AGREEMENT AND PLAN OF MERGER
by and among
WORLDPORT COMMUNICATIONS, INC.
a Delaware corporation,
WORLDPORT ACQUISITIONS, INC.
a Delaware corporation,
THE ▇▇▇▇▇▇▇ ▇▇▇▇ COMPANY
a Texas corporation ,
and
▇▇▇▇ ▇. ▇▇▇▇▇▇
an individual and sole shareholder of The ▇▇▇▇▇▇▇ ▇▇▇▇ Company
DATED: April 20, 1997
TABLE OF CONTENTS
1. THE MERGER......................................................................................1
(a) Merger........................................................................1
(b) Effective Time................................................................2
(c) Certificate of Incorporation and Bylaws; Directors and Officers of
Surviving Corporation.........................................................2
(d) Conversion of Securities......................................................2
(e) Cash and Note Payment.........................................................2
(f) Delivery of Certificates of WorldPort Common Stock Into Escrow and
Conditions of Distribution....................................................2
2. REPRESENTATIONS AND WARRANTIES OF THE WWC
SHAREHOLDER.....................................................................................4
(a) Ownership of Shares...........................................................4
(b) No Transfer of WorldPort Shares...............................................4
(c) No Transfer of WWC's Shares...................................................4
(d) Authority.....................................................................4
(e) Compliance with Law...........................................................4
(f) No Litigation.................................................................4
(g) Solvency......................................................................4
(h) No Material Misstatements.....................................................5
(i) Securities Laws of Compliance.................................................5
3. REPRESENTATIONS AND WARRANTIES OF WWC...........................................................6
(a) Capitalization................................................................6
(b) Organization..................................................................6
(c) Authority.....................................................................6
(d) Financial Statements..........................................................7
(e) Subsidiaries..................................................................7
(f) Legal Proceedings.............................................................7
(g) Tax Returns...................................................................7
(h) Assets........................................................................7
(i) Conduct of Business...........................................................8
(j) Accounts Receivable...........................................................8
(k) Contracts.....................................................................8
(l) Contracts under Negotiation...................................................9
(m) Employment and Other Contracts................................................9
(n) ERISA.........................................................................9
(o) Employee Matters..............................................................9
(p) Labor Practices..............................................................10
(q) Real Property Ownership and Lease Obligations................................10
(r) Investment Company Act; Etc..................................................10
(s) Title........................................................................11
(t) Ownership of Proprietary Rights..............................................11
(u) Plans........................................................................11
(v) Permits; Authorizations......................................................11
(w) Other Obligations............................................................12
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(x) Approvals....................................................................12
(y) Untrue Statements............................................................12
(z) Availability of Documents....................................................12
4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF ACQUISITIONS, INC...............................12
(a) Organization, Standing and Qualification.....................................13
(b) Authority....................................................................13
(c) Compliance with Law..........................................................13
5. REPRESENTATIONS, WARRANTIES AND AGREEMENTS
OF WORLDPORT...................................................................................13
(a) Capitalization...............................................................13
(b) Organization.................................................................13
(c) Authority....................................................................13
(d) Legal Proceedings............................................................14
(e) Tax Returns..................................................................14
(f) SEC Filings..................................................................14
(g) Assets.......................................................................14
(h) Conduct of Business..........................................................15
(i) Contracts....................................................................15
(j) Employment and Other Contracts...............................................15
(k) ERISA........................................................................16
(l) Labor Practices..............................................................16
(m) Real Property Ownership and Lease Obligations................................16
(n) Investment Company Act; Etc..................................................16
(o) Environmental Permits........................................................16
(p) Approvals....................................................................17
(q) Untrue Statements............................................................17
(r) Title........................................................................17
(s) Compliance with Law..........................................................17
(t) Capitalization of the WorldPort..............................................17
(u) Subsidiaries.................................................................17
(v) Plans........................................................................17
(w) Permits; Authorizations......................................................17
(x) Offering.....................................................................18
(y) Availability of Documents....................................................18
6. THE CLOSING....................................................................................18
(a) Closing......................................................................18
7. AGREEMENTS PENDING CLOSING.....................................................................18
(a) Agreements of The WWC Shareholder and WWC
Pending the Closing..........................................................18
(b) Agreements of WorldPort Pending the Closing..................................20
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8. CONDITIONS PRECEDENT TO THE CLOSING............................................................21
(a) Conditions Precedent to WorldPort's Obligations..............................21
(b) Conditions Precedent to the Obligations of WWC and
The WWC Shareholder..........................................................23
9. OTHER MATTERS..................................................................................24
(a) Piggyback and Demand Registration Rights.....................................25
(b) "Market Stand-Off" Agreement.................................................25
(c) Substitution of WorldPort Into Any WWC Agreement.............................25
10. INDEMNIFICATION................................................................................25
(a) General Indemnification Obligation of WWC and The
WWC Shareholder..............................................................25
(b) General Indemnification Obligation of WorldPort..............................26
(c) Limitation of Indemnity......................................................26
(d) Method of Asserting Claims, Etc..............................................27
(e) Payment......................................................................28
11. TERMINATION AND AMENDMENT......................................................................28
(a) Termination..................................................................28
(b) Waiver.......................................................................29
12. MISCELLANEOUS..................................................................................29
(a) Brokers......................................................................29
(b) Expenses.....................................................................29
(c) Survival.....................................................................29
(d) Severability.................................................................29
(e) Notices......................................................................29
(f) Entire Agreement.............................................................30
(g) Binding Effect...............................................................30
(h) Governing Law................................................................30
(i) Press Releases...............................................................30
(j) Assignment...................................................................31
(k) Disclosure Schedule..........................................................31
(l) Counterparts; Headings.......................................................31
(m) Dispute Resolution...........................................................31
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Agreement") is effective as of the
20th day of April, 1997, by and among WorldPort Communications, Inc., a Delaware
corporation ("WorldPort"), WorldPort Acquisitions, Inc., a Delaware corporation
and a wholly-owned subsidiary of WorldPort ("Acquisitions, Inc."), The ▇▇▇▇▇▇▇
▇▇▇▇ Company a Texas corporation ("WWC"), and the sole shareholder of WWC, ▇▇▇▇
▇. ▇▇▇▇▇▇ (the "WWC Shareholder").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of WorldPort, Acquisitions,
Inc. and WWC have approved and adopted this Agreement (or with respect to
Acquisitions, Inc., will have approved and adopted this Agreement prior to
Closing (as hereafter defined)) providing for the merger of WWC into
Acquisitions, Inc. (the "Merger"), upon the terms and subject to the conditions
set forth herein, whereby each issued and outstanding share of WWC Capital Stock
(the "WWC Shares") will be converted into shares of WorldPort Common Stock, par
value $.0001 per share, (the "WorldPort Common Stock");
WHEREAS, WWC is a telecommunications marketing and consulting firm
which produces and implements marketing strategies for clients ranging from
small companies to large corporate clients;
WHEREAS, the WWC Shareholder, as the sole shareholder of WWC, has
approved and adopted this Agreement;
WHEREAS, WorldPort, as the sole shareholder of Acquisitions, Inc., has
approved and adopted this Agreement;
WHEREAS, for income tax purposes, it is intended that the Merger shall
qualify as a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code");
WHEREAS, WorldPort, Acquisitions, Inc., WWC, and the WWC Shareholder
desire to make certain representations, warranties and agreements in connection
with the Merger and also to prescribe various conditions to the Merger;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, the parties agree
as follows:
1. THE MERGER.
(a) Merger. Upon the terms and subject to the conditions
hereof, and in accordance with the Delaware General Corporation Law
(the "Act"), WWC shall be merged with and into Acquisitions, Inc. at
the Effective Time (as defined below). Following the Merger, the
separate corporate existence of WWC shall cease and Acquisition, Inc.
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shall continue as the surviving corporation (the "Surviving
Corporation") and shall succeed to and assume all the rights and
obligations of WWC in accordance with the Act.
(b) Effective Time. The Merger shall become effective when (i)
the Certificate of Merger executed in accordance with the relevant
provisions of the Act, is filed with the Division of Corporation in the
Department of State of the State of Delaware and (ii) when the Articles
of Merger executed in accordance with the relevant provisions of the
Texas Business Corporation Act, are filed with the Secretary of State
of the State of Texas (the "Effective Time").
(c) Certificate of Incorporation and Bylaws; Directors and
Officers of Surviving Corporation.
(i) The Certificate of Incorporation and Bylaws of
Acquisitions, Inc., as in effect immediately prior to the
Effective Time, shall be the Certificate of Incorporation and
Bylaws of the Surviving Corporation until thereafter changed
or amended as provided therein or by applicable law.
(ii) The directors of Acquisitions, Inc. at the
Effective Time shall be the directors of the Surviving
Corporation and will hold office from the Effective Time until
their respective successors are duly elected or appointed and
qualified. The officers of Acquisitions, Inc. at the Effective
Time shall be the initial officers of the Surviving
Corporation.
(d) Conversion of Securities. As of the Effective Time, by
virtue of the Merger and without any action on the part of the WWC
Shareholder and subject to the provisions of Section 1(f) hereof, all
WWC Shares issued and outstanding immediately prior to the Effective
Time shall be converted into 1,400,000 shares of validly issued, fully
paid and nonassessable shares of WorldPort Common Stock. All WWC
Shares, when so converted, shall no longer be outstanding and shall
automatically be canceled and retired and each holder of a stock
certificate representing any WWC Shares shall cease to have any rights
with respect thereto, except the right to receive WorldPort Common
Stock and the Cash and Note Payment described below, and any cash,
without interest, in lieu of fractional shares to be issued or paid in
consideration therefor upon the surrender of such stock certificate.
(e) Cash and Note Payment. In addition to receipt of the
WorldPort Common Stock as described herein, the WWC Shareholder shall
also receive a cash payment in the total aggregate amount of TWO
HUNDRED FIFTY THOUSAND DOLLARS ($250,000) payable as follows: (i)
$75,000 to be delivered at Closing (as defined in Section 6) in the
form of a corporate check payable to the WWC Shareholder and (ii)
$175,000 pursuant to the terms of the promissory note (the "Note")
attached hereto as Exhibit B and incorporated herein by reference (the
"Cash and Note Payment").
(f) Delivery of Certificates of WorldPort Common Stock Into
Escrow and Conditions of Distribution. As soon as practicable after the
Effective Time, WorldPort shall prepare for the benefit of the WWC
Shareholder a certificate or certificates representing 1,400,000 shares
of WorldPort Common Stock. WorldPort shall deliver the 1,400,000 shares
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of WorldPort Common Stock to OTC Stock Transfer, Inc. as escrow agent
(the "Escrow Agent") at Closing, to be held in escrow and released to
the WWC Shareholder upon the occurrence of certain conditions and
performance objectives as set forth below and in the Escrow Agreement
attached hereto as Exhibit C and incorporated herein by reference (the
"Escrow Agreement"):
(i) WWC Financial Statements. As soon as practicable
after the Closing, but in any event not later than forty five
(45) days after the Closing, the WWC Shareholder will deliver
to WorldPort audited financial statements of WWC for the years
ending March 31, 1996 and 1997, together with the notes
thereto (the "WWC Financial Statements"), audited by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇"). Upon delivery to WorldPort
of the WWC Financial Statements the Escrow Agent shall deliver
to the WWC Shareholder a certificate or certificates
representing 500,000 shares of WorldPort Common Stock. In the
event the WWC Financial Statements are not delivered to
WorldPort within forty five (45) days after the Closing, the
Escrow Agent shall return 500,000 shares of the WorldPort
Common Stock to WorldPort for cancellation.
