SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT
REPORT Pursuant to
Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported): December 31,
1996
Sims Communications, Inc. (Exact name of registrant
as specified in its charter)
Delaware 0-25474 65-0287558
(State or other jurisdiction (Commission (I.R.S. Employer) of
incorporation) File Number) Identification No.)
3333 South Congress Avenue, Suite 401, Delray Beach,
Florida 33445
(Address of Principal executive offices) (Zip code)
Registrant's telephone number, including area code (561) 265-3601
N/A Former Name or Former Address, If Changed Since Last Report
Page 1 of Pages
Exhibit Index is on Page
Item 2. Acquisition or Disposition of Assets Effective December
31, 1996, the Company acquired Link International Technologies,
Inc. in consideration for the issuance of 674,157 shares of the
Company's Common Stock. For financial statement purposes the
acquisition was accounted for under the purchase method and the
assets acquired from Link (net of liabilities) were valued by the
Company at approximately $600,000.
Item 5. Other Events
During October 1996 the Company sold 800,000 shares of
common stock in a private offering at a price of $0.50 per share.
During December 1996 loans to the Company in the amount of $25,000
were converted into 50,000 shares of the Company's common stock
(conversion rate of $0.50 per share).
During December 1996 loans to the Company in the amount
of $100,000 were converted into 142,860 shares of the Company's
common stock (conversion rate of $0.70 per share).
In December 1996 the Company acquired Link
International Technologies, Inc. See Item 2 of this Report.
The Company's consolidated condensed financial statements
as of December 31, 1996 and for the three months then ended are
presented below:
December 31, 1996
Current Assets $2,111,835
Net Property and Equipment 1,161,201
Other Assets 1,230,517
Total Assets $4,503,553
Current Liabilities $2,870,665
Long Term Liabilities 59,310
Stockhoders' Equity 1,573,578
$4,503,553
Three Months
Ending
December 31,
1996
Total Revenues $1,035,797
Cost of Sales (620,879)
Operating Expenses (770,207)
Net Loss $(355,289)
The Company's balance sheet as of December 31, 1996
reflects the following:
1. The acquisition of Link International Technologies,
Inc.
2. the receipt of $400,000 in connection with the sale
of 800,000 shares of the Company's Common Stock at $0.50 per
share, and
3. the conversion of $125,000 in bridge loans into
192,860 shares of the Company's Common Stock.
Subsequent to December 31, 1996, the Company received
$801,000, net of sales commissions, from the sale of 1,272,571
shares of Common Stock at $0.70 per share. The sales were made
pursuant to a Private Offering Memorandum dated December 9, 1996.
This Private Offering Memorandum originally offered 800,000
shares for sale at $0.70 per share. However, as of the date of
this report, this Private Offering was oversubscribed by
approximately 472,500 shares. A pro forma balance sheet of the
Company giving effect to the receipt of the $801,000 and the
projected loss for the month of January 1997 is presented below.
The projected loss includes the operations of Link.
Shareholders' Equity as of
December 31, 1996 $1,573,578
Sale of Shares In
Private Offering At
$0.70 Per Share 801,000
Projected Consolidated
Loss For January 1997 (150,000)
Stockholders' Equity at
January 31, 1997 $2,224,578
Item 7. Financial Statements and Exhibits
(a) Financial statements of business acquired (to be filed
by amendment on or before February 28, 1997)
(b) Pro-forma financial statements pertaining to
acquisition of Link International Technologies,
Inc. (to be filed by amendment on or before February 28, 1997)
(c) Exhibits:
Exhibit No. 2. Agreement for Exchange of
(Plan of Acquisition) Shares Between Sims
Communications, Inc. and
Link International
Technologies, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
DATE: February 10, 1997 SIMS COMMUNICATIONS, INC.
By /s/ Melvin Leiner
Melvin Leiner, President
1332D/p.73-76
SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
SIMS COMMUNICATIONS, INC. DATE OF REPORT: DECEMBER
31, 1996
EXHIBIT 2
AGREEMENT TO EXCHANGE CAPITAL STOCK
BETWEEN
SIMS COMMUNICATIONS, INC.
AND
LINK INTERNATIONAL TECHNOLOGIES, INC.
