EXHIBIT 10.2
INVESTMENT AGREEMENT
This Investment and Stockholders Agreement (the "Agreement") dated as
of July 26, 2000, by and among FATA GROUP SpA, an Italian corporation with
principle offices at ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇, ▇▇. ▇▇ - ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (▇▇), ▇▇▇▇▇
("FATA" or "Purchaser"); Cyberfast Systems, Inc., a Florida corporation with
principle offices at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Cyberfast" or
the "Company"), and the current private stockholders of Cyberfast ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, (collectively referred to as the "Controlling
Stockholders" and individually as a "Controlling Stockholder").
WHEREAS, Cyberfast is a company active in the field of VOIP communication
and has developed in recent years good experience and reputation on the relevant
market. In particular, Cyberfast is seeking to further develop its activity
through the establishment of a number of Points of Presence (hereinafter,
"POPs") in various countries, thus fostering the provision of communication
services to and from such countries.
WHEREAS, in view of such development, Cyberfast is interested in
strengthening its organizational and financial situation and has proposed a form
of partnership to FATA, also in consideration of the strategic support that FATA
may provide in the development of operative contacts in several countries;
WHEREAS, Cyberfast submitted to FATA a business plan (attached hereto as
Exhibit 1 and made a part hereof) reflecting the expected development of its
activity over the next three and a half (3 1/2) years and, based on the data
resulting from such business plan, FATA has likewise expressed its interest in a
type of partnership with Cyberfast;
WHEREAS, the parties hereto have entered into that certain Memorandum of
Understanding (the "MOU") dated as of May 5, 2000, pursuant to which they set
forth the basic terms of their prospective relationships;
WHEREAS, FATA desires to acquire a certain number of shares of common
stock, as better specified in Section __, of the Company (the "Common Stock"),
and in particular to ensure its absolute control of the voting rights and
management of the Company and the Company desires to issue and sell to FATA such
number of shares of Common Stock and to ensure to FATA such full control and
governance of the Company, upon the terms and subject to the conditions of this
Agreement;
WHEREAS, pursuant to the MOU, on May 5, 2000, FATA contributed to Cyberfast
a loan in an amount of three hundred thousand dollars (US $ 300,000), to be
fully reimbursed, together with interest at a rate of six percent (6 %) per
annum, upon the payment by FATA of the first tranche of its investment and, in
any case, no later than August 1, 2000, pursuant to the terms hereof.
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WHEREAS, Cyberfast is listed on the Pink Sheet market and is seeking re-
qualification as a "reporting company", under the Securities Act of 1934. The
Controlling Stockholders hold Class A and Class B shares of the common stock of
Cyberfast, as better described in Exhibit 2 hereto and made a part hereof. No
preferred stock of Cyberfast has been issued yet or is outstanding as of the
date hereof;
WHEREAS FATA, the Company and the Controlling Stockholders are also,
pursuant to the terms hereof, agreeing to, among other things, certain rights
and restrictions with respect to the Common Stock of the Company and the
Company's management.
NOW, THEREFORE, inconsideration of the mutual promises and covenants
contained in this Agreement, and intending to be legally bond hereby, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
1.1 Definitions. As used in this Agreement, unless the context requires
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otherwise, the following terms shall have the meanings ascribed to them below
(such terms to be equally applicable to both singular and plural forms of the
terms defined or referred to):
"Affiliate" or "affiliate" means, with respect to any specified person, (x)
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any general partner, member, director or any senior executive of, or any person
or entity that beneficially owns at least a majority of the issued and
outstanding capital stock or other equity interests of, such specified person,
or (y) any other person or group of persons directly or indirectly controlling,
controlled by other common control with, such specified person, at any time
during the period for which such affiliation is being determined, or (z) in the
case of FATA, in general any entity controlling, controlled by or under common
control with FATA, according to the definition of "control" provided in Art.
2359 of the Italian Civil Code.
"Board" means the Board of Directors of the Company as constituted from
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time to time.
"Business Day" means any calendar day which is not a Saturday, Sunday or
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public holiday in Turin, Italy or in Boca Raton, Florida.
"Business Plan" means the business plan that Cyberfast submitted to FATA on
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_________, 2000 and reflecting the expected development of its activity over the
next 3 and a half years;
"Capital Stock" means at any time any then issued capital stock of any
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class or classes of the Company. The term "Capital Stock" shall include, except
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as otherwise provided herein, any and all issued shares of the capital stock or
interests in the Company or any successor or assign of the Company (whether by
merger, consolidation, sale of assets or otherwise), which may be issued in
respect of, in exchange for, or in substitution for any shares of Capital Stock,
by reason of any stock dividend, split, reverse split, combination,
recapitalization, reclassification, merger, consolidation or otherwise.
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"Charter Documents" means the Certificate of Incorporation and By-Laws,
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each as amended, of the Company, as may be in effect from time to time.
"Company Material Adverse Effect" means any material adverse change in, or
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material adverse effect on, the business, prospects or value of the Company, or
any event or circumstance which would likely prevent, hinder or materially delay
the consummation of any of the transactions contemplated by this Agreement.
"Control" (including with correlative meanings, such similar terms as
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"controlling", "controlled by" or "under common control with"), as applied to
any specified person, means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of such
specified person, whether through the ownership of voting securities, by
contract or otherwise.
"Controlling Stockholders" means, jointly and severally, Mr. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
"Default" means, with respect to any particular agreement, (x) any material
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breach of or default under such agreement, (y) any event which could (either
with or without notice or lapse of time or both) give rise to any right of
termination, cancellation or acceleration or any obligation to repay with
respect to such agreement, or (z) any event which could result in either a
material increase in the obligations or liabilities of, or material loss of any
benefit to which, the party in question or any of its affiliates may be entitled
or subject to under such agreement.
"Derivatives" means (i) any equity securities of, or other equity or
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ownership interests in, the Company other than the Capital Stock and (ii) any
securities or rights convertible into, or exercisable or exchangeable for, or
evidencing the right to subscribe for Capital Stock or any of the items referred
to in clause (i) above, including, but not limited to any options to purchase
Capital Stock, warrants, or equivalent instrument.
"FATA Loan" means the three hundred thousand dollar (US $ 300,000) loan
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that, pursuant to the MOU, FATA made to Cyberfast on May 5, 2000, and which loan
shall be fully reimbursed, together with interest at a rate of six percent (6 %)
per annum, upon the payment by FATA of the first tranche of its investment and
in any case no later than August 1, 2000.
"First Closing" or "First Closing Date" shall be the day on which the First
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Lot of Shares will be subscribed to and purchased by FATA, or should have been
subscribed to and purchased pursuant to Article 2.1hereof.
"First Lot of Shares" means those Shares, as set forth in Exhibit __ hereto
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and made a part hereof, that shall be purchased by FATA pursuant to Section 2.1
hereof, subject to adjustment as provided in Article 4 hereof;
"GAAP" means U.S. generally accepted accounting practices, as in effect on
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the date any calculation or financial statement preparation hereunder is made,
applied on a basis consistent with prior periods.
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"Governmental Entity" means any governmental authority, court,
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administrative agency or commission or other governmental or regulatory body or
entity, whether federal, state, local or foreign.
"Intellectual Property" means any patent, copyright, trademark, trade name,
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service ▇▇▇▇, service name, brand ▇▇▇▇, brand name, logo, Internet domain name
or industrial design, any registrations thereof and pending applications
therefor (to the extent applicable), any other intellectual property right
(including, without limitation, any proprietary know-how, trade secret, trade
right, formula, confidential or proprietary report or information, any marketing
data, pricing or cost data, customer list or membership list, and any computer
program, software, database right or data right), any license or other contract
relating to any of the foregoing, and any goodwill associated with any business
owning, holding or using any of the foregoing.
"IPO" means any public offering of common equity securities of the Company
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involving both the sale of Capital Stock of the Company to the general public,
whether involving a primary offering or secondary offering or a combined primary
and secondary offering of such securities on a national securities exchange or
on the NASDAQ Stock Market or NASDAQ National Market.
"Law" means any statute, law, ordinance, rule, regulation or administrative
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ruling or any governmental permit, franchise or license or any injunction,
judgment, order or consent or similar decree or agreement, whether federal,
state, local or foreign.
"Losses" means any and all deficiencies, judgments; settlements, demands,
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claims, actions or causes of action, assessments, liabilities, losses, damages
(whether direct, indirect, incidental or consequential), interest amounts,
fines, penalties, costs and expenses (including, without limitation, reasonable
legal, accounting and other costs and expenses incurred in connection with
investigating, defending, settling or satisfying any and all demands, claims,
actions, causes of action, suits, proceedings, assessments, judgments or
appeals, and in seeking indemnification therefor).
"MOU" means the Memorandum of Understanding by and among FATA, Cyberfast
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and ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (also on behalf of the Controlling Stockholders) dated
as of May 5, 2000.
"person" means an individual, partnership, corporation, limited liability
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company, business trust, joint stock company, trust, unincorporated association,
joint venture or other entity of whatever nature.
"Second Closing" or "Second Closing Date" means the day on which the Second
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Lot of Shares will be subscribed and purchased by FATA, or should have been
subscribed and purchased pursuant to Article 2.1 hereof.
"Second Lot of Shares" means those Shares, as set forth in Annex __ hereto
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and made a part hereof, that shall be purchased by FATA pursuant to Section 2.1,
subject to adjustment as provided in Article 4 hereof;
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"Share Ownership Interest" means an amount, expressed as a percentage,
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equal to the proportionate amount of the Capital Stock that a particular person
owns or holds, in comparison to the total amount of all Capital Stock that are
owned or held by all Stockholders and other persons (including the particular
person in question), in each case as of the date in question.
