PURCHASE AGREEMENT
Execution
Copy
THIS
PURCHASE AGREEMENT (the “Agreement”)
is
dated as of August 17, 2007, by and among ACT-DE LLC, a Delaware limited
liability company (“HIG”),
the
other “Buyer” parties identified on Schedule 1 hereto (collectively with HIG,
the “Buyers”),
and
ADVANCED COMMUNICATIONS TECHNOLOGIES, INC., a Florida corporation (the
“Company”).
RECITALS:
The
parties have reached an agreement pursuant to which the Buyers shall make an
investment in the Company, and the Company shall issue and sell to the Buyer
shares of Series C Convertible Preferred Stock, par value $0.01 per share (the
“Series C Preferred Stock”),
all
in accordance with the terms hereof.
AGREEMENT:
NOW,
THEREFORE, in consideration of the mutual premises herein set forth and certain
other good and valuable consideration, the receipt and sufficiency of which
is
hereby acknowledged, the parties hereto agree as follows:
1. ISSUANCE
OF SHARES AND RELATED TRANSACTIONS.
1.1. Issuance
of Shares.
At
Closing (as defined below), subject to the terms, restrictions and conditions
of
this Agreement, the Buyers shall purchase from the Company, and the Company
shall sell, issue and deliver to the Buyers an aggregate 1,000 shares of Series
C Preferred Stock (the “Buyer Stock”)
to be
purchased by each Buyer as set forth on Schedule 1 hereto, which shall have
the
rights and designations set forth in the Certificate of Designation attached
hereto as Exhibit A (the “Certificate of Designation”).
The
Buyer Stock shall be sold by the Company to the Buyers free and clear of all
liens, claims, pledges, mortgages, restrictions, obligations, security interests
and encumbrances of any kind, nature and description (collectively,
“Encumbrances”).
1.2. Purchase
Price.
The
aggregate purchase price (the “Purchase
Price”)
for
the Buyer Stock shall be $6,300,000 and shall be paid by the Buyers to the
Company in immediately available funds on the Closing Date (as set forth in
Section 1.3 hereof).
1.3. Closing.
The
parties to this Agreement shall consummate the transactions contemplated by
this
Agreement at a closing (the “Closing”)
to be
held no later than August 21, 2007. The date of Closing is referred to herein
as
the “Closing Date.”
The
Closing shall take place at the offices of counsel to HIG, or at such other
place as may be mutually agreed upon by the Buyers and the Company. At the
Closing:
(a) The
Company shall deliver to the Buyers a filed copy of the Certificate of
Designation certified by the Florida Department of State.
(b) The
Company shall deliver to each Buyer certificates representing the Buyer Stock
(as set forth on Schedule
1),
free
and clear of any Encumbrances.
(c) The
Buyers shall pay to the Seller the Purchase Price by wire transfer of
immediately available funds to an account to be designated by the
Purchaser.
(d) The
Buyers, the Company and certain other stockholders of the Company shall execute
and deliver the Stockholder Agreement and Registration Rights Agreement attached
hereto as Exhibits B-1 and B-2 (the “Investor Rights Agreements”).
(e) The
Company shall have delivered to the Buyers (i) filed copies of the Certificates
of Designations attached as Exhibits C-1, C-2 and C-3 (for the Company’s newly
designated Series A-2 Convertible Preferred Stock and Series D Convertible
Preferred Stock, and collectively with the Series C Preferred Stock, the
“Preferred Stock”)
certified by the Florida Department of State and (ii) evidence reasonably
satisfactory to the Buyer confirming that the transactions contemplated by
the
Exchange Agreements have been completed in accordance with the terms of the
“Exchange Agreements”
identified on Schedule
1.3(e)
hereto.
Xxx
Xxxxxxxx, Xxxxxxx Xxxxxx and Dr. Xxxxxxx Xxxxx shall resign as members of the
Board of Directors of the Company and the Board of Directors of the Company
shall adopt resolutions increasing the number of Directors to seven (7) and
electing Xxxx Xxxxx, Xxxxxxx Xxxxx, X.X. (Xxxx) Ball, Xxxxxx X. Xxxxxx and
Xxxxxx X. Kettteler to serve as Directors, effective immediately following
the
Closing after giving effect to the transactions set forth in this Section 1.3.
(f) The
Board
of Directors of the Company shall have adopted an amendment to the By-laws
of
the Company, in a form reasonably satisfactory to HIG, confirming the voting
rights of the Preferred Stock.
2. ADDITIONAL
COVENANTS.
2.1. Public
Announcements.
The
parties will consult with each other before issuing any press releases or
otherwise making any public statement with respect to this Agreement or any
of
the transactions contemplated hereby and no party will issue any such press
release or make any such public statement without the prior written consent
of
the other party, except as may be required by law or by the rules and
regulations of any governmental authority or securities exchange.
2.2. Access
and Inspection, Etc.
The
Company shall allow the Buyers and their authorized representatives full access
during normal business hours from and after the date hereof and prior to the
Closing Date to all of the properties, books, contracts, commitments and records
of the Company for the purpose of making such investigations as the Buyers
may
reasonably request in connection with the transactions contemplated hereby,
and
shall cause the Company to furnish any Buyer with such information concerning
its affairs as such Buyer may reasonably request. The Company has caused and
shall cause its personnel to assist the Buyers in making such investigation
and
shall use their best efforts to cause the counsel, accountants and other
non-employee representatives of the Company to be reasonably available to Buyers
for such purposes.
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2.3. Further
Assurances.
The
parties shall deliver any and all other instruments or documents required to
be
delivered pursuant to, or necessary or proper in order to give effect to, the
provisions of this Agreement, including, without limitation, to issue the Buyer
Stock and to consummate the transactions contemplated by this
Agreement.
2.4. Notification.
Each
party to this Agreement shall promptly notify the other parties in writing
of
the occurrence, or threatened occurrence, of any event that would constitute
a
breach or violation of this Agreement by any party or that would cause any
representation or warranty made by the notifying party in this Agreement to
be
false or misleading in any respect. The Company will promptly notify the Buyers
of any event that could have a material adverse effect on the business, assets,
financial condition or prospects of the Company. The Company shall have the
right to update the Schedules to this Agreement immediately prior to Closing;
provided, that if such update discloses any breach of a representation,
warranty, covenant or obligation of the Company, then the Buyers shall have
the
right to then exercise its available rights and remedies hereunder.
3. REPRESENTATIONS,
COVENANTS AND WARRANTIES OF THE COMPANY.
To
induce
Buyers to enter into this Agreement and to consummate the transactions
contemplated hereby, the Company represents and warrants to and covenants with
the Buyers, as of the Closing, as follows:
3.1. Organization;
Compliance.
The
Company and each Subsidiary (as defined below) is a corporation or limited
liability company duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization. The Company and each Subsidiary
is: (a) entitled to own or lease its properties and to carry on its business
in
all material respects as and in the places where such business is now conducted,
and (b) duly licensed and qualified in all jurisdictions where the character
of
the property owned by it or the nature of the business transacted by it makes
such license or qualification necessary.
