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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) January 2, 1997.
CTI GROUP (HOLDINGS) INC.
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(Exact name of registrant as specified in charter)
Delaware 0-10560 51-0308583
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(State or other jurisdic- (Commission File Number) (IRS Employer
tion of incorporation) Identification No.)
901 South Trooper Road, Valley Forge, PA 19484
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(Address of principle executive offices) (Zip Code)
Registrant's telephone number, including area code 610-666-1700
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N/A
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(Former name or former address, if changed since lastreport.)
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Exhibit Index appears on Page 5
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Item 2. Acquisition or Disposition of Assets
On January 2, 1997, pursuant to the terms of that certain
Agreement and Plan of Merger (the "Agreement"), dated as of
December 16, 1996, by and among CTI Group (Holdings) Inc. (the
"Company"), CGI Acquisition Corp., a wholly-owned subsidiary
of the Company ("Merger Sub"), Soft-Com Inc. ("SC") and John
Perri ("Perri") the Company acquired SC through a tax-free
merger (the "Merger") of such entity with and into Merger Sub.
In connection with the consummation of the Merger, the Company
issued to the shareholders of SC (the "Shareholders") an
aggregate of 795,000 shares (the "Merger Shares") of the
Company's common stock (representing approximately 11.54% of
the Company's common stock on a fully diluted basis).
Additionally, in connection with the Merger, the Company
issued an option to purchase 90,000 shares of the Company's
common stock at a purchase price of $1.50 per share to North
American Venture Capital Fund.
SC is a New York-based telemanagement company. Upon
consummation of the Merger, the separate corporate existence
of SC ceased, and the name of Merger Sub was changed to CTI
Soft-Com Inc.
Pursuant to the terms of a Registration Rights Agreement,
dated as of January 2, 1997, by and between the Company and
each of the Shareholders (the "Registration Rights
Agreement"), (i) in the event the Company proposes to register
any additional shares of its common stock pursuant to the
provisions of the Securities Act of 1933, as amended (the
"Act"), the Company is obligated to register the resale of the
Merger Shares, subject to certain exceptions and (ii) in the
event that on January 2, 2000, 25% of the Merger Shares have
not been registered for resale under the Act, upon the demand
of the holders of such unregistered Merger Shares, the Company
is obligated to register the resale of such Merger Shares
pursuant to the provisions of the Act.
Upon consummation of the Merger, Merger Sub retained the
employees of SC and entered into a new employment agreement
with Perri, the former Chairman of the Board of Directors,
President and Chief Executive Officer of SC. Pursuant to
Perri's employment agreement with the Company (the "Employment
Agreement"), Perri will be employed by Merger Sub as its
President during the period from January 2, 1997 until March
31, 2000, unless earlier terminated by either party. As
compensation for his services, Perri will receive (i) a base
salary of $110,000 per year, (ii) options to purchase 100,000
shares of the Company's common stock at a purchase price
determined in accordance with the Company's stock option plan
and (iii) commissions based on sales of the UNITY windows
version software product. Such commissions will be eliminated
if and when Perri and the Company agree upon a salary review
and profit sharing arrangement. The Company will also provide
Perri with disability insurance and an automobile allowance.
Should Perri's employment be terminated by the Company other
than for "cause," Perri shall be entitled to continue to
receive the base salary through the remainder of the term of
the
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Employment Agreement.
Copies of the Agreement, the Registration Rights Agreement and
the Employment Agreement are attached hereto as Exhibits 2.1,
10.1 and 10.2, respectively.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
(a) Financial Statements of Businesses Acquired.
It is impracticable for the Company to provide the
required financial statements for Soft-Com Inc. at
the time of the filing of this report. The Company
undertakes to file such financial statements as an
amendment of this Form 8-K as soon as practicable
after the date hereof, but in no event later than 60
days after the date on which this report on Form 8-K
is required to be filed.
(b) Pro Forma Financial Information.
It is impracticable for the Company to provide the
required pro forma financial information relating to
the acquisition at the time of the filing of this
report. The Company undertakes to file such pro forma
financial information as an amendment to this Form
8-K as soon as practicable after the date hereof, but
in no event later than 60 days after the date on
which this report on Form 8-K is required to be
filed.
(c) Exhibits
2.1 Agreement and Plan of Merger, dated as of
December 16, 1996, by and among CTI Group
(Holdings) Inc., CGI Acquisition Corp.,
Soft-Com Inc. and John Perri (excluding
exhibits and schedules thereto).
10.1 Form of Registration Rights Agreement, dated
as of January 2, 1997, by and between CTI
Group (Holdings) Inc. and each of the
holders of the capital stock of Soft-Com
Inc.
10.2 Employment Agreement, dated as of December
13, 1996, by and between CTI Group
(Holdings) Inc. and John Perri.
99.1 Press Release, dated December 16, 1996.
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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.
CTI GROUP (HOLDINGS) INC.
(Registrant)
Date: January 16, 1997 By: /s/ Mark H. Daugherty
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Name: Mark H. Daugherty
Title: Chief Financial Officer
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EXHIBIT INDEX
Exhibit No.
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2.1 Agreement and Plan of Merger, dated as of December 16, 1996, by and
among CTI Group (Holdings) Inc., CGI Acquisition Corp., Soft-Com Inc.
and John Perri (excluding exhibits and schedules thereto).
10.1 Form of Registration Rights Agreement, dated as of January 2, 1997,
by and between CTI Group (Holdings) Inc. and each of the holders of
the capital stock of Soft-Com Inc.
10.2 Employment Agreement, dated as of December 13, 1996, by and between
CTI Group (Holdings) Inc. and John Perri.
99.1 Press Release, dated December 16, 1996.
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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER, dated as of the 16th day of December 1996
(the "Plan"), by and among CTI Group (Holdings) Inc. ("CTI"), CGI Acquisition
Corp. ("Acquisition Corp."), Soft-Com Inc. ("SC") and John Perri ("Perri").
W I T N E S S E T H:
WHEREAS, the parties hereto desire that SC merge with and into
Acquisition Corp. upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and
obligations, and intending to be legally bound hereby, the parties hereto adopt
and make this Plan and prescribe the terms and conditions hereof and the manner
and basis of carrying it into effect, which shall be as follows:
1. THE MERGER.
1.1 The Merger. Upon the terms and conditions of this Plan, at the
Effective Date (as hereinafter defined), SC shall be merged with and into
Acquisition Corp. (the "Merger") and the separate existence of SC will cease.
Acquisition Corp. shall be the surviving corporation in the Merger. The
organizational documents of Acquisition Corp. shall remain unaffected until
further amended in accordance with the applicable provisions of law. The Merger
shall be pursuant to the provisions of, and with the effect provided in, the
Delaware General Corporation Law and all other applicable law.
1.2 Closing. The closing of the Merger (the "Closing") shall take place
as soon as practicable after satisfaction or waiver of the conditions set forth
in Article VIII, or on such later date as may be agreed by the parties, at the
offices of Klehr, Harrison, Harvey, Branzburg & Ellers, 1401 Walnut Street,
Philadelphia, PA (the date of the Closing is herein referred to as the "Closing
Date"). On the Closing Date, a certificate of merger (the "Certificate of
Merger") in substantially the form attached hereto as Exhibit A with such
amendments and/or such other certificates or forms as are necessary to comply
with all applicable laws shall be executed, delivered and/or filed in accordance
with all appropriate legal requirements, and the Merger provided for herein
shall become effective upon such filing or on such later date as may be
specified in such certificate of merger (the date of such filing or such later
date is herein referred to as the "Effective Date"). Concurrently with such
filing, Acquisition Corp. shall file with the Secretary of State of the State of
Delaware a Restated Certificate of Incorporation which, among other things,
changes the name of Acquisition Corp. to "CTI Soft-Com Inc."
1.3 The parties hereto intend that the Merger, as consummated in
accordance with the terms hereof, shall be a reorganization under the provisions
of Section 368 of the Internal Revenue Code of 1986, as amended (the "Code") and
the regulations promulgated thereunder (the "Regulations"). The parties hereto
shall take all commercially reasonable efforts to cause the Merger to qualify,
and will not take any actions which could prevent the Merger from qualifying, as
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a reorganization under the provisions of Section 368 of the Code and the
Regulations and, including, without limitation, reporting the Merger as a
reorganization under the provisions of Section 368 of the Code and the
Regulations.
2. CONSIDERATION.
2.1 Outstanding SC Stock. Subject to the other provisions of this Plan,
on the Effective Date, all shares of common stock of SC, $.01 par value per
share (the "SC Stock") issued and outstanding immediately prior to the Effective
Date shall, by virtue of the Merger, automatically and without any action on the
part of the holders thereof, become and be converted into an aggregate of
795,000 shares of Common Stock, $.01 par value per share of CTI (the "CTI
Stock"). Such 795,000 shares of CTI Stock, together with the shares of CTI Stock
issuable pursuant to Section 2.2 below, are hereinafter collectively referred to
as the "Issued Stock." On the Effective Date (i) each holder of SC Stock shall
deliver to CTI all certificates evidencing SC Stock, in exchange for
certificates representing fully paid and non-assessable shares of CTI Stock
registered in the name of such holder, and (ii) holders of SC Stock shall cease
to be, and shall have no rights as, stockholders of SC, other than rights to
receive Issued Stock.
