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Exhibit 2.1
STATE OF GEORGIA
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is entered into this 30th day of June,
1998, by and between Athens' ISP, Inc., a corporation chartered by the State of
Georgia with its principal office in Xxxxxx County, Georgia (hereinafter
"Seller") and ComStar Communications, Inc., a corporation chartered by the
State of Georgia with its principal office in Xxxx County, Georgia (hereinafter
"Buyer").
WITNESSETH:
Whereas, Seller owns certain property and leases certain equipment
involved in the Internet service provider business; and
Whereas, Buyer desires to purchase said property and to assume said
equipment leases as more particularly described herein under the terms and
conditions set forth in this document;
Now, therefore, for and in consideration of the premises and the mutual
promises, agreements, representations, warranties, and covenants hereinafter set
forth, the parties hereto agree as follows:
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1.
The property to be sold consists of the equipment listed in Exhibit
"A", attached hereto and made a part hereof, the E-Commerce account with Kali,
Inc., the "Real-time Software Sales System", and all of Sellers "Dedicated
Business Accounts" (as more specifically described in the next sentence) that
are actively in use and service as of 6:00 p.m. on June 30, 1998, including the
customer lists, contracts, licenses, rights, title, and interest in the
accounts, and the ability to transfer said accounts from Seller to Buyer. The
types of Dedicated Business Accounts to be sold include ISDN 128K dedicated,
ISDN 64K dedicated, dedicated telephone modem, collocation, and webhosting.
All of this will be referred to in this Agreement as "Property".
2.
The closing on the matters set out in this Asset Purchase Agreement
will take place at 10:30 a.m. on July 1, 1998, at the law offices of Blasingame,
Burch, Xxxxxxx, Xxxxxx & Xxxxxx, P.C., 000 Xxxxxxx Xxxxxx Xxxxx, Xxxxxx-Xxxxxx
Xxxxxx, Xxxxxxx.
3.
At the closing, Seller will sell, assign, transfer, convey, and deliver
the Property to Buyer free and clear of all liens and encumbrances whatsoever,
and Seller will warrant that the sale is made free and clear of all liabilities,
obligations, security interests, and encumbrances. Seller will warrant and
forever defend the right and title of the above described Property unto the said
Buyer, its successors and assigns, against the lawful claims of all persons
whomsoever, and Seller will indemnify Buyer fully from any and all said claims
of others. Buyer shall assume liability, if any, which arises from or as a
result
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of the transferring of accounts billed by credit cards resulting from the
existing account holders' credit cards numbers and information being divulged to
and transferred to Buyer.
4.
At the closing, Seller agrees to transfer unto Buyer all customer
records, lists, profiles, other written or recorded information, contracts, and
licenses having to do with the subject Property.
5.
Seller agrees to be responsible for and to pay any tax or similar
charge or assessment on the sale or transfer of the Property. Any personal
property taxes on the subject Property will be pro-rated between Seller and
Buyer as of July 1, 1998. Buyer will take possession of the subject Property as
of July 1, 1998.
6.
The purchase price to be paid by Buyer to Seller at closing for the
aforesaid Dedicated Business Accounts is set out as follows;
The purchase price is 8.5 times the monetary amount of those accounts
for which service is provided as of 6:00 p.m. on June 30, 1998, billed in June,
1998, for a full month's service for accounts billed on a monthly basis; and 8.5
times the monthly pro-rata monetary amount for those accounts for which service
is provided as of 6:00 p.m. on June 30, 1998, but for which accounts the
customer has paid on a quarterly, semi-annual or annual basis. Accounts
activated after June 1, 1998, and accounts activated after May 1, 1998, billed
on a pro-rated xxxx in June, which are active as of June 30, 1998, will be paid
at 8.5 times the minimum charge for such accounts. The accounts will be listed
as an exhibit to the Xxxx of
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Sale to be presented by Seller to Buyer at the closing. Buyer will pay cash at
the closing.
An "active" account is defined as an account which has two or fewer
open invoices and no unpaid invoices older than 60 days from the invoice date.
An amount subtracted from the above-stated purchase price for the
accounts is an amount representing the "prepays", being those customers who have
paid in advance for service, and the "prepays" having been received by Seller
before July 1, 1998.
