AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (the "Agreement") is made on June 3,
2002 by and between AM BROADBAND SERVICES, INC., a Delaware corporation, with an
address at 0000 XX Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000 ("Broadband"),
NEX-LINK ACQUISITION CORP., a Delaware corporation and a wholly-owned subsidiary
of Broadband, with an address at 0000 XX Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx
00000-0000 ("Sub"), NEX-LINK COMMUNICATIONS PROJECT SERVICES, LLC, a Florida
limited liability company (the "Company"), and all of the members (each a
"Member" and, collectively, the "Members") of the Company. The names, addresses
and membership interest of the Members, along with the consideration to be
received by each such Member, are set forth on Exhibit A attached hereto.
BACKGROUND
WHEREAS, the Members own all of the issued and outstanding membership
interests of the Company; and
WHEREAS, the Boards of Directors of Broadband and Sub, and the Members,
deem it advisable and in the best interests of their respective companies to
consummate, and have approved, the transaction provided for herein in which the
Company would merge with and into Sub, with Sub being the surviving corporation
and remaining a wholly-owned subsidiary of Broadband (the "Merger").
NOW, THEREFORE, in consideration of the foregoing recitals and the
respective representations, warranties, covenants and agreements set forth
herein, the parties hereto, intending to be legally bound, agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01 Effective Time of the Merger. Subject to the provisions of
this Agreement, as soon as practicable on or after the Closing Date (as defined
in Section 1.02), (i) a certificate of merger (the "Certificate of Merger")
shall be duly prepared and executed by Sub (and, if required, executed by the
Company) and thereafter delivered to the Secretary of State of the State of
Delaware for filing, as provided in the Delaware General Corporation Law, as
amended (the "GCL"), and (ii) articles of merger (the "Articles of Merger")
shall be duly prepared and executed by the Company (and, if required, executed
by Sub) and thereafter delivered to the Department of State of the State of
Florida for filing, as provided in the Section 607.1105 of the Florida Business
Corporation Act (the "BCL"). The Merger shall become effective upon the filing
of the Articles of Merger with the Department of State of the State of Florida
and the filing of the Certificate of Merger with the Secretary of State of the
State of Delaware or at such time thereafter as is provided in the Articles of
Merger and Certificate of Merger (the "Effective Time").
SECTION 1.02 Closing. The closing of the Merger (the "Closing") will
take place at 10:00 A.M. on a date to be specified by the parties, which shall
be no later than the second business day after satisfaction of the latest to
occur of the conditions set forth in Sections 6.01 and 6.02 (other than the
delivery of the officers' certificate referred to therein) (the "Closing Date"),
at the offices of Xxxxxx & Xxxxxxx, A Professional Corporation, Xxx Xxxxxxxxxx
Xxxxxx, Xxxxxxxxxxx, Xxx Xxxxxx 00000, unless another date or place is agreed to
in writing by the parties hereto.
SECTION 1.03 Effects of the Merger.
(a) At the Effective Time (i) the separate existence of the
Company shall cease and Company shall be merged with and into Sub (Sub and the
Company are sometimes referred to herein as the "Constituent Corporations" and
Sub is sometimes referred to herein as the "Surviving Corporation"), (ii) the
Certificate of Incorporation of Sub as in effect immediately prior to the
Effective Time, with such amendments thereto as are effected by this Agreement,
shall be the Certificate of Incorporation of the Surviving Corporation, and
(iii) the By-laws of Sub as in effect immediately prior to the Effective Time
shall be the By-laws of the Surviving Corporation.
(b) At and after the Effective Time, the Surviving Corporation
shall possess all the rights, privileges, powers and franchises and be subject
to all the restrictions, disabilities and duties of each of the Constituent
Corporations; and all and singular rights, privileges, powers and franchises of
each of the Constituent Corporations, and all property, real, personal and
mixed, and all debts due to either of the Constituent Corporations on whatever
account, as well as for stock and other securities subscriptions and all other
things in action or belonging to each of the Constituent Corporations, shall be
vested in the Surviving Corporation, and all property, rights, privileges,
powers and franchises, and all and every other interest shall be thereafter as
effectively the property of the Surviving Corporation as they were of the
Constituent Corporations, and the title to any real estate vested by deed or
otherwise, in either of the Constituent Corporations, shall not revert or be in
any way impaired; but all rights of creditors and all liens upon any property of
either of the Constituent Corporations shall be preserved unimpaired, and all
debts, liabilities and duties of the Constituent Corporations shall thenceforth
attach to the Surviving Corporation, and may be enforced against it to the same
extent as if said debts and liabilities had been incurred by it.
SECTION 1.04 Directors of the Surviving Corporation. The director(s) of
Sub at the Effective Time shall, from and after the Effective Time, be the
directors of the Surviving Corporation, until their successor(s) are duly
elected and qualified, or until their earlier death, resignation or removal in
accordance with the Surviving Corporation's Certificate of Incorporation and
By-laws.
SECTION 1.05 Certificate of Incorporation of the Surviving Corporation.
The Certificate of Incorporation of the Surviving Corporation shall be amended
as follows, effective as of the Effective Time:
Article FIRST shall be amended to read in its entirety as
follows:
2
"FIRST: Name. The name of the Corporation is AM
Nex-Link Communications, Inc."
ARTICLE II
CONSIDERATION TO BE RECEIVED BY MEMBERS
SECTION 2.01 Consideration to be Received for Membership Interests.
(a) As of the Effective Time, by virtue of the Merger and
without any action on the part of the holders of any of the outstanding
membership interests of the Company (the "Membership Interests"), all of the
outstanding Membership Interests shall be converted into the right to receive,
in the aggregate, 7,000,000 restricted shares of common stock of AM
Communications, Inc., a Delaware corporation (the "Parent"), par value $.10 per
share (the "AM Shares"), to be delivered by Broadband to the Members at the
Closing. The AM Shares shall be allocated among the Members as set forth on
Exhibit A attached hereto. All of the Membership Interests, when so converted,
shall no longer be outstanding and shall automatically be canceled and retired
and shall cease to exist, and each holder of a certificate representing any such
Membership Interest shall cease to have any rights with respect thereto, except
the right to receive his pro rata share of the AM Shares.
(b) In addition to the AM Shares, the following consideration
shall be payable by Sub to the Members in conjunction with the Merger and shall
be allocated among the Members as set forth on Exhibit A attached hereto:
(i) $1,000,000 in cash, to be paid by Sub to the Members
(and allocated among the Members as set forth on Exhibit A attached hereto) in
weekly installments beginning no sooner than the week of July 1, 2002, each in
an amount equal to the amount of the Company's Account Receivables (as such term
is defined hereinafter), or new accounts receivable obtained by the Sub after
the Closing (to the extent such new accounts receivable do not exceed the
difference between the $1,000,000 and the total Account Receivables), which are
actually collected by Sub during the immediately preceding week, and continuing
until the Sub shall have paid an aggregate of $1,000,000 in cash to the Members;
and
(ii) $1,000,000 in the form of a subordinated promissory
note in the form attached hereto as Exhibit B (the "Purchase Note"), to be
delivered by Sub to the Members at the Closing.
SECTION 2.02 Closing Procedures.
(a) The Closing shall be effectuated as follows:
(i) The Members shall deliver to Sub for cancellation (A)
all certificates representing the Membership Interests, or (B) if the Membership
Interests are not represented by certificates, an acknowledgment of cancellation
of each of the Membership Interests in form and substance satisfactory to Sub in
its reasonable discretion. The Members will pay all federal, state, county and
local taxes (including all requisite transfer taxes) which may be due or payable
by reason of the surrender and cancellation of the Membership Interests in
connection with the Merger.
3
(ii) Sub shall deliver to the Members certificates
representing the AM Shares as required in Section 2.01(a) hereof.
(iii) Sub shall deliver to the Members the Purchase Note.
(iv) Sub shall deliver to the Members the Company Note (as
such term is defined hereinafter).
(v) The parties shall deliver the other items as required
in Sections 6.01 and 6.02 hereof.
SECTION 2.03. Adjustment of the Purchase Price.
(a) The Purchase Price shall be adjusted down, on a
dollar-for-dollar basis, if and to the extent that the aggregate Net Book Value
of the Company, as reflected on the Closing Balance Sheets, is less than
$200,000.00. Such adjustment (if applicable) shall be made on a
dollar-for-dollar basis against the outstanding principal balance of the
Purchase Note. For purposes of this Section 2.03, "Net Book Value" means the
book value of the Company's assets minus the book value of its liabilities.
(b) At the election of Sub, the Purchase Price shall be
further adjusted down, on a dollar-for-dollar basis, by an amount equal to the
total amount of the Account Receivables which remains outstanding and
uncollected on the one hundred twentieth (120th) day following the date of the
Closing. Such election shall be made by Sub delivering a written notice (the
"Uncollected A/R Notice") to the Members, on or before the one hundred
thirty-fifth (135th) day following the date of the Closing specifying the amount
of each of the Account Receivables which remained outstanding and uncollected on
the one hundred twentieth (120th) day following the date of the Closing and
which Sub desires to use as a reduction against the Purchase Price. The
adjustment specified in the Uncollected A/R Notice (if applicable) shall be made
on a dollar-for-dollar basis against the outstanding principal balance of the
Purchase Note and, if such balance is insufficient, against the outstanding
principal balance of the Company Note as well. Upon the making of any such
adjustment(s) hereunder, Sub shall immediately take all necessary steps to
assign to the Members each of the Account Receivables specified in the
Uncollected A/R Notice and Sub shall remit to the Members, in the form received,
any payment thereafter received by Sub with respect to any such assigned Account
Receivable.
