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): November 29,2000
Corzon, Inc.
--------------------
(Exact name of Registrant as specified in charter)
Texas 33-95796 76-0406417
------------------- ----------------- -----------
(State or other Jurisdiction(Commission File Number)(IRS Employer
of Incorporation) Identification Number)
1087 Broad Street, Bridgeport, CT 06604
------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
(203) 333-6389
--------------------
(Registrant's Telephone Number, including Area Code)
<PAGE>
Item 2. Acquisition or Disposition of Assets
-------------------------------------------------------------
On November 29, 2000, we purchased from Dharnesh Patel all
of the outstanding shares of The Simple Card Limited in exchange
for 12,500,000 shares of our common stock. The Simple Card
Limited is involved in the business of the distribution of
telecommunication products, mainly prepaid phone cards in the
United Kingdom.
Item 7. Financial Statements and Exhibits
----------------------------------------------------
(a) Financial Statements of Businesses Acquired
The Company has determined that it is impracticable to
provide with this Report on Form 8-K the required financial
statements relating to the transaction as prescribed by Item
310 of Regulation S-B. The Company will file the required
financial statements in an amendment to this Report on Form
8-K within 60 days of the date that this Report on Form 8-K
is due.
(b) Pro Forma Financial Statements
The Company has determined that it is impracticable to
provide with this Report on Form 8-K the required pro forma
financial statements relating to the transaction as
prescribed by Item 310 of Regulation S-B. The Company will
file the required pro forma financial statements in an
amendment to this Report on Form 8-K within 60 days of the
date that this Report on Form 8-K is due.
(c) Exhibits
Exhibit No. Description
2.2 Stock Purchase Agreement by and between Corzon,
Inc., Dharnesh Patel and The Simple Card Limited
dated November 29, 2000.
99.1 Press release dated December 5, 2000.
<PAGE>
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.
Corzon, Inc.
Dated: December 6, 2000 By: /s/ Lawrence Shatsoff
----------------------------
Lawrence Shatsoff
President
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
2.2 Stock Purchase Agreement by and between Corzon, Inc., Dharnesh
Patel and The Simple Card Limited dated November 29, 2000.
99.1 Press release dated December 5, 2000.
<PAGE>
Exhibit 2.2
STOCK PURCHASE AGREEMENT
29th November, 2000
By and Between
Corzon, Inc.
(a Texas corporation)
and
The Simple Card Limited
(a corporation organized under the laws of England and Wales)
<PAGE>
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made as of
29th November, 2000, by and between CORZON, INC., a Texas corporation
("Purchaser"), THE SIMPLE CARD LIMITED, a UK corporation herein
represented by its President, Dharmesh Patel ("Simple") and Dharmesh
Patel ("Patel"), an individual residing in the UK. Purchaser, Simple
and Patel are hereinafter collectively called the "Parties. "
W I T N E S S E T H :
WHEREAS, Dharmesh Patel owns all of the issued and outstanding
shares of the common stock of The Simple Card Limited ("Simple" or
the "Company"), a corporation organized under the laws of England and
Wales, constituting one hundred percent (100%) of the issued and
outstanding shares of the Company's common stock (the "Company Common
Stock");
WHEREAS, the Parties have agreed that it is in their best
interests for Purchaser to purchase and for Patel to sell all of the
Company Common Stock; and
WHEREAS, the Board of Directors of Purchaser has approved the
purchase of the Company Common Stock and the Board of Directors of
Simple has approved the sale of the Company Common Stock upon the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set
forth herein, the Parties agree as follows:
Section 1: THE PURCHASE
1.1 Purchase and Sale of Shares. Upon the terms and subject to the
conditions of this Agreement, Patel shall sell to Purchaser, and
Purchaser shall purchase from Patel, all of the Company Common Stock
consisting of 100 Common shares with a par value of 1bp each all of
which are held by Patel and are validly issued and not subject to
call and there are no issued nor outstanding Preferred Shares.
1.2 Time and Place of Closing. The consummation of the transactions
contemplated by this Agreement (the "Closing") shall take place at
the offices of B4B Communications, Limited, Suite 4C Baird House, 15-
17 St. Cross Street, London, UK at 2:00 p.m. on the first business
day after all conditions set forth in Article 8 (other than the
delivery of certificates, opinions and other instruments and
documents to be delivered at the Closing) have been satisfied or
waived in writing, or at such other place and time as Purchaser and
Patel may agree (the "Closing Date"). At the Closing, the parties
shall execute and deliver the certificates, opinions and other
instruments and documents referred to in Article 8.
<PAGE>
Section 2: OFFICERS AND DIRECTORS
Effective as soon as possible following the Closing, the
following officers and directors of the shall be appointed as
officers and directors of Simple:
(a) Clifford S. Postelnik, Chairman, CEO and Director;
(b) Minesh Patel, President and Director,
(c) Neil Higgins, Head of Marketing and Director,
(d) Dharmesh Patel, Head of Retail Operation and Director
Section 3: PURCHASE PRICE AND PAYMENT OF PURCHASE PRICE
3.1 Purchase Price. Subject to the terms of this Agreement and the
related agreements and documents, the purchase price ("Purchase
Price") for all of the Company Common Stock shall be twelve million,
five hundred thousand shares of common stock, par value $.01 per
share, of Purchaser ("Purchaser Common Stock").
3.2 Payment of Purchase Price. At the Closing, Purchaser shall
deliver (or cause to be delivered) the Purchase Price as follows:
(a) to Dharmesh Patel, certificate representing 12,500,000 shares of
Purchaser Common Stock issued in the name of Dharmesh Patel.
3.3 Surrender and Exchange of Certificates.
(a) Surrender of Certificates. At the Closing, Purchaser shall
deliver certificate for the number of shares of Purchaser Common
Stock provided for in Section 3.1 in a manner as provided in Section
3.2 and Patel shall deliver certificates representing one hundred
percent (100%) of the issued and outstanding shares of the Company
Common Stock (properly issued, executed and countersigned, as
appropriate) (the "Certificates"). All payments in respect of
Company Common Stock that are made in accordance with the terms
hereof shall be deemed to have been made in full satisfaction of all
rights pertaining to such securities.
(b) [Intentionally Omitted]
(c) Dividends on Purchaser Common Stock. No holder of a
Certificate shall be entitled to delivery of any dividend or other
distribution from Purchaser having a record date after the Closing
Date until surrender of such holder's Certificate pursuant to this
Section 3.3. Upon such surrender, there shall be paid to the holder
the amount of any dividends or other distributions (without interest)
that theretofore became payable by Purchaser, but were not paid by
reason of the foregoing with respect to the number of whole shares of
<PAGE>
Purchaser Common Stock represented by the Certificate(s) issued upon
such surrender. From and after the Closing Date, Purchaser shall,
however, be entitled to treat any such Certificate that has not yet
been surrendered pursuant to Section 3.3(a) as evidencing the
ownership of the aggregate Purchase Price represented by such
Certificate, notwithstanding any failure to surrender such
Certificate.
3.4 Legending of Securities.
(a) The shares of Purchaser Common Stock to be delivered
in connection with this Agreement will be issued in a transaction
exempt from registration under the Securities Act of 1933, as amended
(the "Securities Act") by reason of Section 4(2) thereof or
Regulation D promulgated thereunder, and Purchaser is relying on the
representations of Corzon with respect to such exemption. Corzon
understands and agrees that stop transfer instructions with respect
to the shares of Purchaser Common Stock issued pursuant to this
Agreement will be given to Purchaser's transfer agent and that there
will be placed on the certificates for such shares a legend stating
in substance as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES ACT AND MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS IN
THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO
PURCHASER, THE TRANSFER OF SUCH SECURITIES ARE NOT REQUIRED
TO BE REGISTERED UNDER THE SECURITIES ACT OF 1933 AND
APPLICABLE STATE SECURITIES LAWS.
THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE
PROVISIONS OF A STOCK PURCHASE AGREEMENT DATED NOVEMBER 29,
2000, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED, EXCEPT
IN ACCORDANCE THEREWITH. COPIES OF SUCH AGREEMENTS MAY BE
OBTAINED AT THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY.
(B) The foregoing legends will also be placed on any certificate
representing securities issued subsequent to the original issuance of
the Purchaser Common Stock pursuant to this Agreement as a result of
any transfer of such shares or any stock dividend, stock split or
other recapitalization as long as the Purchaser Common Stock issued
pursuant to this Agreement has not been transferred in such a manner
as to justify the removal of the legend therefrom.
3.5 Transfer Taxes. Corzon shall pay all transfer taxes, limited to
stamp duty and fees incurred by Corzon, the Company, and Patel as a
result of the transfer of the Company Common Stock from Patel to
Purchaser, but exclusive of income or capital gain taxes or taxes of
a like nature.
<PAGE>
Section 4: RULES OF CONSTRUCTION
In the interpretation of this Agreement, unless otherwise
provided or the context otherwise requires:
(a) The singular includes the plural and vice versa and,
in particular (but without limiting the generality of the foregoing),
any word or expression defined in the singular has the corresponding
meaning used in the plural and vice versa;
(b) Any reference to any gender includes the other gender;
(c) Any reference to an Article, Section, Exhibit, clause,
subclause, paragraph, subparagraph, Schedule or recital is a
reference to an Article, Section, Exhibit, clause, subclause,
paragraph, subparagraph, Schedule or recital of this Agreement;
(d) Any reference to any agreement, instrument or other
document (i) shall include all appendices, exhibits and schedules
thereto and all agreements, documents or other writings incorporated
by reference therein, and (ii) shall be a reference to such
agreement, instrument or other document as amended, supplemented,
modified, suspended, restated or novated from time to time;
(e) Any reference to any statute shall be construed as
including all statutory provisions consolidating, amending or
replacing such statute and all governmental regulations and rules
promulgated thereunder;
(f) Any reference to "writing" includes printing, typing,
lithography and other means of reproducing words in a visible form;
(g) Any reference to a time or date or to a local time or
date is a reference to the time and date in London, UK;
(h) The headings and Article, Section and paragraph
numbering contained in this Agreement are used solely for convenience
and do not constitute a part of this Agreement, nor shall such
headings and numbering be used in any manner to aid in the
construction of this Agreement;
(i) References herein to the "Company Disclosure
Schedules" mean the disclosure schedules, dated as of the date
hereof, which have been delivered by the Company and/or Patel to
Purchaser and all other documents, agreements, and other items
disclosed by the Company and/or Patel in writing to the Purchaser and
attached to such schedules in connection with this Agreement, and
references to a numbered Company Disclosure Schedule shall mean that
portion of the Company Disclosure Schedules that refers to the
specific section or subsection of Article 5 of this Agreement;
(j) The term "including" means "including, without
limitation";
(k) The term "Governmental Authority" means any United
States federal, state or local, or any foreign, governmental,
regulatory or administrative authority, agency, department, board,
investigative body or commission or any court, tribunal, or judicial
or arbitral body;
(l) The term "Knowledge" as used with respect to Patel
and/or the Company (including any references to Patel and/or the
Company being aware of a particular matter) means the actual
knowledge of Patel and/or the Company, their officers, directors or
employees, and information which Patel and/or the Company, their
officers, directors or employees reasonably should have known, given
the nature of the disclosure;
<PAGE>
(m) The term "Material Adverse Effect" with respect to a
person or entity means any circumstance, change in, or effect on the
business and affairs of such person or entity or any Subsidiary
thereof that, individually or in the aggregate with any other
circumstances, changes in, or effects on, the business and affairs of
such person or entity and its Subsidiaries: (i) is, or would
reasonably be expected to be, materially adverse to the business,
operations, assets or liabilities, prospects, results of operations
or financial condition of such person or entity and its Subsidiaries,
taken as a whole, or (ii) would reasonably be expected to materially
adversely affect the ability of such person or entity and its
Subsidiaries to operate or conduct its or their business and affairs
in the manner in which it is currently operated or conducted or
contemplated by such person or entity to be operated or conducted;
(n) The term "person" means any individual, partnership,
limited liability company, firm, corporation, association, trust,
joint venture, unincorporated organization or other entity, as well
as any syndicate or group that would be deemed to be a person under
Section 13(d)(3) of the Exchange Act (as defined herein);
(o) The term "Subsidiary" means any corporation,
partnership, joint venture or other legal entity in which a specified
person or entity, directly or indirectly, owns or controls the voting
of at least a 50% share or other equity interest or for which such
person or entity, directly or indirectly, acts as a general partner
or managing member;
(p) Each of the Parties acknowledges that it has had the
opportunity to negotiate the terms and provisions of this Agreement,
with the assistance and review of its counsel. This Agreement,
therefore, shall be construed without regard to any presumption or
other rule requiring construction against the party causing the
Agreement to be drafted.