All current payments on the accounts invoiced by Seller before July 1,
1998, will belong to Seller. All current payments invoiced by the Buyer on and
after July 1, 1998, on the accounts will belong to Buyer.
Buyer will pay to Seller, in cash at closing, the amount of $33,100.00
for the equipment set out in Exhibit "A".
Buyer will pay to Seller, in cash at closing, the amount of $245,490.00
in consideration for Seller's giving up its contract with Kali, Inc., for the
Kali program and assigning its rights to Buyer. Buyer will enter into a separate
contract with Kali, Inc., effective July 1, 1998. This amount of $245,490.00
will include the consideration paid by Buyer to Seller for the aforementioned
Real-time Software Sales System.
7.
The transition period is that period of time between the date of
signing this Agreement and the closing on July 1, 1998. During said transition
period, Seller will perform all normal billing for the accounts being sold;
Seller will use its best efforts to preserve intact the business, organization,
and management of Seller's business; Seller will keep available the services of
its present officers and employees and conduct business
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in a normal and ordinary manner; Seller will not incur any indebtedness or enter
into any material contracts or make any capital expenditure or other commitments
which would encumber the Property which is the subject of this Asset Purchase
Agreement; Buyer and its auditors will have immediate access to the books and
records of Seller.
8.
At the closing, Seller will assign and Buyer will assume the leases on
the equipment more fully described in Exhibit "B" attached hereto and made a
part hereof, with the terms and conditions of the leases set out, and the two
leases for the space in the Xxxxxx Building located at 000 Xxxxx Xxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxx, with the Xxxxxx Corporation of Athens, Inc., as the
Lessor, copies of said leases shown as Exhibit "C", attached hereto and made a
part hereof. Seller represents and warrants to Buyer that it has the authority
to assign the leases and has the approval of the lessors to so assign these
leases. Buyer shall indemnify and hold Seller harmless from any and all claims,
costs, liabilities or damages arising from or related to the assumed leases
after July 1, 1998, which result from any act, or failure to act by Buyer under
the terms and conditions of the assumed leases.
9.
Buyer will assume, for no monetary consideration, all of Seller's
accounts receivable for the Dedicated Business Accounts being purchased by Buyer
as of July 1, 1998. Seller will have no interest in or responsibility for the
accounts receivable after July 1, 1998. Buyer is responsible for all legal
actions resulting from future efforts at collecting the
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accounts receivable. Buyer Will keep all amounts received after July 1, 1998,
from the accounts receivable. This accounts receivable provision becomes
effective at the closing.
10.
Buyer agrees to freeze all pricing on all purchased accounts for a
period of three months beginning on July 1, 1998.
11.
Seller and Buyer represent and warrant, each to the other, that they
have the capacity and authority to execute and deliver this Agreement, to
perform hereunder and to consummate the transactions contemplated hereby without
the necessity of any act or consent of any other person whomsoever. This
Agreement constitutes the valid and legally binding obligations of Seller and
Buyer, enforceable against them in accordance with their respective terms.
Seller has good title to the Property, assets, and rights transferred
herein, and represents and warrants to Buyer that it will have good title at the
closing.
Seller agrees to obtain approval of its shareholders and its board of
directors of this Agreement and all transactions set out herein, and Seller
will present to Buyer evidence of such approval at the closing.
12.
At the closing, Seller and Xxxxx X. Xxxxxxx XX will sign a Covenant Not
to Compete, with Buyer as the beneficiary of said Covenant, in which Covenant
Seller and Xxxxxxx will agree that neither will for a period of three years,
beginning July 1, 1998, directly or indirectly deal with or be engaged with the
sale, servicing, or handling of
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Dedicated Business Accounts, commercial accounts, or E-Commerce accounts in any
Internet service provider business within the geographical areas of the State of
Georgia serviced by and covered by the telephone area codes of 706, 770, 404,
and 678. Seller and Buyer agree and understand that Xxxxxxx will become an
employee of Buyer beginning on July 1, 1998, and an exception will be made to
this provision during the time that Xxxxxxx is such an employee of Buyer. Should
Xxxxxxx end his employment with Buyer for a reason other than being terminated
for cause or for a voluntary resignation, Xxxxxxx can be involved in the
Internet service provider business within the aforementioned geographical areas
but cannot be involved as a principal in any business in the capacity as a
shareholder, officer, or otherwise, and Xxxxxxx will not be involved with a
customer or prospective customer of Buyer existing at the time of Xxxxxxx'x
departure from Buyer's employment. Under no circumstance xxxx Xxxxxxx use any
trade secrets, business methods, or proprietary information gained from Buyer
while being an employee of Buyer. Seller and Xxxxxxx will agree that they shall
not be involved with or provide E-Commerce services for Kali, Inc., in any
geographical location.
