SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
SCHEDULE 13D
(RULE 13D-101)
INFORMATION TO BE INCLUDED IN STATEMENT FILED PURSUANT
TO RULE 13D-1(A) AND AMENDMENT THERETO FILED PURSUANT TO
RULE 13D-2(A)
EGLOBE, INC.
-----------------------------------
(Name of Issuer)
Common Stock, par value $.001 per share
----------------------------------------
(Title of Class of Securities)
282339100
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(CUSIP NUMBER)
John J. Sicilian
Eastern Air Lines, Inc.
1221 Brickell Avenue, Suite 1780
Miami, Florida 33131
(305) 536-2246
---------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 20, 1999
---------------------------------------------
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a Statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because Rule 13d-1(e), 13d-1(f) or 13d-1(g) check the
following box [_].
(Continued on following pages)
(Page 1 of 10 pages)
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CUSIP No. 282339100 Page 2 of 10 Pages
1. Name of Reporting Person
I.R.S. Identification No. of Above Person
Outsourced Automated Services and Integrated Solutions, Inc.
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [X]
(b) [_]
3. SEC Use Only
4. Sources of Funds (See Instructions)
00
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Item 2(d) or 2(e) [X]
6. Citizenship or Place of Organization
Delaware
Number of 7. Sole Voting Power
Shares 0
Beneficially 8. Shared Voting Power
Owned by 1,500,000
Each 9. Sole Dispositive Power
Reporting 0
Person with 10. Shared Dispositive Power
1,500,000
11. Aggregate Amount Beneficially Owned by Each Reporting Person
1,500,000
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) [ ]
13. Percent of Class Represented by Amount in Row (11)
7.0%
14. Type of Reporting Person (See Instructions)
CO
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CUSIP No. 282339100 Page 3 of 10 Pages
1. Name of Reporting Person
I.R.S. Identification No. of Above Person
Eastern Air Lines, Inc.
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [X]
(b) [_]
3. SEC Use Only
4. Sources of Funds (See Instructions)
00
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Item 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
Delaware
Number of 7. Sole Voting Power
Shares 0
Beneficially 8. Shared Voting Power
Owned by 1,500,000
Each 9. Sole Dispositive Power
Reporting 0
Person with 10. Shared Dispositive Power
1,500,000
11. Aggregate Amount Beneficially Owned by Each Reporting Person
1,500,000
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) [ ]
13. Percent of Class Represented by Amount in Row (11)
7.0%
14. Type of Reporting Person (See Instructions)
CO
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CUSIP No. 282339100 Page 4 of 10 Pages
ITEM 1. SECURITY AND ISSUER.
The class of equity securities to which this Statement relates is the
Common Stock, par value $.001 per share (the "Common Stock"), of eGlobe, Inc., a
Delaware corporation (the "Issuer"). The Issuer's principal executive offices
are located at 1250 24th Street, NW, Suite 725, Washington D.C. 20037.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(c) This Statement is filed by Eastern Air Lines, Inc., a Delaware
corporation ("Eastern"), and its wholly owned, indirect subsidiary, Outsourced
Automated Services and Integrated Solutions, Inc., a Delaware corporation
("OASIS"). The principal business of Eastern and OASIS is to liquidate the
assets of Eastern Air Lines, Inc. and its subsidiaries. The principal executive
offices of Eastern and OASIS are located at 1221 Brickell Avenue, Suite 1780,
Miami, Florida 33131.
The name and present principal occupation or employment of each
director and executive officer of Eastern and OASIS is set forth below. Each
such person is a citizen of the United States of America. The business address
of each such person is 1221 Brickell Avenue, Suite 1780, Miami, Florida 33131.
John J. Sicilian is the sole director of Eastern and OASIS. Mr.
Sicilian is the Chairman and President of Eastern and the Chairman and Secretary
of OASIS.
J. Michael Jones is the President and Chief Operating Officer of OASIS.
Martin Gray is the Vice President of Marketing of OASIS.
William E. Ivie is the Vice President of Corporate Business Planning
and Development of OASIS.
Donald R. Taylor is the Vice President of Finance and Administration of
OASIS.
(d) and (e) Neither Eastern or OASIS nor, to the knowledge of Eastern
or OASIS, any of the other persons specified in Item 2 above has during the last
five years (i) been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and as a result
of such proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On September 20, 1999, the Issuer, acting through a newly formed
subsidiary, acquired control of OASIS Reservations Services, Inc. ("ORS"), a
Miami-based transaction support services and call center to the travel industry,
from OASIS. The Issuer and OASIS formed eGlobe/Oasis Reservations LLC ("EOR"),
which is responsible for conducting ORS' business operations. EOR
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CUSIP No. 282339100 Page 5 of 10 Pages
was funded by contributions from its members pursuant to that certain
Contribution Agreement dated as of September 15, 1999 (the "Contribution
Agreement") by and among the Issuer, OASIS, EOR, eGlobe/Oasis, Inc. and ORS, a
copy of which is attached as Exhibit 2.1 hereto, and related documents (the
"Transaction Agreements"). The Issuer issued 1,500,000 shares of Common Stock
valued at $3.0 million on the date of issuance, as its contribution to EOR. In
addition, the Issuer contributed warrants to purchase additional shares of
Common Stock to EOR as follows:
(a) Shares equal to the difference between $3.0 million and
the value of 1,500,000 shares which were contributed to EOR on the date that the
Shares are registered with the Securities and Exchange Commission ("SEC") (if
the value of the 1,500,000 shares on that date is less than $3.0 million);
(b) Shares equal to $100,000 for each 30-day period beyond 90
days following the date of contribution that the 1,500,000 shares (and the
shares of Common Stock underlying the warrants) contributed to EOR remain
unregistered with the SEC;
(c) Shares equal to up to $2.0 million, subject to adjustment
based upon EOR achieving certain revenue and EBITDA (earnings before interest,
taxes, depreciation, and amortization) targets; and
(d) Additional shares of Common Stock based upon (1) EOR
achieving revenue and EBITDA targets, and (2) the price of Common Stock at the
date of registration of the 1,500,000 shares with the SEC. Under certain
circumstances, these shares may be equal to the greater of (A) 50% of the
incremental revenue for the Second Measurement Period (as defined in the
Transaction Agreements) over $9,000,000 or (B) four times the incremental
Adjusted EBITDA (as defined in the Transaction Agreements) for the Second
Measurement Period (as defined in the Transaction Agreements) over $1,000,000;
provided, however, that such number of Shares shall not exceed the greater of
(x) 1,000,000 shares of Common Stock or (y) that number of shares of Common
Stock determined by dividing $8,000,000 by the Second Measurement Data Market
Value (as defined in the Transaction Agreements); and provided further, that if
the basis for the issuance of such shares is incremental revenue over $9,000,000
then EBITDA for the Second Measurement Period must be at least $1,000,000 for
revenue between $9,000,000 and $12,000,000 or at least $1,500,000 for revenue
above $12,000,000. Additionally, EOR may receive 500,000 shares of Common Stock
if the revenue for the Second Measurement Period is equal to or greater than
$37,000,000 and the Adjusted EBITDA for the Second Measurement Period is equal
to or greater than $5,000,000.
A copy of the form of warrants is attached as Exhibit 4.1 hereto. The
exercise of the warrants is subject to compliance with SEC and Nasdaq rules,
including the approval of the Issuer's stockholders with respect to the issuance
of 19.9% or more of the Issuer's shares outstanding on the date of contribution.
OASIS contributed all of the issued and outstanding shares of ORS as
its contribution to EOR. If the Issuer declares bankruptcy, as set forth in the
Operating Agreement of EOR, OASIS may redeem its interest in EOR in exchange for
the ORS shares. The Operating Agreement is attached as Exhibit 2.2 hereto.
Pursuant to EOR's Operating Agreement, EOR is an interim step to full
ownership of ORS
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CUSIP No. 282339100 Page 6 of 10 Pages
by the Issuer. Once the Issuer has either raised $10 million in new capital or
generated three (3) consecutive months of positive cash flow and registered the
shares issued in this transaction, EOR will be dissolved and ORS will become a
wholly owned subsidiary of the Issuer. Under these circumstances, OASIS would
receive the shares of Common Stock and warrants contributed to EOR by the
Issuer. Additionally, even if these conditions are not fulfilled, OASIS has the
right to redeem its interest in EOR at any time in exchange for the shares of
Common Stock issued to EOR and the warrants.
In connection with the purchase and installation of equipment and
leasehold improvements at ORS' new facility in Miami, Florida, OASIS agreed to
loan ORS up to $451,400. The loan is required to be repaid in six (6) equal
quarterly principal installments beginning November 30, 1999. The Issuer
guaranteed ORS' obligations under such loan and granted to OASIS a security
interest in its ownership interest in EOR. The Guaranty and the Pledge Agreement
are attached as Exhibits 10.1 and 10.2, respectively.
Eastern and OASIS have entered into an agreement whereby OASIS will
transfer to Eastern, at Eastern's request, the shares of Common Stock and
warrants contributed by the Issuer pursuant to the above mentioned transactions.
The foregoing description does not purport to be complete and is
qualified in its entirety by reference to the Transaction Agreements attached
hereto, each of which is incorporated herein by reference.
ITEM 4. PURPOSE OF TRANSACTION.
OASIS and Eastern have entered into the above mentioned transactions to
acquire the shares of Common Stock for investment purposes. OASIS and Eastern
will continue to evaluate their investment in the Issuer on the basis of various
factors, including the Issuer's business, financial condition, results of
operations and prospects, general economic and industry conditions, the
securities markets in general and those for the Issuer's securities in
particular, their own financial condition, other investment opportunities and
other future developments. Based upon such evaluation, OASIS and Eastern will
take such actions in the future as OASIS and Eastern may deem appropriate in
light of the circumstances existing from time to time. Depending on market and
other factors, OASIS and Eastern may determine to dispose of all or a portion of
the shares of Common Stock or warrants, or the shares issuable upon exercise of
the warrants or to enter into option or other transactions (including, without
limitation, hedging transactions) with third parties with respect to the shares.
Except as set forth in Item 3 or Item 4, OASIS and Eastern have no
plans or proposals with respect to any of the actions specified in clauses (a)
through (j) of Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of the close of business on October 26, 1999, OASIS and Eastern
beneficially owned 1,500,000 shares of Common Stock. Such shares represent
approximately 7.0% of the outstanding Shares (computed on the basis of
20,064,043 Shares outstanding as of August 1, 1999
<PAGE>
CUSIP No. 282339100 Page 7 of 10 Pages
as specified in the Issuer's Quarterly Report on Form 10-Q for the Quarterly
Period ended June 30, 1999, plus 1,500,000 Shares issuable pursuant to the above
mentioned transactions).
To the knowledge of OASIS and Eastern, none of OASIS' or Eastern's
directors, executive officers, affiliates or associates beneficially owns any
equity securities, or rights to acquire any equity securities, of the Issuer.
(b) OASIS and Eastern share the power to vote or to direct the
vote, and to dispose or to direct the disposition of, the
1,500,000 Shares.
(c) None.
(d) No other person has the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the
sale of, any of the 1,500,000 shares of Common Stock.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Except as described in Item 3 above, to the knowledge of OASIS and
Eastern, there are no other contracts, arrangements, understandings or
relationships (legal or otherwise) among the persons named in Item 2 above and
between such persons and any other person with respect to any securities of the
Issuer, including, but not limited to, transfer or voting of any of such
securities, finder's fees, joint ventures, loan or option arrangements, puts or
calls, guarantees of profits, division of profits or loss, or the giving or
withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 2.1 Contribution Agreement by and among eGlobe, Inc.,
eGlobe/OASIS, Inc., OASIS Reservations Services, Inc.,
Outsourced Automated Services and Integrated Solutions, Inc.
and eGlobe/OASIS Reservations LLC, dated as of September 15,
1999.
Exhibit 2.2 Operating Agreement of eGlobe/OASIS Reservations LLC by and
between eGlobe/OASIS, Inc. and Outsourced Automated Services
and Integrated Solutions, Inc., dated as of September 15,
1999.
Exhibit 4.1 Form of Warrants to purchase Common Stock of eGlobe, Inc.,
dated as of September 15, 1999.
Exhibit 10.1 Guaranty made by eGlobe, Inc. in favor of Outsourced Automated
Services and Integrated Solutions, Inc. dated as of September
15, 1999.
Exhibit 10.2 Pledge Agreement by and between eGlobe, Inc. and Outsourced
Automated Services
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CUSIP No. 282339100 Page 8 of 10 Pages
and Integrated Solutions, Inc. dated as of September 15, 1999.
<PAGE>
CUSIP No. 282339100 Page 9 of 10 Pages
SIGNATURES
After reasonable inquiry and to the best of their knowledge and belief,
the undersigned certify that the information set forth in this Statement is
true, complete and correct.
Date: October 26, 1999
OUTSOURCED AUTOMATED SERVICES AND
INTEGRATED SOLUTIONS, INC.
By: /s/ JOHN J. SICILIAN
--------------------------
John J. Sicilian
Chairman
EASTERN AIR LINES, INC.
By: /s/ JOHN J. SICILIAN
--------------------------
John J. Sicilian
Chairman
JOINT FILING AGREEMENT
The undersigned each hereby agree that the Schedule 13D dated October
26, 1999, which relates to the common stock of the Issuer, is to be filed
jointly on behalf of each of them for the reasons stated therein, and any
amendments thereto shall be filed jointly by the undersigned.
Date: October 26, 1999
OUTSOURCED AUTOMATED SERVICES AND
INTEGRATED SOLUTIONS, INC.
By: /s/ JOHN J. SICILIAN
--------------------------
John J. Sicilian
Chairman
EASTERN AIR LINES, INC.
By: /s/ JOHN J. SICILIAN
--------------------------
John J. Sicilian
Chairman
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CUSIP No. 282339100 Page 10 of 10 Pages
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
2.1 Contribution Agreement by and among eGlobe, Inc.,
eGlobe/OASIS, Inc., OASIS Reservations Services, Inc.,
Outsourced Automated Services and Integrated Solutions, Inc.
and eGlobe/OASIS Reservations LLC, dated as of September 15,
1999.
2.2 Operating Agreement of eGlobe/OASIS Reservations LLC by and
between eGlobe/OASIS, Inc. and Outsourced Automated Services
and Integrated Solutions, Inc., dated as of September 15,
1999.
4.1 Form of Warrants to purchase Common Stock of eGlobe, Inc.,
dated as of September 15, 1999.
10.1 Guaranty made by eGlobe, Inc. in favor of Outsourced Automated
Services and Integrated Solutions, Inc. dated as of September
15, 1999.
10.2 Pledge Agreement by eGlobe, Inc. in favor of Outsourced
Automated Services and Integrated Solutions, Inc. dated as of
September 15, 1999.
EXHIBIT 2.1
CONTRIBUTION AGREEMENT
BY AND AMONG
EGLOBE, INC., EGLOBE/OASIS, INC.
OASIS RESERVATIONS SERVICES, INC.,
OUTSOURCED AUTOMATED SERVICES AND
INTEGRATED SOLUTIONS, INC. AND
EGLOBE/OASIS RESERVATIONS LLC
Dated as of the _______ day of September, 1999
<PAGE>
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this "Agreement") is entered into this ___
day of September, 1999, by and among EGLOBE, INC., a Delaware corporation
("EGLOBE"); EGLOBE/OASIS, INC., a Delaware corporation ("EOI"); OASIS
RESERVATIONS SERVICES, INC., a Delaware corporation (the "Company"); OUTSOURCED
AUTOMATED SERVICES AND INTEGRATED SOLUTIONS, INC., a Delaware corporation
("OASIS"); and EGLOBE/OASIS RESERVATIONS LLC, a Delaware limited liability
company (the "LLC").
RECITALS:
A. OASIS and EOI have formed LLC for the purpose of acquiring the
outstanding shares of the Company and operating the business currently conducted
by the Company.
B. OASIS currently owns all the outstanding stock of the Company.
C. EGLOBE currently owns all of the outstanding common stock of EOI.
D. OASIS has agreed to contribute all of the outstanding shares of the
Company to the LLC in exchange for an interest in the LLC, as more fully set
forth in this Agreement.
E. EGLOBE has agreed to contribute to EOI, and EOI has agreed to
contribute to the LLC, shares of the common stock, par value $.001 per share, of
EGLOBE (the "EGLOBE Common Stock") and certain Warrants of EGLOBE ("EGLOBE
Warrants") in exchange for an interest in the LLC, as more fully set forth in
this Agreement.
NOW THEREFORE, in consideration of the mutual promises set forth in
this Agreement, the parties hereby agree as follows:
ARTICLE I
CONTRIBUTIONS TO LLC
SECTION 1.1. CONTRIBUTION OF COMPANY COMMON STOCK.
Subject to the terms and conditions of this Agreement, at the
Closing (as defined below), OASIS shall contribute and deliver to the LLC, and
the LLC shall acquire from OASIS, all of the outstanding capital stock of the
Company, consisting of 1,000 shares of common stock, par value $.01 per share
(the "Company Common Stock").
SECTION 1.2. CONTRIBUTION OF EGLOBE COMMON STOCK AND EGLOBE WARRANTS.
Subject to the terms and conditions of this Agreement, at the
Closing, EGLOBE shall contribute and deliver to EOI, and EOI shall contribute
and deliver to the LLC,
<PAGE>
shares of EGLOBE Common Stock and the EGLOBE Warrants pursuant to the terms and
conditions of the Side Letter between the parties (the "Side Letter"), in the
form of EXHIBIT A. The EGLOBE Warrants shall be in the form of EXHIBITS B-1, B-2
AND B-3 to this Agreement. The shares of EGLOBE Common Stock and the EGLOBE
Warrants to be issued to the LLC are collectively referred to as the "EGLOBE
Securities."
SECTION 1.3. CLOSING.
Subject to the terms and conditions of this Agreement, the closing of the
transactions contemplated by this Agreement (the "Closing") will take place as
promptly as practicable after satisfaction of the latest to occur or, if
permissible, waiver of the conditions set forth in Article VII hereof (the
"Closing Date"), at the offices of EGLOBE, 1250 24th Street, N.W., Suite 725,
Washington, DC 20037 unless another date or place is agreed to in writing by the
parties hereto.
SECTION 1.4. DELIVERIES AT CLOSING.
(a) At the Closing, OASIS shall deliver to the LLC (i)
certificates representing the Company Shares, duly endorsed or accompanied by
stock powers duly executed in blank; (ii) the minute books and stock records of
the Company; and (iii) resignations of the officers and directors of the
Company.
(b) At the Closing, EGLOBE shall deliver to EOI, and EOI shall
deliver to the LLC instruments evidencing the EGLOBE Securities.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF OASIS AND THE COMPANY
OASIS and the Company hereby jointly and severally represent and
warrant to EGLOBE, EOI and the LLC as follows:
SECTION 2.1. ORGANIZATION AND QUALIFICATION.
The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. The Company has
the requisite power and authority to own, operate, lease and otherwise to hold
and operate its assets and properties and to carry on its business as now being
conducted and as proposed to be conducted and to perform the terms of this
Agreement and the transactions contemplated hereby. The Company is duly
qualified to conduct its business, and is in good standing in each jurisdiction
in which the character of its properties owned, operated or leased or the nature
of its activities makes such qualification necessary. The Company has no
subsidiaries or any equity interest or other investment in any person.
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<PAGE>
SECTION 2.2. CERTIFICATE OF INCORPORATION AND BYLAWS.
The Company has heretofore delivered to EGLOBE complete and
correct copies of the certificate of incorporation and bylaws of the Company and
OASIS, each as amended to date. Such certificate of incorporation, bylaws and
other organizational or governing documents are in full force and effect.
Neither the Company nor OASIS is in violation of any of the provisions of its
certificate of incorporation or bylaws or other organizational or governing
document.
SECTION 2.3. CAPITALIZATION.
(a) The authorized capital stock of the Company consists of
one thousand (1,000) shares of Company Common Stock, of which one thousand
(1,000) shares are issued and outstanding. All of the issued and outstanding
shares of Company Common Stock are owned beneficially and of record by OASIS
free and clear of all Encumbrances There are no options, warrants or other
rights, agreements, arrangements or commitments of any character relating to the
issued or unissued capital stock of the Company or obligating the Company to
issue or sell any shares of capital stock of, or other equity interests in, the
Company, including any securities directly or indirectly convertible into or
exercisable or exchangeable for any capital stock or other equity securities of
the Company. There are no outstanding obligations of the Company to repurchase,
redeem or otherwise acquire any shares of its capital stock or make any
investment (in the form of a loan, capital contribution or otherwise) in any
other person. All of the issued and outstanding shares of Company Common Stock
have been duly authorized and validly issued in accordance with applicable laws
and are fully paid and nonassessable and not subject to preemptive rights. No
shares of capital stock of the Company have been reserved for any purpose.
(b) Except as set forth in Schedule 2.3, the Company has no
outstanding indebtedness for borrowed money, except for operating expenses
incurred in the ordinary course of business.
SECTION 2.4. NET WORKING CAPITAL.
The Net Working Capital of the Company as of July 31, 1999 was
$(21,825). Since July 31, 1999, there has not been any material change in the
Company's Net Working Capital, other than normal recurring damages arising in
the ordinary cause of business. For purposes of this Section 2.4, the Net
Working Capital of the Company shall be calculated in accordance with Schedule
2.4 to this Agreement.
SECTION 2.5. AUTHORITY.
The execution and delivery of this Agreement by the Company
and the consummation by the Company of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate (including
stockholder) action and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement
3
<PAGE>
or to consummate the transactions contemplated hereby. This Agreement has been
duly executed and delivered by the Company and, assuming the due authorization,
execution and delivery by the other parties, constitutes a legal, valid and
binding obligation of the Company, enforceable in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general applicability
relating to or affecting creditors' rights generally and by the application of
general principles of equity.
SECTION 2.6. NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) Except as set forth in Schedule 2.6, the execution and
delivery of this Agreement by the Company does not, and the performance by the
Company of its obligations under this Agreement will not, (i) conflict with or
violate the certificate of incorporation or bylaws of the Company, (ii) conflict
with or violate any Law to which the Company is bound or by which any of the
Assets is subject, or (iii) result in any breach of or constitute a default (or
an event which with notice or lapse of time or both would become a default)
under any material note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which the
Company is a party or by which the Company is bound or by which any of the
Assets is subject.
(b) Except as set forth in Schedule 2.6, the execution and
delivery of this Agreement by the Company does not, and the performance of this
Agreement by the Company will not, require any consent, approval, authorization
or permit of, or filing with or notification to, any Government Entity.
SECTION 2.7. FINANCIAL STATEMENTS.
(a) The Company has prepared and furnished to EGLOBE (a) an
audited balance sheet of the Company as of December 31, 1998, and the audited
statement of income and cash flows for the period from June 1, 1998 (inception)
through December 31, 1998 and (b) the unaudited balance sheet of the Company as
of June 30, 1999 (the "Financial Statements Date"), and the unaudited statement
of income and cash flows for the six months then ended. The financial statements
referred to in this Section 2.7 and other financial statements of the Company
provided to EGLOBE pursuant to this Agreement (the "Financial Statements")
present fairly, in all material respects, the financial condition of the Company
as of the respective dates and the results of operations and cash flows for the
respective periods indicated and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved (except that such unaudited statements do not contain all
required footnotes and are subject to normal recurring year-end adjustments).
(b) Since the Financial Statements Date, the Company has
incurred no liabilities, contingent or absolute, matured or unmatured, known or
unknown, except for liabilities incurred in the ordinary course of business,
those liabilities described on Schedule 2.7 and those liabilities, if any, which
would not have a Company Material Adverse Effect.
4
<PAGE>
SECTION 2.8. ACCOUNTS RECEIVABLE.
The accounts receivable of the Company shown on Schedule 2.8,
if any, or thereafter acquired by the Company, have been collected or are bona
fide, arose in the ordinary course of business, and to the Company's and OASIS's
knowledge, are not subject to any disputes or offsets.
SECTION 2.9. OWNERSHIP AND CONDITION OF THE ASSETS.
The Company is the sole and exclusive legal and equitable
owner of and has good and marketable title to the Assets listed on Schedule 2.9
to this Agreement and such Assets are free and clear of all Encumbrances except
as indicated on Schedule 2.7. No Person or Government Entity has an option to
purchase, right of first refusal or other similar right with respect to all or
any part of the Assets. All of the personal property of the Company used in the
operation of its business is in good working order and repair, ordinary wear and
tear excepted, and is suitable and adequate for the uses for which it is
intended or is being used.