3.2. Capitalization
and Related Matters.
(a) The
Company has an authorized capital consisting of 5,000,000,000 shares of Common
Stock and 25,000 shares of Preferred Stock, of which 4,997,711,570 shares of
Common Stock and 15,950 shares of Preferred Stock are issued and outstanding
as
of the date hereof (after giving effect to the transactions contemplated hereby)
as set forth on Schedule
3.2(a)
hereto.
All of the outstanding shares of the Company’s capital stock are, and
immediately after the Closing will be, validly issued and outstanding, fully
paid and non-assessable. No such stock (i) was issued in violation of the
preemptive rights of any shareholder or (ii) is held as treasury stock. All
of
the outstanding capital stock of the Company was issued in compliance with
all
applicable federal and state securities or “blue sky” laws and
regulations.
(b) Except
as
set forth on Schedule 3.2 hereto, there are no outstanding securities
convertible into Common Stock or any other capital stock of the Company nor
any
rights to subscribe for or to purchase, or any options for the purchase of,
or
any agreements providing for the issuance (contingent or otherwise) of, or
any
calls, commitments or claims of any character relating to, such capital stock
or
securities convertible into such capital stock (collectively, “Securities Rights”).
Except as set forth on Schedule 3.2 hereto the Company (i) is not subject to
any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any of its capital stock; or (ii) has no liability for dividends or
other
distributions declared or accrued, but unpaid, with respect to any capital
stock.
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(c) Except
as
set forth on Schedule 3.2, the Company is not a party to any agreement,
understanding or arrangement, direct or indirect, relating to any class or
series of the Company’s capital stock, including, without limitation, any voting
agreement, restriction on resale, shareholder agreement or registration rights
agreement.
3.3. Subsidiaries
and Investments.
(a) Schedule
3.3(a) sets forth, with respect to each Subsidiary (as defined below), (i)
its
name, (ii) the jurisdiction of its organization, the number of its authorized
shares or other equity interests, (iii) the number of its outstanding shares
or
other equity interests of each class or series and (iv) the name of the owner
and the number and percentage of outstanding shares or other equity interests
of
each class or series of such Subsidiary owned of record and, if different,
owned
beneficially by the Company and any other person. All of the outstanding capital
stock and other equity interests of each of the Subsidiaries is validly issued,
fully paid and nonassessable and was issued in compliance with all applicable
federal and state securities or “blue sky” laws and regulations. There are no
Securities Rights relating to any shares of capital stock, other equity
interests or other securities of any of the Subsidiaries. The Company and the
Subsidiaries have good, marketable and exclusive title to the shares or other
equity interests disclosed on Schedule 3.3(a) as being owned by each of them,
free and clear of all Encumbrances. All rights and powers to vote such shares
or
other equity interests are held exclusively by the Company, directly or
indirectly through one or more of the Subsidiaries, as the case may be. For
the
purposes hereof, a “Subsidiary”
means
any corporation, limited liability company, partnership, joint venture or other
entity in which the Company owns, directly or indirectly, more than 50% of
the
outstanding voting securities or equity interests.
(b) Except
as
disclosed on Schedule 3.3(a), the Company does not own, nor since January 1,
2004 has it ever owned, any equity interest in any corporation, limited
liability company, partnership, joint venture or other entity.
3.4. Execution;
No Inconsistent Agreements; Etc.
(a) This
Agreement is a valid and binding agreement of the Company, enforceable in
accordance with its terms, except as such enforcement may be limited by
bankruptcy or similar laws affecting the enforcement of creditors’ rights
generally, and the availability of equitable remedies.
(b) The
execution and delivery of this Agreement by the Company does not, and the
consummation of the transactions contemplated hereby will not, constitute a
breach or violation of the charter or bylaws of the Company, or a default under
any of the terms, conditions or provisions of (or an act or omission that would
give rise to any right of termination, cancellation or acceleration under)
any
note, bond, mortgage, lease, indenture, agreement or obligation to which the
Company is a party, pursuant to which the Company otherwise receives benefits,
or to which any of the properties of the Company is subject.
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3.5. Corporate
Records.
The
statutory records, including the stock register and minute books of the Company,
fully reflect all issuances, transfers and redemptions of its capital stock,
correctly show and will correctly show the total number of shares of its capital
stock issued and outstanding on the Closing Date, the charter or other
organizational documents and all amendments thereto, and bylaws as amended
and
currently in force. Copies of all such materials have been previously delivered
to the Buyers by or on behalf of the Company.
3.6. Financial
Statements; SEC Reporting.
(a) Schedule
3.6(a) contains (i) the consolidated audited balance sheet of the Company and
the Subsidiaries, and the consolidated audited profit and loss statement of
the
Company
and the
Subsidiaries
for the
fiscal year ended June 30, 2006 as reported on the Company’s Form 10K/A and (ii)
the consolidated unaudited balance sheet of the Company and the Subsidiaries
as
of March 31, 2007 and the consolidated unaudited profit and loss statement
of
the Company and the Subsidiaries for the nine months ended March 31, 2007 (the
balance sheet as of March 31, 2007 is hereinafter referred to as the
“Company Balance Sheet”).
All
the foregoing financial statements are referred to herein collectively as the
“Company Financial Statements.”
(b) The
Company Financial Statements have been and will be prepared in accordance with
U.S. GAAP, applied on a consistent basis (except that the unaudited statements
do not contain all the disclosures required by GAAP), and fairly reflect and
will reflect in all material respects the financial condition of the Company
and
the Subsidiaries as of the dates thereof and the results of the operations
of
the Company and the Subsidiaries for the periods then ended. The Company and
its
Subsidiaries (i) make and keep and, for all periods covered by the Company
Financial Statements, have made and kept books, records and accounts which,
in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the Company and its Subsidiaries, and (ii)
maintain and, for all periods covered by the Financial Statements, have
maintained a system of internal accounting controls sufficient to provide
reasonable assurances that transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP. The Company’s and
its Subsidiaries’ auditors have not notified the Company or any of its
Subsidiaries of any deficiencies in the design or operation of the Company’s or
any of its Subsidiaries’ internal controls in connection with its audits of the
Company Financial Statements.
(c) Except
as
set forth on Schedule 3.6(c), since January 1, 2004, the Company has timely
filed all reports, schedules, forms, statements and other documents (the
“SEC Reports”)
required to be filed by it with the United States Securities and Exchange
Commission (the “Commission”)
pursuant to reporting requirements under the Exchange Act of 1934, as amended
(the “Exchange Act”).
Except as set forth on Schedule 3.6(c), as of their respective dates, the SEC
Reports complied in all material respects with the requirements of the Exchange
Act and the rules and regulations of the Commission promulgated thereunder.
The
SEC Reports, as of their respective dates, did not contain any untrue statement
of material fact or omit any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
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3.7. Liabilities.
