1
Exhibit 99.1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made and entered
into as of January 15, 1999 (the "Effective Date") by and between TeleCom
Industrial Group, a Delaware corporation, ("Seller") and The Ontra Companies,
Inc., a Delaware corporation, ("Purchaser").
WHEREAS, Purchaser desires to purchase from Seller, and Seller desires
to sell to Purchaser, 1,000 shares of Common Stock, $0.01 par value per share
(the "Stock"), of Paladin Financial, Inc. (the "Company").
NOW, THEREFORE, for and in consideration of the mutual promises,
representations and covenants herein contained, and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as set forth herein.
1. Purchase and Sale. At the closing of the transactions contemplated
by this Agreement (the "Closing"), Seller shall sell to Purchaser, and Purchaser
shall purchase from Seller, the Stock, free and clear of any liens or other
encumbrances ("Liens"). Purchaser will pay to Seller the purchase price of Four
Hundred Eighty-Three Thousand Seven Hundred Fifty Six and No/100 Dollars
$483,756 (the "Purchase Price") for the Stock. The sale of the stock shall
include only such furniture, fixtures and equipment of Paladin Financial, Inc.
as set forth on Annex 1 and shall include all contract rights, accounts,
licenses and permits also listed on Annex 1, except those specifically excluded
and listed on Annex 2. Such Purchase Price shall be paid by Purchaser to Seller
on the date of the Closing by Purchaser's delivery to Seller of a certified
check or, at Seller's option, immediately available funds by federal funds wire
transfer in accordance with the wiring instructions attached hereto as Annex 1.
2. Closing; Deliveries.
2A. Conditions to Closing. (i) Seller's Conditions to Closing. The
obligation of Seller to sell the Stock to Purchaser is subject to the
satisfaction as of the date of the Closing (the "Closing Date") of each of the
following: (a) all representations and warranties made by Purchaser herein shall
be true and correct on the Closing Date, and (b) Purchaser shall have performed,
satisfied and complied with all covenants required to be performed, satisfied or
complied with by Purchaser hereunder, including, without limitation, delivering
the Purchase Price funds to Seller in accordance with Section 1 above.
3
2
(ii) Purchaser's Conditions to Closing. The obligation of
Purchaser to purchase the Stock from Seller is subject to the satisfaction as of
the Closing Date of each of the following: (a) all representations and
warranties made by Seller herein shall be true and correct on the Closing Date
and (b) Seller shall have performed, satisfied and complied with all covenants
required to be performed, satisfied or complied with by Seller hereunder,
including, without limitation, making all the deliveries to be made by it under
Section 2C below in accordance with the terms hereof.
2B. Closing. The Closing shall occur as soon as reasonably possible
following the Effective Date, but in no event later than 5:00pm, January 27,
1999, at 504 Lavaca, Room 1004, Austin, Texas 78701.
2C. Seller's Deliveries. At the Closing, Seller shall deliver or
cause to be delivered to Purchaser (i) a certificate or certificates evidencing
the Stock, accompanied by a stock power of attorney duly executed in blank,
together with such other documents and instruments as are required in order to
transfer the Stock to Purchaser, free and clear of any Liens and (ii) a closing
certificate ("Seller's Closing Certificate").
2D. Purchaser's Deliveries. At the Closing, Purchaser shall (i)
deliver the Purchase Price to Seller in accordance with Section 1 above and (ii)
a closing certificate ("Purchaser's Closing Certificate").
2E. Satisfaction and Release of Liabilities by Seller. Except with
respect to that certain repurchase obligation owing to Riverway Bank, Houston,
Texas, and related to those certain Title I loans owned by Riverway Bank and
subject to repurchase by the Company, Seller shall, within 60 days from the date
of Closing, fully pay and extinguish all liabilities of the Company existing on
the Effective Date, whether accrued, absolute, contingent or otherwise, whether
due or to become due, and whether disclosed to Purchaser prior to Closing or not
disclosed to Purchaser, except those liabilities which relate to the payment of
license or similar fees of the Company concerning the year 1999. SELLER SHALL
HOLD PURCHASER AND THE COMPANY HARMLESS FROM SAME AND AGREES TO DEFEND AND
INDEMNIFY PURCHASER AND COMPANY IN CONNECTION WITH ANY SUCH LIABILITIES ASSERTED
AGAINST PURCHASER OR COMPANY.
