration Act in conjunction with the rules of the American
Arbitration Association, in accordance with this Section. After the
initiation of arbitration, the parties shall attempt to agree upon one
arbitrator. In the absence of such agreement, there shall be three
arbitrators, one designated in writing by the party sending the notice and
one designated in writing by the party receiving notice, both of which
shall be designated within thirty days after arbitration has been
initiated. The third arbitrator shall be chosen by the two designated
arbitrators within forty days after arbitration has been initiated. All
expenses of the arbitration shall be borne by the parties to the
arbitration as the arbitrator(s) shall determine. Any award shall be a
conclusive determination of the matter, shall be binding upon the parties
and shall not be contested by them. In the case of an Worldlink
Indemnified Claim, within 10 days after the liability for indemnity, if
any, hereunder, is finally established, whether by the agreement
(constructive or otherwise) with a notice of claim, settlement, arbitration
or otherwise, ▇.▇▇▇ shall issue ▇.▇▇▇ Stock at the Fair Value thereof in
the amount of the Loss determined by the arbitrator(s) in accordance with
the terms hereof. In the case of a ▇.▇▇▇ Indemnified Claim, within 10 days
after the liability for indemnity hereunder is finally established, whether
by the agreement (constructive or otherwise) with a notice of claim,
settlement, arbitration or otherwise, Nort and Cho shall surrender ▇.▇▇▇
Stock at the Fair Value thereof in the amount of the Loss determined by the
arbitrator(s) in accordance with the terms hereof.
SECTION 4.04. VOTING ARRANGEMENTS. In connection herewith and as a
condition hereto, immediately following the execution and delivery hereof, Cho
and Nort (principal stockholders of Worldlink) shall execute and deliver to
▇.▇▇▇ a Voting Agreement in the form of SCHEDULE 4.04(A) hereto.
SECTION 4.05. OPINION OF COUNSEL TO ▇.▇▇▇. In connection herewith and as
a condition hereto, ▇▇▇▇▇▇▇▇ & Wedge, special Nevada counsel to ▇.▇▇▇, shall
deliver to ▇.▇▇▇ a legal opinion to the effect that a vote of the stockholders
of ▇.▇▇▇ is not required pursuant to Nevada Law in order the Merger or the
transactions herein contemplated.
ARTICLE V
COVENANTS
SECTION 5.01. COVENANTS OF WORLDLINK.
(a) Except as expressly contemplated in this Agreement, during the
period from the date hereof and continuing until the Effective Time,
Worldlink will carry on its business in the regular and ordinary course,
consistent with past practice, and use its best efforts to preserve intact
its present business organization, keep available the services of its
present officers and employees and preserve its relationships with
customers, suppliers, licensors, licensees, contractors, distributors and
others having business dealings with it and without limiting the generality
of the foregoing, Worldlink will not:
(i) (x) declare, set aside or pay any dividend or other
distribution (whether in cash, stock or property or any combination
thereof) in respect of any of its capital stock, (y) split, combine or
reclassify any of its capital stock or issue or authorize or propose
the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock or (z) amend the terms
of, repurchase, redeem or otherwise acquire any of its securities or
propose to do any of the foregoing;
(ii) authorize for issuance, issue, sell, deliver or agree or
commit to issue, sell or deliver (whether through the issuance or
granting of options, warrants, commitments, subscriptions, rights to
purchase or otherwise) any stock of any class or any other securities
(including indebtedness having the right to vote) or equity
equivalents (including, without limitation, stock appreciation
rights), except as required pursuant to the agreements and instruments
outstanding on the date hereof, or amend in any material respect any
of the terms of any such securities or agreements outstanding on the
date hereof;
(iii) amend or propose to amend its charter or by-laws;
(iv) acquire, sell, lease, encumber, transfer or dispose of any
assets outside the ordinary course of its business, consistent with
past practice, or make any capital expenditures aggregating in excess
of $50,000, except in each case pursuant to obligations in effect on
the date hereof which have been disclosed to ▇.▇▇▇, or enter into any
contract, commitment or transaction outside the ordinary course of its
business, consistent with past practice, or enter into any material
contract, commitment or transaction;
(v) create, incur, assume, guarantee or otherwise become liable
or obligated with respect to any indebtedness for monies borrowed
(other than for obligations incurred under credit arrangements which
are existing as of the date hereof and reflected on the Worldlink
Financial Statements or schedules hereto) or issue or sell any debt
securities or warrants or rights to acquire any debt securities or
guarantee (or become liable for) any debt of others or pledge or
otherwise encumber any material
assets or create or suffer any material lien thereupon;
(vi) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the
ordinary course of business, consistent with past practice, or in
accordance with their terms, of liabilities reflected or reserved
against in, or contemplated in, the Worldlink Financial Statements (or
the notes thereto) or incurred in the ordinary course of business,
consistent with past practice;
(vii) Except as required by law or disclosed on SCHEDULE
5.01(VII), (x) enter into, adopt, amend or terminate any Benefit Plan
or any agreement, arrangement, plan or policy between itself and one
or more of its directors or executive officers or (y) increase in any
manner the compensation or benefits of any director, officer or
employee or pay any benefit not required by any plan and arrangement
as in effect as of the date hereof, except in the case of non-officer
employees for normal increases in the ordinary course of business,
consistent with past practice, that, in the aggregate, do not result
in a material increase in benefits or compensation expense, or enter
into any contract, agreement, commitment or arrangement to do any of
the foregoing; or
(viii) (x) Agree to take any of the foregoing actions or (y)
take or agree to take any action that would result in any of its
representations and warranties set forth in this Agreement being
untrue or in any of the conditions to the Merger set forth in Article
VI hereof not being satisfied.
(b) In connection with the preparation of the Proxy
Statement/Prospectus and the Registration Statement in the form to be filed
with the SEC, Worldlink covenants that the Proxy Statement/Prospectus and
the Registration Statement insofar as they contain information pertaining
to Worldlink, will comply in all material respects with the requirements of
the Securities Act and the Exchange Act and the respective rules and
regulations adopted under such Acts, and will contain no untrue statement
of any material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading,
and Worldlink will advise ▇.▇▇▇ and Newco in writing if prior to the
Effective Time of the Merger it shall obtain knowledge of any facts that
would make it necessary to amend the Registration Statement in order to
make the statements therein not misleading or to comply with applicable
law.
