Communications World International, Inc.
Form 8K
Exhibit 2.1
ASSET PURCHASE AGREEMENT
BY AND AMONG
COMMWORLD ACQUISITION CORPORATION,
COMMUNICATIONS WORLD INTERNATIONAL, INC.,
AND
ALLSTAR SYSTEMS, INC.
Dated as of March 16, 2000
TABLE OF CONTENTS
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Page No.
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[To be provided]
LIST OF EXHIBITS
Exhibit A - Form of Assumption Agreement
Exhibit B - Form of Xxxx of Sale and Assignment
Exhibit C - Purchase Price Allocation
Exhibit D - Form of Opinion of Seller's Counsel
Exhibit E - Form of Furniture and Equipment Lease
Exhibit F - Form of License Agreement
Exhibit G - Form of Sublease Agreement
Exhibit H - Form of Noncompetition Agreement
Exhibit I - Form of Subscription Agreement
LIST OF SCHEDULES
Disclosure Schedules
Schedule 2.1(a) - Inventory
Schedule 2.1(b) - Customer List
Schedule 2.1(c) - Vehicle Leases
Schedule 2.1(d) - Transferred Projects and Transferred Project
Contracts
Schedule 2.1(e) - Vendor Contracts
Schedule 2.5 - Retained Projects and Retained Project Contracts
Schedule 2.8 - Warranty Obligations
Schedule 3.3 - Consents and Approvals
Schedule 3.5 - Liens
Schedule 3.6 - Investigation or Litigation
Schedule 3.9 - Insurance
Schedule 3.12 - Permits
Schedule 3.13 - Financial Statements
Schedule 5.7 - Transferred Employees
-i-
ASSET PURCHASE AGREEMENT
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This ASSET PURCHASE AGREEMENT (this "Agreement") is made as of March 16,
2000, by and among COMMWORLD ACQUISITION CORPORATION, a Texas corporation
("Purchaser"), COMMUNICATIONS WORLD INTERNATIONAL, INC., a Colorado corporation
("CWII"), and ALLSTAR SYSTEMS, INC., a Delaware corporation ("Seller").
In consideration of the mutual covenants and agreements contained herein,
the parties covenant and agree as follows:
1. DEFINITIONS
1.1 General Definitions. Unless otherwise stated in this Agreement, the
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following terms shall have the following meanings:
"1933 Act": As defined in Section 5.11(a) hereof.
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"Accounts Receivable": As defined in Section 5.14(a) hereof.
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"Affiliate": Any Person that, directly or indirectly, controls, or is
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controlled by or under common control with, another Person. For the purposes of
this definition, "control" (including the terms "controlled by" and "under
common control with"), as used with respect to any Person, means the power to
direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities or by
contract or otherwise.
"Assets": As defined in Section 2.1 hereof.
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"Assumed Obligations": As defined in Section 2.7(a) hereof.
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"Assumption Agreement": The Assumption Agreement in the form of Exhibit
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"A" attached hereto.
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"Xxxx of Sale and Assignment": The Xxxx of Sale and Assignment in the form
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of Exhibit "B" attached hereto.
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"Cap": As defined in Section 9.3 hereof.
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"Closing": As defined in Section 7.1 hereof.
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"Closing Date": As defined in Section 7.1 hereof.
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"Code": The Internal Revenue Code of 1986, as amended.
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ASSET PURCHASE AGREEMENT - Page 1
"Customer List": As defined in Section 2.1(b) hereof.
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"CWII Common Stock": As defined in Section 2.3 hereof.
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"Damages": As defined in Section 9 hereof.
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"Disclosure Schedules": The package of disclosure schedules to this
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Agreement delivered by Seller to Purchaser prior to the date hereof and
incorporated by reference to the Section of this Agreement to which each such
schedule relates.
"Environmental Requirements": All federal, state, foreign and local laws,
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statutes, codes, rules, regulations, ordinances, judgments, orders, decrees and
the like of any Governmental Body, and all obligations concerning public health
and safety, worker health and safety, or pollution or protection of the
environment, including all those relating to the presence, use, production,
generation, handling, transport, treatment, storage, disposal, distribution,
labeling, testing, processing, discharge, release, control or cleanup of any
hazardous or otherwise regulated materials, substances or wastes, chemical
substances or mixtures, pesticides, pollutants, contaminants, toxic chemicals,
petroleum products or byproducts, asbestos, polychlorinated biphenyls, noise or
radiation.
"Excluded Assets": As defined in Section 2.2 hereof.
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"Financial Statements": As defined in Section 3.13 hereof.
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"Furniture and Equipment Lease": The Furniture and Equipment Lease in the
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form of Exhibit "E" attached hereto.
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"GAAP": As defined in Section 2.3 hereof.
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"Governmental Body": Any court or any federal, state, municipal or other
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governmental department, commission, board, bureau, agency, authority or
instrumentality, domestic or foreign.
"Gross Revenue": As defined in Section 2.3 hereof.
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"Gross Revenue Period": As defined in Section 2.3 hereof.
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"Gross Revenue Statement": As defined in Section 2.4 hereof.
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"Indemnification Notice": As defined in Section 9.4 hereof.
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"Inventory": As defined in Section 2.1(a) hereof.
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"Knowledge": In the case of knowledge of Seller, "Knowledge" shall mean
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the actual knowledge of the directors and officers of Seller.
ASSET PURCHASE AGREEMENT - Page 2
"License Agreement": The License Agreement in the form of Exhibit "F"
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attached hereto.
"Lien": All mortgages, deeds of trust, claims, liens, security interests,
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pledges, leases, conditional sale contracts, rights of first refusal, options,
charges, liabilities, obligations, agreements, easements, rights-of-way, powers
of attorney, limitations, reservations, restrictions and other encumbrances of
any kind, other than (a) liens for taxes not yet due and payable and (b) liens
securing rental payments under the Vehicle Leases.
"Material Adverse Effect": Any change (individually or in the aggregate)
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in the general affairs, management, business, goodwill, results of operations,
condition (financial or otherwise), assets, liabilities or prospects (whether or
not the result thereof would be covered by insurance) that will or can
reasonably be expected to result in a cost, expense, charge, liability or
diminution in value of the Assets equal to or greater than $25,000.00.
"Noncompetition Agreement": The Noncompetition Agreement in the form of
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Exhibit "H" attached hereto.
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"Operative Documents": This Agreement, the Assumption Agreement, the Xxxx
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of Sale and Assignment, the Furniture and Equipment Lease, the License
Agreement, the Sublease Agreement, the Noncompetition Agreement, the
Subscription Agreement and all other agreements, instruments, documents,
schedules and certificates executed and delivered by or on behalf of Seller or
Purchaser at or before the Closing pursuant to this Agreement.
"Order": Any order, writ, injunction, decree, judgment, award or
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determination of any Governmental Body.
"Permits": All permits, authorizations, certificates, approvals,
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registrations, variances, exemptions, rights-of-way, franchises, privileges,
immunities, grants, ordinances, licenses and other rights of every kind and (a)
under any (1) federal, state, local or foreign statute, ordinance or regulation,
(2) Order or (3) contract with any Governmental Body or (b) granted by any
Governmental Body.
"Person": An individual, partnership, joint venture, corporation, company,
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limited liability company, bank, trust, unincorporated organization,
Governmental Body or other entity or group.
"Premises": The Subleased Real Property.
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"Proceeding": Any action, order, claim, suit, proceeding, litigation,
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investigation, inquiry, review or notice.
"Public Announcement": As defined in Section 5.10 hereof.
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"Purchase Price": As defined in Section 2.3 hereof.
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ASSET PURCHASE AGREEMENT - Page 3
"Purchaser Indemnitees": As defined in Section 9.1 hereof.
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"Registrable Securities": As defined in Section 5.11(a)(ii) hereof.
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"Retained Liabilities": As defined in Section 2.7(b) hereof.
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"Retained Project Contracts": As defined in Section 2.2(a) hereof.
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"Retained Projects": As defined in Section 2.5 hereof.
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"Run Rate": As defined in Section 2.3 hereof.
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"SEC": The Securities and Exchange Commission.
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"Seller Indemnitees": As defined in Section 9.2 hereof.
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"Sublease Agreement": The Sublease Agreement in the form of Exhibit "G"
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attached hereto.
"Subleased Real Property": A portion of the premises located at 6401
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Xxxxxxxxx Xxxxxxx, Xxxxxxx, Xxxxx 00000 which is subleased by Seller to
Purchaser pursuant to the Sublease Agreement.
"Subscription Agreement": The Subscription Agreement in the form of
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Exhibit "I" attached hereto.
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"Subsidiary" or "Subsidiaries": With respect to any corporation shall mean
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any other corporation of which at least a majority of the securities having by
their terms ordinary voting power to elect a majority of the Board of Directors
of such other corporation is at the time directly or indirectly owned or
controlled by such first corporation, or by such first corporation and one or
more of its Subsidiaries.
"Tax Obligations": Any Taxes which are attributable or related to the
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assets or the Telecom Division of Seller for any periods ending on or before the
Closing Date or which may be applicable because of the Transactions.
"Taxes": Any federal, state, local or foreign income, sales, excise, real
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or personal property or other taxes, assessments, fees, levies, imposts, duties,
deductions or other charges of any nature whatsoever (including, without
limitation, interest and penalties) imposed by any law, rule or regulation.
"Telecom Division": Means the business acquired or to be acquired by
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Purchaser pursuant to the Operative Documents, consisting of the Assets and the
Assumed Obligations (but not including the Excluded Assets), and which may be
more particularly described as the interconnect division of Seller known as
"Allstar Communications," located at 0000 Xxxxxxxxx Xxxxxxx, Xxxxxxx, Xxxxx.