INDEX
ARTICLE I - EXCHANGE OF SECURITIES
ARTICLE II - REPRESENTATIONS AND WARRANTIES 2.01Organization
2.02- Capital
2.03- Directors and Officers' Compensation; Banks 2.04
Financial Statements
2.05- Absence of Changes
2.06- Absence of Undisclosed Liabilities
2.07- Tax Returns
2.08- Investigation of Financial Condition 2.09-
Trade Names and Rights
2.10- Contracts and Leases
2.11 - Insurance Policies
2.12- Compliance with Laws
2.13- Litigation
2.14- Ability to Carry Out Obligations
2.15- Full Disclosure
2.16- Title
2.17- Other Representations, Warranties and
Covenants 2A - Organization
2B - Directors and Officers' Compensation;
Banks 2C - Capital
2D - Financial Statements
2E - Absence of Changes
2F - Absence of Undisclosed Liabilities
2G - Tax Returns
2H - Investigation of Financial
Condition 21 - Trade Names and Rights
2J - Contracts and Leases
2K - Insurance Policies
2L - Compliance with Laws
2M - Litigation
2N - Ability to Carry Out Obligations
20 - Full Disclosure
2(i) - Ability to Carry Out
Obligations 2(ii) - Title
ARTICLE III - FUNDING
ARTICLE IV - OBLIGATIONS BEFORE
CLOSING 4.01 -
Investigative Rights
4.02- Required Corporate Action
4.03- Conduct of Business
ARTICLE V - CONDITIONS PRECEDENT TO
PERFORMANCE BY SIMS COMMUNICATIONS,
INC.
5.01 - Conditions
5.02- Accuracy of Representations
5.03- Performance
5.04- Absence of Litigation
5.05- Investment Letter
5.06- Other
-2-
INDEX
(Contd)
ARTICLE VI - CONDITIONS PRECEDENT TO
PERFORMANCE BY THE
SHAREHOLDERS OF LINK INTERNATIONAL
TECHNOLOGIES, INC. 6.01 - Conditions
6.02 - Accuracy of Representations
6.03- Performance
6.04- Absence of Litigation
6.05 - Resignations
6.06- Other
ARTICLE VII - CLOSING
7.01 - Closing
7.02- Exchange of Stock Certificates
7.03- No Fractional Shares
7.04- Appointment of Directors
ARTICLE VIII - REMEDIES
8.01 - Arbitration
8.02- Costs
8.03- Termination
ARTICLE IX - MISCELLANEOUS
9.01 - Captions and Headings
9.02- No Oral Change
9.03- Non-waiver
9.04 Time of Essence
9.05- Entire Agreement
9.06- State Law
9.07- Counterparts
9.08- Notices
9.09- Binding Effect
9.10- Effect of Closing
9.11 Mutual Cooperation
9.12 - Expenses
Exhibit A - Officers, Directors, Bank
Accounts, Safe
Deposit Boxes, Powers of Attorney
(Link International Technologies,
Inc. and Subsidiaries)
Exhibit B - Financial Statements (Link
International
Technologies, Inc. and Subsidiaries)
Exhibit C - Trademarks, Trade Names
and Copyrights
(Link
International Technologies, Inc. and
Subsidiaries)
Exhibit D - Material Contracts (Link International
Technologies, Inc. and Subsidiaries)
Exhibit E - Insurance Policies (Link International
Technologies, Inc. and Subsidiaries)
Exhibit F - Litigation(Link International
Technologies,
Inc.
and Subsidiaries)
Exhibit C - Officers and Directors (SIMS
Communications,
Inc.)
Exhibit H - Financial Statements (SIMS
Communications,
Inc.)
-3-
INDEX
(Contd)
Exhibit I - Trademarks, Trade Names and Copyrights
(SIMS Communications, Inc.)
Exhibit J - Material Contracts (SIMS Communications,
Inc.)
Exhibit K - Insurance Policies (SIMS Communications,
Inc.) Exhibit L - Litigation (SIMS Communications1
Inc.) Exhibit N - Investment Letter
Schedule I - Allocation of Shares
-4-
AGREEMENT TO EXCHANGE CAPITAL STOCK
AGREEMENT, made as of the 31st day of
December,
1996, by and between SIMS Communications,
Inc.
("SIMS"), Link
International Technologies, Inc. ("LINK") and
the shareholders of LINK (the "Shareholders") is for the
purpose of setting forth the terms and conditions upon
which SIMS will acquire all of the issued and
outstanding
common stock of LINK.
In consideration of the mutual promises,
covenants, and representations contained herein, THE
PARTIES HERETO AGREE AS FOLLOWS:
ARTICLE I
EXCHANGE OF SECURITIES
Subject to the terms and conditions of this Agreement,
SIMS agrees to issue, and the shareholders of LINK
agree to accept 674,157 shares of the common stock of
SIMS, in consideration for all of the issued and
outstanding capital stock of LINK. Such shares
will be allocated
among the
Shareholders in accordance with Schedule I attached
hereto. ARTICLE II
REPRESENTATIONS AND WARRANTIES
LINK, Michael N. Malet, Mark E. Bennett and
William Solfisburg, jointly and severally, represent and
warrant to SIMS that:
2.01 Organization. LINK is a corporation duly
organized, validly existing, and in good standing under
the laws of Nevada, has all necessary corporate powers to
own its properties and to carry on its business as now
owned and operated by It, and Is duly qualified to do
business and is in good standing in each of the states
where Its business requires qualification.