"Taxes" means (A) all taxes, charges, fees, levies, or other similar
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assessments, including without limitation, income, gross receipts, ad valorem,
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premium, excise, real property, personal property, windfall profit, sales, use,
transfer, licensing, withholding, employment, payroll, estimated and franchise
taxes imposed by the United States, any state, local, or foreign government, or
any subdivision, agency, or other similar entity of the United States, or any
such government, and any interest, fines, penalties, assessments, or additions
to tax resulting from, attributable to, or incurred in connection with any such
tax or any contest or dispute thereof, and (B) any Taxes (as defined in clause
(A)) for which the Company is liable as a transferee, indemnitor, guarantor,
surety or in a similar capacity under any contract, arrangement, understanding
or commitment, whether oral or written, or by reason of having been a member of
any affiliated, consolidated, combined or unitary group.
"Tax Returns" means any report, return, statement, or other information
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required to be supplied to a federal, state, local or foreign taxing authority
in connection with Taxes.
"Transfer" means any direct or indirect sale, assignment, transfer, pledge,
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mortgage, charge, encumbrance, hypothecation or other disposition of the whole
or any part of any Stockholder's Capital Stock (or any beneficial interest or
voting rights therein) or any grant by such Stockholder of a warrant, option or
other right to acquire the whole or any part of such Stockholder's Capital
Stock.
"Transferred Shares" means the First Lot of Shares and the Second Lot of
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Shares, totaling a Share Ownership Interest of forty-five percent (45%) of
Cyberfast Capital Stock, and bearing at least fifty-one percent (51%) of all
voting rights in the Company.
"Violation" means, with respect to any purchase of securities of the
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Company, any event or circumstance pursuant to which the purchase of such
securities (together with any other purchases of such securities pursuant to
this Agreement) would (x) conflict with or result in a violation of, any law,
statute, rule, regulation, order, writ, injunction, decree or judgment
promulgated or entered by any federal, state, local or foreign court or
governmental authority applicable to either the Company, FATA or any of their
respective subsidiaries or any of their respective assets, or (y) result in a
Default, or constitute a Default, under any agreement to which either the
Company, FATA or any of their respective subsidiaries is a party or by which any
of their respective assets may be bound.
ARTICLE II
SHARE SUBSCRIPTION BY FATA
2.1 Subscription and Purchase of Shares of Common Stock.
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(a) Upon satisfaction of all conditions contained in this Agreement,
on or before July 31, 2000, and in any case not later than five (5)
business days from the approval by its Board, FATA will subscribe to and
purchase from the Company, and the Company hereby agrees to issue and sell
to FATA, the First Lot of Shares, and that such First Lot of Shares shall,
when issued at First Closing, be validly issued, fully paid and non-
assessable and shall be free and clear of any and all Encumbrances. For the
purposes of this Agreement, the term "Encumbrance" shall mean and include
any mortgage, pledge, claim, charge, lien, encumbrance, interest, option,
restriction, condition, violation, security interest, hypothecation or
assessment of any nature affecting in any way the assets or property
involved).
(b) Accordingly, FATA shall, in full payment for the First Lot of
Shares hereunder, pay a total purchase price at First Closing of one
million five hundred thousand dollars (US $ 1,500,000) in escrow to the
Company's attorney via wire transfer to such U.S. bank account as may be
designated by the Company in writing at least four (4) Business Days prior
to the First Closing (the "First Lot Purchase Price"). FATA will however
have the right to reduce such amount by the amount of the FATA Loan and any
interest accrued thereon, in which case the FATA Loan will be deemed to
have been fully repaid. Simultaneously therewith at First Closing, the
Company through its attorney shall deliver to FATA's attorneys in New York
a certificate or certificates representing all the Shares of the First Lot
of Shares. Upon confirmation by FATA's attorneys of receipt of the
certificates, Cyberfast's attorney shall release and transfer the payment
to the Company.
(c) Upon satisfaction of all conditions contained in this Agreement,
but no later than November 30, 2000, FATA will subscribe and agree to
purchase from the Company, and the Company hereby agrees to issue and sell
to FATA, the Second Lot of Shares , and that such Shares shall, when issued
at Second Closing, be validly issued, fully paid and non-assessable and
shall be free and clear of any and all Encumbrances.
(d) Accordingly, FATA shall, in full payment for the Second Lot of
Shares hereunder, pay a total purchase price at Second Closing of three
million five hundred thousand dollars (US $ 3,500,000) in escrow to the
Company's attorney via wire transfer to such U.S. bank account as may be
designated by the Company in writing at least four (4) Business Days prior
to the Second Closing (the "Second Lot Purchase Price"). Simultaneously
therewith at Second Closing, the Company through its attorney shall deliver
to FATA's attorneys in New York a certificate or certificates representing
all the Shares of the Second Lot of Shares. Upon confirmation by FATA's
attorneys of receipt of the certificates, Cyberfast's attorney shall
release and transfer the payment to the Company.
(e) As a result of the acquisition of the First Lot of Shares and the
Second Lot of Shares, FATA shall hold a Share Ownership Interest of at
least forty-five percent (45%) in Cyberfast. Such Shares shall at all
times after Second Closing bear at least fifty-one percent (51%) of all
voting rights (the "Voting Interests") in the Company and give FATA full
control of the management and governance of Cyberfast.
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(f) Notwithstanding anything in this Agreement to the contrary, the
Company and the Stockholders hereby acknowledge and agree that FATA may, in
its sole discretion, transfer any or all of its rights, benefits, interests
or obligations under this Agreement to any of its Affiliates, provided it
controls more than 50% of its capital, at any time prior, at or after
Second Closing upon sixty (60) days written notice to the Company. Any
such transfer shall not require the consent of the Company or of any of its
Stockholders.
2.2 Conversion of Class B Stock into Class A Stock by the Controlling
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Stockholders.
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On or before Second Closing Date, the Controlling Stockholders shall
request the Company to convert and the Company shall so convert at least
_______ Class B Shares into Class A Shares, bearing 1 vote per Share. The
Controlling Stockholders shall deliver a certificate in form and substance
satisfactory to FATA, as well as copy of cancelled Class B Shares
certificates and new Class A Share certificates, confirming such
conversion.
2.3 Resolutions. Amendments to certain Documents of Cyberfast
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On or before Second Closing Date (and/or whenever required by the
law), the Company and the Controlling Stockholders shall cause the
competent organs of the Company, including but not limited to the Board of
Directors and the Shareholders, to adopt any resolutions that may be
necessary to fully implement and ratify the transactions contemplated by
this Agreement, including, but not limited to, the approval of any
necessary modification to the Company's Charter Documents or to any other
applicable document in order to ensure that (i) fifty-one percent (51%) of
the total voting rights are sufficient to fully control and govern the
Company under any respect, an, in fact, to promptly take all measures to
insure such control; and (ii) allow the transfer of Class B Shares - always
subject to the provisions and limitations contained in this Agreement -
without automatic conversion into Class A Shares.
ARTICLE III
CONDITIONS PRECEDENT
3.1 Conditions to Obligation of FATA. Notwithstanding any other provision
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of this Agreement to the contrary, the obligation of FATA to effect the
transactions contemplated herein shall be subject to the satisfaction at or
prior to the Second Closing (or the First Closing, if specified) of each of the
following conditions:
(a) Representations and Warranties True. The representations and
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warranties of the Company contained in this Agreement, including without
limitation, the Schedules, shall be in all material respects true,
complete, and accurate as of the date when made, and as of the Second
Closing (and/or the First Closing, as the case may be) as though such
representations and warranties were made at and as of such time, except for
changes specifically permitted or contemplated by this Agreement, and
except insofar as the representations relate expressly and solely to a
particular date or period, in which case, they
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shall be true and correct in all material respects at the Second Closing
(and/or at the First Closing) with respect to such date or period.
(b) Performance. Company and Controlling Stockholders shall have
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performed and complied in all material respects with all agreements,
covenants, obligations, and conditions required by this Agreement to be
performed or complied with by Company and Controlling Stockholders on or
prior to the Second Closing and/or the First Closing, as applicable.
(c) Required Approvals and Consents.
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(i) The transactions contemplated by this Agreement shall be
approved by FATA's Board before the First Closing;
(ii) Before the First Closing, the Board and the Controlling
Stockholders of Cyberfast shall have approved the transactions
contemplated in this Agreement and taken any other resolution or
action that is necessary and appropriate to perform this Agreement and
the transactions contemplated hereby.
(iii) Any other action required by law and otherwise to be taken
by the Company and Controlling Stockholders to authorize the
execution, delivery, and performance of this Agreement and the
consummation of the transactions contemplated hereby shall have been
duly and validly taken.
(ii) All consents of or from Governmental Entities required
hereunder to consummate the transactions contemplated herein, and all
consents of or from persons and entities other than Governmental
Entities that are identified in the Schedules (including, but not
limited to, waiver of all pre-emptive rights; rights of first refusal
or first offer, if any; third party options or shareholder options to
purchase) shall have been delivered, made, or obtained, and FATA shall
have received copies thereof to its satisfaction.
(d) Adverse Changes. No material adverse change shall have occurred
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in the business of the Company from the Latest Balance Sheet.
(e) No proceeding or Litigation. No suit, action, investigation,
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inquiry, or other proceeding by any Governmental Entities or other person
or entity shall have been instituted or threatened which questions the
validity or legality of the transactions contemplated hereby, or which, if
successfully asserted, would individually or in the aggregate, otherwise
have a material adverse effect on the conduct of the businesses of Company.
(f) Due Diligence. Before Second Closing FATA shall have received
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all necessary information and completed, to its satisfaction in its
exclusive discretion, a detailed due diligence review on Cyberfast and
review of the Business Plan.
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(g) Good Standing - Financial Statements. Before the First Closing,
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FATA shall have received satisfactory evidence, in its sole discretion, of
Company's good standing and effective registration in the appropriate
public records and registers, as well as, before Second Closing, the
audited financial statements of Company.
