UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 11, 2000
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SUNGLOBE FIBER SYSTEMS CORPORATION
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(Exact name of registrant as specified in its charter)
Nevada 2-70345-NY 88-0182534
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
1550 Sawgrass Corporate Parkway, Suite 370 Sunrise, Florida 33323
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (954) 838-0527
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TimeOne, Inc. 631 North Stephanie Street, PMB 378 Henderson, Nevada 89014
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(Former Name or Former Address, if Changed Since Last Report)
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Item 1. Changes in Control of Registrant.
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On July 3, 2000, pursuant to a Merger Agreement, dated June 29, 2000
(the "Merger Agreement"), among the Registrant (the "Company"), SunGlobe
Acquisition, Inc., a Delaware corporation and a wholly-owned subsidiary of the
Company (the "Subsidiary"), and SGFS, Inc. (formerly known as SunGlobe Fiber
Systems Corporation), a Delaware corporation ("SGFS"), the Subsidiary merged
with and into SGFS (the "Merger"), with SGFS as the surviving corporation. Prior
to the Merger, SGFS was a wholly-owned subsidiary of SunGlobe Telecom, Inc., a
Florida corporation ("Telecom"), 71% of the capital stock of which is owned by
Barry H. Pasternak. Pursuant to the Merger Agreement, Telecom transferred all of
the capital stock of SGFS to the Company in exchange for 8,083,292 newly issued
shares of the Company's common stock. Immediately prior to, and as a condition
to the closing of, the Merger, the Company sold its interest in a parcel of real
property located in Montana to Daniel Pentelute ("Pentelute"), the majority
stockholder of the Company prior to the Merger and co-owner of the Montana
property through his wholly-owned company, in exchange for 500,000 shares of the
Company's common stock owned by Pentelute, which shares are now treasury stock
of the Company.
As a result of and immediately following the Merger, Telecom owned 51%
of the outstanding capital stock of the Company. In connection with the Merger,
Telecom has an agreement to pay to The Hamilton Investment Group, Inc. ("HIG") a
finders fee consisting of $75,000 and 404,165 shares of the Company's common
stock owned by Telecom. Payment of such fee will reduce Telecom's beneficial
ownership to 46% of the issued and outstanding shares. The shares to be
transferred by Telecom to HIG wil be subject to a voting agreement in favor of
Telecom.
Item 2. Acquisition or Disposition of Assets.
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In connection with the Merger described in Item 1 above, the Company
acquired all of the capital stock of SGFS at a purchase price negotiated at
arms-length. SGFS has recently entered into an agreement with the Maya-1 Cable
System ("Maya-1") pursuant to which it has agreed to purchase a 0.67% ownership
interest in Maya-1 and to contribute to the development costs of Maya-1 based on
its ownership interest percentage. Maya-1 is a development-stage fiber optic
submarine cable system designed to provide telecommunications capacity in the
Caribbean region. The Maya-1 system is currently in its final stages of
construction. When completed, it is expected to provide fiber optic cable links
among the United States, Mexico, Honduras, Costa Rica, Panama, Colombia and the
Cayman Islands. The system is currently scheduled to become operational in the
third quarter of 2000.
SGFS's only other asset is all of the capital stock of Island Sun
Communications Corp., a corporation organized under the laws of the Commonwealth
of Puerto Rico ("Island Sun"). Island Sun's only asset is a ten-year lease and
option agreement for a largely undeveloped tract of land in Puerto Rico. The
lease permits Island Sun to use the property for office space and for the
proposed installation and operation of telecommunications antennas and related
facilities. The rental rate under the Lease is $1,650 per month. Pursuant to the
terms of the lease, Island Sun may extend the lease for two five-year renewal
terms and has the option to purchase the property at a price of $250,000 if such
option is exercised within the first ten-year term.
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Item 5. Other Events.
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In connection with, and as a condition to the closing of, the Merger,
on July 3, 2000, each of Roy E. Molina and Yolanda Oyler, who constituted all of
the directors of the Company as of such date, resigned. The vacancies created
thereby were filled by Barry H. Pasternak and Carol Pasternak, who, prior to the
Merger and currently, constitute all of the board of directors of SGFS.
The Company changed its name to SunGlobe Fiber Systems Corporation on
July 6, 2000. In addition, the Company relocated its principal offices to 1550
Sawgrass Corporate Parkway, Suite 370, Sunrise, Florida and changed its OTC
Bulletin Board symbol from TYME to SGFS, effective July 7, 2000.
The Company's subsidiary, acquired in the Merger, formerly known as
SunGlobe Fiber Systems Corporation, changed its name to SGFS, Inc. on July 6,
2000.
On July 7, 2000, the Company issued a press release announcing the
completion of the Merger, a copy of which is attached as an exhibit hereto.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(a) Financial statements of Businesses Acquired.
The financial statements required by this item are not
included in this initial report on Form 8-K but will be filed
by amendment not later than 60 days after the date on which
this initial report on Form 8-K is required to be filed.
(b) Pro Forma Financial Information.
The financial statements required by this item are not
included in this initial report on Form 8-K but will be filed
by amendment not later than 60 days after the date on which
this initial report on Form 8-K is required to be filed.
(c) Exhibits.
2.1 Merger Agreement dated June 29, 2000, by and among TimeOne,
Inc., SunGlobe Acquisition, Inc. and SunGlobe Fiber Systems
Corporation.
99.1 Agreement of Purchase and Sale and Release, dated June 30,
2000, by and among TimeOne, Inc. and Daniel F. Pentelute.
99.2 Press Release issued by Registrant on July 7, 2000.
This report on Form 8-K contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section21E
of the Securities and Exchange Act of 1934, as amended. Actual results, events
and circumstances could differ materially from those set forth in such
statements due to various factors. Such factors include the Company's
development-stage business, the need for additional operating capital, the
effect of
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government regulations, risks related to technology and network infrastructure
and changing economic and competitive conditions in the telecommunications
industry, as well as other risks and uncertainties.
[Remainder of this page intentionally left blank.]
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
SUNGLOBE FIBER SYSTEMS CORPORATION
By:
Name: Barry H. Pasternak
Title: President
Dated: July 11, 2000
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Exhibit 2.1
EXECUTION COPY
MERGER AGREEMENT
AMONG
TIMEONE, INC.,
SUNGLOBE ACQUISITION, INC.,
AND
SUNGLOBE FIBER SYSTEMS CORPORATION
June 29, 2000
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MERGER AGREEMENT
AGREEMENT entered into as of June 29, 2000 (the "Agreement"), by and
among TIMEONE, INC., a Nevada corporation (the "Buyer"), SUNGLOBE ACQUISITION,
INC., a Delaware corporation and a wholly-owned subsidiary of the Buyer (the
"Subsidiary"), and SUNGLOBE FIBER SYSTEMS CORPORATION, a Delaware corporation
(the "Target"). The Buyer, the Subsidiary and the Target are referred to herein
individually as a "Party," and collectively as the "Parties".
This Agreement contemplates a reverse subsidiary merger of the
Subsidiary with and into the Target in which the Target Stockholder (as
hereinafter defined) will receive capital stock in the Buyer in exchange for all
of the outstanding capital stock of the Target.
Now, therefore, in consideration of the mutual promises herein made,
and in consideration of the representations, warranties, and covenants herein
contained, the Parties hereby agree as follows.
SECTION I
DEFINITIONS
1.1 Definitions.
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"Accounts" has the meaning set forth in Section 4.10 below.
"Affiliate" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act.
"Buyer" has the meaning set forth in the preface above.
"Buyer Shares" has the meaning set forth in Section 4.3 below.
"Certificate of Merger" has the meaning set forth in Section
2.3 below.
"Closing" has the meaning set forth in Section 2.2 below.
"Closing Date" has the meaning set forth in Section 2.2 below.
"Confidential Information" means any information concerning
the business and affairs of the Target that is not already generally available
to the public.
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"Delaware General Corporation Law" means the General
Corporation Law of the State of Delaware, as amended.
"Effective Time" has the meaning set forth in Section 2.4(a)
below.
"Employment Agreement" has the meaning set forth in Section
6.2(e) below.
"GAAP" means, at any time or for any period of determination,
United States generally accepted accounting principles as then in effect.
"Island Sun" has the meaning set forth in Section 3.2 below.
"Knowledge" means actual knowledge without independent
investigation.
"Merger" has the meaning set forth in Section 2.1 below.
"Merger Consideration" has the meaning set forth in Section
2.4(e) below.
"Montana Property" means that certain parcel of property in
Montana more particularly described in Schedule 1.1 hereto.
"Ordinary Course of Business" means the ordinary course of
business consistent with past custom and practice (including with respect to
quantity and frequency).
"Party" or "Parties" has the meaning set forth in the preface
above.
"Pentelute" means Daniel Pentelute, a shareholder of the Buyer
and the sole shareholder of Desert Land Enterprises.
"Pentelute Shares" has the meaning set forth in Section 2.4(g)
below.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"Promissory Note" means the promissory note dated March 20,
2000 in the stated principal amount of $200,000 made by the Target in favor of
the Buyer, evidencing the Target's obligation to repay to the Buyer a bridge
loan in the amount of $200,000 advanced to the Target by the Buyer.
"SEC" means the Securities and Exchange Commission.
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"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Security Interest" means any mortgage, pledge, lien,
encumbrance, charge, or other security interest, other than (a) mechanic's,
materialman's, and similar liens, (b) liens for taxes not yet due and payable or
for taxes that the taxpayer is contesting in good faith through appropriate
proceedings, (c) purchase money liens and liens securing rental payments under
capital lease arrangements, and (d) other liens arising in the Ordinary Course
of Business and not incurred in connection with the borrowing of money.