Neither
the Company nor any Subsidiary has any material debt, liability or obligation
of
any kind, whether accrued, absolute, contingent or otherwise, except: (a) those
reflected on the Company Balance Sheet, including the notes thereto, and (b)
liabilities incurred in the ordinary course of business and in connection with
the transactions contemplated by this Agreement, including the acquisition
of
Xxxxx Xxxxxxx, Inc., since the date of the Company Balance Sheet, none of which
have had or will have a material adverse effect on the financial condition
of
the Company or any Subsidiary.
3.8. Absence
of Changes.
Except
as described in Schedule 3.8 and in the other Schedules to this Agreement,
from
the date of the Company Balance Sheet to the date of this
Agreement:
(a) there
has
not been any adverse change in the business, assets, liabilities, results of
operations or financial condition of the Company or any Subsidiary or in each
of
their relationships with suppliers, customers, employees, lessors or others
other than changes in the ordinary course of business, none of which, singularly
or in the aggregate, have had or will have a material adverse effect on the
business, properties or financial condition of the Company or any Subsidiary,
except for the incurrence of additional accrued expenses in connection with
the
transactions contemplated by this Agreement, including the acquisition of Xxxxx
Xxxxxxx, Inc. (all of which have been paid as of the date hereof);
and
(b) the
Company and each Subsidiary has complied with the covenants and restrictions
set
forth in Section 5 to the same extent as if this Agreement had been executed
on,
and had been in effect since, the date of the Company Balance
Sheet.
3.9. Title
to Properties.
The
Company and each Subsidiary has good and marketable title to all of its
properties and assets, real and personal, including, but not limited to, those
reflected in the Company Balance Sheet (except as since sold or otherwise
disposed of in the ordinary course of business, or as expressly provided for
in
this Agreement), free and clear of all Encumbrances of any kind or character
except: (a) those securing liabilities of the Company or any Subsidiary incurred
in the ordinary course (with respect to which no material default exists);
and
(b) imperfections of title and Encumbrances, if any, which, in the aggregate
(i)
are not substantial in amount; (ii) do not detract from the value of the
property subject thereto or impair the operations of the Company or any
Subsidiary; and (iii) do not have a material adverse effect on the business,
properties or assets of the Company or any Subsidiary.
3.10. Compliance
With Law.
The
business and activities of the Company and each Subsidiary has at all times
since July 31, 2002 been conducted in accordance with its charter and bylaws
(or
other governing documents) and any applicable law, regulation, ordinance, order,
License (defined below), permit, rule, injunction or other restriction or ruling
of any court or administrative or governmental agency, ministry, or body,
including, without limitation, the Exchange Act, the Securities Act of 1933,
the
Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations of the Commission
promulgated under those Acts, except where the failure to do so would not result
in a material adverse effect on the Company or any Subsidiary.
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3.11. Taxes.
The
Company and each Subsidiary has duly filed all material federal, state, local
and foreign tax returns and reports, and all returns and reports of all other
governmental units having jurisdiction with respect to taxes imposed on it
or on
its income, properties, sales, franchises, operations or employee benefit plans
or trusts, all such returns were complete and accurate when filed, and all
taxes
and assessments payable by the Company or any Subsidiary have been paid to
the
extent that such taxes have become due. All taxes accrued or payable by the
Company or any Subsidiary for all periods through June 30, 2006 have been
accrued or paid in full, whether or not due and payable and whether or not
disputed. The Company and each Subsidiary has withheld proper and accurate
amounts from its employees for all periods in full compliance with the tax
withholding provisions of applicable foreign, federal, state and local tax
laws.
There are no waivers or agreements by the Company or any Subsidiary for the
extension of time for the assessment of any taxes. The tax returns of the
Company and each Subsidiary have never, since July 31, 2002, been examined
by
any authority or other administrative body or court of any state or country.
There are not now any examinations of the income tax returns of the Company
or
any Subsidiary pending, or to the Company’s knowledge any proposed deficiencies
or assessments against the Company or any Subsidiary of additional taxes of
any
kind. The Company and each Subsidiary shall duly and timely prepare and file
all
material federal, state, local and foreign tax returns and reports for 2006,
and
all returns and reports of all other governmental units having jurisdiction
with
respect to taxes imposed on the Company or on its income, properties, sales,
franchises, operations or employee benefit plans or trusts, and all such returns
will be complete and accurate when filed.
3.12. Real
Properties.
Neither
the Company nor any Subsidiary has an interest in any real property, except
for
the Leases (as defined below).
3.13. Leases
of Real Property.
All
leases pursuant to which the Company or any Subsidiary is lessee or lessor
of
any real property (the “Leases”)
are
listed on Schedule 3.13 and are valid and enforceable in accordance with their
terms. There is not under any of such Leases (a) any material default or any
claimed material default by the Company or any Subsidiary or any event of
default or event which with notice or lapse of time, or both, would constitute
a
material default by the Company or any Subsidiary and in respect to which the
Company or such Subsidiary has not taken adequate steps to prevent a default
on
its part from occurring or (b) to the knowledge of the Company, any material
default by any lessee of the Company or any Subsidiary or any event of default
or event which with notice or lapse of time, or both, would constitute a
material default by any such lessee. The copies of the Leases heretofore
furnished to Buyers are true, correct and complete, and such Leases have not
been modified in any respect since the date they were so furnished, and are
in
full force and effect in accordance with their terms. The Company and each
Subsidiary is lawfully in possession of all real properties of which it is
a
lessee (the “Leased Properties”).
3.14. Contingencies.
Except
as disclosed on Schedule 3.14, there are no actions, suits, claims or
proceedings pending, or to the knowledge of the Company threatened against,
by
or affecting, the Company or any Subsidiary in any court or before any
arbitrator or governmental agency that may have a material adverse effect on
the
Company or any Subsidiary or which could materially and adversely affect the
right or ability of the Company to consummate the transactions contemplated
hereby. To the knowledge of the Company, there is no valid basis upon which
any
such action, suit, claim, or proceeding may be commenced or asserted against
it.
There are no unsatisfied judgments against the Company or any Subsidiary and
no
consent decrees or similar agreements to which the Company or any Subsidiary
is
subject and which could have a material adverse effect on the Company or any
Subsidiary.
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3.15. Products
Liability; Warranties; Insurance.
Neither
the Company nor any Subsidiary has incurred any unpaid loss, damage, liability,
fine, penalty, cost or expense (each, a “Liability”)
that
is not fully covered by insurance relating to any product manufactured,
distributed or sold by the Company or any Subsidiary prior to the Closing,
pursuant to a claim or potential claim that such products are or were defective
or improperly designed or manufactured or are in breach of any express or
implied product warranty.
3.16. Intellectual
Property Rights.
(a) The
Company and each Subsidiary owns and possesses all right, title and interest
in
and to, or has a valid license to use, all of its Proprietary Rights (as defined
below) necessary for the operation of its business as presently conducted and
none of such Proprietary Rights have been abandoned;
(b) No
claim
by any third party contesting the validity, enforceability, use or ownership
of
any such Proprietary Rights has been made, is currently outstanding or, to
the
knowledge of the Company, is threatened, and to the knowledge of the Company
there is no reasonable basis for any such claim.