2.2 Adjustments. In the event that, subsequent to the date of this Plan
but prior to the Effective Date, the outstanding shares of common stock of CTI
shall have been increased, decreased, changed into or exchanged for a different
number or kind of shares or securities through a stock dividend, stock split,
reverse stock split, or other like changes in CTI's capitalization (an
"Adjustment"), then, as appropriate, adjustment shall be made to the aggregate
number of shares of CTI Stock to be issued in exchange for all of the
outstanding shares of SC Stock pursuant to Section 2.1 above, so that holders of
SC Stock will not suffer any detriment or benefit as a result of the Adjustment.
3. ACTIONS PENDING MERGER.
3.1 Unless contemplated by this Plan, including, without limitation,
actions contemplated by Section 6.1.E, without the prior written consent or
approval of CTI, in the case of actions to be taken by SC, or SC, in the case of
actions to be taken by CTI, no party shall permit SC, CTI or any subsidiary
thereof to:
A. make, declare or pay any dividend, or declare or make any
distribution on, or directly or indirectly combine, redeem, reclassify, purchase
or otherwise acquire, any shares of its capital stock or authorize the creation
or issuance of or issue or sell any additional shares of its capital stock, or
any options, calls or commitments relating to its capital stock or any
securities or obligations convertible into or exchangeable for, or giving any
person any right to subscribe for or acquire shares of its capital stock or its
assets, or issue any long-term debt securities except pursuant to plans or
agreements as existing on the date hereof;
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B. enter into or substantially modify (except as may be required by
applicable law) any pension, retirement, stock option, stock purchase, savings,
profit sharing, deferred compensation, consulting, bonus, group insurance or
other employee benefit, incentive or welfare contract, plan or arrangement, or
any trust agreement related thereto, in respect to any of its directors,
officers or other employees;
C. substantially modify the manner in which it has heretofore conducted
its business, enter into any new line of business or amend its certificate of
incorporation, by-laws or other organizational documents;
D. dispose of or acquire any assets valued in excess of $25,000 except
in the ordinary course of business;
E. agree to take any action which would reasonably be expected to
jeopardize or delay the consummation of the transactions contemplated hereby;
F. take any other action not in the ordinary course of business; or
G. agree to take any of the foregoing actions.
4. REPRESENTATIONS AND WARRANTIES OF CTI AND ACQUISITION CORP.
4.1 CTI and Acquisition Corp. represent and warrant to each of SC,
Perri and North American Venture Capital Fund ("NAVCF") as follows:
A. CTI is a corporation duly organized and validly existing in good
standing under the laws of the State of Delaware. As of the date hereof, CTI has
(i) 10,000,000 shares of common stock authorized, of which 5,713,366 shares are
outstanding (5,573,116 of which are issued and outstanding and 140,250 of which
are treasury shares) and (ii) no authorized or issued shares of preferred stock
or other shares of the capital stock of CTI. Acquisition Corp. is a corporation
duly organized and validly existing in good standing under the laws of the State
of Delaware. CTI owns all of the issued and outstanding shares of capital stock
of Acquisition Corp.
B. Each of CTI and Acquisition Corp. has the corporate power and
authority to carry on their business as it is now being conducted and to own all
their material properties and assets and is duly qualified as a foreign
corporation in those jurisdictions where the failure to so qualify would have a
material adverse effect on the business of CTI and Acquisition Corp.,
respectively.
C. Except as contemplated by this Plan, as set forth on Schedule 4.1
and any grants made under the CTI Stock Option and Restricted Stock Plan, there
is no outstanding option, warrant, call, unsatisfied preemptive right or other
agreement of any kind to purchase or otherwise receive from CTI any shares of
CTI Common Stock or any other security of CTI; there is no outstanding security
of any kind convertible into any security of CTI; and there is no outstanding
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contract or other agreement to purchase, redeem or otherwise acquire any
outstanding shares of CTI Common Stock or any other security of CTI.
D. The Plan has been authorized by all necessary corporate action of
each of CTI and Acquisition Corp. and is a valid and binding agreement of each
of CTI and Acquisition Corp. enforceable against each of them in accordance with
its terms, subject to bankruptcy, insolvency, moratorium, and other laws of
general applicability relating to or affecting creditors' rights and to general
principles of equity.
E. The execution, delivery and performance of the Plan by each of CTI
and Acquisition Corp. does not, and the consummation of the transactions
contemplated hereby by each of CTI and Acquisition Corp. will not, constitute
(i) a breach or violation of, or a default under, any law, rule or regulation or
any judgment, decree, order, governmental permit or license, or agreement,
indenture or instrument of CTI or Acquisition Corp., respectively, or to which
either is subject, which breach, violation or default would have a material
adverse effect on the financial condition, results of operations, or business
of, or enable any party to enjoin the transactions contemplated hereby, or (ii)
a breach or violation of, or a default under, the articles of incorporation or
by-laws of CTI or Acquisition Corp.; and the consummation of the transactions
contemplated hereby will not require any consent or approval under any such law,
rule, regulation, judgment, decree, order, governmental permit or license or the
consent or approval of any other party to any such agreement, indenture or
instrument, other than the approval of the stockholders of SC.
F. CTI has made all filings and reports with governmental and other
agencies which it has been required to make under applicable law during the
three (3) years immediately preceding the date hereof. For each of the fiscal
years ended March 31, 1995 and 1996 CTI filed its Annual Reports on Form 10-KSB,
and has filed its Quarterly Report on Form 10-QSB for the period ended September
30, 1996 (collectively, the "Reports") with the Securities and Exchange
Commission (the "SEC"). The Reports complied in all respects with the
requirements of the Securities Exchange Act of 1934, as amended. No Report
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. Each of the balance sheets in the Reports (including the related
notes and schedules thereto) fairly presented the financial position of the
entity to which it related as of its date and each of the statements of
operations, statements of cash flows and statements of stockholders' equity
(including any related notes and schedules thereto) fairly presented the results
of operations, retained earnings and changes in cash flows, as the case may be,
of the entity to which it related for the periods set forth therein (subject, in
the case of unaudited interim statements, to normal and recurring adjustments),
in each case in accordance with generally accepted accounting principles
consistently applied during the periods involved, except as may be noted
therein.
G. Except as disclosed in a Report or that certain Quarterly Report on
Form 10-Q for the period ended September 30, 1996, there has been no material
adverse change in the financial condition or business of CTI since September 30,
1996.
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H. Except as disclosed in a Report or as set forth on Schedule 4.1
hereto, no material litigation, proceeding or controversy before any court or
governmental agency is pending which, in the opinion of its chief financial
officer, could have a material and adverse effect on its financial condition,
results of operations, or business or to prevent consummation of the
transactions contemplated hereby, and, to the best of CTI's knowledge, no such
litigation, proceeding or controversy has been threatened or is contemplated.
I. Except as disclosed in a Report, and except for the Plan, and
arrangements made in the ordinary course of business, CTI is not bound by any
material contract to be performed after the date hereof.
J. Except as disclosed on Schedule 4.1, all negotiations relative to
the Plan and the transactions contemplated hereby have been carried on by CTI
directly with the other parties hereto and no action has been taken by CTI that
would give rise to any valid claim against the other parties hereto for a
brokerage commission, finder's fee or other like payment.
K. To the best of CTI's knowledge, it, and all "employee benefit
plans," as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974 ("ERISA"), that cover any of its or their employees, comply with all
laws, requirements and orders under ERISA, the breach or violation of which
could have a material adverse effect on its business; no material liability to
the Pension Benefit Guaranty Corporation has been or is expected by it or them
to be incurred with respect to any such plan; no such plan had an "accumulated
funding deficiency" (as defined in Section 3(12) of ERISA (whether or not
waived)) as of the last day of the end of the most recent plan year ending prior
to the date hereof; the present value of the assets of each such plan, as
defined in Section 3(2) of ERISA, exceeds the present value of the accrued
benefits under such plan as of the end of the most recent plan year with respect
to the respective plan ending prior to the date hereof, calculated on the basis
of the actuarial assumptions used in the most recent actuarial valuation for
such plan as of the date hereof; and it has not contributed to a "multiemployer
plan", as defined in Section 3(37) of ERISA.
L. CTI has good title insurable at regular rates to its property and
assets (other than property as to which it is lessee) that are material to its
business on a consolidated basis.
M. CTI has all necessary government approvals to carry on its business
as now being conducted and, to the best of its knowledge, is in compliance with
all laws and regulations other than such approvals and non-compliance which in
the aggregate would not have a materially adverse effect on its business as now
being conducted.
N. The Issued Stock, when issued in accordance with the terms of the
Plan, will be duly authorized, validly issued, fully paid and non-assessable and
subject to no preemptive rights.
O. CTI has been given the opportunity to examine the SC Reports. SC has
also provided CTI with the opportunity to ask questions of, and to receive
answers from, SC and its representatives concerning the terms and conditions of
the acquisition of the Merger and to obtain information concerning SC and any
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additional information necessary to verify the information contained herein or
in the aforementioned documents. No representations or warranties have been made
to CTI concerning SC, its business or prospects or other matters except as set
forth in this Plan.