(c) If any adjustment is made to the outstanding principal
balance of the Purchase Note or the Company Note pursuant to the provisions of
this Section 2.03, the adjustment(s) shall be deemed, for all intents and
purposes, to have been made as of the date of the Closing and any interest
theretofore paid by Sub to the Members on the amount of the adjusted principal
on either the Purchase Note or the Company Note shall be returned by the Members
to Sub immediately upon demand by Sub.
4
(d) If any adjustment is made to the outstanding principal
balance of the Purchase Note or the Company Note pursuant to the provisions of
this Section 2.03, Sub shall execute and deliver to the Members an amended and
restated Purchase Note and Company Note (if applicable) with a principal balance
equal to the adjusted principal balance thereof determined pursuant to this
Section 2.03 and, upon such delivery, the original Purchase Note and Company
Note (if applicable) delivered by Sub to the Members at the Closing shall each
be marked "cancelled" and delivered to Sub.
SECTION 2.04. Closing Balance Sheets. After the Closing, the parties
shall agree to balance sheets for the Company on the date of the Closing (the
"Closing Balance Sheet") pursuant to the following procedure:
(a) Within sixty (60) days after the Closing, Broadband shall
prepare and submit to the Members the Closing Balance Sheets, which balance
sheets shall be dated as of the date of the Closing and prepared in accordance
with generally accepted accounting principles and using, to the extent
consistent with generally accepted accounting principles, the same accounting
methods, policies, principles practices and procedures, with consistent
classification, judgments and estimation methodology as used in the preparation
of the Financial Statements referred to in Section 3.01(d) (the "Policies").
(b) The Members may, for a period of thirty (30) days
following receipt of the Closing Balance Sheets, review them. Broadband and Sub
shall cooperate with the Members to permit the Members and their representatives
to conduct such review, including but not limited to providing the Members with
reasonable access to the Company's personnel, books, records, accounting records
and the accounting work papers used in the preparation of the Closing Balance
Sheets.
(c) Within thirty (30) days after the Members' receipt of the
Closing Balance Sheets, the Members shall notify Broadband in writing of their
acceptance of the Closing Balance Sheets or their disagreement with respect
thereto. To the extent that the Members disagree with the Closing Balance
Sheets, the Members shall notify the Broadband of such disagreement in writing
within such thirty (30) day period specifying in reasonable detail all disputed
items and the basis therefor. The Members may dispute only those items reflected
on the Closing Balance Sheets on the basis that such amounts were not arrived at
in accordance with generally accepted accounting principles and the Policies.
Broadband, Sub and the Members shall use their best efforts to resolve such
disagreement. In the event that the Broadband and the Members resolve such
disagreement within fifteen (15) days after Broadband's receipt of such notice
of disagreement by the Members, then the Closing Balance Sheets shall be
modified accordingly. In the event that Broadband and the Members are unable to
resolve such disagreement during such fifteen (15) day period, then Broadband
and the Members shall jointly select a firm of certified public accountants of
recognized national standing other than their respective auditors (the
"Arbitrator") to review the Closing Balance Sheets and the work papers used in
connection with the preparation of the Closing Balance Sheets and to determine
those items in dispute using generally accepted accounting principles and the
Policies, and not by independent review. The decision of the Arbitrator as to
any modifications to those items in dispute, if any, that should be made to the
Closing Balance Sheets shall be final and binding upon the parties and all of
such modifications shall be made to the Closing Balance Sheets. Judgment upon
the decision of the Arbitrator may be entered by Broadband or the Members in any
court of competent jurisdiction. The fees and expenses of the Arbitrator shall
be paid one-half by Broadband and one-half by the Members.
5
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE MEMBERS
SECTION 3.01 General Representations and Warranties. The Members
hereby, severally (and not jointly and severally), represent, warrant and
covenant to Sub as of the date hereof and the time of the Closing as follows:
(a) Company Organization, Etc. The Company is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Florida, is duly qualified as a foreign limited
liability company in all jurisdictions wherein the character of the property
owned or leased or the nature of the business transacted by it makes
qualification as a foreign limited liability company necessary (except where the
failure to be so qualified would not have a material adverse effect upon the
assets, business, or financial condition of the Company (a "Material Adverse
Effect")), and has the limited liability company power to own its properties and
carry on its business as presently conducted. The Company does not own any
capital stock or other equity interest in any other corporation or other
organization. True, complete and correct copies of the Certificate of Formation,
Operating Agreement and other constituent documents of the Company have been
heretofore provided to Sub.
(b) Capitalization; Membership Interest Ownership; Authority.
(i) The Company's authorized membership interests consists of 100% membership
interests, of which 100% membership interests are issued and outstanding. There
are no existing options, calls, or commitments of any character whatsoever, or
agreements to grant the same, relating to authorized or issued membership
interests of the Company, and the Company has no outstanding securities
convertible into or exercisable for any such membership interests, or any
options, calls or commitments of any character whatsoever with respect to the
issuance or sale of any such convertible securities.
(ii) The Members are the owners, beneficially and of
record, of all of the issued and outstanding membership interests of the
Company, in the amounts indicated on Exhibit A attached hereto, free and clear
of any claim, lien, option, charge, restriction or encumbrance of any nature
whatsoever (collectively, "Encumbrances"). All of the issued and outstanding
membership interests of the Company have been duly authorized and validly
issued, and are fully paid and nonassessable. The Company and each of the
Members has all requisite power and authority to execute, deliver and perform
this Agreement and to consummate the transactions contemplated hereby. This
Agreement has been duly and validly authorized, executed and delivered by the
Company and each of the Members and constitutes the legal, valid, and binding
obligation of the Company and each of the Members, enforceable in accordance
with its terms, subject to limitations relating to bankruptcy, insolvency,
receivership, other laws limiting creditors' rights generally or principles of
equity.
(iii) All of the issued membership interests of the
Company have been offered, sold and issued in compliance with all applicable
securities laws.
6
(iv) The execution, delivery and performance by the
Company and each of the Members of this Agreement will not result in a breach or
violation of, or constitute a default under, any of the Company's Certificate of
Formation, the Company's Operating Agreement, or any agreement or instrument to
which the Company is a party or by which it is bound, or any Law, or any
judgment, decree, order, rule or regulation of any federal, state, local or
foreign court or governmental or regulatory agency or authority (each, a
"Governmental Authority" and, collectively, "Governmental Authorities")
applicable to the Company.
(v) The execution, delivery and performance by each of the
Members of this Agreement will not result in a breach or violation of, or
constitute a default under, the Articles of Incorporation, bylaws, or other
constituent documents of any Member, or any agreement or instrument to which any
Member is a party or by which it is bound, or any Law, or any judgment, decree,
order, rule or regulation of any Governmental Authority applicable to any
Member.
(c) Filings; Consents. Except as set forth on Schedule 3.01(c)
attached hereto, no filing is required to be made with any Governmental
Authority and no consent or approval is required to be obtained from any
Governmental Authority or from any third party in order for the Company or any
Member to enter into this Agreement and to consummate the transactions
contemplated hereby.
(d) Financial and Other Data. The Members have delivered to
Sub copies of the following financial statements of the Company (the "Financial
Statements"): statements for the fiscal year ended December 31, 2001, reviewed
by Xxxxxx Xxxxxxxxx, CPA, and internally prepared and reviewed monthly
statements for the period of January 1, 2002 through April 30, 2002.
The Financial Statements have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
indicated (other than, with respect to any interim financial statement, normal
year-end accruals and adjustments), the balance sheets included in the Financial
Statements present fairly in all material respects the financial position of the
Company as of their respective dates, and the statements of income included in
the Financial Statements present fairly in all material respects the results of
operations of the Company for the periods covered thereby.
(e) Accounts. The accounts receivable of the Company as of the
date hereof and on the Closing Date (collectively, the "Account Receivables")
(i) represent and will represent transactions for good and valuable
consideration resulting from bona fide sales or services to third parties in the
ordinary course of business, (ii) are not and shall not be subject to any known
defenses, set-offs or counterclaims, and (iii) are and shall be legally
enforceable (except as such enforceability may be limited by bankruptcy,
insolvency or other legal or equitable principles affecting the enforcement of
creditors' rights generally). Except as set forth on Schedule 3.01(e) attached
hereto, each of the Account Receivables will have been outstanding for less than
one hundred twenty (120) days as of the Closing Date. The Account Receivables
will be collectible in the ordinary course of business within one hundred twenty
(120) days after their respective due dates, at the aggregate gross recorded
amount thereof. Since April 30, 2002, there has been no change in the Company's
Account Receivables which would have a Material Adverse Effect.
7
(f) Litigation, Etc. Except for matters set forth on Schedule
3.01(f) attached hereto, there is no litigation, proceeding or governmental
investigation pending or, to the best knowledge of the Members, threatened
against or relating to the Company, its properties or business, or the
transactions contemplated by this Agreement. There are no decrees, injunctions
or orders outstanding or in effect of any Governmental Authority regarding the
Company, or its properties or business.