SECTION 5.02. COVENANTS OF ▇.▇▇▇. Except as expressly contemplated
in this Agreement, during the period from the date of this Agreement and
continuing until the Effective Time, (x) each of ▇.▇▇▇ and its Subsidiaries
(including Newco) will carry on its businesses in the regular and ordinary
course, consistent with past practice, and use its best efforts to preserve
intact its present business organization, keep available the services of its
present officers and employees and preserve its relationships with customers,
suppliers, licensors, licensees, contractors, distributors and others having
business dealings with them and (y) without limiting the generality of the
foregoing, neither ▇.▇▇▇ nor any of its Subsidiaries will or will propose to,
except as contemplated in the ▇.▇▇▇ Reports, the ▇.▇▇▇ SEC Reports or this
Agreement:
(a) (i) declare, set aside or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect
of any of its capital stock, (ii) split, combine or reclassify any of its
capital stock or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock or (iii) amend the terms of, repurchase, redeem or otherwise
acquire, or permit any ▇.▇▇▇ Subsidiary to repurchase, redeem or otherwise
acquire, any of its securities or any securities of its Subsidiaries;
(b) authorize for issuance, issue, sell, deliver or agree or commit
to issue, sell or deliver (whether through the issuance or granting of
options, warrants, commitments, subscriptions, rights to purchase or
otherwise) any stock of any class or any other securities (including
indebtedness having the right to vote) or equity equivalents (including,
without limitation, stock appreciation rights), except as permitted or
required pursuant to agreements or other instruments outstanding on the
date hereof, or amend in any material respect any of the terms of any such
securities or agreements outstanding on the date hereof;
(c) amend or propose to amend its charter or by-laws;
(d) acquire, sell, lease, encumber, transfer or dispose of any assets
outside the ordinary course of its business, consistent with past practice,
or make any capital expenditures aggregating in excess of $100,000, except
in each case pursuant to obligations in effect on the date hereof which
have been disclosed to Worldlink, or enter into any contract, commitment or
transaction outside the ordinary course of its business, consistent with
past practice, or enter into any material contract, commitment or
transaction;
(e) create, incur, assume, guarantee or otherwise become liable or
obligated with respect to any indebtedness for monies borrowed (other than
for obligations incurred under credit arrangements which are existing as of
the date hereof and reflected on the ▇.▇▇▇ SEC Reports, ▇.▇▇▇ Reports or
schedules hereto) or issue or sell any debt securities or warrants or
rights to acquire any debt securities or guarantee (or become liable for)
any debt of others or pledge or otherwise encumber any material assets or
create or suffer any material lien thereupon;
(f) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction in the ordinary course of
business, consistent with past practice, or in accordance with their terms,
of liabilities reflected or reserved against in, or contemplated in, the
▇.▇▇▇ SEC Reports, the ▇.▇▇▇ Reports, or the statements hereto, or incurred
in the ordinary course of business, consistent with past practice;
(g) except as required by law, (i) enter into, adopt, amend or
terminate any Benefit Plan or any agreement, arrangement, plan or policy
between itself and one or more of its directors or executive officers or
(ii) increase in any manner the compensation or benefits of any director,
officer or employee or pay any benefit not required by any plan and
arrangement as in effect as of the date hereof, except in the case of
non-officer employees for normal increases in the ordinary course of
business, consistent with past practice, that, in the aggregate, do not
result in a material increase in benefits or compensation expense, or enter
into any contract, agreement, commitment or arrangement to do any of the
foregoing; or
(h) (i) agree to take any of the foregoing actions or (ii) take or
agree to take any action that would result in any of its representations
and warranties set forth in this Agreement being untrue or in any of the
conditions to the Merger set forth in Article VI hereof not being
satisfied.
SECTION 5.03. NO SOLICITATIONS.
(a) NO SOLICITATIONS BY WORLDLINK. Except as approved in writing by
the chief executive officer of ▇.▇▇▇, Worldlink and its representatives
will not enter into discussions or negotiations with any third party with
respect to any merger, business combination, sale of any assets outside of
the ordinary course of business, sale of shares of capital stock outside of
the
ordinary course of business or similar transaction involving Worldlink
(an "WORLDLINK TRANSACTION"). Neither Worldlink nor any representative on
its behalf will, and each of Worldlink and its representatives shall use
its best efforts to ensure that none of its Affiliates, officers,
directors, representatives or agents will, directly or indirectly, solicit,
initiate or encourage (including by way of furnishing information) any
Person to take any action concerning any Worldlink Transaction (other than
the transactions contemplated in this Agreement). Worldlink or its
representative shall promptly advise ▇.▇▇▇ in writing of any such inquiry
or proposal regarding an Worldlink Transaction, including the material
terms thereof.
SECTION 5.04. ACCESS TO INFORMATION.
(a) Upon reasonable notice and subject to restrictions contained in
confidentiality agreements to which such party is subject (from which such
party shall use reasonable efforts to be released), each party hereto shall
(and shall cause each of its Subsidiaries to) afford to the officers,
employees, accountants, counsel and other representatives of the other,
reasonable access, during normal business hours during the period prior to
the Effective Time, to all its properties, books, contracts, commitments
and records and, during such period, such party shall, and shall cause each
of its Subsidiaries to, furnish promptly to the other all information
concerning its business, properties and personnel as such other party may
reasonably request.
(b) Before the Closing, neither ▇.▇▇▇ nor Worldlink shall make any
public release of information regarding the matters contemplated herein
except (i) that press releases in agreed form shall be issued by ▇.▇▇▇ and
Worldlink as promptly as is practicable after the execution of this letter,
(ii) that ▇.▇▇▇ and Worldlink may each continue such communications with
employees, customers, suppliers, franchisees, lenders, lessors,
shareholders, and other particular groups as may be legally required or
necessary or appropriate and not inconsistent with the best interests of
the other party or the prompt consummation of the transactions contemplated
by this letter, and (iii) as required by law.
(c) Each of ▇.▇▇▇ and Worldlink agrees to treat all information
(including but not limited to any information identified as "confidential"
in writing and any such information which by its content or from the manner
in which it is provided could reasonably be deemed to be confidential)
concerning the other furnished, or to be furnished, by or on behalf of the
other in accordance with the provisions of this paragraph (collectively,
the "INFORMATION"), and to take, or abstain from taking, other actions set
forth herein. The Information will be used solely for the purpose of
evaluating the proposed transactions, and will be kept confidential by each
corporation and its officers, directors, employees, representatives,
agents, and advisors; provided that (i) any of such Information may be
disclosed by either corporation to its officers, directors, employees,
representatives, agents, and advisors who need to know such information for
the purpose of evaluating the proposed transactions, (ii) any disclosure of
such information may be made to which each corporation consents in writing,
(iii) such information may be disclosed if so required by law and (iv) such
obligation of confidentiality shall expire upon such confidential
information becoming public by means other than a breach of this Section
5.04. If the proposed transactions are not consummated, each of ▇.▇▇▇ and
Worldlink will promptly return all documents, contracts, records, or
properties to the other. The provisions of this Section 5.04 shall survive
the termination of this Agreement.
