STOCK PURCHASE AGREEMENT
BY AND AMONG
COMMUNICATION TELESYSTEMS INTERNATIONAL D.B.A. WORLDXCHANGE
COMMUNICATIONS,
ATOCHA, L.P.,
ROGER B. ABBOTT, ROSALIND ABBOTT
AND
EDWARD S. SOREN
SEPTEMBER __, 1998
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1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
2. PURCHASE AND SALE OF THE INITIAL SHARES . . . . . . . . . . . . . . . . . . .4
3. [INTENTIONALLY OMITTED] . . . . . . . . . . . . . . . . . . . . . . . . . . .4
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. . . . . . . . . . . . . . . . .4
4.1 Organization and Corporate Power . . . . . . . . . . . . . . . . . . .4
4.2 Capital Stock and Related Matters . . . . . . . . . . . . . . . . . . .4
4.3 Authorization; No Conflicts . . . . . . . . . . . . . . . . . . . . . .5
4.4 Governmental Consent, etc. . . . . . . . . . . . . . . . . . . . . . .5
4.5 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . .5
4.6 No Brokers or Finders . . . . . . . . . . . . . . . . . . . . . . . . .6
4.7 Accuracy of Information . . . . . . . . . . . . . . . . . . . . . . . .6
4.8 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . .6
4.9 Conformity with Law; Litigation . . . . . . . . . . . . . . . . . . . .6
4.10 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
4.11 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . .6
4.12 Government Authorizations . . . . . . . . . . . . . . . . . . . . . . .6
4.13 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
4.14 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
5. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
RELATING TO EACH SHAREHOLDER . . . . . . . . . . . . . . . . . . . . . . . . .7
5.1 Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
5.2 Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
5.3 Right to Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . .7
5.4 Binding Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . .7
5.5 No Conflicts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
5.6 No Brokers or Finders . . . . . . . . . . . . . . . . . . . . . . . . .7
5.7 Relationships with Related Persons. . . . . . . . . . . . . . . . . . .8
6. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. . . . . . . . . . . . . . . .8
6.1 Organization and Related Matters . . . . . . . . . . . . . . . . . . .8
6.2 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
6.3 No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
6.4 No Brokers or Finders . . . . . . . . . . . . . . . . . . . . . . . . .8
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TABLE OF CONTENTS
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6.5 Investment Representations . . . . . . . . . . . . . . . . . . . . . ..8
7. TRANSFER OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
7.1 Restrictive Legends . . . . . . . . . . . . . . . . . . . . . . . . ..9
7.2 Notice of Proposed Transfers . . . . . . . . . . . . . . . . . . . . 10
7.3 Permitted Transfers . . . . . . . . . . . . . . . . . . . . . . . . 10
8. COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . 10
8.1 Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
8.2 [Intentionally Omitted] . . . . . . . . . . . . . . . . . . . . . . . 11
8.3 Rule 144 Filing . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8.4 Preemptive Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8.5 Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . 11
8.6 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . 11
8.7 [Intentionally Omitted] . . . . . . . . . . . . . . . . . . . . . . . 11
9. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
9.1 Obligations of the Company. . . . . . . . . . . . . . . . . . . . . . 11
9.2 Obligations of the Shareholders . . . . . . . . . . . . . . . . . . . 12
9.3 Obligations of the Purchaser . . . . . . . . . . . . . . . . . . . . 12
9.4 Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
9.5 Exclusive Remedy . . . . . . . . . . . . . . . . . . . . . . . . . . 12
10. CO-SALE RIGHT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
10.1 Co-Sale Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . 13
10.2 Limitation on Co-Sale Right . . . . . . . . . . . . . . . . . . . . . 13
11. GENERAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
11.1 Amendments; Waivers . . . . . . . . . . . . . . . . . . . . . . . . . 13
11.2 Survival of Representations and Warranties. . . . . . . . . . . . . . 13
11.3 Schedules; Exhibits; Integration. . . . . . . . . . . . . . . . . . . 14
11.4 Best Efforts; Further Assurances. . . . . . . . . . . . . . . . . . . 14
11.5 Governing Law and Forum Selection . . . . . . . . . . . . . . . . . . 14
11.6 No Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
11.7 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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TABLE OF CONTENTS
(CONTINUED)
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11.8 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
11.9 Publicity and Reports . . . . . . . . . . . . . . . . . . . . . . . . 15
11.10 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
11.11 Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . 15
11.12 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
11.13 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
11.14 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
11.15 Representation By Counsel; Interpretation . . . . . . . . . . . . . . 16
11.16 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
11.17 No Consequential Damages . . . . . . . . . . . . . . . . . . . . . . 17
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SCHEDULE AND EXHIBITS
Schedule 2 Allocation of the Purchase Price Among the Shareholders
Schedule 4.2 Equity Securities
Schedule 4.16 Directors and Officers Liability Insurance
Schedule 5.1 Equity Securities Owned by the Shareholders
Schedule 8.1 Compensation of the Shareholders
Schedule 10.2 Sample Calculation of Co-Sale Right
Exhibit A Registration Rights Agreement
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "AGREEMENT") is dated as of September
_, 1998, by and among COMMUNICATION TELESYSTEMS INTERNATIONAL D.B.A.
WORLDXCHANGE COMMUNICATIONS, a California corporation (the "COMPANY"), ATOCHA,
L.P., a Texas limited partnership (the "PURCHASER"), ROGER B. ABBOTT, ROSALIND
ABBOTT and EDWARD S. SOREN (each of Messrs. Abbott and Soren and Ms. Abbott is a
"SHAREHOLDER" and collectively they are the "SHAREHOLDERS").
The parties hereby agree as follows:
1. DEFINITIONS.
1.1 DEFINITIONS.
1.1.1 For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires,
(a) the terms defined in this SECTION 1 have the meanings
assigned to them in this SECTION 1 and include the plural as well as the
singular,
(b) the words "herein," "hereof," "hereto" and "hereunder" and
other words of similar import refer to this Agreement as a whole and not to any
particular Section, Subsection or other subdivision, unless the context
otherwise requires, and
(c) all accounting terms not otherwise defined herein have the
meanings assigned under generally accepted accounting principles.