(1) Expenses. The fees and expenses of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ in connection with the audit of the
WWC Financial Statements shall be borne one-third
(1/3) by the WWC Shareholder and two-thirds (2/3)by
WorldPort.
(ii) Business Relationship Agreement. Upon delivery
to WorldPort of a binding, executed agreement establishing a
formal business relationship, acceptable to WorldPort, between
Acquisitions, Inc. (or WorldPort) and an international
telecommunications network operator that provides customers
with voice and data services such as managed data network
services, virtual private networks, electronic commerce,
transaction processing transmission, VSAT, X.25, and frame
delay ("Business Relationship Entity"), including, but not
limited to, those entities set forth in the disclosure
schedule attached as Exhibit E hereto (the "Disclosure
Schedule"), the Escrow Agent shall deliver to the WWC
Shareholder a certificate or certificates representing 700,000
shares of WorldPort Common Stock. In the event that WorldPort
does not enter into an acceptable business relationship with a
Business Relationship Entity by December 31, 1997, the Escrow
Agent shall return 700,000 shares of WorldPort Common Stock to
WorldPort for cancellation.
(iii) New Business Development. Upon delivery to
WorldPort of a binding executed agreement(s) establishing
formal business relationships, acceptable to WorldPort,
between Acquisitions, Inc. (or WorldPort) and one or more
debit card/pre- paid calling card distribution networks, or
one or more long distance carriers or resellers, that results
in commitments to WorldPort of (a) consolidated gross revenues
in excess of $700,000 per month or (b) gross margins of
$50,000 per month, the Escrow Agent shall deliver to the WWC
Shareholder a certificate or certificates representing 200,000
shares of WorldPort Common Stock. In the event a formal
business relationship which is approved and acceptable to
WorldPort's Board of Directors, with one or more debit
card/pre-paid calling card distribution networks, or one or
more long distance service carriers or resellers, as described
3
above is not entered into by December 31, 1997, the Escrow
Agent shall return 200,000 shares of WorldPort Common Stock
to WorldPort for cancellation.
2. REPRESENTATIONS AND WARRANTIES OF THE WWC SHAREHOLDER.
To induce WorldPort and Acquisitions, Inc. to enter into this Agreement, the WWC
Shareholder represents and warrants to WorldPort and Acquisitions, Inc. that the
following statements are true, correct and complete as of the date hereof, and
will be true, correct and complete as of the date of Closing.
(a) Ownership of Shares. The WWC Shareholder owns,
beneficially and of record, the one hundred percent (100%) of WWC
Shares, free and clear of any lien, security interest, pledge, claim,
demand or encumbrance or restriction of any kind or character
whatsoever, and the Shares represent all the issued and outstanding
shares of capital stock and equity securities of WWC. All such Shares
are duly authorized, validly issued, fully paid and nonassessable and
have, all the rights, privileges and preferences ordinarily accorded to
capital stock or equity securities.
(b) No Transfer of WorldPort Shares. The WWC Shareholder
represents and warrants that he has no present plan, intention or
arrangement to sell, transfer or otherwise dispose of any shares of
WorldPort Common Stock to be received in the Merger.
(c) No Transfer of WWC's Shares. The WWC Shareholder agrees
that prior to the Effective Time of the Merger, he will not sell,
transfer or otherwise dispose of any WWC Common Stock.
(d) Authority. The WWC Shareholder now has and will have, at
the Closing, full power, authority and legal right to enter into this
Agreement. This Agreement is the valid and binding obligation of the
WWC Shareholder.
(e) Compliance with Law. To the best knowledge of the WWC
Shareholder, the consummation of the transactions contemplated hereby
will be in compliance with all applicable laws, rules, regulations and
requirements of all Federal, state and local governmental authorities
without the necessity for any license or permit or other action or
permission in the nature thereof, or any registration with, or consent
of, any such governmental authority.
(f) No Litigation. There are no suits or proceedings at law or
in equity, or before or by any governmental agency or arbitrator,
pending, or to the best knowledge of the WWC Shareholder, threatened,
anticipated or contemplated, which in any way affect the consummation
of the transaction contemplated hereby or, if valid, would constitute
or result in a breach of any representation, warranty or Agreement set
forth herein.
(g) Solvency. The WWC Shareholder is not bankrupt nor
insolvent nor has the WWC shareholder assigned its estate for the
benefit of creditors, entered into any scheme or arrangement with
creditors, nor has any present intention to file a petition in
bankruptcy, assign its estate for the benefit of creditors, or enter
into any scheme or arrangement with creditors. The WWC Shareholder has
no knowledge of any basis for the filing by any other person of an
involuntary petition in bankruptcy with respect to any WWC Shareholder
or WWC.
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(h) No Material Misstatements. The WWC Shareholder has not
made any material misstatement of fact or omitted to state any material
fact necessary or desirable to make complete, accurate and not
misleading every representation, warranty and Agreement set forth
herein.
(i) Securities Laws of Compliance. The WWC Shareholder:
(i) Has been represented by such legal and tax
counsel and others, each of whom has been personally selected
by such WWC Shareholder, as the WWC Shareholder has found
necessary to consult concerning this transaction, and such
representation has included an examination of applicable
documents, and an analysis of all tax, financial, and
securities law aspects. The WWC Shareholder, his/her counsel
and advisors, and such other persons with whom the WWC
Shareholder has found it necessary to consult, have sufficient
knowledge and experience in business and financial matters to
evaluate the above information, and the merits and risks of
the share exchange contemplated by this Agreement, and to make
an informed investment decision with respect thereto;
(ii) WorldPort has made available to the WWC
Shareholder, his/her counsel and advisors, prior to the date
hereof, the opportunity to ask questions of, and to receive
answers from, WorldPort and its representatives, concerning
the terms and conditions of the Merger and access to obtain
any information, documents, financial statements, records and
books (A) relative to WorldPort, the business and an
investment in WorldPort, and (B) necessary to verify the
accuracy of any information furnished to the WWC Shareholder.
All materials and information requested by the WWC
Shareholder, his/her counsel and advisors, or others
representing the WWC Shareholder, including any information
requested to verify any information furnished to the WWC
Shareholder, have been made available and examined.
(iii) The WWC Shareholder is acquiring the WorldPort
Common Stock for his own account and not as a fiduciary for
any other person and for investment purposes only and not with
a view to or for the transfer, assignment, resale, or
distribution thereof, in whole or in part. The WWC Shareholder
understands the meaning and legal consequences of the
foregoing representations and warranties. The WWC Shareholder
is not an "underwriter" of the securities, as that term is
defined in Section 2(11) of the Securities Act of 1933
("Securities Act"), and the WWC Shareholder will not take or
cause to be taken any action that would cause either the WWC
Shareholder or WorldPort to be deemed an "underwriter" of the
securities.
(iv) The WWC Shareholder understands that the
WorldPort Common Stock has not been registered under the
Securities Act nor pursuant to the provisions of the
securities or other laws of any applicable jurisdictions. The
WWC Shareholder further understands that the WorldPort Common
Stock cannot be sold, assigned, pledged, transformed or
otherwise disposed of until such shares are registered or an
exemption from registration is available.
5
3. REPRESENTATIONS AND WARRANTIES OF WWC. To further induce WorldPort
and Acquisitions, Inc. to enter into this Agreement, WWC and the WWC Shareholder
jointly and severally represent and warrant the following statements concerning
the affairs of WWC are true, correct and complete as of the date hereof, and
will be true, correct and complete as of the date of Closing.
(a) Capitalization. The WWC Capital Stock is duly authorized,
validly issued and fully paid and nonassessable. The WWC Capital Stock
was issued in compliance with all state and federal laws, including all
securities laws. There are no outstanding subscriptions, warrants,
options, preemptive rights, or other agreements or rights of any kind
to purchase or otherwise receive or be issued, or securities or
obligations of any kind convertible into, any shares of capital stock
of WWC.
(b) Organization. WWC is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas, and
has full power and authority, corporate and otherwise, to carry on its
business as it is now being conducted and to own, or hold under lease,
and use its properties and assets in the manner in which and in the
places where such properties and assets are now owned or held and used,
and is qualified to do business and is in good standing in each other
jurisdiction where the nature or character of its business so requires
such qualification. WWC has delivered to WorldPort true copies of its
Articles of Incorporation and Bylaws, as are in full force and effect
as of the date of this Agreement.
(c) Authority. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been
duly authorized by the Board of Directors of WWC and by the WWC
Shareholder. WWC has the corporate power and authority, to execute and
deliver this Agreement and, at Closing, will have the corporate power
and authority, and all requisite authority, respectively, to consummate
the transactions and perform the obligations contemplated hereby. This
Agreement constitutes the valid and binding obligation of WWC and is
enforceable against WWC in accordance with its terms. All persons who
have executed or will execute this Agreement on behalf of WWC have been
duly authorized to do so by all necessary corporate or other action.
Neither the execution and delivery of this Agreement by WWC nor the
consummation of the transactions contemplated by this Agreement, will,
with or without the giving of notice or the passage of time, or both,
violate, conflict with, result in the breach or termination of, or
constitute a default under (by WWC or any other entity by way of
substitution, novation or otherwise), or result in the acceleration of,
or entitle any party to terminate, any Agreement or instrument to which
WWC is a party or by which any of its property or business may be
bound, or accelerate any obligation under, or confer upon any other
person any interest or right (including any right of termination or
cancellation) in or with respect to any part of the property of WWC,
pursuant to (i) any provision of the Articles of Incorporation or
Bylaws of WWC, (ii) any provision of any judgment, order, injunction,
decree or award against or binding upon WWC or upon the securities,
property or business of WWC, (iii) any provision of any mortgage, lien,
lease, Agreement, license, contract, understanding, permit, instrument,
order, writ, award, judgment or decree to which WWC is a party or by
which it is bound or to which its properties or business are subject,
or (iv) any federal, state or local law, statute, ordinance, rule or
regulation of any jurisdiction applicable to WWC or to the securities,
property or business of WWC.
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(d) Financial Statements. WWC shall provide to WorldPort true
and correct copies of WWC's audited financial statements for the
periods ending March 31, 1996 and 1997 (the "WWC Financial Statements")
on or before forty-five (45) days after Closing. The WWC Financial
Statements shall fairly present WWC's financial condition and the
results of its operations on a consolidated basis at the relevant dates
thereof and for the periods covered thereby, and shall be prepared in
accordance with generally accepted accounting principles, consistently
applied.