(c) Neither
the Company, any Subsidiary nor any registered agent of any of the foregoing
has
received any notice of, nor is the Company aware of any reasonable basis for
an
allegation of, any infringement or misappropriation by, or conflict with, any
third party with respect to such Proprietary Rights, nor has the Company, any
Subsidiary or any registered agent of any of them received any claim of
infringement or misappropriation of or other conflict with any Proprietary
Rights of any third party.
(d) Neither
the Company nor any Subsidiary has infringed, misappropriated or otherwise
violated any Proprietary Rights of any third parties, and the Company is not
aware of any infringement, misappropriation or conflict which will occur as
a
result of the continued operation of the Company or any Subsidiary as presently
operated and as contemplated to be operated or as a result of the consummation
of the transactions contemplated hereby.
(e) All
employees who have contributed to or participated in the conception and/or
development of all or any part of the Proprietary Rights which are not licensed
to the Company or a Subsidiary from a third party either (i) have been party
to
a “work-for-hire” arrangement or agreement with the Company or the Subsidiary,
in accordance with applicable federal and state law, that has accorded the
Company or the Subsidiary full, effective, exclusive, and original ownership
of
all tangible and intangible property thereby arising or (ii) have executed
appropriate instruments of assignment in favor of the Company or the Subsidiary
as assignee that have conveyed to the Company or the Subsidiary full, effective
and exclusive ownership of all tangible and intangible property thereby
arising.
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(f) The
consummation of the transactions contemplated by this Agreement will not
adversely affect the right of the Company or any Subsidiary to continue to
use
the Proprietary Rights. To the extent that the registration of any Proprietary
Right is required by law, such Proprietary Right has been duly and validly
registered or filed, and any fees that are necessary to maintain in force any
Proprietary Rights or registrations thereof have been paid. Schedule 3.16(f)
sets forth a list and description of the copyrights, trademarks, service marks,
trade dress, trade names and domain names used or held by the Company or any
Subsidiary and, where appropriate, the date, serial or registration number,
and
place of any registration thereof.
(g) As
used
herein, the term “Proprietary Rights”
means
all proprietary information of the Company or any Subsidiary, as the case may
be, including all patents, patent applications, patent disclosures and
inventions (whether or not patentable and whether or not reduced to practice),
all trademarks, service marks, trade dress, trade names, corporate names, domain
names, copyrights, all trade secrets, confidential information, ideas, formulae,
compositions, know-how, processes and techniques, drawings, specifications,
designs, logos, plans, improvements, proposals, technical and computer data,
documentation and software, financial, business and marketing plans, and related
information and all other proprietary, industrial or intellectual property
rights relating to the business of the Company or any Subsidiary.
3.17. Material
Contracts.
Schedule 3.17 contains a complete list of all contracts of the Company and
its
Subsidiaries that (i) involve consideration in excess of the equivalent of
$50,000, (ii) have a term of one year or more, (iii) is a collective bargaining
or similar agreement, (iv) is a tax sharing or similar agreement or (iv)
materially restricts a Company from engaging in any business activity anywhere
in the world (the “Material Contracts”).
Except as disclosed on Schedule 3.17, (a) the Company or the applicable
Subsidiary has performed all material obligations to be performed by them under
all such contracts, and is not in material default thereof, (b) no condition
exists or has occurred which with the giving of notice or the lapse of time,
or
both, would constitute a material default by the Company or the Subsidiary
or
accelerate the maturity of, or otherwise modify, any such contract, and (c)
all
such contracts are in full force and effect. No material default by any other
party to any of such contracts is known or claimed by the Company or any
Subsidiary to exist.
3.18. Employee
Benefit Matters.
(a) Except
as
disclosed on Schedule 3.18, the Company and the Subsidiaries do not provide,
nor
are any of them obligated to provide, directly or indirectly, any benefits
for
employees other than salaries, sales commissions and bonuses, including, but
not
limited to, any pension, profit sharing, stock option, retirement, bonus,
hospitalization, insurance, severance, vacation or other employee benefits
(including any housing or social fund contributions) under any practice,
agreement or understanding.
(b) Each
employee benefit plan maintained by or on behalf of the Company, any Subsidiary
or any other party (including any terminated pension plans) which covers or
covered any employees or former employees of the Company or any Subsidiary
(collectively, the “Employee Benefit Plan”)
is
listed on Schedule 3.18. The Company has delivered to Buyers true and complete
copies of all such plans and any related documents. With respect to each such
plan (a) no litigation, administrative or other proceeding or claim is pending,
or to the knowledge of the Company, threatened or anticipated involving such
plan; (b) there are no outstanding requests for information by participants
or
beneficiaries of such plan; and (c) such plan has been administered in
compliance in all material respects with all applicable laws and
regulations.
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(c) The
Company, or the applicable Subsidiary, has timely made payment in full of all
contributions to all of the Employee Benefit Plans which the Company, or the
applicable Subsidiary, was obligated to make prior to the date hereof; and
there
are no contributions declared or payable by the Company, or the applicable
Subsidiary, to any Employee Benefit Plan which, as of the date hereof, have
not
been paid in full.
3.19. Possession
of Franchises, Licenses, Etc.
The
Company and each Subsidiary (a) possesses all material franchises, certificates,
licenses, permits and other authorizations (collectively, the “Licenses”)
from
governmental authorities, political subdivisions or regulatory authorities
that
are necessary for the ownership, maintenance and operation of its business
in
the manner presently conducted; (b) is not in violation of any provisions
thereof, except to the extent that such violations, in the aggregate would
not
have a material adverse effect on the Company; and (c) has maintained and
amended, as necessary, all Licenses and duly completed all filings and
notifications in connection therewith.
3.20. Environmental
Matters.
Except
as set forth on Schedule 3.20, (i) neither the Company nor any Subsidiary is
in
violation, in any material respect, of any Environmental Law (as defined below);
(ii) the Company and each Subsidiary has received all permits and approvals
with
respect to emissions into the environment and the proper collection, storage,
transport, distribution or disposal of Wastes (as defined below) and other
materials required for the operation of its business at present operating
levels; and (iii) neither the Company nor any Subsidiary is liable or
responsible for any material clean up, fines, liability or expense arising
under
any Environmental Law, as a result of the disposal of Wastes or other materials
in or on the property of the Company (whether owned or leased), or in or on
any
other property, including property no longer owned, leased or used by the
Company or any Subsidiary. As used herein, (a) “Environmental Laws”
means,
collectively, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, the Superfund Amendments and Reauthorization
Act of 1986, the Resource Conservation and Recovery Act, the Toxic Substances
Control Act, as amended, the Clean Air Act, as amended, the Clean Water Act,
as
amended, any other “Superfund” or “Superlien” law or any other federal, or
applicable state or local statute, law, ordinance, code, rule, regulation,
order
or decree (foreign or domestic) regulating, relating to, or imposing liability
or standards of conduct concerning, Wastes, or the environment; and (b)
“Wastes”
means
and includes any hazardous, toxic or dangerous waste, liquid, substance or
material (including petroleum products and derivatives), the generation,
handling, storage, disposal, treatment or emission of which is subject to any
Environmental Law.