"Subsidiary" has the meaning set forth in the preface above.
"Summary Business Description" means the Target's Summary
Business Description, dated June 27, 2000, delivered by the Target to the Buyer,
including all attachments thereto.
"Surviving Corporation" has the meaning set forth in Section
2.1 below.
"Target" has the meaning set forth in the preface above.
"Target Share" means any share of the Common Stock, $0.01 par
value per share, of the Target.
"Target Stockholder" means SunGlobe Telecom, Inc., a Florida
corporation.
SECTION II
BASIC TRANSACTION
2.1 The Merger. On and subject to the terms and conditions of this
Agreement, the Subsidiary shall merge with and into the Target (the "Merger") at
the Effective Time. The Target shall be the corporation surviving the Merger
(the "Surviving Corporation") and shall become a wholly-owned subsidiary of the
Buyer.
2.2 The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Dorsey & Whitney
LLP in New York, New York commencing at 9:00 a.m. local time on the business day
on which or by which all conditions to the obligations of the Parties to
consummate the transactions contemplated hereby have been satisfied or duly
waived (other than conditions with respect to actions the respective Parties
will take at the Closing itself), or on such other date as the Buyer and the
Target may mutually determine (the "Closing Date");
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2.3 Actions at the Closing. At the Closing, (i) the Target shall
deliver to the Buyer and the Subsidiary the various certificates, instruments,
and documents referred to in Section 6.1 below, (ii) the Buyer and the
Subsidiary shall deliver to the Target the various certificates, instruments,
and documents referred to in Section 6.2 below, (iii) the Target and the
Subsidiary shall file with the Secretary of State of Delaware a Certificate of
Merger in the form attached hereto as Exhibit A (the "Certificate of Merger"),
and (iv) the Buyer shall sell its interest in the Montana Property to Pentelute
pursuant to a separate sale agreement in the manner provided in Section 2(g)
below.
2.4 Effect of Merger.
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(a) General. The Merger shall become effective at the time
(the "Effective Time") the Target and the Subsidiary file the
Certificate of Merger with the Secretary of State of Delaware. The
Merger shall have the effect set forth in the Delaware General
Corporation Law. The Surviving Corporation may, at any time after the
Effective Time, take any action (including executing and delivering any
document) in the name and on behalf of either the Target or the
Subsidiary in order to carry out and effectuate the transactions
contemplated by this Agreement.
(b) Certificate of Incorporation. The Certificate of
Incorporation of the Target in effect at and as of the Effective Time
will remain the Certificate of Incorporation of the Surviving
Corporation without any modification or amendment in the Merger.
(c) Bylaws. The Bylaws of the Target in effect at and as of
the Effective Time will remain the Bylaws of the Surviving Corporation
without any modification or amendment in the Merger.
(d) Directors and Officers. The directors and officers of the
Target shall become the directors and officers of the Surviving
Corporation and the Buyer at and as of the Effective Time.
(e) Exchange of Target Shares. At and as of the Effective
Time, all outstanding Target Shares shall be transferred by the Target
Stockholder to the Buyer in exchange for newly authorized and issued
Buyer Shares (the "New Shares") in an aggregate amount equal to 51% of
the total authorized and outstanding capital stock of the Buyer on a
fully diluted basis, but after giving effect to (i) the issuance of the
New Shares, (ii) any outstanding options, warrants, conversion rights,
exchange rights, subscription rights or any other contracts or
commitments of the Buyer to issue or sell any of its shares of capital
stock (other than the stock purchase option to be granted by the Buyer
pursuant to the Employment Agreement), and (iii) the repurchase by the
Buyer of the Pentelute Shares (the "Merger Consideration"). The Target
Stockholder shall not have any rights with respect to the Target Shares
after the Effective Time other than the right to receive New Shares as
set forth in this Agreement.
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(f) Retirement of Capital Stock of Subsidiary. At and as of
the Effective Time, each share of capital stock of the Subsidiary shall
be retired.
(g) Sale of Montana Property. On or as promptly as practicable
after the date hereof, the Buyer shall execute, and cause Pentelute to
execute, an agreement of purchase and sale in the form attached as
Exhibit B, by which Buyer shall sell, effective as of the Effective
Time, all of its right, title and interest in and to the Montana
Property to Pentelute at a price equal to its fair market value as
reasonably agreed upon by the Buyer and the Target Stockholder, but in
no event for less than $50,000 (the "Montana Land Value"). The purchase
price shall be paid by the transfer to the Buyer by Pentelute of such
number of Buyer Shares (the "Pentelute Shares") as equals the Montana
Land Value multiplied by ten (10). The Pentelute Shares shall
subsequently be held by the Buyer as treasury stock.
(h) Transfer of Accounts. On the Closing Date, upon receipt of
the Target Shares, the Buyer deliver to the Target all cash and cash
equivalents in the Accounts via wire transfer of immediately available
funds to such accounts as shall be designated by the Target to the
Buyer in writing.
2.5 Closing of Transfer Records. After the close of business on the
Closing Date, transfers of Target Shares outstanding prior to the Effective Time
shall not be made on the stock transfer books of the Surviving Corporation,
other than to reflect the transfer of such Target Shares to the Buyer.
2.6 Name Change. As promptly as practicable after the Closing Date, the
Buyer shall take, or cause to be taken, action necessary to effect a change of
(i) the legal name of the Buyer from "TimeOne, Inc." to "SunGlobe Fiber Systems
Corporation" and (ii) the legal of the Surviving Corporation from "SunGlobe
Fiber Systems Corporation" to "SGFS, Inc.".
SECTION III
REPRESENTATIONS AND WARRANTIES OF THE TARGET
The Target represents and warrants to the Buyer and the Subsidiary that
the statements contained in this Section 3 are correct and complete as of the
date of this Agreement and will be correct and complete as of the Closing Date
(as though made then and as though the Closing Date were substituted for the
date of this Agreement throughout this Section 3).
3.1 Organization, Qualification, and Corporate Power. Each of the
Target and Island Sun is a corporation duly organized, validly existing, and in
good standing under the laws of the State of its formation. The Target is duly
authorized to conduct business and is in good standing under the laws of each
jurisdiction where such qualification is required, except where the lack of such
qualification would not have a material adverse effect on the financial
condition of the Target taken as a whole or on the
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ability of the Parties to consummate the transactions contemplated by this
Agreement. Each of the Target and Island Sun has full corporate power and
authority to carry on the businesses in which it proposes to engage and use the
properties owned and used by it.
3.2 Subsidiaries. The Target has no subsidiaries other than Island Sun
Communications Corp., a corporation organized under the laws of the Commonwealth
of Puerto Rico ("Island Sun"). The Target is the holder beneficially and of
record of all of the outstanding shares of capital stock of Island Sun, free and
clear of all Security Interests. All of the issued and outstanding shares of
Island Sun have been duly authorized and are validly issued, fully paid and
nonassessable. There are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require Island Sun to issue, sell, or
otherwise cause to become outstanding any of its capital stock. There are no
outstanding or authorized stock appreciation, phantom stock, profit
participation or similar rights with respect to Island Sun.
3.3 Capitalization. The entire authorized capital stock of the Target
consists of 1,000 Target Shares, of which 100 Target Shares are issued and
outstanding and all of which are held of record, and to the knowledge of the
Target, beneficially by the Target Stockholder, free and clear of all Security
Interests. All of the issued and outstanding Target Shares have been duly
authorized and are validly issued, fully paid, and nonassessable. There are no
outstanding or authorized options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or commitments
that could require the Target to issue, sell, or otherwise cause to become
outstanding any of its capital stock. There are no outstanding or authorized
stock appreciation, phantom stock, profit participation, or similar rights with
respect to the Target.
3.4 Authorization of Transaction. The Target has, or will have as of
the Closing Date, full power and authority (including full corporate power and
authority) to execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement constitutes the valid and legally binding obligation
of the Target, enforceable against it in accordance with its terms and
conditions.
3.5 Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Target or Island Sun is subject or
any provision of the charter or bylaws of the Target or Island Sun or (ii)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which the Target or Island Sun is a party or
by which it is bound or to which any of its assets is subject (or result in the
imposition of any Security Interest upon any of its assets), except where the
violation, conflict, breach, default, acceleration, termination, modification,
cancellation, failure to give notice, or Security Interest would not have a
material adverse effect on the financial condition of the Target or Island Sun
or on the ability of the Parties to consummate the
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transactions contemplated by this Agreement. Other than in connection with the
provisions of the Delaware General Corporation Law, the Securities Exchange Act,
the Securities Act, and the state securities laws, the Target does not need to
give any notice to, make any filing with, or obtain any authorization, consent,
or approval of any government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement, except where the
failure to give notice, to file, or to obtain any authorization, consent, or
approval would not have a material adverse effect on the financial condition of
the Target or on the ability of the Parties to consummate the transactions
contemplated by this Agreement.
3.6 Undisclosed Liabilities; Material Contracts. Neither the Target nor
Island Sun has any liabilities or obligations of any nature, whether absolute,
accrued, contingent or otherwise and whether due or to become due except as set
forth on Schedule 3.6 hereto. Other than the agreements referenced in the
Summary Business Description, neither the Target nor Island Sun is a party to
any material agreements.