(e) Subsidiaries. WWC has no subsidiaries.
(f) Legal Proceedings. Except as set forth in the disclosure
schedule, attached as Exhibit E hereto (the "Disclosure Schedule"),
there are no Legal Proceedings (defined below) pending or, to the
knowledge of WWC's directors or officers, threatened, nor, to the
knowledge of WWC's directors or officers, is there any basis for any
claim, cause of action or regulatory initiative which would give rise
to any contingent liability. To the knowledge of the directors and
officers of WWC, WWC has been and is operating its business in all
material respects in conformity with applicable laws, ordinances and
regulations to which WWC is subject. No notice of violations against or
affecting WWC's business has been received by WWC from any department
or agency of any federal, state or local government. Since its
organization, WWC has not been charged in any proceeding to which it
has been named as a party and served with process with any violation of
any existing statute, law, ordinance, rule, regulation, policy,
guideline, judgment, order or decree; and compliance with existing
statutes, laws, ordinances, rules, regulations, policies, guidelines,
judgments, orders or decrees in effect as of the date of this Agreement
has not had a material adverse effect on the business and operations of
WWC. For purposes of this Agreement, "Legal Proceedings" means all
suits, actions, administrative, arbitration, regulatory or other
similar proceedings (including proceedings concerning health or safety
violations, labor disputes or grievances, civil rights discrimination
cases and affirmative action proceedings) and all governmental
investigations or audits pending or, to the knowledge of a party,
threatened, and each judgment, order, injunction, decree or award
(whether rendered by a court, administrative agency, or by arbitration
pursuant to a grievance or other procedure) to which a party or by
which its properties or business are bound, which is unsatisfied or
requires continuing compliance therewith.
(g) Tax Returns. WWC has timely and correctly filed all
federal, state and local tax returns, whether relating to income,
sales, franchise, real or personal property or other types of taxes,
which have been required to be filed, and has paid all taxes as shown
on such returns and all assessments received by WWC to the extent such
assessments have become due.
(h) Assets. WWC owns, possesses and controls and has good and
marketable title to all of its assets, free and clear of any mortgage,
lien, claim, defect, charge, encumbrance and right of third parties.
Such assets are in good operating condition and repair, ordinary wear
and tear excepted, and conform to applicable ordinances, regulations,
building, zoning and other laws and directives.
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(i) Conduct of Business. Since March 31, 1997, WWC has
conducted its business in the ordinary course, consistent with past
practices, and has not (i) experienced any material adverse change in
its business, property, financial condition, net worth, or results of
operation or prospects, (ii) amended its Articles of Incorporation or
Bylaws, (iii) issued, transferred, sold or contracted to sell any WWC
Capital Stock or any bonds, warrants, options or other corporate
securities or obligations convertible into WWC Capital Stock, (iv)
declared or made any payment or distribution to its shareholders
(except for the payment of salaries at then existing rates and the
reimbursement of reasonable expenses to any of its shareholders), (v)
purchased options or purchased or redeemed any WWC Capital Stock, (vi)
incurred any obligation or liability, absolute or contingent, except
obligations and liabilities incurred in the ordinary course of the
operation of its business, (vii) cancelled, without payment in full,
any notes, loans or other obligations receivable from any officer,
director or shareholder or any member of the families of any officer,
director or shareholder, or from any corporation, partnership, or other
entity in which any officer, director or shareholder, or any member of
their families then had any direct or indirect interest, (viii)
mortgaged, pledged or subjected to lien any of its assets, (ix) sold,
assigned, or transferred any of its assets, or cancelled any debts or
claims held by it, except for fair market value in the ordinary course
of its business as carried on, at and prior to March 31, 1997, (x)
sold, assigned, transferred, mortgaged, pledged or subjected to lien or
permitted to lapse copyrights, trademarks, trade names, patents,
licenses or other intangible assets or rights to use such intangible
assets, (xi) increased the compensation payable, or to become payable
to its officers, directors or shareholders, or employees (the term
"compensation" to include salaries, bonuses, fringe benefits, pensions,
profit participations and payments or benefits of any kind whatsoever),
(xii) to the knowledge of its directors and officers, performed any act
which will make it liable for, or incurred any liability for, direct or
consequential damages not fully covered by insurance, or (xiii) made
any change in its method of accounting or accounting practices.
(j) Accounts Receivable. The accounts and notes receivable
shown in the WWC Financial Statements and all accounts and notes
receivable thereafter acquired by WWC prior to the Closing have been
collected or are reasonably expected to be collectible in the full
amounts therefor.
(k) Contracts. Except as set forth on the Disclosure Schedule,
WWC has no material obligation, contract, Agreement, lease, sublease,
commitment or understanding of any kind, nature or description, oral or
written, fixed or contingent, due or to become due, existing or
inchoate which involves an obligation in excess of $1,000 (the
"Material Contracts"). All Material Contracts set forth on the
Disclosure Schedule are, in full force and effect and are valid,
binding and enforceable in accordance with their respective terms; all
parties to such Material Contracts have complied in all material
respects with the provisions thereof; no such party is to the best of
WWC's or the WWC Shareholder's knowledge, in default in any respect
under any term thereof and to the best of WWC's and the WWC
Shareholder's knowledge, no event has occurred that with the passage of
time and/or giving of notice would constitute a material default by any
party under any provision thereof. No consent, approval or
authorization of any third party is required in connection with the
consummation of the transactions contemplated hereunder.
8
(l) Contracts under Negotiation. WWC has developed certain
business relationships with (i) an international telecommunications
network operator that provides customers with voice and data services
such as managed data network services, virtual private networks,
electronic commerce, transaction processing transmission, VSAT, X.25,
and frame delay, including, but not limited to, those entities set
forth on Disclosure Schedule 1(f)(ii), and (ii) one or more debit
card/pre-paid calling card distribution networks, long distance
carriers or resellers, which will result in significant business
opportunities for Acquisitions, Inc. and/or WorldPort, including
favorable access to a global telecommunications network with
transmission facilities in over 200 countries worldwide.
(m) Employment and Other Contracts. Except as set forth on the
Disclosure Schedule, WWC is not, directly or indirectly, a party to any
written or oral (i) employment contract with any directors, officers or
employees having a term expiring after the Closing, (ii) sales
representation, agency or distribution contract or Agreement, (iii)
expense reimbursement plan or arrangement which will result in unpaid
obligations of WWC after the Closing, (iv) management, employment,
consulting, agency or other Agreement for personal services to be
rendered by any person (including, but not limited to, any investment
advisor, distributor, sales representative or agency, or advertiser),
or (v) contract with any shareholder or any person affiliated with any
shareholder.
(n) ERISA. WWC has not had since its organization, and
will not have at any time between the date of this Agreement and the
Closing, any ERISA Plan or Multi-Employer Plan.
(o) Employee Matters. Except as set forth on the
Disclosure Schedule, or as otherwise provided in this Agreement:
(i) All legally enforceable obligations of WWC,
whether arising by operation of law, contract, Agreement or
otherwise, for salaries, wages, vacation and holiday pay, sick
pay, incentive compensation, deferred compensation, sales
compensation and bonuses or other forms of compensation or
benefits which are, or may become, payable to its current or
former employees, directors, officers, agents or any other
individual (or any of their respective dependents, heirs,
legatees, beneficiaries or legal representatives) with respect
to periods ending on or before the Closing, have been paid, if
due, or adequate accruals, if accruals are required, in
accordance with generally accepted accounting principles, for
such payments will be made prior to the Closing.
(ii) WWC does not have any plan, program,
arrangement, Agreement or obligation to provide benefits in
the form of bonus, incentive, deferred compensation, dental,
stock options, medical, disability, hospitalization,
insurance, death benefits or any other employee benefits of
any kind whatsoever, which requires WWC to provide benefits to
its employees, directors, officers, agents or any other
individuals (or any of their respective dependents, heirs,
legatees, beneficiaries or legal representatives).
(iii) WWC has complied, and through the Closing will
continue to comply, with the provisions of the Consolidated
9
Omnibus Reconciliation Act of 1985, as amended ("COBRA"),
relating to the continuation of insurance coverage for former
employees and their dependents.
(iv) WWC has complied with all material requirements
of the Code, ERISA and other applicable federal and state
laws, and the regulations promulgated thereunder, which relate
to any employees, former employees or beneficiaries of such
employees, or to any salary, bonus, incentive compensation,
deferred compensation, sales compensation, ERISA Plans or
other employee benefit plan or similar arrangement binding
upon WWC (whether or not existing on the date hereof or at the
Closing).
(v) WWC has no policies, plans or agreements with
respect to payments of severance pay to employees which could
require any payments or severance pay to any employees
terminated subsequent to the Closing. No employee terminated
by WWC on or prior to the Closing has or will have any right
to severance pay.
(vi) Neither the execution or delivery of this
Agreement, nor the consummation of the transactions
contemplated hereby, will (1) result in any payment, including
severance, unemployment compensation, golden parachute or
otherwise, becoming due under any employee benefit plan or
otherwise, (2) increase any benefits otherwise payable under
any such employee benefit plan, or (3) result in the
acceleration of the time of payment or vesting of any benefits
thereunder.
(p) Labor Practices. WWC is not a party to any collective
bargaining Agreement, and no union or group is seeking to become the
collective bargaining representative for any unit of the employees of
WWC. There are no pending (i) unfair labor practice complaints against,
(ii) arbitration proceedings or grievances involving, (iii) OSHA
citations, wage and hour complaints or EEO charges against, (iv) NIOSH
health hazard evaluation determinations against, or (v) findings of
noncompliance with respect to affirmative action requirements against
WWC, and there is no pending labor strike nor, to the knowledge of the
Directors and officers of WWC, has any such complaint, proceeding,
citation, charge, determination, finding or strike been threatened. WWC
has not experienced any material strike or work stoppage during the
three years prior to the date hereof. WWC is not engaged in any unfair
labor practices.
(q) Real Property Ownership and Lease Obligations. Except as
set forth in the Disclosure Schedule, WWC does not, as of the date of
this Agreement, and will not, between the date hereof and the Closing,
own any real estate interests or leasehold interests. All leases to
which WWC is a party are valid and in full force and effect, all rental
and other payments under such leases have been paid when due, and there
exists no default, or event which with the passage of time or notice or
both would constitute a default, under any such lease. The transaction
contemplated by this Agreement will not cause any of the leases to
terminate.
(r) Investment Company Act; Etc. WWC is not (i) an
"investment company" or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as
amended, (ii) a "holding company" or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a
10
"subsidiary company" of a "holding company," as such terms are defined
in the Public Utility Holding Company Act of 1935, as amended, or (iii)
a "public utility," as such term is defined in the Federal Power Act,
as amended.