SECTION 5.05. BEST EFFORTS. Subject to the terms and conditions of
this Agreement, each of the parties hereto agrees to use its best efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, all
things necessary, proper or advisable under applicable Laws to consummate and
make effective the transactions contemplated in this Agreement including,
without limitation, (i) such actions as may be required to be taken under
applicable federal and state securities
or Blue Sky laws in connection with the issuance of ▇.▇▇▇ Stock contemplated
herein, and (ii) the preparation and filing of all other forms, registrations
and notices required to be filed to consummate the transactions contemplated
herein and the taking of such actions as are necessary to obtain any
requisite approval, consent, order, exemption, waiver by any public or
private third party.
SECTION 5.06. MEETING OF WORLDLINK STOCKHOLDERS. Worldlink will take
all action necessary in accordance with applicable law and its Articles of
Incorporation and By-laws to convene a meeting of its stockholders as promptly
as practicable to consider and vote upon the approval of this Agreement and the
transactions contemplated herein. The Board of Directors of Worldlink shall
recommend such approval of Worldlink and shall take all lawful action to solicit
such approval, including, without limitation, timely mailing the Proxy
Statement/ Prospectus (as defined in Section 6.01); PROVIDED, HOWEVER, that such
recommendation or solicitation is subject to any action taken by, or upon
authority of, the Board of Directors of Worldlink in the exercise of their good
faith judgment as to their fiduciary duties to stockholders as imposed by law.
SECTION 5.07. PUBLICITY. Any press release relating to this
Agreement shall be the joint press release of ▇.▇▇▇ and Worldlink and thereafter
each of ▇.▇▇▇ and Worldlink shall, subject to its respective legal obligations,
consult with each other, and use reasonable efforts to agree upon the text of
any press release, before issuing any such press release or otherwise making
public statements with respect to the transactions contemplated herein and in
making any filings with any federal or state governmental or regulatory agency
or body.
ARTICLE VI
SECURITIES MATTERS
SECTION 6.01. REGISTRATION STATEMENT. If, in the opinion of counsel to
▇.▇▇▇, the transactions contemplated herein do not qualify for an exemption from
registration under applicable securities laws, ▇.▇▇▇ and Worldlink shall
cooperate and promptly prepare and ▇.▇▇▇ shall file with the SEC as soon as
practicable a Registration Statement on Form S-4 (the "FORM S-4") under the
Securities Act, with respect to the ▇.▇▇▇ Stock issuable in connection with the
transactions contemplated in this Agreement, a portion of which Registration
Statement shall also serve as the proxy statement with respect to the meeting of
the stockholders of Worldlink in connection with the Merger (the "PROXY
STATEMENT/PROSPECTUS"). The parties will cause the Proxy Statement/Prospectus
and the Form S-4 to comply as to form in all material respects with the
applicable provisions of the Securities Act, the Exchange Act and the rules and
regulations thereunder. ▇.▇▇▇ shall use all reasonable efforts, and Worldlink
will cooperate with ▇.▇▇▇, to have the Form S-4 declared effective by the SEC as
promptly as practicable. ▇.▇▇▇ shall use its best efforts to obtain, prior to
the effective date of the Form S-4, all necessary state securities law or "Blue
Sky" permits or approvals required to carry out the transactions contemplated in
this Agreement and will pay all expenses incident thereto. ▇.▇▇▇ agrees that
the Proxy Statement/Prospectus and each amendment or supplement thereto, at the
time of the mailing thereof and at the time of the meeting of stockholders of
Worldlink, or, in the case of the Form S-4 and each amendment or supplement
thereto, at the time it is filed or becomes effective, will not include an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that the foregoing shall not apply to the extent that any such
untrue statement of a material fact or omission to state a material fact was
made by ▇.▇▇▇ in reliance upon and in conformity with information concerning
Worldlink furnished to ▇.▇▇▇ by Worldlink specifically for use in the Proxy
Statement/Prospectus or the Form S-4. Worldlink agrees that the information
provided by it for inclusion in the Proxy Statement/Prospectus and each
amendment or supplement thereto, at the time of mailing thereof and at the
time of the meeting of stockholders of Worldlink, or, in the case of
information provided by Worldlink for inclusion in the Form S-4 or any
amendment or supplement thereto, at the time it is filed or becomes
effective, will not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading. No amendment or supplement to the Proxy
Statement/Prospectus will be made by ▇.▇▇▇ or Worldlink without the approval
of the other party. ▇.▇▇▇ will advise Worldlink, promptly after it receives
notice thereof, of the time when the Form S-4 has become effective or any
supplement or amendment has been filed, the issuance of any stop order, the
suspension of the qualification of the ▇.▇▇▇ Stock issuable in connection
with the transactions contemplated in this Agreement for offering or sale in
any jurisdiction, or any request by the SEC for amendment of the Proxy
Statement/Prospectus or the Form S-4 or comments thereon and responses
thereto or requests by the SEC for additional information.
SECTION 6.02 LISTING APPLICATION. In the event ▇.▇▇▇ Stock is
traded on the NASDAQ System at the Effective Time, ▇.▇▇▇ shall promptly prepare
and submit to the NASD a listing application covering the shares of ▇.▇▇▇ Stock
issuable in connection with the transactions contemplated in this Agreement, and
shall use its best efforts to obtain, prior to the Effective Time, approval for
the listing of such ▇.▇▇▇ Stock, subject to official notice of issuance.
SECTION 6.03 AGREEMENTS BY AFFILIATED STOCKHOLDERS OF WORLDLINK.
Prior to the date of the Closing, Worldlink shall deliver to ▇.▇▇▇ a list of
names and addresses of those persons who were, in Worldlink's reasonable
judgment, at the record date for its stockholders' meeting to approve the
Merger, "affiliates" (each such person, an "AFFILIATE") of Worldlink within the
meaning of Rule 145 of the rules and regulations promulgated under the
Securities Act ("RULE 145"). Worldlink shall provide ▇.▇▇▇ such information and
documents as ▇.▇▇▇ shall reasonably request for purposes of reviewing such list.
