STOCK PURCHASE AGREEMENT
DATED AS OF NOVEMBER 30, 1998
BY AND AMONG
CTS TELCOM HOLDINGS, INC.
CTS TELCOM, INC.
ROSALIND R. ABBOTT
EDWARD S. SOREN
TABLE OF CONTENTS
Page
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ARTICLE I
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE II
2.1 Transfer of Stock of the Company. . . . . . . . . . . . . . . . . . . .2
2.2 Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
2.3 Delivery of the Shares. . . . . . . . . . . . . . . . . . . . . . . . .2
2.4 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
ARTICLE III
3.1 Incorporation, Stock, Etc.. . . . . . . . . . . . . . . . . . . . . . .2
3.2 Title to Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
3.3 Authority; Binding Effect . . . . . . . . . . . . . . . . . . . . . . .3
3.4 No Brokers or Finders . . . . . . . . . . . . . . . . . . . . . . . . .3
ARTICLE IV
4.1 Representations and Warranties. . . . . . . . . . . . . . . . . . . . .4
ARTICLE V
5.1 Amendment and Modifications . . . . . . . . . . . . . . . . . . . . . .4
5.2 Waiver of Compliance. . . . . . . . . . . . . . . . . . . . . . . . . .4
5.3 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
5.4 Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . . .5
5.5 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
5.6 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
5.7 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
5.8 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
5.9 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
5.10 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
5.11 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . .6
5.12 Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
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SCHEDULES
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Schedule A-1 List of Shareholders, Shares Owned and Addresses
Schedule 3.1(b) Company - Incorporation, Stock, Etc.
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STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "AGREEMENT") is made and
entered into effective as of this 30th day of November, 1998, by and among CTS
Telcom Holdings, Inc, a Delaware corporation ("CTSTH"), CTS Telcom, Inc., a
Florida corporation (the "COMPANY"), and each of the following shareholders of
the Company: Rosalind R. Abbott and Edward S. Soren, (each a "SHAREHOLDER" and
collectively, the "SHAREHOLDERS").
RECITALS
A. As of the date of this Agreement, the outstanding capital
stock of the Company is owned by the Shareholders in the amounts set forth
opposite each such Shareholder's name on SCHEDULE A-1 hereto, and such shares
constitute 100% of the issued stock of the Company.
B. On the Closing Date, CTSTH will acquire all of the issued
and outstanding stock of the Company from the Shareholders on the terms and
conditions provided for herein.
C. For accounting purposes, it is intended that the
acquisition of the Shares be accounted for as a "pooling-of-interests."
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties to this Agreement
hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. As used in this Agreement and the Exhibits
and Schedules delivered pursuant to this Agreement, the following definitions,
in addition to those set forth elsewhere in this Agreement, shall apply:
"Closing" means the consummation of the transactions contemplated
by this Agreement which shall occur concurrently with the execution and delivery
of this Agreement.
"Closing Date" means the date specified in Section 2.6 of this
Agreement.
"Person" means any individual, partnership, joint venture,
corporation, limited liability company, trust, unincorporated organization or
governmental entity.
"Restrictions" shall mean all liens, pledges, encumbrances,
security interests, changes, voting trusts, agreements, rights, options,
warrants, claims, taxes,
contracts, calls, commitments, equities, demands, rights of first refusal,
security agreements, assessments, charges, conditions or other restrictions,
other than any of those in favor of CTSTH created by this Agreement.
ARTICLE II
THE PURCHASE
2.1 TRANSFER OF STOCK OF THE COMPANY. Subject to and upon the
terms and conditions set forth in this Agreement, the Shareholders shall
transfer, convey, assign and deliver to CTSTH, and CTSTH shall accept and
receive from the Shareholders, at the Closing hereunder, all of the issued and
outstanding shares of capital stock of the Company (the shares of the capital
stock of the Company being acquired by CTSTH hereunder shall be referred to
herein collectively as the "SHARES" and each a "SHARE"). The Shares shall be
conveyed by the Shareholders to CTSTH free and clear of all Restrictions
whatsoever.