3.21. Agreements
and Transactions with Related Parties.
Except
as disclosed on Schedule 3.21, neither the Company nor any Subsidiary is, and
since the date of the Company Balance Sheet has not been, a party to any
contract, agreement, lease or transaction with, or any other commitment to,
(a)
a shareholder, (b) any person related by blood, adoption or marriage to
shareholder, (c) any director or officer of the Company or any Subsidiary,
(d)
any corporation or other entity in which any of the foregoing parties has,
directly or indirectly, at least five percent (5%) beneficial interest in the
capital stock or other type of equity interest in such corporation or other
entity, or (e) any partnership in which any such party is a general partner
or a
limited partner having a five percent (5%) or more interest therein (any or
all
of the foregoing being herein referred to as a “Related Party”
and
collectively as the “Related Parties”).
Without limiting the generality of the foregoing, except as set forth on
Schedule 3.21, (a) no Related Party, directly or indirectly, owns or controls
any assets or properties which are or have since the date of the Company Balance
Sheet been used in the business of the Company or any Subsidiary and (b) no
Related Party, directly or indirectly, engages in or has any significant
interest in or connection with any business: (i) which is or which within the
last two (2) years has been a competitor, customer or supplier of, or has done
business with, the Company or any Subsidiary or (ii) which as of the date hereof
sells or distributes products or provides services which are similar or related
to the products or services of the Company or any Subsidiary.
10
3.22. Business
Practices.
Except
as set forth in Schedule 3.22, neither the Company nor any Subsidiary has,
at
any time, directly or indirectly, made any contributions or payment, or provided
any compensation or benefit of any kind, to any municipal, county, state,
federal or foreign governmental officer or official, or any other person charged
with similar public or quasi-public duties, or any candidate for political
office. The Company’s and the Subsidiaries’ books, accounts and records
(including, without limitation, customer files, product packaging and invoices)
accurately describe and reflect, in all material respects, the nature and amount
of the Company’s products, purchases, sales and other transactions. Without
limiting the generality of the foregoing, neither the Company nor any Subsidiary
has engaged, directly or indirectly, in: (a) the practice known as
“double-invoicing” or the use or issuance of pro-forma or dummy invoices; or (b)
the incorrect or misleading labeling, marketing or sale of refurbished goods
as
new goods.
3.23. Shareholder
Matters.
None of
the transactions or matters contemplated by this Agreement require the approval
of the Company’s shareholders, other than the requirement for shareholder
approval of an increase in authorized common stock sufficient for issuance
upon
conversion of the Buyer Stock.
3.24. Full
Disclosure.
No
representation or warranty of the Company contained in this Agreement, and
none
of the statements or information concerning the Company or any of its
Subsidiaries contained in this Agreement and the Schedules, when taken together
as a whole, contains or will contain any untrue statement of a material fact
nor
will such representations, warranties, covenants or statements taken as a whole
omit a material fact required to be stated therein or necessary in order to
make
the statements therein, in light of the circumstances under which they were
made, not misleading.
4. REPRESENTATIONS
AND WARRANTIES OF BUYER.
To
induce
the Company to enter into this Agreement and to consummate the transactions
contemplated hereby, each Buyer represents and warrants, severally and not
jointly, to and covenants with the Company as follows:
11
4.1. Organization.
The
Buyer is a corporation, limited liability company or limited partnership duly
organized, validly existing and in good standing under the laws of its
jurisdiction. The Buyer has all requisite power and authority to execute,
deliver and carry out the terms of this Agreement and the consummation of the
transactions contemplated herein.
4.2. Execution;
No Inconsistent Agreements; Etc.
(a) The
execution and delivery of this Agreement and the performance of the transactions
contemplated hereby have been duly and validly authorized and approved by the
Buyer and this Agreement is a valid and binding agreement of the Buyer,
enforceable against the Buyer in accordance with its terms, except as such
enforcement may be limited by bankruptcy or similar laws affecting the
enforcement of creditors’ rights generally, and the availability of equitable
remedies.
(b) The
execution and delivery of this Agreement by the Buyer does not, and the
consummation of the transactions contemplated hereby will not, constitute a
breach or violation of the charter or bylaws of the Buyer, or a default under
any of the terms, conditions or provisions of (or an act or omission that would
give rise to any right of termination, cancellation or acceleration under)
any
material note, bond, mortgage, lease, indenture, agreement or obligation to
which the Buyer is a party, pursuant to which any of them otherwise receive
benefits, or by which any of their properties may be bound.
4.3. Investment
Representations.
(a) The
Buyer
is purchasing the Series C Preferred Stock for investment purposes and not
with
a view to the sale or distribution, by public or private sale or other
disposition, and the Buyer has no present intention of selling, granting any
participation in or otherwise distributing or disposing of any of the Series
C
Preferred Stock.
(b) The
Buyer
has been offered the opportunity to ask questions of, and receive answers from
the Company’s management, and the Buyer has been given full and complete access
to all available information and data relating to the business and assets of
the
Company and has obtained such additional information about the Company as the
Buyer has deemed necessary in order to evaluate the opportunities, both
financial and otherwise, with respect to the Company and, except as set forth
herein, has not relied on any representation, warranty or other statement
concerning the Company and its evaluation of the decision to consummate the
transactions contemplated herein. In its judgment, the Buyer is sufficiently
familiar with the Company to enable the Buyer to proceed with the transactions
contemplated hereby.
(c) The
Buyer
is an “accredited investor,” as such term is defined in Rule 501 of Regulation D
promulgated under the Securities Act of 1933, as amended (the “Securities
Act”).
(d) The
Buyer
is a sophisticated investor familiar with the type of risks inherent in the
acquisition of securities such as the shares of the Company and the Buyer’s
financial position is such that the Buyer can afford to retain its shares of
Company Series C Preferred Stock for an indefinite period of time without
realizing any direct or indirect cash return on its investment.
12
5. RESERVED.
6. CONDITIONS
TO OBLIGATIONS OF ALL PARTIES.
The
obligation of Buyers and the Company to consummate the transactions contemplated
by this Agreement are subject to the satisfaction, on or before the Closing,
of
each of the following conditions; any or all of which may be waived in whole
or
in part by the joint agreement of Buyers and the Company:
6.1. Absence
of Actions.
No
action or proceeding shall have been brought or threatened before any court
or
administrative agency to prevent the consummation or to seek damages in a
material amount by reason of the transactions contemplated hereby, and no
governmental authority shall have asserted that the within transactions (or
any
other pending transaction involving Buyers or the Company when considered in
light of the effect of the within transactions) shall constitute a violation
of
law or give rise to material liability on the part of the Company or the
Buyers.
6.2. Governmental
Consents.
All
applicable notices, approvals and consents to or from all governmental
authorities and self regulatory organizations that are required to be made
or
obtained in connection with the consummation of the transactions contemplated
by
this Agreement, shall have been made or obtained.
7. CONDITIONS
TO OBLIGATIONS OF THE BUYER.
