MERGER AND REORGANIZATION AGREEMENT
THIS MERGER AND REORGANIZATION AGREEMENT dated as of April 4, 2000, is
entered into among PRE-CELL SOLUTIONS, INC., a Colorado corporation
("Pre-Cell"), USI MERGER CORP., a Georgia corporation and wholly-owned
subsidiary of Pre-Cell ("Merger Subsidiary"), USINTELLICOM, INC., a Georgia
corporation ("USI"), and Ronald I. Kindland (Kindland and such other
stockholders being referred to collectively herein as, the "Stockholders").
WHEREAS, the Stockholders are the owners of all of the outstanding
capital stock of USI in the respective amounts set forth in Exhibit A;
WHEREAS, subject to the terms and conditions of this Merger and
Reorganization Agreement ("Agreement"), the Parties desire to consummate a
merger, as contemplated herein, pursuant to which the Merger Subsidiary shall be
merged with and into USI so that USI becomes a wholly-owned subsidiary of
Pre-Cell; and
WHEREAS, for Federal income tax purposes, the parties intend that such
merger qualify as a reorganization under the provisions of Section 368(a) of the
United States Internal Revenue Code of 1986, as amended (the "Code").
IT IS AGREED:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Upon the terms and subject to the conditions
hereof, and in accordance with the relevant provisions of the Georgia Business
Corporation Code (the "GBCC"), the Merger Subsidiary and USI shall consummate a
merger (the "Merger") of the Merger Subsidiary with and into USI at the
Effective Time (as hereinafter defined) in accordance with the provisions of
this Agreement. Following the Merger, USI shall continue as the surviving
corporation (the "Surviving Corporation") and shall continue its existence under
the laws of the State of Georgia and the separate corporate existence of Merger
Subsidiary shall cease.
Section 1.2 Effective Time. At the Closing, USI and the Merger
Subsidiary shall file with the Georgia Secretary of State in accordance with the
GBCC an executed copy of the Certificate of Merger in the form of Exhibit B
hereto (the "Certificate of Merger") reflecting the Merger. The Merger shall
become effective at such time as the Certificate of Merger is so filed with the
Georgia Secretary of State (the "Effective Time"). To the extent permitted under
law, Kindland, on behalf of and with the authority of the Stockholders, hereby
waives publication of the Articles of Merger. Kindland, on behalf of and with
the requisite authority of the Stockholders, hereby agrees to the adoption and
filing of the Certificate of Merger as required under the GBCC, and acknowledges
and agrees that his signature hereto, on behalf of himself and the Stockholders,
shall constitute the unanimous written consent of the Stockholders for purposes
of authorizing the foregoing by unanimous written consent of stockholders as
provided under the GBCC.
Section 1.3 Effects of the Merger. The Merger shall have the effects
set forth in Section OCGA-14.2-1106 of the GBCC.
Section 1.4 Certificate of Incorporation and By-Laws. The Articles of
Incorporation and the By-Laws of Merger Subsidiary shall be the Articles of
Incorporation and By-Laws of the Surviving Corporation at the Effective Time.
Section 1.5 Directors and Officers of the Surviving Corporation. At the
Effective Time, the Board of Directors and officers of the Surviving Corporation
shall consist of the persons listed in Schedule 1.5, each to serve until his or
her successor is elected and qualified.
ARTICLE II
CONVERSION OF SHARES AND RELATED MATTERS
Section 2.1 Conversion of Outstanding Stock of the Merger Subsidiary
and Exchange for Stock of Surviving Corporation. Upon consummation of the
Merger, all 100 shares of the common stock, no par value, of the Merger
Subsidiary ("Merger Subsidiary Stock") outstanding immediately prior to the
Effective Time shall, by virtue of the Merger and without any action on the part
of the holder thereof, be converted into and exchanged for 100 shares of the
common stock, no par value, of USI ("Surviving Corporation Stock"), which shall
represent all of the issued and outstanding shares of capital stock of the
Surviving Corporation immediately after the Effective Time. All shares of
Surviving Corporation Stock shall be fully paid and non-assessable. Promptly
after the Effective Time, the Surviving Corporation shall issue to Pre-Cell a
stock certificate representing the 100 shares of Surviving Corporation Stock in
exchange for the certificate or certificates which formerly represented 100
shares of Merger Subsidiary Stock, which stock certificates shall be immediately
canceled.
Section 2.2 Conversion of USI Shares. Subject to the provisions of
Section 1.2, all of the outstanding shares of common stock, no par value, of USI
that are outstanding immediately prior to the Effective Time (the "USI Shares")
shall be converted into the right to receive, at the Closing, an aggregate of
11,440,000 shares (the "Stock Consideration") of Pre-Cell's common stock, par
value $.01 per share ("Pre-Cell Stock"),
Section 2.3 Pre-Cell Stock. The Pre-Cell Stock, upon issuance under
Section 2.2 shall be subject to the restrictions of Rule 144 promulgated by the
United States of America Securities and Exchange Commission (the "SEC") under
the Securities Act of 1933, as amended (the "Securities Act"), until properly
disposed of in accordance with the terms and conditions of Rule 144 or another
exemption to the registration requirements of the Securities Act. The number of
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shares of Pre-Cell Stock constituting the consideration payable to any
Stockholder shall be rounded up or down to the nearest whole number of shares.
Section 2.4 Registration Rights.
(a) General. As soon as practicable after the Closing Date, but no
later than September 30, 2000 in any event, Pre-Cell shall file a registration
statement with the United States Securities and Exchange Commission ("SEC") to
register (i) the Pre-Cell Shares issued to USI Stockholders as the Merger
Consideration hereunder; (ii) those Pre-Cell Shares to be issued to the holders
of the Converted Options upon the exercise of the Converted Options as
contemplated thereby; and (iii) those Pre-Cell shares to be issued to USI
Stockholders under the Option Pool Agreement (as hereinafter defined)
(collectively, the "Holders") under the Securities Act of 1933, as amended (the
"Securities Act"), or shall include all such Pre-Cell Shares in a registration
statement which has been filed but not been declared effective, if allowable
under the Securities Act and the rules promulgated thereunder, so that they may
be sold by the Holders to the extent legally permissible. Pre-Cell shall use its
reasonable efforts to cause such registration statement to be declared effective
by the SEC no later than November 30, 2000, and once such registration statement
is declared effective, to keep it effective until all securities registered
thereby are either sold or can be sold under an exemption from the registration
requirements of the Securities Act. Pre-Cell shall bear all fees and expenses
incurred by it in connection with the preparation and filing of such
registration statement. Each Holder will pay all brokerage discounts and
commissions with respect to the sale of his Pre-Cell Shares and any fees and
expenses of separate counsel and accountants which may be retained by the
Holders. Each person for whom Pre-Cell Shares are to be registered for resale
under such registration statement will be required to execute a lock-up
agreement in the form annexed hereto as Exhibit F pursuant to which he shall
agree to (i) not sell any Pre-Cell Shares acquired by him hereunder until the
six month anniversary of the Closing Date; and (ii) only to sell up to that
percentage of the Pre-Cell Shares owned by him as determined by the Pre-Cell
Board of Directors during any three-month period beginning six months after the
Closing Date and ending eighteen months after the closing date.