3.7 Financial Statements. The Target has delivered to the Buyer its
unaudited financial statements as of May 31, 2000, which financial statements
have been prepared by management of the Target in accordance with GAAP applied
on a consistent basis throughout, and such financial statements present fairly
the financial condition, results of operations and cash flows of the Target and
Island Sun as of the indicated date, subject to changes resulting from
non-material audit and normal year-end adjustments.
3.8 Broker Fees. Other than with respect to the Persons listed on
Schedule 3.8, the Target has not taken any action that would give rise to any
claim by any Person for brokerage commissions, finder's fees, registration
rights or any other compensation or consideration of any nature whatsoever.
3.9 Disclosure. This Agreement (including the schedules hereto), the
documents delivered by or on behalf of the Target or Island Sun and the Summary
Business Description do not contain any untrue or misleading statement of a
material fact regarding either of the Target or Island Sun, their proposed
businesses or any of the other matters dealt with in this Section 3 relating to
the Target or Island Sun or the transactions contemplated by this Agreement.
SECTION IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
AND THE SUBSIDIARY
Each of the Buyer and the Subsidiary jointly and severally represent
and warrant to the Target that the statements contained in this Section 4 are
correct and complete as of the date of this Agreement, will be correct and
complete as of the Closing Date (as though made then and as though
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the Closing Date were substituted for the date of this Agreement throughout this
Section 4), and shall survive the Closing Date.
4.1 Organization. Each of the Buyer and the Subsidiary is a corporation
duly organized, validly existing, and in good standing under the laws of the
state of its incorporation.
4.2 Authorization of Transaction. Each of the Buyer and the Subsidiary
has full power and authority (including full corporate power and authority) to
execute and deliver this Agreement and to perform its obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of each of
the Buyer and the Subsidiary, enforceable against each such Party in accordance
with its terms and conditions.
4.3 Capitalization of Buyer. The entire authorized capital stock of the
Buyer consists of 10,000,000 shares of Common Stock, $.0001 par value per share
(the "Buyer Shares"), of which (i) 8,266,300 shares are issued and outstanding
as of the date hereof and (ii) 7,766,300 shares will be issued and outstanding
as of the Closing Date (assuming that the Montana Property is sold in accordance
with the provisions hereof in consideration of the Buyer's repurchase of 500,000
Buyer Shares). Of such issued and outstanding Buyer Shares, Pentelute is the
owner of record of 4,698,237 Buyer Shares and, to the knowledge of the Buyer, he
has no beneficial interest in any other Buyer Shares except 212,625 shares
beneficially owned by him through his ownership of several corporations. No
other Person holds (before giving affect to the issuance to the Target
Stockholder of Buyer Shares pursuant hereto) 5% or more of the outstanding Buyer
Shares. All of the issued and outstanding Buyer Shares have been duly authorized
and are validly issued, fully paid, and nonassessable. There are no outstanding
or authorized options, option plans, warrants, purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or commitments
that could require the Buyer to issue, sell, or otherwise cause to become
outstanding any shares of its capital stock (excluding the commitment of the
Buyer, as of the Effective Time, to grant a stock purchase option pursuant to
the Employment Agreement). There are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights with
respect to the Buyer.
4.4 Subsidiaries. The Buyer has no subsidiaries other than the
Subsidiary and the Subsidiary has no subsidiaries. The Buyer is the holder
beneficially and of record, of all outstanding shares of capital stock of
Subsidiary, free and clear of all Security Interests. All of the issued and
outstanding shares have been duly authorized and are validly issued, fully paid,
and nonassessable. There are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require the Subsidiary to issue, sell,
or otherwise cause to become outstanding any of its capital stock. There are no
outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to the Subsidiary.
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4.5 Undisclosed Liabilities. Neither the Buyer nor the Subsidiary shall
have, as of the Closing Date, any liabilities or obligations of any nature,
whether absolute, accrued, contingent or otherwise and whether due, or to become
due, except for any such liabilities or obligations disclosed to the Target for
purposes Section 6.2(a) below and listed on Schedule 4.5 hereto. Neither the
Buyer nor the Subsidiary shall have, as of the Effective Time, any employees
(other than Persons currently employed by the Target), and shall have no
obligations to, or any liabilities in respect of, any individuals who were,
prior to the Effective Time, employees of the Buyer or the Subsidiary, except as
disclosed to the Target for purposes of Section 6.2(a) below and listed on
Schedule 4.5 hereto. The Buyer believes in good faith that the amount of the
1999 Refund (as such term is defined in Section 6.2(a) below) shall be $16,334.
4.6 Assets and Business of Target. Without limiting the more complete
disclosures set forth in the Summary Business Description, each of the Buyer and
Subsidiary acknowledges that it has received the following information regarding
the Target: (i) each of the Target and Island Sun, as of the Closing Date, is a
development-stage company with no tangible assets or business, no revenue, and a
limited operating history, (ii) the Target recently entered into an agreement
with the Maya-1 Cable System ("Maya-1") pursuant to which it will develop and
provide telecommunication carrier services to Maya-1 in Central and South
America, however, the agreement contemplates heavy risks and there can be no
assurance that the Target will generate significant revenue under the aforesaid
agreement, (iii) Island Sun's sole asset is a lease and option agreement as
further described in the Summary Business Description; and (iv) even after
consummation of the Merger, each of the Target and Island Sun will need to
obtain substantial equity and/or debt capital, in addition to the monies
currently held by the Buyer, in order for either the Target or Island Sun to
pursue all or any significant part of their business plans. The Buyer and the
Subsidiary have received the Summary Business Description and the financial
statements of the Target and Island Sun referred to in Section 3.7 above, have
carefully reviewed them and understand the information contained therein. The
Buyer and the Subsidiary had the opportunity to obtain any additional
information, to the extent the Target had such information in the Target's
possession or could acquire it without unreasonable effort or expense, to verify
the accuracy of the information contained in the Summary Business Description,
the aforesaid financial statements and all documents received or reviewed in
connection with the negotiation hereof and the consummation of the Merger and
have had the opportunity to meet representatives of the Target and to have them
answer any questions and provide such additional information regarding the
current and proposed finances, operations, business and prospects of the Target
and Island Sun deemed relevant by the Buyer and the Subsidiary, and all such
questions have been answered and all requested information, to the extent the
Target had information in the Target's possession or could acquire it without
unreasonable effort or expense, has been provided to the full satisfaction of
the Buyer and the Subsidiary.
4.7 Filings with SEC. The Buyer is subject to the reporting
requirements of Section 15(d) of the Securities Exchange Act and has no
reporting obligations under Section 12 of the Securities Exchange Act. The Buyer
has made all filings with the SEC that it has been required to make under the
Securities Act and the Securities Exchange Act (collectively the "Public
Reports"). Each of the Public
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Reports has complied with the Securities Act and the Securities Exchange Act in
all material respects. None of the Public Reports, as of their respective dates,
contained any untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. The Buyer has made
available to the Target a correct and complete copy of each Public Report
(together with all exhibits and schedules thereto and as amended to date).
4.8 Financial Statements. The Buyer has filed a quarterly report on
Form 10-QSB for the fiscal quarter ended March 31, 2000, and an Annual Report on
Form 10-KSB for the fiscal year ended December 31, 1999. The financial
statements included in or incorporated by reference into these Public Reports
(including the related notes and schedules) have been prepared in accordance
with GAAP applied on a consistent basis throughout the periods covered thereby,
present fairly the financial condition of the Buyer and its subsidiaries as of
the indicated dates and the results of operations of the Buyer and its
subsidiaries for the indicated periods, are correct and complete in all
respects, and are consistent with the books and records of the Buyer and its
subsidiaries; provided, however, that the interim statements are subject to
normal year-end adjustments.
4.9 Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which either the Buyer or the Subsidiary is
subject or any provision of the charter or bylaws of either the Buyer or the
Subsidiary or (ii) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
either the Buyer or the Subsidiary is a party or by which it is bound or to
which any of its assets is subject. Other than in connection with the provisions
of the Delaware General Corporation Law, the Securities Exchange Act, the
Securities Act, and the state securities laws, neither the Buyer nor the
Subsidiary needs to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency in
order for the Parties to consummate the transactions contemplated by this
Agreement.
4.10 Accounts. Other than those accounts listed on Schedule 4.10 hereto
(the "Accounts"), neither the Buyer nor the Subsidiary maintains with any
commercial bank, broker or other financial institution any accounts to which any
cash balances, securities or other assets are credited.
4.11 Brokers' Fees. Neither the Buyer nor the Subsidiary nor any
Affiliate thereof has taken any action which would give rise to any claim by any
Person for brokerage commissions, finders fees, registration rights or any other
compensation or consideration of any nature whatsoever, except for the
compensation payable by the Buyer pursuant to the Finders Agreement, dated as of
June __, 2000 (the "Finders Agreement"), among the Buyer and the other parties
thereto named therein, a true and complete copy of which has been delivered by
the Buyer to the Target.
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SECTION V
COVENANTS
The Parties agree as follows with respect to the period from and after
the execution of this Agreement.
5.1 General. Each of the Parties will use its best efforts to take all
action and to do all things necessary, proper, or advisable in order to
consummate and make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the closing conditions set forth in
Section 6 below).
5.2 Closing Date. Each of the Parties acknowledges that time is of the
essence and will use its best efforts to ensure that the Closing Date occurs by
no later than June 30, 2000.
5.3 Notices and Consents. Each of the Parties will give any notices to
third parties, and will use its best efforts to obtain any board of director or
shareholder approvals and third party consents, that any other Party reasonably
may request in connection with the matters referred to in Sections 3 and 4
above.