1.2 As used in this Agreement, the following definitions shall apply.
"AFFILIATE" means a Person that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, a specified Person.
"AGREEMENT" means this Agreement by and among the Company, the
Purchaser and the Shareholders as amended or supplemented together with all
Schedules and Exhibits attached or incorporated by reference.
"APPROVAL" means any approval, authorization, consent,
qualification or registration, or any waiver of any of the foregoing, required
to be obtained from, or any notice, statement or other communication required to
be filed with or delivered to, any Governmental Entity or any other Person.
"AUDITORS" means Ernst & Young LLP, independent public
accountants to the Company.
"AVAILABLE SHARES" means, collectively, (i) the Offered Shares,
(ii) the number of shares of Stock offered for sale by the Purchaser pursuant to
SECTION 10.1, and (iii) the number
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of shares of Stock offered for sale by Gold pursuant to Section 10.1 of that
certain Stock Purchase Agreement, dated as of the date hereof, by and between
the Company, Gold, and the other parties thereto.
"BALANCE SHEET DATE" means September 30, 1997.
"COMPANY" means Communication TeleSystems International d.b.a.
WorldxChange Communications, a California corporation.
"CONTRACT" means any agreement, arrangement, bond, commitment,
franchise, indemnity, indenture, instrument, lease, license or understanding,
whether or not in writing.
"CO-SALE NOTICE" has the meaning specified in SECTION 10.1.
"ENCUMBRANCE" means any claim, charge, easement, encumbrance,
lease, covenant, security interest, lien, option, pledge, rights of others, or
restriction (whether on voting, sale, transfer, disposition or otherwise),
whether imposed by agreement, understanding, law, equity or otherwise, except
for any restrictions on transfer generally arising under any applicable federal
or state securities law.
"EQUITY SECURITIES" means any capital stock of the Company
(including, without limitation, common stock and preferred stock) or other
equity interest in the Company or any securities convertible into or
exchangeable for capital stock of the Company or any other rights (statutory,
contractual or otherwise), warrants or options to acquire any of the foregoing
securities.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"GAAP" means generally accepted accounting principles in the
United States, as in effect from time to time.
"GOLD" means Gold & Appel Transfer S.A., a British Virgin Islands
corporation.
"GOVERNMENTAL ENTITY" means any government or any agency, bureau,
board, commission, court, department, official, political subdivision, tribunal
or other instrumentality of any government, whether federal, state or local,
domestic or foreign.
"INDEMNIFIABLE CLAIM" means any Loss for or against which any
party is entitled to indemnification under this Agreement; "INDEMNIFIED PARTY"
means the party entitled to indemnity hereunder; and "INDEMNIFYING PARTY" means
the party obligated to provide indemnification hereunder.
"INITIAL SHARES" means, collectively, (i) 553,115 shares of Stock
owned by Roger B. Abbott and Rosalind Abbott, and (ii) 276,557 shares of Stock
owned by Edward S. Soren.
"LAW" means any constitutional provision, statute or other law,
rule, regulation, or interpretation of any Governmental Entity and any Order.
2
"LOSS" means any action, cost, damage, disbursement, expense,
liability, loss, deficiency, diminution in value, obligation, penalty or
settlement of any kind or nature, whether foreseeable or unforeseeable,
including but not limited to, interest or other carrying costs, penalties,
legal, accounting and other professional fees and expenses incurred in the
investigation, collection, prosecution and defense of claims and amounts paid in
settlement, that may be imposed on or otherwise incurred or suffered by the
specified person, but excluding any consequential damages.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
financial condition and business operations of the Company and its Subsidiaries
taken as a whole.
"MATERIAL CONTRACT" means any Contract material to the business of
the subject Person as of the date hereof.
"OFFERING MEMORANDUM" means that certain preliminary offering
circular, prepared by the Company, dated May 4, 1998 (the "PRELIMINARY OFFERING
CIRCULAR") as supplemented by a supplement to the Preliminary Offering Circular,
prepared by the Company, dated September 28, 1998, in the form delivered to
Purchaser on September 29, 1998.
"OFFERED SHARES" has the meaning specified in SECTION 10.1.
"OFFEROR" has the meaning specified in SECTION 10.1.
"ORDER" means any decree, injunction, judgment, order, ruling,
assessment or writ.
"PERSON" means an association, a corporation, an individual, a
partnership, a trust or any other entity or organization, including a
Governmental Entity.
"PROCEEDING" means any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal, administrative,
investigative, or informal) commenced, brought, conducted, or heard by or
before, any Governmental Entity or arbitrator.
"PURCHASE PRICE" has the meaning specified in SECTION 2.
"PURCHASER" means Atocha, L.P., a Texas limited partnership.
"SEC" means the Securities and Exchange Commission or any
successor entity.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SELLERS" means, collectively, the Company and the Shareholders.
"SELLING SHAREHOLDER" has the meaning specified in SECTION 10.1.
"STOCK" means the common stock of the Company, no par value.
"SUBSIDIARY" means any Person in which the Company has a direct or
indirect equity or ownership interest in excess of 50%.
3
"TAX" or "TAXES" means all federal, state, local or foreign net or
gross income, gross receipts, net proceeds, sales, use, AD VALOREM, value
added, franchise, bank shares, withholding, payroll, employment, excise,
property, deed, stamp, alternative or add-on minimum, environmental or other
taxes, assessments, duties, fees, levies or other governmental charges of any
nature whatsoever, whether disputed or not, together with any interest,
penalties, additions to tax or additional amounts with respect thereto.