(g) Compliance with Laws. The Company has complied in all
respects with all federal, state, county, local and foreign laws, statutes,
ordinances, rules, regulations, and orders (each, a "Law" and, collectively, the
"Laws") relating to the Company or its assets, except for violations which do
not, alone or in the aggregate, have a Material Adverse Effect. The operation of
the Company's business at its current location is in conformity in all material
respects with all applicable zoning ordinances and regulations. The Company has
all licenses, franchises, permits, certificates, authorizations, consents,
licenses and approvals required by Law or any Governmental Authority
(collectively, "Permits") for (i) the conduct of the Company's business as
presently conducted, and (ii) the execution, delivery or performance of this
Agreement or any instrument hereunder. The Company is not in default or in
noncompliance in any material respect under any of such Permits. No Permits
shall be affected by the Closing. The consummation of the transactions herein
contemplated including, but not limited to, the execution, delivery, and
performance of this Agreement, does not, and will not, constitute a violation of
or default under, conflict with, or result in a breach of any judgment, order,
award, decree, of any Governmental Authority or Law applicable to the Company.
(h) Assets; Absence of Liens and Encumbrances, Etc. Except as
set forth on Schedule 3.01(h) attached hereto, the Company has good and
marketable title to all its properties and assets, personal, tangible and
intangible, including the assets included on the Financial Statements, free and
clear of all Encumbrances other than Permitted Liens (as hereinafter defined).
The Company does not own any real estate. The term "Permitted Lien" means (i)
any liens for current taxes not yet due, and (ii) those immaterial statutory
liens of the type that arise out of taxes or general or special assessments not
in default and payable without penalty or interest. Such assets are in good
repair and operating condition and include all assets that have been used by the
Company to conduct the business of the Company as it has been conducted during
the three years prior to the date hereof. There is no existing claim which would
provide a right of set-off under any of the Company's contracts, agreements or
leases, each of which is in full force and effect, and there is no default or
event, but for notice or lapse of time or both, which would constitute an event
of default under any such contract, agreement or lease.
(i) Liabilities. Other than liabilities specifically set forth
on the balance sheet included in the latest Financial Statement of the Company
and trade payables incurred by the Company in the ordinary course of business
after the date of the latest Financial Statement of the Company, the Company has
no liabilities or obligations (whether accrued, absolute, contingent or
otherwise) of any nature whatsoever.
8
(j) Absence of Certain Changes or Events. Since the date of
the latest Financial Statement of the Company, there has not been:
(i) Any change in the financial condition, assets,
liabilities, or business of the Company other than changes which do not,
individually or in the aggregate, have a Material Adverse Effect;
(ii) Any declaration, setting aside or payment of any
dividend or other distribution in respect of the Company's membership interests,
or any redemption of the Company's outstanding membership interests, or any
change in the authorized, issued or outstanding membership interests of the
Company, or agreement or commitment with respect to any thereof;
(iii) Any increase in the compensation payable or to
become payable by the Company to any of its managers, members, officers,
employees or agents, whose total compensation for services rendered is currently
at an annual rate of more than $25,000, or any bonus, incentive compensation,
service award or other like benefit, granted, made or accrued, contingently or
otherwise, to or to the credit of any of the directors, officers, employees or
agents thereof, or any employee welfare, pension, retirement or similar payment
or arrangement made or agreed to by the Company, except as set forth on Schedule
3.01(j) attached hereto;
(iv) Any labor trouble, or any controversies or unsettled
grievances pending or threatened, between the Company and any of its employees
or a collective bargaining organization representing or seeking to represent
such employees;
(v) Any conducting of business by the Company other than
in the ordinary course;
(vi) Any material adverse change in relationship with any
substantial customer;
(vii) The entry into, termination of, receipt of notice of
termination of, or amendment of or modification to (x) any license,
distributorship, dealer, supplier, sales representative, joint venture, credit
or similar agreement, or (y) any contract or commitment (other than for the sale
of products by the Company in the ordinary course of business) involving a total
remaining commitment by or to the Company in excess of $5,000;
(viii) Any borrowing or lending of money by the Company;
(ix) Any individual capital expenditure, or incurring of
liability therefor, in excess of $5,000; or
(x) Any loan to or guaranty of the indebtedness of the
Members, any employee of the Company or any of the Company's employees' family
members.
9
(k) Independent Contractors. (i) All persons who have served
as independent contractors for the Company have signed an agreement, whereby
each such person has, among other things, acknowledged that he or she is an
independent contractor responsible for his or her own payroll taxes and workers'
compensation insurance. All independent contractors have been covered by
workers' compensation insurance provided either by the Company or the
contractor.
(ii) Except for current compensation and premiums for
workers' compensation insurance described in clause (i) above, in each case
which is not yet due and payable, the Company has no liabilities or obligations
(whether accrued, absolute, contingent or otherwise) with respect to persons
engaged by the Company as independent contractors prior to the date hereof,
including without limitation liabilities for payment of payroll or withholding
taxes, workers' compensation premium payments, or relating to injuries sustained
by any such independent contractors.
(l) Schedules. The following Schedules which are attached
hereto contain complete and accurate lists and summary descriptions of the
following:
SCHEDULE 3.01(l)(i): (A) A complete list of all real
estate leased by the Company and (B) a complete list of the Company's vehicles,
machinery, equipment, tools, replacement parts, molds and furniture and
fixtures.
SCHEDULE 3.01(l)(ii): All of the Company's intellectual
property, including but not limited to patents, copyrights, trade names and
trademarks, and applications therefor, and registrations thereof, and all other
inventions, discoveries, improvements, designs, processes, formuli, trade
secrets, ideas and other know-how, whether or not patentable.
SCHEDULE 3.01(l)(iii): All contracts, leases, agreements
and other documents and commitments of the Company, including without limitation
agreements with suppliers, distributors and employees.
SCHEDULE 3.01(l)(iv): All policies of insurance in force
with respect to the Company or its assets.
SCHEDULE 3.01(l)(v): All mortgages, promissory notes,
bonds and other evidences of indebtedness upon which the Company is obligated.
SCHEDULE 3.01(l)(vi): All of the suppliers of the Company
accounting for purchases in excess of $5,000 by the Company during 2000, 2001 or
2002.
SCHEDULE 3.01(l)(vii): All Permits necessary to operate
the Company's business as presently conducted.
SCHEDULE 3.01(l)(viii): All of the Company's labor
contracts and collective bargaining agreements, and all employee profit-sharing,
incentive, deferred compensation, welfare, pension, retirement, group insurance
and other employee benefit plans, arrangements and practices (including all
trust agreements and the most recent determination letters of the United States
Internal Revenue Service relating to such plans), relating to the Company or its
employees ("Employee Benefit Plans").
10
SCHEDULE 3.01(l)(ix): The names and current annual rates
of compensation of all the managers, members, officers, employees and agents of
the Company, together with a summary (containing estimates to the extent
necessary) of (i) existing bonuses, additional compensation (whether current or
deferred) and other like benefits, if any paid to such persons in the two prior
fiscal years or subsequent thereto, and (ii) any other payments made by or on
behalf of the Company to any labor organization or representative, employee, or
agent of any labor organization in the two prior fiscal years or subsequent
thereto.
SCHEDULE 3.01(l)(x): The name of each institution in which
the Company has a bank account or safety deposit box, the number of any such
account or box and the names of all persons authorized to draw thereon or to
have access thereto.
SCHEDULE 3.01(l)(xi): All marketable securities, and all
other notes or other obligations evidenced by written instruments, owned by the
Company.
Accurate and complete copies of the leases, agreements,
contracts, commitments, plans, policies, arrangements and other documents
referred to in the foregoing Schedules have been delivered by the Company to
Sub.
(m) Tax Matters. The Company has duly and timely filed with
the appropriate Governmental Authority (federal, state, foreign and local) all
tax and other returns required to be filed by it, all of which have been
accurately prepared. All federal, state, local and foreign taxes, assessments,
interest, and penalties, and all other sums owed to any other Governmental
Authority, whether federal, foreign, state or local (collectively, "Taxes"),
due, owing and payable, or which may be due, owing and payable, have been fully
paid or duly provided for in the Financial Statements. The accrual for taxes
reflected in the Financial Statements shall be sufficient for the payment of all
accrued and unpaid Taxes for the period ending on the Closing Date and for all
periods prior thereto. The Company's income tax returns have not been audited by
the United States Internal Revenue Service ("IRS") or any other state, local or
foreign taxing authority. There are no agreements by the Company for the
extension of time for the assessment of any Taxes. No claim for Taxes due is
being contested by the Company. The Company has not received notice from the IRS
or any other taxing authority of any deficiency or other adjustment which has
not been satisfied, and the Members have no knowledge that such a notice may be
sent. The Company has delivered to Sub true and complete copies of the federal
income tax and foreign and state income and franchise tax returns relative to
the operations of the Company from inception through the date hereof, together
with true and complete copies of all reports of federal and state tax
authorities relating to examinations of such returns.
(n) Books and Records. The books of account, minute books,
membership interest record books, and other records of the Company, all of which
have been made available to Sub, are complete and correct and have been
maintained in accordance with sound business practices, including the
maintenance of an adequate system of internal controls. The minute books of the
Company contain accurate and complete records of all meetings held of, and
action taken by, the members and/or managers of the Company, and no meeting of
any such member or manager has been held for which minutes have not been
prepared and are not contained in such minute books. At the Closing, all of
those books and records will be in the possession of the Company.
11
(o) Employee Benefit Plans and Agreements. (i) The Company has
no employment agreements, arrangements, contracts, or understandings, whether
enforceable or unenforceable, or written or oral with any employee, labor
organization, or representative of any labor organization relating to its
employees, except those set forth on Schedule 3.01(o) attached hereto. The
Company has not violated any laws, regulations, orders or contract terms,
affecting the collective bargaining rights of employees, equal opportunity in
employment, or employee's health, safety, wages and hours.