SECTION 2.10. LEASES.
Schedule 2.10 lists and briefly describes all Material Leases
under which the Company is lessee or lessor of any Asset, or holds, manages or
operates any Asset owned by any third party, or under which any Asset owned by
the Company is held, operated or managed by a third party. The Company is the
owner and holder of all leasehold estates purported to be granted to the Company
by the Material Leases described in Schedule 2.10, free and clear of all
Encumbrances. Each such Material Lease is in full force and effect and
constitutes a legal, valid and binding obligation of, and is legally enforceable
against, the respective parties thereto and grants the leasehold estate it
purports to grant free and clear of all Encumbrances. The Company has performed
in all material respects all obligations thereunder required to be performed by
the Company to date. No party is in default in any material respect under any
Material Lease, and to the Company's and OASIS's knowledge, there has not
occurred any event which (whether with or without notice, lapse of time or the
happening or occurrence of any other event) would constitute such a default.
SECTION 2.11. MATERIAL CONTRACTS.
Schedule 2.11 lists all Material Contracts to which the
Company is a party or by which the Company is bound, and the Company has
delivered to EGLOBE true and correct copies of all such agreements. Each such
Material Contract is in full force and effect and constitutes a legal, valid and
binding obligation of, and is legally enforceable against, the respective
parties thereto. The Company has performed in all material respects all the
obligations thereunder required to be performed by the Company to date. No party
is in default in any material respect under any of the Material Contracts, and
there has not occurred any event which (whether with or without notice, lapse of
time or the happening or occurrence of any other event) would constitute such a
default.
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SECTION 2.12. LEASEHOLD INTERESTS.
Schedule 2.12 contains a list and brief description of all
interests in real estate owned by the Company, which interests consist
exclusively of leasehold interests (collectively, the "Leasehold Interests").
The Leasehold Interests described in Schedule 2.12 constitutes all real property
interests necessary to conduct the business and operations of the Company as now
conducted. The Company is not aware of any easement or other real property
interest, other than those described in Schedule 2.12, that is required, or that
has been asserted by a Government Entity or other person to be required, to
conduct the business and operations of the Company. Except as noted in Schedule
2.12, the Company has delivered to EGLOBE true and complete copies of all leases
and other instruments pertaining to the Leasehold Interests (including any and
all amendments and other modifications of such instruments). All Leasehold
Interests (including the improvements thereon) (i) are in good condition and
repair consistent with their present use, (ii) are available to the Company for
immediate use in the conduct of the Company's business and operations, and (iii)
to the knowledge of the Company and OASIS, comply in all material respects with
all applicable building or zoning codes and the regulations of any Government
Entity having jurisdiction over such Leasehold Interests.
SECTION 2.13. ENVIRONMENTAL MATTERS.
(a) The Company has complied in all material respects and is
in material compliance with all Environmental Laws. The Company has no fixed
assets, owned or leased. There are no pending or, to the knowledge of the
Company and OASIS, threatened actions, suits, claims, legal proceedings or other
proceedings against the Company based on, and the Company has not directly or
indirectly received any notice of any complaint, order, directive, citation,
notice of responsibility, notice of potential responsibility, or information
request from any Government Entity or any other Person arising out of or
attributable to: (i) the current or past presence at any part of the Leasehold
Interests of Hazardous Materials (as defined below) or any substances that pose
a hazard to human health or an impediment to working conditions; (ii) the
current or past release or threatened release into the environment from the
Leasehold Interests (including, without limitation, into any storm drain, sewer,
septic system or publicly owned treatment works) of any Hazardous Materials or
any substances that pose a hazard to human health or an impediment to working
conditions; (iii) the off-site disposal of Hazardous Materials originating on or
from the Leasehold Interests; (iv) any operations or procedures of the Company
which do not conform to requirements of the Environmental Laws; or (v) any
violation of Environmental Laws at any part of the Leasehold Interests or
otherwise arising from the Company's activities involving Hazardous Materials.
(b) As used herein, these terms shall have the following
meanings:
(i) "Environmental Laws" means all applicable foreign,
federal, state and local laws (including the common law), rules, requirements
and regulations relating to pollution, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) or protection of human health as it relates to the environment
including, without limitation, laws and regulations relating to releases of
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Hazardous Materials, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials or relating to management of asbestos in buildings.
(ii) "Hazardous Materials" means wastes, substances, or
materials (whether solids, liquids or gases) that are deemed hazardous, toxic,
pollutants, or contaminants, including without limitation, substances defined as
"hazardous substances", "toxic substances", "radioactive materials", or other
similar designations in, or otherwise subject to regulation under, any
Environmental Laws.
SECTION 2.14. LITIGATION.
Except as described on Schedule 2.14, there is no action,
suit, investigation, claim, arbitration or litigation pending or, to the
knowledge of the Company and OASIS, threatened against or involving the Company,
the Assets or the business and operations of the Company, at law or in equity,
or before or by any court, arbitrator or Government Entity. Except as described
on Schedule 2.14, the Company is not operating under or subject to any judgment,
writ, order, injunction, award or decree of any court, judge, justice or
magistrate, including any bankruptcy court or judge, or any order of or by any
Government Entity.
SECTION 2.15. COMPLIANCE WITH LAWS; LICENSES AND PERMITS.
The Company has complied and is in compliance in all material
respects with all laws, ordinances, regulations, awards, orders, judgments,
decrees and injunctions applicable to the Company, the Assets and the Company's
business and operations, including all federal, state and local laws,
ordinances, regulations and orders pertaining to employment or labor, safety,
health, environmental protection, zoning and other matters. The Company has
obtained and holds all permits, licenses and approvals (none of which has been
modified or rescinded and all of which are in full force and effect) from all
Governmental Entities necessary to conduct the business and operations of the
Company as now conducted and to own, use and maintain the Assets.
SECTION 2.16. INTELLECTUAL PROPERTY.
(a) The Company owns, or is licensed or otherwise possesses
all necessary rights to use all patents, trademarks, trade names, service marks,
copyrights and any applications therefor, maskworks, net lists, schematics,
technology, know-how, trade secrets, inventory, ideas, algorithms, processes,
computer software programs and applications (in both source code and object code
form), and tangible or intangible proprietary information or material
("Intellectual Property") that are used or marketed in the business of the
Company as presently conducted.
(b) Schedule 2.16 lists all (i) patents, registered and
unregistered trademarks, trade names and service marks, registered and
unregistered copyrights, and maskworks, included in the Intellectual Property,
including the jurisdictions in which each such
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Intellectual Property right has been issued or registered or in which any
application for such issuance and registration has been filed, (ii) licenses,
sublicenses and other agreements as to which the Company is a party and pursuant
to which any person is authorized to use any Intellectual Property, and (iii)
licenses, sublicenses and other agreements as to which the Company is a party
and pursuant to which the Company is authorized to use any third party patents,
trademarks or copyrights, including software ("Third Party Intellectual Property
Rights") which are incorporated, or form a part of, any Company product.
(c) To the knowledge of the Company and OASIS, there is no
unauthorized use, disclosure, infringement or misappropriation of any
Intellectual Property rights of the Company, any trade secret material to the
Company, or any Intellectual Property right of any third party to the extent
licensed by or through the Company, by any third party, including any employee
or former employee of the Company. Except as set forth in Schedule 2.16, the
Company has not entered into any agreement to indemnify any other person against
any charge of infringement of any Intellectual Property. Except as set forth in
Schedule 2.16, there are no royalties, fees or other payments payable by the
Company to any person by reason of the ownership, use, sale or disposition of
Intellectual Property.
(d) The Company is not, nor will it be as a result of the
execution and delivery of this Agreement or the performance of it obligations
under this Agreement, in breach of any license, sublicense or other agreement
relating to the Intellectual Property or Third Party Intellectual Property
Rights.
(e) The Company (i) has not been served with process, and is
not aware that any Person is intending to serve process on the Company, in any
suit, action or proceeding which involves a claim of infringement of any
patents, trademarks, service marks, copyrights or violation of any trade secret
or other proprietary right of any third party and (ii) has not brought any
action, suit or proceeding for infringement of Intellectual Property or breach
of any license or agreement involving Intellectual Property against any third
party. To the knowledge of the Company, the business of the Company as presently
conducted does not infringe any patent, trademark, service mark, copyright,
trade secret or other propriety right of any third party.
SECTION 2.17. TAXES AND ASSESSMENTS.
(a) Except as described on Schedule 2.17, the Company has paid
or reserved for all Taxes, due and payable for or with respect to all periods up
to and including the date hereof (without regard to whether or not such Taxes
are or were disputed), whether or not shown on any Tax Return.
(b) The Company has filed on a timely basis all Tax Returns
that it was required to file except for Tax Returns for the year which includes
the Closing Date. All such Tax Returns were accurate and complete in all
material respects. Except as described on Schedule 2.17, the Company is not the
beneficiary of any extension of time within which to file any Tax Return. No
claim that has not been resolved has ever been made by an authority in a
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jurisdiction where the Company does not file Tax Returns that it is or may be
subject to taxation by that jurisdiction. The Company has not given any
currently effective waiver of any statute of limitations in respect of Taxes or
agreed to any currently effective extension of time with respect to a Tax
assessment or deficiency. There are no security interests on any of the assets
of the Company that arose in connection with any failure (or alleged failure) to
pay any Tax.
(c) The Company has withheld and paid all Taxes required to
have been withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder or other third party
except for such withholding or payments to be made at or before Closing.
(d) Neither the Company, including any director, officer or
employee responsible for tax matters of the Company, or OASIS, including any
director, officer or employee responsible for tax matters of OASIS, is aware of
any facts or circumstances which could give rise to a reasonable expectation
that any authority may assess any additional Taxes for any period for which Tax
Returns have been filed. There is no dispute or claim concerning any liability
for Taxes of the Company either (i) claimed or raised by any authority in
writing or (ii) as to which such Company has knowledge based upon personal
contact with any agent of such authority. The Company has delivered to EGLOBE
correct and complete copies of all federal income Tax Returns, examination
reports, and statements of deficiencies assessed against or agreed to by any of
the Companies since December 31, 1995. Schedule 2.17 sets forth a complete and
accurate list of Company Tax Returns filed with respect to the taxable periods
of the Company ended on or after December 31, 1995; indicates those Company Tax
Returns that have been audited; and indicates those Company Tax Returns that
currently are the subject of an audit.
(e) The unpaid Taxes of the Company (i) did not, as of the
date of the most recent audited financial statements of the Companies furnished
to EGLOBE on or prior to the date hereof pursuant to Section 2.7, exceed the
reserve for Tax Liability (as opposed to any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) set forth
on the face of the such financial statements, and (ii) do not exceed that
reserve as adjusted for the passage of time through the Closing Date in
accordance with the past custom and practice of the Company in filing its
Company Tax Returns.
(f) The Company has not filed a consent under Section 341(f)
of the Code concerning collapsible corporations. The Company has not made any
payment, is not obligated to make any payment and is not a party to any
agreement that under certain circumstances could obligate it to make any
payments that will not be deductible under Section 280G of the Code. Except as
set forth on Schedule 2.17, the Company has disclosed on its federal income
Company Tax Returns all positions taken therein that could reasonably be
expected to give rise to a substantial understatement of federal income Tax
within the meaning of Section 6662 of the Code. Except as set forth on Schedule
2.17, the Company is not a party to any Tax allocation or sharing agreement. The
Company has not been a member of Affiliated Group filing a consolidated federal
income Tax Return other than a group the common parent of which is OASIS. The
Company has no Liability for the Taxes of any Person
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(other than the Company) under Treas. Reg. Section 1.1502-6 (or any similar
provision of state, local, or foreign law), as a transferee or successor, by
contract or otherwise.
(g) Section 2.17 sets forth the following information with
respect to the Company as of the date hereof: (i) the federal income tax basis
of the Company in its assets; and (ii) the amount of any net operating loss
carryover, net capital loss carryover, unused investment, foreign tax or other
credit, or excess charitable contribution allocable to the Company.
(h) Each Affiliated Group has filed all income Tax Returns
that it was required to file for each taxable period during which the Company
was a member of group. All such Tax Returns were correct and complete in all
respects. All income Taxes owed by any Affiliated Group (whether or not shown on
any Tax Return) have been paid for each taxable period during which the Company
was a member of the group.
(i) OASIS, including any director, officer or employee
responsible for tax matters of OASIS or any of its Subsidiaries, is not aware
that any authority intends to assess any additional income Taxes against any
Affiliated Group for any taxable period during which the Company was a member of
the group. There is no dispute or claim concerning any income Tax Liability of
any Affiliated Group for any taxable period during which the Company was a
member of the group either (A) claimed or raised by any authority in writing or
(B) as to which OASIS, including any director, officer or employee responsible
for tax matters of OASIS or any of its Subsidiaries, has knowledge based upon
personal contact with any agent of such authority. Except as disclosed at
Schedule 2.17, no Affiliated Group has waived any statute of limitations in
respect of any income Taxes or agreed to any extension of time with respect to
an income Tax assessment or deficiency for any taxable period during which the
Company was a member of the group.
SECTION 2.18. EMPLOYMENT MATTERS.
(a) Neither the Company nor any Employee Benefit Plan
maintained by the Company or to which the Company has or has had the obligation
to contribute in respect of any current or former Company employees is in
violation of any provisions of Law (including without limitation, if such
Employee Benefit Plan is intended by the Company to satisfy the requirements for
tax qualification described in Section 401 of the Code, the Code and the
requirements for tax qualification described in Section 401 thereof); no
reportable event, within the meaning of ERISA, ' 4043(c)(1), (2), (3), (5), (6),
(7) or (10), has occurred and is continuing with respect to any such Employee
Benefit Plan and no prohibited transaction, within the meaning of Title I of
ERISA, has occurred with respect to any such Employee Benefit Plan. No Employee
Benefit Plan maintained by the Company is a Multiemployer Plan (as such term is
defined in ERISA), is subject to Title IV of ERISA or provides post-retirement
medical, life insurance or other benefits except to the extent required to
comply with the health care continuation coverage requirements of ERISA and the
Code. Except as set forth in Schedule 2.18, the Company does not (i) maintain
and has never maintained any Employee Benefit Plan or Other Arrangement, (ii) is
or ever has been a party to any Employee Benefit Plan
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or Other Arrangement or (iii) have obligations under any Employee Benefit Plan
or Other Arrangement.
(b) There are no collective bargaining agreements applicable
to any Company employees and the Company has no duty to bargain with any labor
organization with respect to any such persons. There is not pending any demand
for recognition or any other request or demand from a labor organization for
representative status with respect to any persons employed by the Company.
(c) Schedule 2.18 contains a true and complete list of names,
positions and rates of compensation of all employees of the Company. With
respect to any persons employed by the Company, to the Company's and OASIS'
knowledge, the Company is in compliance with all Laws respecting employment
conditions and practices, has withheld all amounts required by any applicable
Laws to be withheld from wages or any Taxes or penalties for failure to comply
with any of the foregoing.
(d) With respect to any Persons employed by the Company, (i)
the Company has not engaged in any unfair labor practice within the meaning of
the National Labor Relations Act and has not violated any legal requirement
prohibiting discrimination on the basis of race, color, national origin, sex,
religion, age, marital status, or handicap in its employment conditions or
practices; and (ii) there are no pending or, to the knowledge of the Company and
OASIS, threatened unfair labor practice charges or discrimination complaints
relating to race, color, national origin, sex, religion, age, marital status, or
handicap against the Company before any Government Entity nor, to the knowledge
of the Company and OASIS, does any basis therefor exist.
(e) No Employee Benefit Plan or Other Arrangement,
individually or collectively, provides for any payment by the Company to any
employee or independent contractor that is not deductible under Section
162(a)(1) or 404 of the Code or that is an "excess parachute payment" pursuant
to Section 280G of the Code.
SECTION 2.19. TRANSACTIONS WITH RELATED PARTIES.
Except as set forth in Schedule 2.19, to the knowledge of the
Company, neither any present or former officer, director, stockholder or Person
known by the Company to be an affiliate of the Company, nor any Person known by
the Company to be an affiliate of any such Person, is currently a party to any
transaction or agreement with the Company, including, without limitation, any
agreement providing for the employment of, furnishing of services by, rental of
Assets from or to, or otherwise requiring payments to, any such officer,
director, stockholder or affiliate. Schedule 2.19 sets forth all amounts
currently owed by the Company to OASIS or any affiliate of the Company
(including amounts charged for administrative, purchasing, data access,
licensing, financial or other services).
SECTION 2.20. INSURANCE.
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The Company has made available to EGLOBE copies of all
policies of title, property, fire, casualty, liability, life, workmen's
compensation, libel and slander, and other forms of insurance of any kind
relating to the Assets or the business and operations of the Company. All such
policies: (a) are in full force and effect; (b) are sufficient for compliance by
the Company with all requirements of applicable Law and of all licenses,
franchises and other agreements to which the Company is a party; (c) are valid,
outstanding, and enforceable policies; and (d) insure against risks of the kind
customarily insured against and in amounts customarily carried by corporations
similarly situated and provide adequate insurance coverage for the Assets and
the business and operations of the Company.
SECTION 2.21. VOTING REQUIREMENTS.
The affirmative vote of the holder of a majority of all
outstanding shares of the Company Common Stock to adopt this Agreement (the
"Company Stockholder Approval"), which such Company Stockholder Approval has
been obtained, is the only vote of the holders of any class or series of the
Company's capital stock necessary to approve and adopt this Agreement and the
transactions contemplated hereby.
SECTION 2.22. BROKERS.
Except as set forth on Schedule 2.22, no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Company.
SECTION 2.23. COMPLIANCE WITH FOREIGN CORRUPT PRACTICES ACT.
The Company represents and warrants that it is not in
violation of the Foreign Corrupt Practices Act of 1977, as amended, which
prohibits businesses and businesspeople from providing any payment or gratuity
to foreign officials in exchange or obtaining or retaining business.
SECTION 2.24. DISCLOSURE.
No representations or warranties by the Company or OASIS in
this Agreement and no statement or information contained in the Schedules hereto
or any certificate furnished or to be furnished by the Company or OASIS to
EGLOBE pursuant to the provisions of this Agreement (taken collectively),
contains or will contain any untrue statement of a material fact or omits or
will omit to state any material fact necessary, in light of the circumstances
under which it was made, in order to make the statements herein or therein not
misleading.
SECTION 2.25. NO STOCK TRADING OR SHORT POSITIONS.
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The Company and OASIS represent and warrant that neither the
Company, OASIS, nor any affiliate or officer if the Company or OASIS has traded,
directly or indirectly, and, in particular, has taken a short position, in the
common stock of EGLOBE subsequent to the signing of a certain letter of intent
in connection with this transaction on June 25, 1999.
SECTION 2.26. YEAR 2000.
To the knowledge of OASIS and the Company, the computer software
utilized by the Company in the operation of its business is capable of correctly
processing data between and within the twentieth and twenty-first centuries.
ARTICLE III
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF OASIS
OASIS hereby represents and warrants to EGLOBE, EOI and the LLC as
follows:
SECTION 3.1. TITLE TO COMPANY SHARES.
OASIS is and as of the Closing Date will be the sole legal,
beneficial and record owner of the Company Shares, which consist and will
consist of one thousand (1,000) shares of Company Common Stock. OASIS has and as
of the Closing Date will have good, valid and marketable title to the Company
Shares, free and clear of all Encumbrances, except such restrictions on the
transfer of such shares as may be applicable under federal and state securities
laws, with full right and lawful authority to contribute the Company Shares to
the LLC pursuant to this Agreement. Immediately following the Closing Date, the
LLC will acquire good, valid and marketable title thereto, free and clear of all
Encumbrances, except such restrictions on the transfer of such shares as may be
applicable under federal and state securities laws.
SECTION 3.2. AUTHORITY AND CAPACITY.
OASIS has full legal right, capacity, power and authority to
execute and deliver this Agreement and all other documents, instruments,
certificates and agreements executed or to be executed by it pursuant hereto,
and to consummate the transactions contemplated hereby and thereby.
SECTION 3.3. ABSENCE OF VIOLATION.
The execution, delivery and performance by OASIS of this
Agreement and all other documents, instruments, certificates and agreements
contemplated hereby to which it is a party, the fulfillment of and the
compliance with the respective terms and provisions hereof and thereof, and the
consummation of the transactions contemplated hereby and thereby, do not and
will not (a) conflict with, or violate any provision of, any Laws having
applicability
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to it; or (b) conflict with, or result in any breach of, or constitute a default
under, any agreement to which it is a party.
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SECTION 3.4. RESTRICTIONS AND CONSENTS.
There are no agreements, Laws or other restrictions of any
kind to which OASIS is party or subject that would prevent or restrict the
execution, delivery or performance of this Agreement by OASIS.
SECTION 3.5. BINDING OBLIGATION.
This Agreement constitutes, and each document, instrument,
certificate and agreement to be executed by OASIS pursuant hereto, when executed
and delivered in accordance with the provisions hereof, shall constitute, a
valid and binding obligation of it, enforceable in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general applicability
relating to or affecting creditors' rights generally and by the application of
general principles of equity.
SECTION 3.6. NO REGISTRATION UNDER THE SECURITIES ACT.
OASIS understands that the shares of EGLOBE Common Stock to be
contributed to the LLC under this Agreement have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), in reliance upon
exemptions contained in the Securities Act or interpretations thereof, and such
shares of EGLOBE Common Stock cannot be offered for sale, sold or otherwise
transferred unless such shares are so registered or qualify for an exemption
from registration under the Securities Act.
SECTION 3.7. ACQUISITION FOR INVESTMENT.
The shares of EGLOBE Common Stock to be issued to the LLC
under this Agreement are being (or will be) acquired by the LLC in good faith
solely for the account of the LLC or OASIS, as the case may be (and its direct
and indirect beneficiaries), for investment and not with a view toward resale or
other distribution within the meaning of the Securities Act. Such shares will
not be offered for sale, sold or otherwise transferred by the LLC or OASIS, as
the case may be, without either registration or exemption from registration
under the Securities Act.
SECTION 3.8. EVALUATION OF MERITS AND RISKS OF INVESTMENT.
OASIS has such knowledge and experience in financial and
business matters that OASIS is capable of evaluating the merits and risks of an
investment in the shares of EGLOBE Common Stock. Oasis understands and is able
to bear any economic risks associated with any such investment. OASIS is an
"accredited investor," as that term is defined in Regulation D promulgated under
the Securities Act. OASIS confirms that EGLOBE has made available to OASIS and
its representatives and agents the opportunity to ask questions of the officers
and management employees of EGLOBE about the business and financial condition of
EGLOBE as OASIS or its representatives have requested.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF EGLOBE AND EOI
EGLOBE and EOI hereby jointly and severally represent and warrant to
OASIS, the Company and the LLC as follows:
SECTION 4.1. ORGANIZATION AND QUALIFICATION.
EGLOBE and EOI are each corporations duly organized, validly
existing and in good standing under the laws of the State of Delaware. EGLOBE
and EOI each have the requisite power and authority to own, lease and operate
their assets and properties, to carry on their business as now being conducted
and to perform the terms of this Agreement and the transactions contemplated
hereby. EGLOBE and EOI are each duly qualified to conduct their business, and
are in good standing, in each jurisdiction where the ownership or leasing of
their properties or the nature of their activities in connection with the
conduct of their business makes such qualification necessary.
SECTION 4.2. CERTIFICATE OF INCORPORATION AND BYLAWS.
EGLOBE and EOI each have herewith delivered to the Company,
complete and correct copies of their certificate of incorporation and the
bylaws, each as amended to date. Such certificates of incorporation and bylaws
are in full force and effect. Neither EGLOBE nor EOI is in violation of any of
the provisions of its certificate of incorporation or bylaws or other
organizational or governing document.
SECTION 4.3. CAPITALIZATION.