Notwithstanding any other provision of this Section 2.4, (i) Pre-Cell
shall have no obligation hereunder to register the Pre-Cell Shares on behalf of
a Holder unless (a) such Holder executes a lock-up agreement as described above
and (b) the Holder provides Pre-Cell with all of the information and documents
with respect to his ownership of the Pre-Cell Shares, compliance with the law,
manner of proposed disposition and such other matters as Pre-Cell shall
reasonably request for disclosure in the registration statement; (ii) Pre-Cell
shall not be obligated to register any of the Pre-Cell Shares unless such
registration is then permitted by law and the policy of the SEC; and (iii) it is
understood and agreed that there may be periods of up to 90 days in duration in
any year during which the registration statement filed in accordance with this
Section lapses into noneffectiveness as a result of (a) the unavailability of
financial statements required to update such registration statement or (b) the
occurrence of material events which require the filing of an amendment to such
registration statement.
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(b) Indemnification
(i) Pre-Cell shall indemnify and hold harmless, to the extent
permitted by law, each Holder, its officers and directors and each person who
controls a Holder (within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act) against all losses, claims, damages,
liabilities and expenses (including reasonable attorneys' fees, costs and
expenses) caused by any untrue or alleged untrue statement of material fact
contained in any registration statement filed pursuant to Section 2.5(a),
prospectus or preliminary prospectus or any amendment thereof or supplement
thereto, or any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as the same are caused by or contained in or omitted from any
information furnished in writing to Pre-Cell by such Holder for use therein.
(ii) In connection with any registration statement in which a
Holder is participating, such Holder will furnish to Pre-Cell such information
as Pre-Cell reasonably requests for use in connection with any such registration
statement or prospectus, and to the extent permitted by law, will indemnify
Pre-Cell, its directors and officers and each person who controls Pre-Cell
(within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act) against any losses, claims, damages, liabilities and expenses
(including reasonable attorneys' fees, costs and expenses) resulting from any
untrue statement of material fact contained in the registration statement,
prospectus or preliminary prospectus or any amendment thereof or supplement
thereto or any omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only to the extent
that such untrue statement or omission is contained in or omitted from any
information so furnished by such Holder in writing which states that such
information is for use in such registration statement, prospectus or preliminary
prospectus or any amendment or supplement thereto.
(iii) Any person entitled to indemnification under this Section
2.4(b) will (i) give prompt written notice to the indemnifying party of any
claim with respect to which it seeks indemnification; provided, that the failure
to give such notice shall not relieve the indemnifying party of its obligations
hereunder; and (ii) unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may exist
with respect to such claim, permit such indemnifying party to assume the defense
of such claim with counsel reasonably satisfactory to the indemnified party and
such indemnifying parties shall promptly and vigorously assume such defense at
its cost and expense. If such defense is assumed, the indemnifying party will
not be subject to any liability for any settlement made by the indemnified party
without its consent (but such consent will not be unreasonably withheld). An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a claim shall promptly pay all costs and expenses of the indemnified party's
defense, but will not be obligated to pay the fees and expenses of more than one
counsel for each party indemnified by such indemnifying party with respect to
such claim.
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Section 2.5 Conversion of USI Options. At the Effective time, all
outstanding options and warrants to purchase USI Shares, a list of which is
attached hereto as Schedule 2.5, ("USI Options") shall automatically be
converted into options and warrants (the "Converted Options") to purchase
Pre-Cell Shares on the basis of 8.8 Pre-Cell Shares for each USI Share entitled
to be purchased under the USI Options, at the per-share price equal to the
quotient of (i) the price contained in the USI Options, divided by (ii) 8.8.
Additionally, the vesting of the Converted Options shall be accelerated such
that all of the Converted Options shall be immediately vested upon the
consummation of the Merger. Other than the foregoing changes, each holder's
Converted Options shall have the same exercise terms as his USI Options.
ARTICLE III
Closing
Section 3.1 Time and Place of the Closing. Subject to the terms and
conditions of this Agreement, the consummation of the transactions contemplated
by this Agreement pursuant hereto shall take place at a closing (the "Closing")
to be held concurrently with the execution of this Agreement, at the offices of
Tobin & Reyes, P.A., 7251 West Palmetto Park Road, Boca Raton, Florida 33433, on
a date and at a time mutually agreeable to the parties (the "Closing Date").
Section 3.2 Procedure at the Closing. At the Closing, the parties agree
to take the following steps in the order listed below (provided, however, that
upon their completion all of these steps shall be deemed to have occurred
simultaneously):
(a) Pre-Cell shall deliver the certificates representing the Stock
Consideration to the Stockholders in accordance with Exhibit A;
(b) The Stockholders shall deliver to Pre-Cell certificates
representing their respective shares of USI common stock, duly endorsed or
accompanied by duly executed stock powers and with all requisite transfer tax
stamps;
(c) Merger Subsidiary and USI shall duly execute the Certificate of
Merger and file the Certificate of Merger with the State of Georgia Secretary of
State.
(d) Pre-Cell and the USI employees listed on Exhibit D shall execute
and deliver to each other an employment agreement as mutually agreed by the
employees and Pre-Cell (the "Employment Agreements");
(e) USI shall deliver to Pre-Cell certified copies of resolutions of
the Stockholders and directors of USI authorizing the execution and delivery of
this Agreement by USI and the performance of USI's obligations hereunder and its
consummation of the transaction contemplated hereby;
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(f) Merger Subsidiary shall deliver to the Stockholders certified
copies of resolutions of the directors of Merger Subsidiary authorizing the
execution and delivery of this Agreement by Merger Subsidiary and the
performance of Merger Subsidiary's obligations hereunder and its consummation of
the transaction contemplated hereby;
(g) Pre-Cell shall deliver to the Stockholders certified copies of
resolutions of the directors of Pre-Cell authorizing the execution and delivery
of this Agreement by Pre-Cell and the performance of Pre-Cell's obligations
hereunder and its consummation of the transaction contemplated hereby;
(h) USI shall deliver the corporate books and records, correspondence
and employment records to Merger Subsidiary;
(i) The Pre-Cell Major Stockholders and the USI Major Stockholders
shall execute the Voting Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF USI
In order to induce Pre-Cell and Merger Subsidiary to enter into this
Agreement and to consummate the transactions contemplated under this Agreement,
USI hereby makes the following representations and warranties each of which is
relied upon by Pre-Cell and Merger Subsidiary regardless of any other action,
omission to act, investigation made or information obtained by Pre-Cell and
Merger Subsidiary.