Worldlink shall deliver or cause to be delivered to ▇.▇▇▇, prior to the date of
the Closing, from each of the Affiliates of Worldlink identified in the
foregoing list, an Affiliate letter ("AFFILIATES LETTER") in the form attached
hereto as EXHIBIT A. ▇.▇▇▇ shall be entitled to place legends as specified in
such Affiliate Letters on the certificates evidencing any ▇.▇▇▇ Common Stock to
be received by such Affiliates pursuant to the terms of this Agreement, and to
issue appropriate stop transfer instructions to the transfer agent for the ▇.▇▇▇
Common Stock, consistent with the terms of such Affiliate Letters.
SECTION 6.04 INDEMNIFICATION.
(a) ▇.▇▇▇ shall indemnify and hold harmless each Worldlink
Stockholder from and against any and all Losses in accordance with the
indemnity provided to Worldlink Stockholders in Section 4.03(a), to which
each Worldlink Stockholder may become subject under the Securities Act,
the Exchange Act, or state securities laws in connection with the Merger
and shall reimburse such Worldlink Stockholder for any legal or other
expenses, incurred by such Worldlink Stockholder in connection with
investigating or defending against any and all such expenses, losses,
claims, damages or liabilities, or actions in respect thereof, directly or
indirectly arising out of or based upon:
(i) any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or any post-
effective amendment thereto, including the prospectus (and any
amendment or supplement thereto) as a part thereof directed or made
available by ▇.▇▇▇ to the Worldlink Stockholders in connection with
the Merger, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or
(ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or prospectus
(as amended or as supplemented if ▇.▇▇▇ shall have filed with the
Commission any amendment thereof or supplement
thereto) directed or made available by ▇.▇▇▇ to the Worldlink
Stockholders in connection with the Merger, or the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
provided, however, that the indemnity agreements of ▇.▇▇▇ contained in
this Section 6.04(a) shall not apply to amounts paid in settlement of
any such claim or action if such settlement is effected without the
consent of ▇.▇▇▇, nor shall it apply to any Losses if such statement
or omission was made in reliance upon and in conformity with
information furnished to ▇.▇▇▇ by or on behalf of Worldlink or any of
the Affiliates of Worldlink for use in any preliminary prospectus or
prospectus, or any Registration Statement, or any such amendment
thereof or supplement thereto in connection with the Merger, or the
failure of Worldlink or any of the Affiliates of Worldlink to provide
such information for inclusion therein as requested by ▇.▇▇▇, nor
shall it apply to any Losses resulting from the failure of Worldlink
or any of the Affiliates of Worldlink to use a prospectus directed to
be used or made available by ▇.▇▇▇ or from the use of a prospectus
not so directed to be used or made available for such purpose by
▇.▇▇▇. Worldlink or any of the Affiliates of Worldlink shall, within
ten days after receipt by it of notice of any claim or of the
commencement of any action as aforesaid, in respect of which
indemnity may be sought from ▇.▇▇▇ under the indemnity agreement
contained in this Section 6.04(a), notify ▇.▇▇▇ in writing thereof.
The omission so to notify ▇.▇▇▇ of any such claim or action shall
relieve ▇.▇▇▇ from any liability which it may have to such Worldlink
Stockholder under the indemnity agreement contained in this
Section 6.04(a), but shall not relieve ▇.▇▇▇ from any other liability
which it may have to Worldlink Stockholders, other than that raised
in any such claim or action explicitly or by reasonable implication
or which may stop ▇.▇▇▇ from raising and effecting some defense it
might otherwise have raised had such notice been given properly.
In case any such action shall be brought against one of the
Worldlink Stockholders, and the Worldlink Stockholder shall notify
▇.▇▇▇ of the commencement thereof, ▇.▇▇▇ shall be entitled to
participate in (and, to the extent that it shall wish, to direct) the
defense thereof at its own expense, but such defense shall be
conducted by counsel satisfactory to such Worldlink Stockholder if
such Worldlink Stockholder is a defendant in the action. ▇.▇▇▇ shall
notify the Worldlink Stockholders promptly of the commencement of any
action against it or any of its officers or directors of which it may
be advised, in connection with the issue or sale of any of its
securities pursuant to any Registration Statement, if such action may
involve the Worldlink Stockholders as defendants. The indemnity
agreement of ▇.▇▇▇ contained in this Section 6.04(a) shall remain
operative and in full force and effect, regardless of any
investigation made by or on behalf of any indemnified party.
(b) Each of Worldlink, Nort and Cho, severally, shall indemnify and
hold harmless ▇.▇▇▇, each of its officers who signs any Registration
Statement, each person who may be liable as a director of ▇.▇▇▇ or as a
person who controls or shall have controlled ▇.▇▇▇ within the meaning of
the Securities Act, from and against any and all Losses, joint or several,
including legal and other expenses incurred in connection therewith, to the
same extent as the foregoing indemnity from ▇.▇▇▇ to the Worldlink
Stockholders, but only insofar as such expenses, losses, claims, damages,
liabilities or actions arise out of or are based upon any untrue statement
or alleged untrue statement or omission or alleged omission based upon
information furnished to ▇.▇▇▇ by or on behalf of Worldlink, any Affiliate,
Nort or Cho for use in any Registration Statement or upon the failure of an
Worldlink Stockholder to provide information pertinent to the information
requested by ▇.▇▇▇, and also in respect of any expenses, losses, claims,
damages, liabilities or actions, joint or several, to which any such person
may become subject under the Securities Act, the Exchange Act, or state
securities laws in connection with the Merger. In the case of any claim or
the commencement of any action in
respect of which indemnity may be sought from Nort or Cho on account of
the indemnity agreement contained in this Section 6.04(b), each person
to be indemnified by Nort and Cho shall have the same obligation, subject
to the same loss of indemnity hereunder, to notify Nort and Cho as the
Worldlink Stockholders have to ▇.▇▇▇ in Section 6.04(a). ▇.▇▇▇ shall
notify each of Nort and Cho promptly of the commencement of any action
or proceeding against any ▇.▇▇▇ Indemnified Person which may arise in
connection with the issue or sale of any of the securities of ▇.▇▇▇
pursuant to the Merger. The indemnity agreement of Nort and Cho contained
in this Section 6.04(b) shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any indemnified
party.
(c) As used in this Agreement, the term "made available", when used
in reference to the availability of a prospectus, means the ▇.▇▇▇
prospectus available to be obtained from ▇.▇▇▇ in connection with the
Merger, whether or not the Worldlink Stockholder actually requests delivery
of such prospectus for use in connection with any such offer or transfer.