3.2 Conditions to Obligation of Cyberfast. Notwithstanding any other
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provision of this Agreement to the contrary, the obligation of Cyberfast to
effect the transactions contemplated herein shall be subject to the satisfaction
at or prior to the Second Closing of each of the following conditions:
(a) Representations and Warranties True. The representations and
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warranties of FATA contained in this Agreement, including without
limitation the Schedules, if any, shall be in all material respects true,
complete, and accurate as of the date when made, and as of the Second
Closing as though such representations and warranties were made at and as
of such time, except for changes specifically permitted or contemplated by
this Agreement, and except insofar as the representations relate expressly
and solely to a particular date or period, in which case, they shall be
true and correct in all material respects at the Second Closing with
respect to such date or period.
(b) Performance. FATA shall have performed and complied in all
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materials respects with all agreements, covenants, obligations, and
conditions required by this Agreement to be performed or complied with by
FATA on or prior to the Second Closing and/or the First Closing, as
applicable.
(c) Required Approvals and Consents.
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(i) The transaction contemplated by this Agreement shall be
approved by FATA's Board before the First Closing;
(ii) Any other action required by law and otherwise to be taken
by FATA to authorize the execution, delivery, and performance of this
Agreement and the consummation of the transactions contemplated hereby
shall have been duly and validly taken.
(iii) All consents of or from Governmental Entities, if any,
required hereunder to consummate the transactions contemplated herein,
and all consents of or from persons and entities other than
Governmental Entities that are identified in this Agreement shall have
been delivered, made, or obtained, and Cyberfast shall have received
copies thereof.
ARTICLE IV
ADJUSTMENT PROVISIONS
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4.1 Cyberfast accepts and acknowledges that, at Second Closing, FATA shall
hold a Share Ownership Interest of forty-five percent (45%) in Cyberfast and
that such interest shall have voting rights vested in it equal to at least
fifty-one percent (51%) of the Voting Interests in the Company and give FATA
full control and governance of Cyberfast.
4.2 The Parties hereto acknowledge that the class, series, number and kind
of Shares to which FATA will subscribe at the First Closing and at the Second
Closing, as reflected in Article 2, have been determined on the following
assumptions which Company and Controlling Stockholders represent to be true and
accurate, as of the date hereof and at the Second Closing:
(a) the total number of Shares that have been issued and allocated for
FATA and any other shareholder at Second Closing is ________ Class A
Shares and ___________ Class B Shares;
(b) at least ______ Class B Shares held by the Controlling Stockholders
are converted on or before Second Closing into Class A Shares,
pursuant to Section __ above;
(c) Fifty-one percent (51%) of the total voting rights are sufficient
to ensure full control and governance of the Company.
4.3 In the event and to the extent that any of the conditions listed
above under Section 4.2 (a) and (b) are not satisfied by the Second Closing, the
number and/or class of Shares to which FATA will subscribe to and to be
allocated for FATA as consideration for the total payment of five million
dollars (US $ 5,000,000) shall be automatically adjusted (with no additional
consideration to be paid by FATA) to ensure that the Share Ownership Interest
held by FATA at Second Closing is equal to 45% of the Capital Stock of
Cyberfast, as resulting at Second Closing and that such Share Ownership Interest
has voting rights vested in it equal to at least 51% of the Voting Interests of
Cyberfast and gives FATA full control and governance of Cyberfast, under all
respects.
ARTICLE V
PUT OPTION
GUARANTEE
5.1 In the event that, for any reason whatsoever, FATA does not proceed
with the subscription and purchase of the Second Lot of Shares, FATA will have
an option (exercisable in its sole discretion) to sell to Cyberfast, and
Cyberfast shall purchase, the First Lot of Shares for a fixed price of US $1.5
million (US $ 1,500,000), plus any additional sums or consideration as of such
time loaned to or contributed into Cyberfast, plus interest at a rate of 6% per
year. Such option shall be validly enforceable at any time but no later than
November 30, 2000. Once enforced, the transfer of the shares and the payment of
the price shall take place within and no later than four (4) months after FATA's
request.
5.2 In the event that Cyberfast, for any reason whatsoever, was unable to
purchase back the Shares or pay the relevant price, such obligations shall be
personally performed by ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, as
guarantors of such obligations of Cyberfast. The same guarantee also applies to
the obligation to reimburse the FATA Loan.
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5.3 Mr. and ▇▇. ▇▇▇▇▇▇▇▇▇'▇ personal guarantee shall be in the form of
Exhibit __ annexed hereto (the "Guarantee") and shall be secured by a mortgage
on the house in _________________________________, owned by Mr. and ▇▇▇.
▇▇▇▇▇▇▇▇▇. Such mortgage shall be in the form of Exhibit __ annexed hereto (the
"Mortgage") and shall be recorded __________________________ and, provided it is
duly recorded, shall have priority over any other right on the same property,
except for the mortgage held by ____________ for a maximum amount of US $
___________ (_______________). This personal guarantee shall be coterminous with
the Put Option.
ARTICLE VI
WARRANT TO ACQUIRE ADDITIONAL SHARE OWNERSHIP INTEREST
6.1 Effective at Second Closing, FATA shall receive a warrant (the
"Warrant") to purchase Cyberfast Class A Common Stock at a price of three
dollars (US $ 3.00) per share. The Warrant will be exercisable to purchase that
number of shares necessary for FATA to attain a 51% Share Ownership Interest and
to retain its 51% Voting Interest as of the Second Closing Date. If any
Derivatives outstanding before the Second Closing Date are exercised after the
Second Closing Date, then FATA shall have the right to exercise the Warrant to
the extent necessary to adjust its Voting and Share Ownership Interests to 51%
calculated as of the Second Closing Date as if such exercised Derivative had
been exercised prior to the Second Closing Date. The Warrant will be exercisable
for so long as unexercised Derivatives that were outstanding on the Second
Closing Date continue to be outstanding.
ARTICLE VII
REPRESENTATIONS, WARRANTIES AND COVENANTS
7.1 Representations, Warranties and Covenants of Each Party. Each party
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hereby represents, warrants and covenants, with respect to itself, as of the
date of this Agreement and on the Second Closing Date to the other parties
hereto:
(a) Valid Existence. If such party is a corporation, partnership or
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other similar entity, it is duly organized and validly existing under the
laws of the jurisdiction of its organization or incorporation and it is in
good standing.
(b) Power and Authority. It has all requisite power and authority to
-------------------
execute and deliver, and to perform all of its obligations under, this
Agreement and, if required, it has taken all necessary action to authorize
such execution, delivery and performance.
(c) No Violation or Conflict. The execution and delivery of, and the
------------------------
performance of its obligations under this Agreement by such party do not
and will not (A) violate any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award presently in effect applicable
to such party, (B) with or without the giving of notice or the passage of
time or both, result in a breach or constitute a Default under any
agreement or instrument to which it is a party or by which it is bound, or
(C) require any
11
authorizations, consents, approvals, licenses, exemption or filings with
any party or governmental authority.
(d) Enforceability of Obligations. This Agreement constitutes the
-----------------------------
legal, valid and binding obligation of such party, enforceable against it
in accordance with its terms, except as such may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and except as may
be limited by general principles of equity.
7.2 Representations, Warranties and Covenants of the Company. In addition
--------------------------------------------------------
to the representations and warranties set forth in Section 8.1 above, the
Company hereby represents, warrants and covenants to FATA that:
(a) Capital Structure. Attached hereto as Schedule 7.2(a)(1) is a
-----------------
true and complete copy of the Charter Documents of the Company with all
amendments, as in effect on the date hereof. As set forth in Schedule 7.2
(a)(2), (i) the authorized capital stock of the Company consists solely of
_______ million (________) shares of Common Stock, of which ________
(_________) Class A Shares (each bearing one vote) and ________ (_________)
Class B Shares (each bearing ten votes), and (ii) there are issued and
outstanding ______________________ (__________) shares of Common Stock (of
which _________ Class A and _________ Class B) and no other shares of
Common Stock are issued and outstanding; no Shares are held by the Company
in its treasury. All outstanding shares of Common Stock are validly issued,
fully paid and non-assessable and are not subject to any preemptive or
other similar rights. Except as set forth in Schedule 7.2(a)(2), there are
not as of the date hereof, and there will not be at the Second Closing, (x)
any outstanding or authorized options, warrants, calls, rights (including
preemptive rights), commitments or any other agreements of any character
which the Company, or any Stockholder, is a party to, or may be bound by,
requiring it to issue, transfer, dispose of, sell, purchase, redeem or
otherwise acquire (or to refrain from doing any of the foregoing) any
shares of Common Stock or any shares of Capital Stock, and (y) any
stockholders' agreements, voting trusts or other agreements or
understandings to which the Company or, any Stockholder, is a party or by
which it is bound relating to the voting of, or placing any restrictions
on, any shares of the capital stock of the Company.
(b) Shares to be Issued to FATA; No Changes in Capital Structure.
------------------------------------------------------------
Subject to adjustments as set forth in Article 4 above, once issued, the
Shares issued to FATA shall give FATA a Share Ownership Interest equal to
forty-five percent (45%), with at least fifty-one percent (51%) of Voting
Interests vested therein. Such Shares are not subject to any preemptive or
other similar rights. Attached hereto as Schedule 7.2(b)(1) is a true and
complete list of all of the holders of record, as provided by the Transfer
Agent, of Common Stock and of any other Capital Stock as of the date
hereof. On and prior to the date hereof, except as set forth on such
Schedule 7.2(a)(2) and except as expressly provided for in this Agreement,
the Company has not - and shall not before Second Closing - (i) declared,
authorized, set aside, paid or distributed any dividend or other
distribution, or any option, warrant, call or right (including preemptive
rights), (ii) issued, transferred, disposed, sold, purchased, redeemed or
otherwise acquired any shares of Capital Stock, or (iii) entered into
12
any agreement of any character requiring the Company to take any of the
actions referred to in clauses (i) and (ii) above.