Section 4.1 Organization, Power and Authority of USI. USI is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Georgia and USI has the requisite corporate power and authority
to own or lease its properties and to carry on its business as it is now being
conducted. USI is duly qualified as a foreign corporation and is in good
standing under the laws of each other jurisdiction in which the conduct of its
business or the ownership of its assets requires such qualification, except
where the failure to qualify would not result in a material adverse effect on
USI or its business. USI has no subsidiaries.
Section 4.2 Due Authorization; Binding Obligation. USI has the
requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated by this Agreement. This Agreement has
been duly and validly executed and delivered by USI and is the legal, valid and
binding obligation of USI, enforceable in accordance with its terms, except as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, preferential transfer, moratorium or
similar laws relating to enforcement of creditors' rights generally and general
principles of equity. Except for any corporate action required by USI, no other
action on the part of any individual or other person or entity is necessary to
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authorize this Agreement or for the consummation of the transactions
contemplated by this Agreement. USI has duly executed this Agreement and
authorized the execution of this Agreement and the consummation of the
transactions contemplated by this Agreement as required under the Georgia GBCC.
Neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated by this Agreement will: (i) conflict with or violate
any provision of USI's Articles of Incorporation or by-laws, or any law,
ordinance or regulation or any decree or order of any court or administrative or
other governmental body which is either applicable to, binding upon or
enforceable against USI; (ii) result in any material breach of or default under
any material mortgage, other contract, agreement, indenture, will, trust or
other instrument which is either binding upon or enforceable against USI or any
of USI' Assets; (iii) result in any breach of or default under any contract;
(iv) violate any legally protected right of any individual or entity or give to
any individual or entity a right or claim against USI or Pre-Cell; or, (v)
impair or in any way limit any material governmental or official license,
approval, permit or authorization of USI to conduct its business. Attached to
this Agreement and marked as Exhibit G are true, correct and complete copies of
the Articles of Incorporation, as amended, and Bylaws, as amended, of USI.
Section 4.3 Financial Statements. Attached to this Agreement as Exhibit
H are true, correct and complete copies of the unaudited financial statements of
USI as of December 31, 1999 and the related statements of earnings and changes
in financial position for the period then ended (collectively, the "Financial
Statements"). The Financial Statements (i) have been prepared in accordance with
USI's accounting policies consistently applied, on a basis consistent with past
practices; (ii) are true, complete and correct; (iii) fairly present the
financial condition of USI as of their respective dates and results of its
operations for the periods ending on their respective dates; and (iv) do not
include or omit to state any fact which renders those statements misleading.
Section 4.4 No Undisclosed Liabilities. USI has no liabilities or
obligations (whether secured, unsecured, absolute, accrued, asserted, contingent
or otherwise) of any nature, whether as principal, agent, partner, co-venturer,
guarantor or in any other capacity except: (i) the liabilities and obligations
of USI that are reflected in the Financial Statements and only to the extent
reflected; (ii) liabilities incurred or accrued in the ordinary course of
business since December 31, 1999 which do not, either individually or in the
aggregate, have a material adverse effect on the financial condition of USI; or
(iii) liabilities otherwise disclosed in Schedule 4.4.
Section 4.5 Licenses; Compliance. USI possesses all licenses and other
required governmental or official approvals, permits, consents and
authorizations necessary for the operation of the Business, all of which are
listed on Schedule 4.5 (collectively the "Authorizations"). USI is in material
compliance with: (i) the terms of all Authorizations; (ii) all laws, ordinances,
statutes and regulations where noncompliance would have a material adverse
effect on USI and its business or assets; and, (iii) all judgments, orders,
rulings or other decisions of any governmental or other regulatory authority,
court or arbitrator having jurisdiction over USI. Neither the execution,
delivery or performance of this Agreement nor the performance of the
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transactions contemplated by this Agreement will affect the validity of any
Authorizations and the same shall remain in full force and effect upon the
consummation of the transactions contemplated by this Agreement, except for
Authorizations which by their terms are not transferable.
Section 4.6 Consents and Approvals. No approval, consent or
authorization must be obtained by USI for the execution, delivery or performance
of this Agreement or for the consummation of the transactions contemplated by
this Agreement, including, without limitation, the filing or registration with
any governmental or other regulatory authority.
Section 4.7 No Stockholder or Affiliate Relationships with USI's
Customers; USI's Interest in Other Businesses. Neither USI nor any of the
Stockholders or their respective affiliates (as such term is defined in Rule 405
promulgated by the SEC under the Securities Act) ("Affiliate") has, or during
the past 5 years had, any direct or indirect material interest in any of USI's
customers. USI does not have any financial interest in any person, firm or
corporation which is, or during the past 5 years was, directly or indirectly,
(a) engaged in the business engaged in by USI or (b) a customer or supplier of
USI, other than ownership of not more than 1% of the equity securities of a
company whose common stock is publicly traded.
Section 4.8 Litigation, Orders and Decrees. Except as listed on
Schedule 4.8, there are no actions, suits, claims, governmental investigations
or arbitration proceedings pending or to the best of USI's knowledge, threatened
against or affecting USI or the Business, assets, or financial condition of USI
and there are no facts or circumstances which are reasonably likely to create a
basis for any of the foregoing, which, either individually or in the aggregate,
would have a material adverse affect on USI, its business or financial
condition. There are no outstanding orders, decrees or stipulations issued by
any local, state or federal judicial authority in any proceeding to which USI is
or was a party which may have a material adverse effect on USI.
Section 4.9 Real Property Owned or Leased. USI does not own any real
property. Attached to this Agreement as Schedule 4.9 is a true and complete list
of all leases of real property (the "Leased Real Property") to which USI is a
party, including all amendments and modifications thereto (the "Real Property
Leases"). USI enjoys peaceful and undisturbed possession of the Leased Real
Property, and the Real Property Leases are the valid and legally binding
obligations of USI and the respective lessors, enforceable against USI and the
respective lessors in accordance with their respective terms, and are in full
force and effect. USI (i) has not received written notice of default under any
of the Real Property Leases, (ii) is not in material default of any Real
Property Leases and (iii) no event has occurred which, with the passage of time
or the giving of notice or both, would constitute a material default under any
of the Real Property Leases.
Section 4.10 Personal Property Leased and Purchase Options. Attached as
Schedule 4.10 is a list of all leases of personal property (the "Personal
Property Leases") to which USI is a party. USI has provided to Pre-Cell true and
complete copies of the Personal Property Leases, including all amendments and
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modifications thereto and true and complete copies of all agreements regarding
USI's rights to purchase the leased personal property which is the subject of
the Personal Property Leases ("the Leased Personal Property") on or before the
expiration of the Personal Property Leases, including all amendments and
modifications thereto (the "Purchase Options"). USI enjoys peaceful and
undisturbed possession of the Leased Personal Property, and the Personal
Property Leases and Purchase Options are the valid and legally binding
obligations of USI and the respective lessors and option grantors, enforceable
against USI and the respective lessors and option grantors in accordance with
their respective terms, subject to the effect of any bankruptcy or other similar
law affecting creditors' rights generally, and are in full force and effect. USI
(i) has not received written notice of default under any of the Personal
Property Leases, (ii) is not in default of any Personal Property Leases, and
(iii) no event has occurred which, with the passage of time or the giving of
notice or both, would constitute a material default under any of the Personal
Property Leases. None of the Purchase Options, if any, have expired.