5.4 Corporate Matters and Approvals. Each of the Parties will give any
notices to, make any filings with, and use its reasonable efforts to obtain any
internal authorizations, consents, and approvals in connection with the matters
referred to in Section 3.4 and Section 4.9 above.
5.5 Comfort Letters. The Buyer and the Subsidiary shall deliver to the
Target on or before the Closing Date a letter of Smith & Company, P.C.,
independent auditors to the Buyer, stating their conclusions, as of the Closing
Date or as of a date as immediately prior thereto as is practicable, as to the
accuracy of certain information derived from the financial records of the Buyer
and the Subsidiary (the "Buyer Comfort Letter"). The Buyer Comfort Letter shall
be reasonably satisfactory to the Target in form and substance. The Target will
deliver to the Buyer on or before the Closing Date a letter of Jennifer
Schectman, C.P.A., independent auditor to the Target, stating her conclusions,
as of the Closing Date or as of a date as immediately prior thereto as is
practicable, as to the accuracy of certain information derived from the
financial records of the Target (the "Target Comfort Letter"). The Target
Comfort Letter shall be reasonably satisfactory to the Buyer in form and
substance.
5.6 Operation of Business. The Parties will not engage in any practice,
take any action, or enter into any transaction outside the Ordinary Course of
Business. Without limiting the generality of the foregoing, the Parties:
(a) will not authorize or effect any change in its charter or
bylaws except as expressly required hereby;
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(b) will not grant any options, warrants, or other rights to
purchase or obtain any of its capital stock or issue, sell, or
otherwise dispose of any of its capital stock (except upon the
conversion or exercise of options, warrants, and other rights currently
outstanding);
(c) will not declare, set aside, or pay any dividend or
distribution with respect to its capital stock (whether in cash or in
kind), or redeem, repurchase, or otherwise acquire any of its capital
stock;
(d) will not issue any note, bond, or other debt security or
create, incur, assume, or guarantee any indebtedness for borrowed money
or capitalized lease obligation outside the Ordinary Course of
Business;
(e) will not make any capital investment in, make any loan to,
or acquire the securities or assets of any other Person outside the
Ordinary Course of Business;
(f) will not commit to do any of the foregoing.
5.7 Full Access. Each of the Parties will permit representatives of the
other Parties to have full access at all reasonable times, and in a manner so as
not to interfere with the normal business operations of the Party, to all
premises, properties, personnel, books, records (including tax records),
contracts, and documents of or pertaining to the Party. Each of the Parties will
treat and hold as such any Confidential Information it receives from the other
Parties in the course of the reviews contemplated by this Section 5.7, will not
use any of the Confidential Information except in connection with this
Agreement, and, if this Agreement is terminated for any reason whatsoever,
agrees to return to the owner all tangible embodiments (and all copies) thereof
which are in its possession
5.8 Notice of Developments. Each Party will give prompt written notice
to the others of any material adverse development causing a breach of any of its
own representations and warranties in Section 3 and Section 4 above. No
disclosure by any Party pursuant to this Section 5.8, however, shall be deemed
to prevent or cure any misrepresentation, breach of warranty, or breach of
covenant
SECTION VI
CONDITIONS TO OBLIGATION TO CLOSE
6.1 Conditions to Obligation of the Buyer and the Subsidiary. The
obligation of each of the Buyer and the Subsidiary to consummate the
transactions to be performed by it in connection with the Closing is subject to
satisfaction of the following conditions:
(a) the Target shall have procured all of the third party
consents specified in Section 5.3 above;
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(b) the representations and warranties set forth in Section 3
above shall be true and correct in all material respects at and as of
the Closing Date;
(c) the Target shall have performed and complied with all of
its covenants hereunder in all material respects through the Closing;
(d) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency
of any federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (i) prevent consummation of any of the
transactions contemplated by this Agreement, (ii) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, (iii) affect adversely the right of the Buyer to own the
capital stock of the Surviving Corporation and to control the Surviving
Corporation, or (iv) affect adversely the right of any of the Surviving
Corporation to own its assets and to operate its businesses (and no
such injunction, judgment, order, decree, ruling, or charge shall be in
effect); there shall not be any judgment, order, decree, stipulation,
injunction, or charge in effect preventing consummation of any of the
transactions contemplated by this Agreement;
(e) the Target shall have delivered to the Buyer and the
Subsidiary a certificate to the effect that each of the conditions
specified above in Section 6.1(a)-(d) is satisfied in all respects;
(f) the Target Stockholder shall have executed and delivered
to the Buyer an investment intent letter, in form and substance as set
forth in Exhibit C hereto.
(g) the Target shall have entered into an Intercompany
Services Agreement with SunGlobe Telecom and the Buyer, effective as of
the Effective Time, in form and substance as set forth in Exhibit D
hereto;
(h) the Buyer and the Subsidiary shall have received from
Dorsey & Whitney LLP, counsel to the Target and the Target Stockholder
an opinion, in form and substance reasonably acceptable to Buyer,
addressed to the Buyer and the Subsidiary, and dated as of the Closing
Date; and
(i) all actions to be taken by the Target in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Buyer and the Subsidiary.
The Buyer and the Subsidiary may waive any condition specified in this
Section 6.1 if they execute a writing so stating at or prior to the Closing.
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6.2 Conditions to Obligation of the Target. The obligation of the
Target to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:
(a) the assets of the Buyer, as of the Closing Date, shall
include, in cash and cash equivalents, in the Accounts, an amount equal
to not less than $1.5 million, (i) less an amount equal to the
outstanding principal of the Promissory Note without accrued interest
through the Closing Date, and (ii) plus an amount equal to the sum of
(A) all liabilities of the Buyer, determined in accordance with GAAP,
existing as of the Closing Date (including without limitation all
professional fees, broker or finder fees and other expenses not paid by
the Buyer as of the Closing Date and incurred by it in connection with
the Merger, and all other liabilities referred to in Section 6.2(b)
below, but excluding amounts payable to Roy Molina, Yolanda Oyler and
Richard Mason in an aggregate amount not greater than $16,334 and which
are not payable by the Buyer unless, if, and to the extent that the
Buyer receives a refund on its U.S. income taxes for its 1999 tax year
(the "1999 Refund")), and (B) all professional fees and other expenses
incurred by the Target in connection with the Merger (which shall not
exceed an amount equal to $100,000, less the amounts paid by the Buyer
pursuant to Section 6.2(h) below), and the Target shall have received
such evidence thereof as it may have requested;
(b) as of the Closing Date, there shall exist no liabilities
of the Buyer or the Subsidiary that would be required to be reflected
on the Buyer's balance sheet in accordance with GAAP, other than
current liabilities not yet due or to be satisfied at the Closing and
which are disclosed to the Target for purposes of the calculations
required under Section 6.2(a) above, and the Target shall have received
such evidence thereof as it may have requested;
(c) the sale of the Montana Property from the Buyer to
Pentelute shall have been consummated in accordance with the provisions
hereof and the Target shall have received from the Buyer copies of all
documents relating to such sale;
(d) the Target shall be satisfied that there are no
currently-effective agreements to which Buyer is a party relating to
the voting, transfer or registration of any shares of capital stock of
the Buyer and the Buyer shall have obtained releases, in form and
substance satisfactory to the Target, from Pentelute, and from such
other Persons as the Target may require, of any and all claims
Pentelute and such other Persons may have against the Buyer;
(e) the Buyer shall have entered into an employment agreement
(the "Employment Agreement") with Barry Pasternak, currently the
President of the Target Stockholder and the Target, effective as of the
Effective Time, substantially in the form attached hereto as Exhibit E;
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(f) the Buyer shall have entered into an Intercompany Services
Agreement with SunGlobe Telecom and the Target, effective as of the
Effective Time, in form and substance as set forth in Exhibit D hereto;
(g) the Finders Agreement shall be in full force and effect,
shall not have been amended, and no party thereto shall be in default
of its obligations thereunder, and the Target shall have received such
evidence thereof as it may have requested;
(h) the Buyer shall pay via bank wire transfer to Dorsey &
Whitney LLP, as counsel to the Target and the Target Shareholder, an
amount equal to $100,000 in respect of legal fees and expenses incurred
and to be incurred by the Target in the negotiation of the Agreement
and consummation of the Merger;
(i) the representations and warranties set forth in Section 4
above shall be true and correct in all material respects at and as of
the Closing Date;
(j) each of the Buyer and the Subsidiary shall have performed
and complied with all of its covenants hereunder in all material
respects through the Closing;
(k) there shall not be any judgment, order, decree,
stipulation, injunction, or charge in effect preventing consummation of
any of the transactions contemplated by this Agreement;
(l) each of the Buyer and the Subsidiary shall have delivered
to the Target a certificate to the effect that each of the conditions
specified above in Section 6.2(a)-(k) is satisfied in all respects;
(m) the Target shall have received from such counsel to the
Buyer and the Subsidiary, as is reasonably acceptable to the Target, an
opinion addressed to the Target and dated as of the Closing Date;
(n) the Target shall have received from Buyer resolutions of
the board of directors of Buyer authorizing (i) the acceptance of the
resignations, effective as of the Closing or the earliest date by which
such resignations may be effected by applicable law, of each director
and officer of the Buyer and (ii) the installation of the designees of
the Target as directors and officers of the Buyer, effective as of the
Closing or the earliest date by which such installations may be
effected by applicable law; and
(o) all actions to be taken by the Buyer and the Subsidiary in
connection with consummation of the transactions contemplated hereby
and all certificates, opinions, instruments, and other documents
required to effect the transactions contemplated hereby will be
satisfactory in form and substance to the Target.