(c) Compliance with Laws. Except as set forth in Schedule 7.2(c)(1)
--------------------
and except for those matters which in the aggregate would not result in a
Company Material Adverse Effect (as defined below), to the best of the
knowledge of the Company (x) the Company is, and at all times has been, in
material compliance with all Laws applicable to the Company or to the
conduct of the business or operations of the Company or the use of its
properties (including any leased properties) and assets, in any place where
such business or operations are performed or such properties or assets are
located, and (y) the Company has not received, and does not know of the
issuance or threatened issuance by any Governmental Entity, of any notices
of violation or alleged violation of any Law applicable to the Company, to
its business and/or operations or to its properties or assets. Except as
set forth in Schedule 7.2(c)(2), to the best of the knowledge of the
Company there is no proposed legislation or Law which, if enacted, is
reasonably likely to result in a Company Material Adverse Effect (other
than any proposed legislation or Law which could affect generally companies
located within the United States or companies operating in the same general
industry as the Company).
In particular (but without limitation), (i) the Company has not issued
any unregistered securities in violation of the registration requirements
of Section 5 of the Securities Act of 1933, as amended, or any other law,
and is not otherwise violating any rule, regulation or requirement under
the Securities Act of 1933, as amended, or the Securities and Exchange Act
of 1934, as amended; and (ii), except as set forth in Schedule 7.2(c) (3),
the Company has duly made all required filings with the Securities and
Exchange Commission under the Securities Exchange Act of 1934 and all
similar required filings with any other Authority and all of the reports,
forms and documents so filed complied in all material respects with all
applicable requirements and Laws; in this respect, the Company will
promptly furnish to FATA an accurate and complete copy of the reports,
forms and documents filed after the date of this Agreement or such reports,
forms or documents reasonably requested by FATA.
(d) Litigation. Except as set forth in Schedule 7.2(d)(1), there is
----------
no action, suit, claim, investigation or proceeding, whether at law or in
equity (each, a "Legal Proceeding"), pending or, to the best knowledge of
the Company, threatened that questions the validity of this Agreement or
any action taken or to be taken by the Company or, to the best knowledge of
the Company, any stockholder in connection with any of the transactions
contemplated hereby or thereby. Schedule 7.2(d)(1) sets forth an accurate
and complete list, and a brief description (setting forth the names of the
parties involved, the court or other governmental or mediating entity
involved, the relief sought and the substantive allegations and the status
thereof), of each Legal Proceeding pending or, to the best knowledge of the
Company, threatened against or affecting the Company or any of its assets.
In any event, none of the matters listed on such Schedule 7.2(d)(1) should,
if adversely determined, either individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect. To the
best knowledge of the Company, no event has occurred and no circumstance,
matter or set of facts exist which would constitute a valid basis for the
13
assertion by any Third Party of any claim or Legal Proceeding, other than
those listed on Schedule 7.2(d)(1), which could reasonably be expected to
result in a Company Material Adverse Effect. There is no outstanding or, to
the best knowledge of the Company, threatened judgment, injunction,
judgment, order or consent or similar decree or agreement of any
Governmental Entity against, affecting or naming the Company, the
Controlling Stockholders or the current management of Cyberfast, or
affecting any of its properties or assets.
For purposes of this Section 7.2(d), any reference to the Company
shall include any corporation that merged with or into or was liquidated
into the Company or a past subsidiary of the Company or otherwise a
predecessor of the Company or such subsidiary.
(e) Taxes. Except as set forth in Schedule 7.2(e) (i) all Taxes with
-----
respect to any periods ending on or before the date hereof which are due
and payable (whether or not shown on any Tax Return) by the Company have
been paid in full and no such Taxes remain outstanding; (ii) the Company
has established, and prior to the Second Closing Date will have
established, current accruals that are adequate for the payment of all
Taxes payable by it which are not yet due and payable with respect to its
results of operations for all periods ending on or before the Second
Closing Date; (iii) the Company has filed all Tax Returns required to have
been filed by it prior to the date hereof and no extension of time for
filing a Tax Return is presently in effect; (iv) the Tax Returns that have
been filed have been accurately prepared, duly and timely filed and are
correct and complete in all material respects; (v) the Company has withheld
and paid all Taxes required to have been withheld and paid by it in
connection with amounts paid to or owing to any employee, independent
contractor, creditor or any other third party; and (vi) to the best
knowledge of the Company, there has been no examination by any Tax
authority of any return of the Company or of any other person, firm or
corporation for which the Company is liable, and there are no audits,
actions, suits, proceedings, investigations or claims now pending or, to
the best knowledge of the Company, threatened against the Company in
respect of any Taxes. For purposes of this Section 7.2(e), any reference to
the Company shall include any corporation that merged with or into or was
liquidated into the Company or any past subsidiary of the Company or
otherwise a predecessor of the Company or such subsidiary.
(f) Pension and Benefit Plans. All employees and/or consultants of
-------------------------
the Company are set forth on Schedule 7.2(f)(1), and all Contracts and
other agreements with such employees and/or consultants are set forth on
Schedule 7.2(n)(1). There are no employee benefit, pension, profit sharing,
deferred compensation, welfare or similar plans of the Company with respect
to its employees. Except as set forth on Schedule 8.2(f)(3) no Legal
Proceedings, investigation, or claim, has commenced or been threatened in
respect to any employee and /or consultant.
(g) Financial Advisors. Except as set forth on Schedule 7.2(g), no
------------------
person or entity has acted directly or indirectly as a broker, finder or
financial advisor for or to the Company in connection with the negotiations
relating to the transactions contemplated by this Agreement. No person or
entity is entitled to any fee or commission or like payment, or expense
reimbursement, in respect of this Agreement or any of the transactions
14
contemplated hereby or thereby, based in any way on agreements,
arrangements or understandings made by or on behalf of the Company.
(h) Financial Statements. Attached hereto as Schedule 7.2(h)(1) are
--------------------
true, correct and complete copies of (x) the balance sheet of the Company
and its consolidated subsidiaries (if any such subsidiaries exist) as at
[_______] and the related statements of earnings, Stockholders' equity and
cash flows of the Company for the period then ended (including the related
notes and schedules thereto, the "1999 Financial Statements"), and (y) the
balance sheet (the "Latest Balance Sheet") of the Company and its
consolidated subsidiaries (if any such subsidiaries exist) as at
[____________] (the "Latest Balance Sheet Date") and the related statements
of earnings, Stockholders' equity and cash flows of the Company for the
nine-month period then ended (the "Interim Financial Statements", and
together with the [_______] Financial Statements, the "Financial
Statements"). The Financial Statements were prepared in accordance with the
books and records of the Company, are complete and correct in all material
respects, have each been prepared in accordance with GAAP and present
fairly the consolidated financial position, results of operations and
changes in financial position or cash flows, whichever is applicable, of
the Company as at the dates and for the periods indicated (subject, in the
case of the Interim Financial Statements, to normal year-end audit
adjustments). The documents mentioned in this section have been provided in
draft before the execution of this Agreement and shall be provided in final
version before the Second Closing.
(i) No Undisclosed Liabilities. Except as set forth in Schedule
--------------------------
7.2(i)(1), both as of [_______] and since such time, the Company has not
had, and it has not incurred, any indebtedness, obligations or liabilities
of any kind (whether accrued, absolute, contingent or otherwise, and
whether due or to become due or asserted or unasserted), other than in the
ordinary course of the Company's business, and, to the best knowledge of
the Company, there was no basis for the assertion of any claim or liability
of any nature against the Company that would be required to be disclosed on
a balance sheet prepared as of [_______] or since such time in conformity
with GAAP, except for (x) those which were fully reflected in, reserved
against or otherwise described in the Latest Balance Sheet, or (y) those
matters which in the aggregate would not result in a Company Material
Adverse Effect.
(j) Absence of Certain Material Developments. Except as set forth in
----------------------------------------
Schedule 7.2(j)(1), since [_______] (a) there has been no event, condition
or state of facts of any character that has had or is reasonably likely to
have a Company Material Adverse Effect (other than those matters which
affect generally companies located within the United States or companies
operating in the same general industry as the Company), and (b) the Company
has not entered into any transaction or contractor conducted its business,
other than in the ordinary course of the Company's business (except for
those matters which in the aggregate would not result in a Company Material
Adverse Effect).
(k) Intellectual Property.
---------------------
(i) Title; Validity; Pending Applications: Infringements, Etc.
---------------------------------------------------------
The Company has full legal and beneficial ownership of, or a valid
right to use all
15
Intellectual Property that it owns, holds or uses. Neither the use of
any Intellectual Property nor the performance of any activity of the
Company will conflict with, infringe upon, violate or interfere with
or constitute an appropriation of any right, title or interest held by
any other person or entity, and there have been no claims made with
respect thereto
(1) Real Property. Schedule 7.2(l)(1) sets forth a description of the
-------------
only property leased by the Company. The Company does not own or have
the right to acquire, pursuant to any agreement, arrangement or
understanding, any real property
(m) Insurance. The Company currently maintains, and will maintain,
---------
valid insurance policies, which policies provide coverage, both in
terms of scope and amount of coverage, for the Company and the
operations conducted by the Business, comparable to the coverage
typically maintained by other companies which are similarly situated
(i.e., as to size of operations and line of business) to the Company.
Schedule 7.2 (m)(1) summarizes all current insurance policies,
including type, coverage, expiration dates, claims history for past
three years and copies of respective binders. There are no pending
claims against such insurance by the Company or its Affiliates as to
which the applicable insurers have denied coverage; there exist no
claims under such insurance that have not been properly filed by the
Company or its affiliates; and the Company has not been refused any
insurance coverage by any insurer from which the Company has sought
coverage.