ASSET PURCHASE AGREEMENT - Page 4
"Third Party Consents": As defined in Section 6.1(i) hereof.
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"Threatened": Any matter or thing will be deemed to have been Threatened
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when used herein with respect to any party if that party has received notice, in
writing, from the Person to whom the threat is attributable, or such Person's
agents, which makes specific reference to and clearly identifies the matter or
thing being threatened.
"Tools and Equipment": As defined in Section 5.13 hereof.
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"Transaction" or "Transactions": The acquisition of the Assets and the
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performance of the other covenants and transactions described in this Agreement.
"Transaction Expenses": The expenses incurred in connection with the
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preparation, negotiation, execution and performance of this Agreement and the
Transactions, including all fees and expenses of counsel and representatives.
"Transferred Project Contracts": As defined in Section 2.1(d) hereof.
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"Transferred Project Payment": As defined in Section 2.1(d) hereof.
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"Transferred Projects": As defined in Section 2.1(d) hereof.
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"Unidentified Payment": As defined in Section 5.14(a)(f) hereof.
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"Vendor Contracts": As defined in Section 2.1 (e) hereof.
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"Warranty Obligations": As defined in Section 2.8 hereof.
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Other defined terms shall have the meanings ascribed to such terms
elsewhere herein.
2. SALE OF ASSETS; ASSUMPTION OF CERTAIN LIABILITIES
2.1 Agreement to Purchase and Sell. Subject to the applicable terms and
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conditions of this Agreement, at the Closing, Seller shall sell, transfer,
assign, convey and deliver to Purchaser, and Purchaser shall purchase from
Seller, the following assets (such assets, specifically excluding the Excluded
Assets, being collectively referred to as the "Assets"):
(a) Inventory. All inventory, parts, raw materials, supplies and
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other materials held or used by the Telecom Division, including, without
limitation, those items listed on Schedule 2.1(a) hereto (the "Inventory");
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(b) Customer List. The list of all past and current customers of
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the Telecom Division, including, without limitation, those customers listed
on Schedule 2.1(b) hereto (the "Customer List");
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ASSET PURCHASE AGREEMENT - Page 5
(c) Vehicle Leases. The vehicle leases described on Schedule 2.1(c)
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hereto (the "Vehicle Leases");
(d) Transferred Projects. The outstanding projects of the Telecom
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Division, including, without limitation, all work-in-progress, labor,
parts, equipment, materials and the purchaser orders, customer contracts
and other written agreements with customers (the "Transferred Project
Contracts") for such projects, described on Schedule 2.1(d) hereto (the
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"Transferred Projects"). In addition to any other consideration to be paid
by Purchaser to Seller under this Agreement, Purchaser agrees to pay
Seller, on or before ninety (90) days from the date of this Agreement, the
sum of $1,496.00 for the Transferred Projects (collectively, the
"Transferred Project Payment"). CWII hereby guarantees Purchaser's payment
of the Transferred Project Payment to Seller in accordance with this
Section 2.1(d). The full amounts of any customer deposits or payments made
to Seller with respect to the Transferred Projects shall be deducted by
Purchaser from such payment;
(e) Vendor Contracts. The vendor contracts of the Telecom Division
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described on Schedule 2.1(e) hereto to the extent that an assignment is
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permitted thereunder (the "Vendor Contracts"). No Vendor Contract shall be
assigned from Seller to Purchaser until the applicable Third Party Consent
has been obtained and Purchaser agrees not to require any assignment if the
vendor requires that Purchaser or CWII enter into a new contract.
(h) Documents and Plans. All documents, correspondence, lists,
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plats, architectural plans, drawings and specifications, creative
materials, studies, reports, and other printed or written materials of or
used by the Telecom Division in connection with the Transferred Projects;
(i) Warranty Rights. To the extent transferable, the benefit of and
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the right to enforce warranties, if any, that Seller is entitled to enforce
covering all or any part of the Assets; and
(j) Telephone Numbers. The telephone and facsimile numbers
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specifically assigned for use by the Telecom Division, being (713) 795-
2200, (000) 000-0000, (000) 000-0000 and (000) 000-0000, respectively.
2.2 Excluded Assets. Seller shall retain, and the Assets shall not
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include, any assets of Seller not expressly listed in Section 2.1 above (the
"Excluded Assets"), including, without limitation, the following:
(a) Retained Projects. The Retained Projects, including without
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limitation, all work-in-progress, labor, parts, equipment, materials and
the purchase orders, contracts and other written agreements for the
Retained Projects (the "Retained Project Contracts");
ASSET PURCHASE AGREEMENT - Page 6
(b) Inventory in Transit. Any inventory of equipment and materials
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in transit as of the Closing Date from the Telecom Division's suppliers or in
transit from the Telecom Division's suppliers directly to (or as ordered by) the
Telecom Division's customers (to the extent that any such items in transit
exist, the parties shall use their reasonable efforts to effect the commercially
reasonable disposition of same on terms and conditions that are mutually
acceptable to the parties);
(c) Non-Essential Assets. Assets not used by the Telecom Division;
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(d) Administrative Assets. Assets used by the Telecom Division to
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perform corporate and general administrative functions, including the Telecom
Division's accounting systems and computer hardware and software used to operate
such systems;
(e) Identity Assets. All of Seller's, and its subsidiaries', names
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and trade names and service marks, or names derived therefrom, other than as
licensed to Purchaser pursuant to the License Agreement;
(f) Accounts Receivable. All of the Telecom Division's accounts
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receivable, including receivables due from suppliers and rebates due from
suppliers and including receivables now and in the future under the Retained
Projects;
(g) Notes Receivable. All notes receivable;
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(h) Cash. All cash and cash equivalents;
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(i) Real Property. All real property (except to the extent of
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Purchaser's leasehold rights in the Subleased Real Property);
(j) Records. All accounting and tax records and customer and sales
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records of the Telecom Division (including originals and all customer lists),
all supplier and purchaser records of the Telecom Division, all personnel
records of the Telecom Division and all other books and records of the Telecom
Division; provided, however, that Seller hereby agrees to maintain such records
for a period of five (5) years after Closing and shall permit Purchaser to have
reasonable access to all such records and to make copies thereof to the extent
necessary and appropriate for its ownership and operation of the Assets of the
Telecom Division;
(k) Insurance Matters. All insurance proceeds, insurance claims,
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prepaid insurance premiums and claims for refunds of insurance premiums;
(l) Other Telephone Numbers. All of Seller's telephone and facsimile
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numbers other than those specifically assigned for use by the Telecom
Division; and
(m) Other Rights and Interests. All right, title and interest of
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Seller in and to all claims and causes of action relating or pertaining to
the Telecom Division to the extent accruing before the Closing Date.
ASSET PURCHASE AGREEMENT - Page 7
2.3 Purchase Price. Subject to the terms and conditions of this Agreement,
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in consideration for Purchaser's acquisition of the Assets, (a) Purchaser shall
pay Seller at Closing TWO HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS
($250,000.00) by certified or cashier's cash; and (b) CWII shall issue to
Seller, pursuant to Section 2.4 below, such number of shares of restricted
common stock, no par value per share, of CWII ("CWII Common Stock") as shall be
determined by dividing the Numerator by the Denominator (as such terms are
hereinafter defined); ((a) and (b) above, collectively, the "Purchase Price").
For purposes of this Agreement, the term (a) the "Numerator" shall be the
product of (i) $300,000.00, multiplied by (ii) the quotient of (A) the
difference between the product of the monthly average of the Gross Revenue
(hereinafter defined) of the Telecom Division for the months of August and
September 2000 (the "Gross Revenue Period") multiplied by twelve (12) (the "Run
Rate") (for purposes of this calculation, the Run Rate may not exceed
$6,000,000.00 and the maximum dollar amount of CWII Common Stock to be received
by Seller pursuant to this Section 2.3 and Section 2.4 below shall not exceed
$300,000.00), minus $3,000,000.00, (B) divided by $3,000,000.00, (b) the
"Denominator" shall be the average of the daily closing price for the CWII
Common Stock for the thirty (30) days in which trading occurs prior to the first
to occur of (i) Closing, and (ii) the Public Announcement, and (c) "Gross
Revenue" shall mean gross earnings as determined in accordance with Generally
Accepted Accounting Principles, consistently applied ("GAAP") and in accordance
with Purchaser's and CWII's normal revenue recognition policies. By way of
example, assuming that the monthly average Gross Revenue for the Telecom
Division for the Gross Revenue Period is $416,666.67 and the Denominator (i.e.