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The Target may waive any condition specified in this Section 6.2 if it
executes a writing so stating at or prior to the Closing.
SECTION VII
TERMINATION
7.1 Termination of Agreement. Any of the Parties may terminate this
Agreement with the prior authorization of its board of directors (whether before
or after stockholder approval) as provided below:
(a) the Parties may terminate this Agreement by mutual written
consent at any time prior to the Effective Time;
(b) the Buyer and the Subsidiary may terminate this Agreement
by giving written notice to the Target at any time prior to the
Effective Time (i) in the event the Target has breached any material
representation, warranty, or covenant contained in this Agreement in
any material respect, the Buyer or the Subsidiary has notified the
Target of the breach, and the breach has continued without cure for a
period of 30 days after the notice of breach or (ii) if the Closing
shall not have occurred on or before June 30, 2000, by reason of the
failure of any condition precedent under Section 6.1 above (unless the
failure results primarily from any action or inaction on the part of
the Buyer or the Subsidiary);
(c) the Target may terminate this Agreement by giving written
notice to the Buyer and the Subsidiary at any time prior to the
Effective Time (i) in the event the Buyer or the Subsidiary has
breached any material representation, warranty, or covenant contained
in this Agreement in any material respect, the Target has notified the
Buyer and the Subsidiary of the breach, and the breach has continued
without cure for a period of 30 days after the notice of breach or (ii)
if the Closing shall not have occurred on or before June 30, 2000, by
reason of the failure of any condition precedent under Section 6.2
above (unless the failure results primarily from any action or inaction
on the part of the Target);
7.2 Effect of Termination. If any Party terminates this Agreement
pursuant to Section 7.1 above, except as specified below, all rights and
obligations of the Parties hereunder shall terminate without any liability of
any Party to any other Party (except for any liability of any Party then in
breach) subject to the following:
(a) the confidentiality provisions contained in Section 5.7
above shall survive any such termination;
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(b) the obligations of the Target evidenced by the Promissory
Note shall survive any termination of this Agreement
SECTION VIII
INDEMNIFICATION
8.1 Survival; Right to Indemnification Not Affected by Knowledge. All
representations, warranties, covenants and obligations of the Buyer and the
Subsidiary in this Agreement and in any agreement, certificate or other document
delivered by, or on behalf of, either the Buyer or the Subsidiary in connection
herewith (collectively, the "Transaction Documents") shall survive the Effective
Time. The right to indemnification and to payment of damages or any other remedy
based on such representations, warranties, covenants and obligations will not be
affected by any investigation conducted with respect to, or any Knowledge
acquired (or capable of being acquired) at any time, whether before or after the
execution and delivery of this Agreement or the Closing Date, with respect to
the accuracy or inaccuracy of, or compliance with, any such representation,
warranty, covenant or obligation. The waiver of any condition based on the
accuracy of any representation or warranty, or on the performance of or
compliance with any covenant or obligation, will not affect the right to
indemnification, payment of damages or other remedy based on such
representation, warranty, covenant or obligation.
8.2 Indemnification. The Buyer and the Subsidiary shall jointly and
severally indemnify and hold harmless the Target Stockholder for, and will pay
to the Target Stockholder the amount of, any loss, liability, damage, cost or
expense incurred by the Buyer, the Surviving Corporation or the Target
Stockholder arising, directly or indirectly, from or in connection with any
breach of any representation or warranty made by the Buyer or the Subsidiary in
any Transaction Document, and any breach by the Buyer or the Subsidiary of any
covenant or obligation on its part under any Transaction Document. The remedies
provided in this Section 8.2 will not be exclusive of or limit any other
remedies that may be available to the Target Stockholder under any other
Transaction Document or under applicable law. The Target Stockholder is an
intended beneficiary of the provisions of this Section 8 and of all
representations, warranties, covenants and obligations of the Buyer and the
Subsidiary in this Agreement and all other Transaction Documents, and the Target
Stockholder may enforce the provisions hereof and thereof on his own behalf
directly against the Buyer and the Subsidiary.
8.3 Procedure for Indemnification as to Third Party Claims Against
Target Stockholder. Promptly after receipt by the Target Stockholder under
Section 8.2 above of notice of the commencement of any legal suits, actions or
other proceeding ("Proceeding") against the Target Stockholder, the Target
Stockholder will, if a claim is to be made against an indemnifying party under
Section 8.2 above, give notice to the indemnifying party of the commencement of
such claim, but the failure to notify the indemnifying party will not relieve
the indemnifying party of any liability that such indemnifying party may have to
the Target Stockholder, except to the extent that the indemnifying party
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demonstrates that the defense of such action is prejudiced by the indemnifying
party's failure to give such notice. The indemnifying party will be entitled to
participate in such Proceeding and, to the extent that such indemnifying party
desires (unless (i) the indemnifying party is also a party to such Proceeding
and the Target Stockholder determines in good faith that joint representation
would be inappropriate or (ii) the indemnifying party fails to provide
reasonable assurance to the Target Stockholder of the indemnifying party's
financial capacity to defend such Proceeding and provide indemnification with
respect to such Proceeding) to assume the defense of such Proceeding with
counsel satisfactory to the Target Stockholder and, after notice from the
indemnifying party to the Target Stockholder of the indemnifying party's
election to assume the defense of such Proceeding, the indemnifying party will
not, as long as the indemnifying party diligently conducts such defense, be
liable to the Target Stockholder under this Section 8 for any fees of other
counsel or any other expenses with respect to the defense of such Proceeding, in
each case subsequently incurred by the Target Stockholder in connection with the
defense of such Proceeding, other than reasonable costs of investigation. If the
indemnifying party assumes the defense of a Proceeding: (A) the claims made in
such Proceeding will be conclusively established for purposes of this Agreement
to be within the scope of and subject to indemnification; (B) no compromise or
settlement of such claims may be effected by the indemnifying party without the
Target Stockholder's consent; and (C) the indemnified party will have no
liability with respect to any compromise or settlement of such claims effected
without the Target Stockholder's consent. If notice is given to an indemnifying
party of the commencement of any Proceeding and the indemnifying party does not,
within ten days after the Target Stockholder's notice is given, give notice to
the Target Stockholder of the indemnifying party's election to assume the
defense of such Proceeding, the indemnifying party will be bound by any
determination made in such Proceeding or any compromise or settlement effected
by the Target Stockholder.
8.4 Method of Payment for Indemnification Claims. Except with respect
to any Proceedings against the Target Stockholder, the Target Stockholder's sole
and exclusive remedy, and the sole and exclusive obligation of the Buyer and the
Subsidiary, for any indemnification claim under Section 8.2 above shall be for
the Buyer to issue to the Target Stockholder, without payment of any additional
consideration, such number of fully-paid and nonassessable Buyer Shares as
equals a fraction, the numerator of which is the dollar amount of such claim and
the denominator of which is $3.50.
SECTION IX
MISCELLANEOUS
9.1 Survival. The representations, warranties, and covenants of the
Parties and the provisions in Section 2 above concerning payment of the Merger
Consideration will survive the Closing Date.
9.2 Press Releases and Public Announcements. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement without the prior written
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approval of the other Parties; provided, that any Party may make any public
disclosure it believes in good faith is required by applicable law or any
listing or trading agreement concerning its publicly-traded securities (in which
case the disclosing Party will use its best efforts to advise the other Party
prior to making the disclosure).
9.3 Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement among the Parties and supersedes any
prior understandings, agreements, or representations by or among the Parties,
written or oral, to the extent they related in any way to the subject matter
hereof.
9.4 Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Parties.
9.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
9.6 Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.7 Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to the Target: Copy to:
---------------- -------
SunGlobe Fiber Systems Corporation Dorsey & Whitney LLP
1550 Sawgrass Corporate Parkway Suite 300 South
Suite 370
10001 Pennsylvania Avenue N.W.
Sunrise, Florida 33323 Washington, D.C. 20004
Attn: Barry Pasternak Attn: Dr. Delbert D. Smith, Esq.
If to the Buyer: Copy to:
--------------- -------
TimeOne, Inc. Keith L. Pope, LLC
631 North Stephanie Street, #378 1000 Boston Building
Henderson, Nevada 89014 9 Exchange Place
Salt Lake City, Utah 84111
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If to the Subsidiary: Copy to:
-------------------- -------
SunGlobe Acquisition, Inc. Keith L. Pope, LLC
c/o TimeOne, Inc. 1000 Boston Building
631 North Stephanie Street, #378 9 Exchange Place
Henderson, Nevada 89014 Salt Lake City, Utah 84111
Any Party may send any notice, request, demand, claim, or
other communication hereunder to the intended recipient at the address set forth
above using any other means (including personal delivery, expedited courier,
messenger service, telecopy, telex, ordinary mail, or electronic mail), but no
such notice, request, demand, claim, or other communication shall be deemed to
have been duly given unless and until it actually is received by the intended
recipient. Any Party may change the address to which notices, requests, demands,
claims, and other communications hereunder are to be delivered by giving the
other Parties notice in the manner herein set forth.
9.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Delaware without giving effect
to any choice or conflict of law provision or rule (whether of the State of
Delaware or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Delaware.