2. PURCHASE AND SALE OF THE INITIAL SHARES.
Simultaneously with the execution and delivery of this Agreement,
the Purchaser shall deliver by wire transfer of immediately available funds the
amount of $10,000,000 (the "PURCHASE PRICE") to the Shareholders as specified
in SCHEDULE 2 against delivery by the Shareholders to the Purchaser of the
certificates evidencing the Initial Shares. The certificates will be properly
endorsed for transfer to or accompanied by a duly executed stock power in favor
of the Purchaser with signatures guaranteed by a commercial bank or by a member
firm of the New York Stock Exchange, for transfer to Purchaser; and otherwise in
a form acceptable for transfer on the books of the Company. Each of the
following documents must have been delivered to Purchaser as of the date of this
Agreement: (i) an opinion of O'Melveny & Myers LLP reasonably acceptable to
Purchaser and (ii) such other documents as Purchaser may reasonably request for
the purpose of facilitating the consummation of the sale of the Initial Shares.
3. [INTENTIONALLY OMITTED].
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Except as otherwise disclosed in the Offering Memorandum or as set forth
in the attached Schedules, the Company represents and warrants that as of the
date hereof:
4.1 ORGANIZATION AND CORPORATE POWER. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of California. The Company has all requisite corporate power and
authority necessary to (i) execute, deliver and perform this Agreement and to
consummate the transactions contemplated hereby and (ii) own and operate its
properties and to carry on its business as now conducted and as presently
proposed to be conducted. The copies of the Company's charter documents and
bylaws furnished to the Purchaser's counsel reflect all amendments made thereto
at any time prior to the date of this Agreement and are correct and complete.
The Company is duly qualified to do business as a foreign corporation and is in
good standing under the laws of each state or other jurisdiction in which either
the ownership or use of the properties owned or used by it, or the nature of the
activities conducted by it, requires such qualification, except where the
failure to be so qualified would not have a Material Adverse Effect.
4.2 CAPITAL STOCK AND RELATED MATTERS. The authorized capital
stock of the Company is as set forth in its articles of incorporation and the
outstanding capital stock, options and other rights to acquire capital stock and
shares reserved for issuance are as set forth in SCHEDULE 4.2. Except as set
forth in SCHEDULE 4.2 and as contemplated by this Agreement, as of the date of
this Agreement: (i) the Company will not have outstanding any stock or
securities convertible or exchangeable for any shares of capital stock, nor will
there be outstanding any
4
rights or options to subscribe for or to purchase any capital stock or any stock
or securities convertible into or exchangeable for any capital stock of the
Company, and (ii) the Company will not be subject to any obligation (contingent
or otherwise) to repurchase or otherwise acquire or retire any shares of its
capital stock. All of the outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable.
4.3 AUTHORIZATION; NO CONFLICTS. The execution, delivery and
performance of this Agreement by the Company and the consummation of the
transaction contemplated hereby have been duly and validly authorized by all
necessary corporate action on the part of the Company. This Agreement
constitutes the legally valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms. The execution, delivery and
performance of this Agreement by the Company will not (i) conflict with,
violate, or constitute a breach or default (whether upon lapse of time and/or
the occurrence of any act or event or otherwise) under, the charter documents or
bylaws of the Company or any Material Contract of the Company, result in the
imposition of any material Encumbrance against any material asset or properties
of the Company or any Subsidiary, or violate any material Law or Order.
4.4 GOVERNMENTAL CONSENT, ETC. No further permit, consent,
Approval, authorization of, declaration to, or filing with any Governmental
Entity is required in connection with the execution, delivery and performance of
this Agreement by the Company or the consummation by the Company of any
transactions contemplated hereby, except as have already been obtained or
accomplished.
4.5 FINANCIAL STATEMENTS.
4.5.1 AUDITED FINANCIAL STATEMENTS. The Company has delivered to
the Purchaser consolidated balance sheets for the Company and its
Subsidiaries at September 30, 1997, 1996 and 1995 and the related
consolidated statements of operations, changes in stockholder's
equity and changes in financial position or cash flow for the
periods then ended. All such financial statements have been
examined by the Auditors whose reports thereon are included with
such financial statements. All such financial statements have been
prepared in conformity with GAAP. Such statements of operations
and cash flow present fairly in all material respects the results
of operations and cash flows of the Company and its Subsidiaries
for the respective periods covered, and the balance sheets present
fairly in all material respects the financial condition of the
Company and its Subsidiaries as of their respective dates.
4.5.2 UNAUDITED INTERIM FINANCIAL STATEMENTS. The Company has
delivered to the Purchaser a consolidated balance sheet for the
Company and its Subsidiaries at August 31, 1998, and the related
consolidated statements of operations for the eleven months then
ended (the "Interim Statements"). The Interim Statements have been
prepared in conformity with GAAP applied on a consistent basis
except for (i) changes, if any, disclosed therein (except for the
absence of notes and normal year-end adjustments consistent with
past practices) and (ii) information in the Interim Statements
concerning EBITDA, which is not determined in accordance with
GAAP. The statements of operations present fairly the results of
operations of the Company and its Subsidiaries for the period
5
covered, and the balance sheet presents fairly in all material
respects the financial condition of the Company as of the date of
the balance sheet.
4.6 NO BROKERS OR FINDERS. No agent, broker, finder, or
investment or commercial banker, or other Person or firm engaged by or acting on
behalf of the Company or its Affiliates in connection with the negotiation,
execution or performance of this Agreement or the transactions contemplated by
this Agreement, is or will be entitled to any brokerage or finder's or similar
fee or other commission as a result of this Agreement or such transactions.
4.7 ACCURACY OF INFORMATION. As of the date hereof, the
Offering Memorandum does not contain any untrue statement of a material fact, or
fail to state any 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.
4.8 NO MATERIAL ADVERSE CHANGE. Since the Balance Sheet Date,
there has not been any Material Adverse Effect.
4.9 CONFORMITY WITH LAW; LITIGATION. To the knowledge of the
Company, the Company has complied with all Laws applicable to it or to the
operation of its business and has not received any written notice of any
violation of, liability or potential responsibility under, any such Law which
has not heretofore been cured and for which there is no remaining liability,
other than, in each case, those not having a Material Adverse Effect.