SECTION 6.05 CONTINGENT DEMAND REGISTRATION RIGHTS. (a) ▇.▇▇▇
acknowledges and agrees that neither of ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, J. ▇▇▇▇ ▇▇▇▇ or ▇▇▇▇▇
▇▇▇ (individually, a "Holder" or collectively, the "Holders") shall have the
right to sell shares of ▇.▇▇▇ Common Stock to the public prior to the time that
all Holders are in a position to sell at least an equal number of such shares.
▇.▇▇▇ acknowledges that ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
have owned shares of ▇.▇▇▇ Common Stock for a longer holding period than any
other of the Holders, and thus pursuant to the provisions of Rule 144, that
▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ would be in a position to
sell shares of ▇.▇▇▇ Common Stock pursuant to Rule 144 prior to the time that
any other Holder would be in such a position. Accordingly, ▇.▇▇▇, Nort and Cho
agree to enter into an agreement (the "Registration Agreement") prior to the
Effective Time providing that none of the Holders will sell shares of ▇.▇▇▇
Common Stock prior to the time that all such Holders are able to sell an
equivalent number of such shares. ▇.▇▇▇ hereby covenants and agrees to grant
certain registration rights as described herein to the Holders (to be registered
in collectively in one sale) in order to achieve parity of selling ability. The
Registration Agreement shall provide that prior to any sale of ▇.▇▇▇ Common
Stock to the public by any Holder, each such Holder shall first notify ▇.▇▇▇ and
each other Holder of such Holder's proposal to sell such shares, and shall
afford to each other Holder the opportunity to register an equal number of
shares of ▇.▇▇▇ Common Stock for sale in a similar type of transaction as that
proposed by such notifying Holder. Such notifying Holder shall agree not to
sell any such shares until such other Holders have their shares registered. The
Registration Agreement shall, among other things, provide the Holders the right
to demand a registration under the Securities Act of a number of shares of ▇.▇▇▇
Common Stock equal to the number of shares of ▇.▇▇▇ Common Stock proposed to be
sold to the public by the notifying Holder. The Registration Agreement shall
also provide that, upon receipt of any such demand, ▇.▇▇▇ shall (i) as soon as
practicable use its best efforts to register shares of the ▇.▇▇▇ Common Stock,
which are the subject of the demand, under the Securities Act, and (ii) provide
an indemnity relating to such registration pursuant to which ▇.▇▇▇ agrees to
indemnify the Holders for claims or causes of action arising from information
about ▇.▇▇▇ included in the registration statement. The demand registration
right shall be exercisable, at the option of any Holder at any time until such
time that all Holders are eligible to sell shares pursuant to Rule 144 (or the
analogous provisions of Rule 145). In the event that any Holder elects a shelf
registration, ▇.▇▇▇ agrees to maintain the effectiveness of such registration
for a period of not more than 120 days.
SECTION 6.06 REGISTRATION EXPENSES. All expenses incurred by ▇.▇▇▇
in complying with the registration requirements which arise under this Article
VI, including, without limitation, all registration and filing fees, fees and
expenses under state securities laws, printing expenses and fees and
disbursements of accountants and counsel for ▇.▇▇▇ shall be borne by ▇.▇▇▇.
Fees and disbursements of counsel for Worldlink shall be borne by Worldlink.
Fees and
disbursements of counsel for Nort and Cho shall be borne by Nort and Cho.
ARTICLE VII
CONDITIONS TO CLOSING
SECTION 7.01. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The obligations of each party to effect the Merger shall be subject to
the satisfaction at or prior to the Closing of the following conditions:
(a) This Agreement shall have been approved and adopted by the
majority vote of the holders of all the outstanding shares of Worldlink
voting on the matter, in accordance with applicable law.
(b) No statute, rule, regulation, executive order, decree or
injunction shall have been enacted, entered, promulgated or enforced by any
United States court or Governmental Entity of competent jurisdiction which
prohibits the consummation of the Merger.
(c) No order to restrain, enjoin or otherwise prevent the
consummation of this Agreement, the Plan, the Articles or the transactions
contemplated in connection therewith shall have been entered and, at the
Effective Time, there shall not be any pending or threatened litigation in
any court, or any proceeding by or before any governmental commission,
board or agency, with a view to seeking to restrain or prohibit
consummation of the Merger or in which divestiture, rescission or
significant damages are sought in connection with the Merger, and no
investigation by any governmental agency shall be pending or threatened
which might result in any such litigation or other proceeding.
(d) There shall have been obtained any and all permits, approvals and
consents of securities or "blue sky" commissions of any jurisdiction and of
any other governmental body or agency, which counsel for ▇.▇▇▇, Newco and
Worldlink may reasonably deem necessary or appropriate so that consummation
of the Merger will be in compliance with applicable law.
(e) All approvals of applications to public authorities, federal,
state or local, domestic or foreign, and all approvals of private persons
or corporations the granting of which is necessary for the consummation of
the Merger or the transactions contemplated in connection therewith, shall
have been obtained.
(f) Each Affiliate of Worldlink shall have executed and delivered the
Affiliates Letter.
(g) Holders of not more than 5 percent of the outstanding shares of
Worldlink Common Stock shall have taken steps to perfect their dissenters
rights respecting the Merger in accordance with the Georgia Business
Corporation Code.
(h) The Closing (as defined in Article VIII of that certain
Acquisition Agreement between Overlook Communications International
Corporation and ▇.▇▇▇ dated July 15, 1996) shall have taken place.
SECTION 7.02. CONDITIONS TO OBLIGATIONS OF WORLDLINK. The
obligations of Worldlink to effect the Merger are further subject to the
satisfaction at or prior to the Closing of the following conditions, unless
waived by Worldlink:
(a) The representations and warranties of ▇.▇▇▇ and Newco set forth
in this Agreement shall be true and correct as of the date of this
Agreement and as of the Closing, as if made as of the Closing, except where
any failures to be true and correct would not, in the aggregate, have a
▇.▇▇▇ Material Adverse Effect.
(b) Each of ▇.▇▇▇ and Newco shall have performed and complied, in all
material respects, with all obligations and covenants required to be
performed or complied with by it under this Agreement at or prior to the
Closing.
(c) From the date of this Agreement through the Closing, ▇.▇▇▇ and
its Subsidiaries, considered as a whole, shall not have suffered a ▇.▇▇▇
Material Adverse Effect.
SECTION 7.03. CONDITIONS TO OBLIGATIONS OF ▇.▇▇▇ AND NEWCO. The
obligations of ▇.▇▇▇ and Newco to effect the Merger are further subject to the
satisfaction at or prior to the Closing of the following conditions, unless
waived by such parties:
(a) The representations and warranties of Worldlink set forth in this
Agreement shall be true and correct as of the date of this Agreement and as
of the Closing, as if made as of such time, except where any failures to be
true and correct would not, in the aggregate, have an Worldlink Material
Adverse Effect.