5. REPRESENTATIONS AND WARRANTIES OF SC AND PERRI.
5.1 SC (which term for purposes of this Article V shall mean SC and all
of its subsidiaries, unless the context otherwise requires) and Perri, jointly
and severally, represent and warrant to CTI and Acquisition Corp. as follows:
A. SC is a corporation duly organized and validly existing in good
standing under the laws of the State of New York. As of the date hereof, the
authorized capital stock of SC consisted of (i) 10,000,000 shares of SC Stock,
4,050,000 of which are issued and outstanding, (ii) 1,000,000 shares of
preferred stock, none of which are issued and outstanding and (iii) no other
authorized or issued shares of the capital stock of SC.
B. Except as contemplated by this Plan, (i) Perri owns, and will own as
of the Effective Date, beneficially and of record, free and clear of any lien,
claim or other encumbrance all of the SC Stock set forth on Schedule 5.1 hereto
and (ii) Acquisition Corp. will own as of the Effective Date, beneficially and
of record, free and clear of any lien, claim or other encumbrance all of the
issued and outstanding SC Stock. All outstanding shares of capital stock of SC
and each of SC's subsidiaries are duly authorized, validly issued and
outstanding, fully paid and non-assessable, and subject to no preemptive rights.
C. Except as set forth on Schedule 5.1 or as contemplated by this Plan,
there is no outstanding option, warrant, call, unsatisfied preemptive right or
other agreement of any kind to purchase or otherwise receive any shares of SC
Stock or any other security of SC; there is no outstanding security of any kind
convertible into any security of SC; and there is no outstanding contract or
other agreement to purchase, redeem or otherwise acquire any outstanding shares
of SC Stock or any other security of SC.
D. Each of SC and its subsidiaries (Schedule 5.1 attached hereto sets
forth a list of all of its subsidiaries) has the corporate power and authority
to carry on its business as it is now being conducted, to own all its material
properties and assets and is duly qualified as a foreign corporation in those
jurisdictions where the failure to so qualify would have a material adverse
effect on the business of SC.
E. The outstanding shares of capital stock of each of SC's subsidiaries
are owned by it free and clear of all liens, claims, encumbrances and
restrictions on transfer.
F. The Plan has been authorized by all necessary corporate action of SC
and is a valid and binding agreement of SC and enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency, moratorium and
other laws of general applicability relating to or affecting creditors' rights
and to general principles of equity.
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G. Other than as disclosed on Schedule 5.1, the execution, delivery and
performance of the Plan by SC does not, and the consummation of the transactions
contemplated hereby by SC will not, constitute (i) a breach or violation of, or
a default under, any law, rule or regulation or any judgment, decree, order,
governmental permit or license, or agreement, indenture or instrument of SC or
to which SC is subject, which breach, violation or default would have a material
adverse effect on the financial condition, results of operations, or business of
SC or its subsidiaries, or enable any party to enjoin the transactions
contemplated hereby or (ii) a breach or violation of, or a default under, the
articles of incorporation, bylaws or other organizational documentation of SC or
SC's subsidiaries; and the consummation of the transactions contemplated hereby
will not require any consent or approval under any such law, rule, regulation,
judgment, decree, order, governmental permit or license or the consent or
approval of any other party to any such agreement, indenture or instrument.
H. SC has made all filings and reports with governmental and regulatory
agencies which it is required to make under applicable law (collectively, the
"SC Reports") during the three (3) years immediately preceding the date hereof.
Each SC Report complied in all material respects with all applicable legal
requirements. SC has presented CTI with true and correct copies of (i) Income
Statements for the years ended July 31, 1996 and July 31, 1995, (ii) Balance
Sheets as of July 31, 1996 and July 31, 1995 and (iii) Statements of Cash Flows
for the years ended July 31, 1996 and July 31, 1995 (collectively, the "SC
Financial Statements"). Each of the SC Financial Statements and any additional
financial statements provided by SC pursuant to this Plan (the "Additional
Statements") (including the related notes and schedules thereto) fairly
presented the financial position of the entity to which it related as of its
date or for the period set forth therein, as the case may be, in each case in
accordance with generally accepted accounting principles, consistently applied
during the periods involved, except as may be noted therein. Except as disclosed
in Schedule 5.1, as of the date hereof, SC has no direct or indirect
indebtedness, liability, claim, loss, damage, deficiency, obligation or
responsibility, fixed or unfixed, choate or inchoate, liquidated or
unliquidated, secured or unsecured, accrued, absolute, contingent or otherwise,
of a kind required by generally accepted accounting principles to be set forth
on a financial statement ("Liabilities") that were not fully and adequately
reflected or reserved against on the SC Financial Statements. SC has no
Liabilities, other than (i) Liabilities fully and adequately reflected or
reserved against on the Financial Statements or the Additional Statements, and
(ii) Liabilities incurred since July 31, 1996 in the ordinary course of
business. Except as disclosed in Schedule 5.1, the value of SC's assets as of
the date hereof does not materially differ from the value of SC's assets as
reflected in SC's July 31, 1996 Balance Sheet.
I. There has been no material adverse change in the financial condition
or business of SC or its subsidiaries since July 31, 1996.
J. Other than as disclosed in Schedule 5.1, no material litigation,
proceeding or controversy before any court or governmental agency is pending
which, in the opinion of SC's executive officers, could have a material and
adverse effect on its financial condition, results of operations or business or
prevent consummation of the transactions contemplated hereby, and, no such
litigation, proceeding or controversy has been threatened or is contemplated,
and neither SC nor any of its subsidiaries is subject to any agreement,
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memorandum of understanding or similar arrangement with any regulatory authority
restricting its operations or requiring that certain actions be taken. SC is not
in violation of any applicable order, judgment, injunction, award or decree, or
any federal, state, local or foreign law, ordinance or regulation, which
violation could reasonably be expected to have a material adverse effect on its
business and neither SC nor any officer or director of SC has received notice
that such violation has been alleged or is being investigated.
K. Except as disclosed in Schedule 5.1 attached hereto, and except for
the Plan, and arrangements made in the ordinary course of business, SC is not
bound by any material contract to be performed after the date hereof.
L. All negotiations relative to the Plan and the transactions
contemplated hereby have been carried on by SC directly with the other parties
hereto and no action has been taken by SC or Perri that would give rise to any
valid claim against the other party hereto for a brokerage commission, finder's
fee or other like payment.
M. To the best of SC's knowledge, it, and all "employee benefit plans,"
as defined in Section 3(3) of ERISA, that cover any of its or their employees,
comply with all laws, requirements and orders under ERISA, the breach or
violation of which could have a material adverse effect on its business; no
material liability to the Pension Benefit Guaranty Corporation has been or is
expected by it or them to be incurred with respect to any such plan; no such
plan had an "accumulated funding deficiency" (as defined in Section 3(12) of
ERISA (whether or not waived)) as of the last day of the end of the most recent
plan year ending prior to the date hereof; the present value of the assets of
each such plan, as defined in Section 3(2) of ERISA, exceeds the present value
of the accrued benefits under such plan as of the end of the most recent plan
year with respect to the respective plan ending prior to the date hereof,
calculated on the basis of the actuarial assumptions used in the most recent
actuarial valuation for such plan as of the date hereof; and it has not
contributed to a "multiemployer plan", as defined in Section 3(37) of ERISA.
N. Each of SC and its subsidiaries have good title insurable at regular
rates to its property and assets (other than property as to which it is lessee),
including, without limitation, all intellectual property that are material to
its business on a consolidated basis, free and clear of any lien, claim or
encumbrance.
O. SC has all necessary government approvals to carry on its business
as it is now being conducted and is in compliance with all laws and regulations
other than such approvals and non-compliance which in the aggregate would not
have a materially adverse effect on its business as now being conducted.
P. Except as set forth on Schedule 5.1, there are no material
contracts, arrangements, understandings, relationships, negotiations or
transactions between SC and any of its shareholders or to which both SC and any
of its shareholders are parties.
Q. All patents, licenses, trade names, trademarks, copyrights, service
marks, computer software, permits, approvals, consents, know-how, formulae,
trade secrets or any other proprietary or trade rights (including rights to or
registrations of the foregoing) or applications and licenses for any of the
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foregoing owned, held or used by SC (collectively, "Proprietary Rights") are set
forth on Schedule 5.1 hereto. SC is not infringing, or otherwise acting
adversely to, any Proprietary Right of any other person and no Proprietary Right
of, or product or service sold by, any other persons infringes or conflicts with
any Proprietary Right heretofore or presently used by SC. No claim has been
asserted or, to the knowledge of SC or Perri, threatened by any person with
respect to any of the Proprietary Rights used by SC and, to the knowledge of SC
and Perri, there is no basis for any such claim.
R. Schedule 5.1 sets forth a correct and complete list of all bank
accounts and safe deposit boxes of SC and all persons authorized to sign checks
drawn on such accounts and to have access to such safe deposit boxes.
S. SC has no interests in any real estate except that SC leases, as
tenant, property described on Schedule 5.1 as being so leased. SC has not
disposed of or arranged for any disposal of any hazardous substances, other than
in conformity with applicable laws and regulations and, to the best knowledge of
SC and Perri, SC has not been designated a potentially liable party for remedial
action or response costs in connection with any of its facilities, locations,
sites or properties under the Comprehensive Environmental Response, Compensation
and Liability Act, as amended, the Federal Resource and Recovery Act, as
amended, the Toxic Control Substance Act, the Clean Water Act, the Clean Air Act
or comparable state statutes.