4.10 ERISA. Each Company employee benefit plan that is subject
to ERISA has been administered in compliance with the applicable requirements of
ERISA, except for such noncompliance, if any, that in the aggregate, would not
have a Material Adverse Effect.
4.11 ENVIRONMENTAL MATTERS. To the knowledge of the Company, all
real property now or previously owned, operated or leased by the Company and
located in the United States has been operated by the Company in compliance with
all applicable Environmental Laws, except for such noncompliance, if any, that
would not have a Material Adverse Effect. As used herein, "Environmental Law"
means any federal, state, or local law, statute, rule or regulation governing or
relating to the environment or to occupational health and safety.
4.12 GOVERNMENT AUTHORIZATIONS. The Company has all federal,
state and local governmental licenses, permits and other authorizations,
including without limitation all licenses and authorizations required by the
United State Federal Communications Commission (the "FCC") and by state public
utilities commissions (collectively, "Company Permits"), necessary to conduct
the Company's business as presently conducted, except where the failure to hold
any such licenses, permits and other authorizations would not result in a
Material Adverse Effect.
4.13 TAXES. To the knowledge of the Company, all Taxes owed by
the Company have been paid or accrued on the Company's financial statements,
except where the failure to pay or accrue such Taxes would not result in a
Material Adverse Effect.
4.14 INSURANCE. SCHEDULE 4.14 sets forth a true and correct
description of the directors and officers liability insurance policy currently
maintained by the Company. There have been no claims made against such insurance
policy.
6
5. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS RELATING TO EACH
SHAREHOLDER.
Each Shareholder represents and warrants to the Purchaser as of
the date hereof as follows with respect to such Shareholder:
5.1 OWNERSHIP. Such Shareholder is the record and beneficial
owner of the number of Equity Securities set forth in SCHEDULE 5.1 across from
such Shareholder's name; such Equity Securities represent the entire ownership
interest of such Shareholder in the Company; and such Shareholder has no other
Equity Securities of the Company.
5.2 TITLE. Such Shareholder has good and marketable title to
such Shareholder's Initial Shares, free and clear of all Encumbrances.
5.3 RIGHT TO TRANSFER. Such Shareholder has full legal right
and power to transfer and deliver to the Purchaser such Shareholder's Initial
Shares. Such Shareholder has taken all steps that may be necessary to duly
authorize the execution and delivery by such Shareholder of this Agreement and
the consummation of the transactions contemplated on his or her part hereby. No
other actions on the part of such Shareholder are necessary to authorize the
execution and delivery of this Agreement by such Shareholder and the
consummation of the transactions contemplated on his or her part hereby.
5.4 BINDING AGREEMENT. This Agreement has been duly executed
and delivered by or on behalf of such Shareholder, and this Agreement is a
legal, valid and binding obligation of such Shareholder, enforceable against
such Shareholder in accordance with its terms.
5.5 NO CONFLICTS. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby by
the Shareholder will not violate, or constitute a breach or default whether upon
lapse of time and/or the occurrence of any act or event or otherwise under, (i)
any Material Contract to which the Shareholder is a party or (ii) any material
Law or Order to which the Shareholder is subject.
5.6 NO BROKERS OR FINDERS. No agent, broker, finder, or
investment or commercial banker, or other Person or firm engaged by or acting on
behalf of such Shareholder or its Affiliates in connection with the negotiation,
execution or performance of this Agreement or the transactions contemplated by
this Agreement, is or will be entitled to any broker's or finder's or similar
fee or other commission as a result of this Agreement or such transactions.
5.7 RELATIONSHIPS WITH RELATED PERSONS. The section titled
"Certain Relationships and Related Transactions" in the Offering Memorandum, as
of the date hereof, does not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
6. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser
represents and warrants that:
7
6.1 ORGANIZATION AND RELATED MATTERS. The Purchaser is a
limited partnership duly organized, validly existing and in good standing under
the laws of Texas. The Purchaser has all requisite partnership power and
authority to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby.
6.2 AUTHORIZATION. The execution, delivery and performance of
this Agreement by the Purchaser and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary partnership
action on the part of the Purchaser. This Agreement constitutes the legally
valid and binding obligation of the Purchaser, enforceable against the Purchaser
in accordance with its terms.
6.3 NO CONFLICTS. The execution, delivery and performance of
this Agreement, and the consummation of the transactions contemplated hereby, by
the Purchaser will not violate, or constitute a breach or default whether upon
lapse of time and/or the occurrence of any act or event or otherwise under (i)
the Certificate of Limited Partnership or the partnership agreement of the
Purchaser, (ii) any Material Contract to which the Purchaser is a party, or
(iii) any material Law or Order to which the Purchaser is subject.
6.4 NO BROKERS OR FINDERS. No agent, broker, finder or
investment or commercial banker, or other Person or firm engaged by or acting on
behalf of the Purchaser or its Affiliates in connection with the negotiation,
execution or performance of this Agreement or the transactions contemplated by
this Agreement, is or will be entitled to any broker's or finder's or similar
fee or other commission as a result of this Agreement or such transactions.
6.5 INVESTMENT REPRESENTATIONS.
6.5.1 This Agreement is made with the Purchaser in reliance upon
the Purchaser's representation to the Company, which by the
Purchaser's execution of this Agreement, the Purchaser hereby
confirms, that (i) the Initial Shares are being acquired for
investment for the Purchaser's own account, not as a nominee or
agent, and not with a view to the resale or distribution of any
part thereof, and that the Purchaser has no present intention of
selling, granting any participation in, or otherwise distributing
the same; and (ii) the Purchaser does not have any Contract,
undertaking, agreement or arrangement with any Person to sell,
transfer or grant participations to any Person with respect to any
of the Initial Shares.
6.5.2 The Purchaser has not been attracted to the purchase of the
Initial Shares by any publication or any advertising, and the
transactions contemplated by this Agreement are not being effected
by or through a broker-dealer.
6.5.3 The Purchaser is an "accredited investor" within the
meaning of Rule 501 of Regulation D promulgated by the SEC, as
presently in effect.