(b) Worldlink shall have performed and complied, in all material
respects, with all obligations and covenants required to be performed or
complied with by it under this Agreement at or prior to the Closing.
(c) From the date of this Agreement through the Closing, Worldlink
shall not have suffered an Worldlink Material Adverse Effect.
(d) ▇.▇▇▇ shall have received an opinion from its counsel, ▇▇▇▇▇,
▇▇▇▇▇▇ & ▇▇▇▇▇, L.L.P., to the effect that, upon consummation of the
Merger, ▇.▇▇▇ will be the owner and holder of all of the issued and
outstanding voting capital stock of Worldlink and will have the power
pursuant to such ownership to elect all of the members of the Board of
Directors of Worldlink.
(e) ▇.▇▇▇ shall have received an opinion from its special Nevada
counsel, ▇▇▇▇▇▇▇▇ & Wedge, to the effect that a vote of the stockholders of
▇.▇▇▇ is not required pursuant to Nevada law to effect the transactions
contemplated herein.
(f) ▇.▇▇▇ and Newco shall have received all necessary and proper
consents of third parties to the transactions contemplated herein.
(g) There shall have been no change in Worldlink (including, without
limitation, the issuance of additional voting securities, any modification
or amendment to the articles of incorporation or bylaws of Worldlink or the
creation of any agreement) which would prevent or restrict the ability of
▇.▇▇▇ to exercise the voting rights and privileges related to the shares of
capital stock of Worldlink and, by virtue of such voting rights, to elect
100% of the board of directors of Worldlink.
(h) Schedule 5.01(vii) and all Schedules described in Article II
shall be prepared and delivered by Worldlink, approved by ▇.▇▇▇ and
attached to the Acquisition Agreement.
ARTICLE VIII
CLOSING
The closing of the transactions and agreements contemplated herein,
hereinafter referred to as the "CLOSING," shall take place beginning at
10:00 a.m. at the offices of ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇, L.L.P., 3600 Two ▇▇▇▇▇
Center, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ on the earlier of
September 30, 1996, or at such other time, place and date as parties may
mutually designate in writing and shall occur in the manner and order specified
in the Memorandum of Closing to be prepared in connection with this Agreement.
ARTICLE IX
DELIVERIES AT CLOSING
SECTION 9.01 DELIVERIES BY WORLDLINK. Unless waived by either of
▇.▇▇▇ or Newco, at its option, at Closing, Worldlink shall deliver to ▇.▇▇▇ and
Newco the following:
(a) OPINION OF COUNSEL. An opinion of E. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇., counsel
to Worldlink, dated the Closing Date, in substantially the form set forth
in EXHIBIT A hereto. Such opinion shall include any matters incident to
the matters herein contemplated as ▇.▇▇▇, Newco and their counsel may
reasonably request, including the form of all papers and the validity of
all proceedings.
(b) FINANCIAL INFORMATION. Financial information and reports with
respect to Worldlink for each monthly period ending after the Balance Sheet
Date, balance sheets and income statements, provided that if no such
balance sheet or income statement is available for any such month, there
shall be provided a good faith estimate of the pre-tax income for each such
month.
(c) OFFICER'S CERTIFICATE. Certificates, dated the date of the
Closing, of the chief executive officer of Worldlink certifying that, as of
the date of the Closing, (i) there is no, and there has not been and there
is not reasonably expected to be any, breach by such corporation in the
performance of any of the agreements, covenants and conditions herein to be
performed by it in whole or in part, which, singly or in the aggregate, has
had or could reasonably be expected to have an Worldlink Material Adverse
Effect; and (ii) each of the representations and warranties of Worldlink
contained in this Agreement, as of the date made and as if made at and as
of the date of the Closing, is true and correct as if made at and as of the
date of the Closing.
(d) MISCELLANEOUS. Any and all documents, agreements, contracts,
certificates or other instruments which ▇.▇▇▇ or Newco may reasonably
request as necessary or appropriate for the consummation of the
transactions contemplated in this Agreement.
SECTION 9.02. DELIVERIES BY ▇.▇▇▇. Unless waived by Worldlink, at
its option, at Closing, ▇.▇▇▇ shall deliver to Worldlink the following:
(a) OPINION OF COUNSEL. An opinion of ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇, L.L.P.,
dated the Closing Date, in substantially the form set forth in EXHIBIT B
hereto. Such opinion shall include any matters incident to the matters
herein contemplated as Worldlink and its counsel shall reasonably request,
including the form of all papers and the validity of all proceedings.
(b) OFFICERS' CERTIFICATE. Certificates, dated the Closing Date,
of the chief executive officer of each of ▇.▇▇▇ and Newco certifying that,
as of the Closing Date, (i) there is no, and there has not been and there
is not reasonably expected to be any, breach by such
corporation in the performance of any of the agreements, covenants and
conditions herein to be performed by it in whole or in part, which,
singly or in the aggregate, has had or could reasonably be expected to
have a ▇.▇▇▇ Material Adverse Effect; and (ii) each of the representations
and warranties of such corporation contained in this Agreement, as of the
date made and as if made as and of the Closing Date, is true and correct
as if made at and as of the Closing Date.
(c) MISCELLANEOUS. Any and all documents, agreements, contracts,
certificates or other instruments which Worldlink may reasonably request as
necessary or appropriate for the consummation of the transactions
contemplated in this Agreement.
ARTICLE X
TERMINATION AND AMENDMENT
SECTION 10.01. TERMINATION. This Agreement may be terminated at any
time prior to the Closing, whether before or after approval of the matters
presented in connection with the Merger by the stockholders of Newco and
Worldlink:
(a) by mutual consent of the parties hereto;
(b) by either Worldlink or ▇.▇▇▇, if the Merger shall not have been
consummated before September 30, 1996 (unless the failure to consummate the
Merger by such date shall be a result of the action or failure to act of
the party seeking to terminate this Agreement); or
(c) by any party hereto, if (i) the conditions to such party's
obligations shall have become impossible to satisfy or (ii) any permanent
injunction or other order of a court or other competent authority
preventing the consummation of the Merger shall have become final and
nonappealable.
SECTION 10.02. EFFECT OF TERMINATION. Except as contemplated in
Section 9.04 hereof, in the event of the termination and abandonment of this
Agreement pursuant to Section 9.01 hereof, this Agreement shall forthwith become
void and have no effect, without any liability on the part of any party hereto
or its affiliates, directors, officers or stockholders. Nothing contained in
this Section 9.02 shall relieve any party from liability for any willful breach
of this Agreement.