T. SC is not a party to any collective bargaining agreement or
employment agreement or any pending or threatened labor dispute. Schedule 5.1
sets forth a true, accurate and complete list of all compensation, benefit and
other arrangements between SC and any employee or consultant of SC.
U. Neither this Plan, including all Schedules and Exhibits hereto, nor
any other financial statement, information, document or other instrument
heretofore or hereafter furnished by SC or Perri to CTI in connection with the
transactions contemplated hereby, contains or will contain any untrue statement
of any material fact or omits or will omit to state any material fact required
to be stated in order to make such statement, document or other instrument not
misleading. There is no fact known to SC or Perri which materially adversely
affects the business, financial condition or affairs of SC or any of its
properties or assets which has not been set forth in this Plan and the Schedules
hereto.
V. (i) Perri is acquiring shares of Issued Stock solely for investment
for his own account and not with a view to, or for resale in connection with,
the distribution or other disposition thereof, and there is no current plan or
intention of Perri to sell, exchange or otherwise dispose of shares of Issued
Stock.
(ii) Perri understands that the acquisition of the shares of Issued
Stock is a speculative investment which involves a high degree of risk of loss
of his investment therein, and that there are restrictions on the
transferability of the shares under the terms of the Securities Act of 1933, as
amended (the "Securities Act") and applicable state securities laws.
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(iii) Perri's knowledge and experience in financial and
business matters are such that he is capable of evaluating the merits and risks
of his acquisition of the shares of Issued Stock.
(iv) In making his decision to acquire the shares of Issued
Stock, Perri has relied upon the representations and warranties of CTI contained
in this Agreement and independent investigations made by him.
(v) Perri has been given the opportunity to examine the CTI
Reports. CTI has also provided Perri with the opportunity to ask questions of,
and to receive answers from, CTI and its representatives concerning the terms
and conditions of the acquisition of the shares of Issued Stock and to obtain
information concerning CTI and any additional information necessary to verify
the information contained herein or in the aforementioned documents. No
representations or warranties have been made to Perri concerning the shares of
Issued Stock or CTI, its business or prospects or other matters except as set
forth in this Plan.
(vi) Set forth on Schedule 5.1 is a true and complete list
of all shareholders of SC and each such shareholder's principal place of
residence.
6. COVENANTS.
6.1 Each party hereby covenants to the other parties that:
A. Each shall use all commercially reasonable efforts in good faith to
take or cause to be taken all action necessary or desirable under the Plan on
their part as promptly as practicable so as to permit the consummation of the
transactions contemplated by the Plan at the earliest possible date and
cooperate fully with the other parties hereto to that end.
B. SC shall submit the Plan to or solicit the consent of a majority of
its stockholders on the earliest practicable date. Perri shall vote, as a
stockholder of SC, to approve the Plan and the transactions contemplated hereby.
SC shall deliver to CTI contemporaneously with the execution of this Plan, an
agreement, in the form attached hereto as Exhibit B, executed by NAVCF.
C. Unless approved by the other parties hereto in advance, no party
will issue any press release or written statement for general circulation
relating to the transactions contemplated hereby, except as otherwise required
by law in the opinion of its counsel.
D. Upon reasonable notice, each of CTI and SC shall (and shall cause
each of its subsidiaries to) afford the other parties hereto, and their
officers, employees, counsel, accountants and other authorized representatives,
during normal business hours throughout the period prior to the Effective Date,
access to all of its and its subsidiaries' properties, books, contracts,
commitments and records and, during such period, it shall (and it shall cause
each of its subsidiaries to) furnish promptly to the other party hereto (a) a
copy of each report, schedule and other document filed by it pursuant to the
requirements of federal or state securities laws and (b) all other information
concerning its business, properties and personnel as the other parties hereto
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may reasonably request, provided that no party shall be required to provide any
such information or documents to the other party which specifically relate to
the deliberations concerning the transactions contemplated hereby. Neither party
hereto will use any information obtained pursuant to this Paragraph (D) for any
purpose unrelated to the consummation of the transactions contemplated by the
Plan and, if the Merger is not consummated, each party hereto will hold all
information and documents obtained pursuant to this Paragraph (D) in confidence
unless and until such time as such information or documents otherwise become
publicly available or as such party is advised by counsel that any such
information or document is required by law to be disclosed, and in the event of
the termination of the Plan, each party will deliver to the other parties all
documents so obtained by it and any copies thereof which relate to such other
parties.
E. In the case of SC (other than as set forth herein), none of SC,
Perri or any subsidiary of SC or any officer, director, employee or agent of the
same, shall solicit or encourage inquiries or proposals with respect to, or
furnish any information relating to or participate in any negotiations or
discussions concerning, any acquisition or purchase of all or a substantial
portion of the assets of, or of any interest in, SC or any of SC's subsidiaries
or any business combination with SC or any of SC's subsidiaries other than as
contemplated by the Plan; Perri shall notify CTI immediately if any such
inquiries or proposals are received by, any such information is requested from,
or any such negotiations or discussions are sought to be initiated with, SC or
any of SC's subsidiaries; and SC shall instruct its officers, directors, agents,
advisors and affiliates to comply with the above.
F. Each party shall notify the other parties hereto as promptly as
practicable of any material breach by it of any representation, warranty or
agreement contained herein.
G. From and after the Effective Date, until that date on which NAVCF or
its affiliates no longer hold fifty percent (50%) or more of the aggregate
shares of Issued Stock, CTI shall give NAVCF advance prior notice of all Board
of Directors meetings of CTI and permit Fred Rohn ("Rohn"), or another
representative of NAVCF, reasonably acceptable to CTI, to attend all such
meetings.
6.2 CTI covenants to Perri that (i) from and after the consummation of
the Merger, it shall maintain an office presence including sales, technical
support and programming staff in New York City (unless CTI and Perri agree to
the contrary), and (ii) it shall fund up to $25,000 of an integration fee
related to SC's Unity software product to Unimax Systems Corp.
6.3 CTI covenants that it will not for a period ending on the earlier
of the date one year after resale of the Issued Stock is permitted pursuant to
an effective registration statement under the Securities Act or the date resale
of the Issued Stock is otherwise permitted, as to each of Perri and NAVCF, under
the Securities Act and applicable state securities laws, without the consent of
Perri and Rohn, issue or grant to (i) any director of CTI or any of its
subsidiaries, (ii) any family member of such directors, and (iii) any entity the
majority of whose equity interests are owned by any of such directors and/or
their family members (collectively, the "Restricted Persons") (a) any option or
other security convertible or exercisable into shares of CTI Stock or (b) any
shares of CTI Stock. Notwithstanding anything to the contrary contained in the
immediately preceding sentence, CTI shall be permitted, without seeking or
obtaining such consent, to issue or grant any of such securities to one or
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more Restricted Persons pursuant to a bona fide private placement or public
offering (at the same price offered to third parties) of securities of CTI, or
a bona fide merger, acquisition or similar transaction.
6.4 As soon as practicable after the execution hereof, but no later
than 10 days before the Closing, SC and Perri shall deliver to each of the
shareholders of SC (i) disclosure materials (as CTI shall reasonably require)
relating to CTI, including, but not limited to, copies of CTI's most recent
Exchange Act filings, (ii) copies of SC's most recent unaudited financial
statements and (iii) an investment representation letter and consent in the form
attached hereto as Exhibit G (the "Consent"). SC and Perri shall use all
commercially reasonable efforts to obtain the signature of each of such
shareholders (other than Perri and NAVCF) on the Consent as soon as practicable
after the date hereof.
7. REGULATORY APPROVALS.
7.1 As promptly as practicable after the date hereof, each of CTI and
SC shall obtain all approvals, consents and rulings to satisfy all requirements
which are necessary for the consummation of the transactions contemplated
hereby.
8. CONDITIONS TO CONSUMMATION.
8.1 The consummation of the Merger is conditioned upon:
A. each of the representations, warranties and covenants contained
herein of CTI and Acquisition Corp. shall, in all material respects, be true on,
or complied with by, the Effective Date as if made on such date (or on the date
when made in the case of any representation or warranty which specifically
relates to an earlier date) and SC shall have received a certificate signed by
the Chief Financial Officer of CTI dated the Effective Date, to such effect;
B. each of the representations, warranties and covenants contained
herein of SC and Perri shall, in all material respects, be true on, or complied
with by, the Effective Date as if made on such date (or on the date when made in
the case of any representation or warranty which specifically relates to an
earlier date) and CTI shall have received certificates signed by the President
of SC and Perri, in his individual capacity, dated the Effective Date, to such
effect;
C. CTI shall have executed and delivered to NAVCF an Option, in the
form attached as Exhibit C hereto, to purchase 90,000 shares of CTI Stock at a
purchase price of $1.50 per share. Such Option shall be exercisable in whole or
part at any time beginning the Effective Date until that date which is three (3)
years from the Effective Date. Such Option shall be transferable to partners of
NAVCF only and shall contain standard anti-dilution protection in the case of
stock splits, stock dividends, reverse stock splits, recapitalizations and
similar transactions;
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D. CTI shall have executed and delivered to Perri an employment
agreement in the form attached hereto as Exhibit D, pursuant to which Perri
shall be employed until March 31, 2000, as President of Soft-Com, Inc. Such
employment agreement, or a separate option agreement, shall provide for the
grant to Perri of options, under CTI's current option plan, to purchase 100,000
shares of CTI Stock at a purchase price as determined pursuant to CTI's stock
option plan. One-third of such options will vest and become exercisable on each
of the first, second and third annual anniversary dates of their grant and all
such options shall expire on that date which is ten (10) years after the Closing
Date;
E. Perri shall have been appointed, as of the Effective Date, a
director of CTI;
F. CTI and the stockholders named in the Registration Rights Agreement
attached as Exhibit E hereto shall have executed and delivered to the other such
Registration Rights Agreement, which shall grant piggyback registration rights
to such stockholders (subject to cut-back if the managing underwriter in an
underwritten public offering determines that inclusion of all of the
stockholders' shares proposed to be included therein would interfere with the
successful marketing of the underwritten shares);
G. NAVCF shall have executed and delivered an Indemnification
Agreement, in the form attached hereto as Exhibit F; and
H. The Certificate of Merger shall have been filed with and accepted by
the Secretaries of State of the States of New York and Delaware.