Section 5: REPRESENTATIONS AND WARRANTIES OF SIMPLE
To induce Purchaser to enter into this Agreement, Patel hereby
represents and warrants to Purchaser as follows:
5.1 Organization.
(a) The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of England and
Wales. The Company has the corporate power and authority to own or
lease all of its properties and assets and to carry on its business
as it is now being conducted, and, except as disclosed on Company
Disclosure Schedule 5.1(a), is duly licensed or qualified to do
business and is in good standing in each jurisdiction in which the
nature of the business conducted by it or the character or location
of the properties and assets owned or leased by it makes such
licensing or qualification necessary. The failure of the Company to
be licensed, qualified or in good standing in the jurisdictions
listed on Company Disclosure 5.1(a) does not have and is not
reasonably likely to have a Material Adverse Effect on the Company.
The Company has no subsidiaries.
<PAGE>
(b) Company Disclosure Schedule 5.1(b) sets forth true and
correct copies of the Articles of Incorporation and Bylaws and
amendments thereto of the Company.
(c) Except as disclosed on Company Disclosure Schedule 5.1(c), the
Company does not own or control, directly or indirectly, any equity
interest in any corporation, company, association, partnership, joint
venture or other entity.
5.2 Capitalization. Patel owns, of record and beneficially, good
and valid title to the Company Common Stock, and the Company Common
Stock is validly issued and are free and clear of any mortgage,
charge (whether fixed or floating), security interest, claim, right
of first refusal, or any other lien, encumbrance or restriction as to
transfer, use or possession, with no defects of title whatsoever, and
Patel has full and exclusive power, right and authority to vote the
Company Common Stock. Upon consummation of the Closing, Purchaser
shall obtain good and valid title to the Company Common Stock, free
and clear of all any mortgages, charges (whether fixed or floating),
security interests, claims, rights of first refusal, and any other
liens, encumbrances and restrictions as to transfer, use or
possession, with no defects of title whatsoever, and shall have full
and exclusive power, right and authority to vote the Company Common
Stock. The authorized capital stock of the Company consists of one
hundred (100) shares of Company Common Stock and no (0) shares of
preferred stock. As of the date hereof, there are one hundred (100)
shares of Company Common Stock issued and outstanding, owned by
Patel. There are no options, warrants, or other rights to acquire
Company Common Stock or any other equity securities of the Company
(collectively, "Company Stock"). Neither the Company nor Patel has
granted or is bound by any outstanding subscriptions, options,
warrants, calls, commitments or agreements of any character calling
for the transfer, purchase, subscription or issuance of any shares of
capital stock of the Company or any securities representing the right
to purchase, subscribe or otherwise receive any shares of such
capital stock or any securities convertible into any such shares, and
there are no agreements or understandings with respect to voting any
such shares.
5.3 Authority; No Violation.
(a) Except as disclosed on Company Disclosure Schedule
5.3(a) (collectively, the "Company Approvals"), no consents,
approvals, authorizations, clearances or orders of, filings or
registrations with or notices to (collectively "Authorizations") any
third party or any Governmental Authority are necessary on behalf of
the Company or Patel in connection with (i) the execution and
delivery by the Company and Patel of this Agreement and (ii) the
consummation by the Company and Patel of the transactions
contemplated hereby. Dharmesh Patel is the sole director of the
Company and he has taken fully approved the transfer of the Company
Common Stock to Purchaser. The Company and Patel have the full
corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby in accordance
with the terms hereof. The execution and delivery of this Agreement
(as defined herein) and the consummation of the transactions
<PAGE>
contemplated hereby and thereby have been duly and validly approved
by the Board of Directors of Simple in accordance with the Articles
of Incorporation and Bylaws of Simple and with applicable Laws (as
defined below). Except for the Company Approvals, no other corporate
proceedings on the part of the Company are necessary for the Company
and Patel to execute and deliver this Agreement to which they are a
party and for the Company and Patel to be bound by the terms hereof
and thereof. This Agreement to which they are a party have been duly
and validly executed and delivered by the Company and Patel and
constitute the valid and binding obligation of the Company and Patel
enforceable against the Company and Patel in accordance with its and
their terms.
(b) Neither the execution and delivery by the Company and Patel of
this Agreement to which they are a party, nor the consummation by the
Company and Patel of the transactions contemplated hereby and thereby
in accordance with the terms hereof and thereof, nor compliance by
the Company and Patel with any of the terms or provisions hereof,
will: (i) violate any provision of the Company's Articles of
Incorporation or Bylaws; (ii) assuming that the Company Approvals are
duly obtained, violate any federal, state or local or foreign
statute, code, ordinance, rule, regulation, judgment, order, writ,
ruling, decree or injunction of any Governmental Authority
(collectively, "Laws") applicable to the Company, Patel or any of its
or their respective properties or assets; or (iii) assuming that the
Company Approvals are duly obtained, violate, conflict with, result
in a breach of any provisions of, constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a
default) under, result in the termination of, accelerate the
performance required by, or result in the creation of any lien,
mortgage, security interest, pledge, charge, other right of third
parties or other encumbrance (collectively, "Liens") upon any of the
respective properties or assets of the Company or Patel under any of
the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which the Company or Patel is a party, or
by which they or any of their respective properties or assets may be
bound or affected, except, with respect to (ii) and (iii) above, such
as individually or in the aggregate will not have a Material Adverse
Effect on the Company, and which will not prevent or delay the
consummation of the transactions contemplated hereby.
5.4 Financial Statements.
(a) Company Disclosure Schedule 5.4(a) sets forth copies
of: (i) the balance sheet of the Company as of 30 September
2000, and (ii) the statement of income for the period ended 30
September 2000 (together with the related notes, collectively,
the "Company Financial Statements"). The Company and Patel
represent and warrant that the business of the Company commenced
in August 2000 and that there is no predecessor entity of the
Company for which financial statements are required under the
<PAGE>
accounting and securities laws, rules and regulations of the
United States or England and Wales.
(b) The Company Financial Statements present fairly, in
all material respects, the financial position of the Company as of
the respective dates set forth therein, and the results of the
Company's operations and its cash flows for the respective periods
set forth therein.
(c) The books and records of the Company have been
maintained in material compliance with applicable legal and
accounting requirements.
(d) Except as and to the extent reflected, disclosed or
reserved against in the Company Financial Statements, or as disclosed
in Company Disclosure Schedule 5.4(d), since 30 September, 2000 the
Company has not incurred any liabilities or obligations of any kind,
whether absolute, accrued, contingent or otherwise ("Liabilities"),
except in the ordinary course of business and consistent with past
practice (which, in the aggregate, are not material).
(e) Since 30 September, 2000 there has not been any
change, occurrence or circumstance affecting the business, results of
operations or financial condition of the Company that has had,
individually or in the aggregate, a Material Adverse Effect, other
than changes, occurrences and circumstances disclosed by the Company
on the Company Disclosure Schedules.
(e) At the Closing, the Company shall not be indebted to Patel.
5.5 Broker's and Other Fees. Except as disclosed in Company
Disclosure Schedule 5.5, neither the Company nor Patel has employed
any broker or finder or incurred any liability for any broker's or
finder's fees or commissions in connection with any of the
transactions contemplated by this Agreement.
5.6 Absence of Certain Changes or Events.
5.6.1 Except as disclosed in Company Disclosure Schedule 5.6(a),
to the Knowledge of Patel or the Company, no facts or conditions
exist which will cause a Material Adverse Effect on the Company in
the future.
5.6.2 Except for execution of this Agreement, the Company has
conducted its business only in the ordinary course, consistent with
past practice since inception.
5.6.3 Legal Proceedings. Except as disclosed in Company
Disclosure Schedule 5.7, neither the Company nor Patel is a party to
any, and there are no pending or, to the knowledge of Patel or the
Company, threatened, legal, administrative, arbitral or other
proceedings, claims, actions or governmental investigations of any
nature against the Company or Patel that involve the Company. Except
as disclosed in Company Disclosure Schedule 5.7, the Company is not a
party to any order, judgment or decree entered in any lawsuit or
proceeding and Patel is not a party to any order, judgment or decree
entered in any lawsuit or proceeding that involves the Company.
Without limiting the foregoing, except as disclosed in Company
Disclosure Schedule 5.7, no actions, suits, demands, notices, claims,
investigations or proceedings are pending or, to the knowledge of
Patel or the Company, threatened against or otherwise involving,
directly or indirectly, any officer, director, employee or agent of
the Company (in connection with such officer's, director's,
employee's or agent's activities on behalf of the Company or that
otherwise relate, directly or indirectly to the Company or its
properties or securities) including without limitation any notices,
demand letters or requests from any Governmental Authority relating
to such potential Liabilities, nor, to the knowledge of Patel or the
Company, are there any circumstances which could lead to such
actions, suits, demands, notices, claims, investigations or
proceedings. The matters referenced on Company Disclosure Schedule
5.7, if resolved against the Company or Patel, would not have a
Material Adverse Effect on the Company. Patel agrees to cooperate
fully with the Company and Purchaser in the defense of any claim or
action referenced on Company Disclosure Schedule 5.7 or otherwise
brought against the Company after the date of Closing.
5.7 Taxes and Tax Returns. Except as disclosed in Company
Disclosure Schedule 5.8:
5.7.1 The Company has duly filed (and until the Closing Date will
so file) all returns, declarations, reports, information returns and
statements ("Returns") required to be filed by it in respect of any
federal, state or local, or any foreign, Taxes and has duly paid (and
until the Closing Date will so pay) all such Taxes due and payable.
As used herein, "Tax" or "Taxes" means and includes any and all
taxes, fees, levies, assessments, duties, tariffs, imposts, and other
charges of any kind (together with any and all interest, penalties,
additions to tax and additional amounts imposed with respect thereto)
imposed by any Governmental Authority, including, without limitation:
foreign, domestic, central, local, state or other jurisdictional
taxes or other charges on or with respect to income, estimated
income, franchises, business, occupation, windfall or other profits,
gross receipts, property, sales, use, capital stock, payroll,
employment, social security, workers' compensation, unemployment
compensation, or net worth; taxes or other charges in the nature of
excise, withholding, ad valorem, stamp, transfer, value added, or
gains taxes; license, registration and documentation fees; and
customs duties, tariffs, and similar charges. The Company has
established (and until the Closing Date will establish) on its books
and records reserves that are adequate for the payment of all Taxes
not yet due and payable, but are incurred in respect of the Company
through such date.
<PAGE>
5.7.2 None of the Returns of the Company have been examined by
the Internal Revenue Service (the "IRS"), or any other federal, state
or local or any foreign Governmental Authority within the past six
years. To the knowledge of Patel and the Company, there are no
audits or other Governmental Authority proceedings presently pending
nor any other disputes pending with respect to, or claims asserted
for, Taxes upon the Company, nor has the Company given any currently
outstanding waivers or comparable consents regarding the application
of any statute of limitations with respect to any Taxes or Returns.
There are no Liens for Taxes upon the assets of the Company, except
Liens for Taxes not yet due. The Company and Patel have complied
(and until the Closing Date will comply) in all respects with all
applicable Laws relating to the payment and withholding of Taxes.
5.7.3 The Company (i) has not requested any extension of time
within which to file any Return which Return has not since been
filed; (ii) is not a party to any agreement providing for the
indemnification, allocation or sharing of Taxes; (iii) is not
required to include in income any adjustment by reason of a voluntary
change in accounting method initiated by the Company (nor to the
knowledge of Patel and the Company has any Governmental Authority
proposed any such adjustment or change of accounting method); (iv)
has not filed a consent with any Governmental Authority pursuant to
which the Company has agreed to recognize gain (in any manner)
relating to or as a result of this Agreement or the transactions
contemplated hereby; or (v) has not been a member of an affiliated
group other than one of which the Company was the common Purchaser.