(ii) There are no labor disputes existing, or to the best
of the Members' knowledge, threatened, involving strikes, slowdowns, work
stoppages, job actions or lockouts of any employees of the Company. There are no
unfair labor practices or petitions for election pending before the National
Labor Relations Board or any other federal or state labor commission relating to
the employees of the Company. No demand for recognition heretofore made by any
labor organization is pending with respect to the Company.
(p) Pension Plans. The Company is not nor has it ever been a
party to any multi-employer retirement plan. No Employee Benefit Plan is in
material violation of any of the provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and no prohibited transaction within
the meaning of Title I or Title II of ERISA has occurred and is continuing with
respect to any such plan. With respect to each Employee Benefit Plan: (i) the
minimum funding standards have been met for each year in which Section 302 of
ERISA or Section 412 of the Internal Revenue Code of 1986, as amended (the
"Code"), were applicable, and no waiver of the minimum funding standards has
been requested for any such year, (ii) no events have occurred which are
required to be reported to the Pension Benefit Guaranty Corporation ("PBGC")
under Section 4043(b) of ERISA, (iii) all premiums required to be paid to the
PBGC have been paid, (iv) there is no unfunded liability, (v) such plans as are
intended to be qualified under Section 401(a) of the Code have received,
subsequent to January 1, 1989, favorable determination letters from the Internal
Revenue Service with respect to such qualified status and at all times have been
operated in a manner consistent therewith, and (vi) all report forms or other
information required to be filed with any government agency or to be delivered
to any plan participant or beneficiary have been filed, distributed or made
available.
(q) Patents, Licenses, and Trademarks. The Company owns or has
sufficient right to use all patents, trademarks, trade names, copyrights and
other intellectual property rights necessary or desirable to conduct the
business of the Company as it is currently being conducted and consistent with
past practice (collectively, "Intellectual Property"), including those set forth
on Schedule 3.01(l)(ii) attached hereto, without any obligation or liability for
royalties, fees, or other compensation to any owner, licensor, or other claim to
any of the foregoing. All Intellectual Property of the Company is valid,
enforceable and unexpired, is free of Encumbrances, has not been abandoned, does
not infringe or otherwise impair the intellectual property of any third party,
and is not being infringed or impaired by any third party. No Governmental Order
has been rendered or, to the best of the Members' knowledge, is threatened by
any Governmental Entity which would limit, cancel or question the validity of
any Intellectual Property of the Company. No action is pending or, to the best
of the Members' knowledge threatened, that seeks to limit, cancel or question
the validity of any of the Intellectual Property of the Company. The Company has
taken all reasonable steps to protect, maintain and safeguard its Intellectual
Property, and has made all filings and executed all agreements necessary or
desirable in connection therewith. No party to any license for Intellectual
Property is, or is alleged to be, in breach or default thereunder. The
transactions contemplated by this Agreement do not require the consent of any
third party, and will not cause any payments to be due, under any license for
Intellectual Property.
12
(r) Environmental Matters. (i) The Company holds, and its
business has been conducted in compliance with, all environmental Permits
required under all applicable environmental laws, rules and regulations, and all
of such Permits are in full force and effect. All such Permits are listed on
Schedule 3.01(l)(vii) attached hereto and, except as set forth on such schedule,
all such Permits shall not be affected by the Closing. The Company's business
has been conducted in compliance with all, and the conduct thereof is not in
violation of any, applicable environmental statutes, rules, regulations,
ordinances and orders of any Governmental Authority, including those relating to
Hazardous Substances (as defined below).
(ii) No notice, citation, summons or order has been
issued, no complaint has been filed, no penalty has been assessed and no
investigation or review is pending or threatened by any Governmental Authority
with respect to (A) any alleged violation in the conduct of the Company's
business or with respect to its assets of any environmental statute, ordinance,
rule, regulation or order of any Governmental Authority; or (B) any alleged
failure to have any environmental Permit required in connection with the conduct
of the Company's business; or (C) any generation, treatment, storage, recycling,
transportation or disposal of any Hazardous Substance in connection with the
conduct of the Company's business or with respect to any of its assets.
"Hazardous Substances" shall mean and include any hazardous substances defined
in the United States Comprehensive Environmental Response, Compensation and
Liability Act, as amended ("CERCLA"), any hazardous materials defined in the
United States Hazardous Materials Transportation Act, any hazardous wastes
defined in the United States Resources Conservation and Recovery Act ("RCRA"),
any toxic substance as defined in the Toxic Substances and Control Act, any
pollutant or contaminant as defined in the United States Clean Water Act and as
the terms hazardous substance, hazardous waste, hazardous materials, toxic
substance or pollutants or contaminants are defined in corresponding state and
local laws, ordinances and regulations and including petroleum products and
radioactive materials.
(iii) The Company has not received any request for
information, notice of claim, demand or other notification that it is or may be
potentially responsible with respect to any investigation or cleanup of any
threatened or actual release of any Hazardous Substances in connection with the
conduct of its business.
(iv) Except as set forth on Schedule 3.01(r) attached
hereto, the Company has not used, generated, treated, stored, recycled or
disposed of any Hazardous Substances on any property now or previously owned,
operated or leased by the Company, and no other person has treated, stored,
recycled or disposed of any Hazardous Substances on any property now or
previously owned, operated or leased by the Company in connection with the
conduct of the Company's business that might have a Material Adverse Effect.
13
(v) The Members know of no facts or circumstances related
to environmental matters concerning the conduct of the Company's business or
with respect to its assets that could lead to any future environmental claims,
liabilities or responsibilities under any presently existing environmental
statute, ordinance, rule, regulation or order of any Authority which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect upon the value of the Company's assets or business to
Sub, or the possession, use, occupancy or operation by Sub, of any portion of
the Company's business or its assets.
(s) Insurance. The Company and its properties, businesses and
assets are covered by such fire, casualty, product liability and other insurance
policies issued by reputable companies as are customarily obtained to cover
comparable business and assets in the regions in which such business and assets
are located, in amounts, scope and coverage which are reasonable in light of
existing conditions, and which are adequate to insure fully against risks to
which the Company and its properties, business and assets, are normally subject
in the operations of the Company's businesses.
(t) Contracts. Each contract of the Company, including those
set forth on Schedule 3.01(l)(iii), is valid and binding, is in full force and
effect, and is being complied with and has not been breached by any other party
thereto in any material respect.
(u) Inventory. The inventory of the Company is fit and
sufficient for the purpose for which it was procured or manufactured and is not
excessive in kind or amount in light of the business of the Company as presently
conducted. All excess and obsolete items in the inventory have been either (i)
written down, (ii) written off, (iii) reserved for, or (iv) otherwise provided
for in accordance with generally accepted accounting principals. Schedule
3.01(u) attached hereto includes a description of the excess and obsolete
inventory policies of the Company. Such policies have been in effect, without
change, for at least three (3) years. The inventory is carried on the books of
the Company at the lower of cost (in accordance with the first-in or first-out
method) or market. All items of the inventory have been purchased in the
ordinary course of business and consistent with the anticipated requirements of
the Company. Schedule 3.01(u) includes a description of the product return
policies and product repair policies of the Company. Such policies have been in
effect, without change, for at least three (3) years.
(v) Product Issues. Except as set forth on Schedule 3.01(v)
attached hereto, there is no alleged or actual defect or hazard in the
manufacture, design, materials or workmanship, or alleged or actual failure to
warn of any of the foregoing, in any product (or component thereof) which has
been manufactured, shipped or sold by the Company. Except as set forth on
Schedule 3.01(v), there has not been any occurrence involving any product
recall, rework or retrofit relating to any product which has been manufactured,
shipped or sold by the Company.
(w) No Brokers. All negotiations relative to this Agreement
and the transactions contemplated hereby have been carried on by the Members
directly with Sub and Broadband without the intervention of any other person as
a result of the act of the Members or the Company, in such manner as to give
rise to any valid claim against any of the parties hereto for a broker's
commission, finder's fee or other like payment.
14
(x) Disclosure. No representation or warranty made in this
Agreement or as provided herein contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements contained
herein or therein not misleading.
SECTION 3.02 Investment Representations. Each Member understands,
represents and warrants to, and agrees with, Sub, Broadband and the Parent (all
such representations and warranties being made to and for the benefit of Sub,
Broadband and the Parent and any transfer agent of any of them employed for that
purpose) as follows:
(a) Each Member understands that no federal or state agency
has passed on or made any recommendation or endorsement of the AM Shares;
(b) Each Member acknowledges that, in making a decision to
acquire the AM Shares hereunder, he or it has relied solely upon independent
investigations made by him or it and not upon any representations made by Sub,
Broadband or the Parent with respect to Sub, Broadband or the Parent, or the AM
Shares;
(c) Each Member understands that the AM Shares are being sold
to him or it hereunder in reliance on specific exemptions from the registration
requirements of federal and state securities laws and that Sub is relying upon
the truth and accuracy of the representations, warranties, agreements,
acknowledgments, and understandings of the Member set forth herein in order to
determine the applicability of such exemptions and the suitability of the Member
to acquire the AM Shares;
(d) Each Member is not an affiliate of Sub, Broadband or the
Parent;
(e) Each Member is aware that (i) the AM Shares have not been
and will not be registered under the Securities Act of 1933, as amended, (the
"Securities Act"), (ii) upon the execution by the Members and the Parent of a
registration rights agreement in the form attached as Exhibit D hereto (the
"Registration Rights Agreement"), the Members will have certain piggyback
registration rights with respect to the AM Shares, subject to the terms and
provisions of the Registration Rights Agreement, (iii) except as otherwise
provided by the Registration Rights Agreement, neither Sub, Broadband nor the
Parent is under any obligation to register or cause to be registered the AM
Shares pursuant to the Securities Act, and (iv) the AM Shares may only be
offered or sold by him or it pursuant to registration under the Securities Act
or an available exemption therefrom; and
(f) Each Member will offer, sell, pledge or otherwise transfer
the AM Shares only pursuant to registration under the Securities Act or an
available exemption therefrom and, in any case, in accordance with all
applicable federal, state and foreign securities laws.