8.2 A. All conditions to consummation of the Merger set forth in
Section 8.1 above to be performed by SC or Perri are for the sole benefit of CTI
and Acquisition Corp. and may be waived by CTI or Acquisition Corp., as
applicable, at any time in their sole discretion.
B. All conditions to consummation of the Merger set forth in Section
8.1 above to be performed by CTI or Acquisition Corp. are for the sole benefit
of SC and Perri and may be waived by SC or Perri, as applicable, at any time in
their sole discretion.
IX. TERMINATION.
9.1 The Plan may be terminated prior to the Effective Date, either
before or after its approval by the stockholders of SC:
A. by the mutual consent of CTI and SC; or
B. by CTI or SC, in the event that the Merger is not consummated by
February 1, 1997; provided, however, the parties shall use their best efforts to
satisfy all closing conditions on or about January 6, 1997.
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X. SURVIVAL OF REPRESENTATIONS; INDEMNITY.
10.1 The respective representations, warranties, covenants and
agreements of CTI, Acquisition Corp., SC and Perri contained in this Plan and in
any Schedule or Exhibit delivered pursuant hereto shall survive the Effective
Date until that date which is thirty-six (36) months after the date hereof,
notwithstanding any investigation made by or on behalf of any party hereto, and
shall not be considered waived by consummation of the transactions contemplated
by this Plan regardless of knowledge of a misrepresentation or breach of
warranty.
10.2 A. Each of CTI and Acquisition Corp., on the one hand, and each of
SC and Perri, on the other hand, agree, jointly and severally, to indemnify and
hold the other parties and their officers, directors (including NAVCF and its
directors, officers and partners) and agents harmless from and against all
damages, losses or expenses (including reasonable attorneys' fee) judgments and
costs of settlement ("Losses") suffered or incurred by the other parties as a
result of any and all claims, demands, suits, causes of action, proceedings,
judgments and liabilities, assessed, incurred or sustained by or against any of
them (collectively, "Claims") with respect to or arising out of (i) the failure
or alleged failure of any representation or warranty made by CTI or Acquisition
Corp., on the one hand, and SC or Perri, on the other hand in this Plan
(including any Schedule or Exhibit delivered pursuant hereto) to be true and
correct in all respects as of the date of this Plan and as of the Effective
Date, and (ii) any Losses incurred by the other parties in connection with a
breach or alleged breach by such party of any of their covenants or agreements,
contained herein.
B. The party which claims to be entitled to indemnification pursuant to
Section 10.2.A (the "Indemnified Party") shall be entitled to control the
defense of any claim with counsel reasonably acceptable to the party against
which indemnification is sought (the "Indemnifying Party"); provided, however,
that the Indemnifying Party shall not be required to pay any amounts incurred in
settlement of any Claim unless it shall have consented to such settlement (such
consent not to be unreasonably withheld). The Indemnified Party shall give
notice to the Indemnifying Party in writing specifying the basis on which such
indemnification is sought and the amount of the asserted claims, provided that
the failure to give such notice shall not relieve an Indemnifying Party of its
obligations to indemnify hereunder except to the extent such Indemnifying Party
is actually prejudiced thereby. The Indemnifying Party and the Indemnified Party
shall provide each other with reasonable cooperation in the event of any Claim.
C. The Indemnifying Party shall have ten (10) days after receipt of
such notice to disagree with the claim for indemnification. In the event of such
disagreement, the Indemnifying Party shall notify the Indemnified Party in
writing as to the basis of its disagreement therewith.
D. An Indemnifying Party may, in its sole discretion, satisfy such
indemnification obligation by delivering to the other party cash or shares of
CTI Stock or a combination thereof. If such obligation is satisfied in shares of
Common Stock, such shares shall be valued at the product of (i) the number of
shares delivered and (ii) the average of the asked and bid price, or closing
price, as the case may be for CTI Stock the ten (10) trading days immediately
preceding the date such shares are delivered.
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E. Notwithstanding anything to the contrary contained herein, no
Indemnifying Party shall be liable with respect to the indemnity provided
herein, unless and until the dollar amount of all Losses against such party
exceed $25,000 and in such event, the Indemnifying Parties, jointly and
severally, shall be liable for the amount of all Losses (including the first
$25,000), as provided herein; provided, however, that SC and Perri shall be
liable, from the first dollar, for all Losses for Claims with respect to or
arising out of the failure or alleged failure of the representations and
warranties contained in Section 5.1(F), (G)(ii), and (V)(vi) to be true and
correct in all respects as of the date of this Plan and as of the Effective Date
or in connection with the breach or alleged breach of Section 6.4 (collectively,
"Non-Capped Losses"). Other than any liability for Non-Capped Losses, in no
event shall the aggregate liability of an Indemnifying Party exceed, in the
aggregate, Two Hundred Fifty Thousand Dollars ($250,000); provided, however, if
a party elects to satisfy an indemnification obligation by delivering shares of
CTI Stock, in no event shall such party be required to deliver, in the
aggregate, in excess of 125,000 shares of CTI Stock.
XI. OTHER MATTERS.
A. If the Plan shall be terminated, the agreements of the parties in
the second sentence of Section 6.1.D, Article X and Paragraphs (E) and (F) of
this Article XI shall survive such termination.
B. Prior to the Effective Date, any provision of the Plan may be (i)
waived by the party benefitted by the provision, or (ii) to the extent permitted
by applicable law, amended or modified at any time (including the structure of
the transaction), by an agreement in writing among the parties hereto approved
by their respective Boards of Directors and executed in the same manner as the
Plan.
C. The Plan may be executed in counterparts each of which shall be
deemed to constitute an original, but all of which together shall constitute one
and the same instrument.
D. The Plan shall be governed by, and interpreted in accordance with,
the laws of the State of Delaware, except as federal law may be applicable.
E. Each party hereto will bear all expenses incurred by it in
connection with the Plan and the transactions contemplated hereby; provided,
however, CTI shall reimburse SC for reasonable attorneys' and/or accountants'
fees and expenses incurred by SC in connection with the Plan in an amount not to
exceed $5,000. Notwithstanding the foregoing, CTI shall not be responsible for
any stock transfer or other tax incurred as a result of the Plan and the
consummation of the transactions contemplated thereby.
F. Each of the parties and their respective agents, attorneys and
accountants will maintain the confidentiality of all information provided in
connection herewith which has not been publicly disclosed unless it is advised
by counsel that any such information is required by law to be disclosed.
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G. All notices, requests and other communications hereunder to a party
shall be in writing and shall be deemed to have been duly given when delivered
by hand, facsimile transmission, overnight courier service, telegram or telex
(confirmed in writing) to such party at its address set forth below or such
other address as such party may specify by notice to the other party hereto.
If to CTI or Acquisition Corp., to:
CTI Group (Holdings) Inc.
901 South Trooper Road
Valley Forge, PA 19484
Attention: Mark H. Daugherty,
Chief Financial Officer
with copies to:
Klehr, Harrison, Harvey, Branzburg & Ellers
1401 Walnut Street
Philadelphia, Pennsylvania 19102
Attention: Stephen T. Burdumy, Esq.
If to SC or Perri, to:
Soft-Com Inc.
140 W. 22nd Street
New York, NY 10011
Attention: John Perri
with copies to:
North American Venture Capital Fund
P.O. Box 714
Village Road
New Vernon, NJ 07976
Attention: Fred Rohn
and
Hannoch Weisman
4 Becker Farm Road
Roseland, NJ 07068
Attention: Jonathan Gross, Esq.
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H. The Plan and the Exhibits and Schedules hereto represent the entire
understanding of the parties hereto with reference to the transactions
contemplated hereby and supersedes any and all other oral or written agreements
heretofore made.
I. Other than as contemplated by Article I, Article II, Section 4.1 and
Article X with respect to NAVCF, nothing in this Agreement is intended or shall
be construed to give any person, other than the parties hereto, any legal or
equitable right, remedy or claim under or in respect of this Agreement, any
provision contained herein or any exhibits hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed in counterpart by their duly authorized officers as of
the day and year first above written.
ATTEST: CTI GROUP (HOLDINGS) INC.
Lisa Ernst By: /s/ Mark Daugherty
- -------------------------- --------------------------------
Its: Chief Financial Officer
ATTEST: CGI ACQUISITION CORP.