6.5.4 The Purchaser understands that (i) neither the Initial
Shares nor the sale thereof to it has been registered under the
Securities Act, or under any state securities law, (ii) no
registration statement has been filed with the SEC, nor with any
other regulatory authority and that, as a result, any benefit
which might normally accrue to an investor such as the Purchaser
by an impartial review of such a registration statement by the SEC
or other regulatory commission will not
8
be forthcoming; and (iii) the Initial Shares are characterized as
"restricted securities" under the federal securities laws inasmuch
as they are being acquired from the Selling Shareholders, who
acquired the Initial Shares from the Company in a transaction not
involving a public offering, and that under such laws and
applicable regulations such securities may be resold without
registration under the Securities Act only in certain limited
circumstances. In this connection, the Purchaser represents that
it is familiar with the SEC's Rule 144, as presently in effect,
and understands the resale limitations imposed thereby and by the
Securities Act.
6.5.5 The Purchaser acknowledges that (i) it is represented by
counsel, (ii) it has received and carefully reviewed a copy of the
Offering Memorandum and this Agreement; (iii) it has received all
information it considers necessary or appropriate for deciding
whether to purchase the Initial Shares; (iv) as a result of its
knowledge of the telecommunications industry, its study of the
aforementioned documents and its prior overall experience in
financial matters, it is property able to evaluate the capital
structure of the Company, the business of the Company and its
Subsidiaries and the risks inherent therein; and (v) it has been
given the opportunity to obtain any additional information or
documents from, and to ask questions and receive answers of, the
officers and representatives of the Company to the extent
necessary to evaluate the merits and risks related to its
investment in the Company.
7. TRANSFER OF SHARES. The Initial Shares are not transferable except upon
the conditions specified in this SECTION 7, which conditions are intended to
assure compliance with the provisions of the Securities Act and state securities
laws in respect of the transfer of any of such Initial Shares.
7.1 RESTRICTIVE LEGENDS. Unless and until otherwise permitted
by this Agreement, the Initial Shares issued or transferred to the Purchaser
pursuant to this Agreement shall be stamped or otherwise imprinted with legends
in substantially the following forms:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933 OR ANY
STATE SECURITIES LAWS AND THUS MAY NOT BE TRANSFERRED UNLESS REGISTERED
OR QUALIFIED UNDER THAT ACT OR SUCH LAWS OR UNLESS AN EXEMPTION FROM
REGISTRATION OR QUALIFICATION IS AVAILABLE."
"SUCH SECURITIES ARE ALSO SUBJECT TO THE RESTRICTIONS ON
TRANSFER CONTAINED IN A STOCK PURCHASE AGREEMENT, DATED AS OF SEPTEMBER
__, 1998, BY AND AMONG COMMUNICATION TELESYSTEMS INTERNATIONAL D.B.A.
WORLDXCHANGE COMMUNICATIONS, ATOCHA, L.P., ROGER B. ABBOTT, ROSALIND
ABBOTT AND EDWARD S. SOREN, COPIES OF WHICH MAY BE OBTAINED FROM THE
SECRETARY OF THE COMPANY."
9
The Company may order its transfer agents to stop the transfer of any Initial
Shares bearing a legend required by this SECTION 7.1 until the conditions herein
with respect to transfer of such securities have been satisfied.
7.2 NOTICE OF PROPOSED TRANSFERS. Subject to SECTION 7.1, prior
to any transfer or attempted transfer of the Initial Shares bearing the legend
in SECTION 7.1, the Purchaser or its permitted assignee, transferee or donee
(the "Holder") shall give the Company written notice of its intention to do so,
describing briefly the nature of any such proposed transfer. If, in the written
opinion of counsel for Holder, addressed to the Company and the Holder, in form
and substance reasonably acceptable to the Company, the proposed transfer may be
effected without registration of such Initial Shares, the Initial Shares
proposed to be transferred may be transferred in accordance with the terms of
said notice and in compliance with applicable state securities laws and
regulations. The Company shall not be required to effect any such transfer prior
to the receipt of such favorable opinion; provided that if the proposed transfer
is governed by Rule 144 promulgated by the SEC, or any successor rule, such
opinion shall not be required, but the Company may prevent such transfer until
it receives evidence satisfactory to it and its counsel that the transfer
complies with Rule 144. Each transfer shall comply with all applicable SEC rules
and applicable state securities laws.
7.3 PERMITTED TRANSFERS. Notwithstanding anything to the
contrary in this Agreement, Purchaser may transfer Initial Shares to any
Affiliate of Purchaser in accordance with the provisions of Section 7.1 and 7.2;
provided that the transferee shall hold such Initial Shares subject to the same
restrictions applicable to its transferor and shall agree in writing to be bound
by the terms of this Agreement.
8. COVENANTS OF THE COMPANY.
8.1 RESTRICTIONS. For a period of three years from the date of
this Agreement, the Company shall not: (i) issue any Equity Securities to the
Shareholders or immediate family members of the Shareholders, except that the
Company may issue 883,069 shares of Stock to the Shareholders in connection with
the sale of the Shareholders' stock in WorldxChange Limited, a New Zealand
corporation, to a wholly owned subsidiary of the Company, (ii) increase the
salary, bonuses, options or payments through consulting agreements or otherwise
(the "Compensation") payable to the Shareholders beyond that set forth in
SCHEDULE 8.1, (iii) increase the Compensation of immediate family members of the
Shareholders other than in amounts consistent with past practices for non-family
members or (iv) engage in any other transactions with immediate family member
employees, except as permitted in subsection (iii). During the third year from
the date of this Agreement, if the Company has not completed an initial public
offering of its securities, the Compensation payable to each Shareholder shall
not exceed 200% of the total Compensation paid to such Shareholder during the
second year after the date of this Agreement.
8.2 [INTENTIONALLY OMITTED].