5.8 Employee Benefit Plans and Relations. Except as disclosed in
Company Disclosure Schedule 5.9:
5.8.1 The Company does not maintain or contribute to any
"employee pension benefit plan" (the "Company Pension Plans"), as
such term is defined in Section 3 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), including any pension,
profit-sharing, retirement, thrift or stock bonus plan, "employee
welfare benefit plan" (the "Company Welfare Plans"), as such term is
defined in Section 3 of ERISA, or any other stock option plan, stock
purchase plan, restricted stock plan, deferred compensation plan,
severance plan, phantom stock plan, bonus plan or other similar plan,
program or arrangement (collectively the "Employee Plans"). The
Company has not contributed to, or been required to contribute to,
any "Multiemployer Plan, " as such term is defined in Section 3(37)
of ERISA.
5.8.2 Each of the Company Pension Plans is intended to be a
qualified plan within the meaning of Section 401(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), and Patel and the
Company are not aware of any fact or circumstance that would
adversely affect the qualified status of any such plan.
5.8.3 Each of the Company Pension Plans, Company Welfare Plans
and other Employee Plans has been operated in compliance in all
material respects with the provisions of ERISA, the Code, and all
other applicable Laws.
<PAGE>
5.8.4 Neither the Company nor, to the knowledge of Patel or the
Company, any trustee, fiduciary or administrator of any Company
Pension Plan or Company Welfare Plan or any trust created thereunder,
has engaged in a "prohibited transaction" as such term is defined in
Section 4975 of the Code, which could subject the Company or any such
trustee, fiduciary or administrator thereof, to the tax or penalty on
prohibited transactions imposed by said Section 4975.
5.8.5 No Company Pension Plan or any trust created thereunder has
been terminated, nor have there been any "reportable events" for
which the 30 day notice has not been waived with respect to any
Company Pension Plan, as that term is defined in Section 4043(b) of
ERISA.
5.8.6 There are no pending or, to the knowledge of Patel or the
Company, threatened or anticipated claims (other than routine claims
for benefits) by, on behalf of or against any of the Company Pension
Plans or the Company Welfare Plans or any trusts related thereto.
5.8.7 Accruals; Funding.
5.8.7.1 Pension Plans. None of the Employee Plans is a Pension
Plan subject to ERISA Title IV (including those for retired,
terminated or other former employees and agents).
5.8.7.2 Other Plans. Company Disclosure Schedule 5.9(g) fully and
accurately sets forth any funding liability under each Employee Plan
not subject to ERISA Title IV, whether insured or otherwise,
specifically setting forth any liabilities under any retiree medical
arrangement and specifically designating any insured plan which
provides for retroactive premium or other adjustments. To the
knowledge of Patel or the Company, the levels of insurance reserves
and accrued liabilities with regard to each such Employee Plan are
reasonable and are sufficient to provide for all incurred but
unreported claims and any retroactive premium adjustments.
5.8.7.3 Contributions. Except as set forth on Company Disclosure
Schedule 5.9(g): (A) the Company and each trade or business (whether
or not incorporated), which together with the Company is treated as a
single employer pursuant to Code Section 414(b),(c),(m) or (o) (an
"ERISA Affiliate"), has made full and timely payment of all amounts
required to be contributed under the terms of each Employee Plan and
applicable Law, or required to be paid as expense under such Employee
Plan, including the Pension Benefit Guaranty Corporation ("PBGC")
premiums and amounts required to be contributed under Code Section
412; (B) where applicable, all contributions have been made in
accordance with the actuarial recommendations; and (C) no excise
taxes are assessable as a result of any nondeductible or other
contributions made or not made to an Employee Plan.
<PAGE>
5.8.8 To the knowledge of Patel and the Company, summary plan
descriptions and all other returns, reports, registration statements,
prospectuses, documents, statements and communications required to
have been filed, published or disseminated under ERISA or other Laws
and the rules and regulations promulgated by the Department of Labor
under ERISA and the Treasury Department or by the Securities and
Exchange Commission ("SEC") with respect to the Employee Plans have
been so filed, published or disseminated.
5.9 Compliance with Applicable Laws. Except as set forth in Company
Disclosure Schedule 5.10, the Company holds all licenses, franchises,
permits, consents and authorizations ("Licenses") necessary for the
lawful conduct of its business, except to the extent a failure to
hold such Licenses would not have a Material Adverse Effect. No
proceeding is pending or threatened seeking the revocation or
suspension of any License. Except as set forth on Company Disclosure
Schedule 5.10, the Company is and has been in compliance in all
material respects with all applicable Laws, and neither the Company
nor any Shareholder has received any notices of any allegation of any
violation by the Company of any Laws or Licenses.
5.10 Certain Contracts.
5.10.1 Company Disclosure Schedule 5.11(a) lists the following
agreements (collectively, the "Material Contracts"), including,
without limitation, leases, purchase contracts and commitments, to
which the Company is a party or by which the Company or any of its
properties or assets is bound:
(i) all agreements involving an annual commitment or
payment by any party thereto of more than $5,000 individually or
which have a fixed term extending more than 12 months from the date
hereof;
(ii) all joint venture, sales agency, sales
representative or distributorship, broker, franchise, license or
similar agreements;
(iii) all leases of real property and all leases
of personal property that is material to the Company's business;
(iv) all notes, bonds, mortgages, security agreements,
guarantees and other agreements and instruments for or relating to
any lending or borrowing by the Company in any amount (exclusive of
advances to employees for expenses in the ordinary course of
business);
(v) all powers of attorney, guarantees, suretyships
or similar agreements; and
(vi) all other written agreements the breach of or
default under which could have a Material Adverse Effect on the
Company.
<PAGE>
(b) Except as set forth on Company Disclosure Schedule
5.11(b), each of the Material Contracts is in full force and effect,
has not been modified, rescinded, cancelled, or amended and is valid,
binding and enforceable on the parties thereto in accordance with its
terms. The Company has provided a copy of each Material Contract to
Purchaser.
(c) Except as disclosed in Company Disclosure Schedule
5.11(c), (i) the Company is not a party to or bound by any agreement
or understanding (whether written or oral) with respect to the
employment of any officers, employees, directors or consultants, and
(ii) the consummation of the transactions contemplated by this
Agreement will not (either alone or upon the occurrence of any
additional acts or events) result in any payment (whether of
severance pay or otherwise) becoming due from the Company to any
officer, employee, director, shareholder or consultant thereof.
Company Disclosure Schedule 5.11(c) sets forth true and correct
copies of all severance or employment agreements with officers,
directors, employees, agents or consultants to which the Company is a
party.
(d) Except as disclosed in Company Disclosure Schedule
5.11(d), no agreement or understanding to which the Company or Patel
is a party or by which any of them is bound limits the freedom of the
Company to compete in any line of business or with any person.
5.10.2 Except as disclosed in Company Disclosure Schedule 5.11(e),
neither the Company nor, to the knowledge of Patel or the Company,
any other party thereto, is in default under any of the Material
Contracts or any other agreement to which the Company or Patel is a
party or to which its or their properties is bound; to the knowledge
of Patel or the Company, no event has occurred which (whether with or
without notice, lapse of time or the happening or occurrence of any
other event) would constitute a default thereunder entitling any
party to terminate a Material Contract or other such agreement; and
the continuation, validity and effectiveness of all such Material
Contracts and agreements under the current terms thereof and the
current rights and obligations of the Company and Patel thereunder
will in no way be affected, altered or impaired by the consummation
of the transactions contemplated hereby. Except as disclosed in
Company Disclosure Schedule 5.11(e), upon consummation of the
transactions contemplated by this Agreement, the Company will be
entitled to continue to enjoy the advantages and benefits of the
business arrangements, agreements, opportunities and relationships of
the Company as it enjoyed on the Closing Date without interference or
interruption.
<PAGE>
5.11 Properties and Insurance.
(a) Except as disclosed in Company Disclosure Schedule
5.12(a), the Company has good and marketable title to all assets and
properties, whether real or personal, tangible or intangible,
reflected in the Company Financial Statements or owned or acquired
subsequent thereto (except to the extent that such assets and
properties have been disposed of for fair value in the ordinary
course of business since such date), subject to no Liens except (i)
statutory liens for amounts not yet delinquent or which are being
contested in good faith (and for which adequate reserves have been
made) and (ii) such Liens and title imperfections that do not in the
aggregate have a Material Adverse Effect on the Company. The Company
as lessee has the right under valid and subsisting leases to occupy,
use, possess and control all real property leased by the Company as
presently occupied, used, possessed and controlled by the Company or
necessary in the operation of its businesses as currently conducted.
(b) The business operations and all insurable properties
and assets of the Company are insured for their benefit against all
risks which, in the reasonable judgment of Patel, should be insured
against, in each case under policies or bonds issued by insurers of
recognized responsibility, in such amounts with such deductibles and
against such risks and losses as are in the opinion of Patel adequate
for the business engaged in by the Company. Copies of all such
policies as in effect on the date hereof are attached hereto as
Company Disclosure Schedule 5.12(b). Neither the Company nor any of
Patel has received any notice of cancellation or notice of a material
amendment of any such insurance policy or bond and the Company is not
in default under any such policy or bond, no coverage thereunder is
being disputed and all material claims thereunder have been filed in
a timely fashion.
(c) No person other than the Company is currently entitled to
possession of any of the properties of the Company, whether owned or
Leased by the Company. To the knowledge of Patel and the Company,
the real property, buildings, structures and improvements owned or
leased by the Company conform to all applicable Laws, including
zoning regulations, none of which would upon consummation of the
transactions contemplated hereby adversely interfere with the use of
such properties, buildings, structures or improvements for the
purposes for which they are now utilized. The Company has not
received notice of, and to the knowledge of Patel and the Company,
there does not exist (i) any pending or contemplated condemnation or
eminent domain proceeding affecting the properties owned or leased by
the Company, (ii) any proposal for increasing the assessed value of
any such properties for state, county, local or other ad valorem
Taxes or (iii) any pending or contemplated proceedings or public
improvements that would result in the levy of any special Tax or
assessment against any such properties; and there are no outstanding
requirements or recommendations by the Company's insurance providers
requiring or recommending any repairs or work to be done with
reference to any such properties or any basis for such. The
properties and assets owned or leased by the Company constitute all
of the property and assets that the Company uses or may reasonably
need in connection with the operation of its business as conducted on
the Closing Date, and all such property and assets are in good repair
and operating condition, normal wear and tear excepted. The
consummation of the transactions contemplated by this Agreement and
the other Purchase Agreements will not impair the ability of the
Company to continue to use such properties and assets.
<PAGE>
5.12 Intellectual Property.
5.12.1 Ownership. Except as set forth in Company Disclosure
Schedule 5.14(a), the Company owns all patents, trademarks, service
marks, trade names and copyrights (including registrations, licenses
and applications pertaining thereto) and all other proprietary
information used by the Company in the conduct of its business.
Company Disclosure Schedule 5.14(a) sets forth all domestic and
foreign patents, trademarks, service marks, trade names and
copyrights owned or used by the Company and all applications therefor
and registrations thereof.
5.12.2 Procedures for Copyright Protection. Company Disclosure
Schedule 5.14(b) sets forth the form and placement of the proprietary
legends and copyright notices displayed in or on the Company's and in
or on documents related to the Company's products or services. To
the knowledge of Patel and the Company, the eligibility of the
Company's products, services, documentation and other assets for
protection under copyright law has not been forfeited to the public
domain.
5.12.3 Procedures for Trade Secret Protection. Neither the
Company nor Patel has ever disclosed proprietary information to a
third party other than the persons identified in Company Disclosure
Schedule 5.14(c). The Company discloses its proprietary information
to employees only on a need-to-know basis in connection with the
performance of their duties to the Company. The Company has at all
times maintained its proprietary information in confidence and the
Company has not taken (nor has it failed to take) any action which
would result in such proprietary information not being protectable as
a trade secret under applicable Laws.
5.12.4 Ownership of Proprietary Information. Except as disclosed
on Company Disclosure Schedule 5.14(d), all persons who have
contributed to or participated in the conception and development of
the Company's proprietary information on behalf of the Company have
been full-time employees of the Company hired to prepare such works
within the scope of employment. As a consequence, the Company has
all ownership interests in its proprietary information.