All
obligations of the Buyers to consummate the transactions contemplated by this
Agreement are subject to the fulfillment and satisfaction of each and every
of
the following conditions on or prior to the Closing, any or all of which may
be
waived in whole or in part by Buyers:
7.1. Representations
and Warranties.
The
representations and warranties contained in Section 3 of this Agreement and
in
any certificate, instrument, schedule, agreement or other writing delivered
by
or on behalf of the Company in connection with the transactions contemplated
by
this Agreement shall be true, correct and complete in all material respects
(except for representations and warranties which are by their terms qualified
by
materiality, which shall be true, correct and complete in all respects) as
of
the date when made and shall be deemed to be made again at and as of the Closing
Date and shall be true, correct and complete at and as of the Closing Date
in
all material respects (except for representations and warranties which are
by
their terms qualified by materiality, which shall be true, correct and complete
in all respects).
7.2. Compliance
with Agreements and Conditions.
The
Company shall have performed and complied with all material agreements and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.
13
7.3. Absence
of Material Adverse Changes.
No
material adverse change in the business, assets, financial condition, or
prospects of the Company and its Subsidiaries (taken as a whole) shall have
occurred, no substantial part of the assets of the Company or any Subsidiary
not
substantially covered by insurance shall have been destroyed due to fire or
other casualty, and no event shall have occurred which has had or could
reasonably be expected to have a material adverse effect on the business,
assets, financial condition or prospects of the Company and its Subsidiaries
(taken as a whole).
7.4. Closing
Covenants.
The
Company shall have taken all of the actions required to be taken by it at or
prior to the Closing pursuant to Section 1.3 herein.
7.5. Certificates
of Designation; Exchange Agreements.
The
Company shall have delivered to the Buyers (i) filed copies of the Certificates
of Designations attached as Exhibits C-1, C-2 and C-3 (for the Company’s newly
designated Series A-2 Convertible Preferred Stock, Series D Convertible
Preferred Stock and Series C Preferred Stock) certified by the Florida
Department of State and (ii) evidence reasonably satisfactory to the Buyers
confirming that the transactions contemplated by the Exchange Agreements have
been completed in accordance with the terms of the Exchange
Agreements.
7.6. Xxxxx
Acquisition.
The
Company (or one of its wholly owned Subsidiaries) shall have entered into
definitive purchase agreements, in form and substance satisfactory to the
Buyers, with the shareholder of Xxxxx Xxxxxxx Electronics, Inc. pursuant to
which the Company (or one of its wholly owned Subsidiaries) will purchase all
of
the capital stock of such entities substantially simultaneously with the
Closing.
7.7. HIG
Agreements.
The
Company shall have executed and delivered the Management Agreement and the
Investment Advisory Agreement with H.I.G. Capital L.L.C, and such agreements
shall be in full force and effect.
7.8. Proceedings
and Documents Satisfactory.
The
Company shall have delivered to the Buyers such other documents and instruments
as the Buyers deem reasonably necessary or desirable to consummate the
transactions contemplated hereby. All proceedings in connection with the
transactions contemplated by this Agreement and all certificates and documents
delivered to the Buyers in connection with the transactions contemplated by
this
Agreement shall be satisfactory in all reasonable respects to the Buyers, and
the Buyers shall have received the originals or certified or other copies of
all
such records and documents as the Buyers may reasonably request. The Buyers
shall have completed its due diligence investigation of the Company and shall
be
satisfied, in its sole discretion, with the results of such
investigation.
8. CONDITIONS
TO OBLIGATIONS OF THE COMPANY.
All
of
the obligations of the Company to consummate the transactions contemplated
by
this Agreement are subject to the fulfillment and satisfaction of each and
every
of the following conditions on or prior to the Closing, any or all of which
may
be waived in whole or in part by the Company:
14
8.1. Representations
and Warranties.
The
representations and warranties contained in Section 4 of this Agreement and
in
any certificate, instrument, schedule, agreement or other writing delivered
by
or on behalf of Buyers in connection with the transactions contemplated by
this
Agreement shall be true and correct in all material respects (except for
representations and warranties which are by their terms qualified by
materiality, which shall be true, correct and complete in all respects) when
made and shall be deemed to be made again at and as of the Closing Date and
shall be true at and as of the Closing Date in all material respects (except
for
representations and warranties which are by their terms qualified by
materiality, which shall be true, correct and complete in all
respects).
8.2. Compliance
with Agreements and Conditions.
The
Buyers shall have performed and complied with all material agreements and
conditions required by this Agreement to be performed or complied with by the
Buyers prior to or on the Closing Date.
9. INDEMNITY.
9.1. Indemnification
by the Company.
The
Company shall defend, indemnify and hold harmless the Buyers, each of their
direct and indirect parent corporations, subsidiaries and affiliates, and each
of their officers, members, directors, employees, attorneys and agents
(hereinafter collectively called “Buyer Indemnitees”)
against and in respect of any and all loss, damage, liability, fine, penalty,
cost and expense, including reasonable attorneys’ fees and amounts paid in
settlement (collectively, “Buyer Losses”),
suffered or incurred by any Buyer Indemnitee by reason of, or arising out
of:
(a) any
misrepresentation, breach of warranty or breach or nonfulfillment of any
covenant, obligation or agreement of the Company contained in this Agreement
or
in any certificate, schedule, instrument or document delivered to the Buyers
by
or on behalf of the Company pursuant to the provisions of this Agreement
(without regard to materiality thresholds contained therein); and
(b) any
action instituted against a Buyer or a Buyer Indemnitee relating to any of
the
transactions contemplated by this Agreement (unless such action is based upon
a
breach of the Buyer’s representations, warranties or covenants under this
Agreement or any violations by the Buyer of state or federal securities laws
or
any conduct by Buyer which constitutes fraud or willful
misconduct).
9.2. Defense
of Claims.
(a) A
Buyer
Indemnitee seeking indemnification hereunder: (i) shall provide the Company
written notice of any claim or action by a third party for which the Company
may
be liable under the terms of this Agreement, within thirty (30) days after
such
claim or action arises and is known to the Buyer Indemnitee, and (ii) shall
give
the Company a reasonable opportunity to participate in any proceedings and
to
settle or defend any such claim or action. The expenses of all proceedings,
contests or lawsuits with respect to such claims or actions shall be borne
by
the Company. If the Company wishes to assume the defense of such claim or
action, the Company shall give written notice to the Buyer Indemnitee within
ten
(10) days after notice from the Buyer Indemnitee of such claim or action, and
the Company shall thereafter assume the defense of any such claim or liability,
through counsel reasonably satisfactory to the Buyer Indemnitee, provided that
the Buyer Indemnitee may participate in such defense at their own expense,
and
the Company shall, in any event, have the right to control the defense of the
claim or action. The failure of the Buyer Indemnitee to give any notice required
by this Section shall not affect any of such party’s rights under this Section
or otherwise, except and to the extent that such failure is actually prejudicial
to the rights or obligations of the Company.