(n) Material Contracts.
------------------
(i) List of Certain Types of Contracts. Except as set forth in
----------------------------------
Schedule 7.2(n)(1), the Company is not a party to, nor are any of its
properties or assets bound by, any (A) contract not made in the
ordinary course of the Company's business or the performance of which
will extend over a period greater than thirty (30) days and which is
not cancelable by the Company without penalty; (B) employment,
consulting, independent contractor, non-competition, severance, golden
parachute or indemnification contract; (C) advertising, public
relations, franchise, distributorship or sales agency contract; (D)
contract involving the commitment or payment in excess of
____________________ thousand dollars (US $__,000) for the future
purchase of services, properties, materials or equipment; (E) contract
among stockholders or granting a right of first refusal or for a
partnership or for a joint venture or for the acquisition, sale or
lease of any properties or assets of the Company; (F) mortgage,
pledge, conditional sales contract, security agreement, factoring
agreement or other similar contract with respect to any property of
the Company; (G) loan agreement, credit agreement, promissory note,
guarantee, subordination agreement, letter of credit, indenture
facility or any other similar type of contract; (H) retainer contract
with investment bankers, attorneys, accountants, actuaries, appraisers
or other professional advisers; (I) lease, sublease or other agreement
under which the Company uses or occupies or has the right to use or
occupy, now or in the future, any real property or personal property
or equipment or vehicles, (J) contract or agreement with any
Governmental Entity; (K) contract
16
which would be reasonably likely to limit or restrain the Company, or
any owner or affiliate of the Company, from engaging in any line of
business, competing with any person, firm, corporation or other
entity, or conducting business in any particular geographic area, (L)
contract relating to the marketing, co-marketing, promotion or co-
promotion of the Company's services, (M) contract the performance or
nonperformance of which by the Company is reasonably likely to cause a
Company Material Adverse Effect, or (N) commitment or agreement to
enter into any of the foregoing (the contracts, agreements and other
arrangements referred to in clauses (A)through (N) above, collectively
referred to as the "Contracts"). The Company has delivered or
otherwise made available to FATA true, correct and complete copies of
the Contracts listed in Schedule 7.2(n)(1), together with all
amendments, modifications and supplements thereto and side letters to
which the Company is a party affecting the obligations of any party
thereunder.
No person or entity holds a power of attorney to act on behalf of
the Company.
(ii) Enforceability; Defaults; Consents; Impending Terminations;
-----------------------------------------------------------
Etc. Except as set forth in Schedule 7.2(n)(2) and except for those
---
matters which in the aggregate would not result in a Company Material
Adverse Effect: (A) to the best knowledge of the Company and the
Controlling Stockholders, each of the Contracts listed, or required to
be listed, on Schedule 7.2(n)(1), is valid and enforceable in
accordance with its terms, (B) no Default exists under any Contract
listed in Schedule 7.2(n)(1) either by the Company or, to the best
knowledge of the Company, by any other party thereto; (C) to the best
knowledge of the Company, no third party has asserted any claim of
Default or breach under any of the Contracts listed in Schedule
7.2(n)(1); (D) with respect to those Contracts listed in Schedule
7.2(n)(1) that were assigned or subleased to the Company by a third
party, all necessary consents to such assignments or subleases have
been obtained, and (E) to the best knowledge of the Company, there is
no present intention on the part of any significant supplier, customer
or other business partner of the Company to either (x) terminate or
significantly change its existing business relationship with the
Company, either now or in the foreseeable future, or (y) fail to renew
or extend its existing business relationship with the Company at the
end of the term of any existing contractual arrangement such supplier
or customer may have with the Company.
(o) Related Party Transactions. Except as set forth in Schedule
--------------------------
7.2(o)(1) hereto, no Affiliate, and, to the best knowledge of the
Company, no Officer, Director or more than 5% Stockholder, Permitted
Transferee of any such Stockholder, or member of the current
management of Cyberfast, either (x) has lent or borrowed any monies to
or from or has outstanding any indebtedness or other similar
obligations to the Company, (y) owns any direct or indirect interest
of any kind (except with respect to the ownership of not more than
five percent (5%) of any class of equity security in a publicly-held
company) in, or is a director, officer, employee, partner, affiliate
or associate of or consultant or lender to, or borrower from, or has
the right to participate in the management, operations or profits of,
any person or entity which
17
is (A) a competitor, supplier or distributor of the Company, (B)
engaged in a business related to the business of the Company or (C)
participating in, or has participated in, any material transaction to
which the Company is a party, (iii) is otherwise a party to, or has
been a party to, any contract, arrangement or understanding with the
Company or (iv) owns or has any rights in any assets (including,
without limitation, Intellectual Property), properties, licenses or
rights which are used or leased (or were used or leased) by the
Company in the conduct of its business.
(p) Subsidiaries: Schedule 7.2(p) accurately lists any subsidiaries
-------------
or other entities in which the Company owns an interest. The
representations and warranties provided under this Article 8 by the
Company shall extend and apply also to any such subsidiaries and
entities.
(q) Machinery, Equipment, Vehicles, and Personal Property. Except as
-----------------------------------------------------
set forth on Schedule 7.2(q)(1), Company has good and merchantable
right, title, and interest in and to, or a leasehold interest in and
to, all its machinery, equipment, vehicles, and other personal
property reflected in the [Latest Balance Sheet] and purchased or
otherwise acquired since the date of the [Latest Balance Sheet]
(except for such items sold or leased in the ordinary course of
business since the date of the [Latest Balance Sheet]). All of such
leasehold interests relating to machinery, equipment, vehicles, and
other personal property are valid, in full force and effect, and
enforceable in accordance with their terms, and there does not exist
any violation, breach, or default thereof or thereunder. None of such
machinery, equipment, vehicles, or other personal property owned by
the Company is subject to any Encumbrance (whether or not of record).
All machinery, equipment, vehicles, or other personal property of the
Company that are necessary to the conduct of its business are in good
operating condition and repair and fit for the intended purposes
thereof and no material maintenance, replacement, or repair has been
deferred or neglected.
(r) Inventories. Except as set forth in Schedule 7.2(r)(1), all
-----------
inventory of the Company, whether reflected in the [Latest Balance
Sheet] or otherwise, consists of a quality and quantity usable and
saleable in the ordinary course of business, and the present
quantities of all inventory of Company are reasonable in the present
circumstances of the businesses as currently conducted or as proposed
to be conducted.
(s) Receivables and Payables.
------------------------
(i) Except as set forth in Schedule 7.2(s)(1): (A) Company has
good right, title, and interest in and to all its accounts and notes
receivable, and trade notes and trade accounts reflected in the
[Latest Balance Sheet] and those acquired and generated since the date
of the [Latest Balance Sheet] (except for those paid since date of the
[Latest Balance Sheet]); (B) none of such accounts and notes
receivable, and trade notes and trade accounts is subject to any
mortgage, pledge, lien, or
18
security interest of any kind or nature (whether or not of record);
(C) except to the extent of applicable reserves shown in the [Latest
Balance Sheet], accounts and notes receivable, and trade notes and
trade accounts owing to the Company constitute valid and enforceable
claims arising from bona fide transactions in the ordinary course of
business and there are no claims, refusals to pay, or other rights of
set-off against any thereof; (D) no account or note debtor whose
account or note balance exceeds the amount set forth in the Schedules
at the date set forth therein was delinquent in payment by more than
ninety (90) days; (E) the aging schedule of the accounts and notes
receivable, and trade notes and trade accounts of Company previously
furnished to FATA is complete and accurate; and (F) there is no reason
why any account or note receivable, or trade note or trade account
will not be collected in accordance with its terms, other than for
such accounts and notes which are not in excess of the reserves
established therefor and reflected in the [Latest Balance Sheet].
(ii) All accounts payable and notes payable by Company arose in
bona fide transactions in the ordinary course of business and no such
account payable or note payable is delinquent by more than ninety (90)
days in its payment.
(t) Dealers and Suppliers. Except as set forth in Schedule
---------------------
7.2(t)(1), there has not been in the twelve (12) month period prior to
the date hereof any adverse change in the business relationship of
Company with any dealer or supplier to Company.
(u) Permits and other Operating Rights. Except as set forth in
----------------------------------
Schedule 7.2(u)(1), to the best of the knowledge of the Company, the
Company does not require the Consent of any Governmental Entities to
permit it to operate in the manner in which it is presently being
operated, and possesses all permits and other authorizations from all
Governmental Entities presently required to permit it to operate its
businesses in the manner in which they are presently conducted.
(v) F.C.P.A.. To the best of the knowledge of the Company, the
---------
Company is in compliance with the U.S. Foreign Currupt Practices Act
and (i) has not paid, promised to pay or authorized the payment of
money, gifts, or anything of value to a foreign official or political
party to obtain or retain business and (ii) does not know or have
reason to know that anything of value has been or will be offered,
directly or indirectly, to a foreign official or political party.
(w) Bank Accounts; Power to Attorney. Schedule 7.2(y) sets forth:
--------------------------------
(i) the names of all financial institutions, investment banking and
brokerage houses, and other similar institutions at which the Company
maintains accounts, deposits, safe deposit boxes of any nature, and
the names of all persons authorized to draw thereon or make
withdrawals therefrom; (ii) the terms and conditions thereof and any
limitations or restrictions as to use, withdrawal or otherwise; and
(iii) the names of all persons or entities holding general or special
powers of attorney from the Company and a summary of the terms
thereof.
19
(x) Schedules. The Schedules set forth under this Article 7 are
---------
intended for reference only and, unless otherwise expressly specified,
do not imply any acceptance by FATA of the consequences possibly
arising from the facts described therein. In particular, the Company
represents and warrants that no Company Material Adverse Effect would
result or derive - individually or in the aggregate - from any and all
such facts and Schedules.