5.12.5 Absence of Claims. Except as set forth in Company
Disclosure Schedule 5.14(e), no claims have been asserted by any
person to rights in the Company's proprietary information, and no
valid basis for any such claim exists. To the knowledge of Patel and
the Company, the use of the proprietary information by the Company
and its licensees does not infringe on the rights of any person
(whether arising under copyright, trade secret, patent, unfair
competition or other Laws which protect intellectual property
rights). To the knowledge of Patel and the Company, the use by the
Company of the patents, trademarks, service marks, trade names and
copyrights identified in Company Disclosure Schedule 5.14(a) does not
infringe the rights of any person, and no claim has been asserted
that the use by the Company of any of the foregoing infringes the
rights of any person. No claim has been asserted by any person to
the effect that any current or former employee of the Company has
violated the provisions of any noncompete or nondisclosure agreement
with such person, or has disclosed any proprietary information of
such person to the Company or any third party.
<PAGE>
5.13 [Intentionally omitted.]
5.14 Third-Party Components. The Company has validly obtained the
right and license to use, copy, modify and distribute any third-party
products, services and materials used in the conduct of its business
pursuant to the contracts identified in Company Disclosure Schedule
5.16, subject to no further license fee, royalty or other payment
obligations not identified in Company Disclosure Schedule 5.16.
5.15 Third-Party Interests or Marketing Rights in Software. The
Company has not granted, transferred or assigned any right or
interest in its proprietary information to any person except pursuant
to the contracts identified on Company Disclosure Schedule 5.17(i).
There are no contracts, agreements, licenses, commitments or
arrangements in effect with respect to the marketing, distribution,
licensing or promotion of the proprietary information by any
independent salesperson, distributor, sublicensor or other remarketer
or sales organization except as set forth on Company Disclosure
Schedule 5.17(ii).
5.16 No Parachute Payments. Except as disclosed on Company
Disclosure Schedule 5.18, no officer, director, employee, shareholder
or agent (or former officer, director, employee, shareholder or
agent) of the Company is entitled now, or will or may be entitled to
as a consequence of this Agreement and the other Purchase Agreements,
to any payment or benefit from the Company or Purchaser which if paid
or provided would constitute an excess parachute payment" as defined
in Section 280G of the Code.
5.17 Absence of Certain Agreements and Practices.
5.17.1 Except as set forth in Company Disclosure Schedule 5.19(a)
or in connection with customary transactions in the ordinary course
of business, no present or former officer, director or shareholder of
the Company:
5.17.1.1 owes money to the Company;
5.17.1.2 has any claim against the Company;
5.17.1.3 has any interest in any property or assets used by the
Company in its business;
5.17.1.4 has any benefits that are contingent on the transactions
contemplated by this Agreement, other than as stated herein;
5.17.1.5 has any agreement with the Company that is not terminable
by the Company without penalty or notice;
5.17.1.6 has any agreement providing severance benefits or other
benefits after the termination of employment of such employee (before
or after a change in control) regardless of the reason for such
termination of employment; or
5.17.1.7 has any agreement or plan, any of the benefits of which
will be increased, vested or accelerated by the occurrence of any of
the transactions contemplated by this Agreement.
<PAGE>
5.17.2 Neither the Company nor any of its directors, officers,
agents, affiliates or employees, nor any other person acting on
behalf of the Company or Patel has (i) given or agreed to give any
gift or similar benefit having a value of $1,000 or more to any
customer, supplier or governmental employee or official or any other
person, for the purpose of directly or indirectly furthering the
business of the Company, (ii) used any corporate funds for
contributions, payments, gifts or entertainment, or made any
expenditures relating to political activities to government officials
or others in violation of any applicable Laws or (iii) received any
unlawful contributions, payments, gifts or expenditures in connection
with the business of the Company.
5.18 Major Vendors and Customers. Company Disclosure Schedule 5.20
sets forth a list of each licensor, developer, remarketer,
distributor and supplier of property or services to, and each
licensee, end-user or customer of, the Company, to whom the Company
paid or billed in the aggregate in excess of $5,000 during calendar
year 2000 and through 29 November, 2000.
5.19 Accounts Receivable. Company Disclosure Schedule 5.21 sets
forth the accounts receivable of the Company as of September 30,
2000, together with an aging of these accounts. These accounts
receivable, and all accounts receivable of the Company created after
September 30, 2000, arose from valid transactions in the ordinary
course of business and will be good and collectible at the recorded
amounts thereof, except to the extent adequate reserves therefor have
been made on the Company Financial Statements. No portion of the
accounts receivable is subject to counterclaim or setoff.
5.20 Bank Accounts. Company Disclosure Schedule 5.22 lists all bank,
money market, savings and similar accounts and safe deposit boxes of
the Company, specifying the account numbers and the authorized
signatories or persons having access to them.
5.21 Corporate Records. The corporate record books (including the
share records) of the Company are complete, accurate and up to date
with all necessary signatures and set forth all meetings and actions
taken by the shareholders and directors of the Company and all
transactions involving the shares of the Company (and contain all
canceled share certificates).
5.22 Combinations Involving the Company. All mergers, consolidations
or other business combinations involving the Company and all
liquidations, purchases or other transactions by which the Company or
any of its Subsidiaries acquired or disposed of any of their business
and property were conducted in accordance with applicable
certificates of incorporation, bylaws, any other applicable
agreements, instruments and documents and applicable Laws.
5.23 Labor Relations. Except as disclosed on Company Disclosure
Schedule 5.25, the Company is in compliance with all federal, state
and foreign Laws respecting employment and employment practices,
terms and conditions of employment, wages and hours, and is not
engaged in any unfair labor or unlawful employment practice except
where a failure to so comply would not have a Material Adverse Effect
on the Company. There is no unlawful employment practice or
discrimination charge pending before any governing body. There is no
unfair labor practice charge or complaint against the Company pending
before the National Labor Relations Board ("NLRB") or any similar
foreign governing body. There is no labor strike, dispute, slowdown
or stoppage actually pending or, to the knowledge of Patel and the
<PAGE>
Company, threatened against or involving or affecting the Company and
no NLRB representation question exists respecting any of its
employees. No grievance or arbitration proceeding is pending and no
written claim therefor exists. There is no collective bargaining
agreement that is binding on the Company. Except for any Material
Contract disclosed pursuant to Section 5.11, the Company is not a
party to or bound by any agreement, arrangement or understanding with
any employee or consultant that cannot be terminated on notice of
ninety (90) or fewer days without liability to the Company or that
entitles the employee or consultant to receive any salary
continuation or severance payment or retain any specified position
with the Company.
5.24 Year 2000 Matters. Except as provided on Company Disclosure
Schedule 5.26, the Company's products and services are designed to be
used after January 1, 2000 and will operate during each such time
period without error relating to date data, specifically including
any error relating to, or the product of, date data which represents
or references different centuries or more than one century or any
leap year. The Company's internal systems and software and the
network connections it maintains are adequately programmed to address
the Year 2000 issue.
5.25 Change in Control Provisions. Company Disclosure Schedule 5.27
contains a true and complete copy of all agreements in effect to
which the Company is a party and which contain any provisions which
become effective upon a change in control, merger, consolidation,
sale of assets or other business combination involving the Company or
otherwise require any payment or performance by the Company or any
officer, director or shareholder thereof, now or in the future, in
connection with or as a result of any of the transactions
contemplated by this Agreement.
5.26 Disclosure. No representation, warranty or statement made by
the Company and/or Patel in this Agreement, or in any document or
certificate furnished or to be furnished to Purchaser pursuant to
this Agreement or the other Purchase Agreements contains or will
contain any untrue or incomplete statement or omits or will omit to
state any fact necessary to make the statements contained herein or
therein not misleading in any material respect. The Company and
Patel have completely and accurately responded to all diligence
inquiries made by Purchaser or its officers, directors, attorneys,
accountants and other representatives in connection with this
Agreement and the other Purchase Agreements. All facts known or
reasonably available to the Company or Patel that are material to the
financial condition, operation, or prospects of the business and
assets of the Company have been disclosed by the Company and Patel to
Purchaser.
5.27 Securities Act Compliance. Patel acknowledges that the issuance
of the shares of the Purchaser Common Stock pursuant to this
Agreement will not be registered under the securities laws of any
state or federal authority (the "Securities Laws"). Patel represents
and warrants that it is acquiring the Purchaser Common Stock for its
own account for investment purposes and not with a view toward, or
for resale in connection with, a distribution or public offering of
<PAGE>
the Purchaser Common Stock. Patel acknowledges that at reasonable
times prior to Patel's execution of this Agreement it has had the
opportunity to ask questions and receive answers concerning the terms
and conditions of this Agreement, the financial condition of
Purchaser, and the Purchaser Common Stock and to obtain any
additional information that is necessary to verify the accuracy of
the information furnished to Patel. Patel understands and agrees
that Patel may not sell or otherwise transfer any of the Purchaser
Common Stock except pursuant to a registered offering or in one or
more private transactions which, in the opinion of counsel reasonably
satisfactory to Purchaser, are not required to be registered under
the Securities Act of 1933 and applicable state securities laws.
5.28 No Prior Convictions. No officer or director of the Company has
been convicted of, arrested for, or has any action pending for, a
crime involving fraud, embezzlement or theft or any similar crime.
5.29 Tax Advice. Patel is responsible for the federal, state, local
and foreign tax consequences (to Patel) of an investment in the
Purchaser Common Stock and the transactions contemplated by this
Agreement. Patel is not relying on any statements or representations
of Purchaser or any of their agents, and Patel (and not Purchaser or
any other person or entity) shall be responsible for its own tax
liability that may arise as a result of this investment or the
transactions contemplated by this Agreement.
<PAGE>
6
REPRESENTATIONS AND WARRANTIES OF PURCHASER
To induce Patel to enter into this Agreement, Purchaser hereby
represents and warrants to Patel as follows:
6.1 Corporate Organization.
6.1.1 Purchaser is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Texas.
Purchaser has the corporate power and authority to own or lease all
of its properties and assets and to carry on its business as it is
now being conducted, and is duly licensed or qualified to do business
and is in good standing in each jurisdiction in which the nature of
the business conducted by it or the character or location of the
properties and assets owned or leased by it makes such licensing or
qualification necessary, except where the failure to be so licensed,
qualified or in good standing would not have a Material Adverse
Effect on Purchaser.
6.2 Capitalization.
6.2.1 The authorized capital stock of Purchaser consists of
500,000,000 shares of Purchaser Common Stock and 20,000,000 shares of
preferred stock, par value $1.00 per share ("Purchaser Preferred
Stock"). As of 9 November, 2000, there were 73,494,998 shares of
Purchaser Common Stock issued and outstanding, and 10,534 common
shares of Purchaser Preferred Stock issued and outstanding. Exhibit
6.2(a) sets forth the number of shares of common stock issuable
pursuant to outstanding stock options and warrants and the number of
shares of common stock issuable upon conversion of outstanding
convertible securities ("Stock Options"). All issued and outstanding
shares of Purchaser Common Stock have been duly authorized and
validly issued and are fully paid and nonassessable.
(b) Exhibit 6.2(b) sets forth true and correct copies of
the Articles of Incorporation and Bylaws and amendments thereto of
Purchaser.
(d) Except as disclosed on Exhibit 6.2(c), Purchaser does not own
or control, directly or indirectly, any equity interest in any
corporation, company, association, partnership, joint venture or
other entity.