9.9 Amendments and Waivers. The Parties may mutually amend any
provision of this Agreement at any time prior to the Effective Time with the
prior authorization of their respective boards of directors; provided, however,
that any amendment effected subsequent to stockholder approval will be subject
to the restrictions contained in the Delaware General Corporation Law. No
amendment of any provision of this Agreement shall be valid unless the same
shall be in writing and signed by all of the Parties. No waiver by any Party of
any default, misrepresentation, or breach of warranty or covenant hereunder,
whether intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
9.10 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
9.11 Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all
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rules and regulations promulgated thereunder, unless the context otherwise
requires. The word "including" shall mean including without limitation.
9.12 Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
*****
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IN WITNESS WHEREOF, the Parties hereto have executed this Merger
Agreement on as of the date first above written.
TIMEONE, INC.
By: __________________________
Name:
Title:
SUNGLOBE ACQUISITION, INC.
By: __________________________
Name:
Title:
SUNGLOBE FIBER SYSTEMS
CORPORATION
By: __________________________
Name:
Title:
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Exhibit 99.1
AGREEMENT OF PURCHASE AND SALE AND RELEASE
by and between
TIMEONE, INC.
as Seller
and
DANIEL F. PENTELUTE
as Buyer
1
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AGREEMENT OF PURCHASE AND SALE AND RELEASE
THIS AGREEMENT OF PURCHASE AND SALE AND RELEASE (this
"Agreement" ) is made as of the Effective Date (hereinafter defined), by and
between TimeOne, Inc., a Nevada corporation ("TimeOne"), and Daniel F.
Pentelute, an individual ("Pentelute").
RECITALS
A. TimeOne entered into a Merger Agreement, dated as of June __, 2000
(the "Merger Agreement"), with SunGlobe Fiber System Corporation ("Fiber") and
SunGlobe Acquisition, Inc. ("Acquisition"), a wholly-owned subsidiary of
TimeOne, for the merger of Fiber and Acquisition.
B. TimeOne is the owner of the Property (as defined in Section 2).
C. As a condition to Fiber's obligation under the Merger Agreement,
TimeOne was required to sell all of its rights, title and interest in the
Property to Pentelute in exchange for the Subject Shares (as defined in Section
1) and a release of all past, present and future claims Pentelute may have
against TimeOne.
D. Pentelute desires to purchase and TimeOne is willing to sell the
Property on the terms and conditions of this Agreement.
E. TimeOne has previously sold lots adjacent to or nearby the Property
described as follows:
Lots 1, 4 and 5 of Westview Estates, according to the map or
plat thereof on file and of record in the office of the Clerk
and Recorder of Flathead County, Montana (collectively, the
"Adjacent Lots").
F. This Agreement is being executed pursuant to the Merger Agreement.
NOW THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Pentelute and TimeOne agree as follows:
AGREEMENT
1. Certain Basic Definitions. For purposes of this Agreement,
the following terms shall have the following definitions:
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1.1 "Affiliate" shall have the meaning assigned to
that term in the Merger Agreement.
1.2 "Closing Date" means the Closing Date as defined
in the Merger Agreement.
1.3 "General Release" means the release of claims
described in Section 14 hereof.
1.4 "Merger" means the Merger as defined in the
Merger Agreement.
1.5 "Subject Shares" means 500,000 of the shares of
common stock, $.001 par value per share, of TimeOne owned by
Pentelute.
2. Sale of Property: Purchase Price.
2.1 Sale of Property. Subject to the terms, covenants and
conditions of this Agreement, TimeOne shall sell to Pentelute, and Pentelute
shall purchase from TimeOne, all right, title and interest of TimeOne in and to
the land located in County of Flathead, State of Montana, more particularly
described as follows:
LOTS 2 and 3 of Westview Estates, according to the map or plat
thereof on file and of record in the office of the Clerk and
Recorder of Flathead County, Montana (the "Property").
2.2 Purchase Price. In exchange for TimeOne's interest in the
Property, Pentelute shall deliver to TimeOne the Subject Shares, the General
Release attached hereto, and make all representations and warranties and
covenants contained in this Agreement.
3. Closing.
3.1 Condition. TimeOne's obligation to close under this
Agreement is subject to the condition that Pentelute's representations and
warranties set forth in this Agreement are true and correct in all material
respects at the Closing. TimeOne's and Pentelute's obligations to close under
this Agreement are subject to the condition that the Merger occurs.
3.2 Time & Place. The closing of this transaction (the "Closing") shall
take place at the offices of Dorsey & Whitney LLP in New York, New York
commencing at 9:00 a.m. local time on the Closing Date.
3.3 TimeOne's Obligations at Closing. At Closing, TimeOne shall:
3
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3.3.1 deliver to Pentelute the Quitclaim Deed in the form of
attached Exhibit A executed and acknowledged by TimeOne and in
recordable form, conveying the Property to Pentelute.
3.3.2 deliver to Pentelute possession and occupancy of the
Property.
3.4 Pentelute's Obligations at Closing At Closing, Pentelute
shall execute a stock power in the form of attached Exhibit B,
conveying to TimeOne the Subject Shares, free and clear of all liens,
encumbrances, options and other claims.
3.5 Pentelute's Representations and Warranties. Pentelute
hereby represents and warrants to TimeOne, which representations and
warranties shall survive the Closing, as follows:
3.5.1 he owns all legal and beneficial interests in the
Subject Shares, free and clear of all liens, encumbrances, options and
other claims.
3.5.2 TimeOne's sale of the Property to Pentelute under this
Agreement has been duly authorized by all requisite corporate action by
TimeOne, this Agreement has been executed and delivered by the
authorized officers of TimeOne, and this Agreement is the valid and
binding obligation of TimeOne enforceable against it in accordance with
the terms of this Agreement.
3.5.3 the execution and delivery of this Agreement, and the
performance by TimeOne of the terms of this Agreement, will not result
in a violation of any provision of or default under, the Articles of
Incorporation or By-Laws of TimeOne or any agreement, instrument,
order, writ, judgment or decree to which TimeOne is a party or by which
TimeOne or the Property is bound.
3.5.4 no approval, authorization or action by, or filing with,
any governmental authority, is required in connection with the
execution and delivery by TimeOne of this Agreement or TimeOne's
transfer of the Property to him pursuant to the terms of this
Agreement.
3.5.5 all charges, invoices and claims related to any physical
improvements made to any of the Property or the Adjacent Lots have been
fully discharged.
3.5.6 the Property is free and clear of all liens,
encumbrances, claims or charges of any kind other than unpaid taxes and
assessments.
3.5.7 after the transfer of the Property to Pentelute pursuant
to this Agreement, TimeOne will neither own nor have any interest in
any real property in Montana or elsewhere.
4
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3.5.8 TimeOne is not presently owed any monies in connection
with its sale of the Adjacent Lots.
3.5.9 TimeOne owns no more than an undivided fifty percent
(50%) interest in the Property.
4. Commissions. Pentelute and TimeOne each represent and warrant to the
other that there are no commissions, finder's fees or brokerage fees arising out
of the transactions contemplated by this Agreement, except as provided in the
Merger Agreement.
5. Notices. All notices, demands, approvals, and other communications
provided for in this Agreement shall be in writing and shall be sent, effective
and otherwise governed by the notice provisions of the Merger Agreement.
6. Governing Law. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of Montana applicable to contracts to
be performed within Montana.
7. Severability. If any provision of this Agreement or application
thereof to any person or circumstance shall to any extent be invalid or
unenforceable, the remainder of this Agreement (including the application of
such provision to persons or circumstances other than those to which it is held
invalid or unenforceable) shall not be affected thereby, and each provision of
this Agreement shall be valid and enforced to the fullest extent permitted by
law. - 8. Counterparts, Headings and Defined Terms. This Agreement may be
executed in counterparts, each of which shall be an original, but all of which
together shall constitute one agreement. The headings to sections of this
Agreement are for convenient reference only and shall not be used in
interpreting this Agreement.
9. Time of the Essence. Time is of the essence of this Agreement.
10. Waiver. No waiver by Pentelute or TimeOne of any of the terms or
conditions of this Agreement or any of their respective rights under this
Agreement shall be effective unless such waiver is in writing and signed by the
party charged with the waiver.
11. Additional Documents. Each party agrees to perform any further acts
and to execute and deliver such further documents which may be reasonably
necessary to carry out the terms of this Agreement.
12. Condition of Property. Pentelute represents and warrants that
Pentelute has, or shall have inspected and conducted tests and studies of the
Property, and that Pentelute is familiar with the general condition of the
Property. Pentelute understands and acknowledges that the Property may be
subject to earthquake, fire, floods, erosion, high water table, water run-off,
5
<PAGE>
dangerous underground soil conditions, hazardous materials and similar
occurrences that may alter its condition or affect its suitability for any
proposed use. TimeOne shall have no responsibility or liability with respect to
any such occurrence. Pentelute represents and warrants that Pentelute is acting,
and will act only, upon information obtained by Pentelute directly from
Pentelute's own inspection of the Property. Notwithstanding anything to the
contrary contained in this Agreement, the suitability or lack of suitability of
the Property for any proposed or intended use, or availability or lack of
availability of (a) permits or approvals of governmental or regulatory
authorities, or (b) easements, licenses or other rights with respect to any such
proposed or intended use of the Property shall be at Pentelute's sole risk and
shall not affect the obligations of the Pentelute hereunder.
13. Property "AS IS".
13.1 Obligations. Pentelute hereby assumes and agrees to pay
and perform all obligations and liabilities with respect to the Property,
including, without limitation, all unpaid real property taxes and assessments
and all other obligations and liabilities the payment of which is secured by any
mortgage, trust indenture, or other contract against the Property.