Lisa Ernst By: /s/ Mark Daugherty
- -------------------------- --------------------------------
Its: Secretary
ATTEST: SOFT-COM INC.
Lisa Ernst By /s/ John Perri
- -------------------------- --------------------------------
Its: President
ATTEST:
Lisa Ernst /s/ John Perri
- -------------------------- --------------------------------
JOHN PERRI
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EXHIBIT 10.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is entered into as of
January 2, 1997, by and among CTI Group (Holdings) Inc., a Delaware corporation
("Company"), and the Holders.
2. Definitions. For purposes of this Agreement:
(a) The term "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933 (the "Act") and,
to the extent possible, in compliance with Rule 415 under the Act, and the
declaration or ordering of effectiveness of such registration statement or
document;
(b) The term "Registrable Securities" means the (i) 795,000 shares of
the Company's common stock, $.01 par value per share (the "Common Stock")
issuable pursuant to the terms of the Agreement and Plan of Merger, dated as of
the 16th day of December, 1996, by and among CTI Group (Holdings) Inc., CGI
Acquisition Corp., Soft-Com Inc. and John Perri (the "Merger"); and (ii) 90,000
shares of Common Stock issuable upon exercise of that certain option dated the
date hereof to be issued to North American Venture Capital Fund.
(c) The term "Holders" means all of the persons who acquire Registrable
Securities pursuant to the Merger or any permitted assignee thereof.
3. Demand Registration. (a) If, on or after that date which is three years from
the date hereof, holders of in excess of twenty-five percent (25%) of the
Registrable Securities which at such time ("Initiating Holders"), have not been
registered for resale pursuant to an effective registration statement with the
U.S. Securities and Exchange Commission ("SEC"), provide the Company with
written notice requesting that the Company cause a registration statement with
respect to such Registrable Securities to be filed with the SEC, the Company
shall promptly give written notice of such request to holders of all such
Registrable Securities. The Company shall use its best efforts to cause all the
shares of Common Stock held by the Initiating Holders and all other holders who
notify the Company in writing within thirty (30) days of receipt of such notice
of their election to include such shares of Registrable Securities in such
registration statement, to be registered under the Act.
(b) The Company shall not be required to file and cause to be effective
more than one (1) registration statement pursuant to Section 2(a).
4. Piggyback Registration. If (but without any obligation to do so) the Company
proposes to register (including, for this purpose, a registration effected by
the Company for shareholders other than the Holders) any of its Common Stock
under the Act in connection with the public offering of such securities (other
than a registration on Form S-8 or on Form S-4), the Company shall, at such
time, promptly give each Holder written notice of such registration. Upon the
written request of each Holder within thirty (30) days after mailing such notice
by the Company, which request shall state the intended method of disposition of
such shares of such Holder, the Company shall cause to
<PAGE>
be registered under the Act all of the Registrable Securities that each such
Holder has requested to be registered (a "Piggyback Registration").
5. Limitation on Obligation to Register.
(a) In the case of a Piggyback Registration on an underwritten public
offering by the Company, if the managing underwriter determines and advises in
writing that the inclusion in the registration statement of (i) all Registrable
Securities proposed to be included by the Holders pursuant to Section 3 hereof
and (ii) all other securities of the Company proposed to be included in such
registration statement for the account of persons other than the Company would
interfere with the successful marketing of the securities proposed to be
registered by the Company, then Registrable Securities may be excluded from such
registration statement only to the extent that the underwriter shall require.
Any such exclusion of Registrable Securities shall be pro-rata among the Holders
who had requested Piggyback Registration and the other persons (the "Other
Holders") for the account of whom securities are being included in such
registration statement, other than the Company (such securities held by Other
Holders being hereinafter referred to as "Other Securities"), in the proportion
that the number of Registrable Securities or Other Securities which each such
Holder or Other Holder seeks to register bears to the total number of
Registrable Securities and Other Securities sought to be included by all Holders
and Other Holders; provided, however, that Registrable Securities may be
excluded from such registration statement only to the extent that the Company
has first excluded all outstanding securities held by persons who are not
entitled to inclusion of such securities in such registration statement or are
not entitled to inclusion on a pro-rata basis with the Registrable Securities.
(b) Notwithstanding anything to the contrary herein, the Company shall
have the right (i) to defer the initial filing or request for acceleration of
effectiveness of any Piggyback Registration or (ii) after effectiveness, to
suspend effectiveness of any such registration statement, if, in the good faith
judgment of the board of directors of the Company and upon the advice of counsel
to the Company, such delay in filing or requesting acceleration of effectiveness
or such suspension of effectiveness is necessary in light of the existence of
material non-public information (financial or otherwise) concerning the Company,
disclosure of which at the time is not, in the opinion of the board of directors
of the Company upon the advice of counsel (A) otherwise required and (B) in the
best interests of the Company.
(c) Any "piggyback" registration rights granted by the Company to
holders of its securities after the date hereof, shall provide that such
holders' securities shall be included in any registration statement registering
Registrable Securities on a pari passu basis with all Registrable Securities
therein.
6. Obligations of the Company. Whenever required under this Agreement to effect
the registration of any Registrable Securities, the Company shall:
2
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(a) Prepare and file with the SEC a registration statement with respect
to such Registrable Securities and use reasonable efforts to cause such
registration statement to become effective.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to keep the registration statement
effective and comply with the provisions of the Act with respect to the
disposition of all securities covered by such registration statement.
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them.
(d) Use reasonable efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the holders of
the Registrable Securities covered by such registration statement; provided,
however, that the Company shall not be required in connection therewith or as a
condition thereto to (a) qualify to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 5(d), (b)
subject itself to general taxation in any such jurisdiction, (c) file a general
consent to service of process in any such jurisdiction, (d) provide any
undertakings that cause the Company undue expense or burden, or (e) make any
change in its charter or bylaws, which in each case the Board of Directors of
the Company determines to be contrary to the best interests of the Company and
its stockholders.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement.
(f) Notify each Holder who holds Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
(g) Furnish, at the request of any Holder requesting registration of
Registrable Securities pursuant to this Agreement, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to this Agreement, if such securities are being
sold through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, an opinion, dated such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities.
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7. Furnish Information. It shall be a condition precedent to the obligations of
the Company to take any action pursuant to this Agreement that the selling
Holders shall furnish to the Company such information regarding themselves, the
Registrable Securities held by them, and the intended method of disposition of
such securities as shall be required to effect the registration of their
Registrable Securities or to determine that registration is not required
pursuant to Rule 144 or other applicable provision of the Act.
8. Expenses of Company Registration. The Company shall bear and pay all expenses
incurred in connection with any registration, filing or qualification of
Registrable Securities with respect to the registrations pursuant to Section 3
for each Holder, including (without limitation) all registration, filing, and
qualification fees, printers and accounting fees relating or apportionable
thereto, but excluding fees and expenses of counsel for the Holders and
underwriting discounts and commissions relating to Registrable Securities.
9. Indemnification. In the event any Registrable Securities are included in a
registration statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify and hold
harmless each "Holder Indemnified Person" (defined for purposes of this Section
8 as each Holder, the shareholders, parties, employees, agents, officers and
directors of each Holder acting in their capacity as such, any underwriter (as
defined in the Act) for such Holder and each person, if any, who controls such
Holder or underwriter within the meaning of the Act or the Securities Exchange
Act of 1934, as amended (the "1934 Act")), against any losses, claims, damages,
expenses, or liabilities (joint or several) ("Losses") to which they may become
subject under the Act, the 1934 Act or other federal or state law, insofar as
such Losses (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively a
"Violation"): (i) any untrue statement of a material fact contained in such
registration statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, (ii) the omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation by the
Company of the Act, the 1934 Act, any state securities law or any rule or
regulation promulgated under the Act, the 1934 Act or any state securities law;
and the Company will reimburse each such Holder Indemnified Person for any legal
or other expenses reasonably incurred by him, her or it in connection with
investigating or defending any such Loss or action; provided, however, that the
indemnity agreement contained in this subsection 8(a) shall not apply to amounts
paid in settlement of any such Loss or action if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably
withheld), nor shall the Company be liable in any such case for any such Loss or
action to the extent that it arises out of or is based upon a Violation which
occurs (i) in reliance upon and in conformity with information furnished
expressly for use in connection with such registration by any such Holder
Indemnified Person, or (ii) the failure of such Holder Indemnified Person to
deliver a copy of the registration statement or the prospectus, or any
amendments or supplements thereto, after the Company or underwriters has
furnished such person with a sufficient number of copies of the same.
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(b) To the extent permitted by law, each selling Holder will indemnify
and hold harmless the "Company Indemnified Persons" (defined for the purpose of
this Section 8 as the Company, each of its directors in their capacity as such,
each of its officers who have signed the registration statement in their
capacity as such, each person, if any, who controls the Company within the
meaning of the Act or the Exchange Act, any underwriter and any other
stockholder selling securities in such registration statement), against any
Losses (joint or several) to which they may become subject under the Act, the
1934 Act or other federal or state law, insofar as such Losses (or actions in
respect thereof) arise out of or are based upon any Violation, in each case to
the extent that such Violation occurs in reliance upon and in conformity with
information furnished by such Holder expressly for use in connection with such
registration or actions taken by an Holder or its directors, officers, employees
or agents; and each such Holder will reimburse any legal or other expenses
reasonably incurred by the Company and any such Company Indemnified Person in
connection with investigating or defending any such Losses or action; provided,
however, that the indemnity agreement contained in this subsection 8(b) shall
not apply to amounts paid in settlement of any such Losses or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; provided further, however, that, in no event shall
any indemnity under this subsection 8(b) exceed the net proceeds from the
offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 8, deliver to the indemnifying party a
written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party shall have the right to retain its own
counsel, with the reasonably incurred fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to actual or
potential differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action, if prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 8, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 8.