6.3 Authority.
6.3.1 Except as disclosed on Exhibit 6.3(a) (collectively, the
"Purchaser Approvals), no consents, approvals, authorizations,
clearances or orders of, filings or registrations with or notices to
(collectively "Purchaser Authorizations") any third party or any
Governmental Authority are necessary on behalf of Purchaser in
connection with (i) the execution and delivery by Purchaser of this
<PAGE>
Agreement and (ii) the consummation by Purchaser of the transactions
contemplated hereby. Assuming that the Purchaser Approvals are duly
obtained, Purchaser has the full corporate power and authority to
execute and deliver this Agreement and the other Purchase Agreements
to which it is a Party and to consummate the transactions
contemplated hereby in accordance with the terms hereof and thereof;
the execution and delivery of this Agreement and the other Purchase
Agreements to which it is a Party and the consummation of the
transactions contemplated hereby and thereby have been duly and
validly approved by the Board of Directors of Purchaser in accordance
with the Articles of Incorporation and Bylaws of Purchaser and with
applicable Laws; no other corporate proceedings on the part of
Purchaser are necessary for Purchaser to execute and deliver this
Agreement and for Purchaser to be bound by the terms hereof; and to
the knowledge of Purchaser, this Agreement to which it is a Party
have been duly and validly executed and delivered by Purchaser and
constitute the valid and binding obligation of Purchaser enforceable
against Purchaser in accordance with its and their terms.
6.3.2 Assuming that the Purchaser Approvals are duly obtained, to
the best of the knowledge of Purchaser, neither the execution and
delivery by Purchaser this Agreement and the other Purchase
Agreements to which they are a party, nor the consummation by
Purchaser of the transactions contemplated hereby and thereby in
accordance with the terms hereof and thereof, nor compliance by
Purchaser with any of the terms or provisions hereof, will: (i)
violate any provision of Purchaser's Articles of Incorporation or
Bylaws; (ii) violate any Laws applicable to Purchaser or any of its
respective properties or assets; or (iii) violate, conflict with,
result in a breach of any provisions of, constitute a default (or an
event which, with notice or lapse of time, or both, would constitute
a default) under, result in the termination of, accelerate the
performance required by, or result in the creation of any Liens upon
any of the respective properties or assets of Purchaser under any of
the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which Purchaser is a party, or by which
they or any of their respective properties or assets may be bound or
affected, except, with respect to (ii) and (iii) above, such as
individually or in the aggregate will not have a Material Adverse
Effect on Purchaser, and which will not prevent or delay the
consummation of the transactions contemplated hereby.
6.4 Financial Statements.
(a) Exhibit 6.4(a) sets forth copies of: (i) the balance
sheet of Purchaser as of 30 September,2000 and (ii) the statement of
income of Purchaser for the period ended 30 September, 2000 (together
with the related notes, collectively, the "Purchaser Financial
Statements").
<PAGE>
(b) The Purchaser Financial Statements present fairly, in
all material respects, the financial position of Purchaser as of the
respective dates set forth therein, and the results of Purchaser's
operations and its cash flows for the respective periods set forth
therein.
(d) The books and records of Purchaser have been maintained in
material compliance with applicable legal and accounting
requirements.
6.5 Broker's and Other Fees. Except as disclosed in Exhibit 6.5,
Purchaser has not employed any broker or finder or incurred any
liability for any broker's or finder's fees or commissions in
connection with any of the transactions contemplated by this
Agreement and the other Purchase Agreements.
6.6 Legal Proceedings. To the knowledge of Purchaser, and except as
disclosed in Exhibit 6.6, Purchaser is not a party to any, and there
are no pending or threatened, legal, administrative, arbitral or
other proceedings, claims, actions or governmental investigations of
any nature against Purchaser. Except as disclosed in Exhibit 6.6, to
the knowledge of Purchaser, Purchaser is not a party to any order,
judgment or decree entered in any lawsuit or proceeding. Without
limiting the foregoing, except as disclosed in Exhibit 6.6, to the
knowledge of Purchaser no actions, suits, demands, notices, claims,
investigations or proceedings are pending or threatened against or
otherwise involving, directly or indirectly, any officer, director,
employee or agent of the Company (in connection with such officer's,
director's, employee's or agent's activities on behalf of Purchaser
or that otherwise relate, directly or indirectly to Purchaser or its
properties or securities) including without limitation any notices,
demand letters or requests from any Governmental Authority relating
to such potential Liabilities, nor, to the knowledge of Purchaser,
are there any circumstances which could lead to such actions, suits,
demands, notices, claims, investigations or proceedings.
6.7 Taxes and Tax Returns. Except as disclosed in Exhibit 6.7:
6.7.1 The Purchaser has duly filed (and until the Closing Date
will so file) all returns, declarations, reports, information returns
and statements ("Returns) required to be filed by it in respect of
any United States federal, state or local, or any foreign, Taxes and
has duly paid (and until the Closing Date will so pay) all such Taxes
due and payable. As used herein, "Tax" or "Taxes" means and includes
any and all taxes, fees, levies, assessments, duties, tariffs,
imposts, and other charges of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed
with respect thereto) imposed by any Governmental Authority,
including, without limitation: foreign, domestic, central, local,
state or other jurisdictional taxes or other charges on or with
respect to income, estimated income, franchises, business,
occupation, windfall or other profits, gross receipts, property,
sales, use, capital stock, payroll, employment, social security,
workers' compensation, unemployment compensation, or net worth; taxes
or other charges in the nature of excise, withholding, ad valorem,
stamp, transfer, value added, or gains taxes; license, registration
and documentation fees; and customs duties, tariffs, and similar
charges. Purchaser has not established on its books and records
reserves that are adequate for the payment of all Taxes not yet due
and payable, but are incurred in respect of Purchaser through such
date.
<PAGE>
6.7.2 To the knowledge of Purchaser, there are no audits or other
Governmental Authority proceedings presently pending nor any other
disputes pending with respect to, or claims asserted for, Taxes upon
Purchaser, nor has Purchaser given any currently outstanding waivers
or comparable consents regarding the application of any statute of
limitations with respect to any Taxes or Returns. To the knowledge
of Purchaser, there are no Liens for Taxes upon the assets of
Purchaser, except Liens for Taxes not yet due.
6.8 Purchaser Common Stock. Assuming the Purchaser Approvals are
duly obtained, at the Closing Date, the Purchaser Common Stock to be
delivered to Patel will be duly authorized and validly issued, fully
paid and nonassessable, free of preemptive rights and free and clear
of all Liens created by or through Purchaser (except as set forth in
this Agreement and the documents and agreements executed in
connection herewith).
7
COVENANTS AND AGREEMENTS OF THE PARTIES
7.1 No Solicitation. Except as indicated on Company Disclosure
Schedule 7.3, from the date hereof to the Closing Date or the earlier
termination of this Agreement in accordance with its terms, Patel:
7.1.1 agrees that neither the Company nor any of its present or
future subsidiaries or other affiliates, nor any of its or their
directors, officers, shareholders, employees, representatives or
other agents (collectively, the "Company Affiliates") shall, directly
or indirectly, (i) enter into any agreement (or agree to do so), or
solicit, initiate or knowingly encourage the invitation of inquiries
or proposals or offers from any person or entity (other than
Purchaser or its directors, officers, employees, representatives and
agents) concerning: (A) any sale of assets or transfer or liabilities
of the Company or any of its present or future subsidiaries,
divisions or other affiliates (other than any such sale or transfer
in the ordinary course of business); (B) any issuance, purchase or
sale of capital stock or debt or other securities of the Company or
any of its present or future subsidiaries, divisions or other
affiliates (other than the incurrence of liabilities in the ordinary
course of its business); or (C) any merger, consolidation,
restructuring, recapitalization or other significant transaction
involving the Company or any of its present or future subsidiaries,
divisions or other affiliates; or (ii) provide any confidential
information to, participate in discussions or negotiations relating
to any such transaction with, or otherwise cooperate with or assist
or participate in any effort to take such action by any person or
entity (other than Purchaser or its directors, officers,
shareholders, employees, representatives and agents). The Company
shall immediately advise Purchaser if any such inquiry, offer or
proposal is made or received by the Company or any of the Company
Affiliates;
<PAGE>
7.1.2 will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties
conducted heretofore with respect to any of the foregoing, and the
Company and Patel will take the necessary steps to inform the
individuals or entities referred to above of the obligations
undertaken in this Section 7.1; and
7.1.3 will notify Purchaser immediately of the identity of any
potential acquiror and the terms of any proposal or offer (including,
without limitation, any proposal or offer to any of Patel) with
respect to a proposed or potential merger, acquisition,
consolidation, business combination, transfer or similar transaction
involving, or any purchase of all or any significant portion of the
assets, equity securities of or rights with respect to any assets or
securities of, the Company whether or not permitted by this Section
7.1.
7.2 Current Information.
7.2.1 During the period from the date of this Agreement to the
Closing Date or the earlier termination of this Agreement in
accordance with its terms, on a frequent basis:
7.2.2 Patel will cause one or more of the Company's
representatives to confer with representatives of Purchaser regarding
its business, operations, properties, assets and financial condition;
each of the Parties will cause one or more of its representatives to
confer with representatives of the other Parties regarding matters
relating to the completion of the transactions contemplated herein;
and
7.2.3 Each of the Parties will notify the other Parties as soon
as practicable after any determination or discovery by it of any fact
or circumstance relating to any Party which it has discovered through
the course of investigation and which represents, or is reasonably
likely to represent, a material breach of any representation,
warranty, covenant or agreement of any Party or which has or is
reasonably likely to have a Material Adverse Effect on any Party.
7.3 Access to Properties and Records; Confidentiality.
7.3.1 Patel shall permit, and shall cause the Company to permit,
Purchaser and its representatives reasonable access to its properties
and shall disclose and make available to Purchaser and its
representatives all books, papers and records and information
relating to it, its assets, stock ownership, properties, operations,
obligations and liabilities, including, but not limited to, all books
of account (including the general ledger), tax records, minute books
of directors' and shareholders' meetings, organizational documents,
agreements, filings with any Governmental Authority, accountants'
work papers, litigation files, plans affecting employees, and any
other records and information in which Purchaser and its
representatives may have a reasonable interest; provided that such
investigation shall be reasonably related to the transactions
contemplated by this Agreement and shall not interfere unnecessarily
with the normal business operations of the Company.
<PAGE>
7.3.2 Patel shall hold in trust and confidence all Confidential
Information (as defined below) and shall not make any copies of,
distribute, or use any Confidential Information except as necessary
to prepare for the completion of the transactions contemplated under
this Agreement. Patel shall not make any unauthorized disclosure of
Confidential Information. Upon the first request in writing from
Purchaser, Patel shall return to Purchaser all Confidential
Information in its possession, without retaining any copies thereof;
provided, however, that Patel may retain Confidential Information
(but not use or disclose such Confidential Information except to
enforce its rights under this Agreement, and any such Confidential
Information so retained shall remain subject to the restrictions
contained in this Agreement) which is necessary to enforce its rights
under this Agreement.
7.3.3 Patel shall hold in trust and confidence all Trade Secrets
(as defined below) and shall not make any copies of, distribute, or
use any Trade Secrets except as necessary to prepare for the
completion of the transactions contemplated under this Agreement.
Patel shall not make any unauthorized disclosure of any Trade
Secrets. Upon the first request in writing from Purchaser, Patel
shall return to Purchaser all manifestations of any Trade Secrets in
their possession, without retaining any copies thereof; provided,
however, that the Patel may retain Trade Secrets (but not use or
disclose such Trade Secrets except to enforce its rights under this
Agreement, and any Trade Secrets so retained shall remain subject to
the restrictions contained in this Agreement) which is necessary to
enforce their rights under this Agreement.
7.3.4 As used in this Section 7.3(b)
7.3.4.1 "Confidential Information" means all information relating
to the Company's business (current or future), or any person or
entity with which the foregoing deals, and whether such information
is oral, written, recorded or stored by electronic, magnetic,
electromagnetic or other form or process or otherwise in a machine
readable form, translated from the original form, recompiled, made
into a compilation, wholly or partially copied, modified, updated or
otherwise altered, or originated or obtained by, or coming into the
possession, custody, control or knowledge of the Company either alone
or jointly; provided, that Confidential Information expressly
excludes Trade Secrets and information in the public domain on the
date hereof or that enters the public domain after the date hereof
through no fault of Patel.
7.3.4.2 By way of example and not in limitation of the foregoing,
"Confidential Information" includes the terms of this Agreement and
the transactions contemplated hereunder, all Inventions; technical
data; research and development information; business records,
information and notes; products; "know-how"; engineering or other
data; designs, specifications, processes and formulae; manufacturing
or planning procedures, techniques or information; marketing plans,
strategies and forecasts; business and product development plans,
strategies and forecasts; financial statements, budgets, prices,
costs and financial projections; accounting procedures or financial
information; names and details of consumers, customers, suppliers and
agents; employee details; and secret information.