13.2 No Side Agreements or Representations. No person acting
on behalf of TimeOne is authorized to make, and by execution hereof, Pentelute
acknowledges that no person has made any representation, agreement, statement,
warranty, guarantee or promise regarding the Property or the transaction
contemplated herein or the zoning, construction, physical condition or other
status of the Property. No representation, warranty, agreement, statement,
guarantee or promise, if any, made by any person acting on behalf of TimeOne
which is not contained in this Agreement will be valid or binding on TimeOne.
13.3 AS IS CONDITION. PENTELUTE ACKNOWLEDGES AND AGREES THAT
TIMEONE HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS ANY
REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF
ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN,
PAST, PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO (I) VALUE OF
THE PROPERTY; (II) THE INCOME TO BE DERIVED FROM THE PROPERTY; (III) THE
SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH PENTELUTE
MAY CONDUCT THEREON, INCLUDING THE POSSIBILITIES FOR FUTURE DEVELOPMENT OF THE
PROPERTY; (IV) THE HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY
OR FITNESS FOR A PARTICULAR PURPOSE OF THE PROPERTY; (V) THE MANNER, QUALITY,
STATE OF REPAIR OR LACK OF REPAIR OF THE PROPERTY; (VI) THE NATURE, QUALITY OR
CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL AND
GEOLOGY; (VII) THE COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION WITH ANY
LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY
OR BODY; (VIII) THE MANNER OR
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QUALITY OF THE CONSTRUCTION OR MATERIALS, IF ANY, INCORPORATED INTO THE
PROPERTY; (IX) COMPLIANCE WITH ANY ENVIRONMENTAL PROTECTION, POLLUTION OR LAND
USE LAWS, RULES, REGULATION, ORDERS OR REQUIREMENTS, INCLUDING BUT NOT LIMITED
TO, TITLE III OF THE AMERICANS WITH DISABILITIES ACT OF 1990, THE FEDERAL WATER
POLLUTION CONTROL ACT, THE FEDERAL RESOURCE CONSERVATION AND RECOVERY ACT, THE
U.S. ENVIRONMENTAL PROTECTION AGENCY REGULATIONS AT 40 C.F.R., PART 261, THE
COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT OF 1980, AS
AMENDED, THE RESOURCE CONSERVATION AND RECOVERY ACT OF 1976, THE CLEAN WATER
ACT, THE SAFE DRINKING WATER ACT, THE HAZARDOUS MATERIALS TRANSPORTATION ACT,
THE TOXIC SUBSTANCE CONTROL ACT, AND REGULATIONS PROMULGATED UNDER ANY OF THE
FOREGOING; (X) THE PRESENCE OR ABSENCE OF HAZARDOUS MATERIALS AT, ON, UNDER, OR
ADJACENT TO THE PROPERTY; (XI) TIMEONE'S TITLE TO THE PROPERTY; (XII) THE
CONFORMITY OF ANY IMPROVEMENTS TO ANY PLANS OR SPECIFICATIONS FOR THE PROPERTY,
INCLUDING ANY PLANS AND SPECIFICATIONS THAT MAY HAVE BEEN OR MAY BE PROVIDED TO
PENTELUTE; (XIII) THE CONFORMITY OF THE PROPERTY TO PAST, CURRENT OR FUTURE
APPLICABLE ZONING OR BUILDING REQUIREMENTS; (XIV) DEFICIENCY OF ANY
UNDERSHORING; (XV) DEFICIENCY OF ANY DRAINAGE; (XVI) THE FACT THAT ALL OR A
PORTION OF THE PROPERTY MAY BE LOCATED ON OR NEAR A GEOLOGIC FAULT LINE OR THAT
THE PROPERTY MAY CONTAIN HIGHLY EXPANSIVE SOILS; (XVII) THE EXISTENCE OF VESTED
LAND USE, ZONING OR BUILDING ENTITLEMENTS AFFECTING THE PROPERTY; OR (XVIII)
WITH RESPECT TO ANY OTHER MATTER. PENTELUTE FURTHER ACKNOWLEDGES AND AGREES THAT
HAVING BEEN GIVEN THE OPPORTUNITY TO INSPECT THE PROPERTY OR HAVING INSPECTED
THE PROPERTY AND HAVING REVIEWED ALL INFORMATION AND DOCUMENTATION PENTELUTE
DETERMINED TO BE RELEVANT AFFECTING THE PROPERTY, PENTELUTE IS RELYING SOLELY ON
HIS OWN INVESTIGATION OF THE PROPERTY AND REVIEW OF SUCH INFORMATION AND
DOCUMENTATION, AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY TIMEONE.
PENTELUTE FURTHER ACKNOWLEDGES AND AGREES THAT ANY INFORMATION MADE AVAILABLE TO
PENTELUTE OR PROVIDED OR TO BE PROVIDED BY OR ON BEHALF OF TIMEONE WITH RESPECT
TO THE PROPERTY WAS OBTAINED FROM A VARIETY OF SOURCES AND THAT TIMEONE HAS NOT
MADE ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND MAKES
NO REPRESENTATIONS AS TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION.
PENTELUTE AGREES TO FULLY AND IRREVOCABLY RELEASE ALL SUCH SOURCES OF
INFORMATION AND PREPARERS OF INFORMATION AND DOCUMENTATION AFFECTING THE
PROPERTY WHICH WERE RETAINED BY TIMEONE OR TIMEONE'S AFFILIATES FROM ANY AND ALL
CLAIMS THAT THEY MAY NOW HAVE OR HEREAFTER ACQUIRE AGAINST SUCH SOURCES AND
PREPARERS OF INFORMATION FOR ANY COSTS, LOSS, LIABILITY, DAMAGE,
7
<PAGE>
EXPENSE, DEMAND, ACTION OR CAUSE OF ACTION ARISING FROM SUCH INFORMATION OR
DOCUMENTATION. TIMEONE IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY ORAL OR
WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY,
OR THE OPERATION THEREOF, FURNISHED BY ANY REAL ESTATE BROKER, AGENT, EMPLOYEE,
SERVANT OR OTHER PERSON. PENTELUTE FURTHER ACKNOWLEDGES AND AGREES THAT TO THE
MAXIMUM EXTENT PERMITTED BY LAW, THE SALE OF THE PROPERTY AS PROVIDED FOR HEREIN
IS MADE ON AN "AS IS" CONDITION AND BASIS WITH ALL FAULTS, AND THAT TIMEONE HAS
NO OBLIGATIONS TO MAKE REPAIRS, REPLACEMENTS OR IMPROVEMENTS. PENTELUTE
REPRESENTS, WARRANTS AND COVENANTS TO TIMEONE THAT PENTELUTE IS RELYING SOLELY
UPON PENTELUTE'S OWN INVESTIGATION OF THE PROPERTY.
-------------------------- ------------------------
TIMEONE'S INITIALS PENTELUTE'S INITIALS
13.4 RADON DISCLOSURE STATEMENT. RADON GAS: RADON IS A ACCUMULATED IN A
BUILDING IN SUFFICIENT QUANTITIES, MAY PRESENT HEALTH RISKS TO PERSONS WHO ARE
EXPOSED TO IT OVER TIME. LEVELS OF RADON THAT EXCEED FEDERAL GUIDELINES HAVE
BEEN FOUND IN BUILDINGS IN MONTANA. ADDITIONAL INFORMATION REGARDING RADON AND
RADON TESTING MAY BE OBTAINED FROM YOUR COUNTY OR STATE PUBLIC HEALTH UNIT.
TIMEONE HAS NEVER CONDUCTED A RADON TEST OF THE PROPERTY.
Receipt of the foregoing statement acknowledged on ___________, 2000.
---------------------------
Daniel F. Pentelute
14. General Release. Pentelute shall rely solely upon Pentelute's own
knowledge of the Property based on his investigation of the Property and his own
inspection of the Property in determining the Property's physical condition.
Pentelute and anyone claiming by, through or under Pentelute hereby waives his
right to recover from and fully and irrevocably releases TimeOne, TimeOne's
Affiliates, SunGlobe, SunGlobe's Affiliates, their respective employees,
officers, directors, representatives, agents, servants, attorneys, affiliates,
parents, subsidiaries, successors and assigns, and all persons, firms,
corporations and organizations in its behalf ("Released Parties" ) from any and
all claims that he may now have or hereafter acquire against any of the Released
Parties for any costs, loss, liability, damage, expenses, demand, action or
cause of action arising from or related to any and all matters of every kind and
description, whether direct or indirect, known or unknown, foreseen or
unforeseen, which Pentelute had or has up to the time of Closing, including, but
not limited to (i) construction defects, errors,
8
<PAGE>
omissions or other conditions, latent or otherwise, including environmental
matters, affecting the Property, or any portion thereof, (ii) salary and
commissions, and (iii) unreimbursed expense. This release shall not apply to
TimeOne's obligations to Pentelute under this Agreement. This release includes
claims of which Pentelute is presently unaware or which Pentelute does not
presently suspect to exist which, if known by Pentelute, would materially affect
Pentelute's release to TimeOne and TimeOne's Affiliates.