the average daily closing price) is $2.00, then the calculation of the number of
shares of CWII Common Stock to be received by Seller is as follows:
ASSET PURCHASE AGREEMENT - Page 8
Step Calculation Result
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1 Multiply Gross Revenue for Gross Revenue Period by 12 to $5,000,000.00
determine Gross Revenue on annualized basis (which may not
exceed $6,000,000.00)
($416,666.67 x 12)
2 Subtract $3,000,000.00 from annualized Gross Revenue determined $2,000,000.00
in Step 1
($5,000,000.00 - $3,000,000.00)
3 Divide result from Step 2 by $3,000,000.00 to determine 66 2/3 %
percentage of $300,000.00 of CWII Common Stock to be received
($2,000,000.00/$3,000,000.00)
4 Multiply percentage obtained from Step 3 by $300,000.00 to $200,000.00
determine dollar amount of CWII Common Stock to be received
($300,000.00 x 66 2/3%)
5 Divide dollar amount of CWII Common Stock to be received from 100,000 shares of
Step 4 by the Denominator (i.e. the average daily closing price) CWII Common Stock to
($200,000.00/2) be received
2.4 Determination of Gross Revenue. Within thirty (30) days after the
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Gross Revenue Period, Purchaser shall deliver to Seller a written statement (the
"Gross Revenue Statement") setting forth the monthly average Gross Revenue for
the Telecom Division for the Gross Revenue Period, together with a calculation
of the number of shares of CWII Common Stock to be received by Seller and such
supporting information as shall be reasonably necessary for Seller to confirm
such Gross Revenue. The Gross Revenue Statement shall be certified by the Chief
Financial Officer of Purchaser to the effect that such statement reflects the
monthly average Gross Revenue of the Telecom Division for the Gross Revenue
Period and that such Gross Revenue was determined consistent with GAAP and with
Purchaser's and CWII's normal revenue recognition policies. Within fifteen (15)
days after its receipt of the Gross Revenue Statement, Seller shall deliver to
the Chief Financial Officer of Purchaser a written acceptance of the Gross
Revenue reflected thereon or a written notice that Seller desires to review
Purchaser's and CWII's books and records related to the Telecom Division. Seller
shall complete any such review within thirty (30) days after its receipt of the
Gross Revenue Statement. To the extent that any such review indicates that the
Gross Revenue reflected on the Gross Revenue Statement was inaccurate, the Gross
Revenue and the applicable number of CWII Common Stock shall be increased or
decreased, as the case may be. If Purchaser and Seller are unable to resolve any
dispute concerning the monthly average Gross Revenue for the Gross Revenue
Period through the procedure outlined above, such unresolved dispute shall be
submitted for further determination to a nationally or regionally recognized
accounting firm to be mutually selected by Purchaser and Seller, and the
determination by such accounting firm shall be made within thirty (30) days
following the submission to them of such dispute and shall be binding upon
Seller and Purchaser. Seller and Purchaser shall each bear fifty percent (50%)
of the fees and expenses of such accounting firm resolving such dispute. After
the Gross Revenue for the Gross Revenue Period has been conclusively determined
pursuant to this Section 2.4, Purchaser shall promptly issue to Seller the
appropriate number of shares of CWII Stock. Cash shall be paid by Purchaser
ASSET PURCHASE AGREEMENT - Page 9
to Seller in lieu of any fractional shares. The certificates representing the
CWII Common Stock shall contain a restrictive legend with respect to the
requirements for the transfer thereof by Seller.
2.5 Completion of Retained Projects. Schedule 2.5 hereto contains a list
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of all outstanding projects of the Telecom Division (including the Retained
Project Contracts), other than the Transferred Projects, which outstanding
projects shall be retained by Seller and not constitute a Transferred Project
(the "Retained Projects"). Schedule 2.5 is intended to be a comprehensive list
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but the inadvertent omission of an outstanding project from the list shall not
result in such project being classified as a Transferred Project. Seller hereby
retains Purchaser to complete the Retained Projects on behalf of Seller, and
Purchaser agrees to complete the Retained Prospects on behalf of Seller and to
give the Retained Projects the same general priority, quality and timely
completion as it gives to its own projects. Purchaser shall charge Seller and
Seller agrees to pay Purchaser such amounts as are necessary to reimburse
Purchaser for the costs of labor (at $50 per hour), subcontractor labor (at its
actual cost), materials (at cost), out-of-pocket expenses (at cost) and
administrative overhead (in an amount equal to ten percent (10%) of the costs of
labor and subcontractor labor and out-of-pocket expenses) (collectively, the
"Retained Project Costs") incurred by Purchaser in completing the Retained
Project. Seller agrees to pay Purchaser for all charges incurred by Seller
pursuant to this Section 2.5 in accordance with Purchaser's standard payment
terms and policies. Seller agrees that the Retained Projects will be delivered
to the customers free and clear of all Liens. Purchaser agrees, at the sole cost
and expense of Seller, to use its reasonable efforts to assist Seller with the
collection of any payment on the Retained Projects.
2.6 Allocation. The Purchase Price shall be allocated among the Assets
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as set forth on Exhibit "C" attached hereto. Seller and Purchaser agree that
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they will not take any position on their income tax returns or on any other
document that is inconsistent with such allocation, and the parties shall duly
prepare and timely file such returns under the Code to report such allocation.
2.7 Assumption of Liabilities.
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(a) Assumed Obligations. Subject to and upon all of the terms and
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conditions of this Agreement, at the Closing, Purchaser shall assume and
agree to pay, perform and discharge the following obligations and
liabilities of Seller (collectively, the "Assumed Obligations"):
(i) Vehicle Leases. All executory obligations and related
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liabilities accruing exclusively after Closing, and based solely
upon events occurring after Closing, under the Vehicle Leases;
(ii) Warranty Obligations. All warranty and service obligations
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expressly set forth in the Transferred Project Contracts;
ASSET PURCHASE AGREEMENT - Page 10
(iii) Vendor Contracts. All executory obligations and related
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liabilities accruing exclusively after Closing, and based solely upon
events occurring after Closing, under the Vendor Contracts assigned to
Purchaser; and
(iv) Transferred Projects. All executory obligations and
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related liabilities expressly set forth in the Transferred Project
Contracts.
(b) Retained Liabilities. Except as provided in Section 2.7(a),
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Purchaser will not assume or agree to pay, perform or discharge, and shall
not be responsible for, any other liabilities or obligations of Seller
(collectively, "Retained Liabilities"), whether accrued, absolute,
contingent or otherwise, including without limitation, liabilities or
obligations based on, arising out of, or in connection with:
(i) Non-Telecom Division. Any expense, debt, obligation or
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other liability not relating to the Telecom Division;
(ii) Warranty Obligations. Except as provided in Section 2.8,
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any warranty and service obligation of Seller with respect to the
Telecom Division, other than those warranty and service obligations
expressly set forth in the Transferred Project Contracts;
(iii) Transaction Expenses. Any expenses incurred by Seller in
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connection with the negotiation, preparation, execution and
performance of the Transactions;
(iv) Pre-Closing. Any events or circumstances occurring prior
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to the Closing Date, other than the Assumed Liabilities;
(v) Taxes. Any Taxes which are attributable or relating to
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the Assets or the Telecom Division or Seller, for any periods ending
on or before the Closing Date, or which may be applicable to Seller
because of Seller's sale of the Telecom Division or any of the Assets
to Purchaser;
(vi) Leases and Indebtedness. Any lease obligations or
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indebtedness of Seller other than those executory obligations and
related liabilities accruing exclusively after Closing, and based upon
events occurring solely after Closing under the Vehicle Contracts and
the Vendor Contracts assigned to Purchaser;
(vii) Intellectual Property. Any unlicensed or unauthorized use
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by Seller of any trademark or other intellectual property rights;
(viii) Other Obligations. Any note, account payable or other
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obligation to any person, entity or Governmental Body, except to the
extent expressly assumed herein; and
ASSET PURCHASE AGREEMENT - Page 11
(ix) Claims or Conditions. Any claims or conditions, to the
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extent relating to the period on or prior to the Closing Date, arising
under any federal, state or foreign statutes, laws, ordinances,
regulations, rules, permits, judgments, orders or decrees attributable
or relating to the Assets (including, without limitation, the
operation thereof) or the Telecom Division or Seller.
2.8 Warranty. For a period of five (5) years after Closing, Purchaser
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agrees to provide Seller with service coverage on those standard warranty,
extended warranty and service contract obligations described on Schedule 2.8
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hereto relating to telephone equipment sold and/or installed by the Telecom
Division prior to the Closing Date on those projects also identified on Schedule
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2.8 hereto (the "Warranty Obligations"); provided, however, that Purchaser's
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Warranty Obligations shall not exceed $30,000.00 in the aggregate (the "Cap").
Purchaser shall provide to Seller monthly statements containing the amount of
Warranty Obligations performed by Purchaser for such month, as well as the total
amount of Warranty Obligations performed by Purchaser since Closing. Purchaser
shall charge Seller at the rate of $50.00 per hour (such hourly rate to be
increased by $5.00 on January 1, 2002), or the actual amount charged to
Purchaser if independent contractors are used to perform such work, plus all
out-of-pocket expenses incurred by Purchaser (the "Warranty Rate"). After the
Cap is exceeded, Seller shall pay Purchaser for all additional work performed by
Purchaser on the Projects in accordance with Purchaser's standard invoice terms
at the Warranty Rate, plus an overhead charge of ten percent (10%) on all labor,
costs (other than costs of materials) and expenses. Purchaser agrees to obtain
the consent of Seller prior to performing any single repair that is expected to
exceed $250.00.
2.9 Further Assurances. At the Closing, and at all times thereafter as may
------------------
be reasonably necessary, Seller, Purchaser and CWII shall each execute and
deliver to the other party such instruments of transfer as shall be reasonably
necessary or appropriate to vest in Purchaser title of the type specified herein
to the Assets and to otherwise comply with the terms, purposes and intent of
this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser and CWII that, except as
set forth in the Disclosure Schedules, the following are true and correct as of
the Closing:
3.1 Organization; Qualification. Seller is a corporation duly organized,
---------------------------
validly existing and in good standing under the laws of the State of Delaware.
Seller has full corporate power and authority to own and lease the Assets and to
carry on the business of the Telecom Division as it is now being conducted.