<PAGE>
(iii) Invention means any invention, drawing, design, model,
contrivance, structure, specification, improvement, discovery,
creation, idea, concept, formula, process and other work or
contribution however developed, created, made discovered or
conceived, and whether or not patented or patentable (whether by
renewal or otherwise), protected by copyright, or otherwise protected
or capable of protection by law anywhere.
(iv) "Trade Secrets" means any information of the
(including but not limited to technical or non-technical data, a
formula, a pattern, a compilation, a program, a device, a method, a
technique, a drawing, a process, financial data, financial plans,
product plans, or a list of actual or potential customers or
suppliers) which (i) derives economic value, actual or potential,
from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use, and (ii) is the subject of
efforts that are reasonable under the circumstances to maintain its
secrecy.
7.4 Regulatory Matters; Consents; Cooperation, etc.
7.4.1 Each of the Parties will promptly furnish each other with
copies of written communications received by them or any of their
respective Subsidiaries from, or delivered by any of the foregoing
to, any Governmental Authorities in respect of the transactions
contemplated hereby.
7.4.2 As soon as practicable following the date hereof, each of
the Parties will use its commercially reasonable efforts to obtain
all material consents, waivers and other Approvals under any of its
or its Subsidiaries' agreements, contracts, licenses or leases
required to be obtained by such Party in connection with the
consummation of the transactions contemplated hereby.
7.5 Parties' Efforts; Further Assurances; Cooperation. Subject to
the other provisions in this Agreement, the Parties shall in good
faith perform their obligations under this Agreement before, at and
after the Closing Date, and shall each use all commercially
reasonable efforts to do, or cause to be done, all things necessary,
proper or advisable under applicable Laws to obtain all
Authorizations and satisfy all conditions to the obligations of the
Parties under this Agreement and to cause the transactions
contemplated by this Agreement to be carried out promptly in
accordance with the terms hereof and shall cooperate fully with each
other and their respective officers, directors, employees, agents,
counsel, accountants and other designees in connection with any steps
required to be taken as part of their respective obligations under
this Agreement. Upon the execution of this Agreement and thereafter,
each party shall take such actions and execute and deliver such
documents as may be reasonably requested by the other Parties in
order to consummate the transactions contemplated by this Agreement.
<PAGE>
7.6 Public Announcements. Prior to the Closing Date or the earlier
termination of this Agreement in accordance with its terms, the
Parties shall consult and cooperate with each other as to the timing,
content and form of any press release or other public disclosure
related to this Agreement or the transactions contemplated herein,
and will not issue a press release or make any such public disclosure
without the prior consent of the other party, which shall not be
unreasonably withheld, conditioned or delayed. After the Closing
Date, Patel shall not make any public announcement regarding any
aspect of this Agreement without Purchaser's prior written consent.
Nothing in this Section 7.6 shall be deemed to prohibit any Party
from making any disclosure which its counsel deems necessary in order
to satisfy such Party's disclosure obligations imposed by Law or
Governmental Authority.
7.7 Intentionally deleted
7.8 Disclosure Supplements. From time to time prior to the Closing
Date, each Party hereto will promptly notify the other Party of any
inaccuracy in its respective Disclosure Schedules delivered pursuant
hereto including, without limitation, any matter which, if existing,
occurring or known at the date of this Agreement, would have been
required to be set forth or described in such Schedule or which is
necessary to correct any information in such Schedule that has been
rendered inaccurate. Notwithstanding the foregoing, for the purpose
of determining satisfaction of the conditions set forth in Article 8,
no such notification shall be deemed to amend such Disclosure
Schedules or shall be deemed to be part hereof unless agreed to by
the other Parties.
7.9 Release; Covenant Not to Sue.
7.9.1 If the Closing occurs, then Patel hereby releases Purchaser
and the Company, and their agents, representatives, successors and
assigns (collectively, the "Released Parties" ) from any and all
Claims (as defined herein) that any of Patel may have or may have had
against any or all of the Released Parties arising out of or in
connection with any transactions between Patel and any or all of the
Released Parties prior to, or arising from or with respect to any
fact, circumstance, act or omissions occurring prior to or on the
Closing Date.
7.9.2 If the Closing occurs, Patel covenants not to sue or
otherwise institute, cause to be instituted or in any way participate
in, any legal or administrative proceeding against any of the
Released Parties with respect to any claims, debts, demands, actions,
causes of action, suits, accounts, damages and liabilities of every
name and nature, both at law and in equity, whether known or unknown
(collectively, the "Claims"), that Patel or the Company now has, ever
had or may, at any time, claim to have had against any of the
Released Parties. This covenant shall not apply to Claims based upon
acts or omissions by a Released Party first occurring after the
Closing Date. Patel represents and warrants that it has not
voluntarily or involuntarily assigned or suffered any transfer of any
of the Claims to any other person or entity, and Patel agrees to
indemnify and hold harmless the Released Parties from and against any
loss, damage, liability, cost and expense (including, but not limited
to, attorneys' fees incurred in connection therewith or in connection
with enforcing this indemnity) asserted against, imposed on or
incurred by any Released Parties by reason of any such Claims which
were effectively or purportedly assigned or transferred by the
Company or Patel.
<PAGE>
7.10 [Intentionally omitted.]
7.11 No Transfers. Except pursuant to this Agreement or with the
prior written consent of Purchaser, Patel shall not transfer, assign,
convey or otherwise dispose of any of the Company Common Stock or any
rights with respect to such Company Common Stock (including voting
and conversion or option rights) after the date of this Agreement.
7.12 Special Provisions with Respect to the Company. If the Closing
occurs as provided herein, then at that time all representations,
warranties, covenants and agreements to the extent made or adopted by
the Company (and only to such extent) shall expire and be of no
further force and effect, and the Company's having made
representations, warranties, covenants and agreements shall in no way
limit the liability of Patel for those representations, warranties,
covenants and agreements pursuant to this Agreement.
7.13 Cooperation and Exchange of Information. The Parties agree to
furnish, or to cause to be furnished in good faith to each other,
such cooperation and assistance as is reasonably necessary to file
any future returns, to respond to audits, to negotiate settlements
with Tax authorities and to prosecute and defend against Tax claims.
7.14 Customer Contacts. The Company shall permit Purchaser to
conduct a survey or otherwise inquire of certain or all of the
Company's key customers, as selected by Purchaser, regarding the
relationship between such customer and the Company and the impact of
a change in control on such relationship. The Company shall assist
Purchaser in making such survey or inquiries and shall have the right
to have a representative of its choice participate therein.
7.14.1.1 Registration. Purchaser hereby agrees to use its best
efforts to file a registration statement with the Securities and
Exchange Commission for the purpose of registering the resale of the
12,500,000 shares of Common Stock to be issued to Patel pursuant to
the terms of this Agreement.
7.15 Non-Competition. Patel shall not at any time after the date of
this Agreement and for five (5) years after the Closing: (i) engage
directly or indirectly in any Competitive Business anywhere in the
Restricted Territory, whether such engagement be as an employer,
officer, director, owner, investor, employee, partner, consultant or
other participant in any Competitive Business; (ii) solicit or accept
business, for a business which is wholly or partly similar to the
Company's Business from anyone who is an active or prospective
customer of Purchaser, the Company, or any of their Affiliates; or
(iii) attempt to do any of the things (or directly or indirectly
assist anyone else in doing or attempting to do any of the things)
specified in this paragraph. For the purposes of this section,
"Competitive Business" means any business, individual, corporation or
other entity which is primarily engaged wholly or partly in any
business similar to the Company's Business; the "Company's Business"
means the business of the Company and "Restricted Territory" means
Europe, Asia, Africa and South America.
<PAGE>
7.16 English Company Legal Matters. Patel shall cooperate with
Purchaser after the Closing to effect all actions necessary or
desirable to vest Purchaser with ownership and enjoyment of the
Company Common Stock, including but not limited to the following
actions: (i) a meeting of the directors of the Company shall be held
and the transfer of the Company Common Stock to Purchaser shall be
passed for registration and registered, and persons nominated by the
Purchaser shall be appointed to be directors or secretaries of the
Company; (ii) at the request of Purchaser, Patel shall procure and
deliver the written resignations of all of the directors and
secretaries of the Company upon terms acceptable to Purchaser; (iii)
at the request of Purchaser, Patel shall procure and deliver the
written resignations of the auditors of the Company containing the
statements referred to in section 394(1), CA 85 that they consider
there are no such circumstances as are mentioned in that section and
confirming that they have deposited or shall deposit that statement
in accordance with section 394(2), CA 85 at the respective registered
offices of the Company; (iv) Patel shall revoke all existing
instructions and authorities to bankers shall replaced the same with
alternative instructions, mandates and authorities in such form as
the Purchaser may require; (v) Patel shall change the registered
office of the Company to such address as the Purchaser shall direct;
(vi) Patel shall cause the Company to change the accounting reference
date to such date as the Purchaser shall direct; and (vii) Patel
shall cause the Company to hold an Extraordinary General Meeting of
the Company to transact such other business as the Purchaser may
require.
8
CLOSING CONDITIONS
8.1 Conditions of Each Party's Obligations Under this Agreement.
The respective obligations of each party under this Agreement shall
be subject to the satisfaction, or, where permissible under
applicable Law, waiver at or prior to the Closing Date of the
following conditions:
8.1.1 Approvals and Regulatory Filings. All necessary
Authorizations of Governmental Authorities required to consummate the
transactions contemplated hereby shall have been obtained without any
term or condition which would materially impair the value of the
Company or Purchaser. All conditions required to be satisfied prior
to the Closing Date by the terms of such approvals and consents shall
have been satisfied; and all statutory waiting periods in respect
thereof shall have expired.
8.1.2 Suits and Proceedings. The consummation of the
transactions contemplated hereby will not violate the provisions of
any injunction, order, judgment, decree or Law applicable or
effective with respect to Purchaser or the Company or their officers
and directors. No suit or proceeding shall have been instituted by
any person, or, to the knowledge of Purchaser or Patel, shall have
been threatened by any Governmental Authority, and not subsequently
withdrawn, dismissed or otherwise eliminated, which seeks (i) to
prohibit, restrict or delay consummation of the transactions
contemplated hereby or to limit in any material respect the right of
Purchaser to control any material aspect of the business of Purchaser
<PAGE>
or the Company after the Closing Date, or (ii) to subject Purchaser
or the Company or their respective directors or officers to material
liability on the ground that it or they have breached any Law or
otherwise acted improperly in relation to the transactions
contemplated by this Agreement.
8.2 Conditions to the Obligations of Purchaser under this Agreement.
The obligations of Purchaser under this Agreement shall be further
subject to the satisfaction or waiver, at or prior to the Closing
Date (and continued until the Closing Date), of the following
conditions:
8.2.1 Representations and Warranties; Covenants and Agreements;
Consents. The representations and warranties of Patel contained in
this Agreement shall be true and correct in all material respects as
of the date hereof and shall also be true and correct in all material
respects on the Closing Date as though made on and as of the Closing
Date, except that those representations and warranties which are
confined to a particular date shall speak only as of such date, and
the Company and Patel shall have performed in all material respects
the agreements, covenants and obligations to be performed by it or
them at or prior to the Closing Date. All Authorizations of or with
any Governmental Authority or other third party that are required for
or in connection with the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby by the
Company and Patel shall have been obtained or made.
8.2.2 Opinion of Counsel. Purchaser shall have received an
opinion of counsel to the Company and Patel, in form and substance
reasonably satisfactory to Purchaser, covering the matters set forth
on Exhibit 8.2(b).
8.2.3 Certificates. Patel shall have furnished Purchaser with
such certificates of the Company and its authorized officers, Patel
or others and such other documents to evidence fulfillment of the
conditions set forth in this Article 7 and otherwise to consummate
the transactions contemplated pursuant to this Agreement as Purchaser
may reasonably request, including certificates in the form attached
hereto as Exhibit 8.2(c).
8.2.4 Transfer Tax. Patel shall have paid to Purchaser the
amount of the stock transfer stamp duty required to lawfully transfer
the Company Common Stock, as estimated by Purchaser, such amount not
to exceed U.S. $30,000.