2.02 Capital. The authorized capital stock of
LINK consists of 50,000,000 shares of common stock, of
which 3,779,823 shares will be issued and
outstanding at closing. At
closing, there will be no outstanding
subscriptions,
options, rights, warrants, convertible securities, or
other agreements or commitments obligating LINK to
Issue or
to
transfer from treasury any additional shares of Its
capital stock of any class.
2.03 Directors and Officers' Compensation:
Banks. Exhibit A to this Agreement contains (i) the
names,
addresses, and titles of all directors and officers of
LINK and all persons whose compensation from LINK as of
the date of this Agreement will equal or is expected to
equal or exceed, on a monthly basis, the sum of $5,000;
(ii) the name and address of each bank with which LINK
has an account or safety deposit box, the
identification number thereof, and the names of all
persons who are authorized to draw thereon or have access
thereto; and (iii) the names of all persons who have a
power of attorney from LINK and a summary of the terms
thereof.
-5-
2.04 Financial Statements. Exhibit B to this
Agreement sets forth the consolidated balance sheet of
LINK as
of September 30, 1996, and the related consolidated
statement of income and
retained earnings for the periods then ended. The
financial statements have been prepared in accordance
with generally accepted accounting principles
consistently followed
by
LINK throughout the periods indicated, and fairly
present the financial position of LINK and its
subsidiaries as of the dates of the balance sheet
included in the financial statements, and the
consolidated results of its operations for the periods
indicated.
2.05 Absence of Changes. Since September 30, 1996,
there has not been any change
in
the financial condition or
operations of LINK or its subsidiaries except changes
in the ordinary course of business, which changes have
not
in the aggregate been materially adverse.
2.06 Absence of Undisclosed Liabilities. LINK
and
its subsidiaries did not as of September 30, 1996,
have any
debt, liability, or obligation of any nature, whether
accrued, absolute, contingent, or otherwise, and whether
due or to become due, that is not reflected on Exhibit
B. At closing, the total liabilities of LINK and its
subsidiaries will not exceed $300,000.
2.07 Tax Returns. Within the times and in the
manner
prescribed by law, LINK and its subsidiaries have
filed all federal, state, and local tax returns required
by law and has paid all taxes, assessments, and
penalties due and payable.
No
federal Income tax returns of LINK or its subsidiaries
has been audited by the Internal Revenue Service. The
provision for taxes, if any, reflected In LINK's
consolidated balance sheet as of September 30, 1996, is
adequate for any and all federal, state, county, and
local taxes for the period ending on the date of that
balance sheet and for all prior periods, whether or not
disputed. There are
no present disputes as to taxes of any
nature payable by LINK or its subsidiaries.
2.08 Investigation of Financial Condition. Without
in
any
manner reducing or otherwise mitigating the
representations contained herein, SIMS shall have the
opportunity to meet with LINK's accountants and
attorneys to discuss the financial condition of
LINK and Its subsidiaries. LINK shall make
available to SIMS the books and records of LINK
and
its subsidiaries. The minutes of LINK and Its
subsidiaries
are a complete and accurate record of all meetings of
the shareholders and directors of LINK and Its
subsidiaries and accurately reflect all actions taken
at such meetings. The signatures of the directors
and/or officers on such minutes are the
valid
signatures of LINK's directors and/or officers who
were duly elected or appointed on the dates that the
minutes were signed by such persons. The stock book of
LINK contains an accurate record of all transactions with
respect to the capital stock of LINK.
2.09 Trade Names and Rights. Exhibit C attached hereto
and made a part hereof lists all trademarks,
trademark registrations or applications, trade names,
service marks, copyrights, copyright registrations or
applications, patents or patent applications used or
owned by LINK and its subsidiaries. No person other
than LINK and its subsidiaries owns any trademark1
trademark registration or application, service mark,
trade name, copyright, or
-6-
copyright registration or application, patents or
patent
applications the use of which is necessary or
contemplated in connection with the operation of
LINK's and its subsidiaries
business.
2.10 Contracts and Leases. Exhibit D attached
hereto and made a part hereof contains a description
of all material contracts, leases and other
agreements of
LINK and
its
subsidiaries presently in existence or which have been
agreed to by LINK and Its subsidiaries. Neither
LINK
nor its subsidiaries are in default under any of these
agreements or leases.
2.11 Insurance Policies. Exhibit E to this
Agreement is a summary description of all Insurance
policies held by LINK and its subsidiaries concerning
their business and properties. All these policies are
in the
respective principal amounts set forth In Exhibit E.
2.12 Compliance with Laws. LINK and its subsidiaries
have complied with, and is not in violation of,
applicable federal, state, or local statutes, laws, and
regulations affecting their properties or the operation
of their business, except where the failure to so
comply would not have a materially adverse effect upon
the business, operations or financial condition of LINK.