8.3 RULE 144 FILING. After the Company's Common Stock is
registered under the Exchange Act, and until the Initial Shares held by
Purchaser have all been publicly sold or are eligible for sale under Rule 144(k)
under the Securities Act, the Company shall use best
10
efforts to file the reports required under Rule 144(c)(1) under the Securities
Act in order to permit sales of the Initial Shares by Purchaser pursuant to Rule
144.
8.4 PREEMPTIVE RIGHTS. Purchaser shall have the right to
subscribe to any additional (i) issuances of shares of capital stock of the
Company, (ii) issuances of securities convertible into shares of capital
stock of the Company, or (iii) grants of options to purchase shares of
capital stock of the Company, other than grants to employees, directors or
consultants of the Company (and the issuance of shares upon exercise of such
options), for cash, on the same terms of such offerings to the extent equal
to the proportion which the number of Initial Shares then held by Purchaser
bears to the Company's fully-diluted capitalization (on an as-converted and
as-exercised basis). Such right is exercisable within ten (10) days after the
receipt of written notice relating to such issuances by the Purchaser. Such
right extends to the same proportion of the new issue of shares, convertible
securities or options as the Purchaser's proportion of the outstanding
shares. Purchaser's right to purchase new issues of shares or convertible
securities or options does not extend to (i) the issuance of shares upon the
conversion or exercise of options or other convertible securities either (A)
outstanding on the date hereof or (B) with respect to which options or other
convertible securities Purchaser had preemptive rights under this Section
8.4, or (ii) securities issued solely in exchange for shares, convertible
securities or options issued in connection with any merger, reorganization or
acquisition (including, without limitation, the proposed transactions
described in Section 8.7 below). The preemptive rights held by the Purchaser
pursuant to this Section 8.4 shall terminate immediately prior to the closing
of an initial public offering of the Company's securities and shall not apply
to any issuance of securities in such offering.
8.5 REGISTRATION RIGHTS. The Company and Purchaser,
concurrently with the Closing, shall execute and deliver a Registration Rights
Agreement substantially in the form attached hereto as EXHIBIT A.
8.6 FINANCIAL STATEMENTS. For as long as Purchaser and Gold,
collectively, own five percent or more of the issued and outstanding Stock, the
Company agrees to deliver to Purchaser (i) unaudited quarterly financial
statements within 45 days after the end of each fiscal quarter of the Company
and (ii) audited annual financial statements within 150 days after the end of
each fiscal year of the Company.
8.7 [INTENTIONALLY OMITTED]
9. INDEMNIFICATION.
9.1 OBLIGATIONS OF THE COMPANY. The Company agrees to indemnify
and hold harmless the Purchaser from and against any and all Losses of the
Purchaser based upon or arising from any inaccuracy in or breach or
nonperformance of any of the representations, warranties, or covenants made or
obligations undertaken by the Company in this Agreement.
9.2 OBLIGATIONS OF THE SHAREHOLDERS. Each Shareholder agrees to
indemnify and hold harmless the Purchaser from and against any and all Losses of
the Purchaser based upon or arising from any inaccuracy in or breach or
nonperformance of any of the representations, warranties, or covenants made by
such Shareholder in this Agreement.
11
9.3 OBLIGATIONS OF THE PURCHASER. The Purchaser agrees to
indemnify and hold harmless (i) the Company from and against any and all
Losses of the Company based upon or arising from, any inaccuracy in or breach
or nonperformance of any of the representations, warranties or covenants made
by the Purchaser in this Agreement and (ii) each Shareholder from and against
any and all Losses of such Shareholder based upon or arising from, any
inaccuracy in or breach or nonperformance of any of the representations,
warranties or covenants made by the Purchaser in this Agreement.
9.4 PROCEDURE.
9.4.1 NOTICE. Any party seeking indemnification with respect to
any Loss shall give notice to the party required to provide
indemnity hereunder (the "INDEMNIFYING PARTY").
9.4.2 DEFENSE. If any claim, demand or liability is asserted by
any third party against any Indemnified Party, the Indemnifying
Party shall upon the written request of the Indemnified Party,
defend any actions or proceedings brought against the Indemnified
Party in respect of matters embraced by the indemnity. If, after
a request to defend any action or proceeding, the Indemnifying
Party does not defend the Indemnified Party, a recovery against
the latter suffered by it in good faith, is conclusive in its
favor against the Indemnifying Party, provided however that, if
the Indemnifying Party has not received reasonable notice of the
action or proceeding against the Indemnified Party, or is not
allowed to control its defense, judgment against the Indemnified
Party is only presumptive evidence against the Indemnifying Party.
The parties shall cooperate in the defense of all third party
claims which may give rise to Indemnifiable Claims hereunder. In
connection with the defense of any claim, each party shall make
available to the party controlling such defense, any books,
records or other documents within its control that are reasonably
requested in the course of such defense.
9.5 EXCLUSIVE REMEDY. This Section 9 shall be the exclusive
remedy of the parties for any Loss of such party based upon or arising from any
inaccuracy in or breach or nonperformance of any of the representations,
warranties, or covenants made by any other party to this Agreement.
Notwithstanding the foregoing, Purchaser shall have the right to the remedy of
specific performance with respect to Sections 3.1, 8.3, 8.4, 8.6 and 10.