3.2 Authority Relative to this Agreement. Seller has full power and
------------------------------------
authority (corporate and otherwise) to execute, deliver and perform this
Agreement (including, without limitation, execution, delivery and performance of
the Operative Documents to which it is a party) and to consummate the
Transactions. The execution and delivery by Seller of this Agreement, and the
consummation of the Transactions, have been duly and validly authorized by the
Board of Directors of Seller and no other corporate proceedings on the part of
Seller are necessary with respect thereto. This Agreement has been duly and
validly executed and delivered by Seller, and constitutes a legal, valid and
binding obligation of Seller, enforceable
ASSET PURCHASE AGREEMENT - Page 12
against Seller in accordance with its terms. Seller will take all corporate
action that is necessary for Seller to complete the Transactions to be completed
by Seller pursuant to this Agreement.
3.3 Consents and Approvals. Except as set forth in Schedule 3.3, the
---------------------- ------------
execution, delivery and performance by Seller of this Agreement and the
consummation of the Transactions by Seller requires no consent, approval, order
or authorization of, action by or in respect of, or registration or filing with,
any Governmental Body or other Person, except as for those, if any, the failure
of which to obtain could not reasonably be expected to have a Material Adverse
Effect.
3.4 No Violations. The execution, delivery and performance of this
-------------
Agreement by Seller, the consummation by Seller of the Transactions and
compliance by Seller with the provisions hereof does not and will not (a)
conflict with or result in any breach or violation of any provision of the
Articles of Incorporation or Bylaws of Seller, (b) result in a default, or give
rise to any right of termination, cancellation or acceleration or loss of any
benefit under any of the provisions of any note, bond, mortgage, indenture,
license, trust, agreement, lease or other instrument or obligation to which
Seller is a party or by which Seller may be bound, except to the extent that
such result would not have a Material Adverse Effect, (c) result in the creation
or imposition of any Lien on any of the Assets, (d) violate any Order, statute,
rule or regulation applicable to Seller, except to the extent that such
violation would not have a Material Adverse Effect, or (e) violate any
territorial restriction on the Telecom Division or Seller or any noncompetition
or similar arrangement.
3.5 Title to and Condition of Assets and Property. Except as specifically
---------------------------------------------
set forth in Schedule 3.5 hereto, Seller has good title to, or a valid leasehold
------------
interest in, all of the Assets and the Assets are free and clear of all Liens.
To Seller's Knowledge, the Assets constitute all of the material assets and
properties, real and personal, tangible and intangible, that are held or used by
Seller in the conduct of the Telecom Division as presently being conducted.
3.6 Investigation or Litigation. Except as set forth on Schedule 3.6
--------------------------- ------------
hereto, there is no Proceeding pending or, to Seller's Knowledge, Threatened
against, relating to or affecting the Assets. Seller is not subject to any
currently existing Proceeding by any Governmental Body relating to or affecting
the Assets. To Seller's Knowledge, there is no basis for the assertion of any
Proceeding by any Governmental Body or any Person regarding any violation of
federal or state laws.
3.7 Taxes. All Taxes that are due and payable by Seller, other than those
-----
presently payable without penalty or interest, have been timely paid, and Seller
has timely filed (and, through the Closing Date, will timely file) all Tax
reports and returns required by law to be filed by Seller. All such Tax reports
and returns are true, complete and correct in all material respects with regard
to Seller for the periods covered thereby. Seller is not delinquent in the
payment of any material amount of Tax. There is no Tax deficiency asserted
against Seller, and there is no unpaid assessment, proposal for additional
Taxes, deficiency or delinquency in the payment of any of the Taxes of Seller or
any violation of any Tax law that could be asserted by any taxing authority.
There are no Tax Liens upon any properties or assets of Seller nor has notice
been given of any event which could lead to any such Lien. No Internal Revenue
Service, state or
ASSET PURCHASE AGREEMENT - Page 13
local, audit, investigation or Proceeding of Seller is pending or Threatened,
and the results of any completed audits are properly reflected in the Financial
statements. Seller has not granted any extension to any taxing authority of the
limitation period during which any Tax liability may be asserted. Seller has not
committed any material violation of any Tax laws. All monies required for the
payment of Taxes not yet due and payable with respect to the operations of
Seller through and including the Closing Date have been approved, reserved
against and entered upon the books and Financial Statements. All monies required
to be withheld by Seller from employees, if any, independent contractors, or
others or collected from customers for income taxes, social security and
unemployment insurance taxes and sales, excise and use taxes, and the portion of
any such taxes to be paid by Seller to governmental agencies or set aside in
accounts for such purpose have been approved, reserved against and entered upon
the books and records and Financial Statements of Seller. Consummation of the
Transactions will not result in any Tax Obligations on the Assets.
3.8 No Brokers. Seller has no liability for any brokerage fees,
----------
commissions or finders' fees in connection with the Transactions, except for
Seller's liability to Xxxxxxx Xxxxxxx, for which Seller will be solely
responsible.
3.9 Insurance. All the insurance policies maintained by Seller in respect
---------
of the Assets and the Telecom Division are in full force and effect, all
insurance premiums have been timely paid. A description of Seller's insurance
policies (including, without limitation, insurance providing benefits for
employees) is attached hereto as Schedule 3.9.
------------
3.10 Contracts. The Disclosure Schedules hereto set forth a true and
---------
correct list of all of the Vehicle Leases, the Vendor Contracts and the
Transferred Project Contracts (and summaries of all oral commitments which, to
Seller's Knowledge, have been made by Seller) relating thereto (the "Transferred
Contracts") and Seller has made available for review by Purchaser copies of such
Transferred Contracts prior to the date hereof. There exists no material breach
or default under any of such Transferred Contracts by Seller, or, to the
Knowledge of Seller, any other party thereto.
3.11 Corporate Matters. The Board of Directors of Seller have approved
-----------------
the execution and delivery of this Agreement and the consummation of the
Transactions contemplated hereby in accordance with applicable law.
3.12 Permits. Schedule 3.12 hereto lists all material Permits held by
------- -------------
Seller and used in the conduct of the business of the Telecom Division. Such
Permits are valid, and Seller has not received any notice that any Governmental
Body intends to cancel, terminate or not renew any such Permit.
3.13 Financial Statements. Attached to Schedule 3.13 are true, complete
-------------------- -------------
and correct copies of the balance sheet of Seller as of December 31, 1998 and
September 30, 1999, and the related statements of income, and changes in
stockholder's equity and net worth for the periods then ended of Seller (the
"Financial Statements") provided by Seller to Purchaser. The Financial
Statements have been prepared in conformity with generally accepted accounting
principles
ASSET PURCHASE AGREEMENT - Page 14
consistently applied, present fairly the financial position of Seller as of the
respective dates indicated.
3.14 Environmental Matters.
---------------------
(a) Compliance Generally. To Seller's Knowledge, Seller is in
--------------------
material compliance with all Environmental Requirements.
(b) Claims. To Seller's Knowledge, Seller has not received any
------
claim, complaint, citation, report or other notice regarding any
liabilities or potential liabilities (whether accrued, absolute,
contingent, unliquidated or otherwise), including any investigatory,
remedial or corrective obligations, arising under the Environmental
Requirements.
(c) Scope of Environment Representations. This Section 3.14 contains
------------------------------------
the sole and exclusive representations and warranties of Seller with
respect to environmental, health and safety requirements.
3.15 Compliance with Laws. To Seller's Knowledge, Seller has complied
--------------------
with and is in compliance with all federal, state, local and foreign statutes,
laws, ordinances, regulations, rules, permits, judgments, orders or decrees
applicable to the Assets and the Telecom Division, except where the failure to
comply would not have a Material Adverse Effect, and, to Seller's Knowledge,
there does not exist any basis for any claim or default under or violation of
any such statute, law, ordinance, regulation, rule, judgment, order or decree
that would have a Material Adverse Effect.
3.16 Disclaimer of Other Representations and Warranties. EXCEPT AS
--------------------------------------------------
EXPRESSLY SET FORTH IN THIS SECTION 3, SELLER MAKES NO REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, IN RESPECT OF THE TELECOM
DIVISION OR ANY OF THE ASSETS, INCLUDING, WITHOUT LIMITATION, WITH RESPECT TO
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, OR THAT THE ASSETS ARE
NOT "SLOW MOVING," OBSOLETE, DAMAGED OR DEFECTIVE, AND ANY SUCH OTHER
REPRESENTATIONS OR WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED. PURCHASER HEREBY
ACKNOWLEDGES AND AGREES THAT, EXCEPT TO THE EXTENT SPECIFICALLY SET FORTH IN
THIS SECTION 3, PURCHASER IS PURCHASING THE ASSETS ON AN "AS-IS, WHERE-IS"
BASIS. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE SELLER MAKES NO
REPRESENTATION OR WARRANTY REGARDING ANY ASSETS OTHER THAN THE ASSETS OR ANY
LIABILITIES OTHER THAN THE ASSUMED OBLIGATIONS, AND NONE SHALL BE IMPLIED AT LAW
OR IN EQUITY.
ASSET PURCHASE AGREEMENT - Page 15
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER AND CWII
Purchaser and CWII hereby jointly and severally represent and warrant to
Seller that the following are true and correct as of the date of this Agreement
and will be true and correct through the Closing Date, regardless of what
investigations, if any, Seller shall have made prior hereto or prior to the
Closing:
4.1 Organization. Purchaser is a corporation duly organized, validly
------------
existing and in good standing under the laws of the State of Texas.