15
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SUB AND BROADBAND
SECTION 4.01 General Representations and Warranties. Sub and Broadband
each hereby represents and warrants to the Members as of the date hereof and the
time of the Closing as follows:
(a) Organization. Each of Sub and Broadband is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware.
(b) Corporate Authority, Etc. All requisite corporate action
has been taken to authorize the execution, delivery and performance of this
Agreement by sub and Broadband. The Agreement has been or at Closing will be
duly executed and delivered by Sub and Broadband and constitutes or will
constitute the legal, valid and binding obligations of Sub and Broadband,
enforceable in accordance with its respective terms, subject to limitations
relating to bankruptcy, insolvency, receivership, other laws limiting creditors'
rights generally or principles of equity.
(c) Consents, Etc. Except as set forth on Schedule 4.01(c)
attached hereto, the consummation of the transactions contemplated by the
Agreement will not (i) require Sub or Broadband to obtain the consent, approval,
authorization or order of any Governmental Authority, or (ii) constitute a
violation of or default under, conflict with, or result in a breach of (A) any
judgment, order, award, decree, of any Governmental Authority or Laws to which
Sub or Broadband is subject, or (B) any agreement or instrument to which Sub or
Broadband is a party or by which it is bound.
(d) No Brokers. All negotiations relative to this Agreement
and the transactions contemplated hereby have been carried on by Sub and
Broadband directly with the Members without the intervention of any other person
as a result of any act of Sub or Broadband in such manner as to give rise to any
valid claim against any of the parties hereto for a brokers commission, finder's
fee or other like payment.
ARTICLE V
FURTHER ASSURANCES
SECTION 5.01 Further Assurances. Each party agrees that it or he will,
upon request of the other at any time after the Closing Date and without further
consideration, execute and deliver such other documents and instruments and take
such other action as may reasonably be requested to carry out more effectively
the purpose and intent of this Agreement.
SECTION 5.02 Conduct of the Company's Business. Pending the Closing,
the Members shall not permit and shall cause the Company not to permit:
16
(a) any conduct of the Company's business other than in the
ordinary course;
(b) any increase in the compensation payable or to become
payable to any of the Company's employees or agents or any bonus, incentive
compensation, service award or other like benefit, granted, made or accrued,
contingently or otherwise, to or to the credit of any thereof, or any employee
welfare, pension, retirement, profit-sharing or similar payment or arrangement
or union or collective bargaining agreement made or agreed to by the Company
pertaining to the Company's employees;
(c) any borrowing or lending of money by the Company;
(c) any declaration, payment or accrual of any dividend or
other distribution to the Members, any redemption or issuance of any of the
Members' respective membership interests or securities convertible into any
membership interest of the Company or commitment to grant the same, or any
retirement of any debt or obligation owed to the Members;
(d) any forgiveness of any liabilities or obligations owed to
the Company by any affiliated person;
(e) any capital expenditures which in the aggregate would
exceed $5,000, or incurring of liability therefor, by the Company;
(f) any failure on the part of the Company to use its best
efforts to preserve its business organization intact, to keep available the
services of its present officers and employees, and to preserve the Company's
assets (including intellectual property) and the business and the goodwill of
its suppliers, customers, referring sources and others having business relations
with it; or
(g) any act or omission which would cause the Company to be
unable to restate, as of the Closing, the representations set forth in Section
3.01 above.
SECTION 5.03 Transition. The Members agree to take any reasonable
action requested by Sub in order to promote the smooth transition of the
Company's business to Sub.
SECTION 5.04 Investigations. (a) The Members may prior to the Closing
Date, through their employees, agents and representatives, make or cause to be
made such investigations during normal and reasonable business hours as it deems
necessary or advisable of the properties, assets, businesses, books and records
of Sub, Broadband and the Parent. In such regard, Sub shall permit and shall
cause Broadband and the Parent to permit the Members and their employees, agents
and representatives to have full access to the premises of Sub, Broadband and
the Parent and all such books and records of Sub, Broadband and the Parent, and
to furnish to the Members such financial, operating and technical data and other
information as the Members shall from time to time reasonably request.
17
(b) Sub may prior to the Closing Date, through its employees,
agents and representatives, make or cause to be made such investigations during
normal and reasonable business hours as it deems necessary or advisable of the
properties, assets, businesses, books and records of the Company, including
without limitation conducting a pre-Closing audit, at Sub's expense, of the
Company's revenue statements and historical reports and the MSO Contract-related
revenues. In such regard, the Members shall cause the Company to permit Sub and
its employees, agents and representatives to have full access to the premises of
the Company and all such books and records of the Company, and to furnish to Sub
such financial, operating and technical data and other information as Sub shall
from time to time reasonably request.
SECTION 5.05 Non-Solicitation. The Members shall not, and shall cause
the Company and each officer, director, employee and agent of the Company not
to, directly or indirectly (i) take any action to solicit, initiate, encourage
or pursue any Acquisition Proposal (as herein defined), or (ii) continue,
pursue, initiate or engage in negotiation with, or disclose any non-public
information relating to the Company, or afford access to the parties, books or
records of the Company to, any person (except Sub) that may be considering or
has made an Acquisition Proposal. The term "Acquisition Proposal" as used herein
means any offer or proposal for or any indication of interest in (a) a merger,
consolidation or other business combination involving any equity interest in the
Company, (b) all or any portion of the assets of the Company, or (c) any
acquisition of all or any portion of the membership interests of the Company.
SECTION 5.06 Provision of Information. From and after the Closing Date,
the Members shall, and shall cause their representatives to, provide on a timely
basis such financial and other reporting information relating to the Company for
periods prior to the Closing as may be reasonably requested by Sub for the
purpose of preparing financial and reporting information required by applicable
law.
SECTION 5.07 Transfer of Monies Received by Members after Closing. As
of and from the Closing, the Members shall remit to Sub all amounts received by
the Members with respect to the operation of the Company.
SECTION 5.08 Covenant Not to Compete. (a) For a period of three (3)
years after the Closing Date neither Xxxxxx Xxxxxx nor Xxxxx Xxxxxxxx shall,
directly or indirectly, own, manage, operate, control, or be engaged as an
officer, director, proprietor, employee, partner, consultant, adviser, agent,
representative or otherwise by any business, firm, sole proprietorship,
corporation, partnership, joint venture or other entity, enterprise or
association that is engaged anywhere in the world in telecommunications
services.
(b) For a period of three (3) years after the Closing Date
neither Xxxxxx Xxxxxx nor Xxxxx Xxxxxxxx shall, either directly or indirectly,
through an affiliate or otherwise, except with the prior written consent of Sub,
seek to employ any employee or consultant of the Company or do any act or thing
to cause, bring about, or induce any interference with, disturbance to or
interruption of any existing relationship of the Company with any employee,
consultant, customer or supplier.
(c) If any provision of this Section 5.08 is held to be
unenforceable because of the scope, duration or area of its applicability, the
court making such determination shall have the power to modify such scope,
duration or area or all of them, and such provision shall then be applicable in
such modified form. No provision of this Section 5.08 shall be interpreted to
limit any provisions or restrictions contained in any separate agreement that
may be entered into between Broadband or Sub and an individual Member.
18
(d) Since a violation of this Section 5.08 will result in
irreparable harm to Sub, Broadband and/or the Parent, for which money damages
alone would not adequately compensate, if either a Member or an affiliate of a
Member violates any of the provisions of this Section 5.08, Sub, Broadband
and/or the Parent shall be entitled to an injunction restraining the commission
or continuation of any violation of this Section 5.08 by such person or entity,
or any other appropriate decree of specific performance. Such remedies shall not
be exclusive and shall be in addition to any other remedy which the Broadband
may have.
SECTION 5.09 Confidentiality. (a) Each Member hereby agrees that all
information furnished to the Members by Sub, Broadband, and/or the Parent (the
"Confidential Information") in connection with the transactions contemplated by
this Agreement (the "Transactions") will be used by such Member solely for the
purpose of evaluating the Transactions and that it and its directors, officers,
employees, agents and representatives ("Representatives"), subsidiaries and
affiliates, will not use the Confidential Information for any other purpose and
will maintain the confidentiality of the Confidential Information in perpetuity.
Each Member hereby agrees to promptly notify Sub, Broadband and the Parent in
writing of any breach of the terms and provisions of this Section 5.09 by any
party of which it has knowledge.
(b) During the course of negotiations between the Members and
Sub pertaining to the Transactions (the "Negotiations") and for a period of two
years following the termination of such Negotiations (other than as a result of
the consummation of the Merger), no Member or its Representatives shall employ,
either directly or indirectly, any officer, director, employee, agent or
representative of Sub, Broadband, or the Parent without the prior written
consent of Sub, Broadband or the Parent, as appropriate.