Section 4.11 Title to Purchased Assets. USI has good and marketable
title to all of its property, tangible or intangible, subject to liens for
current taxes and assessments not yet due and payable. All of USI's property is
free and clear of restrictions on or conditions to transfer or assignment, and
free and clear of any mortgage, lien, charge, encumbrance, security interest or
other restrictions.
Section 4.12 Condition of Purchased Assets. All of the tangible assets
of USI and the Leased Personal Property are in good condition, in good operating
order and are fit for the purposes for which those assets are used or intended
to be used, subject to normal wear and tear.
Section 4.13 Material Contracts. Attached as Schedule 4.13 is a
complete and correct list of each of the following types of contracts or
commitments (whether oral or written) to which USI is a party (collectively the
"Contracts"): (i) Contracts for the employment of any officer or employee and
all bonus, incentive compensation, profit-sharing, retirement, pension, group
insurance, death benefit or other fringe benefit plans, deferred compensation or
post-termination obligations; (ii) Contracts for the future purchase of
materials, inventory, supplies, services or equipment; (iii) distributor
agreements and contracts for the purchase or sale of inventory or supplies; (iv)
agreements or arrangements for the purchase, sale or lease of any other assets;
(v) pledges, sales contracts, leases, security agreements or other similar
agreements with respect to USI's properties; (vi) leases of machinery or
equipment; (vii) loan agreements, promissory notes, guarantees, subordination or
similar type agreements; (viii) consulting agreements; and, (ix) any contract
not otherwise covered by clauses (i) through (viii) above which involves annual
or aggregate payments in excess of $1,000. USI has furnished to Pre-Cell true,
complete and accurate copies of all Contracts that are in writing and has
provided, in the case of oral contracts, complete and accurate descriptions of
all Contracts that are not in writing. Except as set forth in Schedule 4.13, USI
has performed all of the obligations required to be performed by it to date
under the Contracts, and is not in default (with notice or lapse of time or
both) under any of Contracts. USI has obtained all necessary consents with
respect to any USI Contract requiring consent on or prior to the date hereof.
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Except as set forth on Schedule 4.13, the consummation of the transactions
contemplated by this Agreement will not materially affect the continuation,
validity or effectiveness of any of Contracts.
Section 4.14 Contracts with Customers. Schedule 4.14 sets forth a list
of (a) all Contracts or other understandings or arrangements to which USI is a
party relating to the sale or furnishing by it of goods or services where the
consideration for such sale is $1,000 or more, in any single case, (b) any
claims by parties other than USI with respect thereto, (c) product guarantees or
warranties made by USI relating to its goods or services, and (d) any pending
claims by USI with respect thereto. None of the customers, suppliers or other
persons which is a party to any of the Contracts listed in Schedule 4.14 has
notified USI of any intention to terminate its contract or arrangement for
service.
Section 4.15 Contracts Valid; No Default. All Contracts required to be
listed in any of the Schedules referred to in this Agreement are valid and
binding, enforceable in accordance with their respective terms, subject to the
effect of any bankruptcy or other similar law affecting creditors' rights
generally, and are in full force and effect. Except as set forth in such
Schedules, there is not under any such Contract, (a) any existing default by
USI, or any event which, after notice or lapse of time, or both, would
constitute a default by USI or result in a right to accelerate by any other
person or a loss of any rights of USI and (b) to the best of USI's knowledge,
any default by any other person, or any event which, after notice or lapse of
time, or both, would constitute a default by any such person or result in a
right to accelerate by USI or a loss of any rights of any such person. No
existing Contract relating to the business of USI is cancelable by any other
party thereto or is likely to be canceled. Except as disclosed in such
Schedules, USI is not a party to or bound by any Contract which, upon
performance, is reasonably expected to result in any loss or liability to USI.
True and complete copies of all Contracts and other documents listed on such
Schedules (together with any and all amendments thereto) have been delivered to
Pre-Cell.
Section 4.16 Labor Matters. USI is not a party to any collective
bargaining agreements with its employees. USI is in compliance with all federal,
state and local laws regarding employment and employment practices, conditions
of employment, wages and hours and occupational laws, the violation of which
would have a material adverse effect on USI. USI is not engaged in unfair labor
practices, and there are no unfair labor practice complaints pending or, to the
best of USI's knowledge, threatened against USI before the National Labor
Relations Board or any other governmental or regulatory board or agency
performing similar functions. There is no labor strike, slowdown, work stoppage
or dispute pending or threatened against or involving USI. To the best of USI's
knowledge, none of USI's employees are engaged in organizing or are members of
any union or other employee group that is seeking recognition as a bargaining
unit.
Section 4.17 Absence of Changes. Except as set forth in Schedule 4.17,
since December 31, 1999, there has not been: (i) any material adverse change in
the financial condition, assets, liabilities, Business or operations of USI;
(ii) any damage, destruction or loss, whether or not covered by insurance,
materially and adversely affecting the properties, financial condition or
business of USI; (iii) any change in the outstanding capital stock of USI; (iv)
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declared, paid or set aside for payment any dividend or other distribution
(whether in cash, stock, property or any combination thereof) in respect of
USI's common stock or any cancellation, exercise or redemption or other
acquisition by USI of any shares of USI's common stock; (v) any increase in the
rate or terms of compensation payable or to become payable by USI to any of its
officers, directors or key employees or any increase in the rate or terms of
contribution to any employee benefit plans, except as required by law; (vi) any
liabilities or obligations incurred or agreed to be incurred (whether absolute,
accrued, contingent or otherwise), except as incurred in the ordinary course of
business consistent with past practices; (vii) any material capital expenditure
or commitment for replacements or additions or improvements; (viii) any change
by USI in accounting methods, principles or practices; (ix) any disposal,
mortgage, pledge or other disposition of any of its assets other than in the
ordinary course of business; or (x) receipt by USI of any notice of termination
of any contract, lease or other agreement.
Section 4.18 Accuracy of Documents, Exhibits and Schedules. All
contracts, instruments, agreements and other documents delivered by USI to
Pre-Cell for Pre-Cell's review in connection with this Agreement and the
transactions contemplated hereby, including all articles of incorporation,
by-laws, corporate minutes, stock record books, financial statements and tax
returns are true, correct and complete copies of all those contracts,
instruments, agreements and other documents. All Exhibits and Schedules to this
Agreement are true correct and complete as of the date hereof. No statement
contained in this Agreement or in any certificate, Exhibit, Schedule or
instrument furnished to Pre-Cell pursuant to the provisions of this Agreement or
in connection with the consummation of the contemplated transactions contains or
will contain any materially untrue statement or does not include or omit to
state any fact which renders those statements misleading.