(s) Title. Upon delivery of the WWC Capital Stock, WorldPort
will have good and marketable title thereto, free and clear of all
liens, encumbrances, preemptive rights, and other restrictions
whatsoever;
(t) Ownership of Proprietary Rights. WWC owns or has the right
to use all patents, trademarks, service marks, trade names, trade
secrets, business names, other source or business identifiers,
copyrights, designs, and other intellectual property; and all
proprietary techniques, processes, methods of production and
commercialization, specifications and know-how; and all licenses,
rights and rights of way, whether from private or governmental sources
(collectively "proprietary rights") pertaining to or useful in relation
to its business as now conducted or proposed to be conducted as
contemplated by WorldPort. No director, officer, shareholder, or key
employee has an interest, whether direct or indirect, in any business
which is a competitor of WWC;
(u) Plans. The Disclosure Schedule sets forth a true and
complete list of (1) each employment, profit sharing, deferred
compensation, bonus, stock option, stock purchase, pension, retainer,
consulting, retirement, health, welfare, or incentive plan or contract
to which WWC is a party; and (2) each plan or Agreement under which
"fringe benefits" (including, but not limited to, vacation plans or
programs, sick leave plans or programs, dental or medical plans or
programs, severance plans or programs and related or similar benefits)
are afforded to employees of WWC. WWC is not in default with respect to
any material term of any such Agreement, plan, program or contract;
(v) Permits; Authorizations. WWC has all permits, licenses and
other authorizations necessary to the conduct of its business, and no
permits, licenses or other authorizations have been, or are required to
be, obtained or maintained, or will be required to be obtained or
maintained upon consummation of the transactions contemplated hereby,
and no governmental authority or agency with jurisdiction over WWC has
asserted or, to the best of the WWC Shareholder's and WWC's knowledge,
is likely to assert that any permits, licenses or other authorizations
have been, or are required to be, obtained or maintained by WWC, or
will be required to be obtained or maintained upon consummation of the
transactions contemplated hereby, other than those which WWC has
already obtained, with respect to the operation of WWC's business under
any law or any regulations in effect on the date hereof, including, but
not limited to, laws relating to pollution or protection of the
environment, including laws relating to emissions, discharges, releases
or threatened releases of pollutants, contaminants, chemicals, or
industrial or hazardous substances or wastes into the environment
(including, without limitation, ambient air, surface water, ground
water, land surfaces or subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, chemicals
or industrial toxic or hazardous substances or wastes (collectively,
the "Environmental Laws"). Except as noted in the Disclosure Schedule,
to the best of the WWC Shareholder's and WWC's knowledge, WWC is in
substantial compliance, and upon consummation of the transactions
contemplated hereby will continue in substantial compliance, with all
material limitations,
11
restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in all laws applicable
to WWC (including all Environmental Laws) or contained in any
regulation, code, plan, order, decree, judgment, injunction, notice or
demand letter issued, entered, promulgated or approved thereunder,
unless the failure to so comply would not have a material and adverse
effect on the business of WWC. No events, conditions, activities,
practices, incidents, actions or plans of action taken or to be taken
by WWC or, to the best of the WWC Shareholder's and WWC's knowledge,
any predecessor in interest, are reasonably likely to interfere with or
prevent substantial compliance or continued compliance with, to the
extent any are applicable, all laws (including the Environmental Laws)
or with any regulation, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered, promulgated or
approved thereunder;
(w) Other Obligations. Except as and to the extent
specifically reflected or reserved against in the WWC Financial
Statements, and non-material items arising in the ordinary course of
business thereafter, WWC has no liabilities or obligations, whether
absolute, accrued, contingent or otherwise, whether due or to become
due (including, without limitation, any liability for taxes), which are
individually or in the aggregate, material to the WWC Shareholder's
condition (financial or otherwise) or the prospects of its business;
(x) Approvals. Except as set forth in this Agreement and
except as to matters for which WWC is responsible hereunder, to the
knowledge of WWC's directors and officers, no authorization, consent,
order, permit or approval of, or filing with, any federal, state, local
or foreign government or governmental agency or any other authority,
private person or entity, is necessary for the consummation by WWC of
the transactions contemplated by this Agreement.
(y) Untrue Statements. The representations or warranties of
WWC contained in this Agreement or any written certificate furnished to
WorldPort by or on behalf of WWC in connection herewith or in
connection with the transactions contemplated herein do not contain and
will not contain any untrue statement of a material fact and do not
omit and will not omit to state any material fact required to be stated
herein or therein or otherwise necessary to make the statements
contained herein or therein not false or misleading. All of the
representations and warranties made by WWC in this Agreement shall be
true and correct on the Closing with the same effect as if they had
been made on the Closing.
(z) Availability of Documents. The WWC Shareholder and WWC
have made available to WorldPort copies of all documents, including
without limitation all agreements, contracts, commitments, insurance
policies, leases, plans, instruments, undertakings, authorizations,
permits, licenses, rights of way, patents, trademarks, tradenames,
service marks, copyrights and applications therefor, referred to
herein. Such copies are true and complete and include all amendments,
supplements and modifications thereto or waivers currently in effect
thereunder.
4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF
ACQUISITIONS, INC. To induce WWC and the WWC Shareholder to enter into this
Agreement, Acquisitions, Inc. represents and warrants that the following
statements will be true, correct and complete as of the day of Closing:
12
(a) Organization, Standing and Qualification. As of Closing,
Acquisitions, Inc. shall be duly organized and validly existing and in
good standing under the laws of the State of Delaware, and shall be
authorized and qualified to own and operate its properties and assets
and conduct its business in all jurisdictions where such properties and
assets are owned and operated and such business conducted.
(b) Authority. As of Closing, Acquisitions, Inc. shall
have the full right, power and authority to execute, deliver and
perform the terms of this Agreement. This Agreement shall have been
duly authorized by Acquisitions, Inc. and constitutes a binding
obligation of Acquisitions, Inc., enforceable in accordance with its
terms.
(c) Compliance with Law. Neither the execution and delivery of
this Agreement nor consummation of the transactions contemplated hereby
will conflict with or result in a breach of or constitute a default
under any provision of Acquisitions, Inc.'s Certificate of
Incorporation or Bylaws or any indenture, loan Agreement or other
material obligation or liability to which it is a party or by which it
is bound.
5. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF
WORLDPORT. To induce WWC and the WWC Shareholder to enter into this Agreement,
WorldPort represents and warrants that the following statements are true,
correct and complete as of the date hereof, and will be true, correct and
complete as of the date of Closing:
(a) Capitalization. The WorldPort Capital Stock is duly
authorized, validly issued and fully paid and nonassessable. The
WorldPort Capital Stock was issued in compliance with all state and
federal laws, including all securities laws. Except as is set forth in
the Disclosure Schedule, there are no outstanding subscriptions,
warrants, options, preemptive rights, or other agreements or rights of
any kind to purchase or otherwise receive or be issued, or securities
or obligations of any kind convertible into, any shares of capital
stock of WorldPort.
(b) Organization. WorldPort is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware, has full power and authority, corporate and otherwise, to
carry on its business as presently conducted and to own, or hold under
lease, and use its properties and assets in the manner in which and in
the places where such properties and assets are now owned or held and
used. WorldPort is duly qualified to do business and is in good
standing in each other jurisdiction in which it is required to qualify,
except where the failure to so qualify would not have a material
adverse effect on WorldPort's business. WorldPort has delivered to WWC
true copies of its Certificate of Incorporation and Bylaws, as are in
full force and effect as of the date of this Agreement.
(c) Authority. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been
duly authorized by the Board of Directors of WorldPort. WorldPort has
the corporate power and authority to execute and deliver this Agreement
and, at the Closing will have the corporate power and authority to
consummate the transactions and perform the obligations contemplated
hereby. This Agreement constitutes the valid and binding obligation of
WorldPort enforceable against WorldPort in accordance with its terms.
All persons who have executed or will execute this Agreement on behalf
of WorldPort have been duly authorized to do so by all necessary
13
corporate action of WorldPort. Neither the execution and delivery of
this Agreement by WorldPort, nor the consummation of the transactions
contemplated by this Agreement, will, with or without the giving of
notice or the passage of time, or both, violate, conflict with, result
in the breach or termination of, or constitute a default under (by
WorldPort or any other entity by way of substitution, novation or
otherwise), or result in the acceleration of, or entitle any party to
terminate, any Agreement or instrument to which WorldPort is a party or
by which any of its property or business may be bound, or accelerate
any obligation under, or confer upon any other person any interest or
right (including any right of termination or cancellation) in or with
respect to any part of the property of WorldPort, pursuant to (i) any
provision of the Certificate of Incorporation or Bylaws of WorldPort,
(ii) any provision of any judgment, order, injunction, decree or award
against or binding upon WorldPort or upon the securities, property or
business of WorldPort, (iii) any provision of any mortgage, lien,
lease, Agreement, license, contract, understanding, permit, instrument,
order, writ, award, judgment or decree to which WorldPort is a party or
by which it is bound or to which its properties or business are
subject, or (iv) any federal, state or local law, statute, ordinance,
rule or regulation of any jurisdiction applicable to WorldPort or to
the securities, property or business of WorldPort.
(d) Legal Proceedings. Except as set forth in the Disclosure
Schedule, there are no Legal Proceedings pending or, to the knowledge
of WorldPort's directors or officers, threatened, nor, to the knowledge
of WorldPort's directors or officers, is there any basis for any claim,
cause of action or regulatory initiative which would give rise to any
contingent liability. To the knowledge of the directors and officers of
WorldPort, WorldPort has been and is operating its business in all
material respects in conformity with applicable laws, ordinances and
regulations to which WorldPort is subject. No notice of violations
against or affecting WorldPort's business has been received by
WorldPort from any department or agency of any federal, state or local
government. Since its organization, WorldPort has not been charged in
any proceeding to which it has been named as a party and served with
process with any violation of any existing statute, law, ordinance,
rule, regulation, policy, guideline, judgment, order or decree; and
compliance with existing statutes, laws, ordinances, rules,
regulations, policies, guidelines, judgments, orders or decrees in
effect as of the date of this Agreement has not had a material adverse
effect on the business and operations of WorldPort.
(e) Tax Returns. WorldPort has timely and correctly filed all
federal, state and local tax returns, whether relating to income,
sales, franchise, real or personal property or other types of taxes,
which have been required to be filed, and has paid all taxes as shown
on such returns and all assessments received by WorldPort to the extent
such assessments have become due.
(f) SEC Filings. In the last twelve (12) months, WorldPort has
filed all reports required to be filed pursuant to the Securities Act
of 1933 and the Securities Exchange Act of 1934, and the rules and
regulations promulgated thereunder.
(g) Assets. WorldPort owns, possesses and controls and has
good and marketable title to all of its assets, free and clear of any
mortgage, lien, claim, defect, charge, encumbrance and right of third
parties. Such assets are in good operating condition and repair,
ordinary wear and tear excepted, and conform to applicable ordinances,
regulations, building, zoning and other laws and directives.