The authorized capital stock of EGLOBE consists of: (i) one
hundred million (100,000,000) shares of EGLOBE Common Stock of which 22,443,541
shares are issued and outstanding on the date of execution of this Agreement;
and (ii) ten million (10,000,000) shares of preferred stock, par value $.001 per
share, of which: (a) five hundred thousand (500,000) shares of Series B
Convertible Preferred Stock are authorized, of which no shares are issued and
outstanding; (b) two hundred (200) shares of 8% Series C Cumulative Convertible
Preferred Stock are authorized, of which no shares are issued and outstanding;
(c) one hundred twenty-five (125) shares of 8% Series D Cumulative Convertible
Preferred Stock are authorized, of which fifty (50) shares are issued and
outstanding; (d) one hundred twenty-five (125) shares of 8% Series E Cumulative
Convertible Redeemable Preferred Stock are authorized, of which fifty (50)
shares are issued and outstanding; (e) 2,020,000 shares of Series F Convertible
Preferred Stock are authorized, of which 1,010,000 shares are issued and
outstanding; (f) 1 share of 6% Series G Cumulative Convertible Redeemable
Preferred Stock is authorized, of which no shares are issued and outstanding;
(g) 500,000 shares of Series M Convertible Preferred Stock is authorized, issued
and outstanding; (h) 400,000 shares of Series
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I Convertible Preferred Stock is authorized issued and outstanding; and (i) 30
shares of 5% Series G Cumulative Convertible Preferred Stock is authorized,
issued and outstanding. EGLOBE is presently proposing to issue 5% Series J
Cumulative Convertible Preferred Stock as prepayment of $4.0 million under the
$20.0 million secured note agreement. Except as set forth in Schedule 4.3, there
are no options, warrants or other rights, agreements, arrangements or
commitments of any character relating to the issued or unissued capital stock of
EGLOBE or obligating EGLOBE to issue or sell any shares of capital stock of, or
other equity interests in EGLOBE, including any securities directly or
indirectly convertible into or exercisable or exchangeable for any capital stock
or other equity securities of EGLOBE. Except as set forth in Schedule 4.3, there
are no outstanding obligations of EGLOBE to repurchase, redeem or otherwise
acquire any shares of its capital stock or make any investment (in the form of a
loan, capital contribution or otherwise) in any other person.
SECTION 4.4. EGLOBE SECURITIES.
The EGLOBE Securities to be issued pursuant to the terms of
this Agreement, shall, when issued, be duly authorized, validly issued, fully
paid and non-assessable and free from any Encumbrances.
SECTION 4.5. AUTHORITY.
Except for the approval of the Executive Committee of EGLOBE's
Board of Directors, the execution and delivery of this Agreement by EGLOBE and
the consummation by EGLOBE and EOI of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of EGLOBE or EOI are necessary to authorize
this Agreement or to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by EGLOBE and EOI and, assuming
the due authorization, execution and delivery by the other parties, constitutes
a legal, valid and binding obligation of EGLOBE and EOI, enforceable in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws of
general applicability relating to or affecting creditors' rights generally and
by the application of general principles of equity.
SECTION 4.6. NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) Except as set forth in Schedule 4.6, the execution and
delivery of this Agreement by EGLOBE and EOI do not, and the performance by
EGLOBE and EOI of their obligations under this Agreement will not, (i) conflict
with or violate the certificate of incorporation or bylaws of EGLOBE and EOI,
(ii) conflict with or violate any Law applicable to EGLOBE or its assets and
properties, or (iii) result in any breach of or constitute a default under any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which EGLOBE and EOI are parties
or by which EGLOBE and EOI are bound, or by which any of their properties or
assets is subject.
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(b) Except as set forth in Schedule 4.6, the execution and
delivery of this Agreement by EGLOBE and EOI do not, and the performance of this
Agreement by EGLOBE and EOI will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any Government
Entity.
SECTION 4.7. FINANCIAL STATEMENTS.
The balance sheets of EGLOBE as of December 31, 1998 and, June
30, 1999, and the statements of income and cash flows for the fiscal year ended
December 31, 1998 and the six months ended June 30, 1999 fairly present, in all
material respects, the financial condition of EGLOBE as of the respective dates
and the results of operations and cash flows for the respective periods
indicated and have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis. Except as reflected in the
audited balance sheet of EGLOBE as of June 30, 1999 (the "EGLOBE Balance Sheet
Date"), EGLOBE has no liabilities, contingent or absolute, matured or unmatured,
known or unknown, except for liabilities incurred in the ordinary course of
business since the EGLOBE Balance Sheet Date that would not have an EGLOBE
Material Adverse Effect.
SECTION 4.8. ABSENCE OF CERTAIN CHANGES OR EVENTS.
Except as set forth in Schedule 4.8, since June 30, 1999,
EGLOBE has not incurred any material liability, except in the ordinary course of
its business consistent with its past practices, and EGLOBE has conducted its
business in the ordinary course consistent with its past practices. Except as
set forth in Schedule 4.8, since June 30, 1999, there has not been any change in
the business, condition (financial or otherwise) or results of operations of
EGLOBE, including any transaction, commitment, dispute, damage, destruction or
loss, whether or not covered by insurance, or other event of any character
(whether or not in the ordinary course of business) individually or in the
aggregate which has had, or is reasonably likely to have, an EGLOBE Material
Adverse Effect.
SECTION 4.9. AGREEMENTS.
Except as set forth in Schedule 4.9, all agreements that were,
or were required to be, filed as exhibits to the EGLOBE's Annual Report on Form
10-K (collectively, the "EGLOBE Material Contracts") are valid and in full force
and effect on the date hereof, and EGLOBE has not (and has no knowledge that any
party thereto has) violated any provision of, or committed or failed to perform
any act which with or without notice, lapse of time or both would constitute a
default under the provisions of, any EGLOBE Material Contract, except for
defaults which would not reasonably be expected to have an EGLOBE Material
Adverse Effect.
SECTION 4.10. LITIGATION.
Except as set forth in Schedule 4.10, there is no action,
suit, investigation, claim, arbitration or litigation pending or, to the
knowledge of EGLOBE, threatened against or involving EGLOBE or the business and
operations of EGLOBE, at law
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or in equity, or before or by any court, arbitrator or Government Entity. EGLOBE
is not operating under or subject to any judgment, writ, order, injunction,
award or decree of any court, judge, justice or magistrate, including any
bankruptcy court or judge, or any order of or by any Government Entity.
SECTION 4.11. TAXES AND ASSESSMENTS.
Except as set forth in Schedule 4.11, (i) EGLOBE has duly and
timely paid all Taxes which have become due and payable by it; (ii) EGLOBE has
received no notice of, nor does EGLOBE have any knowledge of, any notice of
deficiency or assessment or proposed deficiency or assessment from any taxing
Government Entity; and (iii) there are no audits pending and there are no
outstanding agreements or waivers by EGLOBE that extend the statutory period of
limitations applicable to any federal, state, local, or foreign tax returns or
Taxes.
SECTION 4.12. Voting Requirements.
The Board of Directors of the EGLOBE has previously authorized
the execution, delivery and performance of this Agreement by the EGLOBE, subject
to the future approval of the Executive Committee of the Board of Directors
EGLOBE.
SECTION 4.13. ACTIVITIES OF EOI.
Prior to the date of this Agreement and the Closing Date, EOI
has not and shall not have conducted any business activities of any kind or
nature and shall have no assets, liabilities or commitments of any kind other
than its obligations under this Agreement.
SECTION 4.14. BROKERS.
No broker, finder or investment banker, except in connection
with EGLOBE's evaluation of the transactions contemplated by this Agreement, is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of EGLOBE or EOI.
SECTION 4.15. DISCLOSURE.
No representations or warranties by EGLOBE in this Agreement
and no statement or information contained in the Schedules hereto or any
certificate furnished or to be furnished by EGLOBE to the Company and OASIS
pursuant to the provisions of this Agreement (taken collectively), contains or
will contain any untrue statement of a material fact or omits or will omit to
state any material fact necessary, in light of the circumstances under which it
was made, in order to make the statements herein or therein not misleading. As
of the date hereof, EGLOBE has made all necessary filings pursuant to the
applicable requirements of the Securities Act of 1933, as amended ("Act") and
the Securities Exchange Act of 1934, as amended (collectively, the "EGLOBE
Public Reports"). The EGLOBE Public Reports
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complied at the respective times of the filing thereof in all material respects
with the applicable requirements of the Act and the Securities Exchange Act of
1934, as amended, and, as of the dates thereof, did not contain any untrue
statement of any material fact or omit to state a material fact necessary in the
light of the circumstances under which it was made, in order to make the
statements therein not misleading. All financial statements set forth in the
EGLOBE Public Reports present fairly in all material respects the consolidated
financial condition of EGLOBE and its affiliates as of (or for the years ending
on) their respective dates.
ARTICLE V
COVENANTS
SECTION 5.1. AFFIRMATIVE COVENANTS OF OASIS AND THE COMPANY.
The Company and OASIS hereby covenant and agree that, prior to
the Closing, unless otherwise expressly contemplated by this Agreement or
consented to in writing by EGLOBE, the Company shall (a) operate its business in
the usual and ordinary course consistent with past practices and in accordance
with applicable Laws; (b) preserve substantially intact its business
organization, maintain its rights and franchises, use its best efforts to retain
the services of its respective principal officers and key employees and maintain
its relationship with its respective suppliers, contractors, distributors,
customers and others having business relationships with it; (c) maintain and
keep its properties and assets in as good repair and condition as at present,
ordinary wear and tear excepted; and (d) eliminate all intercompany accounts
between the Company and OASIS and any of the Company's affiliates (other than
the prepaid revenue received by the Company from A Bargain Airfare, Inc.).
SECTION 5.2. NEGATIVE COVENANTS OF OASIS AND THE COMPANY.
Except as expressly contemplated by this Agreement or
otherwise consented to in writing by EGLOBE, from the date hereof until the
Closing, the Company shall not (and OASIS shall cause it not to) take any of the
following actions:
(a) (i) increase the compensation payable to or to become
payable to any of its directors, officers or employees, except for increases in
salary, wages or bonuses payable or to become payable in the ordinary course of
business and consistent with past practice; (ii) grant any severance or
termination pay to, or enter into or modify any employment or severance
agreement with, any of its directors, officers or employees; or (iii) adopt or
amend any employee benefit plan or arrangement, except as may be required by
applicable Law;
(b) declare, set aside or pay any dividend on, or make any
other distribution in respect of, any of its capital stock;
(c) (i) redeem, repurchase or otherwise reacquire any share of
its capital stock or any securities or obligations convertible into or
exchangeable for any share of
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its capital stock, or any options, warrants or conversion or other rights to
acquire any shares of its capital stock or any such securities or obligations;
(ii) effect any reorganization or recapitalization; or (iii) split, combine or
reclassify any of its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of, or in substitution
for, shares of its capital stock;
(d) (i) issue, deliver, award, grant or sell, or authorize or
propose the issuance, delivery, award, grant or sale (including the grant of any
Encumbrances) of, any shares of any class of its capital stock (including shares
held in treasury) or other equity securities, any securities or obligations
directly or indirectly convertible into or exercisable or exchangeable for any
such shares or securities, or any rights, warrants or options directly or
indirectly to acquire any such shares or securities; or (ii) amend or otherwise
modify the terms of any such securities, obligations, rights, warrants or
options in a manner inconsistent with the provisions of this Agreement or the
effect of which shall be to make such terms more favorable to the holders
thereof;
(e) acquire or agree to acquire, by merging or consolidating
with, by purchasing an equity interest in or a portion of the assets of, or by
any other manner, any business or any corporation, partnership, association or
other business organization or division thereof, or otherwise acquire or agree
to acquire any assets of any other Person (other than the purchase of equipment
and supplies in the ordinary course of business and consistent with past
practice), or make or commit to make any capital expenditures other than capital
expenditures in the ordinary course of business consistent with past practice
and in amounts which are set forth and described in the Company's Capital
Budget, a true and complete copy of which has been provided to EGLOBE and other
than expenditures in connection with the consummation of the transactions
contemplated hereunder; and will not unreasonably delay in making expenditures
contemplated by the Company's Capital Budget;
(f) sell, lease, exchange, mortgage, pledge, transfer or
otherwise dispose of, or agree to sell, lease, exchange, mortgage, pledge,
transfer or otherwise dispose of, any of its assets except for dispositions in
the ordinary course of business and consistent with past practice;
(g) propose or adopt any amendments to its certificate of
incorporation and bylaws;
(h) (i) change any of its methods of accounting in effect at
January 1, 1998, or (ii) except with respect to state and federal excise taxes
that may be or become due and payable, make or rescind any express or deemed
election relating to taxes, settle or compromise any claim, action, suit,
litigation, proceeding, arbitration, investigation, audit or controversy
relating to taxes, except, in the case of clause (i) or clause (ii), as may be
required by law or generally accepted accounting principles, consistently
applied;
(i) prepay, before the scheduled maturity thereof, any of its
long-term debt, or incur any obligation for borrowed money, whether or not
evidenced by a note, bond, debenture or similar instrument, other than trade
payables incurred in the ordinary course
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of business consistent with past practices and payables in connection with
consummation of the transactions contemplated hereunder;
(j) enter into or modify in any material respect any Material
Contract or any other contract which, if in effect as of the date hereof, would
have been required to be disclosed on Schedule 2.11;
(k) take any action that would or could reasonably be expected
to result in any of its representations and warranties set forth in this
Agreement being untrue or in any of the conditions set forth in Article VI not
being satisfied; or
(l) agree in writing or otherwise to do any of the foregoing.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.1. LOAN FROM OASIS.
OASIS shall advance, on behalf of the Company, the amount of
$451,400 (the "Loan"), to be utilized as follows: (i) $150,000 will be utilized
to pay one-half of the Company's obligation to make the required deposit of
$300,000 (i.e., $150,000) under that certain Lease Agreement dated June 1, 1999
between the Company and Keystone Miami Property Holding Corp. (the "New Lease");
and (ii) $301,400 will be utilized to purchase and install equipment and
leasehold improvements for the new facility. The Company covenants to utilize
the proceeds of the Loan exclusively for the foregoing purposes. OASIS covenants
to make advances to the Company, upon the Company's request, at such time as
payments are due to be made to third parties with respect to the purchase and
installation of equipment and leasehold improvements at the new facility. At the
time of making each payment, OASIS shall deliver a copy of the check provided to
the third party. The Loan shall be evidenced by a promissory note to be executed
by the Company in form of EXHIBIT C (the "Note") and secured by lien on certain
assets of the Company, as more fully described in the Security Agreement to be
executed by the Company in the form of exhibit d (the "Security Agreement"). The
Loan shall also be guaranteed by EGLOBE, EOI and the LLC pursuant to Guaranty
Agreements to be executed by such parties in the form of EXHIBIT E (the
"Guarantees"). The obligations of EGLOBE, EOI and the LLC under the Guarantees
shall be secured by: (i) a pledge by EGLOBE of all of the outstanding common
stock of EOI; (ii) a pledge by EOI of its interest in the LLC; and (iii) a
pledge of the LLC of all of the shares of the Company, pursuant to the Pledge
Agreements to be executed by EGLOBE, EOI and the LLC in the form of EXHIBIT F
(the "Pledge Agreements"). On or prior to the due date of the first payment
under the Note, OASIS shall deliver to EGLOBE evidence, in a form and substance
reasonably acceptable to EGLOBE, that OASIS has advanced the amount of $451,400
pursuant to this Section 6.1.
SECTION 6.2. SUBSIDY OF LEASE DEPOSIT AND BUILD-OUT COST.
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OASIS shall provide one-half of the required $300,000 deposit
(i.e., $150,000) under the New Lease, and $80,600 of the anticipated $382,000 in
related build-out costs. OASIS shall provide the amount of $80,600 to the
Company within 30 days of the date of this Agreement.
SECTION 6.3. CONSENTS AND APPROVALS; FILINGS AND NOTICES.
The Company and OASIS shall use reasonable efforts to as
promptly as possible make all filings with, provide all notices to and obtain
all consents and approvals from third parties required to be obtained by the
Company and OASIS in connection with the transactions contemplated hereunder,
including, without limitation, all filings, if any, with notices to and consents
and approvals from Government Entities and other persons.
SECTION 6.4. ACCESS AND INFORMATION.
From the date hereof to the Closing Date, the Company shall
afford to EGLOBE and its officers, employees, accountants, consultants, legal
counsel, and other representatives of EGLOBE full and complete access during
normal business hours (with reasonable advance notice) to the properties, books,
records, contracts, facilities, premises, and equipment relating to the Assets
and the Company (including without limitation, operating and financial
information with respect to the Company) as EGLOBE may reasonably request,
provided that EGLOBE and its agents, employees and representatives enter into a
commercially reasonable confidentiality and nondisclosure agreement with the
Company. In the event that EGLOBE determines after the Closing Date that it is
necessary or desirable to audit the financial statements of the Company for any
period prior to the Closing Date, OASIS agrees to cooperate with EGLOBE, the
Company and auditors for the Company to the extent necessary to complete such
audit in a timely manner.
In addition, the Company and OASIS shall, and shall ensure
that their respective affiliates shall, afford to EGLOBE and the LLC and their
respective officers, employees, accountants, consultants and legal counsel,
access at any time and from time to time following the date hereof, but during
business days and normal business hours, to the books, records and other
information (including without limitation, operating and financial information),
contracts, facilities and premises relating to the Assets, OASIS and all other
companies, divisions or other entities or portions thereof that EGLOBE and the
LLC may reasonably request for purposes of preparing audited financial
statements pursuant to EGLOBE's reporting requirements under the Securities Act
of 1933 and the Securities Exchange Act of 1934 (the "Securities Laws"), make
available the personnel, accountants and other representatives having knowledge
regarding the same and cooperate with and furnish assistance to EGLOBE (provided
that the Company and OASIS shall not be obligated to incur more than nominal
cost or expense), as EGLOBE may reasonably request in connection with the
preparation of financial statements with respect to the business of the Company.
In connection with an audit of such financial statements, if required, the
Company and its financial and other management agree to provide certain
representations in the form of a representation letter to BDO Seidman, LLP,
independent certified public accountants, in accordance with
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generally accepted auditing standards. The provision of such financial statement
representations and information and assistance shall be reasonably prompt. The
Company and OASIS shall ensure that none of such information is destroyed during
the three year period commencing on the Closing Date unless EGLOBE has been
afforded a reasonable opportunity to obtain and make copies of the information.
Any document or information produced or disclosed pursuant to
this Section 6.4 in any form is Confidential Information and EGLOBE and the LLC
shall not permit the duplication, use, or disclosure of any such Confidential
Information by or to any third party (other than officers, employees,
accountants, consultants and legal counsel) except as required pursuant to the
Securities Laws and permitted hereunder, unless such duplication, use or
disclosure is specifically authorized by the Company or OASIS in writing prior
to any disclosure. EGLOBE and the LLC shall use commercially reasonable
diligence, and in no event less than that degree of care that such party uses in
respect to its own confidential information of like nature, to prevent the
unauthorized disclosure or reproduction of such information.
SECTION 6.5. CONFIDENTIALITY.
Each party shall hold in strict confidence all documents and
information concerning the other parties and their business and properties
(except that any party may disclose such documents and information to any
Government Entity reviewing the transactions contemplated hereby or as required
in such party's judgment pursuant to any legal requirement or in furtherance of
the transactions contemplated herein), and if the transactions contemplated
hereby should not be consummated, such confidence shall be maintained, and all
such documents and information (in whatever form) and copies thereof shall
immediately thereafter be destroyed, or returned to the party originally
furnishing same, subject to the terms of the existing non-disclosure agreement
between EGLOBE and the Company.
SECTION 6.6. FURTHER ACTION; REASONABLE BEST EFFORTS.
Each of the parties shall use reasonable best efforts to take,
or cause to be taken, all appropriate action, and do, or cause to be done, all
things necessary, proper or advisable under applicable Laws or otherwise to
consummate and make effective the transactions contemplated by this Agreement as
promptly as practicable, including, without limitation, using its reasonable
best efforts to obtain all licenses, permits, consents, approvals,
authorizations, qualifications and orders of Government Entities and other
parties as are necessary for the transactions contemplated herein.
SECTION 6.7. PUBLIC ANNOUNCEMENTS.
Each of OASIS, the Company and EGLOBE shall consult with each
other before issuing any press release or otherwise making any public statements
with respect to the transactions contemplated hereunder and shall not issue any
such press release or make any such public statement prior to such consultation,
except as may be required by Law.
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SECTION 6.8. NO SOLICITATION.
From the date of this Agreement until the earlier of the
Closing Date or the termination of this Agreement, neither the Company nor any
of their affiliates or any person acting on behalf of such party shall (a)
solicit or favorably respond to indications of interest from, or enter into
negotiations with, any third party for any proposed merger, consolidation, sale
or acquisition of the Company, the Assets or any capital stock of the Company or
(b) furnish or cause to be furnished any nonpublic information concerning the
Company to any person other than in the ordinary course of business or pursuant
to applicable Law and after prior written notice to EGLOBE.
ARTICLE VII
CLOSING CONDITIONS
SECTION 7.1. CONDITIONS TO OBLIGATIONS OF EGLOBE AND EOI.
The obligations of EGLOBE and EOI to effect the transactions
contemplated in this Agreement are also subject to the following conditions, any
or all of which may be waived by the EGLOBE and EOI, in whole or in part, to the
extent permitted by applicable law:
(a) Representations and Warranties. The representations and
warranties of the Company and OASIS made in this Agreement shall be true and
correct in all material respects, on and as of the Closing Date with the same
effect as though such representations and warranties had been made on and as of
the Closing Date (provided that any representation or warranty contained herein
that is qualified by a materiality standard shall not be further qualified
hereby), except for representations and warranties that speak as of a specific
date or time other than the Closing Date (which need only be true and correct in
all material respects as of such date or time). EGLOBE shall have received a
certificate of the president or vice-president-finance of the Company and OASIS
to that effect.
(b) Agreements and Covenants. The agreements and covenants of
the Company and OASIS required to be performed on or before the Closing Date
shall have been performed in all material respects. EGLOBE shall have received a
certificate of the president or vice president-finance of the Company and OASIS
to that effect.
(c) No Order. No Government Entity or federal or state court
of competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, executive order, decree, judgment,
injunction or other order (whether temporary, preliminary or permanent), in any
case which is in effect and which prevents or prohibits consummation of the
transactions contemplated in this Agreement; provided, however, that the parties
shall use their reasonable efforts to cause any such decree, judgment,
injunction or other order to be vacated or lifted, and any such action or
proceeding to be dismissed.
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(d) Legal Proceedings. No action or proceeding before any
Governmental Entity shall have been instituted or threatened (and not
subsequently settled, dismissed, or otherwise terminated) which is reasonably
expected to restrain, prohibit or invalidate the transactions contemplated by
this Agreement other than an action or proceeding instituted or threatened by
EGLOBE.
(e) No Company Material Adverse Effect. Since December 31,
1998, no Company Material Adverse Effect have occurred and be continuing.
(f) Required Consents. The Company shall have delivered to
EGLOBE at or before Closing all consents, assignments or notices listed on
Schedule 2.6.
(g) Side Letter. The Company and OASIS shall have executed and
delivered the Side Letter in the form of EXHIBIT A Attached hereto.
(h) Employment and Stock Options Agreements. Each of Candyce
L. Preston and Dan J. Blyth shall have executed and delivered the employment
agreements in the form of EXHIBITS G-1 and G-2 attached hereto, and the Stock
Option Agreements in the form of EXHIBITS H-1 and H-2 attached hereto.
(i) Legal Opinion. EGLOBE shall have received an opinion of
counsel from the in-house counsel for the Company and OASIS, in form and
substance reasonably satisfactory to EGLOBE.
(j) Termination of Employee Rights Agreements. The Company
shall have terminated any Employee Appreciation Rights Plan or Appreciation
Rights Agreements previously entered into by Company and all outstanding options
to purchase shares of the Company's capital stock.
(k) Company Stock Certificates. OASIS shall have delivered to
the LLC ertificates for the Company Shares as provided in Section 1.4 hereof.
(l) Tax Matters Agreement. OASIS shall have delivered the Tax
Matters Agreement in the form of EXHIBIT I attached hereto (the "Tax Matters
Agreement").
(m) Loan Documents. The Company shall have executed and
delivered the Note in the form of Exhibit C and the Security Agreement in the
form of Exhibit D.
(n) Other Closing Documents. The Company and OASIS shall have
executed and/or delivered to EGLOBE such additional documents, certificates,
opinions and agreements as EGLOBE may reasonably request.
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SECTION 7.2. CONDITIONS TO OBLIGATIONS OF THE COMPANY AND OASIS.
The obligations of the Company and OASIS to effect the
transactions contemplated in this Agreement are also subject to the following
conditions any or all of which may be waived by OASIS, in whole or in part, to
the extent permitted by applicable law:
(a) Representations and Warranties. The representations and
warranties of EGLOBE made in this Agreement shall be true and correct in all
material respects, on and as of the Closing Date with the same effect as though
such representations and warranties had been made on and as of the Closing Date
(provided that any representation or warranty contained herein that is qualified
by a materiality standard shall not be further qualified hereby), except for
representations and warranties that speak as of a specific date or time other
than the Closing Date (which need only be true and correct in all material
respects as of such date or time). The Company shall have received a certificate
of the Chief Executive Officer or Chief Financial Officer of EGLOBE to that
effect.