2.2 CONSIDERATION. Neither CTSTH nor the Company shall
transfer any consideration to the Shareholders for the shares.
2.3 DELIVERY OF THE SHARES. At the Closing, each of the
Shareholders shall tender to CTSTH the certificates representing the Shares,
together with such appropriate documentation evidencing the transfer of such
Shareholder's Shares pursuant to this Agreement, which documentation shall be in
form and substance acceptable to CTSTH.
2.4 CLOSING. The Closing Date of the transactions contemplated
by this Agreement shall occur at the offices of CTSTH at 9999 Willow Creek Road,
San Diego, California 92131 at 10:00 A.M., Pacific Standard Time, on November
30, 1998, or at such other location, time and date as the parties hereto shall
agree.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND THE SHAREHOLDERS
The Company and each of the Shareholders hereby represent and
warrant, jointly and severally, to CTSTH, in each case as of the date of this
Agreement, as follows:
3.1 INCORPORATION, STOCK, ETC.
(a) The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Florida, with all requisite power and authority to own its
properties and assets and to carry on the business in which it is
now engaged.
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(b) The issued and outstanding shares of the Company are as set
forth on SCHEDULE 3.1(b) hereto. All of the issued shares of the
capital stock of the Company have been duly authorized and validly
issued and are fully paid and nonassessable. Except as set forth
on SCHEDULE 3.1(b), as of the Closing Date, the Company is not
bound by any subscription, option, warrant, conversion privilege,
or other right, call, agreement or commitment to issue or sell, or
any obligation, agreement or commitment to purchase or otherwise
acquire any of its stock or any securities convertible into or
exchangeable for any of its stock. None of the stock of the
Company has been issued in violation of any preemptive or
contractual rights of any Person. All of the stock of the Company
has been issued in compliance with all applicable securities laws,
and there are no shareholders' agreements, voting trusts or
similar agreements that are in effect with respect to any of such
stock at the Closing Date, except as set forth on SCHEDULE 3.1(b).
3.2 TITLE TO STOCK. Each Shareholder is the beneficial and
record owner of all of the Shares listed next to such Shareholder's name on
Schedule A-1. The Shares are not subject to any Restrictions that, as of the
Closing, have not been or will not be waived or terminated, and each Shareholder
has good and marketable title to such Shareholder's Shares, free and clear of
any Restrictions.
3.3 AUTHORITY; BINDING EFFECT. The execution, delivery and
performance by the Company of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by all
necessary action on the part of the Company, the Company has all requisite
corporate power and authority to enter into this Agreement and to carry out the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Company and is the valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of creditors' rights generally.
The execution, delivery and performance by the Shareholders of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary action on the part of the Shareholders, and
each of the Shareholders has the power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby. This Agreement
has been duly executed and delivered by each of the Shareholders and is the
valid and binding agreement of each Shareholder, enforceable against each
Shareholder in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally.
3.4 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 Company or the Shareholders in connection with the negotiation,
execution or
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performance of this Agreement or the transaction 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 transaction.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF CTSTH
4.1 REPRESENTATIONS AND WARRANTIES. CTSTH hereby represents
and warrants to each of the Shareholders, in each case as of the date of this
Agreement, as follows:
(a) INCORPORATION. CTSTH is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Delaware.
(b) AUTHORITY; BINDING EFFECT. (i) The execution, delivery
and performance by CTSTH of this Agreement and the consummation of
the transactions contemplated hereby by CTSTH has been duly and
validly authorized by all necessary corporate action on the part
of CTSTH; (ii) CTSTH has all requisite corporate power and
authority to enter into this Agreement and to carry out the
transactions contemplated hereby; and (iii) this Agreement has
been duly executed and delivered by CTSTH and is the valid and
binding agreement of CTSTH, enforceable in accordance with its
terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally.
(c) 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 CTSTH in connection with the
negotiation, execution or performance of this Agreement or the
transaction 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 transaction.
ARTICLE V
MISCELLANEOUS PROVISIONS
5.1 AMENDMENT AND MODIFICATIONS. Subject to applicable law,
this Agreement may be amended, modified and supplemented only by written
agreement between the parties hereto which states that it is intended to be a
modification of this Agreement.