4.2 Authority Relative to this Agreement. Purchaser has full power and
------------------------------------
authority (corporate and otherwise) to execute, deliver and perform this
Agreement (including, without limitation, execution, delivery and performance of
the Operative Documents to which it is a party) and to consummate the
Transactions. The execution and delivery by Purchaser of this Agreement, and
the consummation of the Transactions, have been duly and validly authorized by
the Board of Directors of Purchaser and no other corporate proceedings on the
part of Purchaser are necessary with respect thereto. This Agreement has been
duly and validly executed and delivered by Purchaser and CWII, and constitutes a
legal, valid and binding obligation of each of Purchaser and CWII, enforceable
against Purchaser and CWII in accordance with its terms.
4.3 Consents and Approvals. Except as set forth in or otherwise required
----------------------
by this Agreement or the Operative Documents, the execution, delivery and
performance by Purchaser of this Agreement and the consummation of the
Transactions by it requires no consent, approval, order or authorization of,
action by or in respect of, or registration or filing with, any Governmental
Body or other Person.
4.4 CWII Stock. The CWII Stock to be issued to Purchaser pursuant to
----------
Sections 2.3 and 2.4 above has been duly authorized and, when issued and
released in accordance with this Agreement, will be validly authorized and
issued, fully paid and nonassessable with no personal liability attaching to the
ownership thereof and will be free and clear of all Liens and restrictions
except as otherwise set forth in this Agreement or the exhibits hereto.
4.5 No Brokers. Except for American Technology Acquisition Corporation
----------
(whose fees will be the responsibility of Purchaser and CWII), Purchaser has not
employed any broker, agent or finder or incurred any liability for any brokerage
fees, commissions or finders' fees in connection with the Transactions.
4.6 Investigation of Telecom Division and Properties. Purchaser and CWII
------------------------------------------------
hereby acknowledge that they have been afforded the opportunity to make such
investigation of the Telecom Division and Assets of Seller and of their
financial and legal condition as appropriate or advisable to familiarize
themselves therewith. Purchaser and CWII acknowledge that they have been (a)
furnished with all financial, operating and other data and information
concerning Seller and commitments of Seller that they have requested, (b)
afforded access to Seller's offices to review such documents and such books and
records, and (c) given the opportunity to ask questions of, and receive answers
from, representatives of Seller with respect to such matters.
ASSET PURCHASE AGREEMENT - Page 16
5. ADDITIONAL AGREEMENTS
5.1 Further Assurances. At any time after the Closing Date, if any
------------------
further action is necessary, proper or advisable to carry out the purposes of
this Agreement, then, as soon as is reasonably practicable, each party to this
Agreement shall take, or cause its proper officers to take, such action. Each
of the parties hereto further agree that it will cooperate with the other after
the consummation of the Transactions for the purpose of providing Purchaser with
the information and access to information necessary to ensure Purchaser with a
reasonably smooth transition into the ownership of the Telecom Division.
5.2 Agreement Regarding Brokers. Each party agrees that it will pay or
---------------------------
dispute, and hold the other party harmless from, any claims of brokers or others
for finder's or brokerage fees asserted as a result of representations by such
party to such brokers or others, regardless of whether the existence of such
brokers or others are disclosed herein.
5.3 Notice. Seller, Purchaser and CWII shall each promptly give notice to
------
the other parties upon becoming aware of the occurrence or failure to occur, or
the impending or threatened occurrence or failure to occur, of any event that
would cause or constitute, any of their material representations or warranties
being or becoming untrue.
5.4 Information for Tax Returns. Seller shall cooperate with Purchaser
---------------------------
after the Closing by providing Purchaser, within a reasonable time following
Purchaser's request, such records and other information regarding the Assets
and/or the Telecom Division as may reasonably be requested from time to time by
Purchaser in connection with the preparation or audit of its federal, state and
local income and other Tax returns, and audits, disputes, refund claims or
litigation relating thereto. In such connection, Seller will afford the
Purchaser's representatives including independent tax advisers and others access
to books and records or relating to the Assets.
5.5 Maintenance of Existence. Seller shall preserve and maintain its
------------------------
corporate existence and good standing under the laws of the State of Delaware
for a period of at least two (2) years after the Closing Date.
5.6 Payment of Liabilities. Except as otherwise provided in Section 2.7(a)
----------------------
above, following the Closing, Seller shall promptly pay or otherwise satisfy all
claims or liabilities relating to the Assets or the Telecom Division incurred
through the Closing Date, other than the Assumed Obligations and other than
claims or liabilities being disputed by Seller in good faith.
5.7 Employment of Certain of Seller's Employees by Purchaser. Schedule
-------------------------------------------------------- --------
5.7 lists the employees of Seller who may be offered employment by Purchaser or
---
CWII from and after the Closing Date. The employees of Seller listed on
Schedule 5.7 who accept Purchaser's offers of employment after Closing are
------------
referred to as "Transferred Employees." Purchaser and CWII agree for a period
of three (3) years after Closing not to induce or attempt to induce any employee
of Seller or its Affiliates not listed on Schedule 5.7 to leave the employ of
------------
Seller or its Affiliates or in any way interfere with the relationship between
Seller or its Affiliates and any employee.
ASSET PURCHASE AGREEMENT - Page 17
5.8 Audited Financials. Seller shall provide Purchaser on or before March
------------------
31, 2000, at Seller's sole cost and expense, with audited financial statements
of Seller's Telecom Division for calendar years 1998 and 1999, prepared by
Seller's independent auditors, as required by Regulation X for filings under the
Securities Exchange Act of 1934, as amended. Seller will also assist Purchaser
in preparing such other information as is necessary to meet SEC reporting
requirements. Purchaser will coordinate with Seller in the release of any
financial information to meet Seller's SEC reporting requirements.
5.9 Securities Laws. Purchaser and Seller hereby acknowledge that they
---------------
are aware, and that they will advise their respective representatives who are
informed as to the Transactions, that Federal securities laws prohibit any
person who has received material, non-public information concerning the
Transactions from purchasing or selling securities of Purchaser or Seller or
from communicating such information to any person under the circumstances in
which it is reasonably foreseeable that such person is likely to purchase or
sell such securities.
5.10 Confidentiality. It is agreed by Purchaser and CWII that any
---------------
information concerning the business or operations of Seller (other than those
relating to the Telecom Division) disclosed to the Purchaser or CWII or their
counsel, accountants, lenders or other representatives prior to or after the
date of this Agreement shall be treated as confidential and proprietary
information, shall not be disclosed to any third party, and shall be safe-
guarded by Purchaser and CWII using the same degree of care as they use in
protecting their own confidential information, in each case, unless such
information is or becomes available in the public domain or public record or
knowledge other than as a result of a breach by Purchaser of its obligations
under this Section or the disclosure of which is required by any applicable law,
rule, regulation or order or becomes available to Purchaser on a non-
confidential basis from a source other than Seller or its representatives. It
is agreed by Seller that any information concerning the business or operations
of Purchaser disclosed to Seller or its counsel, accountants, lenders or other
representatives prior to or after the date of this Agreement shall be treated as
confidential and proprietary information, shall not be disclosed to any third
party and shall be safeguarded by Seller using the same degree of care as it
uses in protecting its own confidential information, in each case unless such
information is or becomes available in the public domain or public record or
knowledge other than as a result of a breach by Seller of its obligations under
this Section or the disclosure of which is required by any applicable law, rule,
regulation or order or becomes available to Seller on a non-confidential basis
from a source other than Purchaser or its representatives. At or immediately
after Closing, Purchaser and Seller shall mutually agree upon a press release
for the Proposed Transaction (the "Public Announcement").
5.11 Registration Rights.
-------------------
(a) Grant. If CWII proposes to register for resale any of the CWII
-----
Common Stock held by stockholders of CWII under the Securities Act of 1933,
as amended (the "1933 Act") (other than the registration of securities to
be issued or issuable under a stock option plan, employee stock ownership
plan or similar employment related plans), then CWII will:
ASSET PURCHASE AGREEMENT - Page 18
(i) at least fifteen (15) days prior to the filing of the
related registration statements, give to Seller written notice thereof
(such notice shall specify the approximate date on which CWII proposes
to file such registration statements and shall contain a statement
that Seller is entitled to participate in such offering and shall set
forth the number of shares of Registrable Securities (as defined
below) that represents the best estimate of the lead managing
underwriter (or if not known or applicable, CWII) that will be
available for sale by Seller in the proposed offering);
(ii) include in such registration, in accordance with
applicable securities laws, and in any underwriting involved therein,
on the same terms and conditions as CWII in such offering, the shares
of CWII Common Stock then held by Seller which were acquired pursuant
to this Agreement (the "Registrable Securities") specified in a
written request or requests, made by Seller and received by CWII
within ten days after written notice from CWII described in clause (i)
above is mailed or delivered by CWII. Such written request may specify
all or a part of the Registrable Securities;
(iii) take such other actions as are reasonable and necessary to
comply with the requirements of the 1933 Act;
(iv) provide to Seller, and to any attorney, accountant or
other agent retained by Seller, reasonable access to CWII's officers
or directors to ask questions and obtain information reasonably
requested by Seller in connection with such registration; and
(v) notify Seller promptly (1) when CWII is informed that such
registration statement or post-effective amendment to such
registration statement becomes effective, (2) of any request by the
Securities and Exchange Commission for an amendment or supplement to
any registration statement, (3) of the issuance of any "stop order"
suspending the effectiveness of such registration, (4) of the
suspension of qualification of Registrable Securities included in such
registration, and (5) of the completion of the distribution
contemplated by such registration if it relates to an offering by
CWII.