(b) Agreements and Covenants. The agreements and covenants of
EGLOBE required to be performed on or before the Closing Date shall have been
performed in all material respects. The Company shall have received a
certificate of the Chief Executive Officer or Chief Financial Officer of EGLOBE
to that effect.
(c) No Order. No Government Entity or federal or state court
of competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, executive order, decree, judgment,
injunction or other order (whether temporary, preliminary or permanent), in any
case which is in effect and which prevents or prohibits consummation of the any
other transactions contemplated in this Agreement; provided, however, that the
parties shall use their reasonable efforts to cause any such decree, judgment,
injunction or other order to be vacated or lifted, and any such action or
proceeding to be dismissed.
(d) Legal Proceedings. No action or proceeding before any
Government Entity shall have been instituted or threatened (and not subsequently
settled, dismissed, or otherwise terminated) which is reasonably expected to
restrain, prohibit or invalidate the transactions contemplated by this Agreement
other than an action or proceeding instituted or threatened by OASIS or the
Company.
(e) No EGLOBE Material Adverse Effect. Since the date of this
Agreement, no EGLOBE Material Adverse Effect shall have occurred or be
continuing.
(f) Side Letter. EGLOBE, the EOI and the LLC shall have
executed and delivered the Side Letter attached hereto as EXHIBIT A.
(g) Legal Opinion. The Company and OASIS shall have received a
legal opinion from in-house counsel to EGLOBE, in form and substance reasonably
satisfactory to the Company and OASIS.
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(h) Delivery of EGLOBE Securities. EGLOBE shall have delivered
to EOI, and EOI shall have delivered to the LLC, certificates for the EGLOBE
Shares and the EGLOBE Warrants in the form of EXHIBITS B-1, B-2 and B-3 attached
hereto.
(i) Loan Agreements. EGLOBE, EOI and the LLC shall have
executed and delivered, or cause the execution and delivery of, the Guarantees
in the form of Exhibit E and the Pledge Agreements in the form of EXHIBIT F, and
the other instruments and documents required by the terms of such agreements.
(j) Other Closing Documents. EGLOBE shall have executed and/or
delivered to the Company such additional documents, certificates, opinions and
agreements as the Company may reasonably request.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1. TERMINATION.
This Agreement may be terminated at any time prior to the Closing Date:
(a) by mutual written consent of EGLOBE and the Company;
(b) by EGLOBE if the Company shall have breached in any
material respect any of its representations, warranties, covenants or agreements
contained in this Agreement, or any such representation or warranty shall have
become untrue in any material respect, in any such case such that the conditions
precedent to the obligations of EGLOBE to close specified in Section 7.2 will
not be satisfied;
(c) by the Company if EGLOBE shall have breached in any
material respect any of its representations, warranties, covenants or agreements
contained in this Agreement, or any such representation or warranty shall have
become untrue in any material respect, in any such case such that the conditions
precedent to the obligation of the Company to close specified in Section 8.3
will not be satisfied;
(d) by either EGLOBE or the Company if any decree, permanent
injunction, judgment, order or other action by any court of competent
jurisdiction or any Government Entity preventing or prohibiting consummation of
the Acquisition shall have become final and nonappealable; or
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(e) by either EGLOBE or the Company if the Closing has not
occurred on or prior to September __, 1999 (unless such date shall be extended
by the mutual written consent of the parties); provided, that the right to
terminate this Agreement under this Section 8.1(e) shall not be available to any
party whose breach of representations, warranties, covenants or agreements
contained in this Agreement has been the cause of, or resulted in, the failure
of the Closing to occur by such date or the inability of such condition to be
satisfied.
SECTION 8.2. EFFECT OF TERMINATION.
If this Agreement is terminated pursuant to Section 8.1, this
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of any party hereto, except that the provisions of
Sections 6.4 and 10.11 shall not be extinguished but shall survive such
termination, and nothing herein shall relieve any party from liability for fraud
or any intentional breach hereof and each party shall be entitled to any
remedies at law or in equity for fraud or such intentional breach.
SECTION 8.3. AMENDMENT.
This Agreement may not be amended except by an instrument in
writing signed by the parties hereto.
SECTION 8.4. WAIVER.
At any time prior to the Closing Date, the parties may (a)
extend the time for the performance of any of the obligations or other acts of
the other party, (b) waive any inaccuracies in the representations and
warranties contained in this Agreement or in any document delivered pursuant to
this Agreement and (c) waive compliance by the other party with any of the
agreements or conditions contained in this Agreement. Any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. No delay or failure on the part of any party hereto in
exercising any right, power or privilege under this Agreement or under any other
instrument or document given in connection with or pursuant to this Agreement
shall impair any such right, power or privilege or be construed as a waiver of
any default or any acquiescence therein. No single or partial exercise of any
such right, power or privilege shall preclude the further exercise of such
right, power or privilege, or the exercise of any other right, power or
privilege.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION; REMEDIES
SECTION 9.1. SURVIVAL OF REPRESENTATIONS.
All representations, warranties, covenants, indemnities and
other agreements made by any party to this Agreement herein or pursuant hereto,
shall be deemed
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<PAGE>
made on and as of the Closing as though such representations, warranties,
covenants, indemnities and other agreements were made on and as of such date,
and all such representations, warranties, covenants, indemnities and other
agreements shall survive the Closing and any investigation, audit or inspection
at any time made by or on behalf of any party hereto, as follows: (a) unless
otherwise specified below, representations and warranties shall survive for a
period of two (2) years after the Closing Date; (b) representations and
warranties with respect to Taxes and those representations and warranties in
Section 2.18 shall survive until the expiration of the applicable statute of
limitations; (c) representations, warranties and covenants for matters relating
to title to the Company Shares shall continue in full force and effect in
perpetuity; and (d) the covenants and agreements in this Article IX and the
covenants and agreements which by their terms survive the Closing shall continue
in full force and effect until fully discharged. Notwithstanding anything herein
to the contrary, any representation, warranty, covenant or agreement which is
the subject of a claim which is asserted in writing prior to the expiration of
the applicable period set forth above shall survive with respect to such claim
or dispute until the final resolution thereof.
SECTION 9.2. AGREEMENT OF THE COMPANY AND OASIS TO INDEMNIFY.
Subject to the conditions and provisions of this Article IX,
the Company and OASIS hereby agree to indemnify, defend and hold harmless EGLOBE
and its officers, directors, employees, agents and representatives
(collectively, the "EGLOBE Indemnified Persons") from and against and in respect
of all Losses resulting from, imposed upon or incurred by the EGLOBE Indemnified
Persons, directly or indirectly, by reason of or resulting from (a) any material
misrepresentation or material breach of any representation or warranty, or
material noncompliance with any other agreements, given or made by the Company
or OASIS in this Agreement or in any document, certificate or agreement
furnished by or on behalf of any such party pursuant to this Agreement; (b) any
claims arising under or related to the Asset Purchase Agreement dated as of July
2, 1999 between the Company and Internet Travel Network, Inc. (the "ITN
Agreement"); (c) any increase in the fees currently charged by Vincam Human
Resources, Inc. ("Vincam") for employment services rendered by Vincam to the
Company under that certain agreement dated May 16, 1996 between OASIS and
Vincam, provided that indemnification will only be provided for the period from
the Closing until December 31, 1999; or (d) any loss of any existing customer of
the Company directly caused by the relocation of the operations of the Company
to the new facility in the Mall of the Americas in Miami, Florida. It shall be a
condition to the right of any EGLOBE Indemnified Person to indemnification
pursuant to this Section that such EGLOBE Indemnified Person shall assert a
claim for such indemnification within the applicable survival periods set forth
in Section 9.1 hereof.
SECTION 9.3. AGREEMENT OF EGLOBE TO INDEMNIFY.
Subject to the conditions and provisions of this Article IX,
EGLOBE and EOI hereby agree to indemnify, defend and hold harmless the Company
and OASIS and their respective officers, directors, employees, agents and
representatives (collectively, the "OASIS Indemnified
30
<PAGE>
Persons") from and against and in respect of all Losses resulting from, imposed
upon or incurred by the Company and OASIS, directly or indirectly, by reason of
or resulting from any material misrepresentation or material breach of any
representation or warranty, or material noncompliance with any other agreements,
given or made by EGLOBE and EOI in this Agreement or in any document,
certificate or agreement furnished by or on behalf of EGLOBE and EOI pursuant to
this Agreement. It shall be a condition to the rights of any OASIS Indemnified
Person to indemnification pursuant to this Section that such party shall assert
a claim for such indemnification within the applicable survival periods set
forth in Section 9.1 hereof.
SECTION 9.4. CONDITIONS OF INDEMNIFICATION.
The obligations and liabilities of the Company, OASIS, EGLOBE
and EOI hereunder with respect to their respective indemnities pursuant to this
Article IX, resulting from any Third Party Claim shall be subject to the
following terms and conditions:
(a) The party seeking indemnification (the "Indemnified
Party") must give the other party (the "Indemnifying Party"), notice of any
Third Party Claim which is asserted against, imposed upon or incurred by the
Indemnified Party and which may give rise to liability of the Indemnifying Party
pursuant to this Article IX, stating (to the extent known or reasonably
anticipated) the nature and basis of such Third Party Claim and the amount
thereof; provided that the failure to give such notice shall not affect the
rights of the Indemnified Party hereunder except to the extent that the
Indemnifying Party shall have suffered actual material damage by reason of such
failure.
(b) Subject to Section 9.4(c) below, the Indemnifying Party
shall have the right to undertake, by counsel or other representatives of its
own choosing, the defense of such Third Party Claim at the Indemnifying Party's
risk and expense.
(c) In the event that (i) the Indemnifying Party shall elect
not to undertake such defense, (ii) within a reasonable time after notice from
the Indemnified Party of any such Third Party Claim, the Indemnifying Party
shall fail to undertake to defend such Third Party Claim, or (iii) there is a
reasonable probability that such Third Party Claim may materially and adversely
affect the Indemnified Party other than as a result of money damages or other
money payments, then the Indemnified Party (upon further written notice to the
Indemnifying Party) shall have the right to undertake the defense, compromise or
settlement of such Third Party Claim, by counsel or other representatives of its
own choosing, on behalf of and for the account and risk of the Indemnifying
Party, provided, however, that in no event shall the Indemnifying Party be
required to pay for more than one counsel for all the Indemnified Parties with
respect to such Third Party claim. In the event that an Indemnified Party
undertakes the defense of a Third Party Claim under this Section 9.4(c), the
Indemnifying Party shall pay to the Indemnified Party, in addition to the other
sums required to be paid hereunder, the reasonable costs and expenses incurred
by the Indemnified Party in connection with such defense, compromise or
settlement as and when such costs and expenses are so incurred. No Indemnified
Party shall, without the Indemnifying Party's written consent, settle
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<PAGE>
or compromise such Third Party Claim (provided that such consent shall not be
unreasonably withheld or delayed).
(d) Anything in this Section 9.4 to the contrary
notwithstanding, (i) the Indemnifying Party shall not, without the Indemnified
Party's written consent, settle or compromise such Third Party Claim or consent
to entry of any judgment which does not include as an unconditional term thereof
the giving by the claimant or the plaintiff to the Indemnified Party of a
release from all liability in respect of such Third Party Claim in form and
substance reasonably satisfactory to the Indemnified Party; (ii) in the event
that the Indemnifying Party undertakes the defense of such Third Party Claim,
the Indemnified Party, by counsel or other representative of its own choosing
and at its sole cost and expense, shall have the right to participate in the
defense, compromise or settlement thereof and each party and its counsel and
other representatives shall cooperate with the other party and its counsel and
representatives in connection therewith; and (iii) in the event that the
Indemnifying Party undertakes the defense of such Third Party Claim, the
Indemnifying Party shall have an obligation to keep the Indemnified Party
informed of the status of the defense of such Third Party Claim and furnish the
Indemnified Party with all documents, instruments and information that the
Indemnified Party shall reasonably request in connection therewith.
SECTION 9.5 LIMITATIONS.
(a) Anything contained herein to the contrary notwithstanding,
no claim shall be made against OASIS or the Company under Section 9.2(b) of this
Agreement until the aggregate of any such damages exceeds $100,000; provided,
however, if the aggregate of such damage exceeds $100,000, OASIS or the Company
shall be liable for all such damages, not just the excess over $100,000.
Anything contained herein to the contrary notwithstanding, OASIS and the Company
shall have no liability under this Agreement for an amount greater than the
aggregate consideration received by OASIS under this Agreement.
(b) OASIS hereby irrevocably waives any and all right to
recourse against the Company with respect to any misrepresentation or breach of
any representation, warranty or indemnity, or noncompliance with any conditions
or covenants, given or made by OASIS or the Company in this Agreement or any
document, certificate or agreement entered into or delivered pursuant hereto.
OASIS shall not be entitled to contribution from, subrogation to or recovery
against the Company with respect to any liability of OASIS or the Company that
may arise under or pursuant to this Agreement or the transactions contemplated
hereby.
SECTION 9.6. EXCLUSIVE REMEDY.
The remedies provided by this Article IX shall be the
exclusive remedies of the parties for any breach of the provisions of this
Agreement, other than claims based upon fraud and intentional misrepresentation.
ARTICLE X
32
<PAGE>
GENERAL PROVISIONS
SECTION 10.1. NOTICES.
All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly given or made
as of the date delivered, mailed or transmitted, and shall be effective upon
receipt, if delivered personally, mailed by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
changes of address) or sent by electronic transmission to the telecopier number
specified below:
(a) If to EGLOBE or EOI: eGlobe, Inc., 1250 24th
Street, NW, Suite 725 Washington, D.C. 20037
Facsimile No.: (202) 822-8984 Attention:
Ronald Fried
(b) If to the Company or OASIS: Oasis
Reservation Services, Inc., 1221 Brickell
Avenue, Suite 1780 Miami, Florida 33131
Telecopier No: (305) 536-0112 Attention:
John J. Sicilian
33
<PAGE>
with a copy to:
Shutts & Bowen LLP, 201 South Biscayne
Boulevard, Suite 1600 Miami, Florida 33131
Facsimile No.: (305) 381-9982 Attention:
Alfred G. Smith, II., Esq.
SECTION 10.2. CERTAIN DEFINITIONS.
For purposes of this Agreement, the term:
(a) "affiliate" of any Person means any other Person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the first mentioned person.
(b) "Affiliated Group" means any affiliated group within the
meaning of Code '1504(a).
(c) "Assets" shall mean the assets, rights and properties,
whether owned, leased or licensed, real, personal or mixed, tangible or
intangible, that are used, useful or held for use in connection with the
business of the Company. The Assets expressly exclude any of the consideration
received and to be received under the ITN Agreement (and the parties acknowledge
that all of the rights of the Company under such agreement have been assigned to
OASIS).
(d) "EGLOBE Material Adverse Effect" means any material adverse
effect on the assets, business, financial condition or results of operations of
the EGLOBE and its subsidiaries, taken as a whole.
(e) "Company Material Adverse Effect" means any material
adverse effect on the Assets or on the business, financial condition or results
of operations of the Company.
(f) "control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of stock or as trustee or
executor, by contract or credit arrangement or otherwise.
(g) "Employee Benefit Plan" means any plan, program or
arrangement, whether or not written, that is or was an "employee benefit plan"
as such term is defined in Section 3(3) of ERISA and (a) which was or is
established or maintained by Seller or any Subsidiary; (b) to which the Company
or any Subsidiary contributed or was obligated to contribute or to fund or
provide benefits; or (c) which provides or promises benefits to any person who
performs or who has performed services for the Company or any Subsidiary and
because of those services is or has been (i) a participant therein or (ii)
entitled to benefits thereunder.
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<PAGE>
(h) "Encumbrances" means mortgages, liens, pledges,
encumbrances, security interests, deeds of trust, options, encroachments,
reservations, orders, decrees, judgments, restrictions, charges, contract
rights, claims or equity interest of any kind.
(i) "Government Entity" means any United States or other
national, state, municipal or local government, domestic or foreign, any
subdivision, agency, entity, commission or authority thereof, or any
quasi-governmental or private body exercising any regulatory, taxing or other
governmental or quasi-governmental authority.
(j) "knowledge of the Company and OASIS" or "to the Company's
and OASIS' knowledge" means the actual, current personal knowledge of John J.
Sicilian, but without independent investigation beyond his duties as an officer
and director of the Company.
(k) "Laws" means all foreign, federal, state and local
statutes, laws, ordinances, regulations, rules, resolutions, orders,
determinations, writs, injunctions, awards (including, without limitation,
awards of any arbitrator), judgments and decrees applicable to the specified
persons or entities.
(l) "Losses" means all demands, losses, claims, actions or
causes of action, assessments, damages, liabilities, costs and expenses,
including, without limitation, interest, penalties and reasonable attorneys'
fees and disbursements.
(m) "Material Contracts" means, collectively, all contracts
which (a) involve an aggregate annual expenditure by the Company of $5,000 or
more, (b) are not cancelable by the Company without cost on 60 days or less
notice, (c) are with any current customer, supplier or distribution partner and
have an unexpired term of 2 or more years, and (d) restrict or regulate in any
manner the conduct of business of the Company, require the referral of any
business by the Company, or require or purport to require the payment of money
or the acceleration of performance of any obligations of the Company by virtue
of the Closing and "Material Contract" means each of the Material Contracts,
individually.
(n) "Material Leases" means, collectively, all leases which (a)
involve an aggregate annual expenditure by the Company of $5,000 or more, (b)
are not cancelable by the Company without cost on 60 days or less notice, or (c)
have a term which extends for more than one year from the Closing and "Material
Lease" means each of the Material Leases, individually.
(o) "Other Arrangement" means a benefit program or practice
providing for bonuses, incentive compensation, vacation pay, severance pay,
insurance, restricted stock, stock options, employee discounts, company cars,
tuition reimbursement or any other perquisite or benefit (including, without
limitation, any fringe benefit under Section 132 of the Code) to employees,
officers or independent contractors that is not an Employee Benefit Plan.
(p) "Person" means an individual, corporation, partnership,
association, trust, unincorporated organization, other entity or group.
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<PAGE>
(q) "Subsidiary" means a corporation, partnership, joint
venture or other entity of which the Company owns, directly or indirectly, at
least 50% of the outstanding securities or other interests the holders of which
are generally entitled to vote for the election of the board of directors or
other governing body or otherwise exercise control of such entity.
(r) "Third Party Claim" means any claim or other assertion of
liability by a third party.
SECTION 10.3. HEADINGS.
The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
SECTION 10.4. SEVERABILITY.
If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law or public policy, all
other conditions and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the extent possible.
SECTION 10.5. ENTIRE AGREEMENT.
(a) This Agreement (together with the Exhibits, the Schedules
and the other documents delivered pursuant hereto) constitutes the entire
agreement of the parties and supersedes all prior agreements and undertakings,
both written and oral, between the parties, or any of them, with respect to the
subject matter hereof.
(b) In the event of any inconsistency between the provisions in
the body or Schedules of this Agreement and the Tax Matters Agreement, the
provisions in the Tax Matters Agreement shall control.
SECTION 10.6. SPECIFIC PERFORMANCE.
The transactions contemplated by this Agreement are unique.
Accordingly, each of the parties acknowledges and agrees that, in addition to
all other remedies to which it may be entitled, each of the parties hereto is
entitled to a decree of specific performance, provided such party is not in
material default hereunder.
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<PAGE>
SECTION 10.7. ASSIGNMENT.
Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the other
parties. Subject to the preceding sentence, this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and assigns.
SECTION 10.8. THIRD PARTY BENEFICIARIES.
This Agreement shall be binding upon and inure solely to the
benefit of each party hereto, and nothing in this Agreement, express or implied,
is intended to or shall confer upon any other Person any right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement, except for
the EGLOBE Indemnified Persons and OASIS Indemnified Persons under Article IX
hereof.
SECTION 10.9. GOVERNING LAW.
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without giving effect to
applicable choice of law principles).
SECTION 10.10. COUNTERPARTS.
This Agreement may be executed and delivered in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed and delivered shall be deemed to be an original but all
of which taken together shall constitute one and the same agreement.
SECTION 10.11. FEES AND EXPENSES.
Except as otherwise provided for in this Agreement, each party
hereto shall pay its own fees, costs and expenses incurred in connection with
this Agreement and in the preparation for and consummation of the transactions
provided for herein.
37
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
CONTRIBUTION AGREEMENT to be executed and delivered as of the date first written
above.
EGLOBE, INC.
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
EGLOBE/OASIS, INC.
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
OASIS RESERVATIONS SERVICES, INC.
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
OUTSOURCED AUTOMATED
SERVICES AND INTEGRATED
SOLUTIONS, INC.
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
EGLOBE/OASIS RESERVATIONS LLC
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
38
<PAGE>
EXHIBITS AND SCHEDULES
----------------------
Exhibit A Side Letter
Exhibit B-1, B-2, B-3 EGLOBE Warrants
Exhibit C Note
Exhibit D Security Agreement
Exhibit E Guaranty Agreement
Exhibit F Pledge Agreement
Exhibit G-1 Employment Agreement
Exhibit G-2 Employment Agreement
Exhibit H-1 Option Agreement
Exhibit H-2 Option Agreement
Exhibit I Tax Allocation Agreement
Schedule 2.3 Indebtedness
Schedule 2.4 Net Working Capital
Schedule 2.6 Consents
Schedule 2.7 Financial Statements
Schedule 2.8 Accounts Receivable
Schedule 2.9 Encumbrances
Schedule 2.10 Material Leases
Schedule 2.11 Material Contracts
Schedule 2.12 Real Property Leases
Schedule 2.14 Litigation
Schedule 2.16 Intellectual Property
Schedule 2.17 Taxes and Assessments
Schedule 2.18 Employees
Schedule 2.19 Related Party Transactions
Schedule 2.22 Brokers
Schedule 4.3 Capitalization/EGLOBE
Schedule 4.6 Consents/EGLOBE
Schedule 4.8 Material Changes/EGLOBE
Schedule 4.9 EGLOBE Material Contracts/EGLOBE
Schedule 4.10 Litigation/EGLOBE
Schedule 4.11 Taxes and Assessments/EGLOBE
OPERATING AGREEMENT
OF
EGLOBE/OASIS RESERVATIONS LLC
(A DELAWARE LIMITED LIABILITY COMPANY)
<PAGE>
OPERATING AGREEMENT
OF
EGLOBE/OASIS RESERVATIONS LLC
(A DELAWARE LIMITED LIABILITY COMPANY)
THIS OPERATING AGREEMENT is made and entered into as of this _____ day
of September, 1999 (the "Agreement"), by and between EGLOBE/OASIS, INC., a
Delaware corporation ("EOI"), and OUTSOURCED AUTOMATED RESERVATIONS AND
INTEGRATED SOLUTIONS INC., a Delaware corporation ("OASIS").
RECITALS:
A. EOI and OASIS desire to form a limited liability company (the
"Company") pursuant to the terms of this Agreement.
AGREEMENT:
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Capitalized Terms. The following capitalized terms used in this
Agreement have the meanings set forth below:
"Act" means the Delaware Limited Liability Company Act, as the same
may be amended from time to time.
"Affiliate" means any Person who directly or indirectly controls,
is controlled by, or is under common control with, another Person.
"Agreement" means this Agreement as it may be amended from time to
time.
"Bankruptcy" or "Bankrupt" means, with respect to any Person, a
Person making an assignment for the benefit of creditors, becoming a party in
any manner to any liquidation or dissolution action or proceeding with respect
to such Person or any bankruptcy, reorganization, insolvency or other proceeding
for the relief of financially distressed debtors with respect to such Person, or
a receiver, liquidator, custodian or trustee being appointed for such Person or
a substantial part of such Person's assets and, if any of the same occur
involuntarily, the same not being dismissed,
<PAGE>
stayed or discharged within 20 days; or the entry of an order for relief against
such Person under Title 11 of the United States Code or any state bankruptcy or
insolvency proceeding. A Person shall be deemed Bankrupt if the Bankruptcy of
such Person shall have occurred.
"Board of Directors," "Board" or "Directors" means those
individuals elected to serve as Directors by the Members pursuant to the term of
this Agreement. Directors need not be Members.
"Capital Account" means, as to any Member, the capital account
maintained for each Member in accordance with Section 6.1 of this Agreement.