3. Representations and Warranties of Purchaser. Purchaser represents
and warrants to Seller as follows:
4
3
3A. Purchaser is a corporation duly organized and validly existing
under the laws of the State of Delaware;
3B. There are no actions, suits, proceedings or judgments pending
or, to the best of its knowledge, threatened against or affecting Purchaser that
will prevent the consummation of the transactions contemplated by this
Agreement;
3C. Purchaser is not the subject of any pending or, to the best of
its knowledge, threatened bankruptcy or insolvency proceeding;
3D. Purchaser's execution, delivery and performance of this
Agreement, Purchaser's Closing Certificate (collectively, the "Purchaser Closing
Agreements") will not conflict with or result in any violation of or constitute
a default under any law, rule, regulation, agreement, instrument or obligation,
or any judgment, order or decree of any court or governmental body or agency, to
which Purchaser is a party or to which or by which Purchaser may be subject or
bound, which would cause the transactions contemplated herein not to be or
remain consummated, and any consents or approvals, including, without
limitation, approval from Purchaser's board of directors, to Purchaser's
purchase of the Stock required to be obtained by Purchaser under any of the
foregoing have been obtained by Purchaser;
3E. Purchaser has the financial wherewithal to pay the Purchase
Price in accordance with the terms hereof, and such payment of the Purchase
Price shall not cause Purchaser to file a petition in bankruptcy or to become
insolvent or otherwise unable to pay its bills as they become due;
3F. Purchaser has full power and authority to enter into and perform
its obligations under each of the Purchaser Closing Agreements; and each of the
Purchaser Closing Agreements is the legal, valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms; and
3G. Purchaser has not employed any broker, finder, consultant or
intermediary in connection with the transactions contemplated by this Agreement
that would be entitled to a broker's, finder's or similar fee or commission in
connection therewith.
4. Representations and Warranties of Seller. Seller represents and
warrants to Purchaser as follows:
4A. Seller is a corporation duly organized and validly existing
under the laws of the State of Delaware;
5
4
4B. There are no actions, suits, proceedings or judgments pending
or, to the best of its knowledge, threatened against or affecting Seller that
will prevent the consummation of the transactions contemplated by this
Agreement;
4C. Seller is not the subject of any pending or, to the best of its
knowledge, threatened bankruptcy or insolvency proceeding;
4D. Seller's execution, delivery and performance of this Agreement,
Seller's Closing Certificate (the "Seller Closing Agreements") will not conflict
with or result in any violation of or constitute a default under any law, rule,
regulation, agreement, instrument or obligation, or any judgment, order or
decree of any court or governmental body or agency, to which Seller is a party
or to which or by which Seller may be subject or bound, which would cause the
transactions contemplated herein not to be or remain consummated, and any
consents or approvals, including, without limitation, approvals from Seller's
board of directors, to Seller's sale of the Stock required to be obtained by
Seller under any of the foregoing have been obtained by Seller;
4E. Seller is the sole legal and beneficial owner of the Stock, and
the Stock is free and clear of all Liens. Seller also warrants that its
subsidiary Paladin Financial, Inc. is the owner of all of the items listed on
Annex 1 and said items are free and clear of all liens;
4F. Seller has full power and authority to enter into and perform
its obligations under each of the Seller Closing Agreements; and each of the
Seller Closing Agreements is the legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms; and
4G. Seller has not employed any broker, finder, consultant or
intermediary in connection with the transactions contemplated by this Agreement
that would be entitled to a broker's, finder's or similar fee or commission in
connection therewith.
4H. Except for those liabilities and obligations of the Company set
forth on the Trial Balance Sheet attached hereto as Annex 3, Seller knows of no
material liabilities or obligations of the Company that exist on the Effective
Date.
EXCEPT AS SPECIFICALLY SET FORTH HEREIN, SELLER MAKES NO REPRESENTATION
OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE STOCK OR ANY ASPECT OF THE
BUSINESS OF THE SUBSIDIARY WHATSOEVER, AND PURCHASER ACKNOWLEDGES AND AGREES
THAT, EXCEPT AS SPECIFICALLY SET FORTH HEREIN, IT IS PURCHASING THE STOCK ON AN
"AS-IS", "WHERE-IS" BASIS.
6
5
5. Miscellaneous.
5A Expenses. Except as otherwise specifically provided in this
Agreement, each party shall pay its own expenses incurred in connection with the
negotiation and consummation of this Agreement, including legal and accounting
fees and expenses of their representatives and agents, whether or not the
transaction is consummated for whatever reason. All costs of transferring the
Stock in accordance with this Agreement, including recordation, transfer, sales
and documentary taxes and fees, will be paid by Purchaser.