2.13 Litigation. Except as set forth on
Exhibit F, neither LINK nor Its subsidiaries are party to
any suit, action, arbitration, or legal, administrative,
or other proceeding, or governmental investigation
pending or, to the best knowledge of LINK threatened,
against or affecting LINK or its subsidiaries or their
business, assets, or financial condition. Neither LINK
nor its subsidiaries are in default with respect
to any order, writ, injunction, or decree of any
federal, state, local, or foreign court,
department, agency, or
Instrumentality. Neither LINK nor its subsidiaries are
engaged in any legal action to recover moneys due to
it or damages sustained by it other than as disclosed on
Exhibit F.
2.14 Ability to Carry Out Obligations. LINK has the
right,
power, and authority to enter Into, and
perform Its obligations under this Agreement. The
execution and delivery of this Agreement by LINK and
the performance by LINK of its obligations hereunder
will not cause, constitute, or conflict with or result
in (a) any breach or violation or any of the
provisions of or constitute a default under any
license, indenture, mortgage, charter, instrument,
articles of incorporation,
by-law, or
other agreement or instrument to which LINK or its
subsidiaries are a party, or by which they may be bound,
nor will any consents or authorizations of any
party other than those hereto be required, (b) an event
that would permit any party to any agreement or
instrument to terminate it or to accelerate the
maturity of any indebtedness or other obligation of LINK
or its subsidiaries, or (c) an event that would result in
the
creation or Imposition or any lien, charge,
or encumbrance on any asset of LINK or its subsidiaries.
2.15 Full Disclosure. None of
representations and warranties made by LINK, or in any
certificate or memorandum furnished or to be
furnished by LINK, or on its behalf, contains or will
contain any untrue statement of material fact, or omit
any material fact the omission of which would
be
misleading. LINK has disclosed to SIMS all
reasonably foreseeable contingencies which, if
such contingencies
transpired, would have a material adverse effect on
LINK's business.
-7-
2.16 Title. LINK and its subsidiaries have good
and
marketable title to all of their assets and properties.
2.17 Other Representations. Warranties and
Covenants.
Link owns all of the issued and outstanding capital stock
of New View Technologies, Inc. Link Dispensing Systems,
Inc. and Phone Card, Inc. (the "Subsidiaries"). No other
third party has the right to acquire any of the capital
stock of the Subsidiaries or any asset of the
Subsidiaries,
except assets sold in the
normal course of business. The Subsidiaries are
corporations duly organized, validly existing and in
good standing under the laws of their corporate
domicile, have all necessary
corporate powers to own their properties and to carry on
their business as now owned and operated by such
Subsidiaries, and are duly qualified to do business and
are in good standing in each of the states where their
business requires qualification.
SIMS represents and warrants to LINK that:
2A. Organization. SIMS is a corporation duly
organized,
validly existing, and in good standing under the
laws of Delaware, has all necessary corporate powers
to own its properties and to carry on its business as
now
owned and operated
by it, and is duly qualified to do business and is
in good standing in each of the states where its
business requires qualification.
2B. Directors and Officers' Compensation:
Banks.
Exhibit G to this Agreement contains: (i) the names,
addresses, and titles of all directors and officers of
SIMS, and (ii) a listing of all persons who, to the
knowledge of SIMS, own more than 5% of SIMS' common
stock.
2C. Capital. The authorized capital stock of
SIMS
consists of 40,000,000 shares of common stock, of which
6,554,907 shares are issued and outstanding and 200,000
shares of preferred stock, of which 124,250 shares are
issued and outstanding.
All
such shares are validly issued, fully paid, and
nonassessable. All outstanding warrants, options,
convertible securities or other instruments obligating
SIMS to issue or to transfer from treasury any additional
shares of its capital stock of any class are listed on
Exhibit H.
2D. Financial Statements. Exhibit H to this
Agreement
sets forth balance sheets of SIMS as of June 30,
1996 and September 30, 1996, and the related statements
of Income and retained earnings for the periods then
ended. The financial statements have been prepared in
accordance with generally accepted accounting
principles consistently followed by SIMS throughout
the periods indicated, and
fairly present
the
financial position of SIMS as of the dates of the balance
sheets included in the financial statements, and the
results of its operations for the periods indicated.
2E. Absence of Changes. Since September 30,
1996,
there
has not been any change in the financial
condition or operations of SIMS, except changes in the
ordinary course of business, which changes have not
in
the aggregate been
materially adverse.
-8-
2F. Absence of Undisclosed Liabilities. SIMS
did not as of September 30, 1996 have any debt,
liability, or obligation of any nature, whether accrued,
absolute, contingent, or otherwise, and whether due or
to become due, that is not reflected on Exhibit H.