"Capital Cash Flow from ORS" means all cash or other property
received by the Company from (i) any sale or disposition of the ORS Shares; (ii)
any sale or other disposition of the assets of ORS (other than sales or
dispositions in the ordinary course of business) to the extent the proceeds are
not applied to the reduction of the liabilities of ORS; (iii) any damage,
condemnation and insurance recoveries of ORS to the extent not used to restore
or replace the applicable property or applied to the reduction of liabilities of
ORS; and (iv) any financing or refinancing by ORS not applied to the reduction
of the liabilities of ORS or to improving or expanding the business of ORS.
"Cash Flow from the EGLOBE Securities" means all cash or other
property received by the Company from any sale or other disposition of the
EGLOBE Securities (other than the exchange of the EGLOBE Securities under
Sections 11.6 or 11.7).
"Capital Contribution" means, as to each Member, the amount of
capital contributed by such Member in accordance with Article 4 of this
Agreement. Any reference in this Agreement to the Capital Contribution of a
Member shall include the Capital Contributions made by any predecessor in
interest of such Member in respect of the Interests of such Member.
"Certificate of Formation" means the Certificate of Formation
of the Company filed with the Delaware Secretary of State in accordance with the
Act, as the same may be amended from time to time.
"Code" means the Internal Revenue Code of 1986, as amended.
"Contribution Agreement" means that certain Contribution
Agreement dated as of September __, 1999 by and among the Company, EGLOBE, EOI,
OASIS and ORS.
"EBITDA" means, for any period, consolidated earnings from
continuing operations before interest, taxes and depreciation and amortization,
determined in accordance with generally accepted accounting principles,
consistently applied.
"EGLOBE" means EGLOBE, INC., a Delaware corporation.
2
<PAGE>
"EOI" means EGLOBE/OASIS, INC., a Delaware corporation.
"EGLOBE Common Stock" means the shares of Common Stock, par
value $.001 per share, of EGLOBE to be contributed to the Company by EGLOBE
under the Contribution Agreement. Any references in this Agreement to shares of
EGLOBE Common Stock shall include any securities or other property into which
such shares may be converted.
"EGLOBE Securities" means the shares of EGLOBE Common Stock
and EGLOBE Warrants to be contributed to the Company by EGLOBE under the
Contribution Agreement (including any shares of EGLOBE Common Stock issuable
under the EGLOBE Warrants).
"EGLOBE Warrants" means the warrants of EGLOBE to be
contributed to the Company under the Contribution Agreement.
"Entity" means a Person other than a natural person and
includes, without limitation, corporations (both non-profit and other
corporations), partnerships (both limited, limited liability, general), trusts,
joint ventures, limited liability companies, and unincorporated associations.
"Fiscal Year" has the meaning set forth in Section 9.4 of this
Agreement.
"Interests" means the limited liability company interests of a
Member in the Company at any particular time, including the right of such Member
to any and all benefits to which a Member may be entitled under this Agreement,
together with the obligations of such Member to comply with all of terms and
provisions of this Agreement.
"Members" means EOI and OASIS, and all other Persons admitted
as additional or substituted Members pursuant to this Agreement, so long as they
remain Members.
"Member Nonrecourse Debt" as used herein shall have the same
meaning as the term Apartner nonrecourse debt" in Regulations Section
1.704-2(b)(4).
"Member Nonrecourse Debt Minimum Gain" as used herein shall
have the same meaning as the term "partner nonrecourse debt minimum gain" in
Regulations Section 1.704-2(i)(2) and shall be determined in the manner set
forth in Regulations Section 1.704-2(i)(3).
"Minimum Gain" as used herein shall have the same meaning as
the term "partnership minimum gain" in Regulations Section 1.704-2(b)(2) and
(d).
"Net Profits" or "Net Losses" as used herein shall mean for
each fiscal year the Company's taxable income or loss determined under Code
Section 703(a) and adjusted as follows:
3
<PAGE>
(a) Tax exempt income of the Company shall increase Net
Profits and shall decrease Net Losses.
(b) Expenditures described in Regulations Section
1.704-1(b)(2)(iv)(i) shall decrease Net Profits and increase Net Losses.
(c) If the value of property of the Company reflected in the
Members' Capital Accounts is adjusted in accordance with Sections 6.1(c)(i) or
(ii) or 6.1(d) hereof, the amount of such adjustment shall be treated as a gain
or loss in determining Net Profits or Net Losses.
(d) If the value of property of the Company reflected in the
Members' Capital Accounts is adjusted pursuant to Section 6.1(c) or (d), the
Company disposes of such property, and such disposition results in a gain or
loss that is recognized for federal income tax purposes, then such gain or loss
shall be computed by using the value of such property as it is reflected in the
Members' Capital Accounts in lieu of the tax basis of such property.
(e) If the value of property of the Company as reflected in
the Members' Capital Accounts is adjusted in accordance with Section 6.1(c), the
amount of depreciation, depletion, or amortization for such property shall be
the Revised Depreciation.
(f) If an adjustment of the Members' Capital Accounts is
required by Treasury Regulations Section 1.704-1(b)(2)(iv)(m) because of a
distribution to a Member other than a distribution in liquidation of such
Member's Interest, the amount of such adjustment shall be treated for purposes
of determining Net Profits or Net Losses as gain, if it increases the tax basis
of property of the Company, or as a loss, if decreases the tax basis of such
property of the Company.
(g) None of the allocations set forth in Sections 6.3 through
6.9 shall be taken into account in determining Net Profits and Net Losses.
"Nonrecourse Deductions" has the meaning set forth in Treasury
Regulation Section 1.704-2(c).
"OASIS" means Outsourced Automated Reservations and Integrated
Solutions, Inc., a Delaware corporation.
"OASIS Loan" means that certain loan of $451,400 to be made by
OASIS to ORS pursuant to the terms of the Contribution Agreement.
"Officers" are those persons appointed as officers of the
Company and ORS under the terms of this Agreement.
"Operating Cash Flow From ORS" means all cash or other
property received by the Company from any source (excluding Capital Cash Flow
from ORS and Cash Flow from the
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EGLOBE Securities), reduced by cash applied: (i) to pay all of the expenses of
the Company, including debt service, operating expenses and capital
expenditures; and (ii) to establish a working capital reserve for future
expenses of the Company, including debt service, operating expenses and capital
expenditures, which reserve shall be in a reasonable amount to be determined by
the Directors.
"ORS" means Oasis Reservations Services, Inc., a Delaware
corporation.
"ORS Shares" means the shares of the capital stock of ORS to
be contributed to the Company by OASIS under the Contribution Agreement.
"Residual Interest" means that part of the Interest of OASIS
in the Company which has the rights set forth in Sections 7.1(d) and 8.4( c).
"Treasury Regulations" means the regulations of the U.S.
Department of the Treasury promulgated under the Code, as such Treasury
Regulations may be amended from time to time (including corresponding provisions
of succeeding regulations).
"Transfer" has the meaning given to such term in Section 11.1
of this Agreement.
ARTICLE 2
ORGANIZATIONAL MATTERS
2.1 Formation. Subject to the terms and conditions of this Agreement,
the parties hereby form the Company as a limited liability company pursuant to
the provisions of the Act. The rights and duties of the Members, and the affairs
of the Company, shall be governed by the provisions of this Agreement and the
Act.
2.2 Certificate of Formation and Related Documents. As soon as possible
after the execution of this Agreement, the Members shall cause an Amended and
Restated Certificate of Formation (the "Amended Certificate") to be filed in the
Secretary of State of the State of Delaware in accordance with the requirements
of the Act. The Amended Certificate shall reiterate the provisions of Sections
8.1, 8.2 and 8.4 of this Agreement. From time to time, the Members shall execute
such certificates, qualifications to do business, fictitious name certificates,
or similar filings in such jurisdictions as the Board of Directors may determine
from time to time to be necessary or appropriate in connection with the conduct
of the business of the Company or to provide notification of the limitation of
liability of Members under applicable law.
2.3 Name. The name of the Company shall be "eGlobe/Oasis Reservations
LLC."
2.4 Principal Office. The principal office of the Company shall be
located at 1250 24th Street, N.W. , Suite 725, Washington, D.C. 20037, or such
other location as the Board of Directors
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may from time to time determine. The Company shall promptly notify the Members
of any change in the Company's principal office.
2.5 Other Offices. The Company may have such other offices as the Board
of Directors may from time to time determine.
2.6 Term. The existence of the Company shall continue until the Company
is dissolved in accordance with the terms of this Agreement or the Act.
2.7 Registered Agent and Registered Office. The initial registered
agent and registered office of the Company is The Corporation Trust Company, 209
Orange Street, Wilmington, Delaware 19801.
2.8 Change of Registered Agent or Registered Office. The registered
agent and the registered office may be changed from time to time at the
direction of the Board of Directors.
ARTICLE 3
PURPOSE AND POWERS
3.1 Purpose of the Company. The Company is organized for the following
purposes:
(a) To acquire the ORS Shares pursuant to the terms of the
Contribution Agreement; and
(b) To acquire the EGLOBE Securities pursuant to the Contribution
Agreement; and
(c) To conduct, exclusively through ORS, the business currently
conducted and proposed to be conducted by ORS, and any activity incidental
thereto.
3.2 Powers. The Company shall have all powers of a limited liability
company under the Act and the power to do all things necessary or convenient to
accomplish its purposes as set forth in Section 3.1.
ARTICLE 4
CAPITAL CONTRIBUTIONS
4.1 Required Capital Contributions.
(a) Upon the execution of this Agreement, OASIS shall contribute to
the Company all of the outstanding capital stock of ORS, pursuant to the terms
of the Contribution Agreement.
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(b) Upon the execution of this Agreement, EOI shall contribute to
the Company shares of EGLOBE Common Stock, and the EGLOBE Warrants, pursuant to
the terms of the Contribution Agreement.
4.2 Additional Capital Contributions. The Members shall not be required
or permitted to make any additional Capital Contributions without the prior
approval of all of the Members.
ARTICLE 5
INTERESTS IN THE COMPANY
5.1 Interests in the Company. In exchange for the Capital Contributions
to be made by the Members under Section 4.1, OASIS and EOI shall receive the
Interests described in this Agreement.
ARTICLE 6
CAPITAL ACCOUNTS AND ALLOCATIONS
6.1 Capital Accounts; Maintenance Generally. A Capital Account shall be
maintained for each Member in accordance with the following provisions:
(a) Upon the Company's receipt of the Capital Contributions
required by Section 4.1, the Capital Account of OASIS shall be credited with an
initial balance equal to its stockholder's equity as of the date of this
Agreement, and the Capital Account of EOI shall be credited with an initial
balance of $3,000,000. Thereafter, each Member's Capital Account shall be
increased by (i) the amount of money contributed by such Member to the Company;
(ii) the fair market value of property contributed by such Member to the Company
(net of liabilities secured by such contributed property that the Company is
considered to assume or take subject to under Code Section 752), and (iii) the
allocations to such Member of Net Profits and the amount of any items of income
and gain allocated to such Members under Section 6.2 through 6.9 hereof.
(b) Each Member's Capital Account shall be decreased by (i) the
amount of money distributed to such Member by the Company, (ii) the fair market
value of property distributed to such Member by the Company (net of liabilities
secured by such distributed property that such a Member is considered to assume
or take subject to under Code Section 752), and (iii) such Member's distributive
share of Net Losses and the amount of any items of deduction or loss allocated
to such Member under Sections 6.2 through 6.9.
(c) The value of all items of property reflected in the Capital
Accounts of the Members shall be adjusted to their fair market values and such
adjustment shall be reflected in the Capital Accounts of the Members as part of
Net Profits or Net Losses or under Section 6.9 hereof, as the case may be, as of
the following times:
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(i) in connection with a contribution of money or other
property (other than a de minimis amount) to the Company by a new or existing
Member as consideration for an Interest in the Company; and
(ii) in connection with a liquidation of the Company within the
meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g) or a distribution
of money or other property (other than a de minimis amount) by the Company to a
retiring or continuing Member as consideration for an interest in the Company;
(iii) in connection with adjustments to the basis of property
of the Company pursuant to Code Section 734(b) or 743(b), but only to the extent
that the Capital Accounts of the Members are adjusted as required in Treasury
Regulations Section 1.704-1(b)(2)(iv)(m).
(d) The value in the Capital Accounts of the Members of an item of
property of the Company that is distributed to a Member shall, immediately prior
to such distribution, be adjusted to its fair market value and such adjustment
shall be reflected in the Capital Accounts of the Members as part of Net Profits
or Net Losses.
(e) Any Member who shall acquire Interests in the Company by means
of a transfer to such Member of all or a part of the Interests of another
Member, shall have a Capital Account which reflects the Capital Account of the
transferred Interests.
(f) Notwithstanding any provision in this Agreement to the
contrary, the Members intend that each Member's Capital Account shall be
maintained and adjusted in accordance with the Code and the Treasury
Regulations, including, without limitation, (i) the adjustments permitted or
required by Code Section 704(b) and, to the extent applicable, the principles
expressed in Code Section 704(c); and (ii) the adjustments required to maintain
Capital Accounts in accordance with the "substantial economic effect test" set
forth in the Treasury Regulations under Code Section 704(b).
6.2 Allocations of Net Profits and Net Losses. After the allocations
required by Sections 6.3 through 6.9 hereof have been made, Net Profits and Net
Losses shall be allocated among the Members as follows:
(a) Net Profits shall be allocated to the Members (i) first, to
each Member, in proportion to, and to the extent of, the amounts by which the
aggregate amount distributed to each Member pursuant to Section 7.1 exceeds the
aggregate amount of Net Income allocated to such Member pursuant to this Section
6.2(a)(i); (ii) second, to the extent of, and in proportion to, the amount by
which the aggregate amount of Net Losses allocated to each Member pursuant to
Section 6.2(b) exceeds the aggregate amount of Net Income allocated to each
Member pursuant to this Section 6.2(a)(ii), until each Member has been allocated
sufficient Net Profit to reverse the prior Net Losses allocated to such Member;
and (iii) thereafter, 90% to EOI and 10% to OASIS, unless distributions are then
being made pursuant to Section 7.1(c), in which case all further allocations of
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Net Income pursuant to this Section 6.2(a)(iii) shall be made 99% to OASIS and
1% to EOI, or unless distributions are then being made pursuant to Section
7.1(d), in which case all further allocations of Net Income pursuant to this
Section 6.2(a)(iii) shall be made to EOI.
(b) Net Losses shall be allocated to the Members (i) first, to the
extent of, and in proportion to, the amounts (if any) by which the aggregate
amount of Net Income allocated to each Member pursuant to Section 6.2(a)(iii)
exceeds the aggregate amount of Net Loss allocated to each Member pursuant to
this Section 6.2(b)(i); and (ii) thereafter, 90% to EOI and 10% to OASIS, unless
distributions are then being made pursuant to Section 7.1(c), in which case all
further allocations of Net Losses pursuant to this Section 6.2(b)(ii) shall be
made 99% to OASIS and 1% to EOI, or unless distributions are then being made
pursuant to Section 7.1(d), in which case all further allocations of Net Losses
pursuant to this Section 6.2(b)(ii) shall be made to EGLOBE.
6.3 Minimum Gain Chargeback. If there is a net decrease in Minimum Gain
for a fiscal year, to the extent required in Treasury Regulations Section
1.704-2(f), each Member shall be allocated items of income and gain for such
fiscal year, and if necessary, for subsequent fiscal years in accordance with
Treasury Regulations Section 1.704-2(j)2(iii), equal to the Member's share of
the net decrease in Minimum Gain within the meaning of Treasury Regulations
Section 1.701-2(g)(2). The items of income and gain to be allocated pursuant to
this Section 6.3 are intended to constitute a "minimum gain chargeback" within
the meaning of Treasury Regulations Section 1.704-2(f).
6.4 Member Nonrecourse Debt Minimum Gain Chargeback. If there is a net
decrease in Member Nonrecourse Debt Minimum Gain for a fiscal year, to the
extent required in Treasury Regulations Section 1.704-2(i)(4), each Member with
a share of that Member Nonrecourse Debt Minimum Gain, determined in accordance
with Treasury Regulations Section 1.704-2(i)(5), as of the beginning of such
fiscal year shall be allocated items of income and gain for such fiscal year,
and if necessary for subsequent fiscal years in accordance with Treasury
Regulations Section 1.704-2(j)2(iii), equal to the Member's share of the net
decrease in Member Nonrecourse Debt Minimum Gain, determined in accordance with
Treasury Regulations Section 1.704-2(i)(4). The items of income and gain to be
allocated pursuant to this Section shall be those items described in Treasury
Regulations Section 1.704-2(i)(4) and (j)(2). This Section 6.4 is intended to
constitute a "partner nonrecourse debt minimum gain chargeback" within the
meanings of Treasury Regulations Section 1.704-2(i)(4).
6.5 Qualified Income Offset. If a Member unexpectedly receives an
adjustment, allocation, or distribution described in Treasury Regulations
Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6), such Member shall be allocated
items of income and gain (consisting of a pro rata portion of each item of the
income, including gross income, and gain of the Company for such fiscal year) in
an amount and manner sufficient to eliminate as quickly as possible and to the
extent required by the Treasury Regulations, the deficit Capital Account balance
of such Member in excess of the amounts that such Member is deemed obligated to
restore pursuant to Treasury Regulations Section 1.704-2(g)(1) and (Section)
1.704-2(i)(5). The allocations made pursuant to this Section 6.5 shall be made
after all other allocations pursuant to Sections 6.2 through 6.4 and 6.7 through
6.9 have been made.
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This Section 6.5 constitutes a "qualified income offset" within the meaning of
Treasury Regulations Section 1.704-1(b)(2)(ii)(d).
6.6 Gross Income Allocation. In the event that any Member has a deficit
Capital Account at the end of any fiscal year in excess of the amount that such
Member is deemed obligated to restore pursuant to Treasury Regulations Sections
1.704-2(g)(1) and 1.704-2(i)(5), each such Member shall be allocated items of
income and gain in the amount of such excess. The allocations made pursuant to
this Section 6.6 shall be made after all other allocations pursuant to Sections
6.2 through 6.5 and 6.7 through 6.9 have been made.
6.7 Allocations of Nonrecourse Deductions. Nonrecourse Deductions for
each taxable year shall be allocated among the Members as follows: (i) 90% to
EGLOBE and (ii) 10% to OASIS.
6.8 Allocations of Treasury Regulations Section 1.704-1(b)(2)(iv)(m)
Adjustments. If an adjustment to the Capital Accounts of the Members is required
by Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) or (4) because of a
distribution in complete liquidation of a Member's Interest, the amount of such
adjustment shall be treated as an item of gain, if it increases the tax basis of
property of the Company, or as an item of loss, it if decreases the tax basis of
property of the Company. If Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2)
applies to the adjustment to the Capital Accounts, such items of gain or loss
shall be allocated to the Members in accordance with their Percentage Interests.
If Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies to the
adjustment to the Capital Accounts, such items of gain or loss shall be
allocated to the Member receiving the distributions.
6.9 Code Section 704(c) Tax Allocations. Solely for tax purposes, and
in accordance with Code Section 704(c), income, gain, loss, and deductions with
respect to property contributed to the Company by a Member shall be shared among
the Members so as to take account of the variation between the basis of the
property to the Company for federal income tax purposes and its fair market
value at the time of its contribution. If the value of any property of the
Company reflected in the Members' Capital Accounts is adjusted pursuant to
Section 6.2(c)(i) or (ii), thereafter, allocations of depreciation, depletion,
amortization, and gain or loss with respect to such property shall be determined
so as to take into account the variation between the adjusted tax basis and the
adjusted value of such property as reflected in the Members' Capital Accounts in
the same manner as under Code Section 704(c).
ARTICLE 7
DISTRIBUTION TO MEMBERS
7.1 Distributions.
(a) The Company shall make distributions to the Members at such
times and in such amounts as may be approved by the Directors, except that: (i)
prior to any Bankruptcy of any
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Member, the Company or EGLOBE, the Company shall promptly distribute to the
Members any Capital Cash Flow from ORS under Section 7.1(b)(iii), and (ii) after
any Bankruptcy of any Member, the Company or EGLOBE, the Company shall promptly
distribute to the Members all cash flow under Section 7.1(c).
(b) Subject to Section 7.1(c) and 7.1(d), distributions shall be
divided among the Members as follows:
(i) The Operating Cash Flow of the Company shall be divided as
follows: 90% to EOI and 10% to OASIS.
(ii) The Cash Flow from the EGLOBE Securities shall be divided
as follows: 90% to EOI and 10% to OASIS.
(iii) The Capital Cash Flow from ORS shall be divided as
follows: (aa) first, 100% to OASIS until OASIS shall have received aggregate
distributions on or after the date of this Agreement in an amount equal to
$9,000,000; and (bb) then, 90% to OASIS and 10% to EGLOBE.
(c) In the event of any Bankruptcy of any Member, the Company or
EGLOBE, the Operating Cash Flow from ORS, the Capital Cash Flow from ORS and
Cash Flow from the EGLOBE Securities shall be divided as follows: 100% to OASIS
until OASIS shall have received aggregate distributions on or after the date of
this Agreement in an amount equal to $15,000,000; and then (i) 99% to OASIS and
(ii) 1% to EGLOBE.
(d) After the exchange of the Interest of OASIS ( other than the
Residual Interest) under Sections 11.6, 11.7 or 11.8, OASIS shall have the right
to receive, with respect to its Residual Interest, annual distributions from the
Company equal to $1,000 per calendar year.
7.2 Return of Capital. Except as herein provided with respect to
distributions during the term of the Company or following dissolution, no Member
has the right to demand a return of such Member's Capital Contribution (or the
balance of such Member's Capital Account). Further, no Member has the right (i)
to demand and receive any distribution from the Company in any form other than
cash or (ii) to bring an action of partition against the Company or its
property.
7.3 Limitations on Distributions. Notwithstanding any other provisions
of this Article 7, the Company shall not make any distributions of money or
property unless: (i) after such distribution is made, the fair market value of
the Company's assets exceeds its total liabilities; and (ii) such distribution
does not otherwise contravene any provision of law applicable to the Company.
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ARTICLE 8
MANAGEMENT OF THE COMPANY AND ORS
8.1 Control of Business. Subject to the limitations contained in
Section 8.4, and the provisions of the Act, (i) the business and affairs of the
Company and ORS shall be managed or under the direction of the Board of
Directors, and (ii) the power to act for and bind the Company and ORS shall be
vested exclusively in the Board of Directors, subject to the authority of the
Board of Directors to delegate powers and duties to the Officers as set forth in
this Agreement.
8.2 Directors.
(a) Subject to the provisions of Section 8.2(b) and Section 8.2
(d), the Company and ORS shall have three (3) Directors. EOI shall have the
right to appoint two (2) of these Directors, and OASIS shall have the right to
appoint one (1) of these Directors.
(b) Subject to Section 8.2(d), on and after any bankruptcy of
EGLOBE or EOI, the Company and ORS shall have five (5) Directors. EOI shall have
the right to appoint two (2) of these Directors and OASIS shall have the right
to appoint three (3) of these Directors.
(c) Each Director may be removed at any time by the Member who
appointed such Director. Upon the death, resignation or removal of a Director,
the Member that appointed him or her shall promptly appoint his or her
successor.
(d) In the event that the Interest of OASIS in the Company (other
than the Residual Interest) is exchanged pursuant to Sections 11.6, 11.7 or
11.8, then EOI shall be entitled to appoint all of the Directors of the Company.
8.3 Officers.
(a) Authority and Duties. The Officers shall have the authority to
manage and control the day to day operations of the business and affairs of the
Company and ORS and to do all things necessary or convenient to carry out the
business and affairs of the Company and ORS, subject in all cases to the
authority of the Board of Directors and the limitations set forth in Section 8.4
of this Agreement. The Officers shall have the duties set forth in this Section
8.3 and such other duties as may be assigned to them from time to time by the
Board of Directors.
(b) President. The President shall have the powers and duties of
supervision and management usually vested in the office of the chief executive
officer and shall have and perform
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such other duties as may from time to time be assigned by the Board of
Directors. The President shall preside at all meetings of the Members and the
Board of Directors.
(c) Vice Presidents. The Vice Presidents, when appointed by
the Board of Directors, shall have such powers and perform such duties as the
Board of Directors and the President may from time to time assign to them. In
the absence of the President, the Vice Presidents, in the order of their rank as
established by the Board of Directors, shall perform the duties of the President
and, when so acting, shall have all the powers of, and be subject to all the
limitations imposed upon, the President.
(d) Secretary. The Secretary shall attend all meetings of the
Members and the Board of Directors and shall keep true and accurate records of
such meetings. The Secretary shall give notice of all meetings of the Members or
the Board of Directors. The Secretary shall have such other powers and perform
such other duties as the Board of Directors or President may from time to time
assign to the Secretary.