5B. Notices. Any notice or other communication required by or
permitted to be given in connection with this Agreement shall be in writing,
except as expressly otherwise permitted herein, and shall be delivered in person
(including via overnight courier service) or sent by telecopy or certified or
registered mail, return receipt requested, postage prepaid, to the respective
parties at the addresses referenced below. Each of the parties may change the
address to which it desires notices to be sent if it notifies the other party of
such change in accordance with the provisions of this Section 7B. Any such
notice will be deemed to be given when received, if personally delivered or sent
by telecopy and, if mailed, two business days after deposit in the United States
mail, properly addressed, with proper postage affixed.
7
6
Seller: TeleCom Industrial Group, Inc.
c/o TCC Industries, Inc.
504 Lavaca Street
Suite 1004
Austin, Texas 78701
Attn: Mary M. McDonald, Esq.
Telecopy No.: (512) 494-0416
With a copy of Edens Snodgrass Nichols & Breeland, P.C.
notice to Seller to: 2700 Franklin Plaza
(which copy shall 111 Congress Avenue
not constitute notice) Austin, Texas 78701
Attn: Rod Edens, Esq.
Telecopy No.: (512) 344-2911
Purchaser: The Ontra Companies, Inc.
816 Congress Avenue
Suite 1400
Austin, Texas 78701
Attn: Robert D. Starnes
Telecopy No.: (512) 703-2050
With a copy of Akin Gump Strauss Hauer & Feld, P.C.
notice to Purchaser to: 816 Congress Avenue
(which copy shall Suite 1900
not constitute notice) Austin, Texas 78701
Attn: Brandon Janes, Esq.
Telecopy No.: (512) 499-6290
5C. Assignment of Rights. No party may assign all or any part of its
rights, privileges and obligations under this Agreement without the written
consent of the other party.
5D. Invalid Provisions. In the event any one or more of the
provisions contained in this Agreement shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement.
Furthermore, in lieu of such an illegal, invalid or unenforceable provision,
there shall be added automatically as part of this Agreement, a provision as
similar in terms to such illegal, invalid or unenforceable provision as may be
possible and be legal, valid or enforceable.
8
7
5E. Entirety and Amendments; Parties Bound. This instrument embodies
the entire agreement between the parties and supersedes all prior agreements and
understandings, if any, relating to the subject matter hereof and may be amended
only by an instrument in writing executed by both parties. This Agreement will
be binding upon and inure to the benefit of the parties and their successors and
permitted assigns.
5F. Applicable Law; Venue; Counterparts. The terms and conditions of
this Agreement will be construed in accordance with the internal laws of the
State of Texas (and not the laws of conflicts) except insofar as it will be
mandatory by statute to apply the laws of another jurisdiction. All matters
litigated by, among, or between any of the parties that involve this Agreement
(whether in federal or state court) shall be brought only in Austin, Travis
County, Texas. This Agreement may be executed simultaneously in two or more
counterparts, each of which will be deemed an original but all of which together
will constitute one and the same instrument.
5G. Arbitration. Except with respect to seeking injunctive relief as
expressly provided for by this Agreement, any dispute, controversy or claim
arising out of or relating to this Agreement or the other agreements, documents
or instruments executed or delivered in connection herewith, or the breach,
termination or invalidity hereof or thereof, shall be settled by arbitration in
accordance with the commercial arbitration rules of the American Arbitration
Association as then in effect; provided, that the place of the arbitration shall
be Austin, Texas. Any award or determination entered in any arbitration
initiated pursuant to this Agreement shall be final, binding and conclusive on
the parties, and shall be enforceable in any court having jurisdiction with
respect to the matter.
5H. Costs. If any legal action, arbitration or other proceeding is
brought for the enforcement of this Agreement, any Purchaser Closing Agreement,
or any Seller Closing Agreement, or because of an alleged dispute, breach,
default or misrepresentation in connection with any of the provisions of this
Agreement, any Purchaser Closing Agreement, any Seller Closing Agreement or any
other agreements, instruments or documents executed or delivered in connection
herewith, the successful or prevailing party shall be entitled to recover
reasonable attorney's fees and other costs incurred in that action, arbitration
or proceeding, in addition to any other relief to which it or they may be
entitled.
5I. Further Assurances. From time to time, as and when reasonably
requested by any party hereto after the Closing, the other parties will (at the
expense of the requesting party) execute and deliver, or cause to be executed
and delivered, all such documents, instruments and consents and will use
reasonable efforts to take all such actions as may be reasonably requested or
necessary to carry out the intent and
9
8
purposes of this Agreement, and to vest in Buyer good title to, possession of
and control of the interests transferred hereunder.
[THE REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY.]
10
9
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the Effective Date.
SELLER:
TeleCom Industrial Group, Inc.