13.
All notices, requests, demands, and other communications hereunder
shall be in writing and shall be delivered by hand during regular business hours
or mailed by
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registered or certified mail, return receipt requested, first class postage
prepaid, addressed as follows:
To Seller: Athens' ISP, Inc.
c/o Xx. Xxxxx X. Xxxxxxx XX
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
To Buyer: ComStar Communications, Inc.
c/o Xx. Xxxxxxx X. Xxxxxx
000 Xxxxxxxx Xxxxxx
Xxxxx X-0
Xxxxxxxxxxx, Xxxxxxx 00000
14.
Any failure on the part of Seller, on one hand, and Buyer, on the other
hand, to comply with any of their or its obligations, agreements, or conditions
hereunder may be waived by the other party to whom such compliance is owed. No
waiver of any provision of this Agreement shall be deemed, or shall constitute,
a waiver of any other provision, whether or not similar, nor shall any waiver
constitute a continuing waiver.
15.
All expenses incurred by the parties hereto in connection with or
related to the authorization, preparation, and execution of this Agreement and
the closing of the transactions contemplated hereby, including, without
limitation of the generality of the foregoing, all fees and expenses of agents,
representatives, counsel and accountants employed by any such party, shall be
borne solely and entirely by the party that has incurred the same.
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16.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective legal representatives, successors, and
assigns.
17.
This Agreement constitutes the entire agreement among the parties
hereto and supersedes and cancels any prior agreements, representations,
warranties, or communications, whether oral or written among the parties hereto
relating to the transactions contemplated hereby or the subject matter herein.
Neither this Agreement nor any provision hereof may be changed, waived,
discharged, or terminated orally, but only by an agreement in writing signed by
the party against whom or which the enforcement of such change, waiver,
discharge, or termination is sought.
18.
The terms of this Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia.
19.
This Agreement will be executed in two counterparts, each of which shall
be deemed an original, but both of which together shall constitute one and the
same instrument.
20.
Buyer will take possession of the subject property and assume the
aforesaid leases effective at the closing set out herein.
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21.
Buyer agrees to waive Seller's compliance with the applicable bulk
sale provisions of the Bulk Sales Law of the Uniform Commercial Code as enacted
and enforced in the State of Georgia.
22.
All representations, warranties, agreements, covenants, and obligations
made or undertaken by Seller in this Agreement or in any document or instrument
executed and delivered pursuant hereto are material, have been relied upon by
Buyer, shall survive the closing hereunder, and shall not merge in the
performance of any obligation by any party hereto. Seller agrees to indemnify
and hold Buyer harmless from and against all liability, loss, damages, or injury
and all reasonable costs and expenses, including reasonable attorney fees and
cost of any suit related thereto, suffered or incurred by Buyer arising from any
misrepresentation by or breach of any covenant or warranty of Seller contained
in this Agreement.
23.
All of the obligations of Buyer to consummate the transactions
contemplated by this Agreement shall be contingent upon and subject to the
satisfaction, on or before the closing date, of each and every one of the
following conditions:
The representations and warranties made by Seller to Buyer in this
Agreement shall be true and correct in all material respects on the closing date
with the same force and effect as though such representations and warranties had
been made on and as of such time.
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Seller shall have duly performed all of the covenants, acts, and
undertakings to be performed by it on or prior to the closing date in all
material respects.
At the closing, Seller shall have effected the deliveries required of
it pursuant to paragraph 24 below.
No action, proceeding, investigation, regulation or legislation shall
have been instituted, threatened, or proposed before any court, governmental
agency or legislative body to enjoin, restrain, prohibit, or obtain substantial
damages in respect of, or that is related to, or arises out of, this Agreement
or the consummation of the transactions contemplated hereby, or that is related
to or arises out of the assets or the business of Seller, if such action,
proceeding, investigation, regulation or legislation would have a material
adverse effect on the Seller's business.