10. CO-SALE RIGHT.
10.1 CO-SALE PROCEDURE. If any of the Shareholders desire to sell,
assign or otherwise transfer any Stock owned by such Shareholder (except for a
sale, assignment or transfer to a family member of such Shareholder, provided
(i) that the shares of Stock so transferred shall thereafter remain subject to
this SECTION 10 as though the transferee were a Shareholder and (ii) the
transferee agrees in writing to be bound by this SECTION 10), then such
Shareholder (collectively with any other selling Shareholder, the "SELLING
SHAREHOLDER") shall first give written notice (the "CO-SALE NOTICE") to the
Purchaser specifying the following: (i) the name and address of the proposed
purchaser (the "OFFEROR"); (ii) the number of shares of Stock offered for sale
to the Offeror by the Selling Shareholder (the "OFFERED SHARES"); the price or
12
amount per share of Stock to be paid (and other consideration, if any) or
delivered to the Selling Shareholder for the Offered Shares; and (iv) all
other material terms and conditions of the proposed sale. Within five
business days after receipt of the Co-Sale Notice, the Purchaser may elect by
written notice to the Selling Shareholder to sell to the Offeror a number of
shares of Stock not to exceed the product of (i) a fraction where the
numerator is the Offered Shares and the denominator is the total number of
shares of Stock (including the Offered Shares) then held by the Shareholders,
multiplied by (ii) the number of shares of Stock then owned by the Purchaser;
PROVIDED, HOWEVER, that the Purchaser shall have the right, which right may be
exercised by the Purchaser one time only, to sell to the Offeror a number of
shares of Stock equal to double the number of shares allowed to be sold
(before application of this proviso) by the Purchaser pursuant to this
SECTION 10.1.
10.2 LIMITATION ON CO-SALE RIGHT. If the Offeror does not wish
to purchase the full amount of Available Shares, then the Purchaser shall be
entitled to sell to the Offeror a number of shares of Stock not to exceed the
product of (i) a fraction where the numerator is the number of shares of Stock
offered for sale by the Purchaser pursuant to SECTION 10.1 and the denominator
is the number of Available Shares, multiplied by (ii) the total number of shares
of Stock which the Offeror is willing to purchase from the Selling Shareholder,
the Purchaser and Gold. SCHEDULE 10.2 provides a sample calculation of the
application of SECTION 10.1 and SECTION 10.2. The co-sale rights set forth in
SECTIONS 10. 1 and 10.2 shall terminate upon such time as the Initial Shares
then held by the Purchaser (i) may be sold under Rule 144 of the Securities Act
and the disposition of all such Initial Shares and Remaining Shares may be
completed within six (6) months and (ii) are listed on a securities exchange or
qualified for trading on an over-the-counter system selected by the Company.
11. GENERAL.
11.1 AMENDMENTS; WAIVERS. This Agreement and any schedule
attached hereto may be amended only by agreement in writing of all parties. No
waiver of any provision nor consent to any exception to the terms of this
Agreement shall be effective unless in writing and signed by the party to be
bound and then only to the specific purpose, extent and instance so provided.
11.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Except as set
forth in the following sentence, all representations and warranties of the
Company, each Shareholder and the Purchaser set forth in this Agreement or
expressly incorporated herein by reference shall, as of the first anniversary of
the date of this Agreement, expire and terminate and be of no further force or
effect. Notwithstanding the foregoing, (i) the representations and warranties
set forth in Section 4.7 (Accuracy of Information) shall survive until the
thirtieth day following delivery by the Company to the Purchaser of audited
financial statements for the fiscal year ended September 30, 1999, and (ii) the
representations and warranties set forth in Sections 4.2, 5.1, 5.2 and 5.3 shall
survive indefinitely. As of the termination of the respective representations,
warranties and covenants as provided for this Agreement, the Company, each
Shareholder and the Purchaser shall be deemed to have irrevocably waived and
released any and all rights and remedies any of them may have with respect to
any inaccuracy in or breach or nonperformance of any of the representations,
warranties, or covenants made by any party to this Agreement.
13
11.3 SCHEDULES; EXHIBITS; INTEGRATION. Each schedule and exhibit
delivered pursuant to the terms of this Agreement shall be in writing and shall
constitute a part of this Agreement. This Agreement, together with such
schedules and exhibits, constitutes the entire agreement among the parties
pertaining to the subject matter hereof and supersedes all prior agreements and
understandings of the parties in connection therewith.
11.4 BEST EFFORTS; FURTHER ASSURANCES.
11.4.1 STANDARD. Each party will use its best efforts to fulfill
all obligations on its part to be performed and fulfilled under
this Agreement, to the end that the transactions contemplated by
this Agreement shall be effected substantially in accordance
with its terms as soon as reasonably practicable. The parties
shall cooperate with each other in such actions and in securing
requisite Approvals. Each party shall deliver such further
documents and take such other actions as the other party may
reasonably request to consummate or implement the transactions
contemplated hereby or to evidence such events or matters.
11.4.2 LIMITATION. As used in this Agreement, the term "best
efforts" shall not mean efforts which require the performing party
to do any act that is unreasonable under the circumstances, to
make any capital contribution or to expend any funds other than
reasonable out-of-pocket expenses incurred in satisfying its
obligations hereunder, including but not limited to the fees,
expenses and disbursements of its accountants, actuaries, counsel
and other professionals.
11.5 GOVERNING LAW AND FORUM SELECTION. This Agreement is to
be construed and enforced in accordance with the internal laws of the State
of California. The parties consent to the jurisdiction of all federal and
state courts in California. Any civil action or other legal proceeding
arising out of or relating to this Agreement shall be brought and heard only
in a federal or state court located in California, and all parties waive any
right to have such action or proceeding transferred to another location.
11.6 NO ASSIGNMENT. Neither this Agreement nor any rights or
obligations under it are assignable, except pursuant to a permitted transfer
by Purchaser in accordance with Section 7.3 above.
11.7 HEADINGS. The descriptive headings of the Sections and
Subsections of this Agreement are for convenience only and do not constitute
a part of this Agreement.
11.8 COUNTERPARTS. This Agreement and any amendment hereto or
any other document delivered pursuant hereto may be executed in one or more
counterparts and by different parties in separate counterparts. All of such
counterparts shall constitute one and the same agreement (or other document)
and shall become effective (unless otherwise provided therein) when one or
more counterparts have been signed by each party and delivered to the other
party.
11.9 PUBLICITY AND REPORTS. The Sellers and the Purchaser
shall coordinate all publicity relating to the transactions contemplated by
this Agreement and no party shall issue any press release, publicity
statement or other public notice relating to this Agreement, or the
transactions contemplated by this Agreement, without obtaining the prior
written consent of each
14
of the parties to this Agreement except to the extent that a particular
action is required by applicable Law.