(b) Underwriting. If the registration statement under which CWII
------------
gives notice under Section 5.11(a) above is for an underwritten offering,
CWII shall so advise Seller. In such event, the right of Seller to be
included in a registration pursuant to this Section 5.11(b) shall be
conditioned upon Seller's participation in such underwriting and the
inclusion of Seller's Registrable Securities in the underwriting to the
extent provided herein. Seller shall enter into an underwriting agreement
in customary form with the underwriter or underwriters. Notwithstanding any
other provision of the Agreement, if the underwriter determines in good
faith that marketing factors require a limitation of the number of
securities to be underwritten, the number of securities that may be
included in the underwriting shall be allocated, first to Seller and the
other holders of CWII's securities having registration rights, on a pro
rata basis based on the total number of
ASSET PURCHASE AGREEMENT - Page 19
securities held by all such holders; and second, to other stockholders of
CWII, if any, on a pro rata basis. No such reduction shall reduce the
securities being offered by CWII for its own account included in the
registration and underwriting.
(c) Right to Terminate Registration. CWII shall have the right to
-------------------------------
terminate or withdraw any registration initiated by it under this Section
5.11 prior to the effectiveness of such registration whether or not Seller
has elected to include Registrable Securities in such registration.
(d) Expenses of Registration. All registration and filing fees,
------------------------
fees and disbursement of counsel for CWII, and the expense of any special
audits of CWII incident to or required by any such registration shall be
paid by CWII. All selling expenses, including underwriting discounts,
selling commissions and stock transfer taxes applicable to the sale of the
Registrable Securities and the fees and expenses of separate counsel, if
any, for Seller, shall be paid by Seller.
(e) Delay of Registration. Seller shall have no right to obtain or
---------------------
seek an injunction restraining or otherwise delaying any registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 5.11.
(f) Furnishing Information. It shall be a condition precedent to the
----------------------
obligations of CWII to take any action pursuant to this Section 5.11 that
Seller shall furnish to CWII such information regarding itself, the
Registrable Securities held by it and the intended method of disposition of
such securities as shall be required to effect the registration of the
Registrable Securities. CWII agrees that it will furnish to Seller the
number of prospectuses, offering circulars or other documents, and any
amendments or supplements thereto, incident to any registration or
underwriting as Seller may reasonably request in writing.
(g) Termination of Registration Rights. All registration rights
----------------------------------
granted under this Section 5.11 shall terminate and be of no further force
and effect three (3) years after the date of this Agreement. In addition,
Seller's registration rights shall expire if all Registrable Securities
held by Seller may be immediately sold under Rule 144 during any ninety
(90) day period.
(h) Limited Transfer or Assignment of Registration Rights. The
-----------------------------------------------------
rights to cause CWII to register securities granted to Seller under this
Section 5.11 may be transferred or assigned by Seller in connection with a
transfer or assignment of Common Stock to any affiliate of Seller provided
that such affiliate is an accredited investor as defined in Regulation D
under the 1933 Act and that CWII has been given written notice prior to the
transfer or assignment, stating the name and address of the transferee or
assignee and provided further, that the transferee or assignee of such
rights assumes in writing the obligations of Seller under this Section
5.11.
ASSET PURCHASE AGREEMENT - Page 20
5.12 NEC Dispute. Seller agrees to pay at or promptly after Closing any
-----------
outstanding balance to NEC if such payment is necessary to enable Purchaser or
CWII to obtain distribution rights from NEC for the territory included within
Seller's current contract with NEC.
5.13 Tools and Equipment. Purchaser and Seller also agree that Purchaser
-------------------
shall purchase from Seller the tools, equipment, machines, including all related
spare or replacement parts, service agreements, warranties and other items to be
described on a Schedule 5.13 which shall be prepared and approved by Purchaser
-------------
and Seller and attached hereto within thirty (30) days after Closing. Schedule
--------
5.13 shall also contain an agreed "fair market value" of such Tools and
----
Equipment. If Purchaser and Seller are unable to agree on description and value
of the Tools and Equipment within such thirty (30) day period, Purchaser shall
not be required to purchase and Seller will not be required to sell such Tools
and Equipment and Seller shall be entitled to remove such Tools and Equipment
from the premises.
5.14 Accounts Receivable.
-------------------
(a) Seller's Accounts. Seller and Purchaser acknowledge and agree
-----------------
that all customer accounts receivable of the Telecom Division that arose
prior to the Closing Date (including those arising from Retained Projects),
and all trade accounts receivable of Seller and all rebates receivable from
vendors arising at any time (the "Accounts Receivable") are and shall
remain the assets of Seller. Seller represents and warrants to Purchaser
and CWII that there are no accounts receivable from the Transferred
Projects. Subject to the rights of Purchaser contained in the last
sentence of this Section 5.14(a), Seller shall have sole and exclusive
authority to invoice and collect Accounts Receivable and to issue
correction invoices and credit memos with respect to such accounts, and
nothing in this Agreement shall prevent Seller from retaining all rights of
a creditor under applicable law, including, without limitation, the right
to take legal action against its account debtors seeking to collect amounts
owed. Seller shall use its commercially reasonable efforts to keep
Purchaser reasonably informed of any disputes with any customers relating
to Accounts Receivable and Seller's denial of any customer request for a
credit or correction with respect to an Account Receivable.
(b) Collection. Purchaser and Seller shall cooperate with each other
----------
and use commercially reasonable efforts to maximize the collection by
Seller of all Accounts Receivable. Purchaser shall allow Seller reasonable
access to Transferred Employees for that purpose, but Seller shall not
disrupt the duties of Transferred Employees in so exercising its right of
access to Transferred Employees.
(c) Trust. Any payment received by one party to this Agreement after
-----
the Closing Date that properly belongs to another party shall be held in
trust for the benefit of the party properly entitled to the payment and
shall be paid over by the receiving party to the proper party as herein
provided.
(d) Seller Payment. In the event that Purchaser or CWII receives a
--------------
payment on an Account Receivable that is identified by Seller's invoice
number, or that is otherwise accompanied by information identifying it as a
payment belonging to Seller (a
ASSET PURCHASE AGREEMENT - Page 21
"Seller Payment"), Purchaser or CWII, as the case may be, shall turn such
Seller Payment over to Seller. Such Seller Payments shall be turned over to
Seller without representation, warranty or guaranty by, or recourse
against, Purchaser or CWII.
(e) Purchaser Payment. Seller acknowledges that after the Closing,
-----------------
Purchaser will generate accounts receivable from former customers of the
Telecom Division, including, without limitation, customers under the
Transferred Projects. In the event that Seller receives a payment that is
identified by Purchaser's invoice number, or that is otherwise accompanied
by information identifying it as a payment belonging to Purchaser (a
"Purchaser Payment"), Seller shall turn such Purchaser Payment over to
Purchaser. Such Purchaser Payments shall be turned over to Purchaser
without representation, warranty or guaranty by, or recourse against,
Seller.
(f) Unidentified Payment. In the event that either party to this
--------------------
Agreement receives a payment from a former customer of Seller on or after
the Closing Date as to which the owner is not clearly indicated on or with
the payment (an "Unidentified Payment"), the party receiving the payment
shall, within five (5) business days after its receipt, notify the other of
the amount of the Unidentified Payment and the customer from which it was
received, and the parties shall exchange pertinent records and otherwise
cooperate in good faith to determine the party to which the Unidentified
Payment belongs. If the parties are unable to resolve ownership of the
Unidentified Payment from their records, the party who received the payment
shall promptly contact the customer from whom the payment was received to
obtain instructions as to which invoice(s) the customer intended its
payment to be applied, and the instructions of the customer shall be
binding on the parties.
(g) Transfer of Funds. Each Seller Payment and each Purchaser
-----------------
Payment shall be paid over to the party to which it belongs within five (5)
business days after receipt. Each Unidentified Payment shall be paid to
the party to which it belongs within five (5) business days after ownership
of the payment is resolved. All payments belonging to another party but
not timely paid over to the proper party shall bear interest from and after
the next business days after the payment was due until paid at the rate of
ten percent (10%) per annum.
5.15 Occasional Sale. The Purchaser and Seller believe that the purchase
---------------
and sale of the Assets constitutes an occasional sale of the entire operating
assets of a separate division of the Seller within the meaning of Texas Tax
Code (S) 151.304(b)(2) and Texas Administrative Code (S) 3.316(d).
6. ITEMS DELIVERED AT CLOSING
6.1 Items Delivered at Closing. At Closing, the following items have been
--------------------------
executed and/or delivered:
(a) Purchaser's Officers' Certificate. Purchaser has delivered to
---------------------------------
Seller an Officers' Certificate, dated the Closing Date, of the Purchaser
certifying to (a) the due
ASSET PURCHASE AGREEMENT - Page 22
adoption by the Board of Directors of the attached resolutions approving
the execution and delivery of this Agreement, and the consummation of the
Transactions and (b) the incumbency of the President, Secretary and other
officers of the Purchaser executing any of the Operative Documents.
(b) Governmental Consents, Authorizations, Etc. Copies of all
-------------------------------------------
material consents, authorizations, orders or approvals of, and filings or
registrations with, and any permits, licenses or other authorizations
required by, any applicable Governmental Body that are required for, or in
connection with, the execution and delivery of this Agreement by Purchaser
and the consummation by Purchaser of the Transactions have been delivered.
(c) Assumption Agreement. Purchaser has executed and delivered to
--------------------
Seller the Assumption Agreement.
(d) Closing Consideration. Purchaser has delivered to Seller the
---------------------
Closing payments required by Sections 2.1(d) and 2.3 hereof to be delivered
at Closing.