The equipment listed in Exhibits "A" and "B" shall be in the same
condition as on the date of the signing of this Agreement, ordinary wear and
tear excepted.
Seller's account with Buyer shall have a zero dollar account balance.
Seller will expect to be released from all obligations under the present
existing agreements between Seller and Buyer. In the event there is an account
balance after this release from future performance, at closing, the same should
be paid at closing to zero the account.
The cancellation of the Agreement between Seller and Kali, Inc., and
the transfer of all of Seller's rights with Kali, Inc. to Buyer.
That Buyer and Kali, Inc. shall have entered into an Agreement
effective July 1, 1998.
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24.
At the closing on July 1, 1998, Seller shall deliver to Buyer the
following:
(a) Certificate of good standing of Seller, as of the most recent
practicable date, from the Secretary of State of Georgia;
(b) Certified resolutions of Seller's shareholders and board of
directors approving this Agreement and all matters set out
herein;
(c) Bills of sale for the Property set out herein;
(d) Assignments of the leases set out herein and evidence of
approval of said assignments of the leases by the lessors
thereto;
(e) Covenant Not to Compete executed by Seller and Xxxxx X.
Xxxxxxx XX;
(f) All documents, books, and records concerning the accounts and
equipment being sold;
(g) Evidence of the cancellation of the Agreement between Seller
and Kali, Inc., effective July 1, 1998, so that Buyer may
effect its own agreement with Kali, Inc., as hereinbefore set
out.
25.
Seller agrees to transfer to Buyer and Buyer agrees to assume all
obligations and liabilities thereunder, Seller's contracts with Sprint and
BellSouth.
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26.
As has been set out in paragraph 1 of this Agreement, at the closing
Seller will transfer to Buyer all of its rights and title in and to its software
program designed and written by Seller known as "Real-time Software Sales
System", along with all rights, copyrights, and ownership of the software. The
software will include the code, code comments, working notes, documentation,
test versions, and compiled software. After the transfer of the software on July
1, 1998, Buyer will have the right to use, change, or sell said software. Seller
will make no warranty about the software's properties, abilities, or future
performance, and will have no liability for any problems resulting from use of
the software. Buyer will agree, if the software is ever made available for
public sale in the future, that the creative efforts of Seller would be
recognized in the "credits" for the software; however, this recognition will not
imply any ownership or right to the software by Seller.
IN WITNESS WHEREOF, each party hereto has executed or caused this
Agreement to be executed on its behalf, all on the day and year first above
written.
ATHENS' ISP, INC.
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
President
Attest: /s/ X. Xxxxxxxxx-Xxxxxxx
-----------------------------------------
Secretary
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COMSTAR COMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Executive Vice President
Attest: /s/ Naen Xxxxxx
-----------------------------------------
BUYER
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00
XXXXXXX "X"
XXX R5000 Indy 96MB RAM, 2GB harddrive, CDROM,
w/Maya 1.0 and PowerAnimator 8.1
SGI R5000 Indy 96MB RAM, 6GB harddrive, DAT,
w/ MIPSpro compiler 7.2
SGI 4xR4400 Challenge L, 256MB RAM, 7GB harddrive, CDROM, DAT,
w/ IRIX IDO, Wyse terminal
APC Smart-UPS 2200XLNET
w/SGI IRIX Powerchute Pro and cables
(2) Adtran TSU routers, 1 new, 1 used
Ether switch, (2) Ethernet hubs, (1) rack, (7) desks, (2) bookshelves, (6)
chairs
Informix Dynamic Online Server, version 7.24.UCI-1 IRIX 6.2, 10 user lic.
Informix Dynamic Server OpenLine (priority support), 10 user lic, ends May 11/99
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EXHIBIT "B"
Cisco 3600 4-slot Modular Router-AC, w/Cisco 3640 IP feature set, network
module, cards and cables, and maintenance agreement. Balboa Capital
Corporation Lease #000-00000-00, monthly payment of $303.99 (29% of
total monthly amount $1048.26)
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EXHIBIT C
[Copy of lease dated August 8, 1995 between The Xxxxxx Corporation of Athens,
Inc. and Athens ISP, Inc./Xxxxx X. Xxxxxxx XX.]