2G. Tax Returns. Within the times and in the
manner
prescribed by law, SIMS has filed all federal, state, and
local tax returns required by law and has paid all taxes,
assessments, and penalties due and payable. No federal
income tax returns of SIMS have been audited by the
Internal Revenue Service.
The
provision for taxes, if any, reflected in SIMS's balance
sheet as of September 30, 1996, Is adequate for any
and all federal, state, county, and local taxes for the
period ending on the date of that balance sheet and for
all prior periods, whether or not disputed. There are
no present disputes
as
to taxes of any
nature payable by SIMS.
2H. Investigation of Financial Condition of
SIMS. Without in any manner reducing or
otherwise
mitigating the
representations
contained herein, LINK and the Shareholders shall
have the
opportunity to meet with SIMS's accountants and
attorneys to discuss the financial condition of SIMS.
SIMS shall make available to LINK the books and
records of SIMS.
The minutes of SIMS are a complete and accurate
record of all meetings of the shareholders and
directors of SIMS and
accurately reflect all actions taken at such
meetings. The signatures of the directors and/or officers
on such minutes are the valid signatures of SIMS's
directors and/or officers who were duly elected or
appointed on the dates that the minutes were signed by
such persons.
21. Trade Names and Rights. Exhibit I attached hereto
and made
a part hereof lists all trademarks, trademark
registrations or applications, trade names, service marks,
copyrights, copyright registrations or applications used
or owned by SIMS. No person, other than SIMS, will own
any trademark, trademark registration or application,
service mark, trade name, copyright, or copyright
registration or application the use of which is
necessary or contemplated in connection with the
operation of the business of SIMS, as such business is
to be conducted after the closing of this transaction.
2J. Contracts and Leases. Exhibit J attached hereto and
made
a part hereof contains a description of all material
contracts, leases, and other agreements of SIMS
presently in existence or which have been agreed to by
SIMS. SIMS is not in default under any of these
agreements or leases.
2K. Insurance Policies. Exhibit K to this Agreement
is a summary of all insurance policies held by SIMS
concerning its business and properties. All these
policies are in the
respective principal amounts set forth in Exhibit K.
2L. Compliance with Laws. SIMS has complied with, and is
not in violation of, applicable federal, state, or local
statutes, laws, and regulations affecting its properties
or the operation of its business, except where the failure
to so comply would not have a materially adverse effect
upon the business, operations or financial condition of
SIMS. SIMS does not have any employee benefit plan
which is subject to the provisions of
the
Employee Retirement Income Security Act of 1974.
-9-
2M. Litigation. Other than as disclosed on Exhibit L,
SIMS is not a party to any suit, action, arbitration,
or legal, administrative, or other
proceeding, or governmental
investigation pending or, to the best knowledge of
SIMS threatened, against or affecting SIMS or its
business, assets, or financial condition. SIMS is not in
default with
respect to any order, writ, injunction, or decree of any
federal, state, local, or foreign court, department,
agency, or Instrumentality. SIMS is not engaged in any
legal action to recover moneys due to It or damages
sustained by it other than as disclosed on Exhibit L.
2N. Ability to Carry Out Obligations. SIMS has the
right, power, and authority to enter into, and perform
its obligations under, this Agreement. The execution
and delivery of this Agreement by SIMS and the
performance by
SIMS of its obligations hereunder will not cause,
constitute, or conflict with or result in (a) any
breach or violation or any of the provisions of or
constitute a default under any license, Indenture,
mortgage, charter, instrument, articles of incorporation,
by-law, or other agreement or instrument to which LINK Is
a party, or by which it may be bound, nor will any
consents or authorizations of any party other than
those hereto be required, (b) an event that would
permit any party to any agreement or instrument to
terminate it or to accelerate the maturity of any
indebtedness or other obligation of SIMS, or (c) an
event that would result in the creation or imposition or
any lien, charge, or encumbrance on any asset of SIMS.
20. Full Disclosure. None of representations and
warranties made by SIMS, or In any certificate or
memorandum furnished or to be furnished by SIMS, or on
its behalf, contains or will contain any untrue statement
of material fact, or omit any material fact the omission
of which would be misleading. SIMS has disclosed to LINK
all reasonably foreseeable contingencies which, if
such contingencies transpired, would have a material
adverse effect on SIMS. Each Shareholder represents and
warrants to SIMS, individually as to himself
only, and not jointly, as follows:
2(i) Ability to Carry Out Obligations. The
Shareholder has the right, power, and authority to enter
into, and perform his obligations under this
Agreement. The execution and delivery of this
Agreement by the
Shareholder and the performance by the Shareholder
of his obligations hereunder will not cause, constitute,
or conflict with or result in (a) any breach or violation
or any of the provisions of or constitute a default
under any license, indenture, mortgage, Instrument, or
other agreement or instrument to which the Shareholder
is a party, or by which he may be bound, nor will any
consents or authorizations of any party other than those
hereto be required, (b) an event that would permit any
party to any agreement or instrument to terminate it or
to accelerate the maturity of any indebtedness or other
obligation of LINK or its subsidiaries, or (c) an event
that would result in the creation or imposition or any
lien, charge, or encumbrance on any asset of LINK or
its subsidiaries.