(e) Treasurer. The Treasurer shall keep and maintain or cause
to be kept and maintained accurate and complete books and records of accounts
for the Company and ORS. Subject to the authority of the Board of Directors and
the President, the Treasurer shall manage and oversee all monetary assets of the
Company including cash, short-term investments and money market funds.
8.4 Limitation of Authority of the Board of Directors and Officers.
(a) Subject to Section 8.4(c), notwithstanding the general
authority of the Board of Directors under Section 8.1 and the limited authority
of the Officers under Section 8.3, the following matters shall require the prior
written consent of all Directors and Members:
(i) the merger or consolidation of the Company or ORS with or
into any other entity;
(ii) the sale, exchange or other transfer of all or any
substantial part of the assets of the Company or ORS;
(iii) any sale, exchange or other transfer of the EGLOBE
Shares, other than pursuant to Sections 11.6 or 11.7.
(iv) any sale, exchange or other transfer of the ORS Shares,
other than pursuant to Sections 11.8 or 12.3;
(v) the incurrence or assumption by the Company or ORS,
directly or indirectly, as principal or guarantor, of any indebtedness of any
kind, except for (i) indebtedness of ORS existing as of the date of this
Agreement; (ii) the OASIS Loan; or (iii) any additional
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indebtedness incurred by ORS on or after the date of this Agreement, provided
that the proceeds of such additional indebtedness is utilized exclusively for
the benefit of ORS and further provided, that the aggregate amount of such
additional indebtedness which is outstanding does not exceed an amount equal to
120% of the gross revenues of ORS during the most recently computed calendar
month (the additional indebtedness which may be incurred by ORS under this
subsection (iii) shall not include any indebtedness with respect to the OASIS
Loan);
(vi) the grant of any lien on any of the assets of the Company
or ORS, except for liens on the assets of ORS which encumber indebtedness
permitted by Section 8.4(a)(v);
(vii) any transactions between the Company or ORS, and any
Member, Director or Officer or any of their Affiliates, including but not
limited to any loans, guarantees, advances, payments or transfers of any kind;
except for the following transactions which do not require the prior approval of
all Directors and Members: (aa) transactions expressly authorized by the other
provisions of this Agreement or (bb) the provision of telecommunication services
by EGLOBE or its Affiliates on terms and conditions (including price) which are
at least as favorable as those available to the Company from unaffiliated third
parties;
(viii) the making of any distributions, loans or advances by
the Company to the Members (except as required by Section 7.1);
(ix) the making of any distributions, loans or advances by ORS
to the Company (except as required by Section 7.1); or
(x) any material change in the nature of the business proposed
to be conducted by the Company or ORS as of the date of this Agreement;
(b) Subject to Section 8.4(c), notwithstanding the general
authority of the Board of Directors under Section 8.1 and the limited authority
of the Officers under Section 8.3, neither the Company nor ORS (while a
subsidiary of the Company) shall take any of the actions listed below without
the prior written consent of all Members:
(i) the commencement of any case, proceeding or other action
on behalf of the Company or ORS under any existing or future law of any
jurisdiction relating to bankruptcy, insolvency, reorganization or relief of
debtors; the institution of any proceedings that have the Company or ORS
adjudicated as bankrupt or insolvent or result in the entry of an order for
relief; the consenting to the institution of bankruptcy or insolvency
proceedings against the Company or ORS; the filing of a petition or consenting
to a petition seeking reorganization, arrangement, adjustment, winding-up,
dissolution, composition, liquidation or other similar relief on behalf of the
Company or ORS of its debts under any federal or state law relating to
bankruptcy; seeking or consenting to the appointment of a receiver, conservator,
liquidator, assignee, trustee, sequestrator, custodian or any similar official
for the Company or ORS or any portion of its properties or assets; the making of
any assignment for the benefit of the creditors of the Company or ORS; or the
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admission in writing by the Company or ORS of its inability to pay its debts
generally as they become due or the declaration of a moratorium on the payment
of its debts.
(c) In the event that the Interest of OASIS in the Company (other
than the Residual Interest) is exchanged pursuant to Sections 11.6, 11.7 or 11.8
of this Agreement, OASIS shall not have any rights granted to Members under
Section 8.4(a), but, until the repurchase of the Residual Interest, OASIS shall
continue to have the rights granted to Members under Section 8.4(b); including
the right to prohibit any of the actions listed in Section 8.4(b).
(d) The provisions of this Section 8.4, to the extent they purport
to restrict the activities of ORS, shall only apply to ORS while a majority of
the common stock of ORS is owned by the Company.
8.5 OASIS Loan. OASIS shall loan the amount of $481,400 to the Company
pursuant to the terms of the Contribution Agreement.
8.6 Other Loans from Members. Subject to the limitations of Section
8.4, the Company may borrow additional amounts from the Members on the following
terms: (i) each loan shall bear interest at the rate of 7% per annum, payable
quarterly; (ii) the principal amount of each loan shall be due and payable 36
months after the date of the loan (except that the due date may be accelerated
in the event of the sale of ORS); and (iii) each loan will be unsecured.
8.7 Performance of Duties by Directors and Officers.
(a) The Directors and Officers shall perform their duties in good
faith, in a manner reasonably believed by them to be in the best interests of
the Company, and with such care as an ordinarily prudent person in a like
position would use under similar circumstances. In performing their duties, the
Directors and Officers shall be entitled to rely upon information, opinions,
reports, or statements including financial statements and other financial data,
in each case prepared or presented by:
(i) one or more Officers or agents of the Company whom they
reasonably believes to be reliable and competent in the matters presented; or
(ii) counsel, public accountants or other persons as to matters
which they reasonably believes to be within such person's professional or expert
competence.
(b) The Directors and Officers shall not be considered to be acting
in good faith if they have knowledge concerning the matter in question that
would cause such reliance described in the preceding paragraph to be
unwarranted.
8.8 Limitations on Liability of Members, Directors and Officers. No
Members, Directors and Officers of the Company shall have any liability to the
Company or the Members for any losses
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sustained or liabilities incurred as a result of any act or omission of such
person if (i) the person acted in good faith and in a manner he or she
reasonably believed to be in, or not opposed to, the interests of the Company
and (ii) the conduct of the person did not constitute actual fraud, gross
negligence, or willful misconduct.
8.9 Liability to Third Parties. The debts, obligations, and liabilities
of the Company, whether arising in contract, tort, or otherwise, shall be solely
the debts, obligations, and liabilities of the Company, and the Members,
Directors and Officers shall not be obligated personally for any such debt,
obligation, or liability by reason of acting as a Member, Director of Officer of
the Company.
8.10 Indemnification.
(a) To the maximum extent permitted by law, the Company shall
defend, indemnify and hold harmless the Directors and Officers and the employees
and agents of the Company (each, an "Indemnitee") from and against any and all
losses, claims, demands, costs, damages, liabilities, and expenses of any nature
(including attorney's fees and disbursements), judgments, fines, settlements,
penalties and other expenses actually and reasonably incurred by the Indemnitee,
by reason of the fact that the Indemnitee is or was a Director or Officer of the
Company or is or was an employee or agent of the Company, arising out of or
incidental to the business of the Company provided that (i) the Indemnitee's
conduct did not constitute willful misconduct; (ii) the action is not based on a
breach of this Agreement; (iii) the Indemnitee acted in good faith and in a
manner Indemnitee reasonably believed to be in, or not opposed to, the best
interests of the Company; and (iv) such Indemnitee's conduct was not unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere, or its equivalent,
shall not, in and of itself, create a presumption that the Indemnitee acted in a
manner contrary to that specified above.
(b) Expenses incurred by an Indemnitee in defending any claim,
demand, action, suit or proceeding subject to this Section shall be advanced by
the Company prior to the final disposition of such claim, demand, action, suit
or proceeding upon receipt by the Company upon an undertaking by or on behalf of
the Indemnitee to repay such amount(s) if it shall ultimately be determined that
such Person is not entitled to be indemnified as authorized in this Section.
(c) The indemnification provided by this Section shall be in
addition to any other rights to which the Indemnitee may be entitled under any
agreement, as a matter of law or equity, or otherwise, and shall inure to the
benefit of the successors, assigns, heirs, personal representatives, and
administrators of the Indemnitee.
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ARTICLE 9
BOOKS, RECORDS, ACCOUNTING AND REPORTS
9.1 Funds of the Company and ORS. The funds of the Company and ORS
shall be deposited in such bank accounts, or invested in such interest-bearing
or non-interest-bearing investments, including, without limitation, federally
insured checking and savings accounts, certificates of deposit, government
issued or backed securities, or mutual funds investing primarily in such types
of securities, as shall be designated by the Board of Directors. Such funds
shall not be commingled with the funds of any other person.
9.2 Checks, Drafts, Orders for Payment. All checks, drafts, or orders
for the payment of money, notes, or other evidences of indebtedness issued in
the name of the Company and ORS shall be signed by such Officers or other agents
of the Company and in such manner as the Board of Directors shall from time to
time determine.
9.3 Financial Reports. The Company shall prepare and distribute to the
Members as soon as practicable (and in no event later than 45 days) after the
end of each calender month and each Fiscal Year of the Company, an unaudited
balance sheet as at the end of such period, and an unaudited profit and loss
statement for the period ended, each prepared, in accordance with generally
accepted accounting principles, consistently applied.
9.4 Fiscal Year. The Fiscal Year of the Company shall end on December
31.
9.5 Tax Matters Member. EOI shall be the "tax matters" member within
the meaning of Section 6231 of the Code.
9.6 Tax Returns. The Directors shall cause all tax returns for the
Company and ORS to be prepared and timely filed with the appropriate authorities
and, within 60 days after the end of each fiscal year, shall provide to the
Members such information as shall be necessary for the preparation by the
Members of their federal income tax returns.
9.7 Books and Records. The Company shall maintain, and shall cause ORS
to maintain, appropriate books and records with respect to their business. The
books and records shall include (i) books of account; (ii) a current and past
list of the full name and last known mailing address of each Member and each
Officer and Director not a Member of the Company (all Officers and Directors
shall be identified as such on the records); (iii) a copy of the Articles of
Organization and all amendments thereto, together with executed copies of any
powers of attorney pursuant to which any articles of amendment have been
executed; (iv) copies of federal, state and local income tax returns and reports
of the Company and ORS; (v) an executed copy of this Agreement as in effect and
all amendments thereto; (vi) recent financial statements of the Company and ORS
for the three most recent years; and (vii) copies of such other material
instruments and documents as the Officers may executed on behalf of the Company
and ORS. Such books and records shall be kept at the
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principal office of the Company and ORS, respectively. Each Member shall have
the right, during ordinary business hours, to inspect and copy any of such
records at the requesting Member's expense.
9.8 Accounting. The books of the Company and ORS for financial
reporting purposes shall be maintained on an accrual basis of accounting in
accordance with generally accepted accounting principles, consistently applied.
The Company's books for purposes of maintaining and determining Capital Accounts
shall be maintained in accordance with the provisions of this Agreement, Section
704 of the Code and, to the extent not inconsistent therewith, the principles
described above for financial reporting purposes.
ARTICLE 10
CERTAIN RIGHTS AND OBLIGATIONS OF MEMBERS
10.1 Limited Liability. No Member shall be personally liable for any
debts, liabilities, or obligations of the Company; provided that each Member
shall be responsible (i) for the making of any Capital Contribution required to
be made to the Company by such Member pursuant to the terms of this Agreement;
and (ii) for the amount of any distributions made to such Member that must be
returned to the Company pursuant to the Act.
10.2 Participation in Management. No Member, as such, shall take any
part in the management and control of the business of the Company nor shall any
Member, by reason of its status as such, have any right to transact any business
for the Company or any authority or power to sign for or bind the Company.
Notwithstanding the foregoing, Members shall have the right to approve or
disapprove or otherwise consent or withhold consent with respect to such matters
as are specified in this Agreement or the Act; and provided that Members may
take such actions on behalf of the Company and execute documents or otherwise
bind the Company to the extent, if any, that such powers are delegated to any
such Member by the Directors from time to time.
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ARTICLE 11
TRANSFER OF INTERESTS
11.1 Restrictions on Transfer.
(a) EOI shall not sell, assign, transfer, pledge, hypothecate,
mortgage, encumber or dispose of (a "Transfer") all or any portion of its
Interest without: (i) the prior written consent of OASIS; and (ii) compliance
with the other terms of this Article 11. Any attempted Transfer by EOI in
violation of this Article 11 shall be null and void.
(b) On or before March 15, 2000, OASIS shall not Transfer all or
any portion of its Interest without: (i) the prior written consent of OASIS, and
(ii) compliance with the other provisions of this Article 11. Any attempted
Transfer in violation of this Section 11.1(b) shall be null and void. The
provisions of this Section 11.1(b) shall not apply to an exchange under sections
11.6, 11.7 or 11.8. After March 31, 2000, OASIS may Transfer its Interest upon
compliance with the provisions of Section 11.5.
(c) Any Member other than EOI and OASIS may Transfer its Interest
in the Company upon compliance with the provisions of Section 11.5.
11.2 Bankruptcy, Dissolution or Death of a Member. The Bankruptcy,
dissolution or death of a Member will not terminate the Company. In the event of
the Bankruptcy, dissolution or death of a Member, its successors in interest
will succeed to its Interest and shall be responsible for all of the liabilities
and obligations of such Member under this Agreement, provided, however, that
such successor in interest shall have no right to participate in the management
of the Company, including any right to elect Directors or to vote in any matters
to be voted on by the Members, unless such successor in interest shall receive
the prior written consent of all of the remaining Members.
11.3 Member Ceasing to be a Member. A Member shall cease to be a Member
only upon the occurrence of one or more of the following events:
(a) A Transfer of the Member's Interest in accordance with the
provisions of this Article 11; or
(b) Withdrawal of a Member from the Company, but only with the
prior written consent of all of the remaining Members.
11.4 Withdrawal. No Member may withdraw or retire except with the prior
written consent of all of the remaining Members, which consent the Members may
withhold for any or no reason whatsoever. In the event that consent is granted,
such consent shall be considered granted only within its limited scope and may
contain any and all conditions which the Members, in their sole discretion,
deems appropriate under the circumstances.
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11.5 Substituted Members. Any transferee acquiring the Interest of a
Member as permitted under this Article shall be deemed admitted as a substituted
Member with respect to the Interest transferred concurrently with the
effectiveness of the Transfer (provided that such transferee, unless already a
Member, shall, as a condition to such admission, execute a counterpart of this
Agreement, agreeing thereby to be bound by all of the terms and conditions
hereof), and such substituted Member shall be entitled to all of the rights and
benefits under this Agreement of the transferor of such Interest, subject to the
limitations of Section 11.2. Each transferee shall reimburse the Company for all
reasonable expenses incurred by the Company in connection with such Transfer. No
purported Transfer of any Interest, or any portion thereof or interest therein,
in violation of the terms of this Agreement (including any Transfer occurring by
operation of law) shall vest the purported transferee with any rights, powers,
or privileges hereunder, and no such purported transferee shall be deemed for
any purposes as a Member hereunder or have any right to inspect Company records
to maintain derivative proceedings, to maintain any action for an accounting or
to exercise any other rights of a Member hereunder or under the Act. Any
Transfer in contravention of any of the provisions of this Article 11 shall be
void ab initio and of no effect and shall not bind or be recognized by the
Company.
11.6 Mandatory Exchange of OASIS Interest for EGLOBE Securities.
(a) The Interest held by OASIS in the Company (including the
Residual Interest) shall be exchanged for the EGLOBE Securities upon the
fulfillment of the following conditions:
(i) the registration under the Securities Act of 1933, as
amended, of the resale by OASIS of at least $3,000,000 in value of EGLOBE Common
Stock in accordance with the terms and conditions of the Side Letter under the
Contribution Agreement; and
(ii) either (A) the receipt by EGLOBE of at least $10,000,000
in cash proceeds from the sale of equity interests in EGLOBE on or after the
date of this Agreement; or (B) the reporting by EGLOBE of positive EBITDA for
three consecutive calendar months; and
(iii) the absence of any Bankruptcy of EGLOBE.
(b) The consummation of the exchange under this Section shall not
entitle either party to any distribution of Operating Cash Flow from ORS, Cash
Flow from the EGLOBE Securities or Capital Cash Flow from ORS, even if the
Company has generated such cash flow prior to the date of the exchange.
(c) The exchange shall occur at the offices of the Company, five
business days after written notice of the fulfillment of the conditions is
delivered to OASIS. At the closing, the Company and OASIS shall execute and
deliver such documents as each of the parties shall reasonably request in order
to consummate the exchange of the OASIS Interests in the manner provided by this
Section 11.6.
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11.7 Optional Exchange of OASIS Interest for EGLOBE Securities.
(a) OASIS shall have the right to exchange its Interest in the
Company (including the Residual Interest) at any time into the EGLOBE
Securities, subject to the terms and conditions of this Section 11.7.
(b) The consummation of the exchange under this Section shall not
entitle either party to any distribution of Operating Cash Flow from ORS, Cash
Flow from the EGLOBE Securities or Capital Cash Flow from ORS, even if the
Company has generated such cash flow prior to the date of the exchange.
(c) To exercise its rights under this Section, OASIS must provide
written notice of its exercise of its exchange rights to the Company and EOI.
The closing of the exchange shall occur at the offices of the Company, five
business days after the notice of exercise is delivered to the Company. At the
closing, the Company and OASIS shall execute and deliver such documents as each
of the parties shall reasonably request in order to consummate the exchange in
the manner provided by this Section 11.7.
11.8 Optional Exchange of OASIS Interest for ORS Shares.
(a) OASIS shall have the right to exchange its Interest in the
Company (other than the Residual Interest) for the ORS Shares at any time on or
after the Bankruptcy of EGLOBE.
(b) The consummation of the exchange under this Section shall not
entitle either party to any distribution of Operating Cash Flow from ORS, Cash
Flow from the EGLOBE Securities or Capital Cash Flow from ORS, even if the
Company has generated such cash flow prior to the date of the exchange.
(c) To exercise its rights under this Section, OASIS must provide
written notice of its exercise of its exchange rights to the Company and EOI.
The closing of the exchange shall occur at the offices of the Company, five
business days after the notice of exercise is delivered to the Company. At the
closing, the Company and OASIS shall execute and deliver such documents as each
of the parties shall reasonably request in order to consummate the exchange in
the manner provided by this Section 11.8.
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11.9 Repurchase of Residual Interest.
The Company may repurchase the Residual Interest of OASIS for
a payment of $1,000, at any time commencing four years after the closing of any
exchange of the Interest of OASIS in the Company (other than the Residual
Interest) under Sections 11.6, 11.7 or 11.8.
ARTICLE 12
DISSOLUTION
12.1 Events of Dissolution. Each of the following shall be an "Event of
Dissolution" causing the Company to dissolve:
(a) The unanimous vote of the Members to dissolve the Company; or
(b) The election of OASIS, following the Bankruptcy of EGLOBE;
(c) The election of either Member to cause the dissolution of the
Company, provided that such election may not be made prior to March 31, 2001.
12.2 Effect of Death, Withdrawal, Bankruptcy of Dissolution of Member.
Notwithstanding anything to the contrary contained in the Act, the Company shall
not dissolve upon the death, withdrawal, Bankruptcy or dissolution of a Member.
12.3 Liquidation.
(a) Upon dissolution of the Company, the President, or if there is
no President, such person as is designated by a majority of the Directors (the
President or such other person being herein referred to as the "Liquidating
Agent") shall proceed to wind up the business and affairs of the Company in
accordance with the terms hereof and the requirements of the Act. The
Liquidating Agent shall have all of the rights in connection with the
liquidation and termination of the Company that the Board of Directors and the
Officers would have had with respect to the assets and liabilities of the
Company during the term of the Company, and the Liquidating Agent is hereby
expressly authorized and empowered to effectuate the liquidation and termination
of the Company and the transfer of any assets and liabilities of the Company.
The Liquidating Agent shall have the right from time to time, by revocable
powers of attorney, to delegate to one or more persons any or all of such rights
and powers and the authority and power to execute documents in connection
therewith, and to fix the reasonable compensation of each such person, which
compensation shall be charged as an expense of liquidation. The Liquidating
Agent is also expressly authorized to distribute the Company's property to the
Members, subject to satisfaction of any liens. This Agreement shall remain in
full force and effect during the period of winding up, except that the Members
shall not
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have the right to make withdrawals of capital or additional Capital
Contributions or to retire from the Company.
(b) Upon the dissolution of the Company, the Liquidator shall
promptly distribute the ORS Shares to OASIS and the EGLOBE Securities to EOI.
The distribution of the ORS Shares and EGLOBE Securities under this Section
shall not entitle either party to any distribution of Operating Cash Flow from
ORS, Cash Flow from the EGLOBE Securities or Capital Cash Flow from ORS, even if
the Company has generated such cash flow prior to the date of the exchange.
(c) If distributions are insufficient to return any Member the
full amount of such Member's Capital Contributions, such Members shall have no
recourse against any other Member or any Director. No Member shall have any
obligation to restore, or otherwise pay to the Company, any other Member, or any
third party, the amount of any deficit balance in such Member's Capital Account
upon dissolution and liquidation. Following the completion of the winding up of
the affairs of the Company and the distribution of its assets, the Company shall
be deemed terminated and the Liquidator shall file a certificate of cancellation
in the Secretary of State of the State of Florida as required by the Act.
(d) Each Member shall be furnished with a statement prepared by
the Liquidating Agent which shall set forth the assets and liabilities of the
Company as at the date of complete liquidation, and each Member's share thereof.
Upon completion of the liquidation, each Member shall cease to be a Member of
the Company, and the Liquidating Agent shall execute, acknowledge and cause to
be filed articles of dissolution of the Company, pursuant to the Act.
ARTICLE 13
MEETINGS OF DIRECTORS AND MEMBERS
13.1 Meetings of Directors. Meetings of Directors may be held whenever
called by any Director or the President.
13.2 Meetings of Members. Meetings of the Members may be held whenever
called by the Board of Directors or by the written demand of any Member. Any
written demand by a Member shall state the purpose or purposes of the proposed
meeting, and business to be transacted at any such meeting shall be confined to
the purposes stated in the notice thereof, and to such additional matters as the
Board of Directors may determine to be germane to such purposes. The President
shall serve as the chairman of any meetings of Members.
13.3 Place of Meetings. Meetings of the Directors or the Members shall
be held at the principal office of the Company, or such other place as the Board
of Directors shall determine.
13.4 Notice of Meetings. Written notice stating the place, day, and
hour of any meeting of the Directors or the Members and the purpose or purposes
for which the meeting is called shall
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be delivered not less than five (5) nor more than fifty (50) days before the
date of the meeting, either personally, by facsimile, or by mail, by or at the
direction of the person calling the meeting, to each Director and each Member.
Any party may waive notice of any meeting. The attendance of a party at any
meeting shall constitute a waiver of notice of such meeting except where a party
attends a meeting for the express purpose of objecting to the transaction of any
business on the grounds that the meeting is not lawfully called or convened.
13.5 Quorum.
(a) At any meeting of the Directors, the presence in person or by
proxy of a majority of the Directors shall constitute a quorum.
(b) At any meeting of Members, the presence in person or by proxy
of both Members shall constitute a quorum.
13.6 Voting.
(a) If a quorum is present at a meeting of Directors, the
affirmative vote of a majority of the Directors shall constitute the approval of
the Directors.
(b) If a quorum is present at a meeting of Members, the
affirmative vote of both Members shall be the act of the Members.
13.7 Proxies. At meetings of the Members and any adjournments thereof,
a Member may vote in person or by proxy executed in writing by the Member or by
its duly authorized attorney-in-fact. Such proxy shall be filed with the Board
before or at the time of the meeting. No proxy shall be valid after sixty (60)
days from the date of its execution, unless otherwise provided in the proxy. The
burden of proving the validity of any undated, irrevocable, or otherwise
contested proxy will rest with the person seeking to exercise the same.
13.8 Meetings by Telephone. Any Director or Member may participate in
any meeting of Directors or Members, as the case may be, by means of a
conference telephone or similar communication equipment whereby all Directors or
Members participating in such meeting can hear one another. Such participation
shall constitute attendance in person.
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13.9 Record of Meetings. The Company shall prepare minutes for each
meeting of Directors or Members.
13.10 Action Without a Meeting.
(a) Any action by the Directors which may be taken at any meeting
of the Directors, may be taken without a meeting, without prior notice, and
without a vote, if a consent in writing, setting forth the action to be taken,
shall be signed by all the Directors.