14
(h) Conduct of Business. Except as set forth in the Disclosure
Schedule, since March 31, 1997, or as otherwise disclosed in any of the
Company's filings with the Securities and Exchange Commission,
WorldPort has conducted its business in the ordinary course and has not
(i) experienced any material adverse change in its business, property,
financial condition, net worth, or results of operation or prospects,
(ii) amended its Certificate of Incorporation or Bylaws, (iii) except
for a contemplated private placement offering of up to $5,000,000 under
Regulation D of 1,666,667 shares of Series A Preferred Stock at $3.00
per share, issued, transferred, sold or contracted to sell any of
WorldPort's Capital Stock or any bonds, warrants, options or other
corporate securities or obligations convertible into WorldPort's
Capital Stock, (iv) declared or made any payment or distribution to its
shareholders (except for the payment of salaries at then existing rates
and the reimbursement of reasonable expenses to any of its
shareholders), (v) purchased options or purchased or redeemed any
WorldPort's Capital Stock, (vi) incurred any obligation or liability,
absolute or contingent, except obligations and liabilities incurred in
the ordinary course of the operation of its business, (vii) cancelled,
without payment in full, any notes, loans or other obligations
receivable from any officer, director or shareholder or any member of
the families of any officer, director or shareholder, or from any
corporation, partnership, or other entity in which any officer,
director or shareholder, or any member of their families then had any
direct or indirect interest, (viii) mortgaged, pledged or subjected to
lien any of its assets, (ix) sold, assigned, or transferred any of its
assets, or cancelled any debts or claims held by it, except for fair
market value in the ordinary course of its business as carried on, at
and prior to March 31, 1997, (x) sold, assigned, transferred,
mortgaged, pledged or subjected to lien or permitted to lapse
copyrights, trademarks, trade names, patents, licenses or other
intangible assets or rights to use such intangible assets, (xi)
increased the compensation payable, or to become payable to its
officers, directors or shareholders, or employees (the term
"compensation" to include salaries, bonuses, fringe benefits, pensions,
profit participations and payments or benefits of any kind whatsoever),
(xii) to the knowledge of its directors and officers, performed any act
which will make it liable for, or incurred any liability for, direct or
consequential damages not fully covered by insurance, or (xiii) made
any change in its method of accounting or accounting practices.
(i) Contracts. Except as set forth on the Disclosure Schedule,
WorldPort does not have any material obligation, contract, Agreement,
lease, sublease, commitment or understanding of any kind, nature or
description, oral or written, fixed or contingent, due or to become
due, existing or inchoate which involves an obligation in excess of
$25,000. All Material Contracts set forth on the Disclosure Schedule
are, in full force and effect and are valid, binding and enforceable in
accordance with their respective terms; all parties to such Material
Contracts have complied in all material respects with the provisions
thereof; no such party is to the best of WorldPort's knowledge, in
default in any respect under any term thereof and to the best of
WorldPort's knowledge, no event has occurred that with the passage of
time and/or giving of notice would constitute a material default by any
party under any provision thereof. No consent, approval or
authorization of any third party is required in connection with the
consummation of the transactions contemplated hereunder.
(j) Employment and Other Contracts. Except as set forth in
the Disclosure Schedule, WorldPort is not, directly or indirectly, a
party to any written or oral ( i ) employment
15
contract with any directors, officers or employees having a term
expiring after the Closing, (ii) sales representation, agency or
distribution contract or Agreement, (iii) expense reimbursement plan or
arrangement which will result in unpaid obligations of WorldPort after
the Closing, (iv) management, employment, consulting, agency or other
Agreement for personal services to be rendered by any person
(including, but not limited to, any investment advisor, distributor,
sales representative or agency, or advertiser), or (v) contract with
any shareholder or any person affiliated with any shareholder.
(k) ERISA. Except as set forth in the Disclosure Schedule,
WorldPort has not had since its organization, and will not have at any
time between the date of this Agreement and the Closing, any ERISA Plan
or Multi-Employer Plan.
(l) Labor Practices. WorldPort is not and has not ever been a
party to any collective bargaining Agreement, and no union or group is
seeking to become the collective bargaining representative for any unit
of the employees of WorldPort. There are no pending (i) unfair labor
practice complaints against, (ii) arbitration proceedings or grievances
involving, (iii) OSHA citations, wage and hour complaints or EEO
charges against, (iv) NIOSH health hazard evaluation determinations
against, or (v) findings of noncompliance with respect to affirmative
action requirements against WorldPort, and there is no pending labor
strike nor, to the knowledge of the directors and officers of
WorldPort, has any such complaint, proceeding, citation, charge,
determination, finding or strike been threatened. WorldPort has not
experienced any material strike or work stoppage during the three years
prior to the date hereof. WorldPort is not engaged in any unfair labor
practices.
(m) Real Property Ownership and Lease Obligations. Except as
set forth in the Disclosure Schedule, WorldPort does not, as of the
date of this Agreement, and will not, between the date hereof and the
Closing, own any real estate interests or leasehold interests and
WorldPort is not a party to any lease and has no obligation to make any
rental or other payments.
(n) Investment Company Act; Etc. WorldPort is not (i) an
"investment company" or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as
amended, (ii) a "holding company" or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," as such terms are defined
in the Public Utility Holding Company Act of 1935, as amended, or (iii)
a "public utility," as such term is defined in the Federal Power Act,
as amended.
(o) Environmental Permits. WorldPort does not engage in or
conduct any business which requires any permits, licenses or other
authorizations which are required under federal, state and local laws
relating to pollution or protection of the environment, including laws
relating to emissions, discharges, releases or threatened releases of
pollutants, contaminants or hazardous or toxic materials or wastes into
ambient air, surface water, ground water or land, or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants or
hazardous or toxic materials or wastes.
16
(p) Approvals. To the knowledge of WorldPort's directors and
officers, no authorization, consent, order, permit or approval of, or
filing with, any federal, state, local or foreign government or
governmental agency or any other authority, private person or entity,
is necessary for the consummation by WorldPort of the transactions
contemplated by this Agreement.
(q) Untrue Statements. The representations or warranties of
WorldPort contained in this Agreement or any written certificate
furnished to WWC by or on behalf of WorldPort in connection herewith or
in connection with the transactions contemplated herein do not contain
and will not contain any untrue statement of a material fact and do not
omit and will not omit to state any material fact required to be stated
herein or therein or otherwise necessary to make the statements
contained herein or therein not false or misleading. All of the
representations and warranties made by WorldPort in this Agreement
shall be true and correct on the Closing with the same effect as if
they had been made on the Closing.
(r) Title. Upon issuance of the WorldPort's Capital Stock, the
WWC Shareholder will have good and marketable title thereto, free and
clear of all liens, encumbrances, preemptive rights, and other
restrictions, other than the conditions set forth therein;
(s) Compliance with Law. WorldPort has no knowledge and has
not received any notice from any federal, state or local governmental
authority that its business does not comply, in all material respects,
with any applicable codes, laws, ordinances, rules, and regulations,
and no proceedings in respect thereto are pending or, to the knowledge
of WorldPort, threatened;
(t) Capitalization of the WorldPort. The authorized capital
stock of the WorldPort consists of 65,000,000 shares of Common Stock,
par value $.0001 per share, of which 10,883,333 shares are issued and
outstanding as of April 20, 1997; and 10,000,000 shares of Preferred
Stock, par value $.0001 per share, of which no shares are issued and
outstanding.
(u) Subsidiaries. Other than Acquisitions, Inc., WorldPort
has no subsidiaries and no other investment in any person or entity;
(v) Plans. Except as set forth in the Disclosure Schedule,
WorldPort has no employment, profit sharing, deferred compensation,
bonus, stock option, stock purchase, pension, retirement, health,
welfare, or incentive plans for employees;
(w) Permits; Authorizations. No permits, licenses or other
authorizations have been, and no governmental authority or agency with
jurisdiction over WorldPort has asserted or, to the best of WorldPort's
knowledge, is likely to assert that any permits, licenses or other
authorizations have been required to be obtained or maintained by
WorldPort. To the best of WorldPort's knowledge, WorldPort is in
substantial compliance, and upon consummation of the transactions
contemplated hereby will continue in substantial compliance, with all
material limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables
contained in all laws applicable to WorldPort or contained in any
regulation, code, plan, order, decree, judgment, injunction, notice or
demand letter issued, entered, promulgated or approved thereunder,
unless the failure to so comply would not have a material and adverse
effect on the business of WorldPort. No events, conditions, activities,
17
practices, incidents, actions or plans of action taken or to be taken
by WorldPort or, to the best of WorldPort's knowledge, any predecessor
in interest, are reasonably likely to interfere with or prevent
substantial compliance or continued compliance with, to the extent any
are applicable, all laws or with any regulation, code, plan, order,
decree, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder;
(x) Offering. Subject to the accuracy of the WWC Shareholder's
representations on Exhibit F hereof, the offer and sale of WorldPort's
Stock constitute transactions exempt from the registration requirements
of Section 5 of the Securities Act of 1933, as amended and any
applicable state Blue Sky Laws;
(y) Availability of Documents. WorldPort has made available to
the WWC Shareholder copies of all documents, including without
limitation all agreements, contracts, commitments, insurance policies,
leases, plans, instruments, undertakings, authorizations, permits,
licenses, patents, trademarks, tradenames, service marks, copyrights
and applications therefor, referred to herein. Such copies are true and
complete and include all amendments, supplements and modifications
thereto or waivers currently in effect thereunder.
6. THE CLOSING.
(a) Closing. The closing (the "Closing") of the transactions
contemplated by this Agreement shall take place on or before July 18,
1997, at the offices of WorldPort, or on such other date and time as
may be mutually agreed upon in writing by WorldPort and the WWC
Shareholder;
7. AGREEMENTS PENDING CLOSING.
(a) Agreements of The WWC Shareholder and WWC Pending the
Closing. The WWC Shareholder and WWC covenant and agree that, from the
date hereof through the Closing and except as otherwise agreed to in
writing by WorldPort:
(i) Ordinary Course. The WWC Shareholder shall cause
the business of WWC to be, and the business of WWC shall be,
conducted solely in the ordinary course consistent with past
practice, with no changes in methods of management, operation
or accounting;
(ii) Maintenance of Assets. The WWC Shareholder shall
cause WWC to, and WWC will, continue to maintain and service
the physical assets used in the conduct of its business in
good working order and condition and in the same manner as has
been its consistent past practice;
(iii) Employees. The WWC Shareholder shall cause WWC
to, and WWC will, use reasonable efforts to keep available the
services of the present employees and agents of its business
and to maintain the relations and goodwill with material
suppliers, customers, distributors and any others having
material business relations with WWC;
18
(iv) Consents. WWC shall obtain all consents from
third parties necessitated by the terms of any contract to
which WWC is a party;
(v) Compliance with Law. WWC shall comply with all
laws, ordinances, rules, regulations and orders applicable to
WWC;
(vi) Performance of Obligations. WWC shall have
performed its obligations under all contracts and leases to
which it is subject, to the extent such performance is
required prior to the Closing.