(c) Without the prior written consent of Sub, each Member and
its Representatives agrees not to contact or solicit any customer or supplier,
or prospective customer or supplier of, Sub Broadband or the Parent during the
course of the Negotiations and for a period of two years from the date of the
termination of the Negotiations (other than as a result of the consummation of
the Merger), with respect to any bid, proposal, contract, order or
work-in-progress disclosed by Sub, Broadband and/or the Parent to any Member or
any Member's Representative during the course of the Negotiations.
(d) In addition, without the prior written consent of Sub,
none of the Members nor any of their Representatives will disclose to any person
(which shall include, without limitation, any corporation, company, group,
partnership or individual) (i) that the Confidential Information has been made
available to the Members or their Representatives, (ii) that the Members or
their Representatives have inspected any portion thereof, (iii) that discussions
or negotiations are taking place concerning a possible transaction with Sub,
Broadband and/or the Parent, or (iv) any of the terms, conditions, or facts with
respect to any such possible transaction, including without limitation the
status thereof.
19
(e) Each Member acknowledges and agrees that Sub, Broadband
and/or the Parent will be irreparably damaged in the event that any of the
provisions of this Section 5.09 are breached by the Members or their
Representatives, and that Sub, Broadband and/or the Parent shall, without the
necessity of posting any required bond or other form of financial assurance, be
entitled to (i) an injunction or injunctions to prevent breaches of any of the
provisions of this Section 5.09 by any Member or its Representatives and (ii)
enforce specifically the terms and provisions of this Section 5.09 in any court
in the United States, or any state thereof having jurisdiction, in addition to
any other remedy to which Sub, Broadband and or the Parent may be entitled at
law or in equity.
(f) Each Member hereby agrees that it will promptly, upon the
request of Sub, Broadband, and/or the Parent, return to Sub all of the
Confidential Information and any other material contained in or reflecting any
the Confidential Information, and will not retain copies, extracts, or other
reproductions, in whole or in part, of any such material. All documents,
memoranda, notes and other writings whatsoever in the possession of any Member
or its Representatives and prepared based on the information in the Confidential
Information shall also be delivered to Sub upon request.
(g) If the Transaction is not consummated, each Member hereby
agrees that it shall not make, and it shall use its best efforts to prevent its
Representatives from making, any defamatory remarks concerning Sub, Broadband
and/or the Parent to any third party.
(h) Notwithstanding anything to the contrary contained herein,
in the event that any of the Members or their Representatives is requested or
becomes legally compelled (by oral questions, interrogatories, requests for
information or documents, subpoena, civil investigative demand or similar
process) to disclose any of the Confidential Information or take any other
action prohibited hereby, the Members will provide Sub with prompt written
notice thereof so that Sub, Broadband and/or the Parent may seek a protective
order or other appropriate remedy and/or waive compliance with the provisions of
this Section 5.09. In the event that such protective order or other remedy is
not obtained, or that Sub, Broadband and/or the Parent waives compliance with
the provisions of this Section 5.09, the Members and/or their Representatives
will furnish only that portion of the Confidential Information or take only such
action which is legally required and will exercise its best efforts to obtain
reliable assurance that confidential treatment will be accorded any of the
Confidential Information so furnished.
SECTION 5.10 Legal Conditions to Merger. Each of the Company, Sub and
Broadband, and each Member will take all reasonable actions necessary to comply
promptly with all legal requirements which may be imposed on itself with respect
to the Merger (which actions shall include, without limitation, approvals or
filings with any Governmental Entity) and will promptly cooperate with and
furnish information to each other in connection with any such requirements
imposed upon any of them or any of their subsidiaries in connection with the
Merger. Each of the Company, Sub, and Broadband, and each Member will, and will
cause its subsidiaries to, promptly take all reasonable actions necessary to
obtain (and will cooperate with each other in obtaining) any consent,
authorization, order or approval of, or any exemption by, any Governmental
Entity or other public or private third party, required to be obtained by any
party in connection with the Merger or the taking of any action contemplated
thereby or by this Agreement.
20
SECTION 5.11 Expenses. Whether or not the Merger is consummated, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expense.
SECTION 5.12 Brokers or Finders. Each party hereto represents, as to
itself, its subsidiaries and its affiliates, that no agent, broker, investment
banker, financial advisor or other firm or person is or will be entitled to any
brokers' or finder's fee or any other commission or similar fee in connection
with any of the transactions contemplated by this Agreement, and each party
hereto agrees to indemnify and hold each other party hereto harmless from and
against any and all claims, liabilities or obligations with respect to any other
fees, commissions or expenses asserted by any person on the basis of any act or
statement alleged to have been made by such party or its affiliate.
SECTION 5.13 Indemnification by the Members. The Members, severally
(and not jointly and severally), shall indemnify, defend and hold harmless Sub,
Broadband and the Parent, and each of their respective affiliates (collectively,
the "Buyer Indemnified Parties"), from and against any and all losses, costs,
damages, and expenses (including reasonable attorneys' fees), arising from or
relating to:
(a) (i) Any breach of any representation or warranty, or any
misrepresentation or alleged misrepresentation, by the Company, the Members or
any Member under this Agreement, (ii) any breach of any covenant or agreement of
the Company, the Members or any Member under this Agreement, or (iii) any
liabilities of the Company relating to the period prior to the Closing (except
for liabilities specifically reflected in the Financial Statements); and
(b) Any and all actions, suits, proceedings, demands,
assessments, judgments, costs and expenses, including reasonable attorneys'
fees, incident to any of the foregoing.
(c) The Members shall not be liable for any claims under this
Section 5.13 arising out of a breach of representation or warranty (other than
the representations and warranties contained in any Excluded Section (as such
term is define hereinafter)) until the aggregate amount due in respect of such
claims exceeds $25,000. If such aggregate amount exceeds $25,000, then the
Members shall be liable for the entire amount of such claims and not merely the
amount exceeding $25,000. The obligation of the Members to indemnify the Buyer
Indemnified Parties shall not be limited. For purposes of this paragraph, to the
extent any claim may reasonably be deemed to fall under or relate to a breach of
a representation or warranty under an Excluded Section and could also be deemed
to fall under another section of this Agreement, such claim shall be deemed to
fall under such Excluded Section.
SECTION 5.14 Indemnification by Sub. Sub shall indemnify, defend and
hold harmless the Members from and against any and all losses, costs, damages
and expenses (including reasonable attorney's fees) arising from or relating to:
(a) (i) Any breach of any representation or warranty, or any
misrepresentation or alleged misrepresentation, by Sub, Broadband and/or the
Parent under this Agreement, or (ii) any breach of any covenant or agreement of
Sub, Broadband and/or the Parent under this Agreement; and
21
(b) Any and all actions, suits, proceedings, demands,
assessments, judgments, costs and expenses, including reasonable attorneys'
fees, incident to any of the foregoing.
SECTION 5.15 Notice of Claims and Potential Claims. (a) Any claim for
indemnity under Section 5.13 or 5.14 hereof shall be made by written notice to
the indemnifying party specifying in reasonable detail the basis of the claim.
The indemnified party agrees to give prompt written notice to the indemnifying
party of any claim by a third party against the indemnified party which might
give rise to a claim against the indemnifying party under Section 5.13 or 5.14
hereof, stating the nature and basis of such claim and, if ascertainable, the
amount thereof, but the failure to so notify the indemnifying party will not
relieve the indemnifying party of any liability that it may have to the
indemnified party, except to the extent that the indemnifying party demonstrates
that the defense of such action is prejudiced by the failure to give such
notice. In connection with any such third party claim, the indemnifying party
may, at its election and expense, assume the defense of such third party claim,
provided that the indemnifying party shall have acknowledged in writing its
obligation to indemnify in respect of such third party claim, and provided
further that the indemnified party has not determined in good faith that joint
representation is not possible under ethical guidelines. If the indemnifying
party assumes the defense of the third party claim, no compromise or settlement
of such claim may be effected by the indemnifying party without the indemnified
party's consent, which will not be unreasonably withheld. If the indemnifying
party shall not have elected to so assume the defense of such third party claim,
no such third party claim shall be settled without the consent of the
indemnifying party, provided that the indemnifying party shall have acknowledged
in writing its obligation to indemnify in respect of such third party claim and
provided further that such consent will not be unreasonably withheld.
(b) Each party hereto agrees to use its best efforts,
consistent with reasonable business practices, to mitigate any liability that is
the subject of an indemnity claim.
SECTION 5.16 Further Assurances. Each party hereto agrees to execute
and deliver all such other instruments and take all such other action as any
other party hereto may reasonably request from time to time, before the
Effective Time and without payment of further consideration, in order to
effectuate the transactions provided for in this Agreement. The parties shall
cooperate fully with each other and with their respective counsel and
accountants in connection with any steps required to be taken as part of their
respective obligations under this Agreement.
SECTION 5.17 Additional Agreements; Best Efforts. Subject to the terms
and conditions of this Agreement, each of the parties hereto agrees to use best
efforts to take, or cause to be taken, all action and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement.
SECTION 5.18 Survival of Representations and Warranties. The
representations and warranties made by the Members set forth in Article III of
this Agreement shall survive until the thirty-six (36) month anniversary of the
Closing Date, except that (a) the representations and warranties contained in
Section 3.01(m) shall expire at the end of the relevant statute of limitations,
(b) the representations and warranties contained in Sections 3.01(b)(i),
3.01(b)(ii). 3.01(r) or 3.02 (collectively, with Section 3.01(m), the "Excluded
Sections") shall survive indefinitely, and (c) if a claim or notice is given
under Section 5.15 with respect to any represent-ation or warranty prior to the
applicable expiration date, such representation or warranty shall continue
indefinitely until such claim is finally resolved. This Section 5.18 shall not
limit any covenant or agreement of any Member that contemplates performance
after the Closing Date.