15
(b) If
the
Company shall not assume the defense of, or if after so assuming it shall fail
to defend, any such claim or action, the Buyer Indemnitee may defend against
any
such claim or action in such manner as they may deem appropriate and the Buyer
Indemnitee may settle such claim or litigation on such terms as they may deem
appropriate but subject to the Company’s approval, such approval not to be
unreasonably withheld; provided, however, that any such settlement shall be
deemed approved by the Company if the Company fails to object thereto, by
written notice to the Buyer Indemnitee, within fifteen (15) days after the
Company’s receipt of a written summary of such settlement. The Company shall
promptly reimburse the Buyer Indemnitee for the amount of all expenses, legal
and otherwise, incurred by the Buyer Indemnitee in connection with the defense
and settlement of such claim or action.
(c) If
a
non-appealable judgment is rendered against any Buyer Indemnitee in any action
covered by the indemnification hereunder, or any lien attaches to any of the
assets of any of the Buyer Indemnitees, the Company shall immediately upon
such
entry or attachment pay such judgment in full or discharge such lien unless,
at
the expense and direction of the Company, an appeal is taken under which the
execution of the judgment or satisfaction of the lien is stayed. If and when
a
final judgment is rendered in any such action, the Company shall forthwith
pay
such judgment or discharge such lien before any Buyer Indemnitee is compelled
to
do so.
9.3. Waiver.
The
failure of any Buyer Indemnitee to give any notice or to take any action
hereunder shall not be deemed a waiver of any of the rights of such Buyer
Indemnitee hereunder, except to the extent that the Company is actually
prejudiced by such failure. The Company hereby acknowledges and agrees that
the
Buyer Indemnitees are third party beneficiaries of this Agreement for purposes
of this Section 9.
10. RESERVED.
11. DEFINED
TERMS
11.1. Definitions.
Definitions for the terms listed below can be found in the following
sections:
|
Defined
Term
|
Section
Reference
|
|
|
Agreement
|
Recitals
|
|
|
Buyers
|
Recitals
|
|
|
Company
|
Recitals
|
|
|
Series
C Preferred Stock
|
Recitals
|
|
|
Buyer
Stock
|
1.1
|
|
|
Certificate
of Designation
|
1.1
|
16
|
Defined
Term
|
Section
Reference
|
|
|
Encumbrances
|
1.1
|
|
|
Purchase
Price
|
1.2
|
|
|
Closing
|
1.3
|
|
|
Closing
Date
|
1.3
|
|
|
Investor
Rights Agreements
|
1.3(d)
|
|
|
Preferred
Stock
|
1.3(e)
|
|
|
Exchange
Agreements
|
1.3(e)
|
|
|
Securities
Rights
|
3.2(b)
|
|
|
Subsidiary
|
3.3(a)
|
|
|
Company
Balance Sheet
|
3.6(a)
|
|
|
Company
Financial Statements
|
3.6(a)
|
|
|
SEC
Reports
|
3.6(c)
|
|
|
Commission
|
3.6(c)
|
|
|
Exchange
Act
|
3.6(c)
|
|
|
Leases
|
3.13
|
|
|
Leased
Properties
|
3.13
|
|
|
Liability
|
3.15
|
|
|
Proprietary
Rights
|
3.16(g)
|
|
|
Material
Contracts
|
3.17
|
|
|
Employee
Benefit Plan
|
3.18(b)
|
|
|
Licenses
|
3.19
|
|
|
Environmental
Laws
|
3.20
|
|
|
Wastes
|
3.20
|
|
|
Related
Party
|
3.21
|
|
|
Securities
Act
|
4.3(c)
|
|
|
Buyer
Indemnitees
|
9.1
|
|
|
Buyer
Losses
|
9.1
|
12. MISCELLANEOUS.
12.1. Notices.
(a) All
notices, requests, demands, or other communications required or permitted
hereunder shall be in writing and shall be deemed to have been duly given upon
receipt if delivered in person or by facsimile, or upon the expiration of one
(1) days after the date sent, if sent by federal express (or similar overnight
courier service) to the parties at the following addresses:
17
(i) If
to a
Buyer other than HIG, the address set forth on Schedule 1 hereto. If to
HIG:
c/o
H.I.G. Capital Management, Inc.
000
Xxxxxxxx Xxxxxx, 00xx
Xxxxx
Xxxxxx,
XX 00000
Attention:
Xxxx Xxxxx, Xxxxxxx Xxxxx
Telephone:
000-000-0000
Telecopy:
000-000-0000
with
a
copy to:
Xxxxxxx
XxXxxxxxx LLP
000
Xxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxx X. Xxxxxxxx, Esq.
Telephone:
000-000-0000
Telecopy:
000-000-0000
(ii) If
to the
Company:
Advanced
Communications Technologies, Inc.
000
Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxx,
Xxx Xxxx 00000
Attention: Xxxxx
Xxxxxx
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
With
a
copy to:
Xxxxxx
Xxxxxxx Xxxxxx & Xxxxxx, LLC
Two
Liberty Place
00
Xxxxx
00xx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx,
XX 00000
Attention:
Xxxx X. Xxxxxx
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
(b) Notices
may also be given in any other manner permitted by law, effective upon actual
receipt. Any party may change the address to which notices, requests, demands
or
other communications to such party shall be delivered or mailed by giving notice
thereof to the other parties hereto in the manner provided herein.
12.2. Survival.
The
representations, warranties, agreements and indemnifications of the parties
contained in this Agreement or in any writing delivered pursuant to the
provisions of this Agreement shall survive any investigation heretofore or
hereafter made by the parties and the consummation of the transactions
contemplated herein and shall continue in full force and effect after the
Closing.
18
12.3. Counterparts;
Interpretation.
This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed an original, and all of which shall constitute one and the same
instrument. This Agreement supersedes all prior discussions and agreements
between the parties with respect to the subject matter hereof, and this
Agreement contains the sole and entire agreement among the parties with respect
to the matters covered hereby. All Schedules hereto shall be deemed a part
of
this Agreement. This Agreement shall not be altered or amended except by an
instrument in writing signed by or on behalf of all of the parties hereto.
No
ambiguity in any provision hereof shall be construed against a party by reason
of the fact it was drafted by such party or its counsel. For purposes of this
Agreement: “herein”, “hereby”, “hereunder”, “herewith”, “hereafter” and
“hereinafter” refer to this Agreement in its entirety, and not to any particular
subsection or paragraph. References to “including” means including without
limiting the generality of any description preceding such term. Nothing
expressed or implied in this Agreement is intended, or shall be construed,
to
confer upon or give any person other than the parties hereto any rights or
remedies under or by reason of this Agreement.
12.4. Governing
Law.
This
Agreement shall be governed by and interpreted in accordance with the laws
of
the State of New York without regard to the principles of conflict of laws.
The
parties further agree that any action between them shall be heard exclusively
in
the Borough of Manhattan, New York, New York, and expressly consent to the
jurisdiction and venue of the state and federal courts therein, for the
adjudication of any civil action asserted pursuant to this paragraph. Each
party
hereby irrevocably waives, to the fullest extent it may effectively do so,
the
defense of an inconvenient forum to the maintenance of any such action in the
forum selected hereby.
12.5. Successors
and Assigns; Assignment.