(y) No Misrepresentation. Neither this Agreement (including the
--------------------
Schedules hereto), nor any information supplied by or on behalf of the
Company or any of the Controlling Stockholders to FATA, in connection
with this Agreement, or the transactions contemplated hereby, contains
or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary to make the statements
contained herein or therein, in light of the circumstances under which
they were made, not misleading. To the best knowledge of the Company,
there exist no facts or circumstances which are reasonably likely to
cause a Company Material Adverse Effect after the date hereof
(including after giving effect to the consummation of the transactions
contemplated pursuant to this Agreement), which have not been set
forth in the Financial Statements or disclosed with specificity in a
schedule attached to this Agreement.
7.3 Representations, Warranties and Covenants of FATA. In addition to the
-------------------------------------------------
representations and warranties set forth in Section 7.1 above, FATA hereby
represents, warrants and covenants to Cyberfast that:
(a) Capital Structure. Attached hereto as Schedule 7.3(a)(1) is a
-----------------
true and complete copy of the By-Laws, as in effect on the date hereof.
Schedule 7.3 (a)(2) sets forth the capital structure of FATA.
(b) Compliance with Laws. FATA has not committed violations of any
--------------------
Laws applicable to it that may substantially affect or prevent the
consummation of this transaction.
(c) Financial Advisors. Except as set forth on Schedule 7.3(c), no
------------------
person or entity has acted directly or indirectly as a broker, finder or
financial advisor for or to FATA in connection with the negotiations
relating to the transactions contemplated by this Agreement, that may be
entitled to claim from the Company any fee or commission or like payment,
or expense reimbursement, in respect of this Agreement or any of the
transactions contemplated hereby or thereby.
(d) Financial Statements. Attached hereto as Schedule 7.3(d) are
--------------------
true, correct and complete copies of the last balance sheet of FATA.
(e) Schedules. The Schedules set forth under this Article 7 are
---------
intended for reference only and, unless otherwise expressly specified, do
not imply any acceptance by Cyberfast of the consequences possibly arising
from the facts described therein.
20
(f) No Misrepresentation. Neither this Agreement (including the
--------------------
Schedules hereto), nor any information supplied by or on behalf of FATA to
the Company, in connection with this Agreement, or the transactions
contemplated hereby, contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to
make the statements contained herein or therein, in light of the
circumstances under which they were made, not misleading.
ARTICLE VIII
MISCELLANEOUS COVENANTS
8.1 Corporate Governance until Second Closing. From and after the date
-----------------------------------------
hereof and until the Second Closing, each Controlling Stockholder shall vote (to
the extent entitled to vote), at each regular or special meeting of stockholders
of the Company and/or - if he/she is also a Board member - at each Board meeting
(or in any written consent executed in lieu of such a meeting of stockholders or
board meeting) and shall take all actions reasonably necessary, including - but
not limited to - causing the calling of any such meeting that is necessary, to
ensure that:
a. the Charter Documents do not, at any time, conflict with the
provisions of this Agreement and no other revision shall be made
thereto;
b. the Charter Documents and/or any other relevant documentation are
amended as requested by this Agreement;
c. after the First Closing a person nominated by FATA is appointed
as Board member;
d. should at any time after the date hereof become necessary to
appoint a new member of the Board, this will be done only with
FATA's prior consent on the name of the appointee;
e. effective at the Second Closing, three other members of the Board
resign to allow the election by FATA of a total of four (4) new
Board Members out of a total of seven, at the Second Closing
f. the Company is managed in accordance with the provisions of this
Agreement and all the obligations that this Agreement provides to
be fulfilled before Second Closing are complied with.
8.2 Agreements as to Specified Matters. (a) Except as expressly set forth
----------------------------------
in this Agreement and except in the ordinary course of business and consistent
with past practice, and except as may be otherwise agreed to in writing by FATA,
from the date hereof until the Second Closing, the Controlling Stockholders
shall not permit the Company and the Company shall not:
(i) Amend its articles or certificate of incorporation or
bylaws, or other relevant corporate document, unless insofar as
necessary to implement the provisions of this Agreement;
(ii) Borrow or agree to borrow any funds;
(iii) Incur assume, suffer, or become subject to, whether
directly or by way of guarantee or otherwise, any claims, obligations,
liabilities, or loss
21
contingencies which, individually or in the aggregate, are material to
the conduct of the business of Company or have or would have a Company
Material Adverse Affect on the financial condition of Company;
(iv) Pay, discharge, or satisfy any material claims,
liabilities, or obligations;
(v) Permit or allow any of its properties or assets material
to the operation of its businesses to be subjected to any mortgage,
pledge, lien, security interest, encumbrance, restriction, or charge
of any kind;
(vi) Write down the value of any inventory or write off as
uncollectable any notes or accounts receivable or any trade accounts
or trade notes;
(vii) Cancel or amend any debts, waive any claims or rights to
sell, transfer, or otherwise dispose of any properties or assets,
other than for such debts, claims, rights, properties, or assets
which, individually or in the aggregate, are not material to the
conduct of its businesses;
(viii) License, sell, transfer, pledge, modify, disclose,
dispose of, or permit to lapse any right to the use of any
Intellectual Property other than for such Intellectual Property which,
individually or in the aggregate, are not material to the conduct of
its businesses;
(ix) Pay or set aside for payment any dividend or other
securities (including without limitation, distributions in redemption
or liquidation) or redeem, purchase, or otherwise acquire any such
shares of its Capital Stock or other securities;
(x) Authorize and/or perform any kind of operation on the
capital stock of Cyberfast (such as increase in the capital stock, or
issuance of any other shares of capital stock, options, warrants,
debentures or other similar instruments that are or may be convertible
into capital stock), except for issuance of additional Capital Stock,
consequent to the exercise of any of the now and thereafter existing
and outstanding Derivatives, except for any accelerated vesting of
options that may be necessary to carry out the terms of this
agreement.
(xi) Sell, transfer, or otherwise dispose of any properties or
assets to, or enter into any agreement or arrangement with, any
director, officer, employee, or Stockholder relating hereto;
(xii) Enter into any contractual or other arrangement with any
of the Stockholders or any of their respective Affiliates; or effect
any transaction (including, without limitation, the payment of any
amounts or the delivery of any goods or services) with any of the
Stockholders or any of their respective Affiliates;
22
(xiii) Agree, whether in writing or otherwise, to take any
action described in this subsection.
8.3 No operations on Cyberfast's capital or Shares. In addition to what
----------------------------------------------
has been provided under Section 7.2(x), before the Second Closing the
Controlling Stockholders shall not sell or purchase or otherwise subscribe for
any Capital Stock of Cyberfast;
8.4 Shareholders' loans. The parties agree that any present or
-------------------
future shareholder loans to Cyberfast (including Mr. and ▇▇▇. ▇▇▇▇▇▇▇▇▇'▇
current loan), will be reimbursed only according to a plan based on available
cash flow, and in any case, without affecting the operations of the Company.
However, it is also agreed that, should the operations of the Company, as
reflected in the Business Plan, require that the Controlling Stockholders pay
new finance into the Company as shareholder's loan before the date of the First
Closing, such contributions, provided that they have been authorized by FATA and
within a maximum amount of two hundred thousand dollars (US $200,000), can be
reimbursed immediately after the First Closing.
8.5 No Solicitation of Alternate Transaction. Until July 31, 2000 and,
----------------------------------------
after the occurrence of the First Closing, until the earlier of (i) the date
FATA exercise its Put Option pursuant to Section 6.1; or (ii) the date on which
FATA informs the Company that it does not intend to proceed with the Second
Closing; or (iii) November 30, 2000, the Controlling Stockholders and Company
shall not, and shall each use its best efforts to ensure that Company's
stockholders and Company directors, officers and employees, independent
contractors, consultants, counsel, accountants, investment advisors, and other
representatives and agents shall not, directly or indirectly, solicit, initiate,
or encourage discussions or negotiations with, provide any nonpublic information
to, or enter into any agreement with, any third party concerning (or concerning
the business of the Company in connection with) any tender offer (including a
self tender offer), exchange offer, merger, consolidation, sale of substantial
assets or of a significant amount of assets, sale of securities, acquisition of
a beneficial ownership of or the right to vote securities representing any
voting power or (except as permitted herein) Capital Stock of the Company,
liquidation, dissolution, or similar transactions involving Company or any
division of Company.
8.6 Non competition - Key employees of Cyberfast. The Controlling
--------------------------------------------
Stockholders hereby agree that they will not engage, directly or indirectly, in
any activity that may be in competition with Cyberfast for: (i) all the time
that they will hold shares of Cyberfast, and for a period of at least two years
thereafter, or (ii) pursuant to existing employment agreements between Cyberfast
and the respective employee, whichever length of time is the greatest. Cyberfast
has executed employment agreements with current management consistent with the
conditions set forth in this sub-paragraph 8.6. In any event, after the Second
Closing Data, FATA reserves the right to review and discuss with the management
the terms (including, but not limited to, the economical terms and any stock
option plan) of any such agreement that has not been executed, whether before or
after the date hereof, with FATA's prior consent.
8.7 Full Access to FATA. After the First Closing and through November 30,
-------------------
2000, the Controlling Stockholders shall cause the Company and the Company shall
afford to FATA and its directors, officers and employees, consultants, counsel,
accountants, investment advisors, and other
23
authorized representatives and agents free and full access to the facilities,
properties, and books of the Company, and shall instruct Cyberfast's lawyers to
provide them all necessary assistance, information and documents to satisfy
FATA's requests, in order that FATA may have full opportunity to make such
investigations as it shall desire to make of the affairs of Company and may
complete its general due diligence; provided, however, that any such
investigation shall be conducted in such a manner as not to interfere
unreasonably with business operations; and the Controlling Stockholders and the
Company shall furnish such additional financial and operating data and other
information as FATA shall, from time to time, reasonably request, including,
without limitation, access to the working papers of their independent certified
public accountants; and provided, further, that any such investigation shall not
affect or otherwise diminish or obviate, in any respect, any of the
representations and warranties of Stockholders herein.