Section 4.19 Investment Representations. All shares of Pre-Cell Stock
to be acquired by the Stockholders pursuant to this Agreement will be acquired
for his/her own account and not with a view towards distribution thereof. USI
and the Stockholders understand that they must bear the economic risk of the
investment in the Pre-Cell Stock, which cannot be sold by them unless they are
registered under the Securities Act, or an exemption therefrom is available, and
such sale is permitted under the terms of the Lock-Up Agreement. The
Stockholders, acting through their representatives, have had both the
opportunity to ask questions and receive answers from the officers and directors
of Pre-Cell and all persons acting on its behalf concerning the business and
operations of Pre-Cell and to obtain any additional information to the extent
Pre-Cell possesses or may possess such information or can acquire it without
unreasonable effort or expense necessary to verify the accuracy of such
information. The Stockholders acknowledge receiving copies of the SEC Filings
referred to in Section 5.5. The certificates representing the shares of Common
Stock shall bear the legends set forth in Exhibit I.
Section 4.20 Proprietary Rights.
(a) Except as listed on Schedule 4.20(a), there are no trademarks,
trademark applications, trade names, assumed names, service marks, logos,
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patents, patent applications, copyrights and copyright registrations, owned or
licensed by USI and used in or necessary for the conduct of the business and
operation of USI (the foregoing together with all inventions, trade secrets,
customer lists and confidential processes, and all other similar rights
presently owned or licensed by USI are the "Proprietary Rights"). USI owns or
possesses the royalty-free license or other right to use all of the Proprietary
Rights which are required to be listed on Schedule 4.20(a) or which are
necessary to conduct its business as presently operated, and, except as set
forth on Schedule 4.20(a), no person, firm, corporation or other entity is
entitled to restrain USI from using any such Proprietary Rights. No other
Proprietary Rights are used in or are necessary for the conduct of the business
and operation of USI as presently conducted.
(b) To the best of USI's knowledge, except as disclosed in Schedule
4.20 (b), no Proprietary Rights or know-how used in or necessary for the conduct
of the business and operation of USI conflict with or infringe upon any similar
rights or services of any other person. Except as disclosed in Schedule 4.20
(b), no claims have been asserted by any person with respect to the ownership,
validity, license or use of the Proprietary Rights or the provision of any
services by USI and there is no basis for any such claim.
(c) Schedule 4.20(c) accurately identifies all material databases and
computer software owned, licensed or otherwise used in connection with USI's
business. Except as set forth on Schedule 4.20(c), USI has all the databases and
computer software used or necessary to conduct USI' business.
Section 4.21 Records. The books and records, correspondence, employment
records and files of or relating to the Business USI are complete and correct in
all material respects, and there have been, and will be, no material
transactions which are required to be set forth therein which have not been so
set forth.
Section 4.22 Taxes, Tax Returns. All federal, state, local and foreign
income, property, sales, and other taxes, assessments, governmental charges,
penalties, interest and fines due and payable by USI and by any other person,
firm or corporation which will or may be liabilities of USI ("Taxes"), for all
periods ending on or before the Balance Sheet Date, have been paid in full or
have been fully reserved against on the Balance Sheet. USI has filed all
federal, state, local and foreign income, excise, property, sales, withholding,
social security, information returns, and other tax returns, reports and related
information ("Returns") required to have been filed by it to the date hereof,
and no extension of the time for filing a Return is presently in effect. The
Returns that have been filed have been accurately prepared and have been duly
and timely filed. USI's federal income tax returns have not been audited by the
Internal Revenue Service for all fiscal years through the year ended December
31, 1998. There are no agreements, waivers or other arrangements providing for
an extension of time with respect to the filing of any Return, or payment of any
tax, governmental charge or assessment or deficiency, by USI; and there are no
actions, suits, proceedings, investigations or claims now threatened or pending
against USI in respect of taxes, governmental charges or assessments, or any
matter under discussion with any governmental authority relating to taxes,
governmental charges or assessments asserted by any such authority.
Page 12
Section 4.23 Environmental Matters; Health and Safety Laws. USI is in
material compliance with all federal, state and local laws, regulations,
permits, orders and decrees relating to protection of the environment and
employee health and safety ("Applicable Requirements"). USI has not received any
notice to the effect that its operations are not in compliance with any of the
Applicable Requirements or the subject of any governmental investigation
evaluating whether any remedial action is needed to respond to a release of any
toxic or hazardous waste or other substance (including petroleum products) into
the environment and USI knows of no facts which could constitute the basis for
any thereof.
Section 4.24 Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of USI, provided, however, USI entered into an agreement
with RiverHawk Capital Resources, a division of RiverHawk Holdings, Inc.
("RiverHawk"), which USI terminated. RiverHawk is claiming remuneration under
the agreement arising out of the Merger which USI denies. The matter is subject
to binding arbitration.
Section 4.25 Nature and Survival of Representations and Warranties of
USI. All statements contained in any Schedule, document, certificate or other
instrument delivered by or on behalf of USI pursuant hereto or in connection
with the transactions contemplated hereby shall be deemed representations,
warranties, covenants and agreements made by USI. Each representation, warranty,
covenant and agreement made or deemed made by USI shall survive the Closing. The
representations, warranties, covenants and agreements made or deemed made by USI
in this Agreement shall not be affected or deemed waived by reason of the fact
that Pre-Cell or its representative knew or should have known that any such
representations, warranties, covenants or agreement is or might be inaccurate in
any respect. Any furnishing of information to Pre-Cell by USI pursuant to, or
otherwise in connection with, this Agreement, including, without limitation, any
information contained in any document, contract, book or record of USI to which
Pre-Cell shall have access or any information obtained by, or made available to,
Pre-Cell as a result of any investigation made by or on behalf of Pre-Cell prior
to or after the date of this Agreement, shall not affect Pre-Cell's right to
rely on any representation, warranty, covenant or agreement made or deemed made
by USI in this Agreement and shall not be deemed a waiver thereof.
Section 4.26 Capitalization. The number of authorized, issued and
outstanding shares of capital stock of USI is set forth in Schedule 4.26. The
Stockholders (and their respective residential addresses) as set forth on
Exhibit A, and are the record and beneficial owners of all of the outstanding
capital stock of USI, free and clear of all liens, encumbrances or restrictions
to transfer. Except as set forth on Schedule 4.26, there are no options,
warrants or other contractual rights outstanding which require, or give any
person the right to require, the issuance of any capital stock of USI, whether
or not such rights are presently exercisable.
Page 13
Section 4.27 Employee Benefit Plans. Schedule 4.27 sets forth a list of
all the employee benefit plans (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")), programs and
arrangements maintained for the benefit of any current or former employee,
officer or director of USI (collectively, the "USI Benefit Plans"). Each USI
Benefit Plan and any related trust intended to be qualified under Sections
401(a) and 501(a) of the Code has received a favorable determination letter from
the Internal Revenue Service that it is so qualified and nothing has occurred
since the date of such letter that could reasonably be expected to materially
adversely affect the qualified status of such USI Benefit Plan or related trust.