(vii) Further Disclosure. The WWC Shareholder and WWC
shall promptly disclose to WorldPort in writing any
information contained in its representations and warranties or
the Exhibits which, is incomplete or is no longer correct as
of all times, commencing on the date hereof until the Closing.
To the extent that such disclosures are acceptable to
WorldPort, such disclosures shall be deemed to modify, amend
and supplement the representations and warranties of the WWC
Shareholder and WWC and/or the Exhibits for all purposes;
(viii) Sale and Transfer. The WWC Shareholder and WWC
shall not, directly or indirectly, sell or transfer all or any
part its assets, other than in the ordinary course of business
consistent with past practice, nor shall the WWC Shareholder
or WWC further encumber all or any part of their assets (other
than purchase money security interests) or initiate or
participate in any discussions or negotiations with respect to
a sale of its assets, a merger or consolidation of it with
another entity or enter into any Agreement to do any of the
foregoing. The WWC Shareholder and WWC shall not provide any
confidential information concerning WWC's business or its
properties or assets to any third party other than in the
ordinary course of business;
(ix) Amendments to Leases and Contracts. WWC shall
not amend any leases or material contracts to which it is a
party without the written consent of WorldPort;
(x) Access to Information. The WWC Shareholder and
WWC shall give to WorldPort's officers, employees, counsel,
accountants and other representatives free and full access to
and the right to inspect, during normal business hours, all of
the properties, assets, records, contracts and other documents
relating to WWC's business and shall permit them to consult
with the officers, employees, accountants, counsel and agents
of WWC for the purpose of making such investigation of WWC as
WorldPort shall desire to make, provided that such
investigation shall not unreasonably interfere with WWC's
business operations. Furthermore, The WWC Shareholder and WWC
shall furnish to WorldPort all documents, records and
information in The WWC Shareholder's or WWC's possession with
respect to the affairs of WWC's business and copies of any
working papers relating thereto, as WorldPort shall from time
to time reasonably request;
19
(xi) Public Announcement. Upon execution of this
Agreement, WorldPort and the WWC Shareholder may agree on and
issue a joint press release describing the transactions set
forth in this Agreement for immediate release to the public.
(xii) Confidential Information. The WWC Shareholder
and WWC will hold, and shall cause all others, including The
WWC Shareholder's and WWC's counsel, independent certified
public accountants, appraisers and investment bankers to hold,
in confidence any confidential data or information made
available to the WWC Shareholder or WWC in connection with
this Agreement or with respect to WorldPort's business, using
the same standard of care to protect such confidential data or
information as would be used by a prudent and reasonable
business person in similar circumstances. If the transactions
contemplated by this Agreement are not consummated, The WWC
Shareholder agrees that it shall return or cause to be
returned to WorldPort all written materials and all copies
thereof that were supplied to the WWC Shareholder by WorldPort
and that contain any such confidential data or information,
and that the WWC Shareholder will continue to hold in
confidence any such information which it has in its
possession; and
(xiii) Action; Cooperation. The WWC Shareholder will
not knowingly take any action which would result in a breach
of any of its representations and warranties hereunder.
Furthermore, the WWC Shareholder shall cooperate with
WorldPort and use its best efforts to cause all of the
conditions to the obligations of the WWC Shareholder and
WorldPort under this Agreement to be satisfied on or prior to
the Closing.
(b) Agreements of WorldPort Pending the Closing. WorldPort
covenants and agrees that, from the date hereof through the Closing,
and except as otherwise agreed to in writing by the WWC Shareholder:
(i) Ordinary Course. WorldPort shall conduct its
business solely in the ordinary course consistent with past
practice, with no changes in methods of management, operation
or accounting;
(ii) Maintenance of Assets. WorldPort shall continue
to maintain and service its assets in the same manner as has
been its consistent past practice;
(iii) Compliance with Law. WorldPort shall comply
with all laws, ordinances, rules, regulations and orders
applicable to WorldPort;
(iv) Performance of Obligations. WorldPort shall
have performed its obligations under all contracts and leases
to which it is subject, to the extent such performance is
required prior to the Closing;
(v) Further Disclosure. WorldPort shall promptly
disclose to the WWC Shareholder in writing any information
contained in its representations and warranties or the
Exhibits which, is incomplete or is no longer correct as of
all times, commencing on the date hereof until the Closing. To
the extent that such disclosures are acceptable
20
to the WWC Shareholder, such disclosures shall be deemed to
modify, amend and supplement the representations and
warranties of WorldPort and/or the Exhibits for all purposes;
(vi) Access to Information. WorldPort shall give to
the WWC Shareholder and to WWC's officers, employees, counsel,
accountants and other representatives free and full access to
and the right to inspect, during normal business hours, any
assets, records, contracts and other documents relating to
WorldPort and shall permit them to consult with the officers,
employees, accountants, counsel and agents of WorldPort for
the purpose of making such investigation of WorldPort as the
WWC Shareholder shall desire to make. Furthermore, WorldPort
shall furnish to the WWC Shareholder all documents, records
and information in WorldPort's possession with respect to its
business and copies of any working papers relating thereto in
WorldPort's possession as the WWC Shareholder shall from time
to time reasonably request;
(vii) Action; Cooperation. WorldPort will not
knowingly take any action which would result in a breach of
any of its representations and warranties hereunder.
Furthermore, WorldPort shall cooperate with the WWC
Shareholder and use its best efforts to cause all of the
conditions to the obligations of WorldPort and the WWC
Shareholder under this Agreement to be satisfied on or prior
to the Closing;
(viii) Confidential Information. WorldPort will hold,
and shall cause all others, including WorldPort's counsel,
independent certified public accountants, appraisers and
investment bankers to hold, in confidence any confidential
data or information made available to WorldPort in connection
with this Agreement or with respect to the WWC Shareholder's
business, using the same standard of care to protect such
confidential data or information as would be used by a prudent
and reasonable business person in similar circumstances;
provided that WorldPort may disclose such data and information
to potential investors and lenders. If the transactions
contemplated by this Agreement are not consummated, WorldPort
agrees that it shall return or cause to be returned to the WWC
Shareholder all written materials and all copies thereof that
were supplied to WorldPort by the WWC Shareholder and that
contain any such confidential data or information, and that
WorldPort will continue to hold in confidence any such
information which it has in its possession; and
(ix) Public Announcement. Upon execution of this
Agreement, WorldPort and the WWC Shareholder may agree on and
issue a joint press release describing the transactions set
forth in this Agreement for immediate release to the public.
8. CONDITIONS PRECEDENT TO THE CLOSING.
(a) Conditions Precedent to WorldPort's Obligations. All
obligations of WorldPort under this Agreement are subject to the
fulfillment or satisfaction, prior to or at the Closing, of each of the
following conditions precedent (any or all of which may be waived by
WorldPort):
(i) Representations and Warranties True as of the
Closing. The representations and warranties of WWC and the WWC
21
Shareholder contained in this Agreement or in any Exhibit,
certificate or document delivered by WWC and the WWC
Shareholder to WorldPort pursuant to the provisions hereof
shall have been true on the date hereof and shall be true on
the Closing, with the same effect as though such
representations and warranties were made as of such date;
(ii) Compliance with this Agreement. WWC and the WWC
Shareholder shall have performed and complied with all
agreements and conditions required by this Agreement to be
performed or complied with by WWC and the WWC Shareholder
prior to or at the Closing;
(iii) Consents. WWC and the WWC Shareholder shall
have obtained all necessary consents from third parties as
contemplated by Section 7(a)(iv), above.
(iv) No Action. At the Closing date, no governmental
agency or body, or other person or entity, shall have
instituted or threatened any action to restrain or prohibit
any of the transactions contemplated by this Agreement;
(v) Approval of Counsel. All proceedings taken in
connection with the transactions contemplated herein and all
instruments and documents required in connection therewith or
incident thereto shall be satisfactory in form to legal
counsel for WorldPort;
(vi) Escrow Agreement. WWC and the WWC Shareholder
shall have executed an escrow Agreement in substantially the
form of Exhibit C;
(vii) Legal Proceedings. Except as set forth in the
Disclosure Schedule, no Legal Proceedings shall have been
filed, shall be pending or, to the knowledge of WWC and the
WWC Shareholder, threatened before any court or governmental
body to restrain or prohibit, or to obtain substantial damages
in respect of, this Agreement, or the consummation of the
transactions contemplated hereby, and there shall be no Legal
Proceedings filed, pending or threatened that, either
separately or in the aggregate, could materially and adversely
affect the business, operations or condition, financial or
otherwise, of WWC.
(viii) Resolutions. WorldPort shall have received
from WWC certified copies of resolutions duly adopted by the
Shareholder of WWC and by the Board of Directors of WWC
approving this Agreement.
(ix) Articles of Incorporation. WorldPort shall have
received a current copy of the Articles of Incorporation of
WWC, and any amendments thereto, certified as of a date not
more than five business days before the Closing by the Texas
Secretary of State, and a current copy of the Bylaws of WWC,
certified as of the Closing by WWC's Secretary.
(x) Good Standing. WorldPort shall have received a
certificate, issued by the Texas Secretary of State, as of a
date not more than five business days before the Closing,
stating that WWC is in good standing in the State of Texas.
22
(xi) Incumbency of Officers. WorldPort shall have
received an incumbency certificate or certificates, dated the
Closing, certifying the incumbency of all officers of WWC who
have executed this Agreement.
(xii) Investment Representation. The WWC Shareholder
shall have executed an investment representation letter in
substantially the form of Exhibit F hereto;
(xiii) Execution of Other Agreements. WWC and the WWC
Shareholder shall have performed and complied with all
material agreements and conditions required to be performed or
complied with by it prior to or at the Closing;
(b) Conditions Precedent to the Obligations of WWC and The WWC
Shareholder. All obligations of WWC and the WWC Shareholder under this
Agreement are subject to the fulfillment or satisfaction, prior to or
at the Closing, of each of the following conditions precedent (any or
all of which may be waived by WWC and/or the WWC Shareholder):
(i) Representations and Warranties True as of the
Closing. The representations and warranties of WorldPort and
Acquisitions, Inc. contained in this Agreement or in any list,
certificate or document delivered by WorldPort or
Acquisitions, Inc. to WWC or the WWC Shareholder pursuant to
the provisions hereof shall be true on the Closing with the
same effect as though such representations and warranties were
made as of such date;
(ii) Incorporation of WorldPort Acquisitions, Inc.
WorldPort shall have filed all required documents with the
State of Delaware to incorporate Acquisitions, Inc. as a
wholly-owned subsidiary and shall have caused the appropriate
officers of Acquisition to have executed this Agreement;
(iii) Compliance with this Agreement. WorldPort shall
have performed and complied with all agreements and conditions
required by this Agreement to be performed or complied with by
WorldPort prior to or at the Closing;
(iv) Board of Directors Appointment. Mr. ▇▇▇▇ ▇▇▇▇▇▇
shall be appointed to the Board of Directors of WorldPort and
Acquisitions, Inc. effective as of the Closing.