SECTION 10.03. AMENDMENT. This Agreement may be amended by the
parties hereto at any time before or after approval of the matters presented in
connection with the Merger by the stockholders of Newco or Worldlink, but, after
any such approval, no amendment shall be made which by applicable Law requires
further approval by such stockholders without such further approval. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto.
SECTION 10.04. EXTENSION; WAIVER. At any time prior to the Effective
Time, the parties hereto may, to the extent legally allowed, (i) extend the time
for the performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and (iii) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in a written instrument signed on behalf of such party.
ARTICLE XI
OTHER POST CLOSING COVENANTS.
SECTION 11.01. NONCOMPETITION.
(a) RESTRICTIVE COVENANTS. Each of Nort and Cho acknowledges
and agrees that ▇.▇▇▇ and Newco will suffer great loss and damage if the
Nort, Cho or any of their Affiliates should engage in any way in any
business operation which is the same as or similar to the business
operations conducted by Worldlink as of the Effective Time and that it may
be difficult or impossible to compute the amount of such loss or damages,
thereby potentially leaving ▇.▇▇▇ and Newco without adequate legal remedy
if the covenants of this Section 11.01 are breached. Each of Nort and Cho
acknowledges that the covenants and conditions of this Agreement are
reasonable and necessary for the protection of the business of ▇.▇▇▇, Newco
and Worldlink following the Effective Time. For the purposes hereof,
"SIMILAR" shall mean a business which is in active competition with a line
of business in which Worldlink is engaged at the Effective Time. In
recognition of the foregoing, Nort and Cho, individually and on behalf of
their Affiliates, agrees that for a period of one year such parties shall
not, directly or indirectly:
(i) be or become a joint venturer in or owner, in whole or
in part, of, or be a partner, participant, investor, or shareholder of
or be associated with, or have any proprietary or financial interest
in any Person which is engaged in or is carrying on the same or
similar business as that conducted by Worldlink within those
territories where Worldlink is conducting or is presently proposing to
conduct business as of the Effective Time;
(ii) in any way, directly or indirectly, for himself or on
behalf of or in conjunction with any other Person solicit, divert,
take away, or attempt to take away any of the customers of the
business or patronage of any customers of Worldlink; or
(iii) in any way, for himself or on behalf of or in
conjunction with any other Person, solicit, divert, take away or
attempt to take away any of the employees of Worldlink (PROVIDED that
neither shall not be deemed to have violated the prohibition of this
subsection if it employs a former employee of Worldlink and has not
contacted such former employee regarding employment until after such
former employee has left the employment of Worldlink); PROVIDED,
HOWEVER, that nothing herein contained shall be deemed to prevent or
limit any Person's right to invest, directly or indirectly, in the
securities or equity interests of any Person having competing business
if such Person owns not more than five percent (5%) of any class of
outstanding voting securities or not more than five percent (5%) of
the equity interest having management power of such Person.
(b) REFORMATION.
(i) In the event the covenants not to compete contained in
this Section shall be held by any court of competent jurisdiction to
be void or otherwise unenforceable in any manner, then the parties
hereto shall consider this Agreement to be amended and modified so as
to eliminate therefrom such particular provision, area or jurisdiction
as to which this Agreement is so held to be void or otherwise
unenforceable, and, as to all other areas or jurisdictions covered by
this Agreement, the terms and provisions hereof shall remain in full
force and effect as originally written.
(ii) In the event the covenants not to compete contained
herein should be held by any court or other authority to be effective
in a particular area or jurisdiction only if such covenants are
modified to limit their duration, area or scope, then the parties
hereto shall consider such noncompetition provisions to be so amended
and modified with respect to that particular area or jurisdiction so
as to comply with the order of any such court or other authority and,
as to all other states, countries, or political subdivisions, the
noncompetition covenants contained herein shall remain in full force
and effect as originally written.
(c) REMEDIES. In recognition of the irreparable harm that a
violation of any of the covenants of this Agreement (including without
limitation this Section) would cause ▇.▇▇▇ and Newco, each of Nort and Cho
agree that, in addition to any other relief afforded by law, an injunction
against such violation or violations may be issued against him and every
other Person concerned thereby, it being the understanding of the parties
that an injunction shall be the proper mode of relief.
SECTION 11.02. CERTAIN TAX MATTERS. ▇.▇▇▇ will prepare and file or
cause to be prepared and filed all Tax Returns for Worldlink that are required
to be filed with the appropriate Governmental Entities for all periods as to
which such Tax Returns are due after the Effective Time. Nothing in this
Section shall be interpreted to limit, reduce, expand or augment any of the
warranties or representations of Worldlink as to Taxes and Tax Returns. A
complete list of Tax Returns reasonably anticipated to be due by Worldlink
within 90 days after the Effective Time shall be provided by Worldlink to ▇.▇▇▇
at least 15 days prior to the Effective Time.
SECTION 11.03. COMPENSATION ARRANGEMENTS.
(a) COMPENSATION TO CHO. ▇.▇▇▇ and Cho shall negotiate in good
faith and, within a reasonable time after the Effective Time, enter into a
compensation agreement which is acceptable to such parties, providing for
adequate compensation to be paid to Cho by ▇.▇▇▇ (or Worldlink) in exchange
for the continuing services of Cho to ▇.▇▇▇ (or Worldlink); PROVIDED
HOWEVER, that ▇.▇▇▇ hereby covenants and agrees to pay $4,000 per month to
Cho as compensation from date of the Closing until the earlier of September
27, 1997 or the date on which ▇.▇▇▇ has declared effective a registration
statement or registration statements which register, in the aggregate, an
amount of ▇.▇▇▇ Stock owned by Cho equal to the amount of ▇.▇▇▇ Stock owned
by Cho at the Effective Time. Such $4,000 shall be offset against any
incentive compensation (and not base compensation) which is due to Cho
under such compensation agreements.
(b) COMPENSATION TO NORT. ▇.▇▇▇ and Nort shall negotiate in
good faith and, within a reasonable time after the Effective Time, enter
into a compensation agreement which is acceptable to such parties,
providing for adequate compensation to be paid to Nort by ▇.▇▇▇ (or
Worldlink) in exchange for the continuing services of Nort to ▇.▇▇▇ (or
Worldlink).
(c) TERMINATION WITHOUT CAUSE. ▇.▇▇▇ hereby covenants and
agrees that, if ▇.▇▇▇ or Worldlink terminates either Nort or Cho without
cause prior to September 27, 1997, such terminated party shall have the
right to demand that ▇.▇▇▇ repurchase all ▇.▇▇▇ Stock then owned by such
terminated party at a per share price equal to 75% of the average of the
closing bid and asked prices of the ▇.▇▇▇ Common Stock for the 10 trading
days next preceding the date of such termination.