8.2.5 The Simple Card, Limited. Patel shall have delivered the
following documents regarding the Company to Purchaser: (i)
resolutions of the sole director of the Company authorizing the
transfer of the Company Stock to Purchaser; (ii) original stock
transfer forms endorsed by members of the board of directors of
Simple effecting the transfer of the Company Stock from Simple to
Purchaser; and (iv) original stock certificates in the name of
Dharmesh Patel evidencing all of the Company Stock.
<PAGE>
8.2.6 Completion of Due Diligence on the Company. Purchaser
shall have completed its review of the Company, the results of which
shall be acceptable to Purchaser in its absolute discretion.
8.2.7 No Material Adverse Effect on the Company. No event shall
have occurred and no fact or circumstance shall have arisen which, in
the judgment of Purchaser, is reasonably likely to have a Material
Adverse Effect on the Company or materially and adversely affect the
value of this transaction to Purchaser, since the date of the most
recent Company Financial Statements except (i) the announcement of
this Agreement or (ii) conditions effecting global economy or
regional economy in which Purchaser operates any part of its or their
business.
8.2.8 Customer Inquiries. Purchaser shall be reasonably
satisfied with the results of their inquiries of the Company's
customers with respect to the impact of a change in control on their
relationship with the Company.
8.2.9 No Interest in Proprietary Information. Except as set
forth in Company Disclosures Schedule 8.2(i), the Company shall have
eliminated or provided for the elimination of any and all claims to
ownership, access, copies, source code and license and royalty
interests in all products, services, software, systems and
proprietary information associated with the Company.
8.2.10 Spinoff. The Company and Patel shall have executed and
delivered agreements, the terms of which are acceptable to Purchaser,
with respect to which Patel and the Company shall have transferred,
assigned, sold or otherwise conveyed all of the Company's assets and
all of its liabilities, including accounts receivable, customer
agreements, intellectual property rights, software, and any other
support systems necessary to ensure continuity in the business and
operations to be transferred to Purchaser pursuant to this Agreement.
8.2.11 Release of Obligations. All obligations of the Company
pursuant to any loan, lease, guaranty, commitment or other
undertaking of the Company, Patel or any of its or their Subsidiaries
and other Affiliates, whether as maker, guarantor or otherwise,
including those obligations listed on Schedule 8.2(k), shall have
been fully and permanently released or satisfied, or payoff letters
shall have been executed and delivered, pursuant to documents and
agreements satisfactory in all respects to Purchaser.
8.3 Conditions to the Obligations of the Company and Patel under
this Agreement. The obligations of the Company and Patel under this
Agreement shall be further subject to the satisfaction or waiver, at
or prior to the Closing Date, of the following conditions:
<PAGE>
8.3.1 Representations and Warranties; Covenants and Agreements;
Consents. The representations and warranties of Purchaser contained
in this Agreement shall be true and correct in all material respects
as of the date hereof and shall also be true and correct in all
material respects on the Closing Date as though made on and as of the
Closing Date, and Purchaser shall have performed in all material
respects the agreements, covenants and obligations to be performed by
it and them at or prior to the Closing Date. All Authorizations of
or with any Governmental Authority or other third party that are
required for or in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby
by Purchaser shall have been obtained or made, except where the
failure to obtain any such Authorizations would not have a Material
Adverse Effect on Purchaser.
8.3.2 Certificates. Purchaser shall have furnished the Company
with such certificates of its officers or others and such other
documents to evidence fulfillment of the conditions set forth in this
Article 8 and otherwise to consummate the transactions contemplated
pursuant to this Agreement as the Company may reasonably request.
8.3.3 No Material Adverse Effect on Purchaser. No Material
Adverse Effect with respect to Purchaser shall have occurred since
the date of this Agreement except (i) the announcement of this
Agreement, and (ii) conditions effecting global economy or regional
economy in which Purchaser operates any part of its business.
8.3.4 Approvals. This Agreement and the transactions
contemplated hereby shall have received all Required Government
Consents and other consents or approvals from third parties
(including lenders, licensees and lessors) required to consummate the
transactions contemplated hereby which, either individually or in the
aggregate, if not obtained would have a Material Adverse Effect.
ARTICLE 9
TERMINATION, AMENDMENT AND WAIVER
9.1 Termination. This Agreement may be terminated prior to the
Closing Date, whether before or after approval of this Agreement by
Patel or Purchaser:
(a) by mutual written consent of Purchaser and Patel;
(b) by Purchaser or Patel if the Closing Date shall not have
occurred on or prior to the Deadline Date; provided, however, that
the right to terminate this Agreement under this Section 9.1(b) shall
not be available to any Party whose action or failure to act has been
a principal cause of or resulted in the failure of the transaction
contemplated by this Agreement to occur on or before such date and
such action or failure to act constitutes a willful and material
breach of this Agreement;
<PAGE>
(c) by Purchaser, if there has been a material breach of any
representation, warranty, covenant, agreement or obligation of the
Company or Patel hereunder in each case which either is not capable
of being remedied, or, if capable of being remedied, shall not have
been remedied within 10 days after receipt by the Company or Patel,
as appropriate, of notice in writing from Purchaser specifying the
nature of such breach and requesting that it be remedied;
(d) by Patel, if there has been a material breach in any
representation, warranty, covenant, agreement or obligation of
Purchaser hereunder in each case which either is not capable of being
remedied, or, if capable of being remedied, shall not have been
remedied within 10 days after receipt by Purchaser of notice in
writing from Patel specifying the nature of such breach and
requesting that it be remedied;
(e) by Purchaser if any of the conditions set forth in Section 8.1
or 8.2 is not satisfied and is no longer capable of being satisfied
by the Closing Date; or
(f) by Patel if any of the conditions set forth in Section 8.1 or
8.3 is not satisfied and is no longer capable of being satisfied by
the Closing Date;
9.2 Effect of Termination. If either Purchaser or Patel terminates
and abandons this Agreement pursuant to Section 9.1, this Agreement,
other than Section 7.5(b), this Section 9.2, Section 9.3, Article 10
and Section 11.1 (each of which shall survive termination), shall
forthwith become void and have no effect, without any liability on
the part of any Party or its officers, directors or shareholders;
provided, however, that nothing contained in this Section 9.2, shall
relieve any Party from any liability for any material breach of this
Agreement.
9.3 Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of all the Parties hereto.
9.4 Extension; Waiver. The Parties may, at any time prior to the
Closing Date, (a) extend the time for the performance of any of the
obligations or other acts of the other Parties; (b) waive any
inaccuracies in the representations and warranties contained herein
or in any document delivered pursuant thereto; or (c) waive
compliance with any of the agreements or conditions contained herein.
Any agreement on the part of any Party to any extension or waiver
shall be valid only if it is set forth in an instrument in writing
signed on behalf of the Party against which the waiver is sought to
be enforced and shall apply only to the specific condition,
representation or warranty identified by the writing as being waived,
extended or modified.
<PAGE>
ARTICLE 10
INDEMNIFICATION
10.1 Indemnification by Simple. Subject to the terms of this Article
10, Simple shall indemnify, defend, save and hold harmless Purchaser,
its subsidiaries and their respective predecessors, successors,
directors, officers, employees, agents, representatives and assigns
(collectively, the "Purchaser Indemnified Parties"), from and against
any demands, claims (as defined in Section 101 of the U.S. Bankruptcy
Code), actions, losses, damages, deficiencies, liabilities, costs and
expenses (including, without limitation, reasonable attorneys' and
accountants' fees and expenses), together with interest and
penalties, if any, awarded by court order or otherwise agreed to
(collectively, "Indemnifiable Damages"), suffered by Purchaser
Indemnified Parties that arise out of or result from any of the
following (whether or not a third party initiates the proceeding or
claim giving rise to such Indemnifiable Damages):
(a) any breach of any of the representations, warranties, covenants
or agreements made by the Company or Patel in this Agreement; or
(b) any breach of any representation, warranty, covenant or
agreement in a document, certificate or affidavit delivered by the
Company or Patel at the Closing.
10.2 Indemnification by Purchaser. Subject to the terms of this
Article 10, Purchaser shall indemnify, defend, save and hold harmless
the Company and Patel (but after consummation of the transactions
contemplated by this Agreement, solely Patel, and not the Company)
and its predecessors, successors, directors, officers, employees,
agents, representatives and assigns (collectively, the "Company
Indemnified Parties"), from and against any Indemnifiable Damages
suffered by the Company Indemnified Parties that arise out of or
result from any of the following (whether or not a third party
initiates the proceeding or claim giving rise to such Indemnifiable
Damages):
(a) any breach of any of the representations, warranties, covenants
and agreements made by Purchaser in this Agreement and the other
Purchase Agreements; or
(b) any breach of any representation, warranty, covenant or
agreement in a document, certificate or affidavit delivered by
Purchaser at the Closing.
10.3 Claims for Indemnification. The representations, warranties,
covenants and agreements in this Agreement shall survive the Closing
for a period of two years and shall not be affected by any
investigation made by the parties hereto prior to the date hereof or
the Closing Date. The Party seeking indemnification (the
"Indemnified Party") shall give the Party from whom indemnification
is sought (the "Indemnifying Party") a written notice ("Notice of
Claim") within sixty (60) days of the discovery of any loss,
liability, claim or expense in respect of which the right to
indemnification contained in this Article 10 may be claimed;
provided, however, that the failure to give such notice within such
sixty (60) day period shall not result in the waiver or loss of any
right to bring such claim hereunder after such period unless, and
only to the extent that, the other Party is actually prejudiced by
such failure. In the event a claim is pending or threatened or the
Indemnified Party has a reasonable belief as to the validity of the
basis for such claim, the Indemnified Party may give written notice
(a "Notice of Possible Claim") of such claim to the Indemnifying
Party, regardless of whether a loss has arisen from such claim. A
Party shall have no liability under this Article 10 for breach of a
representation or warranty, unless a Notice of Claim or Notice of
Possible Claim therefor is delivered by the Indemnified Party;
provided, however, that the limitations set forth in this Section
10.3 shall not apply to liability under this Article 10 for any
intentional breach of a representation or warranty in this Agreement.
Any Notice of Claim or Notice of Possible Claim shall set forth the
representations, warranties, covenants and agreements with respect to
which the claim is made, the specific facts giving rise to an alleged
basis for the claim and the amount of liability asserted or
anticipated to be asserted by reason of the claim.
<PAGE>
10.4 Defense of Claim by Third Parties. If any claim is made by a
third party against a Party to this Agreement that, if sustained,
would give rise to a liability of another Party under this Agreement,
the Party against whom the claim is made shall promptly cause notice
of the claim to be delivered to the other Party and shall afford the
other Party and its counsel, at the other Party's sole expense, the
opportunity to join in the defense and settlement of the claim. The
failure to provide such notice will not relieve the Indemnifying
Party of liability under this Agreement unless, and only to the
extent that, the Indemnifying Party is actually prejudiced by such
failure.
10.5 Third Party Claim Assistance. From time to time after the
Closing, Purchaser, the Company and Patel shall provide or cause
their appropriate employees or representatives to provide the other
Parties with information or data in connection with the handling and
defense of any third party claim or litigation (including
counterclaims filed by the parties) in respect to which a Party may
be required to indemnify another Party under this Agreement. The
Party receiving such information or data shall reimburse the other
Parties for all of their reasonable costs and expenses in providing
these services, including, without limitation, (i) all out of pocket,
travel and similar expenses incurred by their personnel in rendering
these services; and (ii) all fees and expenses for services performed
by third parties engaged by or at the request of such other Parties.
10.6 Settlement of Indemnification Claims. If a recipient of a
Notice of Claim desires to dispute such claim, it shall, within
thirty (30) days after receipt of the Notice of Claim, give
counternotice, setting forth the basis for disputing such claim, to
Purchaser or Patel, as the case may be. If no such counternotice is
given within such thirty (30) day period, or if Purchaser or Patel,
as the case may be, acknowledges liability for indemnification, then
the amount claimed shall be promptly satisfied. If, within thirty
(30) days after the receipt of counternotice by Purchaser or Patel,
as the case may be, Patel and Purchaser shall not have reached
agreement as to the claim in question, then the Party disputing the
claim shall satisfy any undisputed amount and the disputed amount of
the claim of indemnification shall be submitted to and settled by
arbitration in accordance with the then prevailing commercial
arbitration rules of the American Arbitration Association. Such
arbitration shall be held in the Stratford, Connecticut area before a
panel of three (3) arbitrators, one selected by each of the Parties
and the third selected by mutual agreement of the first two, and all
of whom shall be independent and impartial under the rules of the
American Arbitration Association. The decision of the arbitrators
shall be final and binding as to any matter submitted under this
Agreement. To the extent the decision of the arbitrators is that a
Party shall be indemnified hereunder, the amount shall be satisfied.