(b) Any action required to be taken at any meeting of Members or
any action which may be taken at any meeting of Members, may be taken without a
meeting, without prior notice, and without a vote if a consent in writing,
setting forth the action so taken, shall be signed by the Members having not
less than the minimum number of votes that would be necessary to authorize or
take such action at a meeting at which all Interests entitled to vote thereon
were present and voted.
(c) Any consents under this Section 13.10 may: (i) be signed in
counterparts; and (ii) may have faxed signatures, copies of which shall be
effective when received by the Company. Within 10 days after first obtaining
such authorization by written consent, notice must be given to all Directors and
Members.
ARTICLE 14
GENERAL PROVISIONS
14.1 Notices. Any notice, demand, request or report required or
permitted to be given or made under this Agreement shall be in writing and shall
be deemed given or made when delivered in person or five (5) days after the date
when sent by certified or registered mail to: (i) a Member, when addressed to
such Member at the address set forth on the signature pages hereto or such other
address as the Member may hereafter provide to Company in writing; and (ii) the
Company, when addressed to the Company at its principal office.
14.2 Governing Law. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of Delaware, without reference to its
principles of conflicts of laws.
14.3 Headings. The Article and Section headings of this Agreement are
for convenience only, do not form a part of this Agreement, and shall not in any
way affect the interpretation hereof.
14.4 Power of Attorney.
(a) Subject to the terms and conditions hereof, each Member hereby
irrevocably constitutes and appoints each of the Directors his true and lawful
attorney-in-fact and agent with full power and authority to act in his name,
place and stead to execute, acknowledge, swear to, deliver, file, record and
publish any document requisite to carrying out the intention and purposes
enumerated below, including, but not limited to, the execution, acknowledgment,
swearing to,
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delivery, filing, recording and publication of this Agreement and amendments
thereto, documents, conveyances, leases, contracts, loan documents and/or
counterparts thereof, and all other documents which such person reasonably deems
necessary or appropriate:
(i) To qualify or continue the Company as a limited liability
company;
(ii) To effect the dissolution and termination of the Company;
or
(iii) To effect transfers, admissions, withdrawals and
substitutions of Members as specifically provided under the terms of this
Agreement.
(b) No person shall take any action as an attorney-in-fact of any
Member which would in any way increase the liability of such Member beyond the
liability expressly set forth in this Agreement or increase the term of the
Company nor is any Member bound by such action taken. This power of attorney
shall be irrevocable.
14.5 Parties in Interest. Nothing herein shall be construed to be to
the benefit of or enforceable by any Person not a party to this Agreement,
including, but not limited to, any creditor of the Company, other than the
Persons entitled to indemnification under Section 8.12.
14.6 Further Assurances. The Members will execute and deliver such
further instruments and do such further acts and things as may reasonably be
required to carry out the intent and purposes of this Agreement.
14.7 Remedies Cumulative. No remedy conferred upon or reserved to the
Company or any Member by this Agreement is intended to be exclusive of any other
remedy. Each and every such remedy shall be cumulative and shall be in addition
to any other remedy given to the Company or any Member hereunder or now or
hereafter existing at law or in equity or by statute.
14.8 Successors and Assigns. Subject to the restrictions on Transfer
set forth in Article 11, this Agreement shall bind and inure to the benefit of
the parties hereto and their respective successors and assigns.
14.9 Dispute Resolution. Prior to any Bankruptcy of any Member, the
Company or EGLOBE, any dispute by and among the Members and the Company with
respect to their rights and duties under this Agreement shall be determined by
arbitration in Miami, Florida pursuant to the Commercial Arbitration Rules of
the American Arbitration Association. In the event of any Bankruptcy of any
Member, the Company or EGLOBE, any dispute by and among the Members and the
Company with respect to their rights and duties under this Agreement shall
therefore be determined by the U.S. District Court for the Southern District of
New York pursuant to, and as part of, the jurisdiction of such court over the
Estate of Eastern Airlines, Inc.
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14.10 Legal Fees. In the event that any party should commence legal
proceedings with respect to the rights and duties of the parties to this
Agreement, the prevailing party in such legal proceedings shall be entitled to
reimbursement from the non-prevailing party of all legal fees and expenses
incurred in such proceedings.
14.11 Amendment. This Agreement may not be amended except with the
prior written consent of all Members.
14.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
shall constitute one and the same agreement.
14.13 Entire Agreement. The terms and conditions of this Agreement
constitutes the entire agreement between the Members concerning the subject
matter hereof, and shall supersede all previous communications, either oral or
written, between the parties hereto, and no agreement or understanding modifying
this Agreement shall be binding upon any Member unless such modification is in
writing and signed by such Member.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first-above written.
ADDRESSES: MEMBERS:
EOI:
EGLOBE/OASIS, INC.
_________________________ By:_______________________________
_________________________ Its: _____________________________
_________________________ Name:_____________________________
OASIS:
OUTSOURCED AUTOMATED
RESERVATIONS AND INTEGRATED
SOLUTIONS, INC.
_________________________ By:_______________________________
_________________________ Its: _____________________________
_________________________ Name:_____________________________
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E X H I B I T S
Exhibits
A - Certificate of Formation
29
EXHIBIT 4.1
Form of Warrant
RESTRICTION ON TRANSFER
THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") OR APPLICABLE STATE SECURITIES LAWS, AND
CANNOT BE RESOLD UNLESS SUBSEQUENTLY REGISTERED UNDER THE ACT AND SUCH LAWS OR
UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
WARRANT
To purchase shares of Common Stock of
eGlobe, Inc.
1. Grant of Warrant. This is to certify that, for value
received, Outsourced Automated Services and Integrated Solutions, Inc., a
Delaware corporation ("OASIS"), is entitled to purchase, subject to and in
compliance with the provisions of this Warrant, from eGlobe, Inc. ("eGlobe" or
the "Company") at a purchase price equal to $.001 per share (the "Exercise
Price"), that number of shares of the Common Stock referred to as the
__________________ as more fully described in the Side Letter.
2. Term. This Warrant may be exercised, subject to and in
compliance with the provisions of this Warrant, in whole or in part at any time
or from time to time during the period commencing on the date set forth in the
Side Letter, and ending 120 days after the later of: (i) the date that the
Company notifies the Holder that this Warrant has become exercisable; or (ii)
the date of the termination of any restrictions on exercisability described in
Section 9.
3. Adjustments.
(i) Adjustment for Stock Splits and Combinations. If eGlobe
shall at any time or from time to time after the date of the initial issuance of
this Warrant (the "Original Issue Date") effect a subdivision of the outstanding
Common Stock, the number of shares issuable under this Warrant immediately
before that subdivision shall be proportionately increased and the Exercise
Price shall be proportionately decreased. Conversely, if eGlobe shall at any
time or from time to time after the Original Issue Date combine the outstanding
shares of Common Stock into a smaller number of shares, the number of shares
issuable under this Warrant immediately before the combination shall be
proportionately decreased and the Exercise Price shall be proportionately
increased. Any adjustment under this Section 3(i) shall become effective at the
close of business on the date the subdivision or combination becomes effective.
(ii) Reorganizations, Mergers or Consolidations. If at any
time or from time to time after the Original Issue Date, the Common Stock is
converted into other securities or property, whether pursuant to a
reorganization, merger, consolidation or otherwise (other than a
recapitalization, subdivision, combination, reclassification, exchange or
substitution of shares provided for elsewhere in this Section 3), as a part of
such transaction, provision shall be made so that the Holder shall thereafter be
entitled to receive upon exercise of this Warrant the number of shares of stock
or other securities or property of eGlobe to which a holder of the number of
shares of Common Stock deliverable upon exercise would have been entitled in
connection with such transaction, subject to adjustment in respect of such stock
or securities by the terms thereof. In any such case, appropriate adjustment
shall be made in the application of the provisions of this Section 3 with
respect to the rights of the Holder after such transaction to the end that the
provisions of this Section 3 (including adjustment of the number of shares
issuable under this Warrant and the Exercise Price then in effect) shall be
applicable after that event and be as nearly equivalent as practicable. In the
case of any reorganization, merger or consolidation in which eGlobe is not the
surviving entity, eGlobe shall not consummate the transaction unless the entity
surviving such transaction assumes all of eGlobe's obligations hereunder.
If at any time or from time to time after the Original Issue
Date, the Common Stock issuable upon the exercise of this Warrant is changed
into the same or a different number of shares of any class or classes of stock,
whether by recapitalization, reclassification or otherwise (other than a
subdivision or combination of shares or stock
<PAGE>
dividend or a reorganization, merger or consolidation provided for elsewhere in
this Section 3), in any such event the Holder shall have the right thereafter to
exercise this Warrant for the kind and amount of stock and other securities and
property receivable in connection with such recapitalization, reclassification
or other change with respect to the maximum number of shares of Common Stock for
which this Warrant could have been exercised immediately prior to such
recapitalization, reclassification or change, all subject to further adjustments
as provided herein or with respect to such other securities or property by the
terms thereof.
(iii) Notices.
(I) eGlobe shall promptly give written notice to the Holder
that this Warrant is exercisable after this Warrant first becomes exercisable
and that this Warrant has been adjusted after any adjustment to this Warrant.
(II) Upon any reorganization, any reclassification or
recapitalization of the capital stock of eGlobe, any merger or consolidation of
eGlobe with or into any other corporation, or any Liquidation, eGlobe shall mail
to the Holder at least twenty (20) days prior to the record date specified
therein a notice specifying (1) the date on which any such reorganization,
reclassification, transfer, consolidation, merger or Liquidation is expected to
become effective, and (2) the date, if any, that is to be fixed for determining
the holders of record of Common Stock (or other securities) that shall be
entitled to exchange their shares of Common Stock (or other securities) for
securities or other property deliverable upon such reorganization,
reclassification, transfer, consolidation, merger or Liquidation.
4. Definitions. "Common Stock" means, collectively, eGlobe's
common stock, par value $.001 per share; and if there is a change such that the
securities issuable upon exercise of this Warrant are issued by an entity other
than eGlobe or there is a change in the class of securities so issuable, then
the term "Common Stock" shall mean the shares of the security issuable upon
exercise of this Warrant if such security is issuable in shares, or shall mean
the smallest unit in which such security is issuable if such security is not
issuable in shares.
"Company" means OASIS Reservation Services, Inc.
"Contribution Agreement" means the Contribution Agreement,
dated as of September 15, 1999 by and among eGlobe, OASIS, EOI, the Company and
the LLC.
"Liquidation" means the liquidation, dissolution or winding up
of eGlobe, whether voluntary or involuntary; provided, however, that neither the
consolidation or merger of eGlobe into or with any other entity or entities, nor
the sale or transfer by eGlobe of all or any part of its assets, nor the
reduction of the capital stock of eGlobe, shall be deemed to be a Liquidation.
"LLC" means eGlobe/OASIS Reservations LLC.
"Side Letter" means the side letter, dated as of September 15,
1999 by and among eGlobe, OASIS, EOI, the Company and the LLC.
5. Exercise Procedures. In order to exercise this Warrant, the
Holder shall send a written notice of exercise to eGlobe on any business day at
eGlobe's principal office, addressed to the attention of the Secretary of
eGlobe, which notice shall specify the number of shares for which this Warrant
is being exercised. Payment of the Exercise Price for the shares of eGlobe
Common Stock purchased pursuant to the exercise of this Warrant shall be made by
cash or check. If the person or entity exercising this Warrant is not the
Holder, such person or entity shall also deliver, with the notice of exercise,
appropriate proof of the right of such person or entity to exercise this
Warrant. An attempt to exercise this Warrant granted hereunder other than as set
forth above shall be invalid and of no force and effect. Promptly after exercise
of this Warrant as provided for above, eGlobe shall deliver to the person
exercising this Warrant a certificate or certificates for the shares Stock being
purchased. In the event this Warrant is exercised in part only, eGlobe shall,
upon surrender of this Warrant for cancellation, execute and deliver to the
Holder a new Warrant of like tenor evidencing the right of the Holder to
purchase the balance of the shares of eGlobe Common Stock subject to purchase
hereunder. Such stock certificate or certificates shall bear an appropriate
legend to the extent required by federal or state securities laws. All shares of
eGlobe Common Stock issued upon exercise of this Warrant shall be duly
authorized and validly issued, fully paid and non-assessable.
6. Transferability. This Warrant shall be transferred by the
Holder in whole or in part without the prior written consent of eGlobe.
2
<PAGE>
7. Reservation of Shares. eGlobe shall at all times reserve and
keep available out of its authorized but unissued shares of Common Stock, solely
for the purpose of issuance upon the exercise of this Warrant, such number of
shares of Common Stock as shall from time to time be sufficient to effect the
full exercise of this Warrant. All shares of Common Stock which are so issuable
shall, when issued, be duly and validly issued, fully paid and nonassessable and
free from all taxes, liens and charges. If at any time the number of authorized
but unissued shares of Common Stock shall not be sufficient to effect the
exercise of all then-outstanding shares of this Warrant, eGlobe will take such
corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purpose.
8. Fractional Shares. No fractional shares of Common Stock
shall be issued upon exercise of this Warrant. All shares of Common Stock
(including fractions thereof) issuable upon more than one exercise of this
Warrant by the Holder thereof shall be aggregated for purposes of determination
whether the exercise would result in the issuance of any fractional share. If,
after the aforementioned aggregation, the exercise would result in the issuance
of any fractional share, eGlobe shall, in lieu of issuing any fractional share,
pay cash equal to the product of such fraction multiplied by the Common Stock's
fair market value (as determined by the Board) on the date of exercise.
Notwithstanding the foregoing, in the event that the Holder seeks to make ten
separate exercises of this Warrant ten times within any one year period, eGlobe
shall not be obligated to pay any cash amount for fractional shares upon any
subsequent exercise(s) by such holder during such year, but may withhold the
fractional share(s) and aggregate such fractional share(s) with any additional
fractional share(s) issuable to such holder during such year, and pay the cash
(if any) required by this section for any fractional shares remaining after such
aggregation at the end of such year.
9. General Restrictions. eGlobe shall not be required to issue
any shares of eGlobe Common Stock under this Warrant if the issuance of such
shares would constitute a violation by eGlobe of the registration requirements
of the Securities Act of 1933, as amended (the "Securities Act") or any
applicable state securities laws.
10. Securities Law Documentation. As a condition to the
issuance of the shares under this Warrant, the Holder shall provide to the
Company any documentation reasonably requested by the Company in order to
establish that the issuance of the shares does not violate the registration
requirements of the Securities Act.
11. NASDAQ Limitations. The Holder acknowledges that the number
of shares which may be issued under this Warrant may be limited by the rules and
regulations of the NASDAQ Stock Market which restrict the number of shares which
may be issued without shareholder approval (as more fully set forth in the Side
Letter).
12. Divisibility; Combination. This Warrant may, at the option
of the Holder, without expense, be divided into or combined with other Warrants
for Common Stock which carry the same rights. Upon surrender of this Warrant and
any such other Warrant to eGlobe together with a written notice signed by the
Holder and specifying the denominations for not less than 10,000 shares of
Common Stock in which new Warrants are to be issued, eGlobe shall execute and
deliver new Warrants, as requested entitling the Holder to purchase in the
aggregate the same number of shares of Common Stock purchasable hereunder and
under any such other Warrants. The term "Warrant" as used herein includes any
Warrant into which this Warrant may be divided or combined.
13. Applicable Law. This Warrant shall be governed by and
construed in accordance with the laws of the State of Delaware except to the
extent federal law may be applicable.
14. Payment of Taxes. The issuance of certificates for shares
of Common Stock upon exercise of this Warrant shall be made without charge to
the Holder for any issuance tax in respect thereof or other cost incurred by
eGlobe in connection with such exercise and the related issuance of shares of
Common Stock.
3
<PAGE>
IN WITNESS WHEREOF, eGlobe has caused this Warrant to be duly
executed on the day and year set forth below.
DATED: __________ __, 1999
eGLOBE, INC.
-----------------------------------
Christopher J. Vizas
Chairman & Chief Executive Officer
ATTEST:
By ____________________________________
Its ____________________________________
EXHIBIT 10.1
GUARANTY AGREEMENT
Dated as of September 15, 1999
This GUARANTY AGREEMENT (this "Guaranty" or this "Agreement") is made
as of the date set forth above by EGLOBE/OASIS, INC., a Delaware corporation
(the "Guarantor"), in favor of OUTSOURCED AUTOMATED SERVICES AND INTEGRATED
SOLUTIONS, INC., a Delaware corporation ("OASIS").
A. The Guarantor, OASIS, Oasis Reservations Services, Inc., a Delaware
corporation (the "Company"), eGlobe, Inc., a Delaware corporation, and
eGlobe/Oasis Reservations LLC, a Delaware limited liability company, have
entered into a certain Contribution Agreement as of September 15, 1999 (the
"Contribution Agreement"), pursuant to which OASIS has agreed to loan certain
amounts to the Company (the "Loan").
B. The Company's obligations with respect to the Loan are evidenced by
that certain Promissory Note dated as of the date hereof, in the original
principal amount of $451,400 made by the Company in favor of OASIS (the "Note")
and secured by that certain Security Agreement dated as of the date hereof, made
by the Company in favor of OASIS (the "Security Agreement").
NOW, THEREFORE, in consideration of the mutual promises set forth
herein, and in order to induce OASIS to enter into the Contribution Agreement
and to consummate the transactions contemplated thereby, the Guarantor agrees
with OASIS as follows:
ss.1. Guaranty. The Guarantor: (a) hereby irrevocably, absolutely and
unconditionally guarantees the payment when due of all amounts payable under the
Note and the timely satisfaction of all of the other obligations of every kind
or description of the Company to OASIS under the Note and the Security Agreement
(as such agreements may hereafter be extended or amended from time to time),
whether such obligations are absolute or contingent and whether for payment or
performance (all obligations of the Company referred to above in this Section 1
being the "Obligations," and each an "Obligation"); and (b) hereby irrevocably
agrees to pay any and all costs and expenses (including reasonable attorneys'
fees, and legal expenses, at every level) incurred by OASIS at any time or times
in its good faith effort to enforce any rights under this Guaranty.
ss.2. Guaranty Absolute; Reinstatement. The Guarantor guarantees that
the Obligations will be satisfied strictly in accordance with the terms of the
Note and the Security Agreement (and of any other documents relating thereto),
as the same may hereafter be amended or extended from time to time, regardless
of any law, regulation or order now or hereafter in effect in any jurisdictions
affecting any of such terms or the rights of OASIS with respect thereto. The
liability of the Guarantor under this Guaranty shall be absolute and
unconditional irrespective of:
<PAGE>
(a) any change in the manner of satisfaction of, or in any
other term of, all or any of the Obligations, or any other amendment, waiver or
release of, or consent to any departure from, the Note and the Security
Agreement;
(b) the voluntary or involuntary bankruptcy of the Company,
and/or any assignment for the benefit of creditors, reorganization,
receivership, liquidation or other similar proceedings affecting the Company or
any of the Company's assets;
(c) any present or future action of any governmental authority
amending, varying, reducing or otherwise affecting (or purporting to amend,
vary, reduce or otherwise affect) any of the Obligations, or purporting to
amend, vary or otherwise affect this Guaranty; and
(d) any other event or circumstance which might otherwise
constitute a defense available to, or a discharge of, the Company or the
Guarantor.
This Guaranty shall continue in effect, or be reinstated, if at any
time any of the Obligations (though once paid by the Company, the Guarantor
and/or any other person(s)) is reinstated, or if at any time any payment (by any
person(s)) of any of the Obligations is rescinded or must otherwise be returned
by OASIS upon the insolvency, bankruptcy or reorganization of the Company, or
the Guarantor, all as though such payment had not been made.
ss.3. Waiver. The Guarantor hereby irrevocably and unconditionally
waives:
(a) promptness, diligence, notice of acceptance, presentment,
demand, protest, notice of dishonor and all other notices with respect to any of
the Obligations and this Guaranty;
(b) any requirement that OASIS protect, secure, perfect or
insure any security interest or lien on any property subject thereto or exhaust
any right or take any action against the Company, or the Guarantor or other
person or entity or any collateral;
(c) any defense available to the Guarantor in its capacity as
guarantor, including, without limitation, any defense based on any event or
circumstance described in Section 2; and
(d) any duty of OASIS to advise the Guarantor of any
information known to OASIS regarding the financial condition of the Company, or
any other circumstance affecting the Company's ability to perform its
obligations to OASIS, it being agreed that the Guarantor assumes the
responsibility for the Guarantor's being and keeping informed regarding any such
condition or any such circumstance.
ss.4. No Subrogation Unless Obligations Paid. So long as any part of
any of the Obligations is unpaid or this Guaranty is in effect (even if
reinstated as provided in the last sentence of Section 2 hereof), the Guarantor
shall have no right of subrogation, reimbursement, contribution or indemnity
whatsoever and no right of recourse to or with respect to the Company or any of
its assets or property, or any collateral or other security (including without
limitation any other guaranty) for any of the Obligations, all of which rights
are hereby unconditionally and irrevocably waived by
<PAGE>
the Guarantor. If any amount shall be paid to or recovered by the Guarantor
contrary to the provisions of the preceding sentence, such amount shall be
received by the Guarantor in trust for the benefit of OASIS and shall forthwith
(without any demand by OASIS) be paid by the Guarantor to OASIS to be credited
and applied first against any costs and expenses of the enforcement hereof, and
then as provided at the end of Section 1 hereof. Upon (but only upon) payment in
full of all the Obligations and all amounts payable under this Guaranty, the
Guarantor shall be subrogated to any security interests and other interests,
rights and claims which OASIS may have (with respect to the Obligations) in, to,
against or with respect to the Company, any assets or property of the Company or
any collateral or other security for any of the Obligations. However, if this
Guaranty thereafter continues in effect, or is reinstated, pursuant to the last
sentence of Section 2, then: (a) the Guarantor shall have no right of
subrogation, reimbursement, contribution or indemnity whatsoever and no right of
recourse to or with respect to the Company, any of its assets or property, or
any collateral or other security for any of the Obligations; and (b) if any
amount shall theretofore have been paid to or recovered by the Guarantor based
on any right (or purported right) of subrogation, reimbursement, contribution or
indemnity on the part of the Guarantor -- or based on any other right (or
purported right) of recourse, on the part of the Guarantor, to or with respect
to any assets or property of the Company or any collateral or other security for
any of the Obligations -- then such amount shall forthwith be paid to OASIS by
the Guarantor (without any demand by OASIS) to be credited and applied first
against any costs and expenses of the enforcement hereof, and then as provided
at the end of Section 1 hereof.
ss.5. Representations and Warranties. The Guarantor hereby represents
and warrants to OASIS (and shall be deemed to represent and warrant to OASIS
every day hereafter until the termination of this Guaranty) that, as of the date
of this Guaranty (and as of every other date on which such representation or
warranty is deemed given):
(a) The Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of Delaware; has full power and
authority to execute, deliver and perform this Guaranty; has taken all corporate
and legal actions that are necessary to authorize the execution, delivery and
performance of this Guaranty.
(b) The execution, delivery and performance by the Guarantor
of this Guaranty do not contravene law or regulations or any contractual
restriction binding on or affecting the Guarantor, and will not result in any
lien, security interest, charge or other encumbrance with respect to any
property of the Guarantor under any other agreement or document binding upon the
Guarantor or any of its property.
(c) No authorization or approval or other action by, and no
notice to or filing with, any person or any governmental authority or regulatory
body, is required for the due execution, delivery and performance by the
Guarantor of this Guaranty.
(d) The Guarantor has received adequate consideration for
executing and delivering this Guaranty and will not be rendered insolvent
thereby or left with unreasonably small capital to continue its businesses or
left unable to pay its debts as they become due.
3
<PAGE>
(e) This Guaranty constitutes the legal, valid and binding
obligation of the Guarantor enforceable against it in accordance with the terms
hereof.
(f) There is no pending or threatened action or proceeding
affecting the Guarantor before any court, governmental agency or arbitrator
which may materially adversely affect the Guarantor's financial condition or the
enforceability of this Guaranty.
(g) All of the recitals at the beginning of this Guaranty are
true and correct as of the date of this Guaranty.
ss.6. Covenants. The Guarantor covenants and agrees that, so long as
any part of the Obligations shall remain unpaid, the Guarantor shall, unless
OASIS shall otherwise consent in writing:
(a) Comply in all material respects with all laws, rules,
regulations and orders applicable to it or to its property (such compliance to
include, without limitation, paying before the same become delinquent all taxes,
assessments and governmental charges imposed upon it or upon its property)
non-compliance with which would have a material adverse effect on the value of
this Guaranty to, or its enforceability by, OASIS.