Each USI Benefit Plan has been operated in all material respects in accordance
with the terms and requirements of applicable law and all required returns and
filings for each USI Benefit Plan have been timely made. Neither USI nor any
entity under common control with USI has incurred any direct or indirect
liability under, arising out of or by operation of Title I or Title IV of ERISA
in connection with any USI Benefit Plan and no fact or event exists that could
reasonably be expected to give rise to any such liability. All contributions due
and payable on or before the date hereof in respect of each USI Benefit Plan
have been made in full and in proper form.
Section 4.28 Insurance Policies; Claims. Schedule 4.28 sets forth all
insurance policies and bonds maintained by or on behalf of USI. Except as
disclosed in Schedule 4.28, the insurance policies and bonds set forth in
Schedule 4.28, are provided by reputable insurers or issuers, and provide
adequate coverage for all normal risks incident to the businesses of USI and its
assets. No claims have been made against USI as a result of allegedly defective
products and USI knows of no basis for the assertion of any such claim. No
insurance policy issued to or on behalf of USI has ever been canceled by the
policy issuer.
Section 4.29 Bank Accounts. Schedule 4.29 sets forth the name of each
bank in which USI has an account or safe deposit box, vault, lock-box or other
arrangement, the account number and description of each account at each bank and
the names of all persons authorized to draw thereon or to have access thereto;
and the names of all persons, if any, holding tax or other powers of attorney
from USI.
Section 4.30 Records. The books of account, minute books, stock
certificate books and stock transfer ledgers of USI are complete and correct in
all material respects, and there have been no material transactions involving
USI of the type typically recorded in such records that have not been recorded.
Section 4.31 No Illegal or Improper Transactions. Neither USI nor any
officer, director, employee, agent or affiliate of USI has offered, paid or
agreed to pay to any person or entity (including any governmental official) or
solicited, received or agreed to receive from any such person or entity,
directly or indirectly, any money or anything of value for the purpose or with
the intent of (i) obtaining or maintaining business for the benefit of USI, (ii)
illegally or improperly facilitating the purchase or sale of any product or
service, or (iii) avoiding the imposition of any fine or penalty, in any manner
which is in violation of any applicable ordinance, regulation or law.
Page 14
Section 4.32 Related Transactions. Except as disclosed in Schedule
4.32, and for compensation and related arrangements with employees for services
rendered consistent with past practices, no current or former director, officer,
employee or stockholder of USI has been, (a) a party to any transaction with USI
(including, but not limited to, any contract, agreement or other arrangements
providing for the furnishing of services by, or rental of real or personal
property from, or otherwise requiring payments to, any such director, officer,
employee or shareholder), or (b) the direct or indirect owner of an interest in
any corporation, firm, association or business organization which is a present
competitor, supplier or customer of USI, nor does any such person receive income
from any source other than USI which relates to the business of, or should
properly accrue to, USI.
Section 4.33 Software. USI owns all right, title and interest in and to
the software which is described in Schedule 4.33 (the "Software"). The
marketing, reproduction or use of the Software, does not infringe upon any
patent, copyright, trademark, trade secret or other proprietary right of any
third party. No proceedings have been instituted, are pending or are threatened
which challenge the rights of USI under or the validity of the Software, none of
the intellectual property rights relating to the Software is being infringed
upon by others and none of the intellectual property rights relating to the
Software is subject to any outstanding order or judgment. USI has taken all
steps reasonably necessary to protect the intellectual property rights in the
Software, including, but not limited to, utilization of the proper statutory
form of copyright notice on all copies of the Software and any documentation
relating of the Software that has been commercially distributed prior to the
Closing Date.
Section 4.34 Incorporation of Schedules by Reference. All of the
disclosures, lists, descriptions and otherwise set forth in any Schedule to this
Agreement shall be conclusively deemed to have been made under and with respect
to each and every other Section and Schedule to this Agreement, where
applicable. It is the intent of this provision that the disclosure by USI under
any one Schedule, shall be notice and disclosure to Pre-Cell and Merger
Subsidiary, respectively, under this Agreement.
ARTICLE V
Representations and Warranties of Pre-Cell
In order to induce USI and the Stockholders to enter into this
Agreement and to consummate the transactions contemplated under this Agreement,
Pre-Cell and Merger Subsidiary hereby make the following representations and
warranties each of which is relied upon by USI and the Stockholders regardless
of any other action, omission to act, investigation made or information obtained
by USI or the Stockholders:
Section 5.1 Organization, Power and Authority. Pre-Cell and Merger
Subsidiary are corporations duly organized and validly existing under the laws
of the States of Colorado and Georgia, respectively, with full corporate power
and authority to enter into this Agreement and perform their obligations under
this Agreement.
Page 15
Section 5.2 Due Authorization; Binding Obligation. The execution,
delivery and performance of this Agreement, the consummation of the transactions
contemplated by this Agreement and the issuance of the Stock Consideration have
been duly authorized by all necessary corporate action of Pre-Cell and Merger
Subsidiary. This Agreement has been duly executed and delivered by Pre-Cell and
Merger Subsidiary and is the valid and binding obligation of Pre-Cell and Merger
Subsidiary, enforceable in accordance with its terms. Neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
by this Agreement will: (i) conflict with or violate any provision of the
articles of incorporation or by-laws of Pre-Cell or Merger Subsidiary, or of any
law, ordinance or regulation or any decree or order of any court or
administrative or other governmental body which is either applicable to, binding
upon or enforceable against Pre-Cell or Merger Subsidiary; (ii) result in any
material breach of or default under any material mortgage, contract, agreement,
indenture, will, trust or other instrument which is either binding upon or
enforceable against Pre-Cell or Merger Subsidiary or their respective assets.
Section 5.3 Shares. When issued in accordance with the terms of this
Agreement, the Pre-Cell Stock to be issued to the Stockholders shall be validly
issued, fully paid and non-assessable.
Section 5.4 Consents and Approvals. The execution and delivery of this
Agreement by Pre-Cell do not, and the performance of this Agreement by Pre-Cell
will not, require Pre-Cell to obtain any consent, approval, authorization or
other action by, or to make any filing with or notification to, any governmental
or regulatory authority.
Section 5.5 SEC Reports. Pre-Cell has delivered to the Stockholder its
reports (the "SEC Filings") filed pursuant to the Securities And Exchange Act of
1934, as amended (the "Securities And Exchange Act"). Each of the SEC Filings,
including the financial statements contained therein, as of their filing dates,
complied in all material respects with the requirements of the rules and
regulations promulgated by the Securities and Exchange Commission (the
"Commission") with respect thereto and did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
Section 5.6 Brokers. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Pre-Cell.