2(ii) Title. The shares of LINK that such
Shareholder
will
deliver at closing are owned by such shareholder free
of any liens or encumbrances.
-10-
ARTICLE III
FUNDING
3.1 Upon the closing of the transactions contemplated
by this Agreement, SIMS agrees to provide LINK with
funding of at least $20,000 per week, up to a maximum
amount of $180,000.
ARTICLE IV
OBLIGATIONS BEFORE CLOSING
4.01 Investigative Rights. From the date of this
Agreement until the date of closing, each party shall
provide to each other party, and such other party's
counsel, accountants, auditors, and other authorized
representatives, full access during normal business
hours to all of each party's properties, books,
contracts,
commitments, records and correspondence and
communications with regulatory agencies for the
purpose of examining the same. Each party shall furnish
the other
party with all information concerning each party's affairs
as the other party may reasonably request.
4.02 Required Corporate Action. Each party will
promptly call and hold a meeting of their respective Board
of Directors for the purpose of submitting to them a
proposal to approve this Agreement.
4.03 Conduct of Business. Prior to the
closing, and except as contemplated by this Agreement,
each party shall conduct its business in the ordinary
course, and shall not sell, pledge, or assign any
assets, without the
prior
written approval of the other party, except In the
ordinary course of business. Except as contemplated by
this Agreement, neither party to this Agreement shall
amend Its Articles of Incorporation or By-laws, declare
dividends, redeem or sell stock or other securities,
incur additional or newly-funded material liabilities,
acquire or dispose of fixed assets, change senior
management, change employment terms, enter into any
material or long-term contract, guarantee obligations of
any third party, settle or discharge any balance sheet
receivable for less than Its stated amount, pay more on
any liability than its stated amount, or enter into any
other transaction other than in the regular course of
business.
ARTICLE V
CONDITIONS PRECEDENT TO PERFORMANCE BY
SINS COMMUNICATIONS, INC.
5.01 Conditions. SIMS's obligations hereunder shall be
subject to the satisfaction, at or before the
Closing, of all the conditions set forth In this Article
V. SIMS may waive any or all of these conditions in
whole or in part without prior notice; provided, however,
that no such waiver of a condition shall constitute a
waiver by SIMS of any other condition of or any of
SIMS's other rights or remedies, at law or in equity,
if LINK shall be In default of any of Its
representations, warranties, or covenants under this
agreement.
-11-
5.02 Accuracy of Representations. Except as
otherwise permitted by this Agreement, all
representations and
warranties by LINK in this Agreement or in any
written
statement that shall be delivered to SIMS by LINK
under this Agreement shall be true on and as of the
closing date as though made at those times.
5.03 Performance. LINK shall have performed,
satisfied, and
complied with all covenants, agreements, and conditions
required by this Agreement to be performed or complied
with by It, on or before the closing. LINK shall
have obtained all necessary consents and approvals
necessary to consummate the transactions contemplated
hereby.
5.04 Absence of Litigation. No action, suit, or
proceeding before any court or any governmental
body or authority, pertaining to the transaction
contemplated by this agreement or to its consummation,
shall have been instituted or threatened on or before the
closing.
5.05 Investment Letter. Each Shareholder of LINK
shall
execute and deliver to SIMS an "Investment Letter" in
the form attached hereto as Exhibit M, which form
will contain the acknowledgment by the Shareholder of
LINK that the shares such Shareholder Is
acquiring in SIMS
represent restricted securities as that term Is defined
in Rule 144 of the Securities and Exchange Commission.
5.06 Other. LINK shall have entered into
employment
contracts with Mark Bennett and Michael Malet on
terms and conditions that are acceptable to SIMS.
ARTICLE VI
CONDITIONS PRECEDENT TO PERFORMANCE BY
THE SHAREHOLDERS OF LINK INTERNATIONAL
TECHNOLOGIES, INC.
6.01 Conditions. The obligations of LINK and
the
Shareholders hereunder shall be subject to the
satisfaction, at or before the Closing, of the
conditions set forth in this
Article VI. LINK or the Shareholders may waive any or
all of these conditions in whole or In part without
prior notice; provided, however, that no such waiver
of
a condition shall
constitute a waiver by LINK or the Shareholders of any
other
condition of or any of LINK's or the Shareholder's other
rights or remedies, at law or in equity, if SIMS shall be
in default of any of its representations, warranties, or
covenants under this agreement.