(v) No Action. At the Closing date, no governmental
agency or body, or other person or entity, shall have
instituted or threatened any action to restrain or prohibit
any of the transactions contemplated by this Agreement;
(vi) Approval by WWC and The WWC Shareholder. All
documents and proceedings of WorldPort in connection with the
transactions contemplated hereby shall have been approved as
to form and substance by WWC and the WWC Shareholder and their
respective legal counsel, which approval will not unreasonably
be withheld.
23
(vii) Legal Proceedings. Except as set forth on the
Disclosure Schedule, no Legal Proceedings have been filed,
shall be pending or, to the knowledge of WorldPort, threatened
before any court or governmental body to restrain or prohibit,
or to obtain substantial damages in respect of, this
Agreement, or the consummation of the transactions
contemplated hereby, and there shall be no Legal Proceedings
filed, pending or threatened that, either separately or in the
aggregate, could materially and adversely affect the business,
operations or condition, financial or otherwise, of WorldPort.
(viii) Resolutions. The WWC Shareholder shall have
received from WorldPort a certified copy of the resolution
duly adopted by the Board of Directors of WorldPort approving
this Agreement.
(ix) Certificate of Incorporation. The WWC
Shareholder shall have received a current copy of the
Certificate of Incorporation of WorldPort and Acquisitions,
Inc. and any amendments thereto certified as of a date not
more than five business days before the Closing by Delaware
Secretary of State, and a current copy of the Bylaws of
WorldPort and Acquisitions, Inc., certified as of the Closing
by the respective corporate Secretary.
(x) Good Standing. The WWC Shareholder shall have
received certificates, issued by the Delaware Secretary of
State, as of a date not more than five business days before
the Closing, stating that both WorldPort and Acquisitions,
Inc. are in good standing in the State of Delaware.
(xi) Incumbency of Officers. The WWC Shareholder
shall have received an incumbency certificate or certificates,
dated as of Closing, certifying the incumbency of all officers
of WorldPort who have executed this Agreement.
(xii) Escrow Agreement. WorldPort shall have executed
an escrow Agreement in substantially the form of Exhibit C.
(xiii) Promissory Note. WorldPort shall have executed
a promissory note in substantially the form of Exhibit B.
(xiv) Registration Rights Agreement. WorldPort and
the WWC Shareholder shall have executed a registration rights
Agreement in substantially the form of Exhibit D.
(xv) Execution of Other Agreements. WorldPort shall
have performed and complied with all agreements and conditions
required by this Agreement to be performed or complied with by
it prior to or at the Closing.
9. OTHER MATTERS.
24
(a) Piggyback and Demand Registration Rights. The WWC
Shareholder shall have piggyback registration rights and a one time
demand registration right with regard to the WorldPort Common Stock
received hereunder. These rights may be exercised pursuant to the
Registration Rights Agreement attached hereto as Exhibit D, and
incorporated herein by reference.
(b) "Market Stand-Off" Agreement. The WWC Shareholder hereby
agrees that, if requested by WorldPort and any underwriter of common
stock (or other securities of WorldPort) in connection with a public
offering of the securities of WorldPort pursuant to a registration
statement filed with the United States Securities and Exchange
Commission, the WWC Shareholder will not sell or otherwise transfer or
dispose of any shares of common stock of WorldPort (or other
securities) held by such the WWC Shareholder during the period
beginning seven (7) days prior to and ending one hundred eighty (180)
days following the date of the final prospectus of WorldPort as filed
under the Securities Act of 1933. The WWC Shareholder further agrees to
execute any Agreement requested by WorldPort and such underwriter with
respect to this paragraph, in a form satisfactory to WorldPort and such
underwriter. WorldPort may impose "stop-transfer" instructions with
respect to the common stock (or other securities) subject to the
foregoing restriction until the end of such 180 day period.
(c) Substitution of WorldPort Into Any WWC Agreement. Prior to
the Closing of this Agreement, WorldPort shall have the right, in the
place of WWC, to enter into any and all agreements, transactions or
other relationships that WWC has the right to enter.
10. INDEMNIFICATION.
(a) General Indemnification Obligation of WWC and The WWC
Shareholder. Subject to the limitations hereinafter provided, from and
after the Closing, WWC and The WWC Shareholder will indemnify and hold
harmless WorldPort and its successors and assigns (an "Indemnified
WorldPort Party") against and in respect of:
(i) Damages. Any and all damages, losses,
deficiencies, liabilities, costs and expenses (collectively,
"Damages") incurred or suffered by the Indemnified WorldPort
Party that result from, relate to or arise out of:
(1) Any and all liabilities and obligations
of WWC of any nature whatsoever, in existence as of
the Closing, except for those liabilities and
obligations of WWC set forth in the WWC Financial
Statements or disclosed in the schedules to this
Agreement;
(2) Any and all actions, suits, claims or
legal, administrative, arbitration, governmental or
other proceedings or investigations against an
Indemnified WorldPort Party that relate to the WWC
Shareholder or WWC to the extent that the event
giving rise thereto occurred prior to the Closing or
which result from or arise out of any action or
inaction prior to the Closing of the WWC Shareholder,
WWC, or any director, officer, employee, agent,
25
representative or subcontractor of WWC, except for
those set forth in the WWC Financial Statements or
schedules to this Agreement; or
(3) Any misrepresentation, breach of
warranty or nonfulfillment of any Agreement or
covenant on the part of the WWC Shareholder under
this Agreement, or from any misrepresentation in or
omission from any certificate, schedule, statement,
document or instrument furnished to WorldPort
pursuant hereto (collectively, a "misrepresentation
or breach of warranty"). In determining the amount of
any Damages incurred as a result of any
misrepresentation or breach of warranty for purposes
of this subsection, any reference to "materiality" in
any representation, warranty or covenant contained in
this Agreement shall be ignored.
(ii) Actions. Any and all actions, suits, claims,
proceedings, investigations, demands, assessments, fines,
judgments, costs and other expenses (including, without
limitation, reasonable legal fees and expenses) (collectively,
"Actions") incident to any of the foregoing.
(b) General Indemnification Obligation of WorldPort. Subject
to the limitations hereinafter provided, from and after the Closing,
WorldPort will reimburse, indemnify and hold harmless WWC and the WWC
Shareholder and their successors and assigns (an "Indemnified WWC
Party") against and in respect of:
(i) Damages. Any and all damages incurred or suffered
by any Indemnified WWC Party that result from, relate to or
arise out of any misrepresentation, breach of warranty or
non-fulfillment of any Agreement or covenant on the part of
WorldPort under this Agreement or any other document delivered
by WorldPort pursuant to this Agreement, or from any
misrepresentation in or omission from any certificate,
schedule, statement, document or instrument furnished to WWC
or the WWC Shareholder pursuant hereto or thereto; and
(ii) Actions. Any and all Actions incident to any
of the foregoing or to the enforcement of this subsection 10.
(b)(ii).
(c) Limitation of Indemnity. Notwithstanding any provision in
this Agreement to the contrary, an Indemnifying Party (as hereinafter
defined) shall not be liable to an Indemnified Party (as hereinafter
defined) for indemnification under this Section 10 for:
(i) Dollar Amounts Limitations.
(1) Threshold Limitation. Neither WorldPort
nor the WWC Shareholder shall be liable for damages
or actions in an amount less than $5,000 in
connection with any claim hereunder relating to a
single occurrence or event, or for the first $25,000
of aggregate Damages or Actions in connection with
all claims hereunder; PROVIDED, HOWEVER, the
limitation herein provided shall not apply to any
claim by the WWC Shareholder against WorldPort for
failure to pay the full amount of the
26
purchase price (including, without limitation, the
distribution of WorldPort common stock as provided in
the Escrow Agreement).
(2) Ceiling Limitation. Except with respect
to claims relating to "Intentional
Misrepresentations" (as said term is hereinafter
defined), no party shall be liable for damages or
actions in excess of $1,000,000 in the aggregate;
PROVIDED, HOWEVER, the limitation herein provided
shall not apply to any claim by the WWC Shareholder
against WorldPort for failure to pay the full amount
of the purchase price (including, without limitation,
the distribution of WorldPort common stock as
provided in the Escrow Agreement).
(3) Definitions. For purposes of Subsection
10.(c)(i)(2), hereof, the term "Intentional
Misrepresentation" shall mean the making of any
representation or warranty by WWC or the WWC
Shareholder which to WWC or the WWC Shareholder's
knowledge at the time of making such representation
or warranty is false or inaccurate in any material
respects.
(ii) Time Limitation. It is the intention hereof that
all obligations of the parties to indemnify pursuant to this
Section 10 shall terminate on December 31, 1999 (the
"Indemnification Termination Date") with respect to all claims
for Damages and Actions, except those for which a Claim Notice
(as defined below) has been received on or before the
Indemnification Termination Date; and
(iii) Insurance. Neither WorldPort nor the WWC
Shareholder shall be liable for any claim hereunder to the
extent such claim is paid by any insurer.
(d) Method of Asserting Claims, Etc. In the event that any
claim or demand is asserted against or sought to be collected from an
Indemnified WorldPort Party or Indemnified WWC Party (an "Indemnified
Party") by a third party, the Indemnified Party shall promptly notify
the party from which indemnification is sought pursuant to paragraphs
10(a) and 10(b) above (the "Indemnifying Party") of such claim or
demand, specifying the nature of such claim or demand and the amount or
the estimated amount thereof to the extent then feasible (which
estimate shall not be conclusive of the final amount of such claim and
demand) (the "Claim Notice"). The Indemnifying Party shall have twenty
(20) days from its receipt of the Claim Notice (the "Notice Period") to
notify the Indemnified Party, (i) whether or not the Indemnifying Party
disputes its liability to the Indemnified Party hereunder with respect
to such claim or demand and (ii) notwithstanding any such dispute,
whether or not the Indemnifying Party desires, at its sole cost and
expense, to defend the Indemnified Party against such claim or demand.
(i) Dispute of Liability. If the Indemnifying Party
disputes its liability with respect to such claim or demand or
the amount thereof (whether or not the Indemnifying Party
desires to defend the Indemnified Party against such claim or
demand as provided herein), such dispute shall be resolved in
accordance with section 12(m) hereof. Pending the resolution
of any dispute by the Indemnifying Party of its
27
liability with respect to any claim or demand, such claim or
demand shall not be settled without the prior written consent
of the Indemnified Party.
(ii) Defense. In the event that the Indemnifying
Party notifies the Indemnified Party within the Notice Period
that it desires to defend the Indemnified Party against such
claims or demand, then, provided: (i) that the Indemnifying
Party acknowledges that it is liable to indemnify the
Indemnified Party with respect to a particular claim; and (ii)
the Indemnifying Party has financial resources which are
reasonably adequate to pay the amount of the claim, except as
hereinafter provided, the Indemnifying Party shall have the
right to defend the Indemnified Party by appropriate
proceedings, which proceedings shall be promptly settled or
prosecuted by the Indemnifying Party to a final conclusion in
such a manner as to avoid any risk of the Indemnified Party
becoming subject to liability with respect thereto. If any
Indemnified Party desires to participate in, but not control,
any such defense or settlement, it may do so at its sole cost
and expense.