22
ARTICLE VI
CONDITIONS TO CLOSING
SECTION 6.01 Conditions to the Members' Obligations to Effect the
Merger. The obligations of the Members at the Closing to effect the Merger shall
be subject to the satisfaction of the following conditions precedent at Closing
(each of which may be waived by the Members):
(a) Representations. All representations and warranties of Sub
and Broadband contained herein shall be true and correct on the Closing Date in
all material respects as if made on such date; all agreements of Sub and/or
Broadband contained herein shall have been complied with; and the Members shall
have received a certification of each of Sub and Broadband, dated the Closing
Date and executed by President or Vice President of each of Sub and Broadband,
to each such effect.
(b) Stock Certificates. The Members shall receive the AM
Shares specified in Section 2.01(a) hereof.
(c) Governmental Consents. All necessary governmental consents
and approvals to the transactions contemplated hereby shall have been obtained.
(d) Actions or Proceedings. No preliminary or permanent
injunction or other order by any federal or state court of competent
jurisdiction that makes it illegal or otherwise prevents the consummation of the
transactions contemplated hereby shall have been issued and shall remain in
effect.
(e) Purchase Note. Sub shall have executed and delivered to
the Members the Purchase Note.
(f) Registration Rights Agreement. The Parent shall have
executed and delivered the Registration Rights Agreement
(g) Members' Due Diligence Investigations. The results of the
due diligence investigations referred to in Section 5.04 above (the "Members'
Due Diligence") shall have been satisfactory to the Members in their sole and
absolute discretion; provided, that the results of the Members' Due Diligence
shall be deemed to have been satisfactory if the Members do not give Sub written
notice to the contrary on or before the Closing Date.
23
(h) Company Note. The Members have agreed to permit Sub
restructure certain existing indebtedness owed to the Members by the Company in
the principal amount of $300,000.00, into a thirty-six (36) month term loan
bearing interest at a rate of five percent (5%) per annum, and otherwise
evidenced by a subordinated promissory note in the form attached hereto as
Exhibit C (the "Company Note"), to be delivered by Sub to the Members at the
Closing.
(i) Subordination Agreement. Each of the Members and Comerica
Bank shall have executed a subordination agreement with respect to the Purchase
Note and the Company Note in a form acceptable to the Members in their sole
discretion.
(j) Shareholders' Agreement. Each Member shall have executed
and delivered to Sub a shareholders' agreement in a form acceptable to the
Members in their sole discretion.
SECTION 6.02 Conditions to Sub's and Broadband's Obligations to Effect
the Merger. The obligations of Sub and Broadband at the Closing to effect the
Merger shall be subject to the satisfaction of the following conditions
precedent at the Closing (each of which may be waived by Sub and/or Broadband):
(a) Representations. All representations and warranties of the
Company and the Members contained herein shall be true and correct in all
material respects on the Closing Date as if made on such date; all agreements of
the Company and the Members contained herein shall have been complied with; and
Sub shall receive a certification, dated the Closing Date, of the Members, to
each such effect.
(b) Approval. All action required by law to be taken by the
Members and/or the Company with respect to the execution, delivery and
performance of the Agreement shall have been taken and shall continue to be in
full force and effect, including without limitation approval by the Company's
managers and/or members.
(c) Membership Certificates. The Members shall have delivered
to Sub the certificate or certificates representing the Membership Interests,
duly endorsed in blank for transfer or accompanied by transfer powers executed
in blank, with signature guaranteed and with all requisite documentary or
transfer tax stamps affixed, or, if the Membership Interests are not evidenced
by any form of certificate, assignments of membership interests in form and
substance satisfactory to Sub in its reasonable discretion.
(d) Opinion of Counsel. There shall have been delivered to Sub
the opinion, dated the Closing Date, of the Members' and the Company's counsel,
to the effect that:
(i) The Company is a limited liability company duly
formed, validly existing and in good standing under the laws of Florida and has
the corporate power to carry on its business as it is then being conducted and
to enter into and carry out its obligations under this Agreement.
24
(ii) The Agreement has been duly authorized, executed and
delivered by the Members and the Company, and constitutes the valid and binding
obligation of each such person or entity, enforceable in accordance with its
terms.
(iii) The authorized capital of the Company consists of
100%membership interests, of which 100% membership interests are issued and
outstanding. All of such outstanding membership interests are validly issued,
fully paid and nonassessable. Such counsel is not aware of any existing options,
calls or commitments of any character whatsoever, or agreements to grant the
same, relating to authorized or issued membership interests of the Company, or
any outstanding securities convertible into or exercisable for such membership
interests, or any options, calls or commitments of any character whatsoever,
with respect to the issuance or sale of any such convertible securities.
(iv) The Members have the full requisite power and
authority to transfer and deliver the Membership Interests to Sub. The Members
are the record owners, and to the best knowledge of such counsel based on a
diligent inquiry, the beneficial owners, of the Membership Interests, have duly
endorsed certificates or transfer powers relating to such membership interests,
or in lieu thereof assignments of membership interests, and following the
consummation of the Merger and receipt of the consideration specified herein by
the Members for the Membership Interests, valid title to the Membership
Interests shall pass to Sub, free and clear of any adverse claim within the
meaning of the Uniform Commercial Code.
(v) The execution, delivery and performance of this
Agreement by the Members and the Company will not result in a breach or
violation of any of the terms or provisions of, or constitute a default under
the Company's or any Member's Articles of Incorporation, by-laws or other
constituent document, any agreement or other instrument listed in Schedule
4.01(c) attached hereto, any agreement to which the Company or any Member, or
the Company's or any Member's assets, are bound, any Law, or any judgment,
decree, order, rule or regulation known to such counsel of any Governmental
Authority applicable to the Company, the Members or the assets of any of them.
(vi) To such counsel's knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation to which the
Company is a party or to which the property of the Company is subject, before or
brought by a court or governmental agency or body which, if determined
adversely, would have a Material Adverse Effect upon the assets, business or
affairs of the Company.
(e) Judgment, Tax Lien and Uniform Commercial Code Searches.
The Members shall have delivered to Sub:
(i) Federal and State judgment, tax lien, bankruptcy and
pending suit search results indicating the existence of no judgments, tax liens,
bankruptcies, pending suits or other encumbrances on any assets of the Company;
(ii) Uniform Commercial Code search results from all
appropriate jurisdictions (which, without limiting the generality of the
foregoing, shall include (x) the Secretary of State of the State of Florida, (y)
the secretary of state or other appropriate state office of any other state in
which the Company has maintained an office during the five years preceding the
Closing Date, and (z) the appropriate local and county recording offices located
in any municipality or county in which the Company has maintained an office
during the five years preceding the Closing Date) listing all effective
financing statements which name the Company (under its present or any previous
name or any trade names) as debtor, together with copies of such financing
statements; and
25
(iii) For the Company and for each Member that is a
limited liability company or corporation, (x) a copy of such Company's or
Member's certificate of formation or charter, as applicable, certified by the
Secretary of State of the jurisdiction in which such Company or Member was
formed or incorporated, as applicable, (y) a certificate of good standing issued
by the Secretary of State of the jurisdiction in which such Company or Member
was formed or incorporated, as applicable, and each jurisdiction in which such
Company or Member conducts such business as would require it, pursuant to the
laws of such jurisdiction, to be qualified to do business in such jurisdiction,
and (z) an incumbency certificate attested to by such Company's or Member's
manager(s) or corporate secretary, as applicable.
(f) Resignations. All managers and each officer of the Company
shall have resigned.
(g) Third Party and Governmental Consents. All necessary third
party and governmental consents and approvals to the transactions contemplated
hereby shall have been obtained, including without limitation any consent
required to be obtained by Sub, Broadband and/or Parent from Comerica Bank.
(h) No Options, Etc. There shall be no outstanding options,
calls or commitments of any character whatsoever, or agreements to grant the
same, relating to the authorized or issued membership interests of the Company,
and the Company shall not have outstanding any securities convertible into or
exercisable for any such membership interests, or any options, calls or
commitments of any character whatsoever with respect to the issuance or sale of
any such convertible securities.
(i) Injunction; Litigation. No preliminary or permanent
injunction or other order by any federal or state court of competent
jurisdiction that makes illegal or otherwise prevents the consummation of the
transactions contemplated hereby shall have been issued and remain in effect.
There shall not be pending or threatened any litigation, suit, action or
proceeding by any person which could reasonably be expected to have a Material
Adverse Effect on the Company's assets or business or which seeks damages from
Sub, Broadband, the Parent, or the Company or any Member as a result of the
transactions contemplated by this Agreement.
(j) Sub's Due Diligence Investigations. The results of the due
diligence investigations referred to in Section 5.04 above (the "Sub's Due
Diligence") shall have been satisfactory to Sub in its sole and absolute
discretion; provided, that the results of the Sub's Due Diligence shall be
deemed to have been satisfactory if Sub does not give any of the Members written
notice to the contrary on or before the Closing Date.
26
(k) No Legal Action. No action, suit, investigation or other
proceeding relating to the transactions contemplated hereby shall have been
instituted or threatened before any court or by any governmental body which
presents a substantial risk of the restraint or prohibition of the transactions
contemplated hereby or the obtaining of material damages or other material
relief in connection therewith.
(l) Discharge of Loans. The Company shall have discharged all
loans owed by the Company to the Members or to any employees of the Company.