11.10 CONFIDENTIALITY. All information disclosed by any party
(or its representatives) whether before or after the date hereof, in
connection with the transactions contemplated by, or the discussions and
negotiations preceding, this Agreement to any other party (or its
representatives) shall be kept confidential by such other party and its
representatives and shall not be used by any such Persons other than as
contemplated by this Agreement, except to the extent that such information
(i) was known by the recipient when received, (ii) it is or hereafter becomes
lawfully obtainable from other sources, (iii) is necessary or appropriate to
disclose to a Governmental Entity having jurisdiction over the parties,
provided that the disclosing party give reasonable notice to the other
parties and the opportunity to protect any such confidential information,
(iv) as may otherwise be required by Law or (v) to the extent such duty as to
confidentiality is waived in writing by the other party.
11.11 PARTIES IN INTEREST. This Agreement shall be binding upon
and inure to the benefit of each party, and nothing in this Agreement,
express or implied, is intended to confer upon any other Person any rights or
remedies of any nature whatsoever under or by reason of this Agreement.
Nothing in this Agreement is intended to relieve or discharge the obligation
of any third person to any party to this Agreement.
11.12 NOTICES. Any notice or other communication hereunder must
be given in writing and (i) delivered in person, (ii) transmitted by telex,
telefax or telecommunications mechanism or (iii) mailed by certified or
registered mail, postage prepaid), receipt requested as follows:
IF TO PURCHASER, ADDRESSED TO:
Atocha, L.P.
6429 Georgetown Pike
McLean, Virginia 22101
IF TO THE COMPANY OR THE SHAREHOLDERS, ADDRESSED TO:
WORLDxCHANGE
9999 Willow Creek Road
San Diego, California 92131
Attn: Roger B. Abbott
Facsimile No. (619) 625-0217
WITH A COPY TO:
O'Melveny & Myers LLP
610 Newport Center Drive
Newport Beach, California 92660
Attn: David A. Krinsky, Esq.
Facsimile No. (949) 823-6994
15
or to such other address or to such other person as either party shall have
last designated by such notice to the other party. Each such notice or other
communication shall be effective (A) if given by telecommunication, when
transmitted to the applicable number so specified in (or pursuant to) this
SECTION 11.12 and an appropriate answer back is received, (B) if given by
mail, three days after such communication is deposited in the mails with
first class postage prepaid, addressed as aforesaid or (C) if given by any
other means, when actually received at such address.
11.13 EXPENSES. Each Party shall pay its own expenses incident
to the negotiation, preparation and performance of this Agreement and the
transactions contemplated hereby, including but not limited to the fees,
expenses and disbursements of such party's respective investment bankers,
accountants and counsel.
11.14 WAIVER. No failure on the part of any party to exercise
or delay in exercising any right hereunder shall be deemed a waiver thereof,
nor shall any single or partial exercise preclude any further or other
exercise of such or any other right.
11.15 REPRESENTATION BY COUNSEL; INTERPRETATION. The Sellers
and the Purchaser each acknowledge that each party to this Agreement has been
represented by counsel in connection with this Agreement and the transactions
contemplated by this Agreement. Accordingly, any rule of Law, including but
not limited to Section 1654 of the California Civil Code, or any legal
decision that would require interpretation of any claimed ambiguities in this
Agreement against the party that drafted it has no application and is
expressly waived. The provisions of this Agreement shall be interpreted in a
reasonable manner to effect the intent of the Purchaser and the Sellers.
11.16 SEVERABILITY. If any provision of this Agreement is
determined to be invalid, illegal or unenforceable by any Governmental
Entity, the remaining provisions of this Agreement to the extent permitted by
Law shall remain in full force and effect provided that the economic and
legal substance of the transactions contemplated is not affected in any
manner materially adverse to any party. In event of any such determination,
the parties agree to negotiate in good faith to modify this Agreement to
fulfill as closely as possible the original intents and purposes hereof.
11.17 NO CONSEQUENTIAL DAMAGES. Notwithstanding anything to the
contrary elsewhere in this Agreement, no party (or its Affiliates) shall, in
any event, be liable to any other party (or its Affiliates) for any
consequential damages, including, but not limited to, loss of revenue or
income, or loss of business reputation or opportunity relating to the breach
or alleged breach of this Agreement. The foregoing shall not be deemed to
limit Purchaser's right to specific performance with respect to Sections 3.1,
8.3, 8.4, 8.6 and 10.
16
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized officers as of the day and
year first above written.
COMPANY: PURCHASER:
COMMUNICATION TELESYSTEMS ATOCHA, L.P., a Texas limited partnership
INTERNATIONAL D.B.A.
WORLDXCHANGE By: /s/ [ILLEGIBLE], its general partner
COMMUNICATIONS, a California
corporation
By: /s/ [ILLEGIBLE]
-----------------------------------
By: /s/ Roger B. Abbott Its: General Partner
------------------------------ ---------------------------------
Its: CEO
----------------------------
SHAREHOLDER: SHAREHOLDER:
ROGER B. ABBOTT ROSALIND ABBOTT
/s/ Roger B. Abbott /s/ Rosalind Abbott
------------------------------- --------------------------------
SHAREHOLDER:
EDWARD S. SOREN
/s/ Edward S. Soren
------------------------------
17
LIST OF OMITTED SCHEDULES AND EXHIBITS
The following Schedules and Exhibits to the Stock Purchase Agreement
dated September 29, 1998 (Atocha L.P.) have been omitted from this Exhibit
and shall be furnished supplementally to the Commission upon request:
Schedule 2 - Allocation of the Purchase Price Among the Shareholders
Schedule 4.2 - Equity Securities
Schedule 4.16 - Directors and Officers Liability Insurance
Schedule 5.1 - Equity Securities Owned by the Shareholders
Schedule 8.1 - Compensation of the Shareholders
Schedule 10.2 - Sample Calculation of Co-Sale Right
Exhibit A - Registration Rights Agreement