Section 5.7 Absence of Changes. Except as set forth in Schedule 5.7,
since December 31, 1999, there has not been: (i) any material adverse change in
the financial condition, assets, liabilities, Business or operations of
Pre-Cell; (ii) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties, financial
condition or business of Pre-Cell; (iii) any change in the outstanding capital
Page 16
stock of Pre-Cell; (iv) declared, paid or set aside for payment any dividend or
other distribution (whether in cash, stock, property or any combination thereof)
in respect of Pre-Cell's common stock or any cancellation, exercise or
redemption or other acquisition by USI of any shares of Pre-Cell's common stock;
(v) any increase in the rate or terms of compensation payable or to become
payable by Pre-Cell to any of its officers, directors or key employees or any
increase in the rate or terms of contribution to any employee benefit plans,
except as required by law; (vi) any liabilities or obligations incurred or
agreed to be incurred (whether absolute, accrued, contingent or otherwise),
except as incurred in the ordinary course of business consistent with past
practices; (vii) any material capital expenditure or commitment for replacements
or additions or improvements; (viii) any change by Pre-Cell in accounting
methods, principles or practices; (ix) any disposal, mortgage, pledge or other
disposition of any of its assets other than in the ordinary course of business;
or (x) receipt by Pre-Cell of any notice of termination of any contract, lease
or other agreement.
Section 5.8 Accuracy of Documents, Exhibits and Schedules. All
contracts, instruments, agreements and other documents delivered by Pre-Cell to
USI for USI's review in connection with this Agreement and the transactions
contemplated hereby, including all articles of incorporation, by-laws, corporate
minutes, stock record books, financial statements and tax returns are true,
correct and complete copies of all those contracts, instruments, agreements and
other documents. All Exhibits and Schedules to this Agreement are true correct
and complete as of the date hereof. No statement contained in this Agreement or
in any certificate, Exhibit, Schedule or instrument furnished to Pre-Cell
pursuant to the provisions of this Agreement or in connection with the
consummation of the contemplated transactions contains or will contain any
materially untrue statement or does not include or omit to state any fact which
renders those statements misleading.
Section 5.9 Limitation of Liabilities. Notwithstanding anything
contained herein to the contrary, Pre-Cell shall have no liability to the
Shareholders if any of the representations and warranties contained in this
Article V are inaccurate or for a breach of any representation or warranty
contained herein.
Section 5.10 Incorporation of Schedules by Reference. All of the
disclosures, lists, descriptions and otherwise set forth in any Schedule to this
Agreement or in any of the SEC Filings shall be conclusively deemed to have been
made under and with respect to each and every other Section and Schedule to this
Agreement, where applicable. It is the intent of this provision that the
disclosure by Pre-Cell under any one Schedule or in any one of the SEC Filings,
shall be notice and disclosure to USI and the Stockholders, respectively, under
this Agreement.
ARTICLE VI
Covenants of USI
Section 6.1 Further Assurances. From time to time after the date of
this Agreement, the Stockholders shall execute and deliver such other
instruments and shall take such other actions as Pre-Cell may reasonably request
to effectuate the transactions contemplated by this Agreement.
Page 17
Section 6.2 Press Releases. Neither the Stockholders nor any of their
Affiliates shall issue or cause to be issued any press release in connection
with or referring to any of the transactions contemplated by this Agreement.
Section 6.3 Non-use of Name. From and after the date hereof, no
Stockholder or any of their Affiliates shall establish or otherwise be
associated with, as an owner, partner, shareholder, employee or otherwise, any
firm which utilizes the name "USI," "US/Intellicom," US/Intelicom" or any
variant thereof (collectively, the "Names") as part of its business name other
than in connection with their employment by Pre-Cell itself after the Closing
Date or grant to any person or entity the right to use the Names or any variant
thereof.
Section 6.4 Maintenance of USI Employee Medical Benefits. From the date
hereof, through the last day of the month in which the Closing takes place, USI
shall continue to afford coverage under its existing health and medical plans to
those employees of USI that are covered under such plans as of the date hereof.
Section 6.5 Lock-Up Agreements. Within thirty days after the Closing,
each of the Stockholders will execute and deliver to Pre-Cell a Lock-Up
Agreement substantially in the form of Exhibit F annexed to this Agreement
pursuant to which they agree to not sell any shares of Common Stock acquired by
them for the period of time indicated on Exhibit F.
Section 6.6 Opinion of Counsel. Within thirty days after the Closing,
USI shall cause its counsel, Andre & Blaustein, LLP to deliver an opinion of
counsel to Pre-Cell and Merger Subsidiary in form and content reasonably
satisfactory to Pre-Cell, Merger Subsidiary and their counsel;
ARTICLE VII
Covenants of Pre-Cell
Section 7.1 Further Assurances. From time to time after the date of
this Agreement, Pre-Cell shall execute and deliver such other instruments and
shall take such other actions as the Stockholders may reasonably request to
effectuate the transactions contemplated by this Agreement.
Section 7.2 Disclosure. Pre-Cell will not be required to obtain the
prior written consent of the Stockholders to disclose the existence or any term
or condition of this Agreement if Pre-Cell believes (based upon the advice of
counsel) such disclosure is required under the securities laws of the United
States.
Page 18
Section 7.3 Membership of Purchaser's Board of Directors.
(a) As soon as reasonably practicable after the Merger, Pre-Cell
agrees to hold an annual meeting of its stockholders and to seek their approval
for an increase in the size of the Board from three (3) members to seven (7)
members. Upon approval by the Pre-Cell shareholders of the increase of the size
of the Board, Pre-Cell agrees to nominate for election and use its best efforts
to have elected to its Board (i) two (2) designees selected by the USI Major
Stockholders (as defined in the Voting Agreement) so long as the USI
stockholders continue to hold an aggregate of at least 6,900,000 of the Pre-Cell
Shares acquired n the Merger; and (ii) one (1) designee selected by the USI
Major Stockholders so long as the USI stockholders continue to own 3,450,000
Pre-Cell Shares acquired in the Merger. In the event the USI stockholders own
less than 3,450,000 of Pre-Cell Shares acquired hereunder, Pre-Cell shall have
no further obligation hereunder to nominate any USI Nominees to the Board.
Section 7.4 Release of Guarantees. Simultaneous with the Closing,
Pre-Cell shall cause the release of those guarantees and accommodations by the
Stockholders set forth in Schedule 7.4 who have exercised options on the option
pool described in Section 7.5.
Section 7.5 Option Pool. Pre-Cell shall establish an option pool
substantially in the form of Exhibit J (the "Option Pool Agreement") pursuant to
which those Stockholders listed on Schedule 7.5 (the "LOC Stockholders") shall
have the right to acquire Pre-Cell common stock at the prices and upon the terms
set forth in an Option Pool Agreement executed by the LOC Stockholders and
Pre-Cell.