By TCC Industries, Inc., its Sole Shareholder
PURCHASER:
The Ontra Companies, Inc.
By:
------------------------------------------
Its:
------------------------------------------
10
ANNEX 1
PALADIN FINANCIAL, INC. DESKTOPS
NAME SYSTEM TYPE SERVICE TAG MONITOR MODEM PRICE $
Misc. Telecom Tools estimated value $ 200.00
John Darden Dell Latitude CPI Laptop $ 1,550
ALR Quad6 PDC (Exchange email server, file and print server etc. Dell 15" $ 8,136.61
Brian DeRoeck Dell Optiplex GXa C4QND Dell 15" $ 1,200
Cindy Castille Dell Optiplex GXa CK6YW Dell 15" $ 1,200
Ginger Ledbetter Dell Optiplex GXi BHB0Z Dell 15" ZOOM V.34+$40.00 $ 1,240
Jim Barlow Dell Optiplex GXa C4QN9 Dell 15" ZOOM V.34+$40.00 $ 1,240
John Darden Dell Optiplex GXa C6QK8 Dell 21" $ 1,200
John Hickman Dell Optiplex GXa CMG18 Dell 15" $ 1,200
Jorge Sauri Dell Optiplex GXa C4QN8 Dell 21" $ 1,200
Kaye Overcash Dell Optiplex GXa BVXCQ Dell 15" ZOOM V.34+$40.00 $ 1,240
Linda Dunkeson Dell Optiplex GX1 GMT5N Dell 15" ZOOM V.34+$40.00 $ 1,240
Mary Lou Adrian Dell Optiplex GXa CT3HG Dell 15" $ 1,200
Todd Barry Dell Optiplex GXa CMG15 Dell 15" $ 1,200
Tricia Dickerson Dell Optiplex GXa BVXCT Dell 15" $ 1,200
Victor Rodriguez Dell Optiplex GXa CT4JF Dell 15" ZOOM V.34+$40.00 $ 1,240
Wayne Pike Dell Optiplex GXi GMT5R Dell 15" $ 1,200
Ming (need for solomon) Dell Optiplex GXa BVXCX Dell 15" $ 1,200
Open Dell Optiplex GXa BVXCR Dell 15" $ 1,200
Open Dell Optiplex GXa CT3HH Dell 15" $ 1,200
Open Dell Optiplex GXa CK6Z2 Dell 15" $ 1,200
Open Dell Optiplex GXa CT3HJ Dell 15" $ 1,200
Open Dell Optiplex GXi 9WK6N Dell 15" $ 1,200
Open Dell Optiplex GXa C2ZJN Dell 15" $ 1,200
Open Dell Optiplex GXa CM612 Dell 15" $ 1,200
Open Dell Optiplex GXa BH7J6 Dell 15" $ 1,200
Open Dell Optiplex GXa BH78Z Dell 15" $ 1,200
Open Dell Optiplex GXa D91GR Dell 15" $ 1,200
Open Toshiba 445CDX $ 1,200
2 Zoom modems 28.8 V.34 $ 80
Book Shelf $ 100
PRINTERS
LaserJet 5Si Floor (Need for 90% faxing and printing configuration) $ 1,185
LaserJet 5 Accounting (Need for private check and invoice printing etc.) $ 600
TOTAL $ 43,251.61
12
11
PAGE 2 - ANNEX 1
PALADIN FINANCIAL, INC. LICENSES/NOTICES
CT Corp Notice of Lending Servicing
State Represent Authority License Expires License Expires
- -----------------------------------------------------------------------------------------------------------------
Arizona Yes Yes N/A
California Yes Yes Yes
Colorado Yes Yes
Delaware Yes Yes
Florida Yes Yes Yes 8/31/00
Georgia Yes Yes Yes 12/31/99
Illinois Yes Yes
Minnesota Yes Yes N/A
Nevada No Yes N/A Yes
New Jersey Yes Yes
New Mexico No Yes N/A N/A
New York Yes Yes No
Utah Yes Yes N/A 1/31/99 N/A
Wisconsin Yes Yes No
13
12
ANNEX 2
Excluded Rights
1. The right to:
a. Cash in accounts.
b. The interest spread earned to January 15, 1999 on the
Title I Loans (approximately $600,000) owned by
Riverway Bank pursuant to the terms of a Master
Purchase Agreement between Riverway Bank, TCC
Industries, Inc. and Paladin Financial, Inc. dated
January 30, 1998, as amended.
2. The right, if any, to remain in possession of the premises
leased by TCC Industries, Inc. at 504 Lavaca Street, 10th Floor, Austin, Texas
after January 31, 1999.
14