(d) To the extent any indemnification by an indemnifying party pursuant
to this Section 8 is prohibited or limited by law, the indemnifying party agrees
to make the maximum contribution with respect to any amounts for which it would
otherwise be liable hereunder to the fullest extent permitted by law; provided,
however, that (i) no contribution shall be made under circumstances where the
maker would not have been liable for indemnification under the fault standards
set forth in this Section 8, (ii) no seller of Registrable Securities guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any seller of Registrable Securities who
was not guilty of such fraudulent misrepresentation, and (iii) contribution
(together with any indemnification or other obligations under this Agreement) by
any seller of
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Registrable Securities shall be limited in amount to the net proceeds received
by such seller from the sale of such Registrable Securities.
(e) The obligations of the Company and Holders under this Section 8
shall survive the completion of any offering of Registrable Securities in a
registration statement under this Agreement.
10. Amendment of Registration Rights. Any provisions of this Agreement may be
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the holders of a 75% of the Registrable
Securities. Any amendment or waiver effected in accordance with this paragraph
shall be binding upon each Holder, each future Holder, and the Company.
11. Notices. All notices required or permitted under this Agreement shall be
made in writing signed by the party making the same, shall specify the section
under this Agreement pursuant to which it is given, by certified, registered,
overnight or regular mail and shall be addressed if to (i) the Company at Chief
Financial Officer, CTI Group (Holdings) Inc., 901 South Trooper Road, Valley
Forge, PA 19484, Telecopy No. (610) 666-7707 and (ii) the Holders at their
respective last address as the party shall have furnished in writing as a new
address to be entered on such register.
12. Termination. This Agreement shall terminate on the later to occur of (a) the
date that is five years from the date of this Agreement and (b) the date any
distribution of Registrable Securities described in a registration statement
filed pursuant to this Agreement is completed; but without prejudice to (i) the
parties' rights and obligations arising from breaches of this Agreement
occurring prior to such termination or (ii) other indemnification obligations
under this Agreement.
13. Assignment. No assignment, transfer or delegation, whether by operation of
law or otherwise, of any rights or obligations under this Agreement by the
Company or any Holder, respectively, shall be made without the prior written
consent of the majority in interest of the Holders and the Company,
respectively; provided, however, that the rights of an Holder may be transferred
to a subsequent holder of the Holder's Registrable Securities including, without
limitation, a partner of an Holder (provided such transferee shall provide to
the Company, together with or prior to such transferee's request to have such
Registrable Securities included in a Piggyback Registration, a writing executed
by such transferee agreeing to be bound as an Holder by the terms of this
Agreement); and provided, further, however, that the Company may transfer its
rights and obligations under this Agreement to a purchaser of all or a
substantial portion of its business if the obligations of the Company under this
Agreement are assumed in connection with such transfer, either by merger or
other operation of law (which may include, without limitation, a transaction
whereby the Registrable Securities are converted into securities of the
successor in interest) or by specific assumption executed by the transferee.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to agreements made
in and wholly to be performed in that jurisdiction, except for matters arising
under the Act or the 1934 Act, which matters shall be construed and interpreted
in accordance with such laws. Any action brought to enforce, or otherwise
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<PAGE>
arising out of, this Agreement shall be heard and determined only in either a
federal or state court sitting in the city and county of Philadelphia in the
Commonwealth of Pennsylvania.
14. Third Party Beneficiaries. It is the intent of the parties that the
provisions of this Agreement inure to the benefit of all of the Holders, whether
or not they execute this Agreement.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
CTI GROUP (HOLDINGS) INC.
By:
---------------------------------
Name:
Title:
HOLDER
-------------------------------------
Name
By:
---------------------------------
(Signature)
Address:______________________________
______________________________
______________________________
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EXHIBIT 10.2
CTI Data Solutions (USA) Inc.
901 South Trooper Road
P.O. Box 80360
Valley Forge, PA 19484 USA
December 13, 1996
John J. Perri, President
Soft-Com Inc.
140 W. 22nd Street
New York, NY 10011
Dear Mr. Perri:
CTI Group (Holdings) Inc. (the "Company") agrees to retain you as the
President of Soft-Com Inc., which Subsidiary shall be responsible for the parent
Company's and any Subsidiary's telemanagement business.
1. Term: The term of your employment under this agreement shall begin
on the 2nd day of January, 1997 and end on the 31st of March, 2000 ("the
Employment Period").
2. Duties: During the Employment Period, you shall devote substantially
all of your working time and effort to Soft-Com's affairs. You shall not be
employed by or devote substantial time to any other business. You may, however,
attend to personal and charitable activities that do not conflict with the
affairs of Soft-Com or your duties as President of Soft-Com Inc. Your duties
shall be those normally performed as President.
3. Standards: During the Employment Period, you shall manage the
affairs of Soft-Com Inc. in good faith, in the long-term best interests of the
Company and in accordance with law and Soft-Com's organizational documents. You
shall be subject to the direction of the Company's President & Chief Executive
Officer whom you shall keep informed of Soft-Com's affairs in accordance with
the normal business practices of a President of an operating subsidiary company.
4. Director: During the Employment Period, the Company shall nominate
you to be a director of the Company. The Company shall use its best efforts to
cause you to be elected and continue to remain a director of the Company and
Soft-Com Inc. during the Employment Period, unless you resign.
5. Base Salary: During the Employment Period, the Company will cause
Soft-Corn Inc. to pay you a base salary at a rate of $110,000 per annum (less
taxes and other amounts required to be withheld by law). The base salary shall
be paid to you in equal installments on the 15th day and the last day of each
month.
6. Commission/Review: For a period of 12 months from the commencement
date of this
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agreement you shall be entitled to receive commission at the rate of 10% based
on the achieved selling price of all sales of the UNITY windows version
software. For the avoidance of doubt, such commission is not applicable to any
other aspect of the sale of software such as hardware, installation, set-up
costs, maintenance or specific custom software enhancement. A Sale is defined as
an installed, accepted and invoiced customer. The payment due date of commission
will be in accordance with payment receipt from the respective customer and will
be included within the relative salary payment at the end of each monthly
period.
Following this first period of 12 months from the commencement date of
this agreement, the rate of commission will reduce to 5% under the same
parameters as above for the second 12 month period.
Following this first and second period of 12 months from the
commencement date of this agreement, the rate of commission will reduce to
2-1/2% under the same parameters as above for the remainder of this agreement.
The Company and John Perri will attempt to negotiate a salary review
and profit sharing arrangement before the end of the first 12 month period of
this agreement which will eliminate any further commissions due beyond this
point. Should agreement not be reached, the Company and John Perri will attempt
to negotiate a salary review and profit sharing arrangement before the end of
the second 12 month period of this agreement which will eliminate any further
commissions due beyond this point. No agreement need be reached on an
alternative compensation plan if the parties don't agree.
7. Benefit Plans: During the Employment Period, you may participate, on
the same terms the President/CEO is entitled to participate in which includes
any health insurance plan, pension plan, 401K plan, and similar benefit plans
the Company may maintain, at the Company's expense, for the benefit of its
employees. Additionally, the Company shall cause Soft-Com Inc. to continue to
contribute towards your current disability program up to an amount of $2,200 per
annum in substitution of the Company's standing disability program. The Company
shall cause Soft-Com Inc. to provide you with an automobile allowance of $885
per month for the purpose of leasing, maintaining and fueling an automobile of
your choice which payment is not dependent on the cost of such automobile.
8. Expenses: The Company shall cause Soft-Com Inc. to pay or reimburse
all your reasonable and properly documented travel, business, and other expenses
in the performance of services for Soft-Com and the Company during the
Employment Period.
9. Vacation: You shall be entitled to take one week of vacation during
each fiscal quarter during the Employment Period, which vacation, if not taken
in any such quarters, shall be cumulated with vacation accrued in a later
quarters. Perri will be paid for accrued and unused vacation upon termination of
this agreement.
10. Termination: (a) The Company may terminate your employment and your
position as a director of the Company by the unanimous vote of the Board of
Directors with your abstention
(1) if you shall die;
(2) if you shall become physically or mentally unable to
perform fully your duties under this agreement for a
continuous period exceeding four (4) months;
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(3) if you shall be unable to legally reside in the
United States;
(4) if you shall materially fail to perform your duties
as normally performed by an operating Subsidiary
President, which failure is likely to cause a
substantial adverse effect to such subsidiary;
(5) if you shall be formally convicted of a felony
involving moral turpitude, commit a fraudulent or
dishonest act against the Company or its
Subsidiaries, breach your fiduciary duty or breach
any other duty imposed by law on an officer;
(b) Upon any termination of your employment pursuant to Section
10(a), the Company shall not be obligated to make any payment
and shall have no further obligation under this agreement
except for the payment of base salary accrued under Section 5
and any commission payment accrued under Section 6 through the
date of such termination; this to include commission to be due
on all sales made prior to the termination date at the time of
payment on these sales from the respective customers. In the
event of termination pursuant to Section 10a(l) such
payment(s) will be made to your estate.