Section 7.6 Opinion of Counsel. Within thirty days after the Closing,
Pre-Cell shall cause its counsel, Tobin & Reyes, P.A., to deliver an opinion of
counsel to USI in form and content reasonably satisfactory to USI and its
counsel;
ARTICLE VIII
Miscellaneous
Section 8.1 Survival of Representations and Warranties. All of the
respective representations and warranties of the parties to this Agreement shall
survive the consummation of the transactions contemplated by this Agreement. All
covenants of the parties to this Agreement shall survive the consummation of the
transactions contemplated by this Agreement.
Section 8.2 Amendment and Modification. The parties to this Agreement
may amend, modify and supplement this Agreement but only in writing and such
writing must be signed by all the parties.
Section 8.3 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors, assigns,
heirs, estates, beneficiaries, executors and legal and personal representatives.
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Section 8.4 Entire Agreement. This instrument and the Exhibit and
Schedules attached to this Agreement contain the entire agreement of the parties
with respect to the acquisition and the other transactions contemplated in this
Agreement, and supersede all prior understandings and agreements of the parties
with respect to the subject matter of this Agreement. Any reference in this
Agreement shall be deemed to include the Exhibits and the Schedules.
Section 8.5 Headings. The descriptive headings in this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
Section 8.6 Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed an original.
Section 8.7 Notices. Any notice, demand or communication required or
permitted to be given under any provision of this Agreement shall be given: (i)
when sent by reputable overnight courier service which provides written proof of
delivery, including but not limited to via United Parcel Service, Federal
Express, or other nationally recognized carrier; (ii) when hand-delivered; or
(iii) when transmitted by facsimile, if such facsimile is confirmed to the
sender and is followed by a hard copy of the facsimile communication being
delivered to the party to be notified in accordance with the above, in each case
when addressed to the parties as set forth below, or such other addresses as
shall be specified by written notice delivered to the other parties.
If to Pre-Cell: Pre-Cell Solutions, Inc.
385 East Drive
Melbourne, Florida 32904
Attn: Thomas E. Biddix,
Chief Executive Officer
Facsimile: (407) 729-8484
With a copy to: Tobin & Reyes, P.A.
7251 West Palmetto Park Road
Suite 205
Boca Raton, Florida 33433
Attn: David S. Tobin, Esq.
Facsimile: (561) 620-0656
or the Stockholders: To the addresses set forth on Exhibit A
with a copy to: Andre & Blaustein, LLP
The Candler Building
127 Peachtree Street, N.E.
Atlanta, Georgia 30303-1800
Attn: Jon Blaustein, Esq.
Facsimile: (404) 653-0338
Page 20
All notices, demands and communications shall be effective when
sent. However, the time period in which to respond to any such notice, demand or
communication shall begin to run from the date of receipt by the addressee
thereof, as designated on the return receipt of the notice, demand or
communication or on the date of the actual receipt in the case of delivery by
other means. If a notice, demand or communication is sent but not actually
received by a party as a result of that party's rejection or other refusal to
accept delivery or the inability of the other party to deliver because a change
of address as to which no notice was given, such intended recipient shall be
deemed to be in receipt of the notice, demand or request once sent.
Section 8.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida applicable to
contracts made and to be performed in Florida without reference to the choice of
law principles. Each Party hereby submits to the exclusive jurisdiction of the
courts (city, state and federal) located in the County of Palm Beach, State of
Florida, pursuant to this Agreement or any other agreement, instrument or other
document any action, proceeding or claim brought by any other Party executed and
delivered in connection with this Agreement or pursuant hereto. Service of
process in any such action or proceeding brought against a Party may be made by
registered mail addressed to such Party at the address set forth in Section 8.7
or to such other address as such Party shall notify the other Party in writing
is to be used for such purpose pursuant to Section 8.7. For purposes hereof, the
address designated for USI shall also be the address designated for the
Stockholders.
Section 8.9 Expenses. All accounting, legal and other costs and
expenses incurred in connection with this Agreement and the transactions
contemplated by this Agreement shall be paid by the party incurring those fees,
costs and expenses.
Section 8.10 Waiver. Any party to this Agreement may extend the time
for or waive the performance of any of the obligations of the other, waive any
inaccuracies in the representations or warranties by the other, or waive
compliance by the other with any of the covenants or conditions contained in
this Agreement. Any such extension or waiver shall be in writing and signed by
the parties. No such waiver shall operate or be construed as a waiver of any
subsequent act or omission of the parties.
Section 8.11 Severability. The invalidity or unenforceability of any
one or more of the words, phrases, sentences, clauses, or sections contained in
this Agreement shall not affect the validity or enforceability of the remaining
provisions of this Agreement or any part of any provision, all of which are
inserted conditionally on their being valid in law, and in the event that any
one or more of the words, phrases, sentences, clauses or sections contained in
this Agreement shall be declared invalid or unenforceable, this Agreement shall
be construed as if such invalid or unenforceable word or words, phrase or
phrases, sentence or sentences, clause or clauses, or section or sections had
not been inserted or shall be enforced as nearly as possible according to their
original terms and intent to eliminate any invalidity or unenforceability. If
any invalidity or unenforceability is caused by the length of any period of time
or the size of any area set forth in any part of this Agreement, the period of
Page 21
time or area, or both, shall be considered to be reduced to a period or area
which would cure the invalidity or unenforceability.
Section 8.12 Attorney's Fees. In the event of any arbitration or
litigation, including appeals, with regard to this Agreement, the prevailing
party shall be entitled to recover from the non-prevailing party all reasonable
fees, costs, and expenses of counsel (at pre-trial, trial and appellate levels).
Section 8.13 No Breach. The parties agree that the execution of this
Agreement shall not be deemed to be an assignment of any contract where consent
to such assignment is required by the terms of the contract provided that the
foregoing shall not affect USI' obligation to obtain all consents as provided in
this Agreement.
Section 8.14 Construction. This Agreement shall be construed without
regard to any presumption or other rule requiring construction against the party
causing this Agreement to be drafted. If any words in this Agreement have been
stricken out or otherwise eliminated (whether or not any other words or phrases
have been added) and the stricken words initialed by the party against whom the
words are construed, this Agreement shall be construed as if the words so
stricken out or otherwise eliminated were never included in this Agreement and
no implication or inference shall be drawn from the fact that those words were
stricken out or otherwise eliminated.
Section 8.15 No Jury Trial EACH PARTY WAIVES ALL RIGHTS TO ANY TRIAL BY
JURY IN ALL LITIGATION RELATING TO OR ARISING OUT OF THIS AGREEMENT.
[signatures on next page]
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IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be duly executed as of the date hereof.
PRE-CELL SOLUTIONS, INC.,
a Colorado corporation
By: /s/ Thomas E. Biddix
-----------------------------
Thomas E. Biddix,
Chief Executive Officer
USI MERGER CORP.
a Georgia corporation
By: /s/ Thomas E. Biddix
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Thomas E. Biddix,
President
US/INTELICOM, INC.,
a Georgia corporation
By: /s/ Ronald Kindland
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Ronald Kindland,
Chief Executive Officer
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