5.2 WAIVER OF COMPLIANCE. Any failure of the Company and the
Shareholders, on the one hand, or CTSTH, on the other, to comply with any
obligation, covenant, agreement or condition herein may be expressly waived in
writing by the other
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party, but such waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure.
5.3 EXPENSES. The parties agree that all fees and expenses
incurred by them in connection with this Agreement and the transaction
contemplated hereby shall be borne by the party incurring such fees and
expenses, including, without limitation, all fees of counsel, investment bankers
and accountants.
5.4 FURTHER ASSURANCES. Each party shall execute and deliver
after the Closing such further certificates, agreements and other 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. Notwithstanding the foregoing, the Shareholders shall not be obligated
to incur any financial obligation or other liability other than as expressly
provided herein.
5.5 WAIVER. No failure on the party 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.
5.6 NOTICES. All notices, requests, demands and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given upon receipt if delivered by hand or mailed,
certified or registered mail with postage prepaid:
(a) if to CTSTH, to:
CTS Telcom Holdings, Inc.
9999 Willow Creek Road
San Diego, California 92131
Attention: General Counsel
if to Company, to:
CTS Telcom, Inc.
9999 Willow Creek Road
San Diego, California 92131
Attention: General Counsel
or to such other person or address as CTSTH or Company shall furnish to
each of the Shareholders in writing;
(b) if to a Shareholder, to the address for each such
Shareholder listed
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on SCHEDULE A-1 hereto, or to such other person or address
as such Shareholder shall furnish to CTSTH in writing.
5.7 ASSIGNMENT. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, but neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
any of the parties hereto without the prior written consent of the other party.
5.8 GOVERNING LAW. This Agreement and the legal relations
among the parties hereto shall be governed by and construed in accordance with
the laws of the State of California, as applied to contracts entered into and to
be wholly performed within such State, without giving effect to conflict of
laws.
5.9 COUNTERPARTS. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
5.10 HEADINGS. The headings of the Sections and Articles of
this Agreement are inserted for convenience only and shall not constitute a part
hereof or affect in any way the meaning or interpretation of this Agreement.
5.11 ENTIRE AGREEMENT. This Agreement, including the Exhibits
and Schedules hereto, and the other documents and certificates delivered
pursuant to the terms hereof, set forth the entire agreement and understanding
of the parties hereto in respect of the subject matter contained herein, and
supersede all prior agreements, promises, covenants, letters of intent,
arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party hereto.
5.12 THIRD PARTIES. Except as specifically set forth or
referred to herein, nothing herein expressed or implied is intended or shall be
construed to confer upon or give to any person or corporation other than the
parties hereto and their successors or assigns, any rights or remedies under or
by reason of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and their respective corporate seals to be affixed hereto,
all as of the day and year first above written.
"CTSTH"
CTS TELCOM HOLDINGS, INC.
a Delaware corporation
By: /s/ Edward S. Soren
----------------------------
Name: Edward S. Soren
Title: President
"COMPANY"
CTS TELCOM, INC.
a Florida corporation
By: /s/ Edward S. Soren
----------------------------
Name: Edward S. Soren
Title: President
"SHAREHOLDERS"
/s/ Rosalind R. Abbott
- -----------------------------
ROSALIND R. ABBOTT
/s/ Edward S. Soren
- -----------------------------
EDWARD S. SOREN
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SCHEDULE A-1
LIST OF SHAREHOLDERS,
SHARES OWNED AND ADDRESSES
NAME AND ADDRESS SHARES HELD
- --------------------- -----------
Rosalind Abbott 620,000
9999 Willow Creek Road
San Diego, CA 92131
Edward S. Soren 380,000
9999 Willow Creek Road
San Diego, CA 92131
Schedule A-1
SCHEDULE 3.1(b)
INCORPORATION, STOCK, ETC.
1. The number of issued shares of the Company are 1,000,000.
2. There are no outstanding options.
Schedule 3.1(b)