ARTICLE XII
GENERAL PROVISIONS
SECTION 12.01. EFFECTIVENESS OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS. The representations, warranties and agreements of each party hereto
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any other party hereto, any person
controlling any such party or any of their officers or directors, whether prior
to or after the execution of this Agreement, for a period of one year.
SECTION 12.02. NOTICES. All notices and other communications given
or made pursuant hereto shall be in writing and shall be deemed to have been
duly given or made as of the date delivered, mailed or transmitted, and shall be
effective upon receipt, if delivered personally, mailed by registered or
certified mail (postage prepaid, return receipt requested) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like changes of address) or sent by electronic transmission to the telecopier
number specified below:
(a) If to Worldlink, Cho or Nort:
Worldlink Communications, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇ ▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
E. ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
-------------------------------
Attention:
Telecopier No.: (▇▇▇)▇▇▇-▇▇▇▇
(b) If to ▇.▇▇▇:
Charter Communications International, Inc.
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Chairman
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇, L.L.P.
3600 Two ▇▇▇▇▇ Center
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 12.03. CERTAIN DEFINITIONS. For purposes of this Agreement,
the term:
"AFFILIATES" or "AFFILIATES" shall have the meaning assigned to such
term under Rule 145 of the rules and regulations promulgated under the
Securities Act ("RULE 145")
"KNOWLEDGE" or "KNOWN" shall mean, with respect to any matter in
question, if an executive officer of ▇.▇▇▇, Newco or Worldlink, as the case may
be, has actual knowledge of such matter as of the date as of which such matter
is represented;
"PERSON" means an individual, corporation, limited liability company,
partnership, association, trust, unincorporated organization, other entity or
group (as defined in Section 13(d) of the Exchange Act);
"SUBSIDIARY" or "SUBSIDIARIES" of any person, means any corporation,
limited liability company, partnership, joint venture or other legal entity of
which such person, as the case may be (either alone or through or together with
any other subsidiary), owns, directly or indirectly, 50% or more of the capital
stock or other equity interests the holders of which are generally entitled to
vote for the election of the board of directors or other governing body of such
corporation or other legal entity;
"TAX" or "TAXES" shall mean any and all taxes, charges, fees or
levies, payable to any federal, state, local or foreign taxing authority or
agency, including, without limitation, (i) income, franchise, profits, gross
receipts, minimum, alternative minimum, estimated, AD VALOREM, value added,
sales, use, service, real or personal property, capital stock, license, payroll,
withholding, disability, employment, social security, workers compensation,
unemployment compensation, utility, severance, excise, stamp, windfall profits,
transfer and capital gains taxes, (ii) custom duties, imposts, charges, levies
or other similar assessments of any kind, and (iii) interest, penalties and
additions to tax imposed with respect thereto.
SECTION 12.04. HEADINGS. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 12.05. SEVERABILITY. If any term or other provision of this
Agreement is determined to be invalid, illegal or incapable of being enforced by
any rule of law or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated herein is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the extent possible.
SECTION 12.06. ENTIRE AGREEMENT. This Agreement (together with the
Annexes, Schedules and Exhibits hereto) constitutes the entire agreement of the
parties and supersedes all prior agreements and undertakings, both written and
oral, between the parties with respect to the subject matter hereof.
SECTION 12.07. ASSIGNMENT. This Agreement shall not be assigned by
operation of law or otherwise without the prior express written consent of the
other parties hereto.
SECTION 12.08. PARTIES IN INTEREST. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.
SECTION 12.09. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right. All rights and remedies
existing under this Agreement are in addition to, and not exclusive of, any
rights or remedies otherwise available.
SECTION 12.10. GOVERNING LAW. It is the intention of the parties
that the internal laws, and not the laws of conflicts, of the State of Texas
shall govern the enforceability and validity of this Agreement, the construction
of its terms and the interpretation of the rights and duties of the parties;
PROVIDED, HOWEVER, that with respect to matters of law concerning the internal
affairs of any entity that is a party to or the subject of this Agreement, the
law of the jurisdiction of organization of such entity shall govern.
SECTION 12.11. JURISDICTION. In the case of a claim brought by
Worldlink, each party hereby irrevocably submits to the exclusive jurisdiction
of the United States District Court for the Southern District of Texas or any
court of the State of Texas located in the City of Houston in any action, suit
or proceeding arising in connection with this Agreement or the transactions
contemplated herein, and agrees that any such action, suit or proceeding shall
be brought only in such court (and waives any objection based on forum non
conveniens or any other objection to venue therein); provided, however,that such
consent to jurisdiction is solely for the purpose referred to in this Section
12.11 and shall not be deemed to be a general submission to the jurisdiction of
said Courts or in the State of Texas other than for such purpose. In the case
of a claim brought by ▇.▇▇▇, each party hereby irrevocably submits to the
exclusive jurisdiction of the United States District Court for the Northern
District of Georgia, Atlanta Division, or any court of the State of Georgia
located in Dekalb County, Georgia in any action, suit or proceeding arising in
connection with this Agreement or the transactions contemplated herein, and
agrees that any such action, suit or proceeding shall be brought only in such
court (and waives any objection based on forum non conveniens or any other
objection to venue therein); provided, however,that such consent to jurisdiction
is solely for the purpose referred to in this Section 12.11 and shall not be
deemed to be a general submission to the jurisdiction of said Courts or in the
State of Georgia other than for such purpose. All parties hereby waive any
right to a trial by jury in connection with any such action, suit or proceeding;
provided, however, that matters to be resolved through arbitration as specified
herein shall be resolved only by such arbitration, and the final arbitration
award may thereafter be enforced as provided in this Section 12.11.
SECTION 12.12. COUNTERPARTS. This Agreement may be executed in one
or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, ▇.▇▇▇, Newco, Nort, Cho and Worldlink have caused
this Agreement to be executed as of the date first written above, in the case of
such corporations, by their respective officer thereunto duly authorized.
CHARTER COMMUNICATIONS INTERNATIONAL,
INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name:
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Title:
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WORLDLINK ACQUISITION CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name:
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Title:
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WORLD LINK COMMUNICATIONS, INC.
By: /s/ J. ▇▇▇▇ ▇▇▇▇
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Name: J. ▇▇▇▇ ▇▇▇▇
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Title: Chairman/Secretary
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J. ▇▇▇▇ ▇▇▇▇
/s/ J. ▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇ ▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇
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