(iii) Indemnifying Party Liability. (1) If the
Indemnifying Party elects not to defend the Indemnified Party
against such claim or demand, whether by not giving the
Indemnified Party timely notice as provided above or
otherwise, then the amount of any such claim or demand, or if
the same be defended by the Indemnifying Party or by the
Indemnified Party (but no Indemnified Party shall have any
obligation to defendant any such claim or demand), then that
portion thereof as to which such defense is unsuccessful, in
each case shall be conclusively deemed to be a liability of
the Indemnifying Party hereunder, unless the Indemnifying
Party shall have disputed its liability to the Indemnified
Party hereunder, as provided herein, in which event such
dispute shall be resolved in accordance with the dispute
resolution provisions set forth in Section 12(m) hereof; (2)
In the event an Indemnified Party should have a claim against
the Indemnifying Party hereunder that does not involve a claim
or demand being asserted against or sought to be collected
from it by a third party, the Indemnified Party shall promptly
send a Claim Notice with respect to such claim to the
Indemnifying Party. If the Indemnifying Party disputes its
liability with respect to such claim or demand, such dispute
shall be resolved in accordance with Section 12(m) hereof; if
the Indemnifying Party does not notify the Indemnified Party
within the Notice Period that it disputes such claim, the
amount of such claim shall be conclusively deemed a liability
of the Indemnifying Party hereunder.
(e) Payment. Upon determination of liability hereunder, the
appropriate party shall pay to the other, as the case may be, within
twenty (20) days after such determination, the amount of any claim for
indemnification made hereunder. Upon the payment in full of any claim
hereunder, then entity making payment shall be subrogated to the right
of the indemnified party against any person, firm or corporation with
respect to the subject matter of such claim.
11. TERMINATION AND AMENDMENT.
(a) Termination. This Agreement may be terminated by
WorldPort or the WWC Shareholder at any time prior to Closing upon
written notice to the other party if:
28
(i) the representations, warranties and agreements or
conditions of this Agreement to be complied with or performed
by WWC or the WWC Shareholder (in the case of WorldPort) or
WorldPort (in the case of WWC or the WWC Shareholder) on or
before the Closing shall not have then been complied with or
performed in some material respect and such material
noncompliance or nonperformance shall not have been waived by
the party giving notice of termination or shall not have been
cured by the defaulting party, or cure thereof commenced and
diligently prosecuted thereafter by such party within five (5)
days after written notice of such material noncompliance or
nonperformance is given by the non-defaulting party;
(ii) any governmental action is commenced to prevent
the consummation of the transactions contemplated hereby; or
(iii) the Parties agree to terminate by mutual
consent.
(b) Waiver. Any representations, warranties, agreements or
conditions of this Agreement may be waived at any time by the party
entitled to the benefit thereof by action taken and evidenced by a
written waiver executed by any such party.
12. MISCELLANEOUS.
(a) Brokers. The parties hereby represent and warrant, each to
the other, that, the parties have not dealt with any brokers in
connection with the transactions contemplated hereby, and that no
brokerage fees or commissions are owed to any party. In the event of
any allegation of any broker to the contrary, the party against which
liability is sought to be imposed by such broker shall defend the same
at its expense;
(b) Expenses. Each of the parties hereto will bear its own
legal fees and other expenses in connection with the transactions
contemplated by this Agreement;
(c) Survival. All parties agree that the representations,
warranties and agreements contained in this Agreement shall survive the
Closing and shall thereafter remain in full force and effect, for one
year from the date of Closing;
(d) Severability. If any term or provision of this Agreement,
including the exhibits hereto, or the application thereof to any
person, property or circumstances, shall to any extent be invalid or
unenforceable, the remainder of this Agreement, including the exhibits
or the application of such term or provision to persons, property or
circumstances other than those as to which it is invalid and
unenforceable, shall not be affected thereby, and each term and
provision of this Agreement and the exhibits shall be valid and
enforced to the fullest extent permitted by law;
(e) Notices. Any notices, requests or consents hereunder shall
be deemed given, and any instrument delivered, two days after they have
been mailed by first class mail, postage prepaid, or upon receipt if
delivered personally or by facsimile transmission, as follows:
29
To WWC or The WWC Shareholder: ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇ III
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
To WorldPort or Acquisitions: WorldPort Communications, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: W. ▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax : (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
except that any of the foregoing may from time to time by written
notice to the other designate another address which shall thereupon
become its effective address for the purposes of this paragraph.
(f) Entire Agreement. This Agreement, including the exhibits
and documents referred to herein which are a part hereof, contains the
entire understanding of the parties hereto with respect to the subject
matter contained herein and may be amended only by a written instrument
executed by all parties hereto or their respective successors or
assigns. There are no restrictions, promises, warranties, covenants, or
undertakings other than those expressly set forth or referred to
herein. Any paragraph headings or table of contents contained in this
Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement;
(g) Binding Effect. This Agreement shall inure to the benefit
of and be binding upon all parties hereto and their respective
successors, but shall not inure to the benefit of anyone other than the
parties signing this Agreement and their respective successors;
(h) Governing Law. This Agreement shall be governed by the
laws of the State of Delaware.
(i) Press Releases. Each party agrees that, unless approved by
the other parties hereto in advance and in writing, such party will not
make any public announcement, issue any press release or publicly
confirm any statements by third parties concerning the transactions
contemplated hereby, except as otherwise required by law. Further,
nothing contained herein shall prevent any shareholders which are
30
corporations or partnerships from disclosing such information as they
deem necessary and advisable to their respective shareholders or
partners (whether general or limited), as the case may be.
(j) Assignment. This Agreement may not be assigned by any
party.
(k) Disclosure Schedule. The Disclosure Schedule referred to
in this Agreement is hereby incorporated in and made a part of this
Agreement.
(l) Counterparts; Headings. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
The headings contained in this Agreement are for reference purposes
only and shall not affect the meaning or interpretation of this
Agreement.
(m) Dispute Resolution. Any and all disputes arising under or
involving this Agreement, directly or indirectly, or the interpretation
or performance thereof, or touching upon the rights or obligations of
any party hereunder, shall, if not settled by negotiation, be resolved
in the manner provided below.
(i) Mediation Prior to submitting any matter to
binding arbitration as provided herein, each party agrees to
first try in good faith to resolve any dispute by mediation
under the Procedures for Mediation of Business Disputes of the
Center for Public Resources, Inc.
(ii) Mediation Procedures. A demand for mediation
shall be made in writing and served upon the other party in
the same manner as otherwise provided for notice in this
Agreement. Within thirty (30) days of receipt of the demand
for mediation, the parties shall confer and select a mediator.
The site of any mediation session shall be within the State of
Texas. If (i) the parties are unable to agree upon the
mediator to use within fifteen (15) days after receipt of the
demand for mediation, (ii) the mediation is not undertaken in
a meaningful way within thirty (30) days after such notice, or
(iii) any unresolved dispute remains after mediation, then any
party may institute arbitration under this Section m(iii)
below. In any mediation, the fees and costs of the mediator
shall be borne equally by the parties to the mediation and
shall be payable upon invoice from the mediator. Each party
shall bear the fees and costs of its own legal counsel and
witnesses.
(iii) Binding Arbitration. All disputes not resolved
by negotiation or mediation as provided herein, shall at the
written request of any party be arbitrated pursuant to the
then prevailing Commercial Arbitration Rules of the American
Arbitration Association. The Arbitrator shall be agreed upon
by the parties or, if the parties cannot agree on the
arbitrator within ten (10) business day after either party
shall have requested such arbitration, the arbitrator shall be
appointed by the American Arbitration Association in
accordance with such Rules. The arbitration shall take place
in Texas. The arbitrator shall have the right to award or
include in his award any relief which he deems proper in the
circumstances, including, without limitation, specific
performance and injunctive relief, provided that the
arbitrator may not award exemplary or punitive damages. The
parties agree that the award of the arbitrator shall
31
be final and binding upon the parties; shall be the sole and
exclusive remedy between them regarding any claims,
counterclaims, issues, or accountings presented or pled to the
arbitrator; that it shall be made and shall promptly be
payable in U.S. dollars free of any tax, deduction or offset
(with respect to monetary awards) and that any costs, fees, or
taxes incident to enforcing the award shall, to the maximum
extent permitted by law, be charged against the party
resisting such enforcement. The award shall include interest
from the date of any damages incurred for breach or other
violation of this Agreement, and from the date of the award
until paid in full, at a rate to be fixed by the arbitrator.
The costs of any such arbitration, including without
limitation the administrative fee, arbitrator's fee,
attorneys' fees, fees of expert witnesses, and travel expenses
shall be borne by the losing party. Judgment upon the award of
the arbitrator may be entered in any court of competent
jurisdiction, or application may be made to such court for a
judicial acceptance of the award or an order of enforcement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement effective as of the date set forth below.
WORLDPORT COMMUNICATIONS, INC.
By: /s/▇▇▇▇ ▇▇▇▇▇ Date: April 20, 1997
-----------------------------------
Its: Chief Executive Officer
-----------------------------------
The WWC Shareholder:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ Date: April 20, 1997
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
THE ▇▇▇▇▇▇▇ ▇▇▇▇ COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ Date: April 20, 1997
-----------------------------------
Its: President
-----------------------------------
WORLDPORT ACQUISITIONS, INC.
By: ____________________________________ Date: _____________
Its:_____________________________________
32
EXHIBIT A
WORLDPORT'S
COMMON SHARES
PERCENT ISSUED IN
OWNERSHIP OF WWC EXCHANGE FOR
NAME COMMON SHARES COMMON SHARES WWC SHARES
▇▇▇▇ ▇. ▇▇▇▇▇▇ 1,000 100% 1,400,000
EXHIBIT B
PROMISSORY NOTE
EXHIBIT C
ESCROW AGREEMENT
EXHIBIT D
REGISTRATION RIGHTS AGREEMENT
EXHIBIT E
DISCLOSURE SCHEDULE
Schedule 1(f)(ii) Business Relationship Agreement
Schedule 3(f) Schedule of Legal Proceedings
Schedule 3(k) Contracts
Schedule 3(m) Employment and Other Contracts
Schedule 3(o) Employee Matters
Schedule 3(q) Real Property Ownership and Lease Obligations
Schedule 3(u) Plans
Schedule 3(v) Permits and Authorizations
Schedule 5(a) Schedule of Outstanding Subscriptions, Warrants,
Options, Preemptive Rights, or Other Agreements
Schedule 5(d) Legal Proceedings
Schedule 5(h) Conduct of Business
Schedule 5(i) Contracts
Schedule 5(j) Employment and Other Contracts
Schedule 5(k) ERISA
Schedule 5(m) Real Property Ownership and Lease Obligations
Schedule 5(v) Plans
EXHIBIT F
THE WWC SHAREHOLDER'S REPRESENTATION LETTER