(e) Seller's Officers' Certificate. Seller has delivered to Purchaser
------------------------------
an Officers' Certificate, dated the Closing Date, of the President and
Secretary of Seller certifying to (a) the Certificate of Incorporation of
Seller (as certified to by an appropriate officer of the State issuing
same), (b) the Bylaws of Seller, (c) the due adoption by the Board of
Directors and stockholders of Seller of the attached resolutions approving
the execution and delivery of this Agreement, and the consummation of the
Transactions, (d) the incumbency of the President, Secretary and other
officers of Seller executing any of the Operative Documents, and (e) a
Certificate of Good Standing of Seller.
(f) Opinion of Counsel for Seller. Seller has furnished Purchaser
-----------------------------
with an opinion dated the Closing Date of Xxxxxx & Xxxxxx, L.L.P. in the
form of Exhibit "D" attached hereto.
-----------
(g) Governmental Consents, Authorizations, Etc. Copies of all
-------------------------------------------
material consents, authorizations, orders or approvals of, and filings or
registrations with, and any permits, licenses or other authorizations
required by, any applicable Governmental Body that are required for or in
connection with, the execution and delivery of this Agreement by Seller and
the consummation by Seller of the Transactions have been delivered in form
and substance reasonably satisfactory to the parties hereto.
(h) Delivery of Documents. Seller has delivered to Purchaser (1) the
---------------------
Disclosure Schedules, (2) the Xxxx of Sale and Assignment, and (3) all
other documents, instruments, schedules and financial statements required
hereunder.
(i) Third Party Consents. Except as provided in Section 2.1(e),
--------------------
Seller has delivered copies of all approvals and consents of third parties
required on the part of Seller for consummation of the Transaction (the
"Third Party Consents") and all necessary action has been taken to assign
to Purchaser the Transferred Project Contracts,
ASSET PURCHASE AGREEMENT - Page 23
the Vendor Contracts and the Vehicle Leases, and any other material
agreements between Seller and their suppliers, customers and third parties
to the extent related to the Telecom Division in form and substance
reasonably satisfactory to the parties hereto.
(j) License Agreement. Purchaser and Seller have executed and
-----------------
delivered the License Agreement.
(k) Sublease Agreement. Purchaser and Seller have executed and
------------------
delivered the Sublease Agreement.
(l) Furniture and Equipment Lease. Purchaser and Seller have executed
-----------------------------
and delivered the Furniture and Equipment Lease; provided, however, that if
the parties hereto cannot complete the negotiation and execution of the
Furniture and Equipment Lease on or prior to Closing, Closing shall
nevertheless occur and the parties shall proceed after Closing in good
faith to negotiate and execute the Furniture and Equipment Lease as soon as
is reasonably practicable.
(m) Noncompetition Agreement. Purchaser and Seller have executed and
------------------------
delivered the Noncompetition Agreement.
(n) Subscription Agreement. Seller shall have executed the
----------------------
Subscription Agreement.
(o) Resale Certificate. Purchaser shall deliver to the Seller a duly
------------------
executed Texas resale certificate, reflecting the Purchaser's Texas sales
and use tax permit, with respect to the Inventory.
7. CLOSING AND TERMINATION
7.1 Closing Date. The closing for of the Transactions contemplated by
------------
this Agreement (the "Closing") shall have taken place at the offices of Seller's
legal counsel at 10:00 a.m. on Thursday, March 16, 2000 (the "Closing Date").
8. SURVIVAL
8.1 Survival of Representations and Warranties. The respective
------------------------------------------
representations and warranties contained in this Agreement and the Operative
Documents shall survive the consummation of the Transactions contemplated in
this Agreement and shall continue in full force and effect after the Closing for
a period of one (1) year from the Closing at which time they shall expire,
except as to claims made in respect thereof in writing by either party on or
before the expiration of such period; provided, however that (a) the
representations and warranties contained in Section 3.7 shall survive until the
expiration of the statutory period of limitations for assessment of Tax
deficiencies, including any extensions thereof, for each taxable year of Seller
which begins before the Closing, and (b) the representations and warranties
contained in Section 3.5 shall survive for the respective applicable statute of
limitations period. The covenants
ASSET PURCHASE AGREEMENT - Page 24
and agreements hereunder shall not be affected by the expiration of any
representation or warranty pursuant to this Section 8.1 and shall survive
indefinitely.
9. INDEMNIFICATION
The parties shall be entitled to indemnification as provided in this
Section 9. As used herein, the term "Damages" shall mean all liabilities,
demands, claims, actions or causes of action, regulatory, legislative or
judicial proceedings or investigations, assessments, levies, losses, fines,
penalties, damages, costs and expenses, including, without limitation,
reasonable attorneys', accountants', investigators', and experts' fees and
expenses, sustained or incurred in connection with the defense or investigation
of any such claim, plus interest on any out-of-pocket losses, fines, penalties,
damages, costs and expenses, at the per annum rate equal to the lesser of (i)
ten percent (10%) per annum, and (ii) the highest rate permitted by applicable
law.
9.1 Indemnification by Seller. Subject to the limitations contained in
-------------------------
Section 9.3, Seller shall indemnify and hold harmless Purchaser and CWII, their
Affiliates and their respective partners, members, managers, officers,
directors, stockholder, agents and employees, and their successors and assigns
(each a "Purchaser Indemnitee" and collectively, the "Purchaser Indemnitees")
against and from all Damages sustained or incurred by any Purchaser Indemnitee,
as a result of or arising out of or by virtue of:
(a) any breach of any representation and warranty made by Seller to
Purchaser herein or in any closing document delivered to Purchaser in
connection herewith;
(b) the breach by Seller or failure of Seller, directly or indirectly,
including by virtue of action taken by its directors or officers acting in
their capacity a such, to comply with any of the covenants or obligations
of Seller under this Agreement;
(c) any Retained Liabilities; or
(d) the ownership, use or operation by Seller of the Assets or the
Telecom Division on or prior to the Closing Date (other than with respect
to the Assumed Obligations and the Transferred Projects).
9.2 Indemnification by Purchaser. Subject to the limitations contained in
----------------------------
Section 9.3, Purchaser shall indemnify and hold harmless Seller, its Affiliates
and its and their respective officers, directors, stockholders, agents and
employees and their successors and assigns (each a "Seller Indemnitee" and
collectively, the Seller Indemnitees") against and from all Damages sustained or
incurred by any Seller Indemnitee, as a result of or arising out of or by virtue
of:
(a) any breach of any representation and warranty made by Purchaser or
CWII to Seller herein or in any closing document delivered to Seller in
connection herewith;
ASSET PURCHASE AGREEMENT - Page 25
(b) the breach by Purchaser or CWII or failure of either Purchaser or
CWII, directly or indirectly, including by virtue of action taken by its
directors or officers acting in their capacity as such, to comply with any
of the covenants or obligations of Purchaser or CWII under this Agreement;
(c) any Assumed Obligations; or
(d) the ownership, use or operation of the Assets or the Telecom
Division from or after the Closing Date (other than with respect to the
Retained Liabilities and the Retained Projects).
9.3 Indemnification Thresholds and Limits. Neither the Seller Indemnitees
-------------------------------------
nor the Purchaser Indemnitees shall be entitled to indemnification pursuant to
the terms of this Section 9 until the aggregate amount of all claims for
indemnification by such Indemnitees exceed $25,000, but once such claims exceed
$25,000, the Seller Indemnitees, on the one hand, or the Purchaser Indemnitees,
on the other hand, shall be entitled to indemnification for all indemnification
claims up to a maximum of $250,000 (the "Cap"), which Cap shall be exclusive of
all reasonable attorneys' fees, court costs and related expenses incurred by the
party being indemnified hereunder. Notwithstanding the foregoing, there shall be
no threshold or time or dollar limit on claims for indemnification pursuant to
fraud or the breach by a party hereto of its obligation to make payments to
another party hereto. The parties hereto acknowledge, agree and confirm that the
CAP is intended by the parties to be the maximum amount that may be recovered
against any party hereto as a result of claims arising out of this Agreement.
9.4 Indemnification Procedures. In the event an indemnified party seeks
--------------------------
or expects to seek indemnity for any Damage arising out of or in connection with
a claim, demand, cause of action or proceeding by a third party, the
indemnifying party shall promptly notify the indemnified party in writing of the
nature of the Damages (the "Indemnification Notice"). The indemnifying party
shall have the right to assume the defense thereof and the indemnifying party
shall not be liable to any indemnified parties for any legal expenses of other
counsel or any other expenses subsequently incurred by such indemnified parties
in connection with the defense thereof, except that if the indemnifying party
elects not to assume in writing such defense within fifteen (15) days after the
Indemnification Notice or counsel for the indemnifying parties advise that
because of conflicts of interest between the indemnifying party and the
indemnified parties such counsel cannot, as a matter of professional
responsibility, represent both the indemnified parties and the identifying
parties (it being agreed by the parties that the indemnified party shall not be
obligated to waive any conflict of interest of such counsel), then the
indemnified parties may retain counsel satisfactory to them, and the
indemnifying party shall pay all reasonable fees and expenses of such counsel
for the indemnified parties promptly as statements therefore are received. In no
event shall an indemnifying party be liable for the fees and expenses of more
than one separate law firm for all indemnified parties. So long as the
indemnifying party is defending in good faith such third party Damage, the
indemnified party shall not settle or compromise such third party claim without
the indemnifying party's prior written consent. The indemnified party shall make
available to the indemnifying party or its representatives all personnel records
and other materials reasonably required by them for use in contesting any third
party Damage and shall cooperate fully with the indemnifying party in the
defense of such
ASSET PURCHASE AGREEMENT - Page 26
Damage. In case any event shall occur which would otherwise entitle an
indemnified party to assert a claim for indemnification hereunder, no loss,
damage or expense shall be deemed to have been sustained by such party to the
extent of (1) any tax savings realized by such party with respect thereto, or
(2) any proceeds received by such party from any insurance policies with respect
thereto.