8.8 FATA Manager to work with Cyberfast. After the First Closing, FATA
-----------------------------------
will appoint and send to Boca Raton a manager to assist and work together with
Cyberfast management, in order to enhance the knowledge of the business and
develop common managerial practices. The manager shall be elected a member of
Cyberfast Board, as provided herein. The relevant costs shall be borne by FATA
until the Second Closing Date.
8.9 Confidentiality. The Confidentiality Agreement executed by FATA
---------------
and Cyberfast on May 5, 2000 shall remain in full force and effect also with
reference to this Agreement.
8.10 Filings; Consents; Removal of Objections; Exchange Listing.
----------------------------------------------------------
Subject to the terms and conditions contained herein, the parties hereto shall
use their best efforts to take or cause to be taken all actions, and do or cause
to be done all things necessary, proper, or advisable under applicable Laws to
consummate and make effective, as soon as reasonably practicable, the
transactions contemplated hereby, including without limitation, obtaining all
Consents of any person or entity, whether private or governmental, required in
connection with the consummation of the transactions contemplated herein. In
furtherance, and not in limitation of the foregoing, it is the intent of the
parties to consummate the transactions contemplated herein at the earliest
practicable time. In particular, Cyberfast shall at the earliest practicable
time shall seek to obtain the re-qualification of the Company for the purposes
of a listing agreement on a national stock exchange.
The Parties hereto agree, accept and acknowledge that a necessary element
of this Agreement shall be their common efforts to obtain a listing of Cyberfast
securities on a national securities exchange, the NASDAQ Small Capital, or
NASDAQ National Market System, as the case may be.
8.11 Further Assurances; Cooperation; Notification.
---------------------------------------------
(i) Each party hereto shall, before, at, and after Second Closing,
execute and deliver such instruments and take such other actions as the
other party or parties, as the case may be, may reasonably require in order
to carry out the intent of this Agreement.
(ii) At all times from the date hereof until Second Closing, each
party shall promptly notify the other in writing of the occurrence of any
event which it reasonable
24
believes will or may result in a failure by such party to satisfy any of
the conditions specified in this Agreement. Such notification shall have no
effect of relieving such party from its liability, if any, in connection
with such event and/or failure.
8.12 Supplements to Schedules. The Parties acknowledge that most of
------------------------
the Schedules will be defined and prepared after First Closing. Prior to Second
Closing, the Company shall complete all Schedules and will supplement or amend
the Schedules with respect to any event or development which, if existing or
occurring at or prior to the date of this Agreement, would have been required to
be set forth or described in the Schedules, or which is necessary to correct any
information in the Schedules or in any representation or warranty of Company
which has been rendered inaccurate by reason of such event or development.
However, for the purposes of determining the truth and accuracy as of the date
hereof of the representations and warranties of Company and Controlling
Stockholders contained in this Agreement and in order to determine the
fulfillment of any of the conditions set forth in this Agreement, the Schedules
shall be deemed to exclude any information contained in any supplement or
amendment hereto delivered after the delivery of any such Schedule, or otherwise
prepared after the execution of this Agreement, unless the relevant information
had already been communicated to or was known by FATA before the execution of
this Agreement.
8.13 Public Announcement. None of the parties hereto shall disclose or
-------------------
make any public announcement with respect to the transactions contemplated
herein without the prior written consent of the other parties, which consent
shall not be unreasonable withheld or delayed; provided, however, that any of
the parties hereto may at any time make any announcements which are required by
applicable law so long as the party so required to make an announcement promptly
upon learning of such requirement notifies the other parties of such requirement
and discusses with the other parties in good faith the exact proposed wording of
any such announcement.
8.14 Financial Reports. Prior to Second Closing, the Company shall
-----------------
prepare and distribute to FATA, following the end of each fiscal quarter of the
Company, an unaudited balance sheet of the Company as at the end of the fiscal
quarter in question and the related unaudited, statements of earnings,
Stockholders' equity and cash flows of the Company for the three-month period
then ended (each such set financial statements, the "Periodic Financial
Statements"). Each set of Periodic Financial Statements shall be delivered to
FATA as soon as reasonably practicable after the end of the applicable financial
period (but in any event no later than forty-five (45) days after the end of the
fiscal quarter in question, or, with respect to any fiscal year-end financial
statements, ninety (90) days after the end of the fiscal year in question). All
Periodic Financial Statements shall be prepared in accordance with the books and
records of the Company, shall be complete and correct in all material respects,
shall have each been prepared in accordance with GAAP and shall present fairly
the consolidated financial position, results of operations and changes in
financial position or cash flows, whichever is applicable, of the Company as at
the dates and for the periods indicated (subject, in the case of any interim,
unaudited Periodic Financial Statements, to normal year-end audit adjustments).
8.15 Stock Certificate Legend. A copy of this Agreement shall be filed
------------------------
with the corporate secretary of the Company and kept with the records of the
Company. Each of the parties agree that whatever legends (if any) are required
under the 1933 Securities Act and/or the 1934
25
Securities Exchange Act and consistent with this Investment Agreement are placed
on the certificates representing any shares of Capital Stock owned by them. The
parties to this agreement shall be bound by the requirements of such legend to
the extent that such legend is applicable. Upon any registration of any Capital
Stock under the appropriate securities act, and pursuant to an IPO, the
certificate representing such shares shall, if appropriate, be replaced, at the
expense of the Company, with certificates which do not bear the legend referred
to above.
ARTICLE IX
SURVIVAL AND GENERAL INDEMNIFICATION
9.1 Survival and General Indemnification.
------------------------------------
(a) Survival. Unless expressly set forth herein, the representations
--------
and warranties of each of the parties hereto shall survive the Second Closing.
(b) Indemnification by FATA. FATA agrees to indemnify the Company
-----------------------
from and against any and all loss, liability, or damage suffered or incurred by
it by reason of: (i) any untrue representation of, or breach of warranty by,
FATA, in any part of this Agreement, provided, however, that no claim for
indemnity may be made pursuant to this subsection after eighteen (18) months
from the Second Closing; and (ii) any non-fulfillment of any covenant,
agreement, or undertaking of FATA in any part of this Agreement which by its
terms is to remain in effect after the Second Closing and has not been
specifically waived in writing at the Second Closing by the party or parties
hereof entitled to the benefits thereof. Such indemnification shall include any
and all costs and expenses, including without limitation, legal fees and
expenses, in connection with enforcing the indemnification rights of the
Company.
(c) Indemnification by - Untrue Representation or Breach of Warranty.
----------------------------------------------------------------
The Company agrees to indemnify FATA from and against any and all loss,
liability, or damage suffered or incurred by it by reason of: (i) any
untrue representation of, or breach of warranty by, any Stockholder in this
Agreement, provided, however, that no claim for indemnity may be made
pursuant to this subsection after eighteen (18) months from the Second
Closing; and (ii) any non-fulfillment of any covenant, agreement, or
undertaking of any Controlling Stockholder in this Agreement which by its
terms is to remain in effect after the Second Closing and has not been
specifically waived in writing at the Second Closing by the party or
parties hereof entitled to the benefits thereof. Such indemnification shall
include any and all costs and expenses, including without limitation, legal
fees and expenses, in connection with enforcing the indemnification rights
of FATA.
(d) Exemption from Indemnification by the Controlling Stockholders.
-------------- -----------------------------------------------
The Controlling Stockholders shall not be responsible for a breach of
warranty that it is solely attributable to the action of another director
or officer of the Company and of which the Controlling Shareholders were
not (nor should have been) aware of.
26
(e) Basket Amount. Notwithstanding anything in this Article 9 to the
-------------
contrary, FATA shall not be entitled to any indemnification under such
subsections if the aggregate amount of all claims thereunder is less than
two hundred thousand U.S. dollars ($200,000) (the "Exception Amount"), but
if the aggregate amount of all claims equals or exceeds the Exception
Amount, then FATA shall be entitled to full indemnification of all claims
and there shall be no Exception Amount. The parties hereto do not intend
that the Exception Amount be deemed to be a definition of what is
"material" for any purpose in this Agreement.
(f) Claims for Indemnification. The parties intend that all
--------------------------
indemnification claims hereunder be made as promptly as practicable by the
party seeking indemnification (the "Indemnified Party"). Whenever any
claim shall arise for indemnification hereunder, the Indemnified Party
shall promptly notify the party from whom indemnification is sought (the
"Indemnifying Party") of the claim and, when known, the facts constituting
the basis for such claim. In the case of claim against the Controlling
Stockholders, the notification shall be made jointly to the Stockholders
identified on the signature page hereof at the address specified under Art.
11.5. In the case of any such claim for indemnification hereunder
resulting from or in connection to any claim or legal proceedings of a
third party, the notice to the Indemnifying Party shall specify, if known,
the amount or an estimate of the amount of the liability arising therefrom.
The Indemnified Party shall not settle or compromise any claim by a third
party for which it is entitled to indemnification, or is not entitled to
indemnification in the amount claimed in such notice, it shall deliver,
within ten (10) Business Days after the receipt of such notice, a written
objection to such claim and written specifications in reasonable detail of
the aspects or details objected to, and the grounds for such objection. If
the Indemnifying Party shall file timely written notice of objection to any
claim for indemnification, the validity and amount of such claim shall be
determined by arbitration pursuant to Section 11.1 hereof. If timely
notice of objection is not delivered, or if a claim by an Indemnified Party
is admitted in writing by an Indemnifying Party, or if an arbitration award
is made in favor of an Indemnified Party, the Indemnified Party, as a non-
exclusive remedy, shall have the right to set-off the amount of such claim
or award against any amount yet owed, whether due or to become due, by the
Indemnified Party or any subsidiary thereof to any Indemnifying Party by
reason of this Agreement or any agreement or arrangement or contract to be
entered into at the Second Closing.