6.02 Accuracy of Representations. Except as
otherwise permitted by this Agreement, all
representations and warranties by SIMS in this
Agreement or in any written statement that shall be
delivered to LINK by SIMS under this Agreement shall be
true on and as of the closing date as though made at those
times.
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6.03 Performance. SIMS shall have performed,
satisfied, and complied with all covenants, agreements,
and conditions required by this Agreement to be performed
or complied with by it, on or before the closing. SIMS
shall have obtained all necessary consents and
approvals necessary
to consummate the
transactions contemplated hereby.
6.04 Absence of Litigation. No action, suit, or
proceeding before any court or any governmental
body or authority) pertaining to the transaction
contemplated by this agreement or to its consummation,
shall have been instituted or threatened on or before the
closing.
ARTICLE VII CLOSING
7.01 Closing. At the closing, the following
documents, in form reasonably acceptable to counsel to
the parties or as set forth herein, shall be delivered:
By LINK:
A. Executed Investment Letters by all shareholders of
LINK;
B. Certificates, dated the closing date, (i) signed
by
the President of LINK and attested to by
Its secretary,
stating that all representations, warranties,
covenants and conditions set forth in this Agreement
on behalf of LINK are true and correct as of, or have
been fully performed and complied with by, the closing
date; and (ii) signed by each Shareholder, stating that
the representations and warranties made by him in
Sections 2(i) and 2(u) of the Agreement are true and
correct as of the closing date.
C. Certificates representing all Issued and
outstanding
shares
of LINK.
By SIMS:
A. An officer's certificate, dated the closing date,
that
all
representations, warranties, covenants, and conditions set
forth in this Agreement on behalf of SIMS are true
and correct as of, or have been fully performed and
complied with by, the closing date.
B. Certificates for the common stock of SIMS, as set
forth
in
Article I.
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7.02 Exchange of LMS's Stock Certificates. On the
closing date, each share of common stock of LINK then
issued and outstanding, will be exchanged for fully paid
and nonassessable shares of SIMS in accordance with this
Agreement. At the option of SIMS, this Agreement may be
closed with the Shareholders of LINK owning at least 85%
of the issued and outstanding shares of LINK's common
stock.
7.03 No Fractional Shares. No certificates for
fractional share interests of common stock of SIMS will
be
issued, but, in lieu thereof, SIMS will issue one share
of its common stock for each fractional share held in
LINK.
7.04 Appointment of Directors. At the closing of
this Agreement, SIMS will cause Mark Bennett and Michael
Malet to be appointed to SIMS's Board of Directors.
ARTICLE VIII
REMEDIES
8.01 Arbitration. Any controversy or claim arising out
of, or re lating to, this Agreement, or the making,
performance, or
interpretation thereof1 shall be settled by arbitration
in
Boca Raton, Florida in accordance with the Rules of
the American Arbitration Association then existing,
and judgment on the arbitration award may be entered in
any court having jurisdiction over the subject matter of
the controversy.
8.02 Costs. If any legal action or any arbitration or
other pro ceeding is brought for the enforcement of
this Agreement, or because of an alleged dispute,
breach, default, or misrepresentation in connection
with any of the provisions of this Agreement, the
successful or prevailing party or parties shall be
entitled to recover reasonable attorney's fees and
other costs incurred in that action or proceeding, in
addition to any other relief to which it or they may be
entitled. 8.03 Termination. In addition to the other
remedies, SIMS,
LINK, or the Shareholders collectively owning more
than 75% of LINK's common stock, may on or prior
to the closing date terminate this Agreement,
without liability to any other party:
(i) If any bona fide action or proceeding shall be
pending
against SIMS, LINK or any Shareholder on the closing
date that could result in an unfavorable judgment,
decree, or order that would prevent or make unlawful the
carrying out of this Agreement or if any agency of the
federal or of any state government shall have objected at
or before the closing date to this acquisition or to
any other action required by or in connection with this
Agreement;
(ii) If the legality and sufficiency of all steps taken
and to be taken by each party In carrying out this
Agreement shall not have been approved by the
respective party's counsel, which approval shall not be
unreasonably withheld.
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(iii) If a party breaches any material
representation, warranty, covenant or obligation of such
party set forth herein and such breach Is not corrected
within ten days of receiving written notice from the
other party of such breach.
ARTICLE IX MISCELLANEOUS
9.01 Captions and Headings. The Article and
paragraph headings throughout this Agreement are for
convenience and reference only, and shall in no way be
deemed to define, limit, or add to the meaning of any
provision of this Agreement.
9.02 No Oral Change. This Agreement and any provision
hereof, may not be waived, changed, modified, or
discharged orally, but only by an agreement in writing
signed by the party against whom enforcement of any
waiver, change, modification, or discharge is sought.