10. GENERAL PROVISIONS AND OTHER AGREEMENTS
10.1 Notices. All notices and other communications hereunder shall be in
-------
writing and shall be deemed given if and when delivered by certified mail
(return receipt requested) or sent by a recognized next business day courier
(with written acknowledgment of receipt by the recipient) to the following
persons at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) If to Purchaser:
Communications World International, Inc.
0000 Xxxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxxxxx, Chief Executive Officer
with a copy to:
Xxxxx X. Xxxxxx, Esq.
Xxxx, Xxxxxxxx & Xxxxxx LLP
1400 One XxXxxxxx Plaza
0000 XxXxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
(b) If to Seller:
Xx. Xxxxx X. Xxxx
President and Chief Executive Officer
Allstar Systems, Inc.
0000 Xxxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
with a copy to:
C. Xxxxx Xxxx
Xxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000-0000
10.2 Fees and Expenses. Seller Purchaser shall each pay all of their own
-----------------
fees, costs and expenses (including without limitation, those of accountants,
appraisers and attorneys) incurred in connection with or related to the
preparation, negotiation, execution, delivery,
ASSET PURCHASE AGREEMENT - Page 27
satisfaction, compliance and consummation of this Agreement and the Transactions
contemplated hereby and the closing conditions hereunder.
10.3 Interpretation. The headings contained in this Agreement are for
--------------
reference purposes only and shall not affect the meaning or interpretation of
this Agreement. Terms such as "herein," "hereof," "hereinafter" refer to this
Agreement as a whole and not to the particular sentence or paragraph where they
appear, unless the context otherwise requires. Terms used in the plural include
the singular, and vice versa, unless the context otherwise requires.
10.4 Facsimile; Counterparts. This Agreement may be executed by facsimile
-----------------------
and in two or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
10.5 Invalid Provisions. If any provision of this Agreement is held to be
------------------
illegal, invalid or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully severable. This Agreement shall
be construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part hereof; and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or its severance from this
Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable
provision there shall be added automatically as part hereof a provision as
similar in terms, but in any event no more restrictive than, such illegal,
invalid or unenforceable provision as may be possible and be legal, valid and
enforceable.
10.6 Binding Effect. This Agreement shall be binding upon and inure to
--------------
the benefit of the parties hereto and their respective heirs, legal
representatives, successors and permitted assigns.
10.7 Captions. The captions, headings and arrangements used in this
--------
Agreement are for convenience only and do not in any way affect, limit or
amplify the provisions hereof.
10.8 Attorneys' Fees. In the event that any Proceeding is commenced by
---------------
any party hereto for the purpose of enforcing any provision of this Agreement,
the party to such Proceeding may receive as part of any award, judgment,
decision or other resolution of such Proceeding its costs and attorneys' fees as
determined by the person or body making such award, judgment, decision or
resolution. Should any claim hereunder be settled short of the commencement of
any such Proceeding, the parties in such settlement may mutually agree to
include as part of the damages alleged to have been incurred reasonable costs of
attorneys or other professionals in investigation or counseling on such claim.
10.9 Jurisdiction and Venue. Any judicial proceedings brought by or
----------------------
against any party on any dispute arising out of this Agreement or any matter
related thereto shall be brought in the state or federal courts of Xxxxxx
County, Texas and, by execution and delivery of this Agreement, each of the
parties accepts for itself the exclusive jurisdiction and venue of the aforesaid
courts as trial courts, and irrevocably agrees to be bound by any judgment
rendered thereby in connection with this Agreement after exhaustion of all
appeals taken (or by the appropriate appellate court if such appellate court
renders judgment).
ASSET PURCHASE AGREEMENT - Page 28
10.10 Assignability. This Agreement may not be transferred, assigned,
-------------
pledged or hypothecated by any party hereto without the prior written consent of
the other parties to this Agreement.
10.11 Entirety. This Agreement and the documents executed and delivered
--------
pursuant hereto, executed on the date hereof or in connection herewith, contain
the entire agreement among the parties with respect to the matters addressed
herein and supersede all prior representations, inducements, promises or
agreements, oral or otherwise, which are not embodied herein or therein.
10.12 Amendment. This Agreement and the exhibits and schedules hereto may
---------
be amended by the parties hereto at any time prior to the Closing Date;
provided, however, that any amendment must be by an instrument or instruments in
writing signed and delivered on behalf of each of the parties hereto.
10.13 Governing Law. This Agreement shall be governed by the substantive
-------------
laws of the State of Texas without regard to principles of choice or conflict of
law.
10.14 Settlement of Disputes.
(a) Mediation; Arbitration. For a period of thirty (30) days after
----------------------
any controversy or claim arises out of or relating to this Agreement, or
the breach hereof (the "Pre-Arbitration Period"), both parties shall, as
their sole and exclusive remedy, attempt in good faith to negotiate the
resolution of such controversy or claim. Such negotiations shall include
submitting the controversy or claim to nonbinding mediation before a
neutral third party. Mediation shall be conducted and administered by the
American Arbitration Association ("AAA") under its rules and the costs
thereof shall be shared equally by the parties to such mediation. If any
such controversy or claim remains unresolved after the expiration of the
Pre-Arbitration Period, then Purchaser and Seller, as their sole and
exclusive remedy, submit such controversy or claim for settlement to
arbitration pursuant to the following procedures:
(i) After a dispute or controversy arises, either party may,
in a written notice delivered to the other party, demand such
arbitration. Such notice shall designate the name of the arbitrator
appointed by such party demanding arbitration, together with a
statement of the matter in controversy;
(ii) Within thirty (30) days after receipt of such demand, the
other party shall, in a written notice delivered to the other party,
name such party's arbitrator. If such party fails to name an
arbitrator, then the second arbitrator shall be named by the AAA. The
two arbitrators selected shall name a third arbitrator within thirty
(30) days, or in lieu of such agreement on a third arbitrator by the
two arbitrators so appointed, the third arbitrator shall be appointed
by the AAA;
(iii) Each party shall bear its own arbitration costs and
expenses. The
ASSET PURCHASE AGREEMENT - Page 29
arbitration hearing shall be held in Houston, Texas at a location
designated by a majority of the arbitrators. The Commercial
Arbitration Rules of the AAA shall be used and the substantive laws of
the State of Texas (excluding conflict of laws provisions) shall
apply;
(iv) The arbitration hearing shall be concluded within ten (10)
days unless otherwise ordered by the arbitrators and the award thereon
shall be made within fifteen (15) days after the close of submission
of evidence. An award rendered by a majority of the arbitrators
appointed pursuant to this agreement shall be final and binding on all
parties to the proceeding and judgment on such award may be entered by
either party in a court of competent jurisdiction; and
(v) The parties stipulate that the provisions of this Section
10.14 shall be a complete defense to any suit, action or proceeding
instituted in any federal, state or local court of before any
administrative tribunal with respect to any controversy or dispute
arising out of this agreement. The arbitration provisions hereof
shall, with respect to such controversy or dispute, survive the
termination or expiration of this agreement.
Neither any party hereto nor the arbitrators may disclose the existence or
results of any arbitration hereunder without the prior written consent of the
other party; nor will any party hereto disclose to any third party any
confidential information disclosed by any other party hereto in the course of
any arbitration hereunder without the prior written consent of such other party.
(b) Emergency Relief. Notwithstanding anything in Section 10.14(a) to the
----------------
contrary, either party may seek from a court any provisional remedy
that may be necessary to protect any rights or property of such party
pending the establishment of the arbitral tribunal or its
determination of the merits of the controversy.
(i) Jurisdiction. In connection only with the provisions of this
------------
Section 10.14(b), each party hereto hereby irrevocably submits to
the exclusive jurisdiction of the United States District Court
for the Southern District of Texas and, if such court does not
have jurisdiction, of the courts of the State of Texas in Xxxxxx
County, for the purposes of any action arising out of this
agreement, or the subject matter hereof or thereof, brought by
any other party under this Section 10.14(b).
(ii) Waiver of Defenses. In connection only with the provisions of
------------------
this Section 10.14(b), to the extent permitted by applicable law,
each party hereby waives and agrees not to assert, by way of
motion, as a defense or otherwise, in any such action brought
under this Section 10.14(b), any claim (1) that it is not
personally subject to the jurisdiction of the above-named courts,
(2) that the action is brought in an inconvenient forum, (3) that
it is immune from any legal process with respect to itself or its
property, (4) that the venue of the suit, action or proceeding is
improper,
ASSET PURCHASE AGREEMENT - Page 30
or (5) that this agreement, or the subject matter hereof, may not
be enforced in or by such courts.
10.15 Specific Performance. Each of the parties acknowledges and agrees
--------------------
that the other party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the parties agree that the
other party shall be entitled to enforce specifically this Agreement and the
terms and provisions hereof.
Signature Page Follows
ASSET PURCHASE AGREEMENT - Page 31
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers.
SELLER:
ALLSTAR SYSTEMS, INC.
By:__________________________________________
Xxxxx X. Xxxx, President
PURCHASER:
COMMWORLD ACQUISITION CORPORATION
By:__________________________________________
Xxxxx Xxxxx, Chief Financial Officer
CWII:
COMMUNICATIONS WORLD
INTERNATIONAL, INC.
By:__________________________________________
Xxxxx Xxxxx, Chief Financial Officer
ASSET PURCHASE AGREEMENT - Page 32