(c) Should the Company terminate this agreement other than for
reasons as provided within the agreement, the Company will be
liable to continue to pay the base salary as provided for
under section 5 for the remaining period of the agreement.
(d) John Perri shall have the right to terminate his employment at
any time for no reason upon giving 90 days prior written
notice to the Company and upon giving such notice. John Perri
shall be entitled to the payment of base salary accrued under
Section 5 any commission payment accrued under Section 6
through the date of such termination.
(e) Under all circumstances, the Company shall reimburse you for
expenses incurred by you as set forth in paragraph 8.
(f) The Company may terminate your position as a director of the
Company and Soft-Com Inc. and all your rights as director
under this agreement by the unanimous vote of the Board of
Directors, with your abstention, for cause that would permit
the removal of a director of a Delaware corporation for cause.
11. Competition: (a) For three years from the date of this Agreement,
regardless of whether or not your employment is terminated, you shall not
directly or indirectly engage in, invest in or support any competing business
which the Company and its subsidiaries is actively engaged in the United States
at the time of termination of this agreement.
(b) Engaging in, investing in or supporting any business includes
being an officer, director, owner, employee, shareholder or
partner or a beneficial owner of less than 5% of the
outstanding stock of a publicly traded company of such
business and includes assisting others in engaging in such
business and inducing employees of the Company or its
Subsidiaries to engage in such business.
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(c) Competing business includes any business substantially similar
to that of the Company or any of its subsidiaries at any time
during the term of this agreement or at the time you enter
into the competing business, in any geographical area in which
the Company or any of its subsidiaries does or is doing
business at any such time.
12. Confidentiality: (a) All equipment, notebooks, documents,
memoranda, reports, files, correspondence and other written or graphic records
affecting or relating to the Company or any of its affiliates or their business,
customers, property or processes that you may prepare, use, observe, possess or
control shall be and remain the Company's sole property. You shall not retain
any copy, note or abstract of any such materials or of any confidential
information after the end of your employment by the Company.
(b) You shall not at any time during or after your employment by
the Company, disclose, use, copy or make notes of any
confidential information except that (1) during the term of
your employment you may make disclosures in publicly filed or
released documents in accordance with securities laws, (2) you
may disclose information when compelled by law or judicial
process, (3) you may use, copy and make notes of information
in the ordinary exercise of your duties to the Company and (4)
you may disclose information to employees, officers,
directors, agents, customers and potential customers of the
Company.
(c) Confidential information includes all ideas, materials and
information you may learn, conceive, create, observe, prepare
or develop in the course of or in connection with your
employment by the Company concerning any matters affecting or
relating to the Company or its affiliates or their business,
customers, property or processes. It also includes any other
confidential or proprietary information you may have about the
Company, its affiliates or their business, customers, property
or processes. It does not include information in the public
domain before you use or disclose it.
(d) You shall promptly and fully disclose to the Company all
tangible work product, contacts or possible transactions with
customers and ideas, trade secrets or know-how made, developed
or conceived by you during the Employment Period (whether or
not conceived or developed during your working hours) with
respect to which the equipment, supplies, facilities or
information of the Company was used, which shall in any way
relate to the business conducted or contemplated to be
conducted by the Company or its affiliates. All such work
product, ideas, trade secrets and know-how shall be and remain
the sole and exclusive property of the Company. At the request
of the Company, you shall assist the Company in any reasonable
way (but at the Company's expense) to vest in the Company
title to all such product, ideas, trade secrets and know-how
and to obtain any patents, trademarks or copyrights thereon.
13. No conflict: You hereby represent to the Company that you are not a
party to, you are not bound by, nor have you agreed to become a party to any
employment, consulting, agency or other agreement or understanding (other than
this agreement) or any other agreement that could in any way conflict with this
agreement or your ability to perform your duties hereunder in accordance with
the standards set forth herein.
14. Miscellaneous: (a) This agreement constitutes the entire
understanding of the parties relating to the subject matter hereof. Neither
party shall be bound by any change, release or termination of this
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agreement unless it is in writing and signed by such party.
(b) If any provision of this agreement shall be
adjudicated to be invalid or unenforceable, such
provision shall be amended to delete therefrom the
portion thus adjudicated to be invalid or
unenforceable, such deletion to apply only for the
operation of such provision in the particular
jurisdiction in which such adjudication is made.
(c) If you breach or threaten to breach any provision of
this agreement, the Company shall be entitled to any
injunction restraining you from such breach. The
Company shall not be prohibited from pursuing any
other remedy available at law or equity for such
breach or threatened breach of this agreement.
(d) The Company shall withhold such amounts from any
compensation or other benefits referred to in this
agreement as payable to you on account of payroll and
other taxes as may be required by applicable law or
regulation of any governmental authority.
(e) Pennsylvania law governs this agreement.
(f) You may not assign any interest you have in this
agreement. The Company may assign this agreement to
any successor of its business upon which you shall
receive a minimum 30 days advance written notice of
assignment.
15. The Company agrees not to relocate you during the term of this
agreement except by mutual agreement between the parties hereto.
Please confirm your agreement to the foregoing by signing below. This
agreement will be effective when you have signed and returned a copy of this
agreement. The parties hereto, intending to be legally bound hereby, do agree to
all of the above terms and conditions.
CTI Group (Holdings) Inc.
Approved on behalf of the
Board of Directors
By: /s/ Anthony P. Johns and By: /s/ Mark H. Daugherty
------------------------------ ----------------------------
Anthony P. Johns, Chairman Mark H. Daugherty, Director
/s/ John Perri
- ---------------
John Perri
Attest:/s/ Lisa Ernst
--------------
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EXHIBIT 99.1
NEWS RELEASE
December 16, 1996
FOR IMMEDIATE RELEASE
for more information contact
Mark H. Daugherty, CFO
+1 610 666 1700
CTI Group Acquires Soft-Com Inc.
Telemanagement Companies Join Forces for
Technology Transfers and Market Synergies
Valley Forge, Pennsylvania USA. . .CTI Group (Holdings) Inc. (CTIG, NASD OTC
Bulletin Board) announced today that it has acquired Soft-Com Inc., a
privately-held New York telemanagement company, for a straight equity
consideration equivalent to approximately 12.5% of the combined companies'
equity. Soft-Com will operate as a wholly-owned subsidiary of CTIG under the new
name, CTI Soft-Com Inc., from its existing offices in New York City. John Perri,
President and CEO of Soft-Com, will joint CTIG's board of directors and will
assume the position of president of the new subsidiary which will be responsible
for all of the Group's combined telemanagement business.
The acquisition more than doubles CTIG's client base and strengthens the
Company's portfolio of telemanagement products which are used by companies,
institutions and government agencies to control costs associated with operating
telecommunications networks. For Soft-Com, Mr. Perri said, "The merger will
result in a broader market penetration for the UNITY Telemanagement Server.
Additionally, it unites complementary products of both companies, including
CTIG's Call Accounting Service Bureau, under the new CTI Soft-Com entity."
Soft-Com UNITY Server System supports Windows and Windows NT Server platforms
and adds advanced capabilities not currently available in CTIG's Service Bureau
or ITMS/III Telemanagement System, such as E-mail distribution of call
accounting reports over corporate LANs and WANs, and computer telephony
capabilities.
CTIG Chairman and CEO Anthony P. Johns said that the agreement benefits both
companies in several ways. Said Mr. Johns, "We pursued this merger because
Soft-Com's Unity product fills a gap with a state-of-the-art product offering.
Our telemanagement clients can now upgrade sooner with the Unity Server.
Furthermore, their engineering uses object-oriented methodology in parallel with
our own development program for telecommunications billing software."
<PAGE>
Mr. Johns said that the addition of Mr. Perri to CTIG's board of directors "will
strengthen the board and enhance its ability to allocate R&D resources more
cost-efficiently." Mr. Perri agreed that the R&D synergies of the combined
companies offer great promise for the future. Aside from benefits in the
telemanagement sector, Mr. Perri expressed excitement about CTIG's billing
products for providers of telecommunications services, which are attracting
increasing interest since passage of the Telecommunications Act of 1996. "CTIG's
Neptune Billing and Customer Care System for Windows NT Server is very
impressive," said Mr. Perri. "The enormous potential of this product in the hot
telecommunications billing market was influential in negotiating a straight
equity agreement in lieu of cash considerations."
CTIG, through its CTI Data Solutions (USA) Inc. subsidiary, designs, markets and
supports information processing software and services for managing
telecommunications systems. Business is conducted in two market sectors: billing
solutions for providers of telecommunications services and network management
solutions for corporate users of telecommunications services.
Soft-Com Inc. founded thirteen years ago designs, develops, and markets a wide
range of telemanagement products and currently serves an installed base in
excess of 4,000 sites.
For additional information, contact:
Mark H. Daugherty John Perri
Chief Financial Officer President and CEO
CTI Group (Holdings) Inc. Soft-Com Inc.
Valley Forge, Pennsylvania New York, NY
Telephone: +1 610 666 1700 Telephone: +1 212 242 9595