(b) Keep proper books of record and account, in which full and
correct entries will be made of all financial transactions and the assets and
business of the Guarantor in accordance with fair and reasonable valuations and
sound business practices.
(c) From time to time, upon the request of OASIS, provide to
OASIS such current financial statements and other information relating to the
Guarantor and its business as OASIS may reasonably require.
ss.7. Amendments, Etc. No amendment or waiver of any provision of this
Guaranty nor consent to any departure by the Guarantor therefrom shall in any
event be effective unless the same shall be in writing and signed by OASIS, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.
ss.8. Notices. All notices, requests, demands, directions and other
communications provided for hereunder shall be in writing and mailed (certified
or registered, prepaid and return receipt requested), telexed or telefaxed with
written confirmation to the applicable party at the address indicated below:
If to OASIS: Eastern Air Lines, Inc.
1221 Brickell Avenue, Suite 1780
Miami, Florida 33131
4
<PAGE>
If to the Guarantor: c/o EGLOBE, INC.
1250 24th Street N.W., Suite 725
Washington, D.C. 20037
All such notices and other communications shall, when mailed or faxed,
respectively, be effective when deposited in the mails or received by facsimile
with confirmation, respectively, addressed as aforesaid.
ss.9. No Waiver; Remedies. No failure on the part of OASIS to exercise,
and no delay in exercising, any right hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
ss.10. Continuing Guaranty; Termination. This Guaranty is a continuing
guaranty and shall (a) remain in full force and effect until satisfaction in
full of the Obligations and all other amounts payable under this Guaranty (and
thereafter as provided in the last sentence of Section 2), and (b) be binding
throughout upon the Guarantor and its successors and assigns, provided that
Guarantor shall not have the right to assign its obligations and/or rights under
this Guaranty without the prior written consent of OASIS.
ss.11. Governing Law. This Guaranty shall be governed by, and construed
in accordance with, the law of Florida, without regard to its principles of
conflicts of law.
ss.12. Terminology. As used herein, "hereof," "hereunder," hereby,"
"herein" and similar terms refer to this Guaranty as a whole and not merely the
Section in which they appear. As used herein, "attorneys' fees" includes,
without limitation, attorneys' fees incurred by OASIS in any judicial,
bankruptcy, administrative or other proceedings and in any appellate
proceedings, whether such proceedings arise before or after entry of a final
judgment.
ss.13. Severability. If any provision of this Guaranty shall be held
invalid under any applicable law, such invalidity shall not affect any other
provision of this Guaranty that can be given effect without the invalid
provision, and, to that end, the provisions hereof are severable.
ss.14. Further Assurances. The Guarantor shall, from time to time and
at any time, take any actions and execute, deliver, file or register any
documents which OASIS shall reasonably deem necessary or appropriate in order to
preserve or protect the rights or remedies of OASIS under this Guaranty.
ss.15. Construction. If any provision of this Guaranty is capable of
more than one interpretation, it shall be interpreted, if possible, so as to
render it enforceable. Captions in this Guaranty are included for convenience of
reference only and shall in no way amplify, limit or otherwise constitute a part
of this Guaranty for any other purpose.
5
<PAGE>
ss.16. Counterparts. This Guaranty may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument.
ss.17. Jurisdiction. THE GUARANTOR HEREBY IRREVOCABLY AGREES THAT ANY
ACTION OR PROCEEDING ARISING HEREUNDER OR RELATING HERETO THAT IS BROUGHT BY THE
GUARANTOR SHALL BE TRIED BY THE FEDERAL OR STATE COURTS SITTING IN DADE COUNTY,
FLORIDA. THE GUARANTOR IRREVOCABLY SUBMITS, IN ANY SUCH ACTION OR PROCEEDING
THAT IS BROUGHT BY OASIS TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURT,
IRREVOCABLY WAIVES THE DEFENSE OF LACK OF PERSONAL JURISDICTION, IMPROPER VENUE
OR AN INCONVENIENT FORUM WITH RESPECT TO ANY SUCH ACTION OR PROCEEDING, AND
IRREVOCABLY AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY
BE MADE UPON THE GUARANTOR BY MAILING A COPY THEREOF TO THE GUARANTOR AT THE
GUARANTOR'S ADDRESS AS PROVIDED HEREINABOVE, AS WELL AS BY ANY OTHER LAWFUL
METHOD.
ss.18. Jury Waiver. THE GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY AND ALL RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION (INCLUDING BUT NOT LIMITED TO ANY CLAIMS, CROSS CLAIMS,
COUNTERCLAIMS AND THIRD PARTY CLAIMS) ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS GUARANTY. THE GUARANTOR HEREBY CERTIFIES THAT NO REPRESENTATIVE OF
OASIS NOR OASIS'S COUNSEL HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT OASIS
WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS JURY WAIVER.
THE GUARANTOR ACKNOWLEDGES THAT THIS JURY WAIVER HAS BEEN A MATERIAL INDUCEMENT
TO OASIS TO ENTER INTO THIS AGREEMENT.
6
<PAGE>
IN WITNESS WHEREOF, the Guarantor has duly executed and delivered this
Guaranty as of the date first above written.
EGLOBE/OASIS, INC.
By:
-----------------------
(Signature)
-----------------------
(Print Name)
Title:
---------------------
(CORPORATE SEAL)
The undersigned hereby accepts delivery of this Guaranty, and agrees to
all the terms and conditions of this Guaranty, as of the date first above
written.
OUTSOURCED AUTOMATED SERVICES AND
INTEGRATED SOLUTIONS, INC.
By:
------------------------
(Signature)
------------------------
(Print Name)
Title:
---------------------
(CORPORATE SEAL)
7
EXHIBIT 10.2
PLEDGE AGREEMENT
Dated as of September 15, 1999
This PLEDGE AGREEMENT ("this Agreement") as of the date set forth above
is made by EGLOBE, INC., a Delaware corporation, having an address at c/o
eGlobe, Inc., 1250 24th Street N.W., Suite 725, Washington, D.C. 20037 (the
"Pledgor"), to OUTSOURCED AUTOMATED SERVICES AND INTEGRATED SOLUTIONS, INC. (the
"Pledgee").
BACKGROUND
A. Pledgor, Oasis Reservations Services, Inc., a Delaware corporation
(the "Company"), eGlobe/Oasis, Inc., a Delaware corporation, eGlobe/OASIS
Reservations LLC, a Delaware limited liability company, and the Pledgee have
entered into that certain Contribution Agreement dated as of September 15, 1999,
pursuant to which the Pledgee has agreed to make a loan to the Company in the
aggregate principal sum of Four Hundred Fifty-One Thousand Four Hundred Dollars
($451,400), all as more fully set forth in that certain Promissory Note
(together with any renewals and modifications thereof and substitutions
therefor, the "Note") dated as of the date hereof, executed by the Company
payable to the order of the Pledgee.
B. As security for the prompt and complete payment of the indebtedness
evidenced by the Note and the Company's obligations under that certain Security
Agreement dated as of the date hereof between the Company and the Pledgee which
secures the payment of all amounts due under the Note, the Pledgor has agreed to
pledge the Pledge Collateral (as defined below) to the Pledgee.
AGREEMENTS
In consideration of the premises and other good and valuable
consideration (receipt of which is hereby acknowledged), the Pledgor hereby
agrees as follows:
1. PLEDGE. The Pledgor hereby pledges to the Pledgee, and grants to the
Pledgee a security interest in, the following, whether now owned by the Pledgor
or hereafter acquired by it, and whether now or hereafter existing (the "Pledged
Collateral"):
(1) All right, title and interest of the Pledgor in _______________
____shares of common stock, par value $____ per share, of eGlobe/OASIS, Inc., a
Delaware corporation (evidenced by Stock Certificate No. __ dated as of the date
hereof, issued in the name of the Pledgor) (the "Pledged Shares").
(2) Any dividends, profits, distributions, share dividends, additional
shares, or other securities, warrants, options or other rights issued with
respect to the Pledged Shares,
<PAGE>
including, but not limited to those items listed in Section 4 of this
Agreement.
(3) All proceeds of any of the foregoing.
2. SECURITY FOR OBLIGATIONS. This Agreement secures the payment of any
and all present or future obligations and liabilities of the Company to the
Pledgee evidenced by or arising under the Note (whether for principal, interest,
fees, expenses or otherwise), the Security Agreement and all obligations of the
Pledgor arising under this Agreement (all such obligations and liabilities
referred to in this Section 2 being the "Obligations").
3. DELIVERY OF PLEDGED COLLATERAL. Each certificate or instrument
representing or evidencing any part of the Pledged Collateral shall, when this
Agreement is executed or when issued by the Company, be delivered to the
Pledgee, and shall thereafter be held by or on behalf of the Pledgee pursuant
hereto and shall be in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to the Pledgee. If and at any time after an
Event of Default (as defined herein), the Pledgee shall have the right, in its
discretion and without notice to the Pledgor, to transfer to or to register in
the name of the Pledgee or any of its nominees any or all of the Pledged
Collateral and the Pledgor shall fully cooperate with any such transfer or
registration. In addition, the Pledgee shall have the right at any time to
exchange certificates or instruments representing or evidencing the Pledged
Collateral for certificates or instruments of smaller or larger denominations.
4. DIVIDENDS, PROFITS AND OTHER DISTRIBUTIONS; CHANGES IN CAPITAL
STRUCTURE; EXERCISE OF RIGHTS.
(1) The Pledgor authorizes the Pledgee: (i) to receive any increase in
or dividends or profits on the Pledged Collateral and to hold the same as part
of the Pledged Collateral; and (ii) to receive any distribution upon dissolution
and liquidation of the Company, to surrender such Pledged Collateral or any part
thereof in exchange therefor, and to hold the net cash receipts from any such
distribution as part of the Pledged Collateral. If the Pledgor receives any such
dividend, profits or distribution, the Pledgor shall, promptly and without the
Pledgee's request, deliver the same promptly to the Pledgee to be held by the
Pledgee in the same manner as, and as part of, the Pledged Collateral. When this
Agreement is executed (and, upon the Pledgee's request at any time thereafter),
the Pledgor shall instruct the Company to make payment of any dividends or other
distributions directly to the Pledgee.
(2) If, during the term of this Agreement, any share dividend,
reclassification, readjustment, or other change is declared or made in the
capital structure of the Company, all new,
<PAGE>
substituted, and additional shares, or other securities, issued by reason of any
such change shall be held by the Pledgee under the terms of this Agreement in
the same manner as, and as part of, the Pledged Collateral.
(3) If, during the term of this Agreement, warrants or any other rights
or options are issued in connection with the Pledged Collateral, such warrants,
rights, and options shall be immediately assigned by the Pledgor to the Pledgee,
and, if exercised by the Pledgor, all shares, securities or other property to
which the Pledgor may become entitled, shall be immediately assigned and
delivered to the Pledgee to be held under the terms of this Agreement in the
same manner as, and as part of, the Pledged Collateral.
(4) If, during the term of this Agreement, the Pledgor exercises any
purchase rights, conversion rights or redemption rights with respect to the
Pledged Collateral, all shares, securities or other property to which the
Pledgor may become entitled shall be immediately assigned and delivered to the
Pledgee to be held under the terms of this Agreement in the same manner as, and
as part of, the Pledged Collateral.
5. VOTING AND OTHER RIGHTS. So long as no Event of Default shall have
occurred and be continuing, the Pledgor shall be entitled to exercise or refrain
from exercising any and all voting and other consensual rights pertaining to the
Pledged Collateral or any part thereof for any purpose not detrimental to the
Pledgee's rights hereunder and not inconsistent with the terms of this
Agreement; provided, however, that the Pledgor shall not exercise or omit to
exercise any such right if, in the Pledgee's reasonable judgment, such action or
omission (as the case may be) would have a material adverse effect on the value
of the Pledged Collateral or any part thereof. However, upon the occurrence and
during the continuance of an Event of Default, all rights of the Pledgor to
exercise or refrain from exercising the voting and other consensual rights which
it would otherwise be entitled to exercise pursuant to this Section 5 shall,
upon notice to the Pledgor by the Pledgee, cease and all such rights shall
thereupon become vested in the Pledgee who shall thereupon have the sole right
to exercise or refrain from exercising such voting and other consensual rights.
Such other consensual rights include, but are not limited to, the exercise of
purchase rights, conversion rights and redemption rights.
6. PLEDGOR'S COVENANTS. As long as any of the Obligations remain
unpaid, the Pledgor:
(1) Shall defend the Pledged Collateral against the claims and demands
of all other parties; shall keep the Pledged Collateral free of all security
interests or other encumbrances, except the security interest created hereby;
and shall not sell, transfer, assign, deliver or otherwise dispose of any of the
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Pledged Collateral or any interest therein without the prior written consent of
the Pledgee;
(2) Shall notify the Pledgee promptly in writing of any change in the
Pledgor's address specified above;
(3) Shall pay all taxes, assessments and other charges of every nature
which may be levied or assessed against the Pledged Collateral;
(4) Shall promptly secure from the board of directors or management of
the Company and deliver to the Pledgee whatever waivers or consents the Pledgee
considers would or might be necessary in connection with any future disposition
of the Pledged Collateral pursuant to Section 13 hereof; and
(5) Shall promptly deliver to Pledgee any and all shares, subscription
warrants or any other rights or options issued in connection with the Pledged
Collateral together with such documents and instruments which Pledgee may
require to continue, create or perfect a first priority security interest
therein in favor of Pledgee.
7. REPRESENTATIONS AND WARRANTIES. The Pledgor represents and warrants
(and, as long as any of the Obligations shall not have been paid in full, shall
be deemed continuously to warrant) to the Pledgee as follows:
(1) The Pledgor is the sole legal and beneficial owner of all the
Pledged Collateral free and clear of any lien, security interest, option or
other charge or encumbrance except for the security interest created by this
Agreement. The Pledged Collateral includes all of the issued and outstanding
common stock of eGlobe/OASIS, Inc.
(2) No authorization, approval, or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required either
(i) for the perfected pledge by the Pledgor of the Pledged Collateral pursuant
to this Agreement or for the execution, delivery or performance of the Agreement
by the Pledgor or (ii) for the exercise by the Pledgee of the rights provided
for in this Agreement or the remedies in respect of the Pledged Collateral
pursuant to this Agreement.
(3) The pledge of the Pledged Collateral pursuant hereto creates a
valid and perfected, first-priority security interest in the Pledged Collateral
securing payment of the Obligations under all applicable or potentially
applicable law.
(4) The Pledgor has received adequate consideration and equivalent
value for executing and delivering this Agreement, will not be rendered
insolvent thereby and will not be left
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undercapitalized thereby. This Agreement is the legal, valid and binding
obligation of the Pledgor enforceable against it in accordance with its terms.
(5) The Pledgor is a corporation duly organized, validly existing and
in good standing under Delaware law.
(6) The execution, delivery and performance of this Agreement have been
duly authorized by all necessary action and do not violate or conflict with the
Pledgor's Certificate of Incorporation or any other agreement of the Pledgor or
its members.
8. FURTHER ASSURANCES. The Pledgor agrees that at any time and from
time to time, at the expense of the Pledgor, the Pledgor will promptly execute
and deliver all further instruments and documents, and take all further action,
that may be necessary or desirable, or that the Pledgee may reasonably request,
in order to perfect or protect any security interest granted or purported to be
granted hereby or to enable the Pledgee to exercise and enforce its rights and
remedies hereunder with respect to any of the Pledged Collateral.
9. TRANSFERS AND OTHER LIENS. The Pledgor agrees that it will not (i)
sell or otherwise dispose of, or grant any option with respect to, any of the
Pledged Collateral, or (ii) create or permit to exist any lien, security
interest, or other charge or encumbrance upon or with respect to any of the
Pledged Collateral, except for the security interest created under this
Agreement.
10. PLEDGEE APPOINTED ATTORNEY-IN-FACT. The Pledgor hereby appoints the
Pledgee the Pledgor's attorney-in-fact, with full authority in the place and
stead of the Pledgor and in the name of the Pledgor or otherwise, from time to
time in the Pledgee's discretion to take any action and to execute any
instrument which the Pledgee may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation, to receive, indorse
and collect all instruments made payable to the Pledgor representing any
dividend, interest payment or other distribution in respect of the Pledged
Collateral or any part thereof, to exercise any consensual rights with respect
to the Pledged Collateral, including any purchase rights, conversion rights and
redemption rights, and to give full discharge for the same.
11. PLEDGEE MAY PERFORM. If the Pledgor fails to perform any agreement
contained herein and the applicable grace period, if any, expires, the Pledgee
may itself perform, or cause performance of, such agreement, and the reasonable
expenses of the Pledgee incurred in connection therewith shall be payable by the
Pledgor under Section 14 hereof.
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12. REASONABLE CARE. The Pledgee shall be deemed to have exercised
reasonable care in the custody and preservation of the Pledged Collateral in its
possession if the Pledged Collateral is accorded treatment substantially equal
to that which the Pledgee accords its own property, it being understood that the
Pledgee shall not have any responsibility for (i) ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any of the Pledged Collateral, whether or not the Pledgee
has or is deemed to have knowledge of such matters, or (ii) taking any necessary
steps to preserve rights against any parties with respect to any of the Pledged
Collateral.
13. REMEDIES UPON DEFAULT.
(1) For purposes of this Agreement, an Event of Default means: (i) any
breach or default by Pledgor of the terms of this Agreement which is not cured
within five (5) days of notice from the Pledgee; (ii) any Event of Default as
defined in the Note; or (iii) any Event of Default as defined in the Security
Agreement.
(2) If and at any time after an Event of Default as defined or
described in the Note or the Security Agreement occurs, the Pledgor defaults in
the performance of any covenant or warranty hereunder, or any representation of
the Pledgor to the Pledgee proves to be inaccurate or misleading:
(1) The Pledgee may exercise in respect of the Pledged Collateral,
in addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default under
the Uniform Commercial Code (the "Code") in effect in the State of Florida at
that time, and the Pledgee may also, without notice except as specified below,
sell the Pledged Collateral or any part thereof in one or more parcels at public
or private sale, at any exchange, broker's board or at any of the Pledgee's
offices or elsewhere, for cash, on credit or for future delivery, and upon such
other terms as the Pledgee may deem commercially reasonable. To the maximum
extent permitted by applicable law, the Pledgor waives any right it may have to
notification of the sale or other disposition of the Pledged Collateral. The
Pledgor agrees that, to the extent notification of sale shall be required by law
and cannot be waived, at least seven calendar days' notice to the Pledgor of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Pledgee shall not be
obligated to make any sale of Pledged Collateral regardless of notification of
sale having been given. The Pledgee may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned.
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(2) Any cash held by the Pledgee as Pledged Collateral and all cash
proceeds received by the Pledgee in respect of any sale of, collection from, or
other realization upon all or any part of the Pledged Collateral may, in the
discretion of the Pledgee, be held by the Pledgee as collateral for, and/or then
or at any time thereafter applied (after payment of any amounts payable to the
Pledgee pursuant to Section 14) in whole or in part by the Pledgee against, all
or any part of the Obligations in such order as the Pledgee shall elect.
14. EXPENSES. The Pledgor shall, upon demand, pay to the Pledgee the
amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, which the Pledgee may
incur in connection with: (i) the perfection of the Pledgee's security interest
in the Pledged Collateral; (ii) the custody or preservation of, or the sale of,
collection from, or other realization upon, any of the Pledged Collateral; (iii)
the exercise or enforcement of any of the rights of the Pledgee hereunder; or
(iv) the failure by the Pledgor to perform or observe any of the provisions
hereof.
15. AMENDMENTS, ETC. No amendment or waiver of any provision of this
Agreement nor consent to any departure by the Pledgor herefrom, shall in any
event be effective unless the same shall be in writing and signed by the
Pledgee, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
16. ADDRESSES FOR NOTICES. All notices, demands or other communications
to the Pledgor in connection herewith shall be sufficiently given if mailed,
hand-delivered or telecopied to the Pledgor at the address specified at the head
of this Agreement (or, if no address is specified there, the address appearing
in the Pledgee's records) or such other place of which the Pledgor may from time
to time notify the Pledgee. All such notices and other communications shall,
when mailed or faxed, respectively, be effective when deposited in the mails or
received by facsimile with confirmation, respectively, addressed as aforesaid.
17. CONTINUING SECURITY INTEREST; TRANSFER OF NOTE. This Agreement
shall create a continuing security interest in the Pledged Collateral and shall
(i) remain in full force and effect until payment in full of the Obligations and
its release in writing by the Pledgee and thereafter as long as any payment of
or recovery against or with respect to the Obligations might, in the Pledgee's
judgment, be rescinded or otherwise required to be returned by the Pledgee for
any reason, including the bankruptcy, insolvency or reorganization of the
Pledgor, (ii) be binding upon the Pledgor, and its successors and assigns, and
(iii) inure to the benefit of the Pledgee and its successors, transferees and
assigns. Without limiting the generality of the foregoing clause (iii), the
Pledgee
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may assign or otherwise transfer any of the Obligations to any other person or
entity, and such other person or entity shall thereupon become vested with all
the benefits in respect thereof granted to the Pledgee herein or otherwise.
18. SECURITY INTEREST ABSOLUTE. All rights of the Pledgee and
assignment and security interest hereunder, and all obligations of the Pledgor
hereunder, shall be absolute and unconditional irrespective of:
(1) any lack of validity or enforceability of any other agreement or
instrument relating to or giving rise to any of the Obligations;
(2) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or waiver
of or any consent to any departure from any other agreement or instrument giving
rise to any of the Obligations;
(3) any exchange, release or nonperfection of any other collateral, or
any release or amendment or waiver of or consent to departure from any guaranty,
for all or any of the Obligations; or
(4) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, a pledgor.
19. GOVERNING LAW; TERMS. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida, without regard to
any conflict of law rule or principle that would give effect to the laws of
another jurisdiction.
20. JURY WAIVER. THE PLEDGOR HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY AND ALL RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION (INCLUDING BUT NOT LIMITED TO ANY CLAIMS, CROSS CLAIMS,
COUNTERCLAIMS AND THIRD PARTY CLAIMS) ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT. THE PLEDGOR HEREBY CERTIFIES THAT NO REPRESENTATIVE OF THE
PLEDGEE NOR THE PLEDGEE'S COUNSEL HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
THE PLEDGEE WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS
JURY WAIVER. THE PLEDGOR ACKNOWLEDGES THAT THIS JURY WAIVER HAS BEEN A MATERIAL
INDUCEMENT TO THE PLEDGEE TO ENTER INTO THIS AGREEMENT.
21. SEVERABILITY. If any provision of this Agreement shall be held
invalid under any applicable law, such invalidity shall not affect any other
provision of this Agreement that can be given effect without the invalid
provision, and, to that end, the provisions hereof are severable.
22. CONSTRUCTION. If any provision of this Agreement is capable of more
than one interpretation, it shall be interpreted,
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if possible, so as to render it enforceable. Captions in this Agreement are
included for convenience of reference only and shall in no way amplify, limit or
otherwise constitute a part of this Agreement for any other purpose.
23. COUNTERPARTS. This Guaranty may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument.
24. JURISDICTION. THE PLEDGOR HEREBY IRREVOCABLY AGREES THAT ANY ACTION
OR PROCEEDING ARISING HEREUNDER OR RELATING HERETO THAT IS BROUGHT BY THE
PLEDGEE SHALL BE TRIED BY THE FEDERAL OR STATE COURTS SITTING IN DADE COUNTY,
FLORIDA. THE PLEDGOR IRREVOCABLY SUBMITS, IN ANY SUCH ACTION OR PROCEEDING THAT
IS BROUGHT BY THE PLEDGEE TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURT,
IRREVOCABLY WAIVES THE DEFENSE OF LACK OF PERSONAL JURISDICTION, IMPROPER VENUE
OR AN INCONVENIENT FORUM WITH RESPECT TO ANY SUCH ACTION OR PROCEEDING, AND
IRREVOCABLY AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY
BE MADE UPON THE PLEDGOR BY MAILING A COPY THEREOF TO THE PLEDGOR AT THE
PLEDGOR'S ADDRESS AS PROVIDED HEREINABOVE, AS WELL AS BY ANY OTHER LAWFUL
METHOD.
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IN WITNESS WHEREOF, the Pledgor has duly executed and delivered this
Agreement as of the date first-above written.
WITNESSES: EGLOBE, INC.
By:
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Name: Name:
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Title:
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Name:
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(CORPORATE SEAL)
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