This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective heirs, executors, legal representatives, and
successors; provided, however, that the Company may not assign this Agreement
or
any rights hereunder, in whole or in part.
12.6. Partial
Invalidity and Severability.
All
rights and restrictions contained herein may be exercised and shall be
applicable and binding only to the extent that they do not violate any
applicable laws and are intended to be limited to the extent necessary to render
this Agreement legal, valid and enforceable. If any terms of this Agreement
not
essential to the commercial purpose of this Agreement shall be held to be
illegal, invalid or unenforceable by a court of competent jurisdiction, it
is
the intention of the parties that the remaining terms hereof shall constitute
their agreement with respect to the subject matter hereof and all such remaining
terms shall remain in full force and effect. To the extent legally permissible,
any illegal, invalid or unenforceable provision of this Agreement shall be
replaced by a valid provision which will implement the commercial purpose of
the
illegal, invalid or unenforceable provision.
12.7. Waiver.
Any
term or condition of this Agreement may be waived at any time by the party
which
is entitled to the benefit thereof, but only if such waiver is evidenced by
a
writing signed by such party. No failure on the part of a party hereto to
exercise, and no delay in exercising, any right, power or remedy created
hereunder, shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or remedy by any such party preclude any other
future exercise thereof or the exercise of any other right, power or remedy.
No
waiver by any party hereto to any breach of or default in any term or condition
of this Agreement shall constitute a waiver of or assent to any succeeding
breach of or default in the same or any other term or condition
hereof.
19
12.8. Headings.
The
headings as to contents of particular paragraphs of this Agreement are inserted
for convenience only and shall not be construed as a part of this Agreement
or
as a limitation on the scope of any terms or provisions of this
Agreement.
12.9. Expenses.
At the
Closing, the Company shall reimburse the Buyers for up to $3,000,000 in fees
and
expenses of the Buyers incurred in connection with its due diligence
investigation of the Company and Xxxxx (and certain other potential targets)
prior to the Closing and the negotiation of this Agreement and the transactions
contemplated hereby (including, without limitation, the fees, expenses and
disbursements of the Buyers’ legal, accounting and other professional advisors).
The Company shall also promptly reimburse the Buyers for or pay any and all
costs and expenses (including, without limitation, the fees, expenses and
disbursements of the Buyers’ legal, accounting and other professional advisors)
incurred by the Buyers in connection with (A) the waiver of, enforcement of,
or
the preservation of any rights under, this Agreement or the Company’s Articles
of Incorporation or other governing documents; (B) any stamp and other taxes
(other than income taxes) payable with respect to this Agreement or the Buyer
Shares; and (C) any filing required by applicable law, rule or regulation with
any governmental authority or self regulatory organization with respect to
a
Buyer’s purchase or holding of the Buyer Stock. Without duplication of any other
obligation of the Company to reimburse a Buyer for expenses, the Company shall
reimburse each Buyer and its representatives for all reasonable travel expenses
incurred in connection with attending any management meeting or any board
meetings or board committee meetings. Any fees and expenses to be paid pursuant
to this Section 12.9 (other than those to be paid or reimbursed at the Closing)
shall be paid or reimbursed within five (5) business days of having been
invoiced for such amounts. The Company shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement.
12.10. Finder’s
Fees.
The
Buyers represent to the Company that no broker, agent, finder or other party
has
been retained by it in connection with the transactions contemplated hereby
and
that no other fee or commission has been agreed by the Buyers to be paid for
or
on account of the transactions contemplated hereby. The Company represents
to
the Buyer that, other than Xxxxxx Xxxxxxxxxx Xxxxx (the fees and expenses of
whom shall be paid by the Company), no broker, agent, finder or other party
has
been retained by the Company in connection with the transactions contemplated
hereby and that no other fee or commission has been agreed by the Company to
be
paid for or on account of the transactions contemplated hereby.
20
12.11. Gender.
Where
the context requires, the use of the singular form herein shall include the
plural, the use of the plural shall include the singular, and the use of any
gender shall include any and all genders.
12.12. Acceptance
by Fax.
This
Agreement shall be accepted, effective and binding, for all purposes, when
the
parties shall have signed and transmitted to each other, by telecopier, email
or
otherwise, copies of the signature pages hereto.
12.13. Charter
Amendment.
Promptly
following the date hereof, the Company shall use all reasonable commercial
efforts to cause the Articles of Incorporation of the Company to be amended
in
order to increase the authorized number of shares of Common Stock to an amount
reasonably sufficient for the conversion of Series C Preferred Stock into Common
Stock, including the recommendation and submission of a proposal to the
stockholders of the Company for the approval of such amendment.
12.14. NO
JURY TRIAL.
THE
PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY
OF
THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON
OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY DOCUMENT
CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES’ ACCEPTANCE OF
THIS AGREEMENT.
21
IN
WITNESS WHEREOF, the parties have executed this Agreement or caused this
Agreement to be duly executed by their duly authorized officers as of the day
and year first above written.
|
COMPANY:
ADVANCED
COMMUNICATIONS TECHNOLOGIES, INC.
|
||
| |
|
|
| By: | /s/ Xxxxx Xxxxxx | |
|
Name: Xxxxx Xxxxxx |
||
| Title: Chief Executive Officer | ||
|
BUYERS:
ACT-DE
LLC
|
||
| |
|
|
| By: | /s/ Xxxxxxx Xxxxx | |
|
Name: Xxxxxxx Xxxxx |
||
| Title: Executive Vice President | ||
22
|
PROSPECT HARBOR CREDIT
PARTNERS,
L.P.
|
||
| |
|
|
| By: | /s/ Xxxxxx Xxxxxx | |
|
Name: Xxxxxx Xxxxxx |
||
| Title: Managing Director | ||
| SANKATY CREDIT OPPORTUNITIES II, L.P. | ||
| |
|
|
| By: | /s/ Xxxxxx Xxxxxx | |
|
Name: Xxxxxx Xxxxxx |
||
| Title: Managing Director | ||
| SANKATY CREDIT OPPORTUNITIES III, L.P. | ||
| |
|
|
| By: | /s/ Xxxxxx Xxxxxx | |
|
Name: Xxxxxx Xxxxxx |
||
| Title: Managing Director | ||
| RGIP, LLC | ||
| |
|
|
| By: | /s/ R.B. Malt | |
|
Name: R. B. Malt |
||
| Title: Managing Member | ||
23
Execution
Copy
Schedule
1
|
Buyer
|
Shares
|
Purchase
Price ($)
|
|||||
|
ACT-DE
LLC
|
913.79
|
5,756,897
|
|||||
|
Prospect
Harbor Credit Partners, L.P.
|
8.93
|
56,250
|
|||||
|
Sankaty
Credit Opportunities II, L.P.
|
17.64
|
111,098
|
|||||
|
Sankaty
Credit Opportunities III, L.P.
|
58.78
|
370,325
|
|||||
|
RGIP,
LLC
|
0.86
|
5,430
|
|||||
|
1,000
|
6,300,000
|
||||||
24