In this connection and to the extent permitted by law,
Pentelute hereby agrees, represents and warrants that Pentelute realizes and
acknowledges that factual matters now unknown to him may have given or may
hereafter give rise to causes of action, claims, demands, debts, controversies,
damages, costs, losses and expenses which are presently unknown, unanticipated
and unsuspected, and Pentelute further agrees, represents and warrants that the
waivers and releases herein have been negotiated and agreed upon in light of
that realization and that Pentelute nevertheless hereby intends to release,
discharge and acquit TimeOne from any such unknown causes of action, claims,
demands, debts, controversies, damages, costs, losses and expenses which might
in any way be included as a material portion of the consideration given to
TimeOne by Pentelute in exchange for TimeOne's performance hereunder. However,
this release shall not include claims Pentelute may have against TimeOne for
indemnification related solely to claims of third parties of which Pentelute is
unaware or which Pentelute does not reasonably expect to exist that are related
to the activities of TimeOne or Pentelute during the period of Pentelute's
service as an officer or director of TimeOne, except to the extent such third-
party claims are based on any act of negligence, malfeasance or breach of
fiduciary duty by Pentelute, in which case any claims of Pentelute for
indemnification by the Released Parties in connection with such third-party
claims are hereby released.
TimeOne has given Pentelute material concessions regarding
this transaction in exchange for Pentelute agreeing to the provisions of this
Section 14. TimeOne and Pentelute have each initialed this Section 14 to further
indicate their awareness and acceptance of each and every provision hereof.
------------------------- --------------------------
TIMEONE'S INITIALS PENTELUTE'S INITIALS
15. Hazardous Materials. From and after the Closing, Pentelute shall
protect, defend, indemnify and hold TimeOne, TimeOne's Affiliates, SunGlobe ,
SunGlobe's Affiliates and their respective parent companies, affiliates and
subsidiaries, and their respective directors, officers, participants, employees
and agents free and harmless from and against any and all claims (including
third party claims), demands, liabilities, damages, costs and expenses,
including, without limitation, investigatory expenses, clean-up costs and
reasonable attorney's fees of whatever kind or nature arising from or in any way
connected with the physical condition of the Property and the Adjacent Lots or
any other aspect of the Property and the Adjacent Lots, no matter whether
earlier discoverable or not and any effort of Pentelute and/or Pentelute's
9
<PAGE>
contractors to correct the same. The Pentelute's obligations of indemnity set
forth herein shall survive the Closing and shall not be merged with the
Quitclaim Deed.
16. Indemnification. Pentelute shall indemnify, defend, protect and
hold harmless TimeOne, TimeOne's Affiliates, SunGlobe, SunGlobe's Affiliates and
each of their respective partners, affiliates, subsidiaries, directors,
officers, participants, attorneys, employees, consultants and agents, from and
against any and all damages, losses, liabilities, costs or expenses whatsoever
(including attorneys' fees and costs) and claims therefor (collectively,
"Claims"), whether direct or indirect, known or unknown, or foreseen or
unforeseen, which may arise from or be related to (a) any inaccuracy in any
representation or warranty made by Pentelute in this Agreement, (b) Pentelute's
breach of any covenant or agreement contained in this Agreement, (c) TimeOne's
activities on or ownership of the Property and the Adjacent Lots, (d) TimeOne's
sale of the Adjacent Lots, or (e) Pentelute's activities on or ownership of the
Property, regardless of how such Claim arises or when the events giving rise to
such Claim occurred, including, but not limited to, the acts or omissions of
TimeOne or Pentelute or their employees, agents, suppliers or contractors.
Pentelute's obligations hereunder shall survive the Closing and shall not be
merged with the Quitclaim Deed.
17. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefits of the heirs, successors and assigns of the parties
hereto.
18. Effective Date of Agreement. The Effective Date of this Agreement
shall be the date of its execution by the last of TimeOne and Pentelute to
execute this Agreement.
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IN WITNESS WHEREOF, Pentelute and TimeOne do hereby execute this
Agreement as of the Effective Date.
SELLER: TimeOne, Inc.
By: _______________________________
Name: ___________________________
Title: _____________________________
BUYER: __________________________
Daniel F. Pentelute
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QUITCLAIM DEED
FOR AN ADEQUATE AND FULL CONSIDERATION, in money or money's
worth, the receipt of which is acknowledged, the undersigned,
TimeOne, Inc., a Nevada corporation
does hereby remise, release and quitclaim unto:
Daniel F. Pentelute, an individual, of
[631 N. Stephanie Street, #378, Henderson,
Nevada 89014 ("Grantee")]
the following described real property in Flathead County, Montana, which is more
particularly described as follows:
LOTS 2 and 3 of Westview Estates, according to the map or plat
thereof on file and of record in the office of the Clerk and
Recorder of Flathead County, Montana.
TO HAVE AND TO HOLD unto the Grantee and his heirs, devisees,
personal representatives, successors and assigns, forever.
IN WITNESS WHEREOF, the undersigned have executed this
Quitclaim Deed on June ___, 2000.
TimeOne, Inc.
By: _______________________________
Name: ___________________________
Title: _____________________________
STATE OF _______________________ )
) ss.
County of )
------------------------------------------------
The foregoing instrument was acknowledged before me this ____ day of
_______, 2000, by __________________ as _____________________ of TimeOne, Inc.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial
Seal the day and year first above written.
(SEAL) Notary Public for State of ______________
Residing at
My commission expires
<PAGE>
IRREVOCABLE STOCK POWER
For good and valuable consideration, in money or money's worth, the
receipt and sufficiency of which is hereby acknowledged, the undersigned, Daniel
F. Pentelute, of [631 N. Stephanie Street, #378, Henderson, Nevada 89014] (the
"Assignor"), hereby sells, assigns and delivers unto TimeOne, Inc., of 631 N.
Stephanie Street, #378, Henderson, Nevada 89014, 500,000 shares of common stock,
$.001 par value per share, of TimeOne, a Nevada corporation, represented by
Certificate number _____________ and does hereby irrevocably appoint and
constitute the secretary or any assistant secretary of TimeOne, Inc. to transfer
said common stock on the books of said corporation, with full power of
substitution in the premises.
Dated as of _________, 2000.
------------------------
Daniel F. Pentelute
STATE OF _______________________ )
) ss.
County of )
------------------------------------------------
The foregoing instrument was acknowledged before me this ____ day of
_______, 2000, by Daniel F. Pentelute.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial
Seal the day and year first above written.
(SEAL) Notary Public for State of ___________
Residing at
My commission expires
<PAGE>
Exhibit 99.2
FOR IMMEDIATE RELEASE
Contact: Bob Griffin, Griffin Public Relations
& Marketing
(212) 481-3456
[email protected]
TIMEONE, INC. AND SUNGLOBE COMPLETE MERGER AND ANNOUNCE
NAME CHANGE
Newly merged company is now called SunGlobe Fiber Systems Corporation
trading under the OTCBB SYMBOL: SGFS;
Corporation President Barry H. Pasternak says the completion of
the merger will enable SunGlobe to provide telecommunications
and Internet services to the Caribbean, Central
and South American regions.
SUNRISE, FLORIDA, July 7, 2000 - TimeOne, Inc. (OTCBB: TYME) ("the Company")
today announced that its subsidiary corporation, SunGlobe Acquisitions, Inc.,
has completed its merger with SGFS, Inc. As a result of the merger, SGFS, Inc.
is now a wholly-owned subsidiary of the Company. At the same time, the
management of SGFS, Inc. has assumed control of the Company and changed its
legal name to SunGlobe Fiber Systems Corporation. The newly named Company will
now be listed on the NASDAQ OTCBB under the trading symbol SGFS.
"We are very pleased to announce this merger," SunGlobe Fiber Systems
Corporation President Barry H. Pasternak said today. "As a participant in the
Maya-1 Cable system, with the completion of this merger, SunGlobe is now more
strongly positioned to provide a new level of enhanced telecommunication and
Internet services to the rapidly expanding Caribbean, Central and South American
regions."
With the completion of the merger, the majority of the Company's common stock is
now held by SunGlobe Telecom, Inc., a Florida corporation. SunGlobe Telecom was,
prior to the merger, the sole stockholder of SGFS, Inc.
-more-
<PAGE>
-2-
Headquartered in Sunrise, Florida, SunGlobe Fiber Systems Corporation, including
its operating subsidiary SGFS, Inc., is a development stage company that was
formed to provide fiber optic capacity. The Company, which holds a Section 214
common carrier license from the Federal Communications Commission, has entered
into an agreement with the Maya-1 Cable system ("Maya-1"), pursuant to which it
will assist Maya-1 in the development of a fiber optic submarine cable system.
When completed, this system will provide telecommunications capacity among the
United States and several under-served South American, Central American and
Caribbean nations. The Maya-1 system is currently scheduled to become
operational in the third quarter of 2000.
Certain statements contained in this press release, such as statements regarding
Maya-1 and other statements that do not relate strictly to historical or current
facts, are forward-looking statements. Forward-looking statements use such words
as plans, expects, will, will likely result, are expected to, will continue, is
anticipated, estimate, project, believes, anticipates, intends and expects, may,
should, continue, seek, could and other similar expressions. Although the
Company believes that its expectations are based on reasonable assumptions, it
can give no assurance that its expectations will be achieved. The important
factors that could cause actual results to differ materially from those in the
forward-looking statements herein (the "Cautionary Statements") include, without
limitation, risks relating to the Company's developmental stage business, the
uncertainty of future profitability of the Company, the Company's need for
additional operating capital, the ability of the Company to successfully
implement its strategies and business plans, the dependence on rights-of-way and
other third-party agreements, the impact of competitive services and pricing,
the impact of governmental regulation, risks relating to technology and network
infrastructure, as well as other risks referenced from time to time in the
Company's filings with the Securities and Exchange Commission. All subsequent
written and oral forward-looking statements attributable to the Company or
persons acting on its behalf are expressly qualified in their entirety by the
Cautionary Statements. The Company does not undertake any obligation to release
publicly any revisions to such forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
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