(m) Evidence of Certain Contracts. The Company shall have
delivered to Sub evidence satisfactory to Sub, in its sole and absolute
discretion, of signed master contracts with major cable television multiple
system operators ("MSO's") which could generate at least $6,000,000 of annual
revenues during the calendar year 2002 (the "MSO Contracts").
(n) Subordination Agreement. Each of the Members and Comerica
Bank shall have executed a subordination agreement with respect to the Purchase
Note and the Company Note in a form acceptable to Sub in its sole discretion.
(o) Registration Rights Agreement. Each of the Members shall
have executed and delivered the Registration Rights Agreement.
(p) Shareholders' Agreement. Each Member shall have executed
and delivered to Sub a shareholders' agreement in a form acceptable to Sub in
its sole discretion.
(q) Other Agreements. Any other agreement to be entered
between an individual Member and the Sub shall have been executed and delivered
to Sub.
ARTICLE VII
TERMINATION AND AMENDMENT
SECTION 7.01. Termination. This Agreement may be terminated at any time
prior to the Effective Time:
(a) By mutual agreement of Sub and the Members; or
(b) By the Members if any of the conditions set forth in
Section 6.01 of this Agreement shall not have been met or waived in writing by
the Members by the Closing Date; or
(c) By Sub if any of the conditions set forth in Section 6.02
of this Agreement shall not have been met or waived in writing by Sub by the
Closing Date; or
(d) By either Sub or the Members in the event that the Closing
shall not have occurred on or prior to July 1, 2002.
27
Nothing in this Section 7.01 shall be deemed to excuse any party for a breach of
any of its obligations or agreements undertaken or made in this Agreement.
SECTION 7.02 Effect of Termination. In the event of a termination of
this Agreement by either Sub or the Members as provided in Section 7.01, this
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of any party hereto, except (a) with respect to Sections
5.09, 5.11, 5.12 and 5.13 and (b) to the extent that such termination results
from the willful breach by a party hereto of any of its representations,
warranties, covenants or agreements set forth in this Agreement.
SECTION 7.03 Extension; Waiver. At any time prior to the Effective
Time, the parties hereto may, to the extent legally allowed, (a) extend the time
for the performance of any of the obligations or other acts of the other parties
hereto, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and (c) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in a written instrument signed on behalf of such party.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 Survival of Representations, Warranties and Agreements.
Notwithstanding any presumption to the contrary, all representations, covenants,
warranties and agreements contained in this Agreement shall survive the Closing.
SECTION 8.02 Governing Law. The provisions of this Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
without regard to any applicable conflict of laws provision.
SECTION 8.03 Notices. Any notice, request, demand, consent, approval,
or other communication required or permitted under this Agreement will be
written and will be deemed to have been given (a) when personally delivered or
sent by telecopy with receipt confirmed, or (b) on the next day after delivery
to a nationally-recognized express delivery service with instructions for
overnight delivery; or (c) on the third day after it is deposited in any
depository regularly maintained by the United States postal service, postage
prepaid, certified or registered mail, return receipt requested, addressed to
the following address or to such other address as the party to be notified shall
have specified to the other party in accordance with this Section:
If to Sub, Broadband or the Parent:
AM Broadband Services, Inc.
0000 XX Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxxxxx X. Xxxxxxxx, Esquire
Fax Number: (000) 000-0000
28
With a copy to:
Xxxxxxx X. Xxxx, Esquire
Xxxxxx & Xxxxxxx
A Professional Corporation
Xxx Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Fax Number: (000) 000-0000
With a copy to:
Xxxxxxx X. Xxxx, Esq.
Xxxxxx & Xxxxxxx
A Professional Corporation
Xxx Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Fax Number: (000) 000-0000
If to the Members or the Company:
To the address set forth for the Company and such
Members on Exhibit A attached hereto
---------
with a copy to:
Xxxxxxx Xxxxxx, Esq.
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxx, Xxxxxxx 00000
Fax Number: (000) 000-0000
SECTION 8.04 Entire Agreement; Etc. This Agreement sets forth the
entire agreement between the parties with respect to the subject matter hereof
and supersedes all prior agreements or understandings of the parties with
respect thereto. This Agreement may be amended or supplemented solely by a
writing executed by the parties hereto.
SECTION 8.05 Public Announcement. Any public announcement made by any
party prior to Closing pertaining to the transactions contemplated under this
Agreement shall be subject to the prior approval of the other parties hereto,
except as required by applicable laws or stock exchange requirements.
SECTION 8.06 Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute but one and the
same agreement.
29
SECTION 8.07 Headings. The headings preceding the text of this
Agreement are inserted solely for convenience of reference and shall not
constitute a part of this Agreement nor affect its meaning, construction or
effect.
SECTION 8.08 Attorney's Fees; Choice of Forum. In the event of
litigation between the parties arising out of or related to this Agreement: (a)
the prevailing party shall be entitled to recover reasonable attorneys' fees,
trial and appellate court costs, and all other costs or expenses associated with
such litigation, and (ii) venue of such litigation shall be in Bucks County,
Pennsylvania. The parties irrevocably consent and submit to the non-exclusive
jurisdiction of the courts of the Commonwealth of Pennsylvania and the United
States District Courts sitting therein and waive any objection based on venue or
forum non conveniens with respect to any action instituted therein arising out
of or related to this Agreement.
SECTION 8.09 Non-Waiver of Rights. No failure or delay in exercising
any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any right, power or privilege hereunder.
SECTION 8.10 Invalidity. The invalidity or partial invalidity of any
provision of this Agreement shall affect only such provision or part thereof and
the balance of this Agreement shall remain in effect.
SECTION 8.11 Headings; Definitions. The Section and other headings
contained in this Agreement are for reference purposes only and shall not in any
way affect the meaning or interpretation of this Agreement. Wherever in this
Agreement words indicating the plural number appear, such words shall be
considered as words indicating the singular number and vice versa where the
context indicates the propriety of such use.
SECTION 8.12 Assignment; Third-Party Rights. This Agreement shall inure
to the benefit of the parties hereto and their respective permitted successors
and assigns. This Agreement and the rights of the Members and/or the Company
hereunder shall not be assignable by the Members and/or the Company without the
prior written consent of Sub. This Agreement and the rights of Sub and Broadband
hereunder may be assigned by Sub or Broadband, as applicable, without the
consent of the Members or the Company so long as Sub or Broadband, as
applicable, guarantees the assignee's performance of all its obligations
hereunder. Any attempted assignment of this Agreement in breach of this
provision shall be void and of no effect. In the event that any assignment is
validly made, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.
Nothing in this Agreement, express or implied, shall be deemed to confer upon
any other person, including without limitation employees of the Company, any
rights or remedies under, or by reason of, this Agreement.
30
SECTION 8.13 Set-Off Rights. Notwithstanding anything to the contrary
contained herein or in any document executed and delivered by Sub, Broadband
and/or the Parent hereunder, including without limitation the Purchase Note, the
Company Note and the Employment Agreements, Sub, Broadband and/or the Parent
shall have the right and each is hereby authorized, to the fullest extent
permitted by law, at any time, and from time to time, to set-off and apply any
and all amounts owed by the Members to the Sub, Broadband and/or the Parent
hereunder or under any other document executed and delivered by the Members
hereunder against any obligation of Sub, Broadband and/or the Parent to the
Members hereunder or under any document executed and delivered by Sub, Broadband
and/or the Parent hereunder, including without limitation the Purchase Note, the
Company Note and the Employment Agreements. Sub agrees promptly to notify the
Members after any such setoff and application, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of Sub, Broadband and/or the Parent under this provision are in addition
to other rights and remedies (including without limitation other rights of
set-off) which Sub, Broadband and/or the Parent may have.
[Signature page to follow.]
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written.
NEX-LINK ACQUISITION CORP.
By: _________________________
Name: _________________________
Title: _________________________
AM BROADBAND SERVICES, INC.
By: ___________________________
Name: _________________________
Title: __________________________
NEX-LINK COMMUNICATIONS PROJECT
SERVICES, LLC
By: ___________________________
Name: _________________________
Title: __________________________
1401077 ONTARIO, LTD.
By: ___________________________
Name: _________________________
Title: __________________________
1418294 ONTARIO, LTD.
By: ___________________________
Name: _________________________
Title: __________________________
________________________________
XXXXXX XXXXXX
________________________________
XXXXX XXXXXXXX
SUMMARY OF EXHIBITS AND OTHER ATTACHMENTS
-----------------------------------------
EXHIBIT NO. DESCRIPTION
----------- -----------
A List of Members, membership interests and consideration
to be received
B Form of Purchase Note
C Form of Company Note
D Form of Registration Rights Agreement
SCHEDULE NO.
------------
3.01(c) Required Approvals
3.01(e) Delinquent Accounts
3.01(f) Outstanding Litigation
3.01(h) Existing Liens
3.01(j) Extraordinary Employee Compensation
3.01(l)(i) Real Estate, Vehicles, Equipment, Furniture and Fixtures
3.01(l)(ii) Intellectual Property
3.01(l)(iii) Contracts, Leases and Agreements
3.01(l)(iv) Insurance
3.01(l)(v) Indebtedness
3.01(l)(vi) Suppliers
3.01(l)(vii) Permits
3.01(l)(viii) Employee Matters
3.01(l)(ix) Employee Compensation
3.01(l)(x) Bank Accounts
3.01(l)(xi) Securities
3.01(o) Employment Agreements
3.01(r) Hazardous Substances
3.01(u) Inventory
3.01(v) Defective Products
4.01(c) Third Party Consents for Broadband and Sub