9.03 Non-Waiver. All representations and
warranties contained herein will survive the closing of
this Agreement. Except as otherwise expressly provided
herein, no waiver of any covenant, condition, or
provision of this Agreement shall be deemed to have
been made unless expressly in writing and signed by the
party against whom such waiver is charged; and (i) the
failure of any party to Insist in any one or more cases
upon the performance of any
of the provisions, covenants, or conditions of this
Agreement or to exercise any option herein contained
shall not be construed as a waiver or relinquishment for
the future of any such provisions, covenants, or
conditions, (ii)
the
acceptance of performance of anything required by this
Agreement to be performed with knowledge of the breach
or failure of a covenant, condition, or provision
hereof shall not be deemed a waiver of such breach or
failure, and (iii) no waiver by any party of one
breach by
another party shall be construed as a waiver with respect
to any other or subsequent breach.
9.04 Time of Essence. Time is of the essence of this
Agreement and of each and every provision hereof.
9.05 Entire Agreement. This Agreement contains the
entire Agreement and understanding between the parties
hereto, and supersedes all prior agreements,
understandings and the letter of intent between the
parties dated December 6, 1996.
9.06 State Law. This Agreement and its application
shall be governed by the laws of the State of Florida.
9.07 Counterparts. This Agreement may be
executed simultaneously in one or more counterparts, each
of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.08 Notices. All notices, requests, demands, and
other communications under this Agreement shall be in
writing and shall be deemed to have been duly given on
the date of service If served personally on the party to
whom notice is to be given, or on the third day after
mailing if mailed to the party to whom notice is to be
given, by first class mail, registered or certi fied,
postage prepaid, and properly addressed as follows:
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SIMS:
Melvin Leiner
SIMS Communications1 Inc.
3333 5. Congress Ave.
Suite 401
Delray, Florida 33445
With a copy to:
William T. Hart
Hart & Trinen
1624 Washington St.
Denver, Colorado 80203
Link International Technologies Inc.
Mark E. Bennett
17821 Sky Park Circle
Suite G
Irvine, California 92614
and
Michael N. Malet
17821 Sky Park Circle
Suite G
Irvine, California 92614
With a copy to:
Kenneth August
Jamboree Center
Two Park Plaza
Suite 1040
Irvine, California 92714
9.09 Binding Effect. This Agreement shall inure to
and be binding upon the heirs1 executors, personal
representatives, successors and assigns of each of the
parties to this Agreement.
9.10 Effect of Closing. All representations,
warranties, covenants, and agreements of the parties
contained in this Agreement, or in any instrument,
certificate, opinion, or other writing provided for in it,
shall survive the closing of this
Agreement.
9.11 Mutual Cooperation. The parties hereto shall
cooperate with each other to achieve the purpose of this
Agreement, and shall execute such other and further
documents and take such other and further actions as may
be necessary or convenient to effect the transaction
described herein. Neither party will intentionally take
any action, or omit to take any action, which will cause a
breach of such party's obligations pursuant to this
Agreement.
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9.12 Expenses. Each of the parties hereto agrees to pay
all of its own expenses (including without limitation,
attorneys' and accountants' fees) incurred in
connection with this Agreement, the transactions
contemplated herein and negotiations leading to the
same and the preparations made for carrying the same Into
effect. Each of the parties ex pressly represents and
warrants that no finder or broker has been involved in
this transaction and each party agrees to indemnify and
hold the other party harmless from any commission, fee
or claim of any person, firm or corporation employed or
retained by such party (or claiming to be employed or
retained by such party) to bring about or represent such
party in the transactions contemplated by this Agreement.
AGREED TO AND ACCEPTED as of the date first above written.
SIMS COMMUNICATIONS, INC. By /s/ Melvin Leiner
Melvin Leiner, President
LINK INTERNATIONAL TECHNOLOGIES, INC.
By_____/s/ Mark Bennett Mark Bennett,
President SHAREHOLDERS:
/s/ Mark B. Bennett
/s/ Michael N. Malet
/s/ William Solfisburg
2498D: as
Name of
Shareholders
Communications
Inc.
Michael N. Malet
166,580
Mark B. Bennett 166,580
Byron B. Wade 16,336
Ronald R. Ressel 16,336
Vincent A. Sentner 1 '499
Richard 3.p. Sinek 1,499
Michael Hughes 1,499
Chad Kioft 1,499
William Litvak 1,649
Kenneth 5. August 1,649
Gary Francis 1,499
Rodney Fingleson 1,499
Tho Hoc Trieu 1,499
Dennis Corn 1 ,499
Matthew Worthington 1,499
Hilton Kessler 1,499
William Bickenburg 1,499
William Solfisburg 268,276
Southeast Phonecard, Inc.
16,336 Grupo Barak SA de CV
3~926
674.157
24980-p. 18
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