ARTICLE X
SPECIFIC PERFORMANCE
10.1 Specific Performance. Each of the parties hereto acknowledges and
--------------------
agrees that in the event of any breach of this Agreement, the non-breaching
party or parties would be irreparably harmed, no adequate remedy at law would
exist and damages would be difficult to determine. It is accordingly agreed that
(x) in the event of a breach of any provision of this Agreement, the aggrieved
party may be entitled to specific performance of this Agreement (without the
necessity of proving actual damages and without posting bond or other security),
in addition to any other remedy to which such aggrieved party may be entitled at
law or in equity, and (y) each of the
27
parties hereto shall waive the defense in any action for specific performance or
other equitable relief that a remedy at law would be adequate.
ARTICLE XI
MISCELLANEOUS
11.1 Arbitration. Any controversies, disputes, actions, causes of
-----------
action, or other claims arising out of or in connection with the provisions of
this Agreement which cannot be settled by mutual agreement shall be finally
settled by arbitration in New York City, NY in accordance with the Rules of the
American Arbitration Association. The arbitrator may enter a default decision
against any party who fails to participate in the arbitration proceedings. The
decision of the arbitrator on the points in dispute will be final, unappealable
and binding and judgment on the award may be entered in any court having
jurisdiction thereof. So long as this Agreement has not previously been
terminated in accordance with its provisions, the parties shall continue their
performance under this Agreement while the arbitration proceeding is pending.
The arbitrator will be authorized to apportion its fees and expenses and the
reasonable attorney's fees and expenses of the parties hereto as the arbitrator
deems appropriate. In the absence of any such apportionment, the fees and
expense of the arbitrator will be borne equally by each party, and each party
will bear the fees and expenses of its own attorney. The parties agree that this
clause has been included to rapidly and inexpensively resolve any disputes
between them with respect to this Agreement, and that this clause shall be
grounds for dismissal of any court action commenced by either party with respect
to this Agreement, other than post-arbitration actions seeking to enforce an
arbitration award and actions seeking equitable, injunctive or other similar
relief.
11.2 Relationship of Parties. It is understood and agreed that the
-----------------------
relationship of the parties created under this Agreement is that of independent
contracting parties, and no partnership, joint venture, agency or other
relationship is intended or created hereby, nor shall either party nor any of it
affiliates, employees or representatives be construed to be an affiliate,
employee, agent or representative of the other party hereto. Except as otherwise
expressly set forth in this Agreement - and in particular without prejudice for
the "non competition" obligations binding Cyberfast's management and the
Controlling Stockholders - the parties hereto acknowledge and agree that each
party hereto shall be free to enter into any contractual, business or other
relationship(s) with any person with respect to any area of business.
11.3 Expenses. Except as otherwise expressly set forth in this
--------
Agreement, all costs and expenses, including all fees and expenses of attorneys,
accountants and other advisers, incurred in connection with this Agreement or
any matters related hereto, shall be paid by the party incurring such costs and
expenses.
11.4 Governing Law and Jurisdiction. This Agreement shall be governed
-------------------------------
by, and construed in accordance with, the laws of New York. The parties hereto
hereby consent and submit to the exclusive jurisdiction of New York with respect
to any suit, action or proceeding arising out of or in connection with this
Agreement. The parties further agree that, notwithstanding any contrary
provision of law, process will be sufficient and effective if and only if served
in accordance with the notice provisions set forth in Section 12.5 hereof.
28
11.5 Notices. For the purposes of this Agreement, all notices,
-------
requests, demands and other communications to be given hereunder shall be given
by hand or by overnight delivery service or by registered mail; and by telecopy.
Any notice delivered by hand shall become effective when received (which may be
established, without limitation, by the sender by receipt of written
confirmation of delivery signed by a person who is or purports to be an employee
of the receiving entity). Any notice delivered by overnight delivery service or
by registered mail shall become effective on the date of receipt (which may be
established, without limitation, by reference to evidence of delivery provided
by the overnight delivery service). Any such notice shall be addressed
expressly to the attention of the officer or individual named below for each
party and shall be addressed as follows:
If to Cyberfast:
Cyberfast Systems, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Fax ▇▇▇-▇▇▇-▇▇▇▇
Copy to:
. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, P.C.
Regency Plaza one
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. - ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
Fax ▇▇▇-▇▇▇-▇▇▇▇
If to the Controlling Shareholders:
▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇. ▇▇▇▇▇
Fax ▇▇▇ ▇▇▇ ▇▇▇▇
Copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (as above)
If to FATA:
FATA GROUP SpA
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇, ▇▇. ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (▇▇), ▇▇▇▇▇
Fax: ▇▇▇ ▇▇▇ ▇▇▇▇
Attn: Rag ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Copy to:
▇▇
▇▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇'▇▇▇▇▇
Pavia e Ansaldo
▇▇▇ ▇▇▇▇' ▇▇▇▇▇▇▇▇▇▇, ▇
▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇)
Fax: ▇▇-▇▇▇▇▇▇▇
11.6 Entire Agreement: Waivers; Amendments. This Agreement, together
-------------------------------------
with the schedules and Exhibits attached hereto, constitute the entire agreement
between the parties as to the subject matter hereof, and shall supersede (with
the only exception of the Confidentiality Agreement dated May 5, 2000 - to the
extent that their provisions have not been clearly amended or derogated from by
the provisions of this Agreement) all prior understandings, letters, agreements,
contracts and other documents. No failure or delay by any party to exercise, and
no course of dealing with respect to, any right of any such party regarding an
obligation of any other party to this Agreement, shall operate as a waiver
thereof, unless agreed to in writing by the parties in question. Any single or
partial waiver by either party of any obligation of the other party under this
Agreement shall constitute a waiver of such obligation only as specified in such
waiver and shall not constitute a waiver of any other obligation; in addition,
no single or partial exercise of any power or right shall preclude any party's
other or further exercise or the exercise of any other power or right. This
Agreement may not be amended, modified or supplemented, and no waivers of,
consents to or departures from the provisions hereof may be given, without the
prior written consent of the Company and FATA and/or any then current
controlling stockholder(s) owning in the aggregate at least a 51% Share
Ownership Interest.
11.7 Construction: Headings. The construction and interpretation of this
----------------------
Agreement shall not be strictly construed against the drafter. The headings in
this Agreement are for reference only, and shall not affect the interpretation
of this Agreement.
11.8 Successors; Assigns: Transferees. The provisions of this Agreement
--------------------------------
shall be binding upon and accrue to the benefit of the parties hereto and their
respective heirs, permitted successors and permitted assigns and legal
representatives. Unless specifically provided by this Agreement, neither this
Agreement nor any right hereunder may be assigned, whether voluntarily or by
operation of law, by either party hereto without the prior written consent of
the other party hereto (which consent may not be unreasonably withheld);
provided that no such consent shall be necessary for such an assignment,
transfer or delegation by any party hereto to any of its Affiliates, so long as
such assigning party remains liable with respect to its obligations hereunder
and such Affiliate enters into a supplementary agreement.
11.9 No Third Party Beneficiaries; Defaults. Nothing in this Agreement
--------------------------------------
is intended to confer any rights or remedies on any person or entity which is
not a party to this Agreement. A default by any party to this Agreement in such
party's compliance with any of the conditions or covenants hereof or performance
of any of the obligations of such party hereunder shall not constitute a default
by any other party.
11.10 Severability. The invalidity or unenforceability of any provision
------------
of this Agreement in any jurisdiction shall not affect the validity, legality or
enforceability of the remainder of this Agreement in such jurisdiction or the
validity, legality or enforceability of this Agreement,
30
including any such provision, in any other jurisdiction, it being intended that
all rights and obligations of the parties hereunder shall be enforceable to the
fullest extent permitted by law.
11.11 Further Assurances. Each party hereto or person or entity subject
------------------
hereto shall do and perform or cause to be done and performed all such further
acts and things and shall execute and deliver all such other agreements,
certificates, instruments and documents as any other party hereto or person or
entity subject hereto may reasonably request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
11.12 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same Agreement.
11.13 Interpretation. The parties hereto agree that, whenever any matter
--------------
is stated in this Agreement to be (a) to the "knowledge of the Company" or to
the "best knowledge of the Company", such reference shall be deemed to include
the knowledge of each of the officers and directors of the Company, in each case
after reasonable inquiry by such persons as to such matter, and (b) "in the
ordinary course of the Company's business" or any phrase of similar meaning,
such reference shall be deemed to refer to the ordinary course of the Company's
business, consistent with the normal business practices of companies in the same
industry as the Company and, where applicable, entered into on an arm's length
basis.
11.14 Recapitalization. etc. In the event that any capital stock or
---------------------
other securities are issued in respect of, in exchange for, or in substitution
of, any shares of Capital Stock by reason of any reorganization, any
recapitalization, reclassification, merger consolidation, spin-off, partial or
complete liquidation, stock dividend, split-up, sale of assets, distribution to
stockholders or combination of the shares of Capital Stock or any other change
in the Company's capital structure, appropriate adjustments shall be made in the
percentages specified herein.
31
IN WITNESS WHEREOF, the parties have caused their respective representatives to
execute this agreement as of the date affixed above.
Cyberfast Systems, Inc.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
________________________________________________________________________________
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Chairman/Chief Executive Officer
Controlling Shareholders
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
________________________________________________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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The FATA Group S.p.A.
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Managing Director
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