Judgment upon any award rendered by the arbitrators may be entered in
any court of competent jurisdiction.
<PAGE>
10.7 [intentionally omitted].
10.8 Certain Limitations. The foregoing indemnification obligations
are subject to the limitation that no Indemnifying Party shall have
any liability for indemnification for breaches of representations and
warranties pursuant to this Article 10 unless the total Indemnifiable
Damages for which the Indemnifying Party would be liable exceed
$50,000 in the aggregate; provided, however, that the foregoing
limitation shall not apply to any Indemnifiable Damages with respect
to, as a result of or involving any intentional breach of a
representation or warranty in this Agreement. In no event shall the
liability of Simple and Patel and Purchaser under this Article 10
exceed the total Purchase Price paid by Purchaser for the Company
Common Stock.
ARTICLE 11
MISCELLANEOUS
11.1 Expenses.
(a) Except as otherwise expressly stated herein, all costs and
expenses incurred in connection with this Agreement and the
transactions contemplated hereby (including legal and accounting fees
and expenses) shall be borne by the Party incurring such costs and
expenses and shall be paid by such Party prior to or on the Closing
Date.
(b) Notwithstanding any provision in this Agreement to the contrary,
if any of the Parties shall willfully default in its obligations
hereunder, the non-defaulting Party may pursue any remedy available
at law or in equity to enforce its rights and shall be paid by the
willfully defaulting Party for all damages, costs and expenses,
including without limitation reasonable legal and accounting expenses
incurred or suffered by the non-defaulting Party in connection
herewith or in the enforcement of its rights hereunder.
11.2 Notices. All notices or other communications which are required
or permitted hereunder shall be in writing and sufficient if
delivered personally or by reputable overnight or express courier,
sent by registered or certified mail, postage prepaid, or by telefax
(with subsequent delivery via one of the two previous methods) as
follows:
(a) If to Purchaser, to:
Corzon, Inc.
1087 Broad Street, Suite 402
Bridgeport, CT 06604
Telefax: (203) 335-1455
Copy (which shall not constitute notice) to:
(b) If to the Company (prior to Closing) or Patel, to:
The Simple Card Limited
Unit B
The Accessory House
Cox Lane
Chessington
Surrey
KT9 1SD
or such other addresses and telefax numbers as shall be furnished in
writing by any Party, and any such notice or communications shall be
deemed to have been given as of three business days after the date
actually sent via overnight or express courier, eight days after
mailed and upon telefax confirmation of receipt to addressee by the
sender.
<PAGE>
11.3 Parties in Interest. This Agreement shall be binding on and
shall inure to the benefit of the Parties hereto and their respective
successors, representatives and assigns. This Agreement (and the
rights and interests herein) may not be assigned by any Party without
the written consent of the other Parties; provided, however,
Purchaser may assign its interests herein to (a) an entity
controlling, controlled by or under common control with Purchaser or
(b) a purchaser or transferee of all or substantially all of the
business or assets of Purchaser, whether by sale of stock or assets,
merger or otherwise. Any attempted assignment in contravention of
the foregoing shall be null and void. Nothing in this Agreement is
intended to confer, expressly or by implication, upon any other
person or entity any rights or remedies under or by reason of this
Agreement.
11.4 Entire Agreement. This Agreement, which includes the Disclosure
Schedules, Exhibits and the other documents, agreements, certificates
and instruments executed and delivered pursuant to or in connection
with this Agreement (collectively, the "Purchase Agreements"), sets
forth the agreement among the Parties with respect to the purchase
and sale of the Company Common Stock.
11.5 Counterparts; Facsimiles. This Agreement may be executed in two
or more counterparts, each of which shall be an original, and each of
which shall constitute one and the same agreement. Any Party may
deliver an executed copy of this Agreement and any documents
contemplated hereby by facsimile transmission to another Party, and
such delivery shall have the same force and effect as any other
delivery of a manually signed copy of this Agreement or of such other
documents.
11.6 Governing Law.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE UNITED STATES OF AMERICA AND THE
STATE OF CONNECTICUT, EXCLUDING CHOICE OF LAW PRINCIPLES.
(c) Purchaser, the Company and Patel consent to the exclusive
jurisdiction and venue of the courts of any county in the State of
Connecticut and the United States Federal District Courts of
Connecticut, in any judicial proceeding brought to enforce this
Agreement. The Parties agree that any forum other than the State of
Connecticut is an inconvenient forum and that a lawsuit (or non-
compulsory counterclaim) brought by one Party against another Party,
in a court of any jurisdiction other than the State of Connecticut
should be forthwith dismissed or transferred to a court located in
the State of Connecticut.
11.7 Arbitration.
(a) Any dispute, controversy or claim arising out of or
relating to this Agreement or any other related documents,
agreements, certificates or other writing, or the breach,
termination, construction, validity or enforceability hereof or
thereof, shall be settled by binding arbitration in accordance with
the rules of the American Arbitration Association (except as
otherwise provided in this Section 11.7).
<PAGE>
(b) Termination or limitation of Purchaser's rights in any
of its software, products, or any associated intellectual property
rights or documents may not be awarded under any circumstances. The
right to demand arbitration and to receive damages and obtain other
available remedies as provided hereunder shall be the exclusive
remedy in the event an arbitration demand is made, except that
Purchaser shall be entitled to obtain equitable relief, such as
injunctive relief, from any court of competent jurisdiction to
protect its rights in any of its software products or any associated
intellectual property rights or documents while such proceeding is
pending or in support of any award made pursuant to such arbitration.
11.8 Invalidity of any Part. If any provision or part of this
Agreement shall for any reason be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this
Agreement and shall be construed as if such invalid, illegal or
unenforceable provision or part thereof had never been contained
herein, but only to the extent of its invalidity, illegality, or
unenforceability. Upon any such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the
Parties hereto will 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 the transactions
contemplated by this Agreement are consummated to the extent
possible.
11.9 Time of the Essence; Computation of Time. Time is of the
essence of each and every provision of this Agreement. Whenever the
last day for the exercise of any right or the discharge of any duty
under this Agreement shall fall upon Saturday, Sunday or a federal,
public or legal holiday, the Party having such right or duty shall
have until 5:00 p.m., Eastern Standard Time on the next succeeding
regular business day to exercise such right or to discharge such
duty.
[Signatures begin on following page]
<PAGE>
IN WITNESS WHEREOF, Purchaser and Patel have caused this
Agreement to be executed by their duly authorized officers as of the
day and year first above written.
PURCHASER:
Corzon, Inc.
By: /s/ Larry Shatsoff
------------------------
Name: Larry Shatsoff
Title: President
COMPANY:
The Simple Card Limited
By: /s/Dharnesh Patel
------------------------
Name: Dharnesh Patel
Title: President
PATEL:
Dharnesh Patel
By: /s/Dharnesh Patel
-----------------------
Name: Dharnesh Patel
Title:
<PAGE>
SCHEDULES
Schedule 5.1(a) - Governmental Authority
Schedule 5.1(b) - Articles of Incorporation and Bylaws of
Company
Schedule 5.1(c) - Equity Interests
Schedule 5.2 - Shareholders and other Holders of Company Stock
Schedule 5.3(a) - Company Approvals
Schedule 5.4(a) - Company Financial Statements
Schedule 5.4(d) - Certain Company Liabilities and Obligations
Schedule 5.5 - Brokers, Finders, Etc.
Schedule 5.6(a) - Facts or Conditions
Schedule 5.7 - Litigation of Company
Schedule 5.8 - Taxes and Tax Returns
Schedule 5.9 - Employee Benefit Plans
Schedule 5.9(g) - Accruals; Funding: Employee Benefit Plans
Schedule 5.10 - Compliance with Applicable Laws
Schedule 5.11(a)- Material Contracts
Schedule 5.11(b)- Amendments to Material Contracts
Schedule 5.11(c)- Employment/Severance Agreements
Schedule 5.11(d)- Limits on Competition
Schedule 5.11(e)- Defaults on Material Contract
Schedule 5.12(a)- Ownership of Company Assets and Properties
Schedule 5.12(b)- Insurance
Schedule 5.14 - Intellectual Property not owned by the Company
Schedule 5.14(a)- Ownership of Patents, Trademarks, Service Marks,
Trade Names and Copyrights
Schedule 5.14(b)- Proprietary Legends and Copyright Notices
Schedule 5.14(c)- Trade Secret Protection
Schedule 5.14(d)- Ownership of Software
Schedule 5.14(e)- Absence of Claims
Schedule 5.16 - Third Party Components
Schedule 5.17 - Third Party Interests
Schedule 5.18 - Parachute Payments
Schedule 5.19(a)- Absence of Certain Agreements
Schedule 5.20 - Major Vendors and Customers
Schedule 5.21 - Accounts Receivable
Schedule 5.22 - Bank Accounts
Schedule 5.25 - Labor and Employment Matters
Schedule 5.26 - Year 2000 Matters
Schedule 5.27 - Change in Control Provisions
Schedule 7.3 - No Solicitation
Schedule 8.2(i) - No Interest in Proprietary Information
Schedule 8.2(k) - Release of Obligations
<PAGE>
EXHIBITS
Exhibit 3.1 - Liabilities of Simple to be Assumed by Purchaser
Exhibit 6.2(a) - Outstanding Securities of Purchaser
Exhibit 6.2(b) - Articles of Incorporation and Bylaws of Purchaser
Exhibit 6.2(c) - Subsidiaries
Exhibit 6.3(a) - Purchaser Approvals
Exhibit 6.4(a) - Financial Statements
Exhibit 6.5 - Broker's and Other Fees
Exhibit 6.6 - Legal Proceedings
Exhibit 6.7 - Taxes and Tax Returns
Exhibit 8.2(b) - Form of Opinion of Counsel to the Company and
Patel
Exhibit 8.2(c) - Form of Certificate of the Company
<PAGE>
Exhibit 99.1
Corzon, Inc. Announces Acquisition
Bridgeport, CT December 5/PRNewswire/ -- Corzon, Inc. (OTC Bulletin
Board: CRZN) announced today that it has acquired all of the
outstanding shares of The Simple Card Limited ("Simple"), a privately
owned London based distributor of calling card products in exchange
for shares of Corzon common stock.
Since mid September of this year, Simple has been selling a new
series of prepaid card products. B4B Communications Limited, a
wholly owned Corzon UK subsidiary which has agreements in place with
several international telecommunications carriers, has been providing
the telecommunication services for the Simple card products. Simple
has been purchasing the underlying minutes for the various products
directly from B4B.
Neil Higgins, Sales Director for B4B Communications Limited stated,
"The acquisition of Simple not only brings a highly recognizable
brand name under Corzon but it is a major step in "locking up"
distribution points for new products that B4B and/or Simple might
bring to market. Presently, Simple has 130 distribution points for
its card products and is constantly adding new distributors. In
addition to bringing a number of reputable point of sale locations to
the Company, Simple also has a store front located in Walton on
Thames which has helped in bringing about product recognition. "
Minesh Patel, Chairman of Simple stated, "The business relationship
between Simple and B4B has been nothing but a very positive
experience for both companies. It seemed like a natural progression
that we join forces more closely to help ensure the success of our
respective companies. "Mr. Patel will remain with Simple as President
and Director.
Safe Harbor Statement under the Private Securities Litigation Act of
1995; The statements which are not historical facts contained in this
press release are forward-looking statements that involve certain
risks and uncertainties including but not limited to risks associated
with the new uncertainty of future financial results, additional
financing requirements, development of new products, regulatory
approval processes, the impact of competitive products or pricing,
unpredictability of patent protection, technological changes, the
effect of economic conditions and other uncertainties detailed in the
company's filings with the Securities